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

[Audio Gap] 2024. In this space, we have Jorge Mario Velasquez, President of Grupo Argos; Alejandro Piedrahita, 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; Pablo Arroyave, Vice President for Corporate Finance of Odinsa; and Andres Bejarano, President of Pactia. I want to remind you all that on the website, you might find all the of the quarter's information joined with the presentation, we'll be following during this call. To download that you can access the financial information menu and afterwards in the section reports. Additionally, we're transmitting this conference through X space through Twitter. We want to invite you to move on to Slide #3 of the presentation, so we can start our meeting, and I want to give the word to Jorge Mario Velasquez, President of Grupo Argos.

Thank you Juan, and good morning for all those that are with us in this call. I want to extend a warm welcome to the shareholders, analysts and the executives that are with us today in this conversation. This first quarter, we've presented the results in which company-wise we reported all the profits that we have during 2023 with transformational transactions that we will define the future path of the company. I would like to highlight the combination of the status between Argos USA with Summit Materials that's valued in our operations -- cement operations. Operations in country for [ $3.2 billion ]. And also for this quarter, we have an agreement with this industry participation that Grupo Argos has in Grupo Nutresa. This ended in larger economic rights for Grupo Sura [indiscernible] at the same time that each [indiscernible] keep on growing and keep on generating value for all our groups of interest. And we will obviously be discussing about these 2 transactions that require a level of detail and we want to share this with you all. Let me start by Summit [indiscernible] just disclosed, that happened in December this year, materialize the transaction is the combination of the Summit Material assets and Cementos Argos assets. Creating leader platform in the construction material sector for a national scale in the United States for a company value of around $9.5 billion. We want to highlight the investment of a bit less than COP 5 trillion. That was done for a period of 18 years in the United States resulted in a profit of COP 5.3 trillion, which is reflected in the status of results of this same quarter. Since the announcement of this transaction that led to a significant discount in the -- what we've been negotiated in the Colombian Stock Exchange, the versatile value of the company or the market capacity company has increased more than COP 7 trillion. As a result of the cash that was received by this transaction, Cementos Argos closed the month of May with leverage net debt to EBITDA indicator of 2x. That's actually the lowest one that we've had for the last 2 years. This places the company in a strengthened position in order to keep on consolidating and potentiating its presence in Colombia, Central America and the Caribbean and also strengthening exportation capacities towards the United States and other geographies. Since the close of the transaction, the Summit stock price in the New York Stock Exchange has been growing up to the 15th of May, it was at $42, which represents an increase of $6 compared with those $36 of the -- close of the transaction, this equals -- evaluation of the investment for more than $200 million in just a couple of months. At current market values, the Summit investment has an estimated or close value to -- or equal to COP 6500 each Cementos Argos share, given that the objective price by analysts for the Summit Materials share is around $50. That's why we are optimistic about the price potential that this investment might have. From another side, in this first month of the year, we completed all of the transactions that were agreed on the framework agreements celebrated on 15th of June 2023 by which Grupo Argos and Grupo Sura no longer have shares in Grupo Nutresa and IHC, JGDB and Nugil don't have shares in Grupo Sura. As you might see on this slide you can find on Slide #4 with the graph -- you might find on Slide #5, sorry. Grupo Argos exchanged 9.9% of its third participation in Grupo Nutresa. And got $115 million in cash in this exchange. As a result of this transaction Grupo Argos, has the right of receiving 39.5% of the economic rights of Grupo Sura, considering both the shares from which we are beneficiaries as well as the economic rights that we receive from this autonomous equity to which Grupo Sura shares were transferred. Besides it, we received a participation in [ portfolio society ] in which the company has 16.6% of circulating shares. Considering that Grupo Sura also received own shares in this share exchange. And while these shares are reacquired, it rights are suspended due to legal disposition. Grupo Argos transferred shares of Grupo Sura for an amount that's equal or even higher to which we had a right to receive according to the framework agreement. So an autonomous equity that has an [indiscernible] instruction of not exercising political rights over the shares. As a consequence, Grupo Argos will not exercise those political rights further than the 49% of the shares that are represented in the Grupo Sura and the shareholder assembly, this considering that Grupo Argos as an infrastructure holding and as we've constantly said, we don't have nor the intention or the vocation of constituting a controller of Grupo Sura. From another side, last 9th of May, an extraordinary meeting was held for the shareholder assembly the Sociedad Portafolio in which the partnership by laws were modified in order for to end at the 5th of June this year. After this date, the partnership will be dissolved and would start the liquidation process in order to distribute to the shareholders of Sociedad Portafolio going to the [indiscernible] of its participation, the remnant of the shares of this partnership once everything has been paid. Sociedad Portafolio is confirmed by mainly 62 million shares of Grupo Sura and 82.3 million shares of Grupo Argos. We want to highlight that after the transaction, S&P Global confirmed a AAA rating for Grupo Argos, which is a proof of the financial strength that the company has. Given that the investment of Grupo Nutresa was classified as a financial instrument that has been measured at a reasonable value, with changes that were expressed in the other interval results known as ORI. The generated profit due to the share transfer of Grupo Nutresa for this quarter was reflected in the accumulated profits as a reclassification from the ORI. There rest of the effects associated with the transaction are recognized in the consolidated status of results. Because of this, both of them need to be considered jointly in order to visualize the economic benefit of the transaction. The increase in the accumulated gains was COP 1.5 trillion. And the positive effect in the status of results -- in the consolidated status of results were: COP 1 trillion for a net gain of COP 2.5 trillion. This profit includes the recognized profit by Grupo Sura over the transaction, incorporated in the status of results of Grupo Argos via the participation method application as it's traditionally recorded in terms of the profits for Grupo Sura. The Grupo Nutresa this investment marks a new stage of our history as Grupo Argos to the company. We'll keep on focused on the value release for our shareholders. And in the leadership investments that the organization has achieved in the last decade in the infrastructure section. With the consolidation of investment platforms for transmission and energy distribution projects as well as solar generation and transportation platforms, attracting in the way capital coming from global investors that remunerates and recognize our operational and management capacity. Now I want to speak about the new vision that Grupo Argos has in terms of adding different efforts. The materialization of this exchange through the participation, I previously mentioned Grupo Nutresa. Grupo Argos portfolio has experimented a significant transformation focusing obviously more towards infrastructure and construction materials. Now I want you to move on to Slide #6. I where we can see how the investment portfolio of Grupo Argos has transformed itself. Taking as reference, the values that we have in our ledgers of the non-listed investments such as Odinsa, the urban development business, Pactia others. And the price of -- the stock price in the Colombian Stock Exchange, such as Celsia, Cementos Argos, Grupo Argos, Sociedad Portafolio and previously Nutresa, we can see that in respect with the first quarter of 2023 -- first quarter last year, and Grupo Argos portfolio has valued in COP 4.1 trillion. This increase is supported in the closure of strategic transactions and the final operational performance of our business. Besides this, the disinvestment of Grupo Nutresa and the operations such as Summit Materials have allowed for the Instructure segment to increase its weight from 55% to 63% (sic) [ 64% ] within the company's investment portfolio. Up until this moment of 2024, we keep on advancing in share purchase programs for an aggregated amount of more than COP 1 trillion for companies of Grupo Empresarial Argos that are in the stock exchange. Right now, we've executed close to COP 330 billion in terms of that approved amount. [indiscernible], we buy our own shares at current market value, we increased the participation of each shareholder that keeps their investment besides offering a larger dynamics and liquidity to the market, in moments that is required. Since we announced the repurchase program before the assemblies of 2023, and jointly with the financial results and the transactions that we have previously mentioned, the value of the Grupo Argos shares have doubled and in the case of Cementos Argos have tripled. In this term, the market cap for Grupo Empresarial Argos has grown close to COP 15 trillion. Now I want to invite you to go over consolidated results. On Slide of -- on Slide 8, you could see that Grupo Argos closed this quarter with consolidated revenues of COP 4.5 trillion and EBITDA of COP 2.4 trillion. This means a growth of 21% and 90%, respectively, compared with the same period previous year, bear in mind that as a result of the agreement between Cementos Argos and Summit Materials. Grupo Argos disposed 100% of its associated subsidiaries to the United States region. By which the assets involved in this transaction were classified as a discontinuous operation. As a consequence, the company made out changes in the presentation of the consolidated financial results up to 31st of March 2023, reclassifying all the associated parts into a group of assets in the region of the United States under unique line of net profit of discontinuous operations. As a result, the net profit close to COP 6.5 trillion, and the controlled net profit close to COP 3.8 trillion. These figures reflect the profits generated by the transaction and the exchange of the Nutresa shares. I want to make a comment here in the sense that is a very important value expression that we've seen this quarter is the construction of a value that has been generated by the shareholders for a long period of time and were not reflected in the financial results. This [indiscernible] to be a reality of the economic value that has been created, not just with the assets, but also with the investments, group did in Nutresa. Driven by these nonrecurring events that affected the consolidated results that I've already discussed, the separated financial results showed that the accumulated revenues for the year closed at COP 3 trillion, EBITDA and COP 2.94 trillion as net profit reaches COP 2.6 trillion. Now I want to invite you to move on to Slide #10, where we could see the summarized structure of the asset that the company manages at the close of the first quarter 2024. [indiscernible] will be recorded in terms of financial results. We can see how despite that Grupo Argos continues exercising control and consolidating Cementos Argos, Celsia and Odinsa, the transactions of our subsidiaries have made during the last year frame under the evaluation of [indiscernible] shareholders and as the strategy of the company transforming into infrastructure asset manager have led that many of the results that -- results and debt associated with many of these assets are not consolidated line after line in the financial statuses and as a consequence, neither in Grupo Argos from now on, for example, 31% of the participation that Cementos Argos has in Summit Materials will be reflected in the consolidated financial results through the participation method. Likewise, the asset management business of Celsia, including the platforms that we know as C2Energia or Tesorito and that's a thermal generation plant in [indiscernible] or Caoba. Where we anticipate a great part of the growth of this branch is through associations of third-party capital. This will not be recorded line by line in the financial results of the company. Likewise, the creation of the platforms of road and airports in Odinsa in association with Macquarie. We saw that in the results of this won't be consolidated either. That's why it's so important to consider that from now on, the financial statuses will only incorporate a minority group of the assets that have been managed by the company. In other words, the revenues in the consolidated EBITDA will not fully reflect the operational performance of our businesses. On the upcoming slide, I want to see -- and I want to check the details that we have in the accounting changes that we have in the company for this 2024 besides the deconsolidation of the Cementos Argos assets in the United States and the corresponding change in the financial result presentation. During 2024, the company will record a lower revenue level in its energy business, given that this investment of great part of its assets in Central America during 2023. Besides this, we will deconsolidate the participation in Opain and will record a lower method for the Quiport participation as a result of the airport [indiscernible] creation that was carried out with Macquarie Asset Management. There will also be an increase in the Grupo Sura's participation method given the increase of its economic rights in that investment, and we'll stop recording the dividends that were being received from Grupo Nutresa. Rest, you might find on Slides 12, 13 and 14 -- present a summary of the revenue contribution, EBITDA contribution and consolidated net profit contribution, joined with the nonrecurring impact considerations and that we have mentioned for this quarter and for each one of the segments. The results have been mainly influenced by the deconsolidation of Argos USA and costs of the transaction that was reported by Summit in this quarter in the cement business that totalized $61.3 million. That will be included in the status of results for Summit in the first quarter, the deconsolidation after the sale of certain assets in Central America, and the El Nino phenomenon effects in the Energy business, which is a negative accounting impact in the adjustment of the reasonable value of the Pavas and Baru lots a deferred tax in the Real Estate segment and the deconsolidation of Opain after the creation of the airport platform and the concession businesses. Likewise, there is a summary of the revenue variations, EBITDA net profit for the energy platforms, roads, airports, as well as the Summit Material results. These investments for the company, despite the fact that they don't consolidate the financial statuses, are not evident in its contribution due to the consolidated segments, but do keep on showing growth and very positive operational performances. Now I want to reiterate and open and sincere invitation for you could approach the different teams that the organization has in order to drill down deeper in these accounting changes that we are having. I'm aware that this not just -- there's not just operational transformations that are very relevant, but also in accounting transformation. And that's due to the association model that we have been doing with several businesses, such as in the energy and infrastructure businesses with business partners that contribute capital. This strategic definition joined with the transformational events we are recording, we are aware and do lead to more complex dynamic in terms of understanding the financial results. As when we had industrial operations where we have revenues, cost expenses. This is the dynamic of these types of holdings. And I do understand the complexity that this is in terms of interpretation. So that's why I want to reiterate that all our accounting team or our financial team or our legal team, investor relations team, we are all open to help you deeper understand all this information. Now I want to invite you to move on to the results found on Slide #16. This is for the cement business. With the move of challenging landscape Cementos Argos kept showing positive results, focusing on the profitability in the operations of Latin America, improving the EBITDA margin close to 200 basis points. Despite the economic deacceleration in several markets in which we operate. In another front, the objective of improving the share liquidity and bear in mind the criteria compliment in order for us to be eligible -- the emerging market index. The extraordinary assembly of Cementos Argos approved the conversion of the preferential shares for the company for ordinary shares. As a result of this process, 99.8% of the preferential shares turned into ordinary shares. And this way, this last shares start representing 99.96% of the shares that are under circulation right now for the company. We expect for this measure to improve the liquidity of the share, bringing the closer to its fundamental value. In addition, and following the measures in terms of [indiscernible] value for our shareholders, including Grupo Argos, Cementos Argos kept during this quarter its reacquisition -- share reacquisition program, acquiring since the program started 26 million shares. Bear in mind, the growth of this product -- the reacquisition program as well as the conversion -- the conversion program, the 705 million shares of Grupo Argos went from being 51.3% of the economic rights at the end of 2023 to represent today 53.4%. This equals an increase of 2% in the participation that at current values in the market is equal to something close to COP 200 billion that is generated for the Grupo Argos shareholders. This favors even more our position as a leader player in the construction materials sector for Latin America, Colombia and the Caribbean, with a relevant exposition to the most important economy of the world through the participation of Summit Materials. During the quarter, Cementos Argos dispatched 2.1 million tons in its Colombian operations -- in Colombia, Central America and Caribbean operations, 13% less in the same period previous year in those geographies. Revenues dropped 6% in the quarter, while the EBITDA grew 2%, which was translated in a quarter where there is improvement in the EBITDA margin that reached a maximum of 22%. When analyzing the figures in dollar terms, functional currency of the majority of the countries in Central America and the Caribbean where the company has a presence. We found that the revenues in that specific currency grew at 13%. And EBITDA 23%. Now I want to invite you to move on to the Energy business results. Financial results for the quarter in terms of our energy business, represent a significant drop in terms of EBITDA and net profit, which is explained by the El Nino phenomenon and its challenges in terms of hybrid generation. Nevertheless, the capacity of the company to contribute to the system has proven the strength of our assets and the balance that we have between our business. This is contrasted with the situation that a company faced during El Nino phenomenon back in 2015 and 2016. When the company reported a loss that could be attributed to the controllers that was close to COP 82 billion. And where we were in the need of selling part of our investment portfolio in order to decrease dividends in this year in order to ensure the liquidity that was necessary in order to and be able to find a way out, this was 9 years ago. The strength that the company has proven during this quarter, in terms of similar climatic conditions and even worse, is the result of a portfolio optimization that has happened last year towards a more equal generation balance. This is an evidence that we can contribute to today's electric system and the future Colombian electric system, even facing challenging environmental conditions. For the upcoming months, we anticipate a recovery to an EBITDA margin close to 32% to 35% in the measure that the weather conditions come back to normal. This joined with the positive results in Tesorito, the reduction of the debt cost and the deleveraging that came from the sales of certain assets in Central America. At the end of last year, this should allow Celsia close in 2024 with the net profit that would be similar to the one we had previous year. In terms of the asset management business, we want to highlight the results of C2Energia platform specialized in the large-scale solar energy with 300 megawatts in operation recorded a generation of 127 gigawatt hour of energy, this means growth of 17% and reported revenues for COP 44 billion and a COP 37 billion EBITDA, both with an increase of more than 150% compared with the same period 2023. Besides this platform has today a 308 megawatts under construction and close to 522 megawatts in development. Following this growth trajectory that will consolidate Celsia as the leader for the renewable energy generation in Colombia, the nonconventional renewable energy in Colombia. In terms of revenue for Celsia in the first quarter, we reached COP 1.4 trillion, which represents a drop of 3% compared with 2023 same period, given the effect of the sold assets in Central America during the last year, the consolidated EBITDA was COP 326 billion, which led to a drop of 36%. Nevertheless, when we bear in mind the EBITDA coming from the Celsia investment platforms that, as we have mentioned, will not be consolidated financial results. The total EBITDA for the quarter is close to COP 437 billion. This is a figure that if we compare with the EBITDA of platforms that have been excluded from the Central American assets in first quarter 2023, represent a drop of around 20%. During the quarter, the generated energy was of 962 megawatts hour, which represents a drop of 45% part of a lower [ hydroelectric ] generation due to El Nino phenomenon. Now I want to invite you to move on to the audience results found on Slide 20. The airport traffic keeps showing sustainable growth -- outstanding growth. The platform accumulate 48 million passengers that have been mobilized during the last 12 months from which 42 million correspond to El Dorado International Airport. This is a record figure for this asset that's operating at full capacity. From another side, the company began the construction of the road exchange that will replace external roundabout of the Jose Maria Cordova airport in Rionegro, Antioquia. The objective of this work and developed by the Túnel Aburrá Oriente concession joined with the Antioquia Governance offices to contribute to the improvement of the mobility of this part of the department and reducing the traveling times for the subregion, the investment for this project will be close to COP 67 billion. And the execution time will be close to 24 months and will generate close to 300 direct employments. With this and with other investments, we keep on embedding not just on Medellín’ connectivity with the airport, but that is of growing importance giving the decision that the city has in terms of tourism and businesses, but also to connect the Aburrá Valley with the San Nicolás Valley, which are 2 economic polls that are destined to be connected in order to improve the competitiveness of all the region. In terms of the commitment that we have in shared value generation, Odinsa was included as one of the most sustainable companies around the world. The most recent addition of the sustainability yearbook made by S&P Global, the company occupied a very interesting position between the 297 companies that were evaluated within the industry. Now moving on to the operational results that can be found on Slide 21. The road platform closed the quarter with an average traffic of 107,000 daily vehicles. This is stable compared with the same period previous year. The revenues of the platform's concession grew 23% for the quarter, while the EBITDA was placed in COP 164 billion. This is an increase of 3% in airports, which figures are found on Slide #22. Traffic during the quarter reached COP 13 billion -- 13 million, sorry, growing 20%. The Opain revenues reached COP 458 billion with a 3% increase, and the EBITDA reached COP 144 billion which is equal to a drop of 12%. This is an effect that's explained by the drop of the exchange rates -- of the interest rate, sorry, given that between 55% and 60% of these revenues of the asset are in dollars. From its side, the revenues per EBITDA in Quiport grew 15% and 16%, respectively. In the real estate business, the effective -- gross revenue was COP 121 billion, which is equal to a growth of 10% year after year, and the EBITDA for the quarter was COP 67 billion, also with a 10% growth year after year. In total, we renewed contracts for 63,000 square meters, and there were new contracts for 16,000 square meters for the first quarter 2024. At the end of the period, the fund closed with the non-hotel portfolio of 96.1%, which is a drop of 24 basis points compared with the same period 2023 and a drop of 113 basis points versus the previous quarter. Compared with the same -- with first quarter 2023, in the logistics and storage sectors obtained a higher increase in terms of revenues with an increase of 15%, followed by offices with a 13% increase. On the urban development business, the net cash flow for the quarter was COP 23 billion. This is a positive result considering the market deceleration. Our plans keep on improving resiliency compared with a less dynamic market, which reflects the differentiation that we reached, thanks to our quality urbanism and strategic location of our projects, for this year and next, we expect recovery imposed by the unsatisfied demand of housing of social interest and the reactivation of the government subsidies. The first quarter 2024, the revenues for lot sales was 24% higher. Nevertheless, the total revenues and the EBITDA recorded negative figures. This is explained to an adjustment in the reasonable value that we have made in the Pavas in Baru lots. Where we modified the disposal of urbanism costs, which resulted in the detriment for this quarter, we might highlight this effect -- accounting effect and will allow us to consider more usage, which can also accelerate even more the sales towards the future. Speaking about [indiscernible] project that's being developed in Puerto Colombia Atlantico, the projects advancing comply with all the social, legal and environmental commitments. besides this generating unseen transformation for the social inclusion and development of the region. [indiscernible] region is developing with the best urban standard from Grupo Argos, which includes Central Park of 130,000 square meters which first 10,000-meter quadrant was recently inaugurated for midsize. The housing projects are being led by some of the most important construction companies in the country, and Grupo Argos does not construct in its land lots. Its construction began in 2019 in area of 80 hectares, from which 45 are being developed for a total of 16,000 housing units, 14,000 of these are social interest housing up to the moment, more than 1,000 of these apartments have been delivered and more than 5,000 have already constructed and more than 9,200 families have separated or acquired housing solutions within this development. This is a project that in terms of density will double the tax collection for Puerto Colombia and will generate more than 2,000 employments in its constructive stage. Even though that it has -- already in 2023, has included more than 3,000 people. In total, [indiscernible] will represent than COP 3.5 trillion. This capital irrigation that's relevant -- in a moment -- for housing construction has been decelerating in the country. Barranquilla just recorded a stop of more than 60% of housing sales during 2023. The Urban Development business will keep on moving forward, seeing how can we generate value for all our groups of interest with this project and other relevant projects that we might carry out. Now let's move on to Slide 27 and go over the evolution of the consolidated indebtment in this front, the net debt closed in COP 7.6 trillion, this is equal to a drop of 42% compared with the same period last year, mainly explained by the cash received during the Summit transactions. Likewise, the net financial expenses for the quarter and dropped to 20% year after year. Thanks to the cash position, which with the company accounts with the net debt for Grupo Argos that is detailed on Slide #30, close to quarter with COP 789 billion. This is 34% less compared with the same period last year, which grants a complete financial flexibility to the company and allows closing the year with healthy indebtment indicators and aligned with our current credit rating. Within the interest strategies, we want to highlight that the company closed the period with fixed rent papers for close to COP 820 billion, which generated a positive carry, given that its performance is higher than the cost paying for the debt. The product of the [ OP ] of Nutresa shares, the company disinvested COP 432 billion and -- but they did not have to require into additional indebtment. This will be reflected in the lower cash position, obviously, for the upcoming quarter. To close, we would like to share the sustainability milestone that fuels us with pride as a business group, the Energy Department of the United States published the list of high-impact projects in terms of CO2 emission reduction with initiatives that add close to $20 billion as commitment to find new technologies in industries in order to fight climate change. Some of the materials was chosen as one of those projects with a grant that's basically in government contribution that totalize $215 million for the negotiation the construction protocol for 4 facilities in the United States. This project was conceived initially by the innovation team of Grupo Argos -- Cementos Argos in Colombia, where the first plant was established in 2016. This is a milestone for our R&D teams. That, as we have been previously mentioned, we're about to become one of the most important initiatives that will be built in the United States in order to make a relevant contribution to the greenhouse effect gases reduction. Because of this, we want -- with this, sorry, we would like to finish this part of the presentation. And I want to invite you now to ask any questions that you might have.

Thank you. I wanted to remind all of the assistance that the Q&A session or the Q&A widget is open in Zoom. You can ask your questions there. We have a couple of questions right now that has started -- anonymous assistant as the following thing. The profit of the discontinuous operations is cash? Or is this an accounting matter such as in the associate participations?

Yes. Thank you very much. The results that we gave as product of the Summit transaction with Cementos Argos from [ 4.33 million ] appear as a discontinuous operation that does not reflect cash. But nevertheless, we cannot forget that the transaction that was done with Summit at 2 components, it was a 31% that was received by the company that today at market prices is equal to close to $2.3 billion in cash for $1.2 billion. So this is the effect that we have, in addition, if you add the results to Cementos Argos, you can see that the indebtment level that we had to March 2023, was [ COP 7.38 billion ] after this [indiscernible] because of this and Jorge Mario mentioned, the EBITDA -- the net EBITDA [indiscernible] was [ 2.9 ] last year and increased 2x. So this is a component that was shown [indiscernible] accounting component, but there is some real effect on cash that have been previously mentioned that are actually reflected with lower little [indiscernible].

We have a question from Ana Plata.

Given the revenue drop in the main operational segments, those that are consolidated, have you considered in reducing the Grupo Argos debt.

Well, yes, thank you. Let me give you a bit of detail of the leveraging structure that we have, in terms of each one of the companies. So you could see the efforts that have been made, not just in terms of consolidated levels, but also in terms of the independent results for each business, as Jorge Mario was previously mentioning, the consolidated level in terms of leveraging for us [indiscernible] was close to COP 15.3 trillion. And today, it's close to COP 11.85 trillion. So here, just in a consolidated manner, we're seeing a significant drop of close to COP 4 trillion. In terms of Cementos I've previously mentioned over, there is a leveraging drop of COP 7.38 trillion to COP 4.68 trillion. This is a significant drop, as I was mentioning. In Celsia case, that Jorge mentioned that had a challenging quarter, deleveraging 1 year ago for Celsia was COP 5.7 trillion. Today, that leveraging value is COP 5.27 trillion, net debt-to-EBITDA ratio was 2.9%. Right now, it's 2.8%. So despite the drop in leveraging and with the EBITDA effect, we're able to drop this leveraging ratio. In the case of Odinsa, Odinsa last year has had debt for COP 16 billion. Right now, it's close to COP 263 billion. So basically, with the cash that Odinsa has is leveraging indicators close to 0. And in case of Grupo Argos, we had a [indiscernible] [ 1.65 and now it's 1.63 ] and our net debt in terms of EBITDA is under and 0.7x. So what this has proven is that in terms of other companies, so we do have a larger flexibility and less leveraging. And all the efforts will be kept on -- we'll keep on happening in order to have a larger flexibility in the lower -- indebtment both at business level and as well as consolidated level.

Okay. We have an additional question from anonymous assistant. That says you ask for [indiscernible] shareholders for Grupo Sura and [indiscernible] that the Cementos Argos share conversion -- and do you think asking Grupo Sura doing the same? And second question is the [indiscernible] with [ Min Capital ]. Are you thinking making this public? Or how do you see the future of this new economic group.

Let me answer this question. For share conversion, each of the partnerships [indiscernible] discussion that happens within institutional governance in totality that happens within each 1 of the companies. Goes for Grupo Argos as well as for Suramericana as well as Grupo Sura. The discount, the prices are different in each company. And because of this, the moment of making this type of operations is not necessarily the same one with all the organizations. Grupo Sura has publicly mentioned the interest -- it's interest in looking at the conversion of the preferential shares. And at the moment, we have the possibility of doing so and the conditions that we allow to do so. But this will be an operation and that we'll have to go over within Grupo Sura in its right moment and in its right time. Let me say once again, this is different from these Cementos ones, and these were different also in the ones for Cementos [indiscernible] decision was made. So summarizing, if this is an option that's being considered, but it should be analyzed just under its institutionality in a different moment, but not today. In terms of the future, the Board of the company has been working on analyzing different options different organizational architectural options in order to face the realities that come share exchange between Grupo Nutresa or with larger economic participation that as I mentioned before, close to 54% of the economic rights of Grupo Argos and its franchise in Grupo Sura. But simultaneously, as it has been said, and as it has been publicly announced, Grupo Argos does not have the intention of consolidating or becoming the metrics of a financial conglomerate such as Grupo Sura is -- those 2 realities have driven the company to do the study with different consultants, different organizational alternatives in order to structure this with its property structure and holding structure. The results of this evaluation -- are the owners of the company. And this is a strategic sensible element. And because of this, these are not publicly available documents, it is a research for the Board and given to the [indiscernible] delegation that the shareholder assembly has. Those decisions and the measure that have not been made are not constituted as a relevant information. And the moment that we take decisions are not defined yet. We will inform this to the market through available information mechanisms. We have conversations such as this one. But for the moment, this information is strategically sensible and its confidential for the Board.

Okay. We have an upcoming question coming from [ Catherine Ortiz ].

How will the participations be for Grupo Argos and SEB in Grupo Sura after liquidating reported for Sociedad Portafolio over the ordinary shares.

I can take that question. So first, let me speak of the current participation of Grupo Argos in Grupo Sura. For the moment, Grupo Argos has 56 million shares in Grupo Sura, which represent 17%, 18% of the political rights of that company and the autonomous equity. And I guess that's what Catherine speaks to. [ SPB ] has 114.5 million shares with an inhibit vote. So jointly, this was expressed on Slide #5, where Grupo Argos has 39.5% of the political rights of Grupo Sura. Now after liquidating the Sociedad Portafolio, Grupo Sura will receive shares, which will increase to all its shareholders, including Grupo Argos and Grupo Argos will also receive some additional shares from Grupo Sura. This leads -- the economic participation of Grupo Argos in Grupo Sura will be 45.8%. As we've been mentioning in the past, Grupo Argos does not have intention or the vocation of having more than 49% to control to Grupo Sura. That's why the participation in the [ SPB ] will also increase in an anticipated manner for us to be under that percentage. I don't know if my colleagues want to complement on that.

Okay. We have another question from [indiscernible]. How will the construction business evolve while the Colombian economy keeps deaccelerating. What yields and what returns is the company expecting in that sense?

Thank you, Juan. That's a very interesting question. I conceptually introduced the strategy that we are managing in terms of the businesses that are related with the construction business basically material -- construction materials business and the cement business. And I also want to give the word to Andre Bejarano, so he can also speak of the real estate business that also has to do with this sector.

I want to say something. Clearly, the construction sector in Colombia and the figures showed us has -- is facing a challenging market that's [indiscernible] the acceleration or specifically the social interest housing area. I guess that the announcement that has been previously mentioned in terms of the reconsideration of social interest housing subsidies in order to stop using the [ expense ] level. I would hope that the types of measures will offer a positive dynamic in terms of the subsidy allocation for programs such as [indiscernible]. And that way we could reactivate the social interest housing. In the meanwhile, the expectation of the businesses is based in parallel paths. One -- and the most important one is efficiency. As you were able to see in the Grupo Argos results, we had an EBITDA margin of 22%. That's close to 200 basis points in respect with the previous year. That gain of 10% in terms of competitiveness is due to an expense revision and improving our operational processes and also as supported by an innovation process and market penetration prices into different segments. These are added value products. I believe that the result is clearly seen despite the deceleration that we could see in the market that's close to 50%. The company's results are positively growing. And this is our first strategy that has been implemented that has been very successful, but we need to keep on strengthening even more the competitiveness and efficiency in the businesses. In terms of real estate business development, I would like to highlight, as I previously mentioned on the call, I'd like to highlight projects such as the one that's happening in the city of Puerto Colombia. [indiscernible] as it's known. Another project that was made a couple of years ago that was [ Alameda]. These are projects that have extraordinary quality in terms of the urban development conceptualization in terms of parks, in terms of roads, in terms of networks, in terms of pedestrian paths, in terms of cycle routes, in terms of urbanism quality that are inviting to [ multistates ] urbanism with transportation access, health access, best real estate conditions in order to attend a demand that is fare, but did not have an available supply. In other words, we are creating the demand, we are creating an opportunity in order to attend the markets.

And if we just stay waiting to develop those traditional urbanism models, probably this will take years for these houses to be constructed. As I also mentioned during the conference and later on, I'll give the word to María Aristizábal. Examples, as the ones we're hearing out in Barranquilla, examples of business innovation models in order to develop a demand that would not be reflected growth-wise in this terrains. So summarizing the answer to this good question is that it goes through careful work within the organization in order for us to be more efficient and also working on innovation in terms of product and in terms of business model. So with those 2 variables, we're attacking realities that we face in a country such as Colombia. That accelerates from a corporate object Argos has the virtue of geographic diversification in terms of cycles -- in terms of currencies that allows dampening the exploration cycles in certain countries such as the one the Colombia is experiencing. Let me give the word to Andres Bejarano and María Clara Aristizábal. So we can drill down deeper in the strategy that we have for the -- for this Urban Development business because I do believe it's a very interesting question because this touches the strategy that we are trying to develop.

Thank you, Jorge. Real estate rentals, there is a very particular situation and that is that despite the deacceleration of the economy, the 3 spaces that are available are very low. For example, last year -- at the end of last year, only 3% in terms of logistics and industry was available. The trade occupations are close to 95% and the offices that we thought that were going to be the most affected segment, at the end of last year, the only 10% of the area was free. If we add this to the increase in construction materials and the increase in interest rates, the expectations in this sector despite the economy deacceleration are good. We need to construct new infrastructure, this will be higher cost with rents that obviously will have to be higher. And this will have a positive effect for funds such as ours that has new assets that because of what we've been explaining might have larger rentals towards the future. So despite the difficulties, I believe we are pretty optimistic about the situation.

Yes, pretty clear. Thank you. Maria Clara, maybe you could mention about the primary generation -- primary demand generation.

Thank you, Jorge. Good morning to you all. Effectively if there is deacceleration in the market, this demographic destination in the market such as ours in Barranquilla, there's a quantitative [indiscernible] of asset is pretty high. So at the rate that they're being sold despite the deacceleration up to April will take 70 years to close the gap. So projects such as [indiscernible] will accelerate this gap closure. [ None VIS ], we also have an opportunity. This market has to come back to those levels -- those sustainable levels. And as Jorge mentioned, the subsidy allocation according to the Ministry of Housing, once the requirements are complied. This should accelerate the market finally. I just wanted to complement what Jorge mentioned about quality urbanism at the end this is translated at projects such as ours rolled 4x faster than the rest of the projects in the city. For example, the VIS that's social interest housing. Takes 10 months to sell versus 44 months that take other projects within the city. So these are larger towns also or less profits for the developers. And that's why it's more attractive to look at Grupo Argos lens because we have higher activity. So there's a deacceleration, but nevertheless, our differentiated product allows us to rotate faster and thinking on the mid and long term, demographically speaking, conditions are there for the market to recover.

That was very clear. Thank you, we extended ourselves a bit, but it was totally worth it, very interesting question. So we keep on answering questions to make sure we receive them. [ Albaro de Banca Martis ] asked about the share conversion in Grupo Argos from preferential to ordinary shares. This -- we can come back to this if you find it necessary in [indiscernible] news about the portfolio restructuring after Sociedad Portafolio liquidation, and we've been mentioning the work that we've been doing with Bay. So we'll move on to this, but if you have additional questions about this point, we can approach them. We have a question from an analyst at [ indeed ], that says as far as, to what value per share are the Grupo Sura the share has been reflected in the Grupo Argos balance.

It very important to bear in mind that the values are differentiated as we have them in the consolidated. And as we have the separate balance. So in the opening balances, both values start exactly the same, but the market values that Grupo Sura had in those days -- in those moments. In the case of the consolidated value, that value and that we mentioned, that we received the participation methods from Grupo Sura. That value starts increasing and today, that value is in COP 56,000 for the case of the separate one. We started with that opening balance and its value that's kept fixed that was recently updated with an average according to the values that we take from the transaction exchange that were recently announced and that value is COP 38,216. I want to mention this because due to IFRS, the value is different. So that's -- we see the differences between both consolidated and separate balances.

So we have an additional question from [ Catherine Ortiz ] what was the profit in first quarter 2024, excluding the effect of the Summit transaction and the effect of the transaction or with the Grupo Nutresa shares. Like to give the word to Alejandro.

Thank you, Catherine. We need to bear in mind even when we eliminate the effect of the participation method for Cementos that has results of the combination of the asset -- of the Summit assets in the first exchange as we were explaining. The transformation of the business models also makes the comparison between 2023 and 2024 is not as one only just excluding these operations comparing both years, it does not come from the same base.

And once again, I repeat. For example, last year, we consolidated Opain this year were not. Energy platform where the growth is found, has not seen the energy consolidated reports, this investment in the energy assets that happened in 2020 -- at the end of 2023 in Central America does not allow to make an easy comparison. With that, [indiscernible], let me give the word to Alejandro once again, so they could drill deeper in this.