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

Good morning to you all. I want to thank you for your presence today. This space will be focused on presenting the financial results for Grupo Argos at the end of the second quarter 2101 -- 2021; sorry. We'll have QA session at the end. We have Jorge Mario Velasquez, President of Grupo Argos; Alejandro Piedrahita, Vice President of Strategy and Corporate Finances of Grupo Argos; Rafael Olivella, Vice President of Talent and Corporate Matters at Grupo Argos; Mauricio Ossa, President of Odinsa; Maria Clara Aristizabal, Manager for the Urban Development Business; Pablo Arroyave, Vice President for Corporate Finance in Odinsa; and [ Clina Urtado ], lead manager for Pactia. This teleconference is being translated into English simultaneously. I also want to remind you that in our website we have all the quarter information together with the presentation that we'll be following during teleconference. If you download it, you can access the financial information menu and afterwards the report section. I want to invite you to move on to Slide #3 in order to start this teleconference. And I will give the word to Jorge Mario Velasquez, President of Grupo Argos.

Thank you, Natalia. Good morning for everyone. Welcome. I want to thank you all for being with us in this teleconference in order to share with you those fruitful results that we've had for second quarter 2021. I wanted to begin by making a brief summary of the efforts done by the business group in order to drive the reactivation economy process, protecting the life of our collaborators, which is high priority since the beginning of this pandemic, but also protecting those people that are part of our value chain. Without no doubt, the effort that we've done during this last weeks with the support of [ Andi ] and through the programs offered by the national government allowed us to contribute with the vision of optimism and hope in order to advance the economic recovery and keep mobilizing the economy. I'm proud to inform you all that today close to 8,000 collaborators that belong to our organization in Colombia have at least one dose of the vaccine, which corresponds to 86% of the country's population, including those that are benefited by initiatives driven by the company, and also by the national vaccination plan led by the national government. The number of live doses reaches 10,400 people in the 18 geographies we are -- where we are present, and 79% of the total population belonging to the business group. In addition, this benefit is being extended to more than 3,600 collaborators and contractors in our cement, energy and construction businesses. Our vaccination plan has allowed us to advance in each one of our businesses which summed with joint effort of all our human team, which for more than 1 year has been able to optimize and make our operations more efficient in a challenging environment allows us to present results that prove a new recovery cycle in which we closed a quarter with important growth in terms of profit. During this call we'll drill down to the financial results. But I'd like to say now that the benefits of the operation lever of the business group for the second quarter of this year is clearly reflected in an EBITDA of COP 1.3 trillion with a growth of 2 digits compared with results from 2020 and 2019. Net profit of COP 392 billion for the period, growing more than 400% compared to the growth we had in 2020, and growing 63% if we compare this with 2019. Even when we exclude the extraordinary profits, nonrecurring businesses such as the disinvestment in the Dallas concrete business [indiscernible] we closed June with an optimized capital structure, thanks to a reduction of more than COP 1.5 trillion [indiscernible] in the consolidated indebtment which gives us a larger financial flexibility and allowed us to drive the site that a reduction in the financial expenses close to a 20% if we compare this year after year. Now I want to invite you to go over the cement business results. In June, we were able to close the sale of 24 concrete plants in Dallas. We sold them to SRM Concrete for more than $184 million after complying with the [indiscernible] conditions and were -- and given that there was no objections from the United States regulator. The resources generated by this disinvestment allowed to accelerate the deleveraging process of the company and capturing value from a set of assets that were not integrated to a cement supply network due to its distance and transportation costs to the Board of the company that is located in the city of Houston. This disinvestment joined with the operational efforts to maximize the cash operations led to the goal that we had in terms of indebtment reduction that went from COP 7.8 trillion in June 2020 to COP 6.3 trillion in June 2021. This 20% reduction is equal to more than COP 1.5 trillion compared to last 12 months, which clearly improves the competitive position of company, reduces the interest payments, directs the cash generation in order to generate value, and accelerates the goal that we had initially said for December 2021 where we wanted to reduce the net debt indicator over EBITDA to 3.1x. Under this same line, the company keeps on innovating in efficient financing mechanisms aligned to the vision that we have in our business group. Because of this, in June we closed a new credit tied to ESG indicators for COP 135 billion, which will allow Cementos Argos to reduce in 1 -- in 0.5% the interest rate in the case that we reach the goals and conditions that we have previously agreed. Additionally, during the second quarter of this year, we started the operation of the -- of [ queue #3 ] which -- in Cartagena -- which will allow an additional production of 360,000 tons per year in order to strengthen the exports towards the United States, Central American and the Caribbean. CapEx for the reactivation of this line reached COP 13 billion, which is equal to less than $10 per ton. While the development of last Greenfield projects in the region has been around $350 and $400 per ton. This means that this is an additional capacity at a very low reactivation cost. The increase in our export capacity in Colombia, besides the install capacity we have in the United States makes us a relevant actor in order to attempt the growing demand of cement of that region, which received a drive in these last days given the infrastructure plan that has been approved by the Senate and that corresponds to a federal investment, actually one of the most important federal investments in terms of roads, bridges, and railways in decades. According to the analysts, this project will require 30 and 40 million tons of cement distributed in the next years that will reach close to 100 million tons per year. Moving on to the operational plane. Cementos Argos presented a growth of 42% in the cement volume compared to the second quarter 2021, and a 9% if we compare this to the same period 2019. We yet had no effects due to the pandemic. Through this year the sales volume has continued in a growing path in which the increases in the United States, Central America and the Caribbean during the second quarter compensated and increased the effects of those dispatches in Colombia due to the national strike. The good dynamic in terms of volumes together with the price stability has translated into a revenue increase of 16% and an increase of 26% in terms of EBITDA when we eliminate the [indiscernible] effect that generated the Dallas disinvestment in the results. The largest growth in EBITDA shows the operational efficiency of the company which allowed us to close the first quarter with an EBITDA margin, an adjusted EBITDA margin close to 20.2%. I wanted to highlight that this is the highest margin that we have recorded in the last 8 years of operations in the company. Now I want to invite you to check the energy business in the upcoming slide. During the quarter we saw with optimism the results in terms of distribution and commercialization. We keep advancement with relevant investments and focused in the experience of our customers and clients. Only in the Department of Tolima the investments allowed us to reduce the service interruptions during the first quarter in a 35% in terms of its frequency and 13% in terms of its length compared with the same period last year, year in which we acquired the Tolima assets. In addition, the discipline in the portfolio management and the good quality of the service were translated into a collection for the whole operation of 98%. This is a more milestone if we bear in mind the impacts of the national strike and those in Valle del Cauca, that's the region where the company operates. In energy generation we want to highlight the investment in the thermal electrical project construction, El Tesorito, that accounts with an execution higher than 50% and could start its operations March next year. In addition, we ended the construction of the Celsia plant, La Paila, a project with a generation capacity of 9.9 megawatts that will supply the energy consumption of the industrial plant of Columbina, located in Valle del Cauca. And we advanced in the construction of the solar projects in Prudencia also of 9.9 megawatts which is located in Dos Mares, City Panama that will start its operations in the upcoming weeks. At an operational level, during the quarter we recorded a growth of 39% year after year in the generation and 11% in commercialization. This results prove the resiliency that Celsia has and the power of its portfolio. It's also important to highlight that the average price on the stock market of the energy during the quarter was [ COP 0.118 ] kilowatt hour, which represents a reduction of 62% compared with the same period last year, which is a clear reflection of the larger water contributions of this period as well as the level of the reservoirs. This and good operational performance in Celsia's strategy in terms of contracting a great part of it's generated the energy fought back against the price reduction of energy in order to close the quarter with revenues of COP 940 billion that grew 5% compared with the same period last year. EBITDA closed with COP 313 billion, in line with that figure that we reached in the second quarter 2020. But that grows 5% year after year if we eliminate the effect it generated on that year, the option, the bridges option of energy that we had in Termoflores transaction. And it's a revenue more related to the disinvestment that -- to the operation. Now I want to invite you to go over the results of the construction, the road construction business. In road construction in airport -- road and airport construction Odinsa closed the quarter with a frank recovery. During the period Fitch ratified the AA- rating for the company, bearing in mind its positive perspective of cash flow generation leverage in a balanced portfolio. The same perspective was evidenced at an asset level with the refinancing of the debt in American dollars for the Pacifico 2 project, which will allow the construction to access a lower interest rate, product of a lower asset risk that's finalizing or almost already ended its construction phase and starting its operation and maintenance phase. During the quarter Odinsa maintained the growth trend in terms of revenue and EBITDA that has been recorded last year, that obeys to the growth in vehicle and passenger traffic in the airports. Revenues close in COP 234 billion, and the EBITDA close to COP 137 billion with an increase to 55% and 49% respectively compared to the same period last year when the confinement measures due to COVID-19 were significantly more strict. When we compare the results of this quarter with the same period 2019 in order to eliminate the base effect of 2020, we also see a growth of 17% in terms of revenues and a 4% growth in terms of EBITDA, which confirms the immense operational and efficiency effort that has been driven by the business. Currently, all the roads operated by Odinsa are operated in normal conditions with a traffic that exceeds the previous records we had before the pandemic, and that in June reached 117 vehicles average day. And here we want to highlight the performance of Tunel de Oriente which depends in great measure between the traffic -- of the traffic between Medellín and the International Jose Maria Cordova International Airport that has not yet recovered fully, that recorded an operation level of 29 vehicles to 9,000 vehicles per day on June. I wanted to mention that in a certain days we've reached 32,000 vehicles per day. The airport segment closed June with 2.1 million mobilized passenger. This is a behavior that exceeds the recovery forecast that we had, but still represents a reduction of 37% compared with June 2019, meaning by this prepandemic period. In order to have a reference, the expectation from the air transportation national association, IATA, was that the traffic of the airport segment will keep itself in 60% under the pre-COVID level up to the end of 2021. And this expectation has already been exceeded in the Odinsa's airports. Moving on to the real estate business on Slide 11. We wanted to highlight that the net cash flow was increasing in 91% compared with second quarter 2020 and more than 100% in what has -- in this year. Even considering the execution of those works that we're developed in Barú we have a positive flow. This means that during the quarter the business paid the totality of its expenses and costs, including property taxes that are paid in a dissipated manner. In respect to the sales revenues recorded on the P&L we -- this quarter we transferred 5 lots in Barranquilla for this under the macro project Ribera de Marroquín which represents an increase of 781%. We also want to highlight that in 2020 we registered the appraisal of this land lot's contributing to the EBITDA of the second quarter last year, a total of COP 24 billion. This means that the profit of this transaction was mainly recorded last year. But even though this happened, we have an EBITDA increase of 4% this year. Additionally, in July, we reached the first point of equilibrium for the first stage of the Casablanca houses, [ starting point ] for the effective revenue. In terms of the contributions we had for this project we want to highlight the good results on cashflow, the materialization of the Mallorquín -- Ribera de Mallorquín project into the P&L. The beginning of the compliance of the agreements in the -- with the Barú communities, the employment generation due to the works, the high level -- high levels in Barranquilla and the reactivation of tourism lead us to be optimistic towards next months. Now I want to invite you to check on the next slide the results of the real estate rental business. Effective gross revenue was of COP 81 billion, growing at 43% year after year, and the EBITDA for the quarter was COP 36 billion, with an increase of 71% year after year. It's also important to highlight that the fund administration during this month -- for this year, we renewed close to 93,000 square meters, and we commercialized in terms of rentals and sales close to 146,000 square meters. As a result of these efforts, the portfolio occupation without including hotels closed in 91% for this quarter. And when we include hotels that have a lower occupation today, the result is of 88%. From this occupation, we want to highlight the first multifamily housing asset, known as 850 Living in Miami, which reached an occupation of 92% in its first semester of operations 9 months before forecasted. The fundamentals in terms of occupation and transits for shopping malls have been improving with the elimination of the mobility constraints in the country. For the first semester, traffic and sales grew 47% and 33%, respectively, compared with the same period last year. Finally, the fund keeps seeking opportunities where we could recycle capital due to the sale of nonstrategic assets or mature assets. And at the end of June 2021, we have ensured more than COP 48 billion of this investment close to a margin of 4%. Now I want to invite you to go over the slide that has results to Group Argos, this is found on Slide #14, where we can see the aggregated effect and the positive performance of our business in the first quarter. Revenues reached COP 4 trillion during this period and COP 7.8 trillion in the year's accrual, which represents an increase of 11% compared with the first quarter 2020 and 2% compared with period 2019. The higher sales level was translated into an increase of EBITDA that closed in COP 1.3 trillion during this quarter and COP 2.3 trillion this year, even eliminating the fan-out of the Dallas concrete operation disinvestment. Operational results grow in comparison with 2020 and also compared with 2019. Net profit of the period increased even more, thanks to the operational performance that the business had. And simultaneously to the financial interest reduction closing the semester in COP 583 billion, figure that's almost equal 4x the net profit that we registered in 2020. The net profit for the controller closed in COP 285 billion, exceeding the loss we had the previous year. On Slide 15 we could see the variation quarter and by quarter, seeing how the main business lines of Grupo Argos significantly improved year after year. We want to highlight the cement business with an additional contribution of COP 347 billion in terms of revenues, the concession business with COP 180 billion, and the energy business with COP 46 billion, parting with a higher comparative base in terms of stability for the second quarter 2020. When we analyze the EBITDA contribution by business on the slide that you'll find, on Slide 16, we want to highlight the important growth presented by Cementos Argos that leverages the year-after-year growth of 27%. This business, even eliminating the contribution of the Dallas disinvestment generated an additional EBITDA of COP 109 billion during this quarter. In terms of consolidated expenses, we see an increase of COP 25 billion, that's equal to 6% year after year and that the company had budgeted in order to respond to the demand growth. And so many of these expenses are directly related with the volumes that we've had in sales, in cement sales. This efficiency is reflected when we compare this with the pro forma EBITDA that grew COP 238 billion. This means 10x more than the expense increase, which confirms the drive of the operational lever which allows increasing the EBITDA in a high proportion than the revenue. We also want to highlight that one of the main catalyzers for the profit growth during the period was the reduction of the indebtment. Now I want to invite you to move on Slide 18 in order to understand this behavior. The effort in order to optimize the capital structure and achieve a more likely operation is proven in the amortization of COP 1.5 trillion in the consolidated leveraging of the organization. In terms of net debt, we closed the quarter with a balance of COP 15.9 trillion over which we'll keep on working in order to reach even higher reductions. Financial expenses dropped 20% year after year, thanks to the decrease of the leveraging of Cementos Argos, thanks also to the lower indexation rates and the strategies implemented by the treasury team in order to keep offering financial flexibility to the organization. Now I want to invite you to go over the separate financial results that as well as the consolidated financial results. We had significant growth compared with 2020 and 2019. The revenues for the second quarter closed in COP 219 billion, EBITDA COP 133 billion, net profit in COP 115 billion which represents an increase of COP 171 billion compared with the net loss that we had in the second quarter 2020. Moving on to the separate cash flow that you'll find on Slide 22, we could see the implemented strategy in order to cover that temporal gap between the received dividends and the paid dividends. As we had announced in the market, Grupo Argos paid the totality of the dividends of the year to its shareholders in April, which if it increased the cash outbounds for the second quarter, that will be reduced for the rest of the year. In order to make this payment, the company took a credit of COP 131 billion that will be paid in the upcoming quarters measure that the company receives as the dividend flows coming from all its investments. In summary, even though the result of the first semester is negative in terms of cash flow -- in terms of operational cash flow due to disparity between those paid dividends and received dividends, during the second semester of this year this behavior will turn due to the dividends that we'll be receiving where I want to highlight the extraordinary dividend of COP 55 billion that if approved Cementos Argos will pay to Grupo Argos in September. When we incorporate this credit that we have mentioned, separate debt for Grupo Argos closed second quarter in COP 1.7 trillion, with expiry dates of 85% of the credits after 2023, which grants a larger financial flexibility to the company. The debt cost closed in 5.3% and deleveraging indicators closed in healthy levels under those levels that we registered for June 2020. This strategy and the capital structure management by the company has been validated by Fitch in June, ratifying the AAA rating with a stable perspective for Grupo Argos. The rating company highlighted the financial flexibility of the organization, thanks to its capacity of accessing alternative liquidity sources. This evaluation summed with the AA+ granted by S&P on May are guarantee of the structural solidness that the company has. Now I want to invite you, go over this chapter in terms of sustainability. As the result of a disciplined management in terms of sustainability, I wanted to highlight that El Dorado Airport became the first airport in the world that has been certified as Leed Platinum in the operation and the maintenance of existing buildings by the Green Building Council of the United States. This recognition is the highest in its type. And it's only granted to those constructions that comply with the highest standards in terms of energy efficiency, efficient water consumption, waste management between other sustainability best practices. Finally, in this chapter I want to highlight with total conviction with the end of positively contributing to the main concerns that we have as a society in the second quarter we advanced in the implementation of our program, creating social value with initiatives in 3 cross-cutting lines, employment generation, strengthening of the entrepreneurial [ tissues ] and the social impact towards the most vulnerable communities. In employment generation we launched during April the alliance for employment for yield [indiscernible] more than 30 companies in Antioquia which will allow us to generate 2,000 employees and will allow to connect 6,000 people with opportunities in employment, education and training. In this front of strengthening entrepreneurial tissues, we launched a new benefit of confirming in order to offer a more flexible financial rates to more than 7,500 micro and small and middle-sized companies in Colombia that work as vendors for the business group and that employ more than 125,000 people. Finally, in terms of social impact, we drive the healthy housing program that in August will deliver improvements in floors bathrooms and kitchens to more than 40 families in La Honda neighborhood in Medellín and will do the same in June with more than 200 vulnerable families in the city. The goal of this program is to intervene close to 10,000 households in long terms. Price of the stock. After growing the operational and financial results of this quarter and after growing the sustainability performance, I wanted to mention or make a reflection in terms of the behavior of the Grupo Argos stocks in the Colombian Stock Exchange. As we've been saying and from the vision we have as administrators, the price of our stock in the market is completely unlinked from the operational reality and from the fundamental value of this organization, even separating us from the fundamental valuation that comes from the need of cash generation from each one of our businesses basing on the holding arbitrage results. So we do see a very important valuation potential or price of potential. In order to explain this reality, we constructed an arbitrage calculator that you can find our menu -- in the investors menu where each one of you can incorporate you different variables in order to calculate your value and support your investment decisions. The performance of our businesses, the talent and the capacity of our human team in terms of transcending and creating value for our groups of interest, besides the structural solidness that the business group has proven in terms of integrating to the economic reactivation is a relevant player in the infrastructure sector of the region, fills us with optimism and hope in order to keep on transforming positively the lives of millions of people through investments in operations in the businesses that we participate. For December this year, we hope close with consolidated revenues between COP 15.6 trillion and COP 16.2 trillion. A consolidated EBITDA between COP 4.2 trillion and COP 4.5 trillion and a net profit of between COP 1 trillion and COP 1.2 trillion. We want to invite each one of those that listen to keep on trusting in our country and to share this optimism that's based on the institutional solidness, in the positive macroeconomic signals that we are identifying, in the advancement of the vaccination plans in the region that are driving a reactivation process and a committed private sector in Colombia, committed to the social, environmental and corporate governance for us. With your trust, we'll keep on driving the private sector as an essential agent in the social value generation through employment opportunities, economy revitalization and the construction of solutions that can contribute to improve the quality of life of billions of people. Thank you. And I want to give the word now to Natalia, so we could establish a dialogue, and open the space for Q&A.

Well, thank you, Jorge. I want to invite you to ask your questions through the Q&A widget. We could start with a question from Juliana Aguilar from Valores Bancolombia. She congratulates us for the results, and she asks about the airport business. Odinsa outline. If we could share with her, how have been the advancements in the second negotiation table in order to compensate those nonrecieved revenues due to the closure.

Let me give the word to Mauricio. But just to give you a context, let's remember that there was a first negotiation round where we established the compensation or the nonregulated and regulated revenues that we didn't receive between March and end of September or October of the previous year. This agreement was translated in a time extension that's binding between both parties. And we established the possibility of generating further negotiation rounds in order to analyze the growth of traffic and going into a compensation due to the same concepts. But I want to give the word to Mauricio who's with us in Bogotá. Maybe he could give us better context in terms of this advancement.

Thank you, Jorge Mario, and a warm greeting for you all. Effectively, as Jorge Mario was mentioning, the first negotiation round we established that there was going to be additional negotiation rounds. Those rounds have been installed. They're installed for each one of the airports in the country. Opain is the one that has advanced the most. And its purpose is to reevaluate the revenue composition, its 3 main components: national passengers, revenues coming from national passengers; international passengers; and nonregulated revenue. Right now we are jointly developing with ANI, the legal framework within the MOU that we've signed last year that allowed the first recomposition in order to establish this recomposition, and that will be in months, as it was the first, I missed our expectation that during the first quarter. We will wrap up this agreement due to the reestablishment of this. And having said this, the national traffic is reaching 75% of the prepandemic level. Speaking about the data we had in 2019. Well, 2019 was a pretty good year in terms of traffic. And in terms of nonregulated revenue, this levels to around 70%. And the international traffic is around 50%. This one has gone a bit slower, particularly due to the conditions, health conditions or bio safety conditions established by Europe. So with this on the table, we're seeking for a recomposition that will have as a range of analysis October 2020 up to July 2021, including July 2021.

Well, thank you, Mauricio. Rodrigo Sanchez from Davivienda asks if we consider -- if we don't have an extraordinary dividend coming from Cementos Argos Group will reach COP 9 billion of primary super average for 2021 that we had announced a couple of months ago. And aligned with this question, if we could maybe detail the sources and uses incorporated in this extraordinarily level.

Let me give the word to Alejandro so he could give you the detail of the cash flow and the different scenarios that we have established.

Well, thank you, Jorge. Basically within our estimation in terms of revenues for the group, the estimated levels that we have are COP 531 billion. Something that's important here is that from those COP 531 billion, dividends are COP 415 billion and the urban development business was close in terms of flow of COP 115 billion approximately. From this COP 415 billion as it was mentioned by Jorge, the extraordinary dividend is higher than just COP 50 billion. In a certain way, if this would be received, this is something that will be compensated prior of the urban development business that we estimate that number could be even higher is something that could be compensated. And there's another element that's very important. And that is the reduction that we've had in terms of financial expenses. But nevertheless, if you analyze this in terms of the operational expenses that we have, in those operational expenses we could have -- we could be under that number. The urban development expenses are around COP 160 billion. So the difference between both could be about COP 400 billion, positive COP 400 billion. We also have property taxation at COP 38 billion in the dividend that was paid by Jorge -- mentioned by Jorge Mario. Actually, this dividend also covers the first quarter 2021. In terms that we had to anticipate those 4 payments that we usually do COP 258 billion and some net revenues close to COP 81 billion that, let me repeat once again, could even be lower to those we had estimated at a certain moment. So in these terms we could be saying that in general terms the primary super EBIT could be around COP 20 billion. So to summarize, Fitch drew the case that we would receive this extraordinary dividend of COP 50 billion, we have 3 days today to compensate, first, a higher revenue to -- due to the urban development business. Second, in terms of expenses, budgetary expenses will have less revenues. And the other thing that we're seeing based on that interest projection that we have a reduction in order to generate that super EBIT. But another very important thing that I want to highlight that is that within the projections that we have, the leverage level last year that was under COP 1.6 trillion, we keep with our budget and we will be closing with the gross indebtment of COP 1.5 trillion with reduction goals close to COP 100 billion.

Very well. I wanted to use this question because this is a very important element that Alejandro mentioned, it's better expectations in terms of cash flow that we're having in the business. And any of the 3 cases will give us lots of flexibility. And to give the word to Maria Clara and for her to tell us a little bit about the revenue perspective for those businesses that have already been closed and the implication in terms of the revenue commitments in terms of cash that we have for the upcoming years, because I believe this is very important because the real estate business, as you know, and as we've discussed on this call, have a very important difference between the cash flow and the P&L. It's a business that's much more read by the cash flow generation, and that cash flow through time. And while we start the operations, there is a pipeline that guarantees this cash flow. So maybe Maria Clara if you could speak about the project in your own terms.

Of course, Jorge. Effectively in this moment we've assigned commitments, contractual commitments up to COP 320 billion in terms of cash disbursements, including 2021, the upcoming years because as you were explaining in the P&L we record our -- this might happen in the moment that we -- as the data we had COP 290 billion of those contractual revenues. Now we have EUR 220 billion, from which COP 150 billion will be coming this year, and that was the figure that Alejandro was mentioning earlier. I would believe that that explains a little bit the difference between our cash flow that's the element that we insisted should be watch the most closely for the urban development business. And the P&L, we are expecting that for this year, in terms of revenue, we'll be seeing more than COP 220 billion that correspond to all of those that I have already mentioned, more specifically for the [ Suramericana ] project that we are launching a second phase. And in terms of cash flow accrual, could be accelerated in terms of the company would need so that will be a fourth income that we might have. That could add to that primary supply that we have. It's very comfortable.

Okay, so let me speak about the capital structure and sourcing usage. Rodrigo also asked is what's the strategy of the holding, considering the important proportion that we have indexed in the [ IPC ] and the inflation dynamic, but also the expectations in terms of monetary cycle change in the country and in the world. And to take this opportunity we're speaking about sources and usages, we're being asked that in terms of this kind of results that we're given for 2021 in terms of the summations, when do we believe that Odinsa could pay dividends once again for our cash flow. Alejandro, the floor is yours.

Yes, this is a very, very valid question and it goes as follows. Actually, not just in terms of Grupo Argos but at a consolidated level is the measure that the capital market so important for us and many of the indexation happens around the IPC strategy that we're following is 2 senses. First is that we possibly, within the group, are monitoring the IPC hedging dynamics in terms of fixed rates in order to ensure that in front of those expectations, so we could look for mechanisms where we could link that financial cost and fix it. But nevertheless, these types of hedges are not that efficient. It's a very expensive insurance. So what we've been doing, and actually we have the closest hedge, is having a fixed rate in IPC. For Grupo Argos I fixed close to 10% of our debt to -- a 12% -- a 12-month time period. So part of the investment has been indexed for 12 months. And part of the region and something that you see in Colombia is that the inflation pressures come more from supply than from the demand side. And many times those inflection cycles have increasing impacts. But after 12, 13, 14 months are rapidly corrected. So maybe sometimes heading for so long is not as efficient and the measure that the hedging curve is not the cheapest in terms of costs. The other thing that's important that I would like to highlight that in front of the interest rate pressures, what the organizations within the business group have been working on together with all the financial vice presidents is making anticipation, [indiscernible] anticipations in order to access better interest rates based on the market conditions. This is what we did last year, which allows us to have a tool, not just for the bank credit, but also for the capital market, which actually we are performing follow-up right now.

Perfect. We are asked, by these investments of Grupo Argos if we have more projects for the rest of the year. And I'll link this to a question which are the levers that we want to reach this COP 1.2 trillion and net profit, highest one in Grupo Argos?

Let's start by the end. The levers that we've had for guidance are moved by 2 drivers. First one is the continuation in terms of revenue, EBITDA and profit increase coming from the Cement business. In the cement business it's very important effect in terms of temporality that has to do with summer months in the United States. Cement consumption between June -- between July, August, September is the highest consumption seasonal wise within the country. That seasonality accelerates between a 5% and 9% from the annual mean. And there's also a very improvement -- there's a very important growth in terms of improvement in the United States. For the third quarter, there is a very good perspective in terms of price increase for the cement business. So in the United States, it's a very good dynamic. And in Colombia and Caribbean, for example, in Honduras, Puerto Rico and the Dominican Republic, we've been seeing growth of 2 digits in the volumes of stability and improvements. Besides this, as I mentioned before, we have the expansion of the exporting capacity of cement that will totalize more than 1.5 million tons this year. Those drivers joined with an improvement with the exchange rate are very important value elements in the summations. Second driver has to do with the good expectation in terms of improvements of airport traffic, as it was mentioned earlier too. The traffic of El Dorado airport and Quito airport have been positively reacting in the last months. The totality of mobilized passengers in the 2 airports totalized 2.1 million passengers. But just in June, in the Bogotá airport closed over 2.2 million passengers, only that airport. So the trends are very positive. Quito airport is also showing a positive trend even with positive trends, which is a very important signal. If you bear in mind that the results that we're showing, when we compare this with 2019, that have growth in revenue, EBITDA, net profit, but we also need to consider that today this is a very important effect in the airport business, and that's a very important element that Grupo Argos consolidates within its financial results. So I believe that we have positive expectations, energy demand growth, growth also in terms of real estate with Ribera de Marroquín. But the functional perspectives for the cement business and for the concession business in airports, plus the consolidation that we have been bringing with are the elements that lead to these projections. And this is actually the first time we do this, but we believe that the capacity of the organization in terms of consolidating this result and having a better visibility of what's coming forward and drivers to work on this guideline.