Good morning, everyone, and welcome to Ferreycorp's Second Quarter 2023 Earnings Conference Call. Joining me on the call today is Mrs. Mariela García, our Chief Executive Officer, and Mrs. Patricia Gastelumendi, our Chief Financial Officer. We will begin our call with an overview of the quarter, focusing on our financial results. At the conclusion remarks, we will open a Q&A session. At that point, if you wish to make a question, please let us know through the chat box below or raise your hand and we will announce you. At this time, and through our leaders' presentation, we ask all participants to keep their microphones off. Please note that this call may include certain forward-looking statements. These statements relate to expectations, beliefs, projections, and other matters that are not historical facts, and are therefore, to risks and uncertainties that might affect future events or results.
With that, I'd now like to turn the call over to Mariela García. Mariela, please go ahead.
Thank you. Thank you, Jimena, and good morning, everyone. Today, we will review a brief presentation, which is available in our website, that support the discussions of the company's results and main highlights for the second quarter, as well as for the first semester 2023, according to the financial statements published yesterday. I would like to start by highlighting important events that occurred after our last call. First, as we informed before, the Shareholders' Meeting approved a cash dividend of PEN 251.3 million, which represented the 60% of the free disposal profits of the FY 2022. Given that on September 2022, we paid an advanced cash dividend of PEN 120 million, the remaining PEN 131.3 million were paid on May 5th.
And second, highlight is the Board of Directors, in its March-May session, approved the extension of the buyback program from 50 million shares up to 94 million shares, which is equivalent to 10% of the company's issued capital. These repurchases of shares might be done in parts, and when market conditions and other variables are convenient to the company's interest. Now, let's go to slide 3, where I will begin a brief introduction of our financials. Through this second quarter of 2023, Ferreycorp delivered strong operational results and was able to keep a solid financial position, as shown by the PEN 106 million net profits, an ROE of 18.5% and an ROIC of 12%.
The main drivers for these results were: higher sales, with a significant boost in spare parts and services, as well as a strong gross margin, including the adjustment made to the FX gain achieved during the quarter, and reexpressing it in the gross profit. Now let us start with an overview of the business environment in Peru. Estimated GDP growth for 2023 is only around 1%, compared to the 2.8% recorded for 2022. I think I said 2022 before, so for 2023, it's 1% compared to the 2.8% recorded in 2022. GDP in the first quarter showed a decrease of only 0.4%, and for the second quarter there was a decline of 1.1%.
The strongest sector this year will be mining, with a growth of 7.8%, while construction will decrease in around 4.5%. Other sectors, such as commerce and services and manufacturing, are projected to have a growth rate of 4%, and in the case of manufacturing, -1% this year. If we talk about private investment, which we all know is an important element for our business, it's still subdued due to the business, to the lack of business confidence, as a direct result of the constant political instability and social unrest we have been experiencing for some time now. Projections estimate a decrease of 9.6% in the second quarter, and 5.8% for the whole year.
As for public investment, it showed no growth in the second quarter, and is projected to decrease by around 2% for the full year. Peru is no exception when observing what's happening throughout Latin America this year, where in general, all countries are expected to experience lower growth rates compared to 2022. Please now turn to slide 5 of our earnings presentation to discuss financial highlights for the semester and, as of June 2023, and later we'll go into details on figures of the second quarter. Consolidated sales for the first semester amounted to PEN 3.2 billion, which is an increase of 6% compared to the first semester last year. In dollars, the total sales amounted to $854 million, 7% higher than last year, when sales reached $799 million.
It's worth mentioning that Caterpillar equipment for mid-size and underground mining, as well as for construction clients, showed an increase in sales of 3%, and that parts and services had an increase of 18%, comparing results to the same period last year. Sales of large mining products, for the first semester, was very limited, but we already have orders that will be delivered in the following months, taking us closer to sales levels of 2022. Gross profit was 13% higher than the one obtained during the first semester of 2022, and amounted to PEN 830 million, led by greater sales and good margins. If we look at the gross margin, it was 25.9%, higher than 2022's level of 24.2%.
As we always explain, this margin has been distorted by the movements in the exchange rate in this semester, which needs to be corrected in order to have a more accurate comparison. In our release, we showed adjusted figures. When we remove the FX impact, which is equivalent to around 1.4% of sales, the Adjusted Gross Profit would be PEN 866 million, which means a growth of 11% compared to last year's, and gross margin for the first semester would be 27.3%. Such level remain higher than the Adjusted Gross Margin of 26.2% recorded in the first semester of 2022. Sales of spare parts and services accounted for 57% in this semester.
Regarding the operating profit, it experienced an increase of 18% compared to the first semester of 2022, and reached PEN 309 million. The operating margin was 9.6% compared to the 8.7% recorded last year. Again, if we remove the FX impact, the Adjusted Operating Profit would be PEN 355 million, showing a growth of 11% from 2022, and the Adjusted Operating Margin would be 11.1% higher than the 10.6% Adjusted Margin reached in the first semester of 2022. SG&A expenses amounted to PEN 529 million, an increase of 10% compared to the same period in 2022.
This increase resulted, in part, from higher variable expenses associated with higher sales, and also because of higher employees' profit sharing, inventory management, and facilities maintenance, provision of bad debts in our subsidiary in Chile, among other expenses. As a percentage of total sales, SG&A expenses represented 16.5%, higher than the 15.9% recorded in 2022. Moving to net financial expenses, they amounted to PEN 34 million for the first half of 2023, which represents 59% increase compared to same period last year. This increase is mainly a result of higher co, cost of debt, which is now 4.19% compared to last year's 2.84%.
This higher cost of debt comes from the average short-term debt interest rate, which last year was very low, at 1.67%, and now it is at 5.75%. While our average medium-term debt interest rate increased in a lesser extent, from 3.28%- 3.85%. We've been experiencing more profoundly the effects of the global increase in financial costs observed in the market, but be assured that we are constantly looking into the most favorable conditions among other diversified portfolio of financing alternatives. I would also want to highlight that the net financial expense is 1% of sales, still within our benchmarks, and much lower than what we have experienced years ago. We now need to explain the FX results during this semester. Let us start reviewing the evolution of the exchange rates.
After 2022, with significant volatility, we have started 2023 experiencing a revaluation of the Peruvian sol and the Chilean peso. During the second quarter of 2023, the Peruvian sol has continued with this trend, gaining 3.51%, while the Chilean peso experienced a depreciation of 1.32%. As a result of these currency movements, in the second quarter of 2023, we recorded an FX gain, which reached PEN 35.2 million. In comparison, in second quarter 2022, we had an FX loss of PEN 57 million. Looking at the first semester, we had an accumulated FX gain of PEN 62.9 million, which in the same period of 2022, the accumulated FX gain was only 38.6.
We estimate there is still a remaining balance of FX gain of around PEN 57 million as of June 2023, that would be offset by the decrease in the gross margin in the next few months, where we'll be continuing to provide adjusted numbers, as we have done today and in previous calls. The pace of that offset will depend on the future evolution of exchange rates. As we always explain, it is very important to remember that the foreign exchange gain or loss only generates an accounting impact, because the inventory is registered in soles, but will be sold in dollars, and the FX loss will be recovered in the upcoming months through gross margin, and the opposite will happen when there is FX gains.
Because of all the accounts just explained, net profit reached PEN 227 million, 20% higher than the PEN 189 million of 2022. If we exclude the FX effect, the adjusted net profit is of PEN 215 million, compared to the 203 million Adjusted Net Profit of last year's first semester. This would mean an increase of 6%, aligned with the sales growth and the gross profit growth. As for the EBITDA, the accumulated EBITDA for the first semester of 2023 amounted to PEN 434 million, which showed an increase of 15% compared to the EBITDA reported on the same period last year. The corporation reported a 13.5% EBITDA margin, higher than the 12.5 obtained in the same period of 2022.
After removing FX distortions, Adjusted EBITDA is PEN 480 million, 11% higher than last year's EBITDA of PEN 434 million. Adjusted EBITDA margin would be 15%, which is higher than first semester of 2022, where Adjusted EBITDA margin was 14.4%. Now, after reviewing all these numbers for the first semester, I will like to turn the call to Patricia Gastelumendi, here with us, our CFO, to discuss the results of the second quarter this year compared to those of the second quarter in 2022. Please, Patricia.
Thank you, Mariela. Let's start talking about sales. Second quarter sales amounted to PEN 1.65 billion, 4% higher than the PEN 1.58 billion achieved in second quarter 2022. In dollars, second quarter sales amounted to $445 million, a 5% increase from second quarter 2022, when second quarter sales reached up to $423 million. During this quarter, Caterpillar mining equipment sales showed a significant reduction of 78% if compared to second quarter 2022. But as we all know, and we always explain, sales of large mining products may vary significantly among quarters due to its large value and specific delivery dates.
As for sales related to equipment for non-mining clients, it is significantly higher when compared to the previous quarter and to same period last year by 37% and 17%, boosted by sales to infrastructure and construction projects originated from activity in local and regional governments, as well as small and medium-sized contractors. This business line represent 20% of total sales in Q2 2023. Worth mentioning also is the Allied Brands business units, which showed an important increase of 30% compared to second quarter 2022. As for sales spare parts and services during the second quarter 2023, these represented 56% of total sales and amounted to PEN 916 million, showing a jump of 13% when compared to second quarter 2022, and recording a slight increase of 1.3% from the previous quarter.
Gross profit increased by 2% compared to second quarter 2022, and amounted to PEN 403 million. If we analyze this quarter's gross margin, it was 24.5%, a bit lower than the 24.9% reached in second quarter 2022. However, when removing the FX impact in both cases, we observed that the second quarter 2023 Adjusted Gross Margin is 26.4%, slightly higher than the same period 2022 . Adjusted Gross Margin of 26.1%. Sales of spare parts and services accounted for 56% in this quarter, compared to 51% in 2022. Regarding the operating profit, it decreased 12% from 2022 and reached PEN 141 million.
The operating margin this quarter was 8.6%, or 10.5%, if we remove the FX impact. SG&A expenses amounted to PEN 270 million, and increased by almost 13% compared to second quarter 2022. SG&A accounts with the higher increases include personal expenses, inventory management, and facilities maintenance. Additionally, in this quarter, we include an accounts receivable provision of PEN 3.7 million related to our subsidiary in Chile, given that some expected payments were not materialized. As a percentage of total sales, SG&A expenses represent 16.4% higher than second quarter 2022 level of 15.1%.... As for the EBITDA, second quarter 2023 amounted to PEN 204 million, which showed a decrease of 6.5% compared to the EBITDA reported in the same period last year.
The corporation reported a 12.4% EBITDA margin, lower than the 13.8% obtained in the same period of 2022. When we remove the FX impact, Adjusted EBITDA margin rises to 14.4%, showing a smaller gap from second quarter of 2022 Adjusted EBITDA margin of 15.1%. Now let's move on to slide 10 to review the net profit during the second quarter 2023. Net profit during the second quarter reached to PEN 106 million , showing a considerable increase of 72% compared to the same period in 2022, mainly explained by an FX gain of PEN 35 million and a result of the revaluation of the sol in this quarter, compared to the PEN 57 million FX loss in second quarter 2022.
This was partially offset by the decrease in EBITDA of 7% or PEN 15 million, which we have explained most, was mostly the result of an increase in SG&A. Our financial expenses rise of 53% or PEN 6 million, which resulted from higher interest rate. The average cost of debt went from 2.7% in the second quarter 2022, to 4.42% in the second quarter 2023. Higher income taxes, which increased by PEN 22 million, and increase in depreciation and amortization of 5% or PEN 5 million. Please, let's go to the slide 11 to review financial resources and cash generation. Total debt as of June 2023 amounted to $500 million, 9% lower than the $548 million reported as of June 2022.
Of the total amount, 49% is current debt and 51% is long-term debt, aligned with the corporation's strategy to have a balanced debt structure. Regarding the cash balance as of June 2023, we have PEN 53 million, slightly lower than the PEN 55 million held in cash by June 2022. Currently, the corporation do not foresee the need to secure extra cash. We should point out that in the second quarter of 2023, the company has a positive free cash flow of PEN 195 million, driven by a very working capital management. Leverage ratio as of June stood at 1.72, showing an important decrease from last year of 1.99x . Additionally, the Adjusted Net Debt to EBITDA ratio amounted to 1.43, way below our covenant limit of 3.5x .
Now move to slide twelve to review the state of financial position main accounts. As of June 2023, total assets amounted to PEN 5.9 billion and decreased by 2.5% if compared to June 2022. The main variations are: cash and cash equivalent decreased by PEN 17 million. Inventory was reduced by PEN 65 million. And thirdly, accounts receivable increased by PEN 101 million, due to a large amount of short-term invoices to clients aligned with higher sales. The cash conversion cycle improved considerably from 157 to 145 days as of June 2023. This result is impacted by inventory days turnover, which decreased from 157 to 156 to 151 days.
Collection days, that increased a bit from 50 to 52 days, and by payable days that improved from 49 to 58 days. Regarding the asset turnover ratio, as of June 2023, it was 1.13, showing an improvement from the 1.07 level achieved by June 2022. Now, let's turn to slide 13 to discuss our CapEx. Net investment in fixed assets as of June 2023 reached to $13 million, and the main details were $8 million in infrastructure investment and $4 million in machinery and equipment for workshops. I will turn the call back to Mariela now for the closing remarks. Please, Mariela.
Thank you, Patricia. After explaining these commercial results, the P&L results, and the balance sheet for the second quarter, and what we did before for the whole semester, I want to close the presentation with some remarks. We consider that the strong results achieved during the second quarter reflect our efforts in a still challenging business scenario, and also reflect the ability of the company to face and manage complex times, always with the support and commitment of our employees, customers, suppliers, and shareholders, and of course, the brands that we represent, as we constantly highlight. This concludes our presentation for today. Thank you for your time, and now we'll be glad to take your questions. Jimena,
the first question comes from Bianca.
Thank you very much for your presentation. I was wondering about the margins on a quarter-to-quarter basis. We saw pressured margins. Could you please elaborate on the higher COGS as a percentage of revenues compared to last quarter? And, if I may, I have a second question that's regarding of your expectations for the second half of the year related to the preventive actions to face the phenomenon El Niño. Do you have any advances in that front with the government? If you could please elaborate on that as well. Thank you very much.
Thank you, Bianca. I would like it. Can you repeat please the part of the gross margin? Because what we explained is that the gross margin has improved from 26.1%- 26.4%.
Um-
I think your question was on a reduction on the margin.
Yes, on a quarterly basis. I was wondering on the decrease in terms of quarter-to-quarter.
Yeah. So semester to semester, it improved from 26.2- 27.3, and quarter to quarter, it also improved from 26.1- 26.4, which is a slight improvement, of course. So what we see is that margins are pretty much stable. Margins in each business line are being stable, and also participation of product support in our sales is also somewhat stable. So at the moment, we're not seeing any relevant change in our margins. And then going to the second part of your question on the phenomenon El Niño. Yeah, you might have been reading actions that different levels of the public sector are taking. This is actions on the executive power, like ministers, and also actions in some of the regional and local authorities.
What we have been getting information on bids that could be called in the following weeks for a larger number of units, for large number of units, to in the hands of either a Ministry of Transportation, or Ministry of Vivienda, or Ministry of Agriculture, where an Authority for Water, the ANA, is also talking about making some public bids. So there are several ministers talking... ministries talking about this at the moment. None of them have been already called. There was a recent purchase by the military, and we won a part of that sale, we're still finishing the details. So... And it's still a small portion of what can be achieved in the following months.
But since we don't have the public bids already called, we don't have exact information on the number. It can be from 100 units-200 units. It's still to finish the information from the ministries. But yes, we expect demand to build capabilities, both in the executive level of authorities in the public sector and also the regional and local ones. Thank you, Bianca. I see you have your hand raised again, so maybe you want to do a follow-on on your question.
Yes. Thank you. I think I wasn't clear. I was referring to the EBITDA margin. For example, last quarter, it was 14.7, and then we saw that this quarter it's 12.4. In terms of operating margin, we also saw a slight, like, decrease quarter-over-quarter, and I was wondering if you could give some color on that. But I didn't know if I, like, made my question clear.
Yeah. Thank you, Bianca. Now it's clear. Yeah, so, the growth in sales is at the same level of the growth in gross profit because of this stabilization on the gross margins, as I was explaining. When we go lower to the operating profit or EBITDA, the growth is lesser than that because we have some... We had already a projection to increase expenses. And mainly, there's three elements of that that we explained throughout the call, but it's an adjustment in salaries and also because of the increase in profits, also a higher distribution to employees.
So that's, that's the reason why the operating margin has not or, or the operating profit, excuse me, or EBITDA, hasn't grown at the same levels of the sales.... and a gross margins on or the gross profit, no? However, EBITDA margin is still at a very nice rate, and it's important to take the information after adjusting the impact of the FX, no? Thank you, Bianca.
Thank you.
Okay, next question comes from Luis Ramos.
Hi, Jimena. Hi, Mariela, hi, Patricia. Thanks for taking my question. I guess I have two questions. The first one regarding inventory days. I saw that in the quarter, there was a reduction. Actually, you mentioned that, and that led to an improvement in cash conversion cycle. Could you give us more color on what efforts you are making to reduce inventory days, and what could we expect in the future? And the second question would be on the debt side. How comfortable you are with this kind of low levels of net debt to EBITDA ratios? And which kind of measures of, you know, we value or in order to give more value to investors or to shareholders, you are willing to take in the next quarters or next years? Thanks.
Thank you, Luis. So, yes, we have made some improvement, a few number of days on the inventory, efforts that, you know, we are very focused on improving our asset turnover. It has improved. Some quarters ago, we were below one, and now we are on top of 1.10, which is a success. We have been very successful with the receivables days, no? Which have been moving around the 60 days, and lower than that still in some quarters. And in the inventories, there's still some challenges because of the delivery dates of suppliers. However, we have been able to improve a little bit, and we will continue in those efforts.
Although we always mention that, in some quarters, in some moments, in some closing dates, we might have bigger deliveries from the factory, and that could distort or deteriorate, but for that closing and not as a long-term trend. Okay? So we will continue to try to reduce inventory days. And then, regarding our leverage ratio, it is low. We have already been very active in paying dividends, no? Not only going to the highest limit of the policy, but also advancing dividends, which is something that we could also discuss in last quarter of this year with the board. We don't have anything already defined.
And also, in the March meeting, fulfill the policy of dividends, but on top of dividend, we have also announced this repurchase program that we could be executing, depending on the market conditions. So, at the moment, we are using our cash and generation to continue to invest in the business. That's why we reinvest a huge portion of our profits. And also, you know, the CapEx has been low, as Patricia explained during her presentation. It's much lower than what we had years ago, but we could be adding some units to the fleet, no? So that goes again to increasing the business.
But at the same time, we are very much focused on creating value to shareholders, not only by improving the business and growing the business and protecting margins, but also giving some cash back, either in the form of dividend or repurchases. Thank you, Luis.
Thanks, Mariela. I have just a follow-up on the first question. Regarding the inventory days, yeah, we understand that there's definitely an improvement. It will depend on, you know, how there are contingencies on the delivery from suppliers. But is there anything structural, is there anything specific you're, that you are doing to reduce inventory days and improve the cash conversion cycle? It will be very helpful to understand what are your moves there.
Yeah, no, there is nothing structural that we are doing. The way we need to manage inventory is to do the best forecasting of the demand in order to place the orders in the appropriate manner. We would love to place orders just for the next couple of months, but we compare the forecasting of our demand forecasting with the delivery date from suppliers that sometimes change suddenly, no? So we need to be very careful in making sure we will have the inventory. At the moment, we're not doing something structural.
We are taking benefit of big data, not only on our side, but Caterpillar has built a capability of forecasting demand and putting everything in a huge platform, and gives recommendation to dealers on the inventory levels and so on. But this is something that we have been doing for a while. So we're using technology to make our best effort in forecasting demand, taking into consideration lead times, taking into consideration logistic challenges, and so on. It's an effort that we have been doing. There's no structural change in this in our policy or inventory management. It's keeping focused on trying to get to a lower number of days. That is the aim, but we have several constraints and variables to put in the equation.
Thank you very much.
Okay, next question comes from Marco Mejía.
Could you give me just, please?
Thanks for the presentation. I have one question. We have seen an important decrease of 78% YoY in Cat mining equipment for the second quarter. Do you expect revenue of this unit to follow this trend in the short term, maybe the third quarter? Thanks.
Thank you, Marco. Yes, as we mentioned during the presentation, the sales for large equipment in these first two quarters has been very low. As we have mentioned before, there was a peak 10 years ago, where there were two projects being bid at the same time, no? But after that peak, the purchase of large mining equipment has always been in the area of $100-$150 million. And for this year, we are expecting something around $100 million. And it is presented in our sales numbers in two lines. It's in large mining equipment and also non-large mining equipment, because we sell to the mines the trucks, the shovels, but also the auxiliary equipment.
But altogether, regardless of in which line of the sales chart there it is, for this year, we are anticipating $100 million, which is a little bit lower than what we had last year, but it's still in this area of $100 million. This would happen in the third and fourth quarter, according to the deliveries that we are expecting. So, I would like to reinforce that mining is very strong. Maybe some of you are reading in the news a lot of talk around brownfields, since there is little greenfields or almost non-greenfield after Quellaveco. But really, the existing mines in Peru have a lot of opportunities to either grow their operation or rebuild their fleets.
So the utilization of the mining fleet is very high, and that is very strong. The sentiment in the existing mines is very strong. That is bringing new opportunities, both of prime product and also opportunities that we are gaining in product support. Thank you for the opportunity to make this comment, Marco.
Thank you.
Okay, so we have a few questions on through the chat box. The first one is from Gerardo Fort, and he has two questions. The first one is: Could you give, could you give us a breakdown of the gross and EBITDA margins for spare parts and services only? It's combined with sales of heavy equipment in the consolidated financial statements. And the second one is: Year to date, we're seeing a slowdown in CapEx. What are your expectations for CapEx as a percentage of revenues for 2023 and going forward?
Yeah. So the margins for spare parts and services are higher than the other lines of businesses, because they have also a higher cost to serve. We have people all over the mines in Peru and dedicated people in the shops and in the warehouses for that business. So even though the gross margin is higher, when it goes down to operating margin or profit, it levels out a little bit with a prime product. We'll follow on in the following calls on giving more color on that. And the CapEx, as I just mentioned in the previous call, in the previous question, sorry.
For the year, it is still going to be somewhat low, but we're making a new, or defining with Caterpillar, a revision on the strategy of our rental business, so that it can bring some units for this year. But since the market can be hot in demand for the phenomenon of El Niño protection, maybe this year we won't be able to increase the rental fleet in a significant way. So I would say the CapEx increase can be seen more towards 2024, and for this year, it will remain at the levels where we're seeing in the first two quarters. Thank you, Gerardo. And I see another question from Hector Arelis around SG&A. I don't know if we have already covered SG&A, but I don't know if there's something new in this question here.
In terms of SG&A, as inflation rates come down in the country, do you expect this more elevated expense level to be normalized as well? So, we won't be reducing the level of expenses because it comes mainly from adjustments of salaries, and we're not going to reduce them because there's no further increase in inflation. So what we can expect is a lower increase, no, but not a reduction of the levels we have right now. Thank you, Hector.
And we also have. Sorry. We have a question from Sebastián Gallego.
Yes, good morning or good afternoon. Can you hear me?
Yes, we can hear you.
Yeah, perfect. Thank you very much for the presentation. I have actually three questions today. The first one, related to the buyback program. You announced the increase from PEN 50 million to PEN 94 million. But I'm just wondering if you can comment on the progress that you have made so far in the buyback program, and what amount is left of the program? Second question, sorry to ask again, a follow-up on that one, but I would like to have a precise number or a range of the expected CapEx for this year. And it would be nice to have kind of a breakdown between maintenance CapEx and strategic CapEx.
Finally, the third question, a bit on strategy of the company, regarding the operations beyond Peru. When we look at the behavior of sales in other countries, you report a slight decrease for Group Two in Central America, and a 7.5 decline in Group Three companies. And also, when looking at the breakdown, there are a bunch of countries that represent less than 1% of total sales of the company. So I'm just wondering if you have a specific strategy going forward for divestments in other countries, or any specific measures to boost sales in these operations. Thank you.
Thank you, Sebastián. Yeah, so after the... Going to the buyback, the first part of your question, after the approval in May, we have been putting purchase orders in the market, and we have already bought approximately 9 million shares. In July, we haven't been active because we have the blackout period. So the blackout period is started in the early days of July, and it finishes yesterday. So we will be again putting our orders in the market. That is regarding the buyback. Secondly, on the CapEx, I will leave Patricia then to talk about that. But going to the last part of your question around the strategy and internationalization strategy. So, first, you mentioned the decrease in sales in the Central America operation.
Yeah, we have been facing, just like here in Peru, political issues and economic issues in those territories, and that's why sales have diminished a little bit. But we're expecting to bring them back in the remainder of the year and throughout 2024. Our relationship with Caterpillar there is very strong, and we serve the market similar way than we have here in Peru, with the difference that in Central America, we don't have a large mining operation. There's no footprint as we have in Peru with all the open pit operations here in Peru. So it's mainly related to construction and infrastructure, and therefore, it is driven by the public investment in infrastructure, and that's the reason of the numbers you are seeing.
And then, the other countries, of course, as you are highlighting, we have an operation in Colombia or Ecuador, for example, that is mainly an extension of the Trex operation that we have here in Peru and Chile. So Peru and Chile are bigger operations for the Trex line, where we also have some Allied, other Allied products. So really, Ecuador and Colombia are like branches to the Chile operation. We see them as that, not as a whole footprint in those two markets, no? And in Central America, we also have that situation. We have the vehicle parts business in Salvador, and they have a small branch in Honduras, so it's not really a footprint in those markets. It's branches, like stores in a neighboring country, that's...
The intent was also to get contact with those markets and see if in the future we can have something bigger there, but at the moment, they're just operating as branches with existing lines, and we don't have any short-term opportunity to increase our footprint with other brands that are more relevant in the corporation. Thank you, Sebastián.
Thank you. I thought you mentioned that Patricia was going to talk about that.
Yes, yes. Okay. We do not see an increase for the last semester, unless assets are purchased for the rental fleet to move to the areas affected by the El Niño phenomenon. Maybe we can increase some machines in our rental fleet, but we will see an important increase in our CapEx for the last of the year.
Okay. Any specific number or any range for the full year, Patricia?
I don't understand. No specific number for CapEx? No, we do not have a number. It depends on the demand for machines, for the rental fleet, but nothing else.
Okay, thank you very much.
If I may add, you also asked about what is the strategic CapEx and maintenance CapEx. So in our presentation, you could have seen that it was mainly infrastructure, and most of that infrastructure is maintenance. And strategic, there's an investment that we are doing in our warehouse, where we are implementing a robot for the fast-moving items, you know, in our parts inventory, that is strategic. And but apart from that, all the rest is maintenance. And the rental fleet, which is really a CapEx, but a semi-inventory at the same time, you know, because we build units, we put units in the fleet, rent them, and from then they are sold as used, and there's a continuous rotation on them.
And that's why it will depend how much units we put in the fleet this year on the demand for rental, but also how much inventory we can get from the factory to satisfy demand for new and for rental. But don't expect something very big. Thank you.
Thank you very much, Mariela.
Yeah. I think there are no more questions at this moment. Mariela, do you have any closing remarks?
Yeah, yeah. And thank you for your participation today. We were not sure if we were going to have too many people in the call, because there are several Peruvians already taking holidays for our independence celebrations, because we celebrate, even with the political uncertainty situation, we celebrate. There is huge opportunity in Peru. We are a country of very committed and passionate citizens, that we will continue to develop the country. I mean, specifically here in Ferreycorp, we will continue to be loyal and committed to our purpose, which is: Together, we create development.
So rest assured that we will be being very focused with the critical and strategic elements of our business model and value to our customers, and of course, creating value to our shareholders, as we have discussed today. So I want to thank for the participation of all of you today, and for your continuous interest in Ferreycorp, and we will remain at your disposal as always. Thank you very much, and goodbye.