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

[Audio Gap] Vice President of Strategy and Corporate Finance for Grupo Argos, Rafael Olivella, Vice President of Corporate Matters for Grupo Argos; Mauricio Ossa, President of Odinsa; Maria Clara Aristizabal, Manager of the Urban Development business; [indiscernible], Vice President of Corporate Finance for Odinsa; and Andre Bejarano, President of [indiscernible]. I want to remind you that on our website, we have placed all the information for this quarter together with the presentation that we will be following during this teleconference. For dial-in, you can access to the menu, financial information and afterwards the sections of report. Besides this, we want to let you know that the first time we are broadcasting this conference via Twitter Space. Now I want to invite you to move on to Slide #3 of the presentation, so we could start the meeting. And for this, I want to give the word to Jorge Mario Velasquez, President of Grupo Argos. Jorge, you might be muted right now.

Good morning to you all. Good morning to you all. I want to thank you for being with us today, sharing the results of this fourth quarter 2022 and the consolidated results at the end of this year. As you might see further on in detail, 2022 was an exceptional year for the organization, where we were able to reach the highest financial results in our history in more than 90 years of history. The consolidated results of our operations allowed us to close the year with revenues of COP 21.3 trillion, which represented growth of 31% compared with the same period last year, a consolidated EBITDA of COP 5.2 trillion with a growth of 21%. For mid side, net profit closed at COP 1.4 trillion, and growing also at 19%. Net controlling profit closed at COP 881 billion with a 49% growth. So we do feel satisfied with the consolidated results of all the businesses of the group. As you might see, the main consolidated metrics grew in double-digits. It proves just the great operational dynamic of the businesses that has been supported by a policy of efficiency that allowed to increase close to 50% the last line of our P&L in environmental volatility and uncertainty, but also with a very high pressure in the costs of raw material and more specifically, in the costs of interest rates. Unfortunately, as we've said several times, these good results are shadowed by the performance of the price of the stock. This is not an exclusive problem of Grupo Argos. But it's a structural reality of the Colombian stock market, in which shares are being negotiated with a great discount compared with other capital markets, this obviously concerns us. The company has been negotiated in the stock exchange in less than half of the value of our current value, where historically, the stock prices have been higher than the carrying value at the end of the year. Grupo Argos closed 2022 with the controlling equity of COP 21 trillion, which is equal to COP 24,200 per share, while the [indiscernible] capitalization of the company closed with COP 7.6 trillion. This same discount is also evident from an operational optic. In the graph at the right side of the screen, in this slide, we can see the evolution of the EBITDA that during the last 10 years tripled going from COP 1.6 trillion to COP 5.2 trillion. In that same period of time, the market capitalization dropped to less than half. Obviously, this is a great decoupling. We faced this reality and we keep -- making projects a priority that can help us to close that gap between the fundamentals of our businesses and the price of the share market. In this slide, the Board of Grupo Argos and its different companies, such as Celsia, Cementos Argos decided to place under the consideration of the shareholders and the authorization to make a reacquisition of the shares for an aggregated amount for all the companies that could be over COP 1 trillion, if it's approved. We're convinced that the price by which the shares have been negotiated in the Colombian stock market is far away from the value of the company. By which -- with these measures, we reassure our conviction and trust of the business plan of Grupo Argos and if all the companies that are and are not in share markets. In addition, last year, we imposed an increase of 30% in the dividend of Grupo Argos of 40% in Cementos Argos and 50% in Celsia. This year supported by the good results of 2022. And over those, incremental basis, we will bring this into the consideration of our shareholders an increase of 15% for the case of Grupo Argos. This is a company that I want to mention that since we gave out our first dividend in 1938 has never stopped doing so. From another side and joined to the efforts of value transfer to our shareholders, the outstanding figures of many of our businesses were also supported by disciplined deleveraging policy that under an environment as we faced during 2022. That was volatile and with a notable increase in financial rates represents and represented an important relief to the increase of the financial expenses. During the last 3 years, the net investment has dropped in more than COP 3 trillion. This is a figure that equals more than half of the recorded consolidated EBITDA that we had for 2022. This strategy represents estimated savings in terms of annual interest for more than COP 0.5 trillion for Grupo Argos. During 2022, we keep -- we kept advancing in the strategic catalyzers and the value of strategic catalyzers. And we announced to the market around 1 year ago. Grupo Argos keeps consolidating as an infrastructure asset manager. The alliance with Macquarie Asset Management as an Odinsa partner in different roads and airports does not just proved the trust of first-level investors in this organization, but also proves that the company is already materializing its futuristic vision in order to consolidate itself as a relevant infrastructure asset manager. In addition, the project of listing Argos USA in the New York Stock Exchange has been advanced. I can assure today that the company is ready to find the market window that will allow the materialization of this initiative once we observe within the market reasonable values and multiples for our shareholders. Now I want to invite you to move on to Slide #7. In order to see the operational results are for our different businesses. Starting by the cement business. At the end of 2022, Cementos Argos reported an operational EBITDA, the highest operational EBITDA of its history. The efforts to mitigate the inflation pressure more specifically during the first semester of the year. And the cost of energetics were translated despite these pressures into an EBITDA of COP 2.1 trillion, which at the same time allowed for the net debt-to-EBITDA ratio to close in 2.8x, the lowest one in the last 9 years. From another side, the net cash position, the net cash position had an increase of COP 772 billion, closing with a healthy excess of COP 1.3 trillion. Besides that, with the commitment of driving initiatives that helped close this gap between the price that's being reflected in the share of the stock exchange and the value of the company, Cementos Argos made public to the market in several plan known as Sprint, that's an acronym for share price recovery initiative, which covers 5 working lines mainly that I'm going to mention. First one is strengthen the financial and operational results in terms of profitability of solid operational results. Second is a significant increase in the distribution of dividends to our shareholders in 2023 for a total amount that will be closed in case of being approved to COP 445 billion. Third is launching a share repurchase program for approximately COP 250 billion that I had previously mentioned. Fourth, we have the improvement of the visibility of the operation -- of the value of the operations and the continuity of the process for the Argos business in the United States, whenever the market conditions are the right ones. And fifth, improving the liquidity of the ordinary shares by the signature of a local market creation contract in order for the Cementos Argos stocks can be eligible for repo operations within the Colombian Stock Exchange. Last year, Argos reached an export record of 1.2 trillion tonnes, 1.2 billion tonnes or 1.2 million tonnes, which represents an increase of 28% with respect to 2021. The concrete volumes in Colombia, increasing 14% driven by year-after-year growth in the construction licenses in the country that, were close to 30%. In terms of the quarter -- in operational terms, the volumes of cement reached 3.9 million tonnes, while the concrete business recorded volumes of 1.8 million cubic meters. These figures that are slightly less compared with previous periods are mainly attributable to the climate conditions, extreme climate conditions that were recorded at the end of last year in the United States, more especially in the concrete business at the states of South Carolina and North Carolina. Now I want to invite you to check the results of the Energy business. Our Energy business recorded historic results once again. The consolidated revenues reached COP 5.6 trillion, growing 36% with an EBITDA close to COP 1.8 trillion, growing 30% compared with previous year. The consolidated net profit closing COP 442 billion, were results despite the impacts generated by the increase of the financial expense due to the increase in interest rates. In respect to the dynamics of the sector -- 02/27 was expedited by which the President of the Republic reassumed for 3 months, the function delegated into some of the regulation commissions for public services within those decree, meaning by this, that they will be leading the administrative acts. And even though no regulations have been disposed, for the moment, we want to make a respectful invitation to keep the sector institutionality that has been strengthening for more than 30 years, which has allowed not just overcoming periods of energy scarcity and have been -- and avoiding moments as we lived in 1992. But this has also allowed the construction and financing of great infrastructure projects with a solid and stable regulation. This institutionality has also allowed that the energy coverage in the country is around 97%, when back in the '90s was a bit less than 80%. The quality indicators of the electric system in the country are better -- every time better. And as a country, we need to create the right conditions in order to preserve the electric safety. It's an [indiscernible] that's not only social, but it's also economic and we need to work on. We are convinced that the economic system of the country is fair and can be even more fair and sustainable but might -- should happened building upon the institutional scaffolding that we have been restricting through decades. Moving on to the operational results on Slide #10. You could see that the generated energy for the period closed in 1,600 megawatts hour and allowed the commercialization of 920 megawatts hour. This quarter, we want to highlight the start-up operations of new installed capacity, where we want to highlight 200 megawatts of the thermal electrical product Tesorito, our new thermal central that was available, operated during all the quarter. The revenues for this quarter closed in COP 1.8 trillion with a 46% increase year after year, leveraged in a larger generation and better energy price and better rates. The consolidated EBITDA reached COP 444 billion which is equal to an annual growth of 10%, mainly led by a positive contribution of all the businesses in Colombia. The quarter's EBITDA grew less than the revenue given to non-recurring events the events that did not represent cash for the company. Now I want to invite you to review the road concession and airport concession business starting on Slide #11. Odinsa closed the year with a total recovery of airport and road traffic. Not just this, but also in fact we prepaid the totality of its debt, which places the company in a very important flexible situation for the future opportunities and charges of the business line faced. Thanks to the disbursements of those assets. Thanks to the disinvestment of the concessions of the Dominican Republic and the Regulation of Macquarie as a business partner in the roads vertical. During the year, there was an amortization of COP 1.2 trillion of separated debt and dividends were distributed for COP 360 billion to Grupo Argos and its shareholders. After being the most affected business by the pandemic, we want to highlight how in a very short period of time, Odinsa was able to reestablish its operations, dramatically improved its structure, its capital structure, bringing a first level partner that remunerates its management and that will potentialize the capacity of growth of road and airport concession business. Besides, in the airport segment, we want to highlight that the good news that at the end of the year 2022, the company received from the Infrastructure National Agency, the approval of prefeasibility of El Dorado Max Private Initiative. This is a project -- our ambitious project that wants to improve the existing infrastructure of El Dorado Airport. As the construction of new sites in order to maximize its capacity to 60 million passengers a year, the airport is mobilizing right now around 36 million passengers. So this would be a project mainly doubled its capacity. Now moving on to the operational results for Odinsa that you might find on Slide #13. The traffic of the road concessions for Odinsa kept improving and growing and closed the year with more than 39 million vehicles. This is an increase of 15% compared with the previous year. This strengthening of the traffic is translated into a larger internal return rate for each one of the concessions highlighting between others, the performance of Tunel de Oriente, where the average daily traffic increased 30% compared with the previous year, reaching the levels that we had originally estimated for 2032. The daily average traffic for the last quarter was 113,000 vehicles with a 2% increase compared with the same period last year. From road side, the airport traffic closed the year with 41 million mobilized passengers; grew 65% compared with 2021. This has translated into a larger profitability, where we want to highlight the substantial growth of the internal return rate expected for El Dorado Airport that in 2022 went from a 13% to a 17% annual. In this quarter, both Opain and Quiport presented increases higher than 25% compared with the same period last year, reaching a total of 11 million passengers mobilized during the quarter. Before closing this chapter, we would like to speak about [indiscernible] of 2023, that freezes the rates of 143 in the country or [indiscernible] in the country. As a company, we want to express our ease given that 75% of the road traffic of Odinsa was not restricted by the decree of this national government. Given that Autopistas del Cafe nor Tunel de Oriente were affected in their flows due to this measure. In addition, the same decree establishes compensation mechanism in for concessionaries, the mandate for the reestablishment of the rates, which is fundamental for guaranteeing the legal and economic stability of the concession scheme. From another side, we would also like to highlight that the government has complied with its other contractual obligations. For the case of Pacifico, the majority of the first collection differential has been disbursed in the times that were established in the contract. Nevertheless, thinking on long-term effects for the sector, we want to make a respectful call to the national government in order for them to keep the signals that have allowed that through the private and public capital association, we can reduce the infrastructure gap that's so important in order to drive competitiveness, the development of the country, but more specifically for social inclusion. Now moving on to Slide 15. In the real estate business, the net revenue was COP 2 billion growing 1% -- sorry, COP 109 billion, growing 1% a year and the EBITDA for the quarter was COP 52 billion, 22% year after year. After adjusting by these investments, the effective gross revenue and the EBITDA grew 11% and 26%, respectively. In terms of the same assets for the complete year, the operational net revenues and EBITDA grew on the rates of 24% and 34% compared to 2021. The business generation dynamic -- and this part of the business structure for Grupo Argos has been very positive. During the quarter, contracts were renewed for 97,000 square meters. And we commercialized another 9,000 square meters. At the end of the period, the fund reached an occupation -- not also the portfolio occupation of 97.3% with a reduction of only 8 basis points compared with the same quarter last year. It is a very healthy figure. The sectors that presented the highest growth were used storage hotels with an increase in revenues of 17% and 16%, respectively, compared with the same period 2021, driven by the economic recovery, better occupations for both products, hotel rates and a lower rotation in the mini warehouses. Besides with it's -- with its management for the nonstrategic assets, the fund had disinvestments of COP 51 billion, including COP 32 billion in terrains, which helped reduce the loan-to-value of the portfolio to 35.6%. Now I want to invite you to move on to the urban development side, Urban Development business slide for 2022. This year can be called as an extraordinary year in terms of results, both operational wise as well as financial and operational figures for the business. We had revenues for COP 224 billion, 39% more than previous year. And we closed the year with the net cash flow at COP 99 billion; this is 24% more than 2021. We launched a very successful call for its third phase of Ciudad Mallorquin project and first 3 blocks of the Portal Empresarial del Norte project in City of Barranquilla, from which we received 12 proposals for Ciudad Mallorquin and 5 for PEN, which equals the 3x the offered area for a total of COP 630 billion. Both of these projects are for VIS housing, which still presents a very high demand. And the P&L for the quarter, we recorded session of 5 plots, 3 in Puerto Colombia and 2 in Barranquilla. This, added to the rest of the quarters allowed us to obtain an EBITDA higher than COP 40 billion. Besides this, we added 47 active transactions for COP 800 billion from which we are still missing COP 350 billion to be entered. In Baru, we keep advancing in the positioning as a relevant tourism destination, not just in the Caribbean region, but globally, The Sofitel Baru CalaBlanca hotel approved to be one of the most representative assets in luxury hotels. The hotel was operational and financial results higher than what we initially budgeted, something that has never been seen in the first year of operations of such a large project. Now I want to invite you to move on, let's see the consolidated results on Page 18 on the presentation you have in front of you. Total revenues reached during the quarter, COP 5.7 trillion, which represents an increase of 29% compared with the same period 2021. The largest level of sales was translated in an EBITDA increase that closed to period in COP 1.3 trillion with a growth of 46% year after year. On Slide 19, we can see the variation of the contribution of each one of our businesses in terms of revenue and consolidated EBITDA. In these graphs, we can clearly see the good performance of all the companies that had during the year, kept presenting operational and financial growth. If the concession business presented a reduction in the accounting contribution in terms of EBITDA, given the deconsolidation of the road vertical assets, where 50% of the assets are transferred to the fund where Macquarie is. This transaction at the same time, prepares audience, as we previously said, to a strong growth in the long term, strong and powerful growth in the long term. On Slide #21, you can find the evolution of the consolidated indebtment. We want to highlight the amortizations that the organization has made during the last 12 months that reached COP 1 trillion, which compensated the impact of the Colombian peso devaluation compared with the U.S. dollar and the consolidated gross debt. Net debt dropped 7% going from COP 15 trillion to COP 14 trillion. Largest part of the indebtment reduction is led by Odinsa. This performance allowed different rating companies of Group Argos such as Standard & Poor and Fitch rating to keep the AAA rating for the organization. In the separated financial results, as well as the consolidated financial results, we recorded positive results. The revenues of the year closed in COP 779 billion. This represents an increase of 19% compared with the previous year. At the same time, EBITDA closed to COP 476 billion, representing a growth of 13% in terms of net profit in COP 346 billion. Thanks to the cash position with which we closed the year. Net debt separated net debt of Grupo Argos detailed on Slide #25. We closed the year with COP 1.1 trillion, the gross debt of COP 1.4 trillion with credit due dates further than 2023, which grants a complete financial flexibility to the company and allows closing the company with indebtment indicators that are healthy and aligned with what we've expressed to the different rating companies. Financial rates have increased around the world. And this has led to debt of the cost to grow in 12%, which represents a significant increase compared with the rates that we had in 2021. Nevertheless, the company has implemented a series of mechanisms of treasury coverage. That has allowed partially mitigating the increase of these rates and the monetary effect over the financial results. We just want to highlight that if the company had not implemented these types of tools, the financial -- the financing rate would be 15.5%. This is 330 basis points higher than what we currently have. Within the strategies of treasury, we want to highlight that today, we count with fixed rent investments for more than COP 180 billion, which generated positive carry given that its performance higher than the cost of the debt. During 2022, the sustainability -- the Dow Jones Sustainability Index placed Group Argos and Cementos Argos being the most sustainable companies around the world within their sectors for the 10th year in a row. In addition Grupo Argos was included within the 10 companies with a better reputation in the country, according with Merco being recognized as the leader in business groups. In terms of the diversity and inclusion perspective, the commitment that Grupo Argos has led in acoustic environments was recognized by the gender parity index of Bloomberg were more than 400 companies figure around the world. Today, this organization comes with a team of more than 11,000 people coming from different origins, generations, cultures, skills, which deliver all their talent and commitment in order to consolidate the trust got in generation capacity for Grupo Argos. And I want to express my thanks to all our hard collaborators. Now moving on to the perspective for this year, this can be found on Slide 28 and 29, where you can see the guidance of the main consolidated figures for Grupo Argos. After overcoming the goals that we set for 2022, in 2023, we expect to maintain the solidness of the results, closing with revenues that will be over COP 22 trillion and EBITDA that will be around COP 5.2 trillion and COP 5.5 trillion. The guidance for 2023 will focus on revenues and EBITDA given the volatility of interest rates that do affect the net results. I want to close the space reassuring the vision of optimism and drive that this team has derived from transformational advancements of the Grupo Argos strategy and the performance that our businesses have proven and the opportunities that we are identifying in the regional infrastructure sector. We are aware of the challenges, but we're also aware of the opportunities that might come from this. Now I want to give floor to Juan Esteban so we could move on with the Q&A session that you might have. Juan Esteban?

Thank you, Jorge. We have been receiving several questions through the Q&A widget. But I just wanted to remind you all those that have questions, you could just write them down on the Q&A with it, and we could answer them all. To begin, we have a question from Sandra Rueda. I would like to understand why despite the excellent results of Grupo Argos and each one of the companies offer the value of the share of Grupo Argos more specific with the preferential share keeps an excessively low values and this is not reflected in the market as an asset that we can commercialize. So those that have invested in it a lot of perspective, we have about this towards the future?

Well, thank you, Sandra. It's a very deep and good question. Let me approach this question, try to be a sincere as possible and try to be as clear as possible. And I want to focus this question under 3 different optics. First one has to do with the fundamentals of the organization. Second, with the liquidity of the market; and third, with which initiatives we've adopted and we've been implementing in order to tackle this problem. As you say in the question, the results of the company are great, not just in terms of revenue, but also in EBITDA generation and growth perspectives, in terms of profits. And because of this, and as I said at the beginning of this call, the growth of the company or the growth of the EBITDA is not explaining -- is not been explained by this decrease in the market capitalization. EBITDA has dropped by 3 and the market capitalization dropped. And this has no logic, a structural logic. The first element is that we are still focused that the generation of structural value of the organization of the businesses will be growing and exponentially higher, because in a certain moment, the markets will recognize the fundamental value of that growth. So the first action that we are taking and that we are focused on is for our operations. We keep on growing and to be more efficient and to generate better flow, because this is what sustains the fundamental value of an organization. And there's, different initiatives and use of fuels, the conventional fuels, not conventional fuels, improving the exports. There is, multiple initiatives in the concession business, as you saw, and do represent a double-digit growth in terms of traffic and regulated revenues and non-regulated revenues. So focusing on the operation in order for this organization to be much more profitable with time therefore to capture the opportunities of growth and generate value. That's the main fundamentals that we need to bear in mind. And second has to do with the dynamics of the market. So here, we could divide the conversation into 2 or 3 different areas. First, what has happened in the Colombian market and Colombian market, now this phenomenon is not exclusive for Grupo Argos. It's exclusive of many other companies. I could say that almost the majority, except those companies that were influenced by open market operations, which are stationary mechanisms that happened this year. But the liquidity dynamic, the appetite of investors, the national investors and institutional investors. Our international investors for these types of markets in emerging markets, has dropped in the last years, more specifically. In Colombia, that dynamic, obviously, it's a dynamic that influences the supply and demand conditions and the price formation. There's, other problems that I guess has been gaining awareness. And this is, for example, something I celebrate that certain exchanges is leading the initiative of integrating of the Peru and Chilean market with the Colombian market, because also the initiatives that are driving in the right direction. As this is bringing in like different types of investors also like retail and institutional. Those mechanisms will also allow a larger efficiency in terms of cost per transaction in each one of the different operations. So there's, others that have to do with market size and with liquidity, with associated costs of the transaction. And finally, I would like to say that there is a series of initiatives that we have been driving and that as I mentioned before, several of this or have been executed totally or partially. But our structural measures will increase the profitability and the retribution of capital to shareholders. And we would expect that through this way. We could have a price recovery increase in the dividend and increasing the propositions that will be taken to the assembly. We're repurchasing more than COP 1 trillion in shares as still those investors that want to step out the market. This is an opportunity. And for those that want to keep inside, they can keep inside the market and keep on aiming towards at long-term growth. So with those 2 initiatives, with the dividends of Grupo Argos and since its branches and repurchasing of shares, we could be speaking of COP 2.2 trillion in terms of liquid resources transfer to the shareholders. In addition, I mentioned it before. Cementos, as we said earlier, it's practically ready with all the compliance processes in order to go live into the New York Stock Exchange in the moment that the market conditions are the right ones. Concession business, as we also said, we have also advanced in the materialization of the promise that we made. And that was that Odinsa would look for strategic business partners and will become an asset manager that has a reality in closing processes. So I want to take the opportunity with your question that this has to do also with appetite, lack of appetite in emerging markets, the dynamics of entering and exits of different funds that do affect these markets. And it's also a problem that we have within our market. And there's also initiatives that correspond and that we are taking from the organization precisely to close those gaps and offer elements with a better value transfer to the shareholders. So thank you for your question. It's just a great question. It's a situation that concerns us, but also gives us work because the performance of the organization. The future of the business, do show different figures than the ones being reflected by the price of the stock.

Thank you, Jorge. Let me move on with a second question coming from Rodrigo Sanchez, asking question that was partially answered with the previous question. But he asked about the New York listing for Argos USA and what more range do you consider right for Argos USA to starting the New York Stock Exchange? And have you thought about the infrastructure sector? This question has also been asked via Twitter. So if you could cover questions related with the stock?

I can begin and then Alejandro can complement or [indiscernible] you can also complement me if you want. I don't want to anticipate myself and give a multiple through this that the market conditions, both in terms of appetite and liquidity and industry multiples are not the ones that are being recommended for the project. The asset we have in the United States are not just valuable, but they're irreplicable -- the network of boards that we have going from Texas up to Northeast of the United States. And integrated clients, such as [indiscernible] more than 25 terminals between dry and maritime. It's infrastructure, and that's not just difficult to replicate or repeat, but a very valuable and long-term vision. So for us, so it's a priority for the listing to happen at the adequate multiples that can remunerate the invested capital, but also the long-term growth projections. So I don't want to give you a number, because I could say, yes, I would like, okay, 12x EBITDA. And then, it was someone might say or if I'm in 12, there's no opportunity. But this depends on the conditions of the market and the growth perspectives, but definitely the levels where we see the market. We don't believe it's the right time in doing and so we're ready. We are ready and being ready. That has required efforts, not just a human efforts, but also economic efforts very important economic efforts. And it is the compliance installment actually of the preparation of the control system preparing all the report system in order to be completely ready and informing sake in order for the company to comply with all different standards and for it to be just a timing decision. So I don't want to commit myself with a multiple, because we need to see how the market evolves in order to remunerate an asset that's structurally very valuable and it also honestly the shareholders. So we could not list it in the wrong time. And in this, as I mentioned, we have already started working on the negotiation with the airports and also for Odinsa. The airport operation is planned to close this year, the Colombian airport and the Ecuador Airport. So for the moment, the most important is being able to close this structure until we're not able to finish the structure and started implementing it. We won't be able to see the listing in the short term of the infrastructure assets. But nevertheless, I want to highlight that this structure is allowing the fundamentals that we had initially stated, the payments and the collection of the management fee the retribution to Odinsa/groups for the asset management and the payments for the performance obtained by these. So the fundamental value independent from the way the asset is managed is being transferred into Grupo Argos. Now let me give the floor to Alejandro. I don't know if you want to complement in any given way. And I also want to congratulate him for his birthday today.

Thank you, Jorge. I believe firmly with what you mentioned. I'd like to highlight 2 things just to complement your analysis. There's something that's clear here. And it's -- if they have the cement assets in the United States, effectively compared with the global cement companies or specialize the concerns in the United States. We do see a very important premium in terms of the multiples that are being negotiated, another important thing that's important facing the market conditions. And this is that recently, what has been happening in terms of the messages that the Fed has been given an inflation control. That's where we have a small pickup. What this does is if it's true that in the equity markets, this has had applications. It's also important to highlight the messages and where they're aiming towards. And these are aiming towards further to be a clear decision of dropping the interest rates and dropping inflation that from a -- this is positive in the medium to long term. What this does is for these opportunities to open and for the market opportunity to be open once again. And as you mentioned before, right now, we don't have any rush, because what we are looking for mainly is to have the right market conditions and transaction independent from the multiple can place the fundamental value of these assets in market conditions that will be attractive for all our shareholders.

And now we have another question from Rodrigo Sanchez. Could you share with us the estimation of sourcing usages for 2023? And can you confirm if your plan is to execute the totality of the COP 500 billion of the repurchase before the end of March 2024, I guess a word to Alejandro Piedrahita.

So there's 2 important things here. First one has to do with the total of sources of 2023. This planning of the usages and sources, has also has to do with what's being decreased in each one of the shareholder assemblies in terms of the dividend give-out. But taking that information, the totality of the sources that has been projected for us at Grupo Argos level as a holding is close to COP 1.44 trillion. This is an increase of close to 28% compared with the sources received in 2022, where we received close to COP 1.3 trillion. So here, we're seeing significant deltas closer COP 300 billion that apart from the urban business. Another one has to do with some disinvestments that Jorge mentioned. And we also closed the year, we closed 2022 with a cash excess of COP 252 billion. If we look at the different usages, the usages that we have for 2023 are 3 main ones. First one, that's very important, is the projection that we have for dividend estimation. And let me say once again, this depends on the approvals that we have in our assemblies. Here, we are speaking of COP 480 billion around. For that, in terms of the financial expense level, we have used that's closed to COP 200 billion. And in terms of taxes and revenues for Grupo Argos in terms of urban development for that business and our operational expenses that we have. We have for taxes; we are speaking of COP 300 billion. So we grabbed those values is around COP 480 billion. So we had an excess cash of COP 434 trillion, sorry, those COP 434 trillion that we have as the access give us the financial flexibility, depending on the market conditions of using that in the reacquisition program, using this also in other different types of investments in a given moment with a very important element. Then, a given moment, part of that money, we could also use to look at deleveraging strategies. And another thing that's important in facing all those mechanisms, deleveraging ratios that we have projected for 2023 will be aligned with our AAA rating, both in Standard & Poor and Fitch, simply just to have an idea that gross debt over dividends will be posting in 2.6x net debt at COP 1.4 trillion and net debt over the adjusted EBITDA because what this does, it takes the revenues received by dividends quarter to cash will be 2.6x and net debt over adjusted EBITDA were 1.5x. So as you can see, I want to send 2 very key messages. First one, all this program that we have planned and where we basically don't have any obligation, but it just depends on the market conditions does not imply a larger leveraging level for Grupo Argos expecting that we have some cash flow levels that we can decide how to use it, or leveraging or looking for new opportunities that might arise, which fills us with ease. And this is aligned with our policy of maintaining our rating of AAA both with Fitch and Standard & Poor.

Okay. So we have a question from Carlos Rico about the repurchase program. And it goes as follows. The repurchase program has a main purpose of the recovery of the value of the share or blocking the open market operations of third parties in order to strengthen the block and maintain a further scope. This is a question about repurchase has also been mentioned by Twitter. So I guess that we could just cover such related questions. Jorge, I guess you're muted.