Earnings Call: Q2 2024

Sep 13, 2024

Summary

Q2 profit was CLP 25.2 billion before Consalud’s Ley Corta adjustment, as stronger financial subsidiaries were offset by weaker markets and health-insurance losses. RedSalud EBITDA grew 14.7% YoY, while net financial debt to equity remained 0.3x.

Hello, everyone, and thank you for joining ILC's second quarter 2024 results conference call. With me is Rosario Letelier, Chief Corporate Development Officer of ILC. Before starting, I would like to invite everyone to download from our website a presentation prepared especially for this conference call. The purpose of this document is to go through the main events and achievements for the period, as well as to explain the context and financial figures of each of our businesses. This call will be divided in five blocks. First, we will review the context of the period in order to continue with ILC's consolidated results for the second quarter of 2024. Then we are going to analyze our subsidiaries' financial results and the main highlights for the quarter. Afterwards, we will do an update regarding our financial position in order to close the call with a Q&A section. First, we're starting slide number 5, which shows macroeconomic context for the period, which is especially important for the results of the quarter. In 2Q 2024, financial markets exhibited weaker performance compared to the same period last year. The IPSA index, which recorded a return of 8.7% in 2Q 2023, fell by 3.5% in 2Q 2024, while the S&P 500, which had achieved an 8.3% return last year, dropped by 2.1% this quarter. Similarly, the Pension Fund C, which is a proxy for the encaje, the results, which had shown growth of 1.6% in 2Q 2023, experienced a decline of 2.1% this quarter. On the employment front, the formal employment rate also saw a slight deterioration, dropping from 72.8% in 2Q 2023 to 71.8% in 2Q 2024. Inflation remained under control, but increased slightly with a quarterly CPI of 0.7% in 2Q 2024 compared to 0.3% last year. Lastly, the monetary policy rate decreased, moving from 11.25% in 2Q 2023 to 5.75% in 2Q 2024, reflecting the Central Bank's response to more stable inflation levels. Slide number 6 highlights the key regulatory advances in the healthcare industry, especially addressing the reforms in the ISAPRE sector. The Ley Corta de Isapres was promulgated in response to the Supreme Court in November 2022, ruling on the application of the single-factor tables, which eliminates gender-based discrimination in health plans. As of September 1, 2024, health plan prices will be adjusted according to the single-factor tables with a mandatory minimum contribution of 7%. The law also introduced a requirement for ISAPRE to present a payment and adjustment plan with monthly refunds that do not accrue interest and are adjusted according to CPI, and will not be considered for the purpose of warranties or financial indicators. An extraordinary premium also capped at 10% of the contribution agreed upon in July 2023, is also incorporated into the plan. While the adjustments are aimed to ensuring financial sustainability in the healthcare system, the approval of the payment plan and the extraordinary premium per beneficiary remains pending as the Superintendency of Health has requested amendments to the plan presented by Consalud. Additionally to this, the introduction of supplementary health insurance for FONASA affiliates in groups B, C, and D through the Modalidad de Cobertura Complementaria is part of the next steps in advancing the regulatory framework. Other advances and regulatory changes is regarding the pension reform in Colombia, which was approved by the Congress on June 14, 2024, following the proposal by President Gustavo Petro. This reform introduced four pillar system that includes solidarity, semi-contributory, contributory, and voluntary savings. One of the key aspects of the reform is the integration of public and private pension regimes. Contributors earning between one and 2.3 minimum wages will direct their contribution to the public average-premium system, with any excess being directed to the private individual saving with solidarity system managed as today by the AFPs. The reform also allows affiliates with at least 750 weeks for women and 900 weeks for men by July 1, 2025, to continue contributing to the existing system with flexibility to those within 10 years of retirement to switch between Colpensiones and AFP. Additionally, the contribution rate will remain at 16% of taxable income, with potential adjustment of up to 3% for those earnings over four minimum wages, with the additional funds directed to the Pension Solidarity Fund. The reform adjusts administration fees for AFPs, capping them at 80 basis points for contributions exceeding 2.3 minimum wages, while 70 basis points will be deducted from the assets of the former portfolios. Regarding the events that occurred during the year, first, one of the main important milestones that we are facing this year is that on August 14, 2024, ILC signed an agreement with Baninter to increase its stake in Banco Internacional, acquiring an additional 10.9% of the bank's shares, raising its total ownership to 78.1%. Next, on July 2, 2024, Banco Internacional completes its first bond issuance on the Swiss market. This secured bond, maturing on July 23, 2027, has a coupon rate of 2.8% and will be used to fund the bank's lending activities and diversifying its funding sources. For Confuturo, they successfully secured a portion of the D&S portfolio in Tender 11. For the period between July 2024 and June 2025, Confuturo acquired six fractions for men and two fractions for women, expanding its portfolio. Moreover, on April 23, 2024, Confuturo carried out a capital increase approved by its shareholders' meeting. The capital increase of up to CLP 74.5 billion was approved, with CLP 18.9 billion subscribed and paid by June 17, 2024. Finally, it is important to mention that Vivir Seguros secured one of the seven fractions of the SISCO portfolio in Tender number seven, with an acquisition rate of 1.73. Regarding our commitment to the elderly, ILC has made significant development in supporting and empowering seniors through various initiatives aligned with our strategy. Confuturo has been ranked as the most senior-friendly company, leading with its Portal de Formación initiative, which offers free online courses tailored to seniors, providing essential tools and support for their daily life. AFP Hábitat secured second place, ensuring the participation of the senior talent among employees and driving impactful initiatives such as Piensan Grande. Additionally, RedSalud received a recognition from SelloMayor for its seniors-focused call center initiative, which promotes the well-being of people over 60 years through concrete actions in accessibility, inclusion, respectful treatment, and prevention. Slide number 11 reference the five pillars of our strategy. These pillars are the foundation of our approach, driving both organic and inorganic growth opportunities. Our focus remains on achieving profitability in our operations, maintaining flexibility in the business we engage with, and ensuring a strong financial position. Importantly, we continue to prioritize ESG values and metrics in all our activities. This strategy framework directly supports our overarching purpose, which is to be leaders in creating social and economic value that enhance the people's quality of lives. Slide number 12 illustrates the consistent returns the company has achieved over time, aligning with our strategy. The company has maintained a double-digit profitability in recent years, reflecting a steady growth and resilience. As previously mentioned, the company is now entering a new phase where growth is expected to stem primarily from its financial businesses, a trend that we are showing in the results of the second quarter of 2024. For the second quarter of 2024, ILC achieved a profit of CLP 25.2 billion before adjustments, resulting from the application of the Ley Corta de Isapres. Compared to CLP 54.3 billion recorded in 2Q 2023, the decrease in profits was mainly explained by weaker performance in financial markets and losses in Consalud that we will explain later. Net of the effect of the application of the Ley Corta de Isapres, ILC recorded a loss for the second quarter of 2024 amounting to CLP 6.2 billion, and the variation is primarily attributed to the loss of CLP 31.4 billion associated with the accounting liability under IFRS standards at Consalud, arising from the total payment plan determined according to the mechanisms established by the Ley Corta de Isapres, promulgated on May 24, 2024. Slide number 13 highlights ILC's earning composition for second quarter 2024. The company recorded a profit of CLP 25.2 billion before the adjustment, primarily driven by the contribution of Banco Internacional, Confuturo, AFP Habitat, RedSalud, and Vivir Seguros. Regarding Banco Internacional, the organic growth in its commercial and consumer portfolios, along with the consolidation of 51% of Autofin, resulted in a profit of CLP 8 billion. Higher operating expenses were partially offset by the increased net indexation and financial income. Confuturo revenues from higher annuity and voluntary pension savings insurance, as well as investment performance in fixed income, real estate, and investment funds, resulted in a profit of CLP 10.1 billion. Regarding AFP Habitat Chile, AFP Habitat Chile saw revenues grow in line with the increase in the average taxable income of its contributors, aligned with our strategy. However, the weaker performance of the financial markets led to lower legal reserves returns, with a profit of CLP 7.5 billion. A lower result was mainly explained by higher revenues and returns on legal reserve, partially offset by higher operating expenses. In the health sector, RedSalud improved its results thanks to the better mix of inpatient services, increased income from dental services, and enhanced operational efficiency, contributing CLP 6.2 billion to the overall profit. Consalud, however, recorded a loss of CLP 13.8 billion, primarily due to the lower revenues from the reduction of the GES tariff and fewer beneficiaries, though it was partially offset by lower inpatient costs. Vida Cámara contributed CLP 4.1 billion to the growth, mainly attributed to the growth in the number of beneficiaries and improved health insurance performance. Lastly, Vivir Seguros, as we mentioned before, was awarded a portion of the SISCO number seven, which contributed to a profit of CLP 5.7 billion. Overall, ILC achieved a total profit of CLP 25.2 billion for 2Q 2024, before the adjustment of the Ley Corta de Isapres. The main contribution came from its financial subsidiaries, despite the challenge that we mentioned before in the health insurance sector, particularly in Consalud. Then if we move to the main operational figures of each of our subsidiaries, moving to slide number 16. June 2024, Banco Internacional commercial loans grew by 10.4%, outpacing the industry 2.1% growth. Commercial loans surged by 720.5%, significantly exceeded the industry's growth, driven the expansion of the loans and strategy acquisition. Meanwhile, the mortgage loans increased by 32.6%, above the industry 6.6% growth rate. I would like here to highlight that Banco Internacional is entering a new stage this year after a successful turnaround phase focused on SMEs, risk management, and efficiency. We are now moving into a new phase with three main pillars. First, deepening our products, particularly for large companies and corporation. Second, the development of retail banking. Finally, the diversification of our products and funding, leveraging the growth of our retail base. Seeing in slide number 17, Banco Internacional has made progress in developing products within its retail banking division. The number of retail customers has grown by 109% since June of 2023, reaching 27,000 customers by June 2024. In addition to this growth, the integration of 36,000 new customers through the acquisition of Autofin in August 2023 further expanded the bank's customer base. Banco Internacional is actively growing its retail products portfolio through targeted initiatives and strategic alliance. In the consumer loan segment, which continues to offer the best rates in the market, the bank has expanded through digital cross-selling to both clients and not clients. Importantly, the bank has formed strategic partnership with Mercado Libre and Portal Inmobiliario, broadening its access to new markets and customers. For credit cards, the bank has introduced digital credit cards and made significant life cycle improvements. Additionally, its recently partnership with DIRECTV has added value by offering co-branded cards, enhancing customer loyalty. In terms of deposit segment, Banco Internacional has successfully collaborated with Tempo to create new cross-selling opportunities between checking accounts and time deposits, strengthening customer retention. Additionally, checking accounts and term deposits are being cross-sold, with an emphasis on customer loyalty. Also, it's important to mention the introduction of the Autofin's digital checking account has further enhanced the bank's offering. Now going to the financial figures. As we can see on slide number 18, Banco Internacional's operating results improved during 2Q24, driven by growth in commercial loans and consumer loans. The net interest and adjustment margin increased by 15.7%, reaching CLP 32.8 billion compared to CLP 28.4 billion in 2Q23. Additionally, the treasury result grew by 54.9%, rising from CLP 6.3 billion to CLP 9.7 billion. The gross operating result rose by 24.6%, reaching CLP 48 billion, with Autofin contributing 22% of this total, reflecting the ongoing impact of the integration of Autofin on the bank financial performance. On the other hand, operating expenses increased by 68.1%, but this is mainly due to a goodwill, the derivation of CLP 2.7 billion, and also the consolidation of Autofin, which account for almost 20% of these expenses. As a result, the efficiency ratio increased to 62.4%. In summary, the higher gross operating result was mainly driven by the increased income from commercial and consumer loans, along with lower deposit expenses. However, the rise in operating expenses primarily due to the consolidation of Autofin and the impact of this goodwill impairment, contributed to the increase in the efficiency ratio. On slide number 19, we can observe that risk expenses have increased, partially explained by the consolidation of Autofin. Total risk expenses rose to CLP 4.1 billion in 2Q 2024, up CLP 2.2 billion in 2Q 2023. This CLP 1.6 billion increase was mainly due to higher provision for consumer loan portfolio impacted by the integration of Autofin. The NPLs ratio also shows a change with Banco Internacional overall NPLs rising from 2.5% in June 2023 to 3.3% in June 2024. While the industry average remains at 2.3%. The consumer loan segment saw an increase from 0.9% to 1.3%, yet it remains the third best NPL ratio related to consumer loans in the industry. Risk index saw a slight increase from 1.8% to 2.1%, with provision to total loans remaining consistent. In terms of collateral coverage, this was a slight decrease from 77.4% in June 2023 to 72.9% in June 2024. Additionally, the bank continues to fully comply the Basel III standards with a solvency ratio of 15.3% as of June 2024, maintaining a strong capital position in line with regulatory requirements. Slide number 20 shows the evolution of Banco Internacional profits and ROE over time. While the bank has shown sustained growth in profitability for 2Q 2024, there was a decrease in profit compared to the same quarter last year. Banco Internacional profit for 2Q 2024 decreased by CLP 2.2 billion from CLP 14 billion to close to CLP 12 billion. This was primarily due to higher operating expenses, which were partially offset by increased adjustment income and improved result from financial operations. Despite the short-term decrease, Banco Internacional continues to maintain a strong long-term profit growth, with profit reaching CLP 55.5 billion and an ROE of 17% for the last 12 months ending in June 2024. Now, if we move to slide number 22, shifting to the annuity market. We're seeing that a recovery in the annuity market industry for the last two years. The annuity rate as of June 2024 has increased to 3.36%, while the program withdrawal stands at 4.41%. This difference has influenced pensioners' decision, with 55% opting for annuities and 43% for program withdrawals. Comparing this to the previous periods, the annuity market continues to show resilience. Although the annuity preference is higher than the last years, and the long-term trend shows that stabilization in this preference. In terms of premium volume, total pension industry premium reached 28.2 million in terms of UF in June 2024. With 23.1 million UF allocated to program withdrawal. We're forcing the recovery of the annuity market. Moving into slide number 23, we see that Confuturo annuity premiums have remained stable quarter over quarter. The offered sales rate for 2Q 2024 reached 3.38%, slightly higher than 3.26% recorded the same period of the last year. Confuturo achieved a market share of 15.2% in annuity sales, maintaining its strong position in the market compared to 15% in 2Q 2023. Total net premium income for 2Q 2024 decreased, reaching CLP 194.5 billion, which is 28.1% lower than 2Q 2023, where the decline was primarily attributed to the reduction in the D&S premiums following the end of the 2022-2023 contract. Despite this, the decline was partially offset by increases in individual life insurance and annuity premiums. In the next slide, we can see Confuturo's investment portfolio performance for this quarter. The investment result grew by 11% quarter-over-quarter, where we exclude life insurance with savings result, reaching CLP 111 billion. This increase was primarily driven by better returns from local and foreign fixed income investments, as well as improved results from real estate investments. The fixed income, both local and foreign, contributed positively to the overall results, with local fixed income adding CLP 3.1 billion and foreign fixed income contributing CLP 2.1 billion. The real estate sector also performed well, contributing CLP 2.6 billion. While the local equities showed a negative contribution, as we see at the beginning of the presentation, mainly due to the lower performance of financial markets. The overall investment performance remained strong due to gains in other areas. On slide number 25, we can see that Confuturo's results in 2Q 2024 were mainly impacted by the lower non-operating income. Although the company benefited from higher annuity premium income and improved investment portfolio returns. These gains were partially offset by a decrease in non-operating profit. Confuturo posted a profit of CLP 14.1 billion in 2Q 2024 compared to CLP 19.5 billion in 2Q 2023. This was primarily due to CLP 6.1 million loss from inflation-indexed unit result compared to a positive result in 2Q 2023. Additionally, the exchange rate result dropped from CLP 2.5 billion in 2Q 2023 to CLP 0.2 billion in 2Q 2024. Overall, Confuturo's ROE for the last 12 months, ending on June 2024, was 13.6%, down from 12.4% in 2023, reflecting the impact of this lower non-operating. If we move to AFP Habitat. Regarding AFP Habitat, as shown in slide number 27, revenues increased by 4.9% in the second quarter of 2024 compared to the same period last year, reaching CLP 62.1 billion. This growth was mainly driven by commission related to mandatory savings, supported by the 7% nominal increase in the average taxable income of AFP Habitat's contributors compared to 2Q 2023. The average taxable income for AFP Habitat contributors in June 2024 was 21.1% higher than the industry average. This was partially offset by the 4% year-over-year increase in the number of contributors. While revenues showed a positive growth, the legal reserve returns dropped by almost CLP 12 billion, reflecting a weaker performance from funds with higher exposure to the equity markets, Funds A, B, and C. As shown in slide number 28, AFP Habitat remained stable profits over time, with profit reaching CLP 140 billion for the last 12 months ending in June 2024. However, looking at the second quarter of 2024, profit decreased by 39% compared to the same period of the last year, dropping from CLP 30.9 billion in the second quarter of 2023 to CLP 18.7 billion this quarter. This decline, as we just mentioned, was primarily driven by the lower returns on legal reserves due to the performance of financial markets. If we move to slide number 29, we can see AFP Habitat Perú and Colfondos performance. Starting with AFP Habitat Perú, revenues grew by 38.5% quarter-over-quarter, reaching CLP 10.6 billion. This increase was driven by higher fees, supported by a larger AUM and an improvement in average taxable income. Additionally, legal reserves return more than double, increasing by 150% to CLP 0.7 billion, reflecting better performance in Funds zero, two, and three. Regarding Colfondos, revenue grew by 38.9%, reaching CLP 21.3 billion in 2Q 2024. This growth was primarily due to higher revenues from mandatory pension fees, which saw a 22% increase. This was also driven by lower D&S fees and higher average salary base. Additionally, legal reserve returns improved by 22.2%, reaching CLP 4.3 billion. As we can see on slide number 30, AAISA continues to consolidate its regional model, with profits reaching CLP 34.9 billion for the last 12 months, ending in June 2024. In 2Q 2024, AAISA posted a profit of CLP 11.2 billion, which is a 17.8% increase compared to 2Q 2023. The profit growth was mainly driven by higher fees, revenues, and returns on legal reserves, partially offset by higher operating expenses, which increased during the period. On slide number 32, we observe a more complex mix in RedSalud, especially in inpatient segment, also with an increased activity in dental services, contributing to higher revenues. Starting with the outpatient and dental activity, there was a 13.3% increase in dental consultation, rising from 77.5 million in 2Q 2023 to 87.8 million in 2Q 2024. Exams also saw a slight increase of 1.4%, while medical consultation remained stable. For the inpatient activity, the number of surgeries increased by 2.4%. Also, additionally, occupancy rates showed an improvement, increasing almost 900 basis points from 67.1% the second quarter of 2023 to 75.9% in 2Q 2024. As a result of these operational improvements, revenues grew across all segments. Outpatient and dental centers saw a 4.3% increase in revenue. The hospital in the metropolitan region posted a 9.9% increase in revenue, and regional hospital recorded the strongest growth, with an almost 13% increase in revenue. Slide number 33 presents RedSalud's EBITDA breakdown. For 2Q 2024, EBITDA increased by CLP 3.2 billion, reaching a total of CLP 24.8 billion. This growth was primarily driven by a better mix of services in the inpatient and increased dental services activity, improved efficiency in personal expenses, medical fees, and impairments. Breaking down the EBITDA, hospitals in the metropolitan region contributed the most with a CLP 4.8 billion increase. Outpatient and dental center added CLP 1.8 billion, and regional hospitals contributed CLP 0.3 billion to the overall EBITDA growth. In addition, the EBITDA margin improved from 12.4% in 2Q 2023 to 13.1% in 2Q 2024. This was driven by better operational efficiency and lower impairments of accounts receivable, largely due to improved payment behavior, especially from the private insurer. As shown in slide number 34, RedSalud continues to diversify its revenue sources. The revenue breakdown by insurer shows a growing share from the public insurer, FONASA, which has gained increasing relevance. By 2Q 2024, FONASA represented 49% of RedSalud's total revenue, up from 48% in 2Q 2023. This shift reflects RedSalud's strategy to diversify its income sources and reduce its dependence on the private insurer, ISAPRE, which accounted for 33% of revenue in 2Q 2024. We move to slide number 35. We can see RedSalud's EBITDA evolution. RedSalud's EBITDA continues to show sustainable high level, reflecting a strong performance in both inpatient and outpatient services. For 2Q 2024, EBITDA reached CLP 24.8 billion, representing a 14.7% increase compared to 2Q 2023. The EBITDA margin also improved, rising from 12.4% in the second quarter of 2023 to 13.1% in 2Q 2024. As we already mentioned, RedSalud continues to face high demand for inpatient and outpatient services. During this quarter especially, results were driven by a more complex inpatient mix, higher activity in dental services, and lower impairments, along with improvement in operational efficiency. Now, if we move to Consalud, the health insurance sector. Revenues were affected by the adjusted in GES premium on a decline in beneficiaries. The reduction in GES premium led to a 2.9% quarter-over-quarter decrease in the average contributor per beneficiary, offset by a 7.6% increase in the base rate increase. Additionally, the number of industry beneficiaries decreased by 7.8% quarter-over-quarter, while Consalud experienced a 9.7% decline. Consalud's revenue dropped by 16.2% quarter-over-quarter, reaching CLP 159 billion in the second quarter of 2024. Moving to slide number 37, we observe that Consalud cost decreased by 2.3% quarter-over-quarter, mainly due to a 3.6% reduction in the total inpatient costs, which was partially offset by higher outpatient and medical leaves costs. The number of medical leaves related to COVID-19 and mental health decreased, but the average cost for mental health services have increased. If we move to slide number 38. The slide focused on the financial impact of the regulatory changes on Consalud, highlighting the loss resulting from the accounting liability under IFRS standards. Consalud recorded an accounting loss of CLP 31.4 billion, net of different taxes, which arise from the total payment plan mandated by the Ley Corta de Isapres, promulgated on May 24, 2024. This law introduced several regulatory changes aimed at achieving financial balance in the financial sustainability in the healthcare system and complying with the Supreme Court ruling of November 2022. Key aspects of the law include a mandatory minimum contribution of 7% of the gross salary, price adjustments using the tabla única de factores, and the introduction of an extraordinary premium to cover the cost of obligation to affiliates. In addition, the law mandates a monthly accrual of the total refund amount, which will be returning surpluses without accruing interest and adjusted according to the CPI. It is important to note that under the Superintendency of Health methodology, the refund amount is not counted for guarantees or financial requirements. Unlike the IFRS accounting, the refund amount is recorded monthly on an accrued basis. As a result of these factors, ISAPRE Consalud posted a quarterly loss of CLP 45.2 billion compared to a profit of CLP 6.5 billion in the same period of the previous year. Excluding the accounting effect of this liability, Consalud's loss amounted to CLP 13.8 billion, primarily due to lower revenues from a reduction in the GES premium in January 2024, partially offset by a decrease in the inpatient coverage costs. Slide number 39 shows Vida Cámara's performance for 2Q24. The contribution margin for health and life insurance increased by CLP 4.7 billion compared to 2Q23, driven by a lower loss ratio. In terms of growth, premium income rose by 48% due to an increase in beneficiaries and lower account receivable deterioration, mainly as a result of changing the model accounted. Consequently, the number of Vida Cámara beneficiaries reached 544,000 as of the end of June 2024, reflecting a 20% increase year-over-year. If we move to chapter number four, financial position of ILC concerning ILC's debt and liquidity structure. This slide shows that the company achieved a net financial debt to equity ratio of 0.3 times. ILC maintains close to CLP 194 billion in liquid assets to meet future obligation and actively manage its cash through investments aimed at reducing financial carry and mitigating foreign currency exposure. Over the past quarters, the company has also reduced its gross debt by redeeming part of its local operating obligation, along with paying regular amortization bonds and bank debt repayments. We move to the next slide. This slide shows the evolution of ILC's stock price until August 30. This year, the stock price outperforming the IPSA index year to date. The stock price increased by 18.6% with a dividend yield of 7.1%, which is one of the highest in the Chilean market, based if we consider the closing price of 2023. In comparison, the IPSA index rose by 3.9% year to date, I mean 4.2% year to date. Then if we move to slide number 44. To round up ILC 2Q24 results were driven by the performance of the financial subsidiaries impacted by the lower performance of the financial markets and losses in Consalud. Starting with Banco Internacional, we saw a significant contribution from the growth in both commercial and consumer loans portfolio. This expansion was a major factor in the bank's strong results for the quarter. Moving on to Confuturo, the annuity market continues to show a strong momentum. This, combined with higher investment returns due to the better performance in local operating investment funds, boosted the operational results of Confuturo. For AFP Habitat, the improvement in the revenues was offset by a decrease in the financial markets, contributing a decrease in the net profit. In the health sector, as we mentioned before, Consalud experienced some challenges, with losses mainly driven by lower revenues from the adjustment in GES premium and the Ley Corta de Isapres impact. On the other hand, in RedSalud, the other side of the coin, reported a stronger EBITDA, supported by a more complex inpatient mix and increased activity in the dental services, which helped to improve its overall performance. Finally, it's important to mention that ILC continues to maintain a strong financial position with the company's strategic pillars, where Banco Internacional, Confuturo, AFP Habitat, and RedSalud being the main drivers behind its results for the quarter. This concludes the presentation. We will now open the floor up for question. If you have any question, you can write in the ask section. There's a first question from Francisca Ralil, where it asked about the impact of the Ley Corta de Isapres, which is CLP 31.4 billion. She asked if it's the only effect, and also in which line of the financial statement of Consalud is reflected these laws. And also, if there's any financial impact we will see in the next quarter for Consalud. I don't know if, Rosario, you want to have this question. Yes. No problem. Regarding the first part of the question, this is reflected in our gains and losses. You can see it on our press release and also in the financial statements and all the notes to the financial statements, and also it has an impact on deferred taxes. All in all, it's CLP 31.4 billion. In the next quarters, the first things to keep in mind is that this is an estimation under IFRS standards. Considering that the final amount has to be approved by the Superintendency of Health, this is the best estimate we have as of today, and we do not expect any significant changes in the upcoming financial statements. This covers all of the amount, and, as I said before, is under IFRS standards, reflects the present value of the amount. You can see all the details in the risk notes, in the financial statements. Thank you, Rosario. There's another question from Henry, who asks, it's very similar to the question of Francisca Ralil, he asks for the future of Consalud business, and also if there's an additional capital that we must put in this subsidiary. Well, I will take this and please jump in if you feel there's need to. The first thing to note is that, as Gustavo mentioned in the presentation, the Ley Corta de Isapres aims to bring stability to the whole healthcare system. As you know, there is pending the approval of the plan that each of the ISAPRES presented to the Superintendency, which is an important milestone for the future of each one of the insurance companies. We understand that the Ley Corta was a key milestone to bring the stability to comply with the Supreme Court ruling. As Gustavo mentioned, the Ley Corta brings different aspects into a table regarding the mandatory minimum contribution, price adjustment using the tabla única de factores, which is important to comply with the Supreme Court ruling. Also introducing an extraordinary premium, which is a very important aspect of the Ley Corta because this brings an additional premium for the insurance companies to be able to cover all the cost and obligation that the ISAPRES has with their affiliates, including the refund amount. All of the above mentioned, we think that aims for the sustainability of the system. Regarding capital increases, it's very important, something that Gustavo mentioned, that under the Superintendency of Health financial statements, which are the financial statements that are used for all financial ratios and all guarantees required by the authority. This refund is accrued on a monthly basis as opposed to IFRS standards, which requires accounting for the best estimate the company has on the present value of all of the amount involved in the refund. Considering this, and to be very clear, the Ley Corta de Isapres states that these refunds, and all of the impacts that the refund has, does not require guarantees and would not have impact on financial ratios. Considering that, we do not foresee any capital requirements in Consalud, for the upcoming or forward-looking statements. Thank you, Rosario. There is another question about the healthcare businesses before I address the other question from Henry about Banco Internacional. There is a question that is asking about if there is a chance to exit the healthcare business, given its diminished strategic importance of operating challenges. As we have put forward in our strategy, health is part of the asset that ILC has, and is part of the forward strategy that the company has nowadays. Considering the combination that ILC has participation in healthcare providers and healthcare insurance, there is some hedge when you see this all in all. Also, I want to add, if I missaid, but when we said the growth will be mainly from the financial sector, we do not say that we will not have growth from the health sector. We expect growth, especially in the providers, the RedSalud, and is one of our subsidiaries that is important for us. The other question about Henry was talk about the transaction that we released in August, that we expect to reach 100% of the stake in Banco Internacional. There is an option of that in May 2027. He asked about the valuation. How is the valuation of the remaining stake? I can give you some ground that, general terms of this agreement states that the first step is to come into agreement between both parties in order to determine the valuation of the stake involved in the call option. In case an agreement is not reached, the next step is to have independent valuation, one of each party. If these valuations differing more than 10%, then there is a third valuation that has to select between one of the two of the previous valuations that each party have. It is important to state that this mechanism has also been part of previous agreements, and ILC and Baninter have reached agreement on the valuation involving the stakes that we have acquired in the past time. Okay. I think this all the questions. If we do not have further questions, this concludes the call for today. Thank you, Rosario, for joining us this quarter. Everyone, have a nice weekend, and holidays next week. Okay, thank you very much for attending the call. Bye.