Grupo Argos S.A. (GRUPOARGOS) Earnings Call Transcript & Summary

[Audio Gap] of Corporate Finances. This conference is being translated into English simultaneously. Besides, we want to remind you that you might find the information on our website, the information for all the quarter, together with the presentation we'll be following during this presentation. You can download from financial information afterwards in the section Reports. I want to invite you to move on to Slide #3. Let's start this teleconference, by which I want to give the floor to Jorge Mario Velasquez, President of Grupo Argos.

Thank you, Natalia. Good morning to you all. Good morning to all the collaborators of the group that are with us today. I want to send a warm welcoming, full hope and positive energy in this moment, hoping that you all are good and safe, you and your families. We should keep on caring for us and our families in facing the challenges that the modern world has brought to us, with all the energy and the hope, with the conviction that we will step out of this strengthened and more energetic. Yes. So I want to start by mentioning that this year has been an arginine test, a deep arginine test for humanity, for the economic systems, for the health systems, for the global economy and obviously for the productive sector. But nevertheless, thanks to the talent and to the conviction that drives our actions in different fronts of infrastructure. We could say that Grupo Argos has proven its strength -- its structural strength and its adaptation capacity -- fast adaptation capacity in a very uncertain environment. This full-time environment that we face right now, I want to ratify the visibility of our portfolio and the strategic power that we have within our business diversification. We want to highlight the resilience of our electric assets as well as our participation in the cyclic sectors of infrastructure. So second quarter this year, this has been an important catalyzer of the organization's growth, facing the different reactivation economic plans and the seamless packages that have led by -- have been led by different governments in different geographies and countries where we operate. The results of this first quarter follow the context of recovery and economic strength, improve the operational strength that we achieved during 2020 with huge efforts in terms of efficiency. Today, we come with an organization that's lighter, that reached savings in terms of expenses close to COP 1.4 trillion previous year and that we will keep maintaining This commitment represented an important contribution to close first quarter with a growth year-to-year of 50% in the consolidated EBITDA and an expansion of the pro forma margin of more than 240 basis points. The operational efficiency added to a favorable environment in terms of interest rates. And due to the optimization of the financial expense, that reduced 28% year-after-year, thanks to the financial discipline of the business group. We'll stress our consolidated net profit of COP 191 billion for the quarter, with a significant growth compared with the same period previous year, to which the pandemic didn't even have affected materially our operations. I just wanted to emphasize this element because, if you remember, the first quarter of 2020, the application was not that important in terms of the pandemic or in the airport traffic or in road traffic or in construction material. It was just up until the end of March, probably last week, where we started seeing those effects driven by the pandemic that were accelerated in the second quarter of 2020. Because of this, it's a growing result as the one that we present today in terms of a first quarter that had, I could say, a -- was mainly normal in its operations, but it showed an important growth in terms of 2019. This is twice relevant. 2021 is behaving much better than 2020. That was actually better than 2019. So in this context, I believe, it's a good foreground to present the operational results of our businesses and offer those that listen and that are with us today a better understanding of the consolidated results of the business group, with the main objective of analyzing the recovery that we have been seeing since the beginning of the second semester previous year and that for the first quarter of this year, we confirm the competitive position of our operations. Now I want to invite you to go over the behavior of this net business. This has been proving positive growth quarter-after-quarter that proves that the economic reactivation is happening together with the leverage of infrastructure. The new housing in Colombia has been driving the cement demand. First quarter, we reached 35% of this and not this housing compared with previous quarter. The commercial dynamic allowed that -- the sort found by the company in Colombia reached 1.2 million tons in the quarter and registered a growth of 19% year-after-year. In the United States, the sales volume grew 3% compared with the first quarter 2020 in order to reach a total of 1.4 million tons, even in a period with a strong winter, especially in Texas, that decelerated the construction expense. In this region, we have very optimistic forecast in terms of the sustained growth of demand during the next upcoming years that will be driven by the ambitious infrastructure plan that's at $ 2.3 trillion in order to activate the economy. This plan should be mentioned completed its investments in projects that are intensive in cement consumption that, according to preliminary calculations, could add in between 40 million tons and 80 million tons of cement in terms of consumption for the next 8 years. So this means between 4 million and 8 million tons per year in a market that currently has been consuming 100 million tons per year. So this means growth of 4% and 8%, additional. Also noting that the operational level of the assets in the United States industry is operating almost to its full capacity. Central America also registered a growing volume and closed the quarter with 1.4 million tons sold, growing to 21% compared to year-after-year, where we want to highlight the performance of Honduras and Panama. The progressive recovery in the sales volumes of all the regions has allowed us to close with revenues of COP 2.3 trillion, growing at 6% year-after-year, while the EBITDA reached COP 445 billion, growing at 30% and expanding its margin from 350 basis points, which proves that the power of the operational leverage marks a positive trend in order to continue advancing in this path of profitability maximization. The company generated a free cash for the period of COP 268 billion, which allowed making amortized -- debt amortization COP 138 billion and improving its leveraging level that closed in a multiple of 4.05x its net debt over EBITDA. These efforts added to the favorable environment in terms of interest rates led to reduced financial expenses of Grupo -- Cementos Argos, 23% compared to the first quarter previous year in order to reach a net profit within the controller of COP 55 billion for the first quarter. The efforts that have been done in terms of deleveraging will be driven by the announcement of these investments in the 24 plants [indiscernible]. And a product of this disinvestment will be 100% destined to debt amortization, which will allow Cementos Argos advancing in its goal of reaching optimal capital structure. We see this achievement as a very important catalyzer for the value recognition, and we expect that this will be clear proof to the market. Now I want to invite you to look at the main aspects of the energy business. I want to highlight the results -- we're entering new businesses, and innovation have gained relevance. The housing sector, in which we reached with a value offer in terms of [indiscernible] energy, Internet and other products and services, presented an increase of 48% year-after-year in terms of revenues, while the business segment in which we attend industrial customers with nonregulated energy, cogeneration, thermal districts, solar panels or other -- between other products, reached a growth of 78% compared with the same period previous year. The generation business -- in terms of the generation business, the company closed the quarter with a growth of 18% year-after-year in terms of generated energy. The result has been driven by the entrance of new plants, such as the San Andrés de Cuerquia plant and a better hydrology. From those 1,396 gigawatts-hour we generated per quarter, 99.1% was generated with renewable sources, from which we want to highlight an increase of 50% year-after-year in the solar energy generation in Colombia, given the incorporation of the new plants in 2020. Celsia registered a revenue increase of 6%, reaching COP 980 billion during the quarter. EBITDA reached COP 336 billion during this period, with a growth of 2%, a lower growth than revenues, given that in this period, we had an extraordinary contribution for the energy purchase option that we have in thermal power generation from previous year. This means that the bases are not exactly comparable. The operational stability, better behavior of interest rates and the financial discipline allowed the company to reduce 47% its financial expense year-after-year during the first quarter. The proper operational and financial performance was translating to a net profit for the controller of COP 84 billion, which means a growth of 28% year-after-year. In Odinsa, the road construction business of the group, we mobilized 114,000 vehicles per day on average during the quarter, achieving a growth of 11% year-after-year. Only in March, the company closed with an average traffic of 117,000 vehicles. All the assets contributed in a positive manner, except the Tunel de Oriente that just grew a 2% year-after-year, proving that interurban traffic between Aburrá Valley and San Nicolás Valley that this asset can -- is compensated mainly by the drop of the airport traffic that this asset mobilizes. In the Construction segment, there was a positive investment in terms of the finalization of Pacífico 2. I just want to highlight that during April, we delivered the functional units 2 and 3 of that asset, which -- the resources were freed according to the delivery of the functional units. Given that the work is coming to an end, the construction activity was less in this quarter compared with the same period previous year, which explains a reduction in the contribution for that specific segment in terms of the company's results. From another side, the airport business continues with the great amplifications in terms of demand and closed the period with a reduction -- a traffic reduction close to 49% year-after-year. Nevertheless, it's also important to highlight that in March, we mobilized a total of 1.6 million passengers in our airports. It's the highest number since the beginning of the pandemic and a very positive signal of traffic recovery for the upcoming months. In order to fight back against this effect of demand, the company has implemented a very important service plan that allows the company to operate more efficiently and comply with the service -- contractual service requirements. In Opain, we want to highlight the closure in April of ANI negotiation that began on May 2020 and that compensates the effect suffered by this asset in the period between 23rd of March and the 30th of September 2020, aligned with the negotiation of these announced agreements in previous conferences in order to mitigate the impact of the equity value of these assets, reaching an extension -- or achieving an extension of that time or that due date that was initially stated. On a consolidated level, mixed results for Odinsa were translated into revenue increase and EBITDA increase, 9% and 20%, correspondingly, year-after-year. We want to highlight also the contribution of roads compensated by the lower contribution of the airports. This result is very important. The benefit that it represents for the company, this implemented saving plan that led the company to a reduction of 11% in terms of operational expenses year-after-year as well as a reduction of 5% in terms of financial expenses during this quarter. Thanks to the proper performance of road construction and achieved efficiencies, the company reached a net profit of COP 50 billion, coming back to a positive field. Now I want to invite you to go over the results, the behavior of the real estate business. This is found on Slide 11. In the first quarter, we want to highlight some -- the urbanization license of this project called Ribera Mallorquín, which is found in Puerto Colombia, Atlántico. It's a milestone. The concrete revenue is -- cash flow revenue is close to COP 21 billion that will be reflected for the rest of the year. This license represents a very important step in terms of the advancement of this iconic project that, until the moment, registered more than 800 sold housing units to the -- at the end of the first quarter and 1,300 during the moment, representing an amount of COP 179 billion. This gives an idea of how this segment has been advancing and how it's running at the city of Puerto Colombia, Atlántico. During this period, we registered revenue in terms of cash flow by sales of 52% higher than what we registered same quarter previous year, for a total increase of revenues of 41%, explained maybe, as I mentioned previously, by the signature of this partial plant at Ribera Mallorquín. This added to the expense reduction gives us a result -- an improvement of 12% in terms of net cash flow, which is very significant if you bear in mind that during the first quarter of the previous year, yet we didn't evidence the impact of the economy in terms of the pandemic revenues of the P&L increasing 23% during the quarter, mainly explained by the appraisals of Pavas in Barranquilla assets, which reflects good dynamic of the housing sector in this moment. EBITDA for the period is negative because of the payment of the total land taxes for this year and difficulty of the structuring at the beginning of this year. I wanted to highlight the specific point or I want to emphasize at this point because we want you to understand that in order to access these important discounts that make all financial sense, what we do in the real estate business is paying the totality of land taxes for the real estate assets for all 2021 since the first quarter of the year. And obviously, this has an asymmetric effect in terms of the asset performance, cash flow and sales that have a better and more stabilized behavior for the rest of the year. Impact here in the real estate business, we have a net revenue of COP 79 billion for the growth of 7% year-after-year, while the nonoperational revenue was COP 54 billion, decreasing 5%. EBITDA for the quarter was COP 38 billion and presented a reduction of 9% year-after-year. Nevertheless, after adjusting revenues by these investments, the operational net revenue and EBITDA grew at 1.4% and 0.5%, respectively. In terms of these same assets for the quarter, the net -- the operational net revenue and EBITDA reached pre-pandemic levels. It's a very good result, considering the mobility constraints that still are applicable in many of our cities. During the quarter, almost 38,000 square meters of assets were renewed and 50,000 were commercialized. The dynamization of shopping malls mitigated the drop in sales that reached a minus 7% compared with same period previous year, with an alleviation reduction of 56% compared with fourth quarter. In terms of logistic parts and the mini storage assets, the fund was able to grow its revenues year-after-year within 8.2% and 20%, given the dynamic -- or a better dynamic of better occupation. Finally, Pactia continues seeking for opportunities of capital recycling through the sale of nonstrategic assets. At the end of March this year, we have insured COP 33 billion in terms of these investments. Moving on now to the consolidated results of Grupo Argos on Slide 14. We can see the combined effect of the performance of our businesses during the quarter. Revenues reached COP 3.7 trillion and growing 3% year-after-year. But it's even more important, the effect in terms of -- the effect, given that we dropped the lines of the P&L and that evidenced the value of the operational efficiency that have been achieved by the business group EBITDA, excluding revenues. But this investment of Odempa in 2020, we were at 15%, for a total of COP 952 billion in terms of net profit. And net profit grew 382%, reaching COP 74 billion during the quarter. I want to emphasize once again, in fact, that we are comparing first quarter 2020 with a very good behavior and with a very strong growth with a very good quarter 2021. Because of this, it is so relevant. Next slide, we can see the contribution of each one of the businesses in terms of consolidated revenue, where we highlight the growth of the cement business and the energy business that compensates the impact in the business -- in the airport business. The contribution for each one of the businesses to the consolidated EBITDA was relevant in order to impose the pro forma increase of 15% that has already been mentioned. We want to highlight the growth of more than COP 100,000 -- or COP 100 billion in the cement business. The cash generation, part of operational results has been partially invested to reduce the consolidated leveraging that during the last 12 years decreased 7% for a total of COP 17.4 trillion. This reduction has been led jointly with a profile restructuring in terms of the debt profile of the business group in order to prolong the due dates, reduce the short-term commitments and use to our advantage the favorable rate environment that we have. In this slide, we want to highlight a reduction of 37% year-after-year in terms of financial expenses that drove the increase of the profit that we achieved this quarter. At a separate level, we also registered a pro forma revenue, EBITDA and net profit during the period. The revenues reached COP 489 million and grew 15% year-after-year when we eliminate the non-recurrent revenue registered in 2020 by Odempa. This investment's EBITDA was COP 132 billion, with a pro forma growth of 19% and a net profit close to COP 118 billion, with an increase of 35%. These results as well as the consolidated results confirm the power of the operational leverage and the importance of financial management that allowed a reduction of the interest rates in order to leverage the significant growth of the net -- of our net profit. Now moving on to analyzing the evolution of expenses separately for Grupo Argos. Since 2017, the expenses that correspond to the holding operation has dropped, on average, 11% per year, reaching a total of COP 85 billion in the last 12 months' period, in which close to COP 18 billion respond to depreciations and amortizations that don't represent a cash for the company. In other words, the cash expenses incurred by the holding during the last 12 months added a total COP 67 billion, which would be equal to a net present value of the total company's overhead close to COP 670 billion if we use a multiple of 10x. These expenses are equal to 0.3% of the cement assets, energy assets and road and airport construction assets that are administrated by Grupo Argos. Conventionally, the expenses of Grupo Argos are evaluated in unified metrics. Nevertheless, by the particular nature of this holding, the urban development business expenses should be beared in mind -- or should be beared in mind separately. Bear in mind that they have already been incorporated with the net present value that we assigned to that business unit in those prices done by a third party. This means that the net present value of the assets of the real estate business have already, within their quantification, a discount of that overhead net present value for that business. In the right side of the slide, you will be able to see the detail of the expense for our urban development business that registered expenses close to COP 45 billion a year that have already been incorporated, as I mentioned before, as a lower value of the appraisal made by Colliers. It's because of this that we should not include as a higher value of the overhead of Grupo Argos because this would be subtracted twice. It's also important to highlight the expense of the urban development business is composed mainly by COP 24 billion of land taxes, close to COP 10 billion of surveillance and maintenance for those assets and only COP 12 billion in terms of administrative expenses. I also want to note that the expense at equipment over the administrative assets is close to 0.5% and has produced 0.3% when we exclude the different expenses different from administrative overhead. This is a number that's significantly lower than what has been charged by different real estate managers in Colombia, which are charging close to 1.4% of those assets that have been administrated and that positions ourselves as an efficient, attractive and competitive manager for real estate assets in the regional market. The separated debt of Grupo Argos closed the first quarter with COP 1.6 trillion with a debt profile, of which 92% of the credits are due after 2023, which grants a larger financial flexibility to the company. I want to highlight that the cost dropped 4.7%. It's a historically low level with a reduction of 230 basis points compared with the cost of the debt that we had in March 2020. The previous evidences the strategic financial management that was set by the group during the last year in order to reduce its financial costs. The different debt multiples are coherent with our credit rating that in the last days was reviewed by Standard & Poor's, which, after its analysis, improved to a positive outlook and maintained the AA+ rating. The improvement in the outlook, it's a clear signal of trust in the organization. That's mainly based in the timely implementation of the shock plan that we implemented the previous year, the reduction of those expenses and costs and the strategic diversification, access in capital market with structures that have been innovative and efficient, such as debts and the credits that are linked to ESG that we will also be mentioning further on. Moving on to this aspect. I wanted to emphasize on the fact the credit -- the ESG credit that has been signed with Bancolombia for COP 392 billion. It's an operation that represents a milestone and a corporate financing innovation, which modifies the existing debt condition in such a way that its interest rate could drop up to 100 basis points if 2 sustainability indicators are met by the business group. The first one is increasing the participation of women in leading positions and understood as people that are levels G-14 and higher to 35%. The second indicator is a commitment of reducing the greenhouse effect gases within 37% by the year 2030. This transaction, done by Grupo Argos, added to a similar operation that was announced on the cement business in previous days and -- plus the green bonds that we have been investing in Celsia reinsures the leadership of the business group in adopting financial schemes that are sustainable for the region but also prove the real, explicit commitment that the company has in terms of environment, in terms of social and corporate government. In addition, this is a clear example that acting responsibly is a good business, understanding the reduction of interest could reach close to COP 8 billion during the life of that credit. We keep on working on similar innovations, given that an organization accounts with more than COP 17 trillion of consolidated debt. These types of value generation mechanisms are very important in terms of magnitude to simply -- just simply to have an idea, a saving of 100 basis points of consolidated debt represents close to COP 170 billion less in terms of interest per year. During the quarter, [indiscernible] we also made relevant investments in terms of our environmental solution and government strategy, including the announcement of planting more than 1 million trees that will be done through mechanisms of the Grupo Argos Foundation that add to more than 8 million trees that have been already compensated by the business group. Besides, we want to highlight a new financial support line for our more than 9,000 suppliers that deploy more than 500,000 people, from which 80% of them are micro, small and middle-sized companies with a sustainable factoring alternative that we have structured with BBVA for them that will help them care for their employment and strengthen their businesses in this moment. These types of factors are the ones that commit the execution of Grupo Argos, not just to generate sustainable financial value but also to positively influence in the performance of our allies and in the preservation of labor in Colombia in a specific treatment for the moment. Now I want to speak about the stock price of Grupo Argos. I want to mention the behavior of the stocks in the stock exchange, which hasn't been coherent with the results of the company and, in our opinion, don't reflect the fundamental value of this organization. In order to analyze the price of the stock discount, I want to invite you to see a slide that's found in Slide 24. In Grupo Argos, we believe in the capacity of growth of our free cash flow of our businesses, given the different dynamics that we have previously presented and the capacity of our human talent in order to manage this efficiently. This cash generation supports the vision that we have in terms of fair present value of each one of the investments and of its growth potential in our portfolio. In our role as strategic architects and asset management grower, we have the capacity of rotating portfolio and these investment assets for a full value, as we've done several times, the case of this would be the port business, in order to destine resources to other investments. The value generation will depend on the expectation of each investor, but ours is that in the value market, our investments in listed assets, which represent the majority of our portfolio, are currently negotiated at a very representative discount if we compare it with fundamental value. Well, we analyze it from value perspective. From a market analyst point of view, which based the objective prices with future cash flow generation perspective, we see a discount between the value of investments within our market price. And the consensus of these analysts closed with 14%. Besides, of this broad discount between the recommended value of those analysts and the market value -- or larger value, the market is incorporating in the Grupo Argos price and the discount that we know as arbitrage discount. This is explained by the difference between the stock price of those investments listed by Grupo Argos and the value of the asset of the staff of Grupo Argos. Low liquidity of the Colombian market and the inefficiency of the market could be some of the factors that could have led to the amplification of this discount. It's going to a figure that's close to 20% in November to 29% currently. When we combine both discounts, internally, we see a broad potential of -- appraisal potential higher than 48%, which led to approve a program of repurchasing actions in 2020. Today, we're still seeing this option, based on these current prices, one of the most attractive uses of our capital towards the future. But nevertheless, and we have previously discussed this, the pandemic -- unexpected pandemic and its impact in the businesses and cash flow led to this responsible decision around our cash flow with the end of guaranteeing sustainability in long term. In other words, yesterday, an investor could purchase in preparation ordinary stock at COP 11,000 and COP 9,000, respectively. In the market, the price is COP 14,000 out of COP 20,000, which means a discount of 29%. This, assuming that the non-listed assets would be available for sale, according to ledger values. And in addition, there's also a discount compared with the recommended value by the analysts of these sort of investments, which offers an appraisal potential even larger and long term. And it's a great opportunity for the marketing of our company. From a cash flow perspective, I consider that it's important also to clarify, as we have previously explained, that we had visualized a stock reacquisition program at the beginning of 2020. The effects of the pandemic in year 2021 led to rebalance the incoming and outgoing flows in order to keep our primary super EBIT in terms of cash flow. These decisions led to postpone the reacquisition stocks and propose our shareholders a dividend that might be taken cash, partially cash and stocks or completely in stock in order to keep this -- or maintain this primary super EBIT in order to guarantee the flexibility and sustainability of the company. It's also important to highlight the effect that the cash received by Grupo Argos comes mainly from dividends paid by its businesses and that during 2021, the company will receive less dividends that correspond to the impact of the pandemic in 2020. This investment focus of the defined leverage from Grupo Argos towards our businesses, where we analyzed the forecasted cash flow for the rest of the year. With the objective of maintaining a stable capital structure, the company decided to pay a dividend, a cash, or cash in stocks or all in stocks, as we mentioned before, satisfying the preferences of each one of our groups of shareholders simultaneously maintaining the [indiscernible] of that cash flow. In the short term, we also see a -- with an optimistic view, the increase of the favorable conceivable cash flows in order for Grupo Argos to retake its investment fundings. It's also important to highlight that the results that have been shown by the businesses will be the enablers of this investment first quarter of this year. The operational cash flow for the group was COP 570 billion, growing at 85% year-after-year, being this the foreground of that cash that will be further on reflected in the separate cash flow for Grupo Argos. Finally, the performance of our businesses, its cash flow generation capacity. Even during these challenging times, the economic reactivations in other regions where we're present and the talent and capacity of our human team in order to present, making or achieving sustainability that serves as leverage for the business, fuels us with enthusiasm and leads us to keep on tracing this path in order to strengthen that return over the investment, with long-term vision for assets with the selective growth and profitable for our organization. We keep proving that Grupo Argos is a solid organization, coherent organization with this purpose and aligned with the fact of developing transformational processes and driving the economic and social progress in the sectors we participate and that today count the fundamentals -- not just solid fundamentals but also very positive fundamentals for the future. Before ending, I consider also important to mention latest events in Colombia that have led us to make this call around trust, around dialogue, around certainty in order to solve [indiscernible]. We trust that this dialogue will be made in order to [indiscernible] consensus through constructing a collective view that respects life and respects healthy co-inhabitance between our citizens. Within our business group, our optimism is still intact. And we'll keep on working with all the energy, with all determination and in a decisive manner for our country, for all Colombians, focused in a sustainable value generation for our interest groups. So with this, I want to thank you for your presence. And I will open now for Q&A for any questions or queries that you might have.

[Operator Instructions] I have the first question. First question comes from Rodrigo Sanchez, Corredores Davivienda. Do you have any estimation that you could share with us about the financial impact that the CemArgos investment will have in the Grupo Argos results?

Yes. Just let me give you context. And afterwards, Alejandro can proceed with the answer. The assets that we have decided to disinvest on corresponds to 24 concrete plants that are located in the metropolitan area of [indiscernible] for a total of $180 million, plus inventory adjustments. Another adjustment [indiscernible] between $3 million and $5 million. These are equal to a multiple, as we have previously mentioned, close to 10.6x for the EBITDA of the last 12 months. So this is a value generation operation from disinvestment optics. But this has a very important rationale we find on this behind this decision, and it goes as follows: The vast market, it's a market where the company doesn't have a vertical integration with cement supply as it does have, for example, in the Houston, Southeast of the United States; in Florida or in South, North Carolina and Virginia; the Georgia also. Given the situation and given the different dynamics that the market presents makes a lot of sense of making these disinvestments around these numbers with their -- and besides that, no value due to vertical integration and using those resources in order to deleverage the balance and simultaneously reduce the invested capital in the cement business, which also confirms over -- return over capital. So making this decision -- let me give the word to Alejandro.

Thank you, Jorge. Two things that I consider that are important and coherent with the answers that we heard in the cement business in this conference call is to make sure that the business has not yet been closed and to make sure that the cost structure -- you need to make certain adjustments. In this moment, there is no specific calculation for the determination of the profit or determining the profit. But nevertheless, I wanted to highlight 2 very important things. First is that both in Argos Cement as Grupo Argos, this disinvestment impacts the operational revenue of this investment. Second is that, from a cash point of view for cement, it's a disinvestment according to what Jorge mentioned. Practically, all this will be cash for the company. As they have mentioned before, there's a reduction, a leverage reduction, a very important leverage reduction. Let's remember that the ratio estimate is going from 4.05 to 3.75, which also affects the consolidated indebtment of Grupo Argos that follows this reduction. And the measure of this profit that -- this is going to be a very important profit both for cement as well as for the group. It will have a positive effect over the EBITDA. So that consolidated leverage ratio of Grupo Argos level will be also important. This is a bit of the answer and also what was also answered in the Cementos Argos conference call.

Second question comes from Juliana Aguilar Vargas, Bancolombia. She has 2 questions. First, concession. Both of them have construction business. The group had an effect due to the demonstrations happening in the country. And second, can you speak about that process of a business partner that you seek?

Well, thank you, Juliana, for both questions. This gives us a possibility of explaining both processes. I'll ask Mauricio Ossa, who's with us. Maybe you could answer the first part of that question? And afterwards, we could tell a little bit about the vertical process that we're following looking for a business partner. But yes, Mauricio, we could start with you. Maybe speaking about the demonstrations that we've been seeing in the country?

Good morning to you all. Thank you, Jorge Mario. Effectively since 28th of April and 9th of May, there has been certain effects in the traffic fill in the roads. That has been more associated or mostly concentrated in the demonstrations done in the coffee region. It have the mobility of individuals within that territory. There has been some partial shutdowns in [indiscernible], but not as much in Pacifico 2 and [indiscernible]. We had a very specific situation that was June 28, 29 and 30. [indiscernible] we closed just due to precautious try to avoid any demonstrations what we understood that situation was already under control and that the fit was low, we have reopened traffic. So we did have a surge effect according to those days. In the case of Autopistas del Café, we had a drop of 60%; in Tunel de Oriente, 20%; in Pacifico 2, 40%; and [ Malla Vial del Meta ], 40%. The important thing here is that we're speaking from the 28th of April to the 9th of May. What has happened, since the 9th of May, the demonstrations have reduced is that traffic has come back to its normal numbers. That have been mentioned during this call. So we could say that the effects happened during that period of time, but traffic is back to normal. It's also worth mentioning, Jorge Mario,if you allow me. In the case of Autopistas del Café, that's where we had our strongest drop, it's a minimum guaranteed revenue. And we are far away from that minimum value. But in the case that we have a volatility, we do have that guarantee. In the case of Pacifico 2, it's a collection differential. In the case of Tunel de Oriente, it's a minimum expected revenue. So this type of situation, if they would prolong in time and this didn't happen because it just took 12, 13 days, this would be hedged according to the way the contracts have been specified. So yes, Jorge, I believe that this would be my answer.

Well, perfect, Mauricio. I could introduce the second part of the question. We've not previously mentioned in other meetings, the interest of counted with a strategic ally that can support us or help us in the concession business, not just supporting us in materializing those value thesis given the generation capacity that we have in our current assets, but also in the expansion of the concession business and infrastructure business not just in Colombia, but in the Americas. The Odinsa concession business has developed a very powerful portfolio balance between assets construction, operational maintenance and a very important group of assets in order to develop within structuring. But besides that, we are also facing very important moments in the region more -- further than the specific situation that we're facing nowadays in terms of the growing needs of infrastructure. So this makes our view to potentialize the long-term. The 2 paths, one would be associated with a business partner that can contribute with capital, capturing on time those growth opportunities. But second, also to remunerate properly the competitions and the management of those assets that the group has and there are parts of the way we've managed our human capital, similar to what has happened in private capital funds as remuneration for the exceptional performances of assets. These 2 strategic levers have led us to explore paths [indiscernible] that, and I must say, not just the assets that the company has, but the growth opportunities, the reputation and the quality and capacity of efficiently administrating the assets are very attractive for many international investors. And we've received -- or we've actually received interest of a very important group interested in participating in this. We are open. This is a competitive structuring process. But with a very favorable core [ ground ] implies, having a business partner, but we will still maintain the control of the assets. And Grupo Argos should have value levers, not just for this investment revenue, but also for handling these areas. So we have been advancing in the rightful path. There's nothing concrete yet. But I should say that there's a very strong interest from the other party, and this reassures 2 things. This reassures the power of the assets, the recognition of Grupo Argos, its capacities of managing international assets and the track record that we have as an organization in tracking and constructing asset networks as we've done in our businesses. So we are definitely optimistic. We're enthusiastic that this step will sound to be happy, and so I don't know if Mauricio, or Pablo, or maybe Alejandro would like to mention anything in addition?

Thank you, Jorge. I believe nothing else to be said. I believe your answer is more than right.

A question from Corredores Davivienda. How time do we believe that we will reach a point of equilibrium in the airport business? Very good question. Thank you, Rodrigo. Who wants to answer this question? Mauricio?

Thank you, Jorge, Rodrigo and pleasure with you. There has been many updates of traffic projections. We've also had the possibility of sharing this with you all. The most recent grabs -- the most up-to-date grabs that don't even collect the dynamic of the markets -- Asian markets or the United States markets have been showing, which prove a recovery or show a recovery understanding a total recovery reaching the traffic that we had in 2019, it's probably at the end of the next year. So probably at the end of 2022, in terms of national/international passengers, we will be reaching those numbers, explained by daily or monthly performance, not accumulated yet, but we'll reach an indicator 2 or 3 important data here. In March, international traffic of El Dorado Airport was 63% of March 2019. So this means with the current condition, is being able and we hope that from here to the end of the year, should be recovering 2/3 of its traffic. The other 2 data with the previews from this phenomenon of people traveling to get their vaccination or previous from the United States opening their borders. The usage factor of available seats is over 85% for national flights, and for international flights, over 75%. So those indicators are the ones that determine the regularization of the historic numbers that we had. So the answer is that, at the end of 2022, we're expecting to reach that normalization stage. Today, the traffic recovery within the United States is reaching 80%, and this would be for April. I also believe it's important to mention [indiscernible] that the global industry of air traffic can -- airport traffic has been [Audio Gap] By rating companies. They have a very positive outlook. According to Mauricio, it's a generalized process further than the actual situation. Just -- doesn't just affect health situations or health -- but the daily or monthly average is showing a very positive recovery, mainly in national traffic. And national traffic is reaching 70% of the historic numbers that we had. So at the end of 2022, 2023, we should be recovering the traffic that we had previous from the pandemic.

Okay. We have a question from [ Hydro Astra ]. He wants to ask about the repurchase program announced by Grupo Sura and Grupo Nutresa, and position that we have over that program. If we would participate or not? So in the participations that we have over our investments, being like this, but do this liquidity, reducing the [indiscernible] of Grupo Argos? So we purchased stocks? He's asking about the ROI of the group has been dropping. And he said that EBITDA is negative. If we have considered reducing invested capital?

Thanks for your question. I believe it's a very deep and interesting question. I'll be as direct as I can and as clear as I can. First part, if we think on or we have an intention of participating in the reacquisition actions, we have not yet thought about participating. We believe -- we do believe that these investments, only the ones we have in the portfolio, the cement portfolio, energy portfolio, concession portfolio we have in Grupo Sura, Grupo Tesa, our result positions with very important growth dynamics with all the businesses. And that offer valuation possibility, a very important valuation and possibility for the future. Second is that those investments have allowed Grupo Argos to reach 2 very important strategic facts, long-term profitabilities that exceed a 14%, 15% in CAGR return long period. Obviously, the task of the investments of the variable profit investments and those cycles that affect price loss in a certain moment. But when you look at this long term, we're just completely convinced of [indiscernible] value of diversification of Grupo Argos' numbers in the strength of the Grupo Argos cash flow in the effect of supporting those cycles that are synchronic in our investments, and this has a very huge stability value for the group. This is recognized between others, the rating companies and also U.S. analysts. So to be frank, to be direct, we believe that these are investments that fill us with satisfaction that we believe they have a very strong valuation potential. And we announcement [ I just read ] about the decoupling between fundamental value of Grupo Argos in respect with the market, I would say that's the first outlook to the importance of certain actions that we have been taking. More specifically, that in Colombia, we should follow [indiscernible] of the capital market to alleviate functions -- to have a market expansion towards other markets [ seen ] in Peru for the best to be broaden for us to eliminate cost restrictions or cost constraints. And that considering that I made for Grupo Argos, that could extend to other of these investments, not just like in cement, or Celsia, or Grupo Sura or Grupo Nutresa. So in summary, we believe that these are strategic investments that are very important due to the function that this [indiscernible] Group for its strong profitability long term and because effectively, the value generation perspectives are more attractive than the long-term investments -- in the short-term investments, sorry. As we mentioned before, the dynamic of Grupo Argos, in its different operational businesses, such cement, energy and concessions, which we just saw, have had a very important impact, really important impact, but the actions taking the shop plan have proven their results. And this has been supported by a recovery in the numbers that leverage and we start the efficiency, potentiates the cash flow and that progressive recovery in that primary surplus is what has allowed us to increase profitability, reduce indebtment long term, keep a better value generation, leveraging the performance of our companies, our [indiscernible] business. So we do believe in these investments. We do believe in the power of these businesses. We do believe also in the fundamental value very, very, very, very superior that what we see in the markets nowadays. So for the moment, we will not be participating.

Steffania Mosquera from CrediCorp Capital she ask, she wants to understand the difference between the results of the road concessions, understanding that the majority of the cases, of the volatility of the income is low because it's not just spending on traffic. So why is there increase year after year on the tunnel if the traffic dropped in that same period?

Mauricio, you want to answer this question? Or Pablo, you want to answer this question?