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

Good morning to you all. I want to thank you for your presence today. This conference will be focused on presenting the financial results from Grupo Argos, for the close of the third quarter 2024. In this state, we have geared Jorge Mario Velásquez, President; Alejandro Piedrahita, Vice President of 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 of Corporate Finance for Odinsa; and Andres Bejarano, President of Pactia. I want to remind you all that in our website, we've placed all the information for the quarter, together with the presentation that we will be following during this teleconference. To download it, you can go in menu, Financial Information. Afterwards go to the section Reports. We're also transmitting this conference through a space of X. We want to invite you to move on to Slide #3 of the presentation, so we could start. And we want to give the word to Jorge Mario Velásquez, President of Grupo Argos.

Thank you, Juan Esteban. Good morning to you all, for being with us. During this call, we will be sharing all the strategic advancements and the results for the third quarter of 2024 that has been very fruitful as we'll be able to share with you all. Our businesses have kept showing positive results, which has been reflected in positive figures that are consolidated for Grupo Argos and that we'll be sharing up next. Nevertheless, before presenting the results of the financial results of the company, I want to share with you about some matters and the recent announcements about the future of Grupo Argos in Grupo Sura. Last 25th of October, as you might all know, after the authorization that happened during the Board in terms of potential conflicts of interest, Grupo Argos [ produced ] the approval of the Board described a memorandum of our understanding with Grupo Sura. In virtue of this agreement, both parts committed to explore exclusively and, if possible, defining transactional structure that has as a result that Grupo Argos and Grupo Sura will start being investors of each business, both directly and indirectly. The transaction structure that's the object of the study that has been explored right now under the framework of this memorandum of understanding must guarantee an acquisitive treatment to all the shareholders of the companies that have been intervened. This has to be financially feasible, accounting feasible and legally feasible in terms of execution, also, in each one of the parts to continue deepening its specialization, developing their business brand in the long term. This memorandum of understanding is aligned with the objective of reducing in an orderly manner the cross participations with Sura, consolidating with a special supervision of Grupo Argos, the management of infrastructure investment and guaranteeing the continuity of the business plan, opening a new chapter within the history of value generation of this company that we believe is important to place on the economy. And that's why I want to come back to the history. In 1978, a group of businesses within which we had Grupo Argos established a cross-participation structure and noncontrolling with the purpose of driving the growth, the growth of the region and the growth of the country. It advanced in such way that way of making businesses focused on positive impacts for the shareholders, clients, collaborators, communities and for society in general. Today, 46 years afterwards, I want to start by recognizing that this structure has been fundamental for the growth, internationalization, the stability of the companies that have contributed to the development of strategic sectors of the Colombian economy and to all its related groups. And when this was established, the investors were seeking for diversification. Nevertheless, the context changed with the opening of the economies and with the sophistication of the markets and the investors, by which we've moved to a world where capitals free flow and investors prefer to manage the diversification according with their own purposes, reason by which the cross participation structure has become the main investment alternative that could be less attractive than what it was in the past. When someone purchased in that time, a share of Argos, they were also accessing to a participation to a business group, the Sura Group, and to the food group -- to a food group in that time was in Nutresa group. So that was a way of exposing to a proxy of 3 very important sectors of the Colombian economy. That diversification is preferred by the investors according to their own preferences. Grupo Argos, its strategic investments and portfolio investments, I must say this with pride, are leaders in their sectors with presence in all the American continent and are ready to take out the next step in terms of growth and consolidation. We consider that the simplification of the shareholder structure could become the main milestone in terms of value transfer and regulation to all the shareholders of Grupo Argos and will be aligned with the appetite of the global investors and the market trends. Keeping, and I want to emphasize on this, simultaneously the essence of the business philosophy, which is a positive impact over the rest of the related groups and revealing value for its shareholders. This new structure can also enable unexplored growth avenues, the 2 [ similar ] companies in terms of their equity, localizing their businesses with more important role in the global context to generate lots of growth and avenues of growth for shareholders. Grupo Argos' portfolio has experimented a significant transformation as part of its most recent transactions, concentrating in infrastructure, a transit that will end in a 100% specialization once the company stops being a shareholder of Grupo Sura. On the slide, we have in the presentation, we could see how the investment portfolio for Grupo Argos has transformed in the last 12 months. Taking as reference the values on the ledgers of our nonlisted investments, such as Odinsa, the urban development business, Pactia and others, and the price of the shares in the Colombian Stock Exchange of our listed investments such as Celsia, Cementos Argos, Grupo Sura in this moment, known as Sociedad Portafolio and previously Nutresa, we can see that in terms of the third quarter of the previous year, meaning by this 2023, Grupo Argos portfolio has appraised close to COP 3 trillion, reaching COP 19.3 trillion. This increase is supported in the close of strategic transactions and the fruitful performance -- operational performance of our business. From another side, the disinvestment in Grupo Nutresa and the operations, such as the ones we mentioned about Summit Materials have allowed that for the Infrastructure segment,to increase, reaching 2/3 of the value of our investment portfolio of the company aligned with the strategic route in order to keep on specializing it in the infrastructure sector. Now I want to invite you to move on to Slide #4, where we want to go over the breakdown and the evolution of the separate expenses of Grupo Argos. It's important to remember that when we share the same company registration number of Grupo Argos, the administrative expenses of the separate financial states include both the structural expenses of the holding as well as those associated to the urban development business, which as operational unit inquired in expenses, such as land taxes, vigilance and maintenance and the payroll linked to its activities, which already appear reflected as lower present value in the Grupo Argos ledgers for this investment. That's why when we analyze the administrative costs of Grupo Argos, it's essential to exclude the specific expenses of the urban development business. Besides in the last 3 years, some nonrecurrent projects that have enabled the generation of value and the specialization of the company in terms of infrastructure have generated superior expenses to the historic average. I'm speaking more specifically about those expenses associated to the attention of the public -- the OPAs that have been launched by Grupo Sura, Grupo Nutresa and even by Grupo Argos that clearly do not correspond to the operational expenses of this company. Excluding the expenses associated to the urban development business and this nonrecurrent projects, we focus on the expenses that reflect a daily operation of Grupo Argos S.A. Holding, which have showed a significant drop and even lower than the inflation with an annual growth rate of minus 4.5%, once again, minus 4.5% between 2015 and 2023. In the same decade, the real expense reduction, the company doubled its EBITDA going from COP 2.6 trillion in 2015 to COP 5.5 trillion in 2023. It doubled the dividend distributed to its shareholders going from COP 234 billion in 2015 to COP 548 billion in 2023 and reduced its consolidated debt close to half in respect with its peak during the pandemic. The relation between the expenses of the holdings in the last 12 months, excluding the expenses of sales and land taxes of urban development, as well as nonrecurring expenses for mergers and acquisitions, depreciations and amortizations, which reached COP 78 billion as a reference value over our portfolio, and this is lower than 0.5%. In terms of what we've covered this year, I want to mention the performance of the market. We keep on advancing in our repurchase programs such as a mechanism to transfer value to all our shareholders in a consolidated manner, the companies of Grupo Empresarial Argos have executed more than $100 million since the repurchases began. This strategy has offered a larger dynamism and liquidity to the market at the moment that it has been required. In the last 12 months, the price of ordinary shares for Grupo Argos has increased 112%, and the preferential shares have increased 108%. The ordinary shares for Cementos Argos at 82%, and the Celsia shares at 56%. In this same period, a versatile capitalization of the companies for Grupo Empresarial Argos has increased more than COP 14.5 trillion. At the same time, the shares have appraised, the average volume negotiated in the stock change has also increased. For the ordinary share in the average for the last month, it's over 3x the same figure of the last month 2023. And for the preferential shares, the average of the month is 4x if we compare this with the same period. Now moving on to the company results for -- we have accumulated for 2024. I wanted to check Slide #6, where we can see that Grupo Argos closed this part of the year with consolidated revenues of COP 1.5 trillion, which are stable compared with the same period 2023. And an EBITDA of COP 4.5 trillion, growing 39% compared with the same period previous year. This bearing in mind that as a result of the combination agreement between Cementos Argos and Summit Materials, the company disposed of 100% as of its associated subsidiaries in the United States by which the involved assets in that transaction were classified as a discontinuous operation. As a consequence, the company made changes in the presentation of its consolidated financial reports to the 30th of September of 2023, reclassifying all the associated parts to the assets disposed in the United States to a unique net profit line of discontinuous operations. Nevertheless, as investment holdings, the result of Summit Materials is kept -- being seen in the first line of the consolidated results for Grupo Argos, registering this as a participation method. As a result, the net profit closed in COP 7.3 trillion, and the net profit for the controller is COP 4.3 trillion. These figures reflect the profits generated both for the Summit transaction as well as for the exchange of the Nutresa shares, which are the materialization of the value that has been generated during the period this organization has managed these investments. Leverage on the good operational results of our infrastructure investments and driven by the same nonrecurring events that impacted the consolidated results, the separate financial results showed that the accumulated revenues for the year closing COP 3.4 trillion, EBITDA at COP 3.3 trillion and net profit reached COP 2.8 trillion. Now I want to invite you to move on to Slide #8, where we can see a summarized structure of the assets that the company manages for the close of this first semester of 2024, and how this will be consolidated and we'll keep on registering financial results in the Grupo Argos ledgers. We could see that despite the fact that Grupo Argos keeps exercising control and consolidation in the 3 main operational businesses, such as Cementos Argos, Celsia and Odinsa, the investments that our subsidiaries have made the last years have led that many of the results, both assets and liabilities, are not consolidated line by line in its financial reports, and, as a consequence, neither in Grupo Argos. Now this is reflected as participation method in the results of each brand and afterwards in the financial and consolidated financial results of Grupo Argos. From now on, 31% of the participation that Cementos Argos, Odinsa and Summit Materials will be reflected in our consolidated financial results through the participation method. Likewise, as -- the Celsia asset management business, including C2Energia platforms or Tesorito y Laurel or Caoba, we anticipate a great part of the growth of these brands through the associations with third-party capital won't be registered line by line in the financial results of the company. Likewise, the growth of the road and airport platform for Odinsa in association with Macquarie result in the -- results of those concessions won't be consolidated either. Because of this, it's important to consider that the consolidated financial results only incorporate a minority group of the assets managed by the company. In other words, the revenues and the consolidated EBITDA won't fully reflect the operational performance of our businesses. Now I want to invite you to move on and go over the operational results of our businesses, which is found on Slide 11. Starting with Cementos Argos that has kept focusing on the profitability and the efficiency of its operations, reaching an EBITDA growth of 4% in comparison with the previous year despite a brief reduction of the revenues. This has allowed the company to reach an EBITDA margin of 22% up to what we've covered this year, which represents an increase of 130 basis points in respect to the first 9 months of the previous year. The company represents 46% of the total EBITDA generated by the industry in Colombia, with an average participation of 35%, market participation, showing the effectiveness of its strategy focused on the optimization of client portfolio and in terms of the efficiency of its operational costs. This achievement supported in a differentiated value proposal and in a solid brand positioning as a deep work in terms of processing cost optimization, which is known as a cross-cutting effort from the [ mine ] up to the market. In terms of 31% investment of Summit Materials, the integration of the Argos USA assets advances based on what has been planned. In last call, 31st of October, CEO of Summit Materials reissued the commitment of materializing $40 million in synergies during this year, keeping the EBITDA guidance for 2024. that's placed in between $970 million and $1 million for this year, which reflects the potential of this integrated platform in order to capture value in the construction materials industry. Before going down into the operational performance of our cement business, it's key to mention the communication that has been issued by Summit Materials to the market the last 24th of October, where the company informed about the reception of an acquisition proposal that has not been requested. Summit has started preliminary conversations with the interested party. And in consultation with its advisers, the Board will evaluate the proposal in order to act under the best industry of the -- the best interest of the company and all the best interest of the shareholders of Cementos Argos. It's also important to highlight that there's no guarantee that we will reach the final agreement, and that Summit has indicated that it won't make any additional comments until the Board makes a decision. For the moment, we cannot offer any additional details. And please ask you all to understand the situation. During the quarter, Cementos Argos dispatched 2.2 million cement tons and 654,000 square cubic meters of concrete in its operations in Colombia, Central America and the Caribbean, with a drop of 9% and 8% in respect to the same period last year. Despite the total dispatches of cement in Colombia have shown a de-acceleration, product of lower activity in the residential segment, it's important to highlight that new housing sales have started to recover, registering an increase of 23% in which we have covered this year in comparison with the same period last year, which is actually a very promising signal. If this increased, together with the moderation of the inflation and the reduction of housing rates, the stabilization of the cement demand in short and medium term and coming back to that growth trend in the future -- in a close by future, supported on the fundamental of the economy of the country. Once the market starts its recovery, Argos will find itself as a more efficient and agile company and fully prepared in order to take advantage of the demand expansion. In the Infrastructure segment, it's relevant to highlight that the main cities of the country have ambitious plans to develop public infrastructure projects in the upcoming years, which also should also drive the cement and concrete demand in the upcoming quarters. In the Central American and the Caribbean region, one of the main attributes of our regional presence is based on the diversification of the economies and the asynchronism of its cycles. This allows us to face challenging market conditions and reaching profitable and sustainable results, taking advantage of the opportunities that emerge from the complementarity of the markets and the logistics connection that Argos has developed in this region. The accumulated EBITDA for this year in Central America and the Caribbean region grew a 10% comparison -- compared with the first quarter in 2023, reaching $106 million with a very healthy EBITDA margin of 24%. Now I want to invite you to move on to the energy business results that can be found on Slide #12. The controlling net profit for Celsia presented a growth of 8% up to this moment of the year despite weather volatility that resulted in rainfalls lower than what we had on average, more specifically during August and September. This situation reduced the flow of the rivers and also effected the reservoirs of the system, which impacted directly the generation of the energy of the company, but also for the national electric system. Nevertheless, despite this climate situation that has being seen throughout the year, we anticipate that Celsia will close with the consolidated net profit similar or even higher than the one that was recorded from 2023 despite the fact that the results of 2024 do not include the contribution of this investment assets in Central America that did contribute to these figures in 2023. This performance reflects how solid our assets are in the energy business, demonstrating their capacity to offer reliability in the electric system in critical moments. In addition, during the quarter, Celsia reached a milestone in the energy transition for Colombia by inaugurating the first solar energy storage system with batteries that has been installed in Colombia. This innovation integrated to Celsia Solar [indiscernible] farm will increase the sub-generating capacity of the plant, allowing that the energy that's created during the day will be able to be delivered during the night. This system breaks the traditional limitation of the solar energy system, extending its availability to more than the daily hours, contributing like this to the investment of the energy metrics. And I believe this is the beginning of the structural transformation that our global level will -- the energy business will suffer with the penetration of this great scale storage. In Celsia, we see this is an opportunity in order to lead this transformation in the markets where we operate. From another side, the electric project of Carreto located in the Atlantic department reached important advancements. Necessary equipment for its operations have already reached the work site of the plant. And we'll continue exploring and investing in its commitment to expand the generation of clean and efficient energy. Now let's move on to results of Celsia. In the second quarter, the consolidated revenues for Celsia totalized COP 1.4 trillion, representing a reduction of 5% in comparison with the same period 2023. And the accumulation of this year, revenues reached COP 4.7 trillion, reflecting an increase of 3%. The consolidated EBITDA was of COP 345 billion, showing a drop of 17%, explainable to the lower energy generation coming from the climate situation and to the deconsolidation of the assets that we sold in Central America. When we consider the EBITDA of the investment platform for Celsia, the administrative EBITDA by the organization during the quarter reached COP 465 billion. This figure adjusted by the sold assets in Central America will be equal to a reduction of 3% year after year in the EBITDA managed by the company, which proves the resiliency of the company when we faced extreme weather phenomenon such as a El Nino. Explained better by its balance between regulated and nonregulated businesses as well as an adequate hiring policy and also on the balance of generation -- energy generation industries. This is key for preparing the organization for extreme cycles that the business might face. The energy generation during the quarter was 1,030 megawatt hour, which represents a drop of 18%. Nevertheless, we want to highlight the growth in the solar energy generation of the company with an increase of 17% during the quarter and 45% during what we've covered this year. And this has been reflected in Celsia Energia, which is our platform of solar farms, which closed this quarter with 339 megawatts in operation, which means 39 more megawatts compared with the previous quarter. Besides this, Celsia Energia accounts with 270 megawatts in 12 projects and another 632 megawatts in different phases of development, which will add more than 1,200 megawatts of installed capacity for solar energy for the company in a close future. Now let's move on to look at the results of Odinsa on Slide #17. The 21st of August, Odinsa and the governance of Antioquia, and the Túnel Aburrá Oriente concession in Grupo Argos jointly announced the beginning of the works for the second stage of Túnel de Oriente, which is a work that will represent a CapEx of COP 1.2 trillion and an OpEx of COP 1.2 trillion, and will generate more than 2,000 direct employments. Since the beginning of its operations, the Túnel has facilitated the transit of more than 42 million vehicles. This is a figure that shows the importance of the connectivity of the deployment of Antioquia, which connects the Aburrá Valley and San Nicolás Valley with Jose Maria Cordova Airport. Capital for this second stage will come from the shareholders of Túnel Aburrá Oriente concession and the financing of private banking. Project will include different parts in Santa Elena 2 tunnel with a length of 8.2 kilometers. The construction of Seminario tunnel, this is a smaller tunnel, that's a bit less than 1 kilometer and the construction of 4.5 kilometers of roads -- open air roads that will connect both tunnels. The second road for [indiscernible] and the broadening of the axis of Via Loreto that will improve the mobility of the Seminario tunnel towards Las Palmas. Second stage of Oriente tunnel also includes the construction of the road exchange for Jose Maria Cordova airport, that's being constructed right now, which reports an advancement of 49% in its works plan and represents a significant step in the consolidation of a modern and efficient road network between both valleys, reducing the traveling times between the subregions that are strategic and have a very high potential for the future of the Antioquia department. For this expansion, Grupo Argos was [Technical Difficulty] positively transforming the life of it, improving not just the regional connectivity, but also generating employment and dynamizing the key segments such as building tourism. From another side, our operational assets have positive performances in terms of airport traffic. The airport platform has mobilized 51 million passengers in the last 12 months, and this is an increase of 16% in respect with the same period last year, from which 46 million correspond to the international airport of El Dorado. This is a record figure for that asset that operates at full capacity. The performance of El Dorado airport in which traffic grows 18% compared with the first 9 months of 2023 reflects the consolidation of Colombia as a tourism destination and business destination and also highlights the competitive position that Bogota has in order to become into a regional hub that will connect all the American continent. The future of the airport sector and tourism in Colombia is very promising. And Odinsa is found in an ideal position in order to capitalize the value that will be generated from these activities. We expect that our private initiatives, such the private initiative of El Dorado Max, that seeks to expand the capacity El Dorado airport to 60 million passengers; and the private initiative of a new airport in Cartagena, we propose to see construction between -- an airport between Cartagena and Barranquilla, both of them under feasibility [Technical Difficulty]. We'll keep on advancing with a good [indiscernible]. On other side, with a total investment at 31st of July, Quiport announced the restart of the expansion works for the Mariscal Sucre Airport in Quito, which is a cross-cutting investment made with their own resources that will improve the experiences of the passengers and will increase the operational capacity of that airport. This project will generate 400 direct employments and approximately 800 indirect employments. And it will keep strengthening the position of this asset as one of the most relevant airports in Latin America. Now moving on to the operational results of Odinsa on Slide #16. The road platform, which represents growth compared to last year, the growth of the [indiscernible] grew 15% compared with the same period, while the EBITDA of the quarter was placed in COP 154 billion with an increase of 2%. The expected TIR for Autopistas del Café closed the quarter at 22%. The Oriente Tunnel in 18% now including the expansion, the Concesión la Pintada, 15% and meta road grid, 11%. In airports, which figures are detailed on Slide #17, the traffic during the quarter reached 13 million passengers, growing 12% from inside. The revenues and the EBITDA of the platforms that have been measured in dollars increased 7% and 2% in respect with the third quarter 2023. As a result, the expected TIR for El Dorado Airport, which is 18%, while Quito reached 11%. Now I want to move on to the results of Pactia and the urban development business and the real estate business that has been detailed on Slide #18. The effective gross revenue was COP 125 billion, representing a growth of 10% year after year. And the EBITDA for the quarter was COP 67 billion, which represents an increase of 12% year after year. In terms of the same assets for the accumulated year, the operational net revenue and the EBITDA grew 10% and 12% compared with 2023. In total, we've renewed contracts for 174,000 square meters, and we placed new contracts for 62,000 square meters until what we've covered this year. Until the end of this period, the fund closed with an occupation of the non-hotel portfolio of 97.2%. This is an increase of 47 basis points compared with the same period in 2023 and an increase of 58 basis points compared with the same quarter. Compared for the third quarter 2023, the hotel sector obtained a larger growth in terms of gross revenue -- effective gross revenues with an increase of 14%, followed by offices with an increase of 12%. In the case of hotels, the results were driven by an increase of the rate close to a 14% year after year. In terms of offices, 9 of the 10 assets of the portfolio achieved a commercial occupation of 100% at the end of the period. Finally, in respect with the trade assets, the brand sales and the traffic increased 0.8% and 1.1%, respectively, in comparison with the same period previous year. Now I want to invite you to check the results of the urban development business that's found on Slide #19. During the third quarter, the urban development business kept exploring new products and strategies in order to dynamize the real estate markets in the areas -- of the metropolitan area of Barranquilla and in the island of Peru. In the accumulation of the year, we've structured for logs in Barranquilla and one in Puerto Colombia, besides the rural land lots in Cienega, with a total of 1,286 hectares, which represents significant savings of the maintenance cost, surveillance and land taxes for Grupo Argos. Nevertheless, the business represents a drop with the previous year, which should be understood under 2 dimensions. From one side, in terms of the P&L, the drop of the figures responds mainly to an adjustment in a reasonable value of the land lots of [ Pavas ] and Baru that were made during February and that we had previously mentioned with you, where we reviewed the future appraisal, which resulted in a provision close to COP 96 billion in the financial ledger. So it's important to highlight that this adjustment is just an accounting adjustment, and we'll allow to explore additional usages for the land lots, which also will lead to an acceleration of the sales towards the future. In terms of the cash flow, that's the second dimension accumulated in the year, we could see a drop compared with the previous year, attributable to a larger level of the expense, more specifically on land taxes and more specifically due to the drop of the dynamic of the Colombian market, housing -- and the Colombian housing market that has been affected by the high interest rates. But as I mentioned, the trend apparently, it's changing towards a more positive effect. This effect obviously affects figures because the deacceleration of new housing in 2023 have impacted initiations of 2024. Nevertheless, given the growth of new housing market in Colombia, as we already explained, we anticipate that this situation will change in the close by future with an urban development business positioned in a privileged way in order to capitalize the recovery of the real estate market represented in VIS and non-VIS market in Barranquilla. Now let's move on to Slide #22 in order to analyze the evolution of the consolidated indebtment of Grupo Argos. In this area, the net debt closed in COP 9.1 trillion. This is a drop of 24% compared with the same period last year. I would like to stop and highlight this achievement. Since the peak of COP 17 trillion, net debt had reached in a consolidated manner at the close of first quarter 2020 during the pandemic, the group has been able to reduce its consolidated net debt, we closed almost half deleveraging and close to COP [ 80 ] trillion during the same period. The companies have kept strengthening its equity and reporting solid results, which are reflected in the performance that we are sharing with you today. Net -- separated net debt of Grupo Argos detailed on Slide 25, closed the quarter in COP 1.2 trillion. This is an increase compared with the same period last year. That's mainly explained by the cash that was disbursed for the joint OPA for the shares of Grupo Nutresa that was filed for this transaction. I wanted to remind you that the -- for this transaction, the company used COP 432 billion from its cash without going into additional indebtment. That's why when we analyze the gross debt of the company, we've seen that this just has increased 12% in respect to the same period 2023, growing from COP 1.6 trillion to COP 1.8 trillion. This means that the attention of the OPA for COP 432 billion was done with the available cash that the company had without getting more debt. Despite the increase of the net debt due to a lower cash, Grupo Argos keeps a very healthy net debt indicator, closing this part of the year, 1.7x. Despite the disbursement of this OPA, the company consumes or keeps a side cash position with fixed rent investments for around COP 345 million, which has a positive carry given that its performance is over because of the net debt. In order -- in closing, I want to speak about sustainability and reputation. And we want to share with you news that fills us with pride. The companies of Grupo Empresarial Argos strengthened its performance in the Sustainability Index of S&P Global, complying 12 consecutive years being as recognized for our performance and the management of environmental, social and corporate governance topics for more than 3,500 companies around the world. Last measurement made by S&P Global ratifies the leadership of Grupo Argos and Cementos Argos, Celsia in terms of sustainability, granting outstanding ratings, which are over 82 points over 100 possible points. From another side, and last addition of corporate reputation business monitor done by Merco Grupo Argos, Cementos Argos and Celsia consolidated within the companies that have the best reputation in Colombia. In this banking addition, Grupo Argos highlighted as one of the top 10 companies with the highest reputation in the country, while Cementos Argos was positioned in place 16, and Celsia is positioned 49. Likewise, Odinsa entered the ranking position 152, placing itself in spot #5 for the construction sector and infrastructure. This recognition marks its third consecutive year, where Grupo Argos appears within the most best reputation companies of Colombia and the fifth consecutive year as the Best Business Group of the country. This achievements motive Grupo Argos to keep on working not just to deliver better results for all its shareholders, but also to do this in an equilibrium with the rest of its group of interests. The company firmly believes that this balance is where the key of the construction of a side reputation is based, with a valuable assets that Grupo Argos has been working for the last 19 years -- in 90 years as a leader of the industry. Now I want to give the word to Juan Esteban Mejia, so we could receive all the questions that you might have. I want to say once again, that besides this space where we have our executive team to attend all those particular points that you might consider, outside of this call, both me and the rest of those on the call are more than available to answer any questions, doubts or queries that you might have around this topic. So thank you for being with us. And let me give the floor to Juan Esteban so he can moderate the Q&A session.

Thank you, Jorge Mario. For the moment, we don't have any questions for the Q&A session. We will be giving you a couple of seconds if we receive any questions, I just wanted to remind you all that the web page for Grupo Argos and on the last slide of this presentation, we have the e-mails you can find my e-mail and also the Investor Relations group that we might attend any questions that you might have, any doubts, questions or queries and then any ongoing questions that you might have about the company. Okay. So we get a question from Katherine Ortiz right now, which she has as follows, could we drill down the upcoming steps that will be followed for the Grupo Sura disinvestment process?

Okay. Katherine, let me answer that question. Thank you for attending to the conference and for making the question. I'm not going to be evasive, but I want to be careful with the answer. Let me explain why. As I was explaining during the call and as we also stated publicly, this is a process that has the following path: for some time now, we publicly told the market in different opportunities, in different calls with investors that our ambitions, due to the reasons I explained during the call, was, at the moment, to look for a property structure for both holdings with each one can have a position of not being shareholders of the other company and due to clarity to simplification will be the attractiveness of this year due to focusing on our own business, and we don't believe this is necessary only, but this is also very convenient for the value generation. This was the first milestone that conviction that the moment has come to transform across our property, if we could call it in such a way. In those moments, the organization started a very in-depth process of analyzing the different alternatives and this has been done by companies that have supported us globally like JPMorgan, for example, [ IP ] Global, analyzing similar schemes that have happened in some parts of the world. Such is in Japan, for example, how has -- have this evolved, which were the alternatives that we had or which were the regulatory implications, which were the value implications that you might have taxation-wise for the company and for its shareholders. This is a process that's still being executed and it's a very in-depth process. In the moment that the Board considered that we were in a point that was advanced enough, we called shareholder assembly. Grupo Sura did something similar in order to remove those potential conflicts of interest that may be members of the Board might have within the analysis, more in-depth analysis and more decision-making process. For example, Alejandro Piedrahita and me, we are part of the Board of Grupo Sura or for example, Ricardo Jaramillo and Francisco are part of Grupo Argos Board. The Board gave a possibility of analyzing these alternatives. This was the second milestone that we checked in this process. The third checked milestone we subscribed and we announced to the market, a memorandum of understanding that basically places a general framework that should lead to a mutual and exclusive effort of finding a mechanism that will allow making that transaction in an ordered manner. And as I mentioned before, attending the best interest of all the shareholders and of all the groups of interest. That memorandum, that's where we are right now, that's a part of the process where we are right now, trying to understand which are the alternatives that we will select. This is still ongoing. And there will be additional steps that we will be also announcing to the market once they're ready and once the Board considers right, that are not that far away, but they're not as immediate. And we will share to the market and everyone which is the path that has been selected to carry out this process, we'll make those in a transparent manner with all the information for everyone to understand. But today, we are not yet ready, and we have not yet approved. And I cannot anticipate this. Once this has been defined and we will generate all the necessary documentations between both organizations that will allow for this framework agreement, that will allow for this to be developed. And this obviously will follow all the regulation approvals and institutional approvals that are required of the diffusion and conversation with the different shareholders and investors of this organizations in order to show the path that we will follow. Simply, I just want to reinforce the message that the spirit that supports this is very clear, why and where do we want to reach. But what I want to reinforce is that all of the alternatives that are being studied part from a premise, and that's the quality and transparency within and for there not to be asymmetric transfers between groups of shareholders and that all the shareholders will receive a fair and just treatment. And that will allow the organizations and then as shareholders keep on exploring and generating value. So once again, thank you for your question. I could not go further because we basically don't have a definition of what's the path that we should follow and we're working on it, and we'll keep on working on this analysis that it's going to be a very in-depth analysis, very comprehensive analysis, that bears in mind all the variables and obviously ask for all the necessary authorizations that are required. So we have been advancing, but we are not yet ready to define what is that transitional path. I don't know if Rafael Olivella would like to count that what I just said.

Yes. Good morning to everyone. Thank you, Jorge. I believe that this was very clear. And any additional topic, as Jorge said, we're more than open to answer any questions that you might have at the moment that you consider. Thank you.

In addition, Katherine asked if we could give more detail in terms of deterioration that some assets have had in the urban development business and what assets are we speaking of? We have Maria Clara Aristizábal from the urban development business.

Katherine, yes, the deterioration corresponds to the Baru assets and Pavas assets in Barranquilla. And this is because of the increase in the raw materials for the urbanism component, understanding and the appraisal of the land lots is residual value and any increase in the cost impacts the value of those assets. And post-COVID and all the disruption within the global supply chain, we saw the increases that were reflected in the costs and, obviously, in the value of these assets. So this is Baru and Pavas in Barranquilla.

Thank you, Maria Clara. Okay. So following the order. Third question, we received also comes from Katherine. And she says, as follows: repurchases of shares have played a key role in the recovery of the price -- in the market price. But at the same time, that this is having a very important impact in the floating price, reducing the possibility of going into international indexes. She asked if we're bearing this in mind for the future repurchasing program steps.

Let me allow Juan Esteban Mejia to answer this.

I would say as well, coming back to what Jorge Mario mentioned at the beginning of the call, since the beginning of the repurchase program that started in March, February last year 2023, shares have had a very positive performance, almost doubling their value. At the same time, Katherine, the liquidity and the transactional volume has increased. And this in the past has been a main indicator for the entrance or for the increase of the wing of Grupo Argos in the indexes. Since the beginning of the program, the preferential share of Grupo Argos has been negotiated 4x more and the preferential on 3x more. So this obviously has had a different effect there, which leads to a higher weighting of the index. And we're also seeing that if Grupo Argos maintains the liquidity indexes that we've had in the last couple of months, we would be eligible to access other indexes. So we do understand the point that you mentioned. And we mentioned that we repurchased shares. The floating price drops a little bit. But in the measure that the companies are more valuable and the shares are more valuable that this leads to a virtuous loop, and we'll be able to access other indexes, and there will be more purchases. I hope that this answers the question. We will go into more detail if you think so. In addition, we have an additional question from Sebastian [ Gallego. ] In case of being successful that offer for Summit, assuming an attractive value, what investment options could be evaluated from Cementos Argos preliminary? Would you consider on staying with Summit if this becomes a private vehicle?

Thank you for the question. But I need to be very careful with the answer. And let me apologize, we're saying this openly. But due to regulatory effects to a publicly listed share in the New York Stock Exchange, the only information that we could speak in this term is the one that has been published by the company. There's [ 13D, ] that's a format that we made with SEC, which basically says, what I mentioned during the call, and that is that the company has received an offer. It's an exploratory offer that was requested, and it has been explored by the Board. Due to the -- that I'm part of Summit Board and being part of Cementos Argos, I could not speak more about that process because this would be very delicate for the value of the stock exchange. But besides that, speculating different exit rows for this process could also be inappropriate at this moment. Let me apologize. I cannot answer this question. But I cannot. And as mentioned that there's more information. In any sense, the company will supply this information publicly and openly. And this information flows from Summit Materials will have the possibility of increasing or sharing any of decisions that are made.