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

[Audio Gap] I'm Carolina Zuluaga, and I'm the Director of Investor Relations at Grupo Argos. Joining us today, we have Juan Esteban Calle, the company's President; Felipe Aristizábal, Vice President of Strategy and Finance; Rafael Olivella Vives, Vice President of Legal Affairs; Juan Esteban Mejia, Manager of Corporate Affairs; and the management teams from Odinsa, the Real Estate business and Pactia. I'd like to remind you that we have made all the quarterly information available on our website, along with the presentation we'll be using during the conference call. To download it, please go to the Investor Relations menu and then to the Reports section. I invite you to turn to Slide 3 of the presentation to begin the meeting. And now I'll turn the floor over to Juan Esteban Calle.

Thank you, Carolina, and good morning, everyone. I'd like to extend a special thanks to you all for joining us today. On august 5th, we presented ACE 1.0, Argos's Convergence Effort, our road map to accelerate the generation, capture and transfer of value with a very specific goal to help Grupo Argos' market price converge towards its fundamental value. To achieve this, we have structured the program around 3 pillars: operational excellence, consolidation of the asset management business and acceleration of the share buyback program. Moving forward, we will include updates on this road map in our earnings presentation to the market, rigorously tracking the program's goals, milestones and results, and we'll show you how its execution is progressing and how each initiative contributes to creating value for our shareholders. The initial reception of ACE 1.0 was positive and confirms that the market values and understands the program's rationale. Analysts have highlighted that ACE provides a clear road map for closing the value gap at Grupo Argos with targets related to EBITDA growth, dividends, share buybacks and improved portfolio visibility. They have also positively highlighted the evolution of Odinsa into Grupo Argos Asset Management and Grupo Argos' clear role as a capital allocator. On the trading day following the announcement, the common stock rose 6% and the preferred stock 5.3%, reflecting an initial favorable market reaction to the program. From August 5 to date, the common stock has risen 30% and preferred stock 21%. We recognize that this is an initial reaction and a vote of confidence that will materialize in greater value creation as cash flows are generated for Grupo Argos and its shareholders. With this mindset, let's now review the key developments and results of businesses during the second quarter of 2026. To do so, I'd like to turn the floor over to Felipe Aristizábal, CFO of Grupo Argos.

Thank you, Juan, and good morning, everyone. Please turn to Slide 5 to begin our review of the operating results of our businesses. Cementos Argos made significant program (sic) progress during the second quarter in building 2 platforms that will mark the company's next phase, Argos Materials and Argos LATAM. This separation represents the natural evolution of the path the company has been diligently charting through the spin-off of Argos USA, the merger with Summit Materials and the subsequent monetization of that stake. Today, Argos is applying the experience to develop 2 businesses with greater focus, autonomy and capacity to realize the value creation potential. This evolution also requires capabilities that enable us to operate simpler, more efficient and more scalable structures. In this context, the recent go-live of the ERP system, Argos LATAM represents a significant milestone, more than just a large-scale technology project executed on time and within budget. The system's launch solidifies SUMMA, our digital service center as a strategic enabler for the Argos business group. With more than 1,200 employees, improving capacities to integrate operations, digitalize processes and rapidly deploy solutions, SUMMA provides us with the flexibility to grow, incorporate new assets and capture efficiencies. Along the same lines and as we announced within the framework ACE, at Argos Latam, we aim to deepen profitability and organically increase EBITDA by more than $75 million over the next 12 to 24 months, raising EBITDA generation from levels close to $350 million to approximately $425 million. This goal is driven by 3 key factors: cost leadership, profitable volume growth and greater volume capture per marginal metric ton accompanied by a disciplined price management. Colombia will be the main driver of this growth. Today, it accounts between 55% and 60% of Argos Latam's EBITDA and has an efficient cost structure, which gives the company significant operational leverage as demand recovers. In 2025, we sold nearly 3.8 million metric tons of cement in the country. And this year, we expect to reach approximately 4.2 million metric tons. Looking ahead, a sustained market recovery could push shipments to levels close to 5 million metric tons with a contribution exceeding $85 per marginal metric ton. Volume growth, coupled with a disciplined price management has a significant potential to translate directly into EBITDA. During the second quarter, we saw clear progress towards achieving this goal. In Colombia, the recovery in volumes continued with year-over-year growth of 5.5% in cement and 15.9% in ready-mix concrete, driven by housing, self-construction and infrastructure. In Guatemala, volumes tripled compared with the second quarter 2025 and now are approaching 10,000 metric tons per month, driven by exports from our Rio Blanquito plant in Honduras. This is the first phase of an expansion strategy in Guatemala, where we have the capacity to continue gaining scale in Central American largest cement market by strengthening our commercial presence and consolidating small importers. In Venezuela, we also continue to make steady progress. During the quarter, we exceeded the initial target of 5,000 metric tons per month, completing the first phase of our reentry into this market through land-based exports. The next step is to scale up supply by sea from Cartagena, taking advantage of its location and competitiveness. And in the third phase, we aim to rebuild a significant local presence, subject to the evolution of conditions in the country and to the eventual realization of the rights associated with the assets that were expropriated from the company without compensation. At the same time, Argos Latam continues to expand from mictomarket and greenlight models throughout the region, focusing on brand strength, technical consulting and the digital self-service throughout Argos One. In Colombia, this approach has enabled us to increase ROCE from 8% to 15% over the past 5 years. The priority now is to replicate these capabilities in other regions with a focus on operational reliability, network optimization, commercial strength and capital discipline. At Argos Materials, during the quarter, we consolidated a management team with specific experience in aggregates, construction materials, operations and M&As. This team is led by Jason Teter, CEO, who has an extensive track record in the U.S. building materials industry and who has previously introduced to the market. Kendall Gregory, CFO, with more than 10 years of financial experience in the building materials, manufacturing and industrial sectors, including executive positions at Industries and CRH. Chad Weems, COO, with extensive experience in operations and engineering in the U.S., aggregate business and 11-year career at Martin Marietta and Juan Camilo Martinez, Country Manager in the Dominican Republic, who has had strategies at Cementos Argos and M&A and corporate strategies at Grupo Argos and has played a key role in the structuring of Argos Materials. This team will be responsible for executing the business plan and developing the operational, commercial and financial capabilities, necessary to scale the platform in the United States. Additionally, we note that during this quarter, the third test shipment to Tampa was successfully completed, meeting expected quality standards and validating the reliability of the logistics chain to the United States. The platform is also making progress in engineering, permitting, expanding quarry capacity in the Dominican Republic and securing port capacity. At the same time, Argos Materials continues to evaluate M&A opportunities with discipline, seeking assets that add strategic and financial value to the platform. Demand fundamentals in target markets remain attractive, driven by infrastructure and new source of construction such as data centers. In the quarterly operational results, Cementos Argos reported a recovery in volumes and maintained positive momentum in revenue and EBITDA. Cement volumes reached 2.3 million metric tons, up 2% from the second quarter of 2025, while concrete volumes totaled 637,000 cubic meters, up 19% year-over-year. Revenue totaled in COP 1.3 trillion, up 2% compared to the same period last year, and EBITDA reached COP 279 billion. In Colombia, demand continued to show a significant recovery, particularly in the retail self-built segments. Local segment volume grew supported by projects such as Túnel de Oriente, Metro de la 80, Quora and other infrastructure initiatives. Revenues in Colombia grew 4% and EBITDA reached COP 201 billion, a 13% increase year-over-year. In Central America, cement volumes increased 20.8%. Panama continues to show shows of recovery, driven by housing and infrastructure, while in Honduras, there are early signs of a recovery in demand following a challenging start to the year. In the Caribbean, cement volumes remained stable and revenue grew 2.1%. Operations in the Dominican Republic returned to normal during the quarter, reaching the highest volume of shipments ever recorded for the month of June. Furthermore, as a result of the strengthening of the insurance program, the company has already recovered $1 million related to the loss we reported in our previous earnings call and expect to recover additional $3.5 million during the second half of this year. Taken together, these results reflect a company that is simultaneously advancing in the execution of its strategic transformation and in consolidation of sustainable profitability in operations. In Celsia, we'd like to begin by sharing more details regarding the efficiency and deleveraging goals that are part of ACE 1.0. First, we will seek to expand the EBITDA margin from 30.9% in 2025 to levels above 40% by the end of 2028, a goal supported by 3 sources: between 500 and 600 basis points for operational excellence, between 200 and 300 basis points for investment consolidation and between 100 and 200 basis points from disciplined capital allocation. The business is pursuing its path to operational efficiency through margin, which by the end of June had achieved savings of COP 62 billion equivalent to 84% of the COP 74 billion targeted for 2026. Furthermore, regarding debt, ACE set the target to reduce debt by COP 1 trillion over the next 12 months. As of June, net debt stood at COP 4.85 trillion, and the net debt to-EBITDA ratio was 3.22x compared to 3.56x a year earlier. During the quarter, net debt repayments totaled COP 224 billion. In this regard, BRC Ratings reaffirmed for the fourth consecutive year, the AAA rating on Celsia's S.A. ordinary bonds and Fitch ratings confirmed Celsia Colombia highest national rating of AAA with a stable outlook. The ratings indicate that improvements in profitability and deleveraging are underway while we preserve the company's financial strengths. In light of El Nino phenomenon, Celsia currently has hydroelectric generation capability, thermal backup and firm power supply contracts in place. Reservoir levels stand at approximately 82%. The company has thermal backup from El Tesorito and Meriléctrica, it maintains gas supply contracts that have been fulfilled as normal, and it retains a contracting level of nearly 70%, which gives its greater flexibility to capture prices at the spot market without compromising supply to its customers. The situation could extend into the first quarter of 2027, depending on its intensity and duration. But beyond this current situation, the Colombian electricity system faces a structural challenge due to the backlogs that have accumulated over the last 4 years in new generation transmission capacity. With this in mind, we believe the country must make progress in streamlining prior consultations, restoring a stable regulatory framework, ensuring the acceleration of transmission and distribution projects, securing hydroelectric and thermal backup, restoring the domestic gas supply and guaranteeing liquidity throughout the entire chain by catching up on subsidies and obligations. We appreciate the new government signal aim to accelerate new projects and consider it's essential that this translate into decisions that allow for the timely addition of megawatts the country requires. Celsia and Grupo Argos Asset Management will continue to contribute capabilities. In the quarter results, Celsia has reported revenue of COP 1.35 trillion, representing a 3% increase compared to second quarter of 2025. Consolidated EBITDA. Power generation totaled 1,050 gigawatt hour, a 19% decrease compared to the same period last year, partly due to the decision to rise reservoir levels ahead of the arrival of El Nino. Sales totaled 1,048 gigawatts hour, up 10%, driven by higher demand. Breaking down revenue, power generation contributed COP 330 billion. Sales reached COP 814 billion, growing 8.4%. Grid use and connection contributed COP 146 billion and other operational services totaled COP 59 billion. For the first half of the year, EBITDA totaled COP 756 billion, with a margin of 28.8%. On a pro forma basis, excluding costs associated with the operational transformation, the cumulative margin would reach 31.2%. Net income for the quarter totaled COP 82.5 billion and net income attributed to the partner company owners was COP 43 billion. In the Investment Platform segment, C2 Energy already has an installed capacity of 580 megawatts. And during the quarter, its revenues grew 65%, while EBITDA increased 75.8% with a margin of 87.5%. Atera signed the Comayagua contract with Argos Honduras for 23 megawatts of solar capacity and 80 megawatts of battery storage. Caoba maintained an EBITDA margin above 84% and El Tesorito continues to meet 100% of its firm power obligation. These developments are significant due to the operational contribution and because they consolidate capacities that could be progressively integrated into the asset management model defined by ACE through the Grupo Argos Asset Management, allowing Celsia to remain focused on its operations as a pure-play utility. And now let's move on to Odinsa. The evolution we announced with the ACE framework towards Grupo Argos Asset Management represents the expansion of capabilities the company has built over more than a decade in origination, structuring, asset management and relationships with institutional investors. We decided to implement this evolution at Odinsa because it's currently the organization ideal vehicle to scale this model as its management strategic infrastructure assets has experience with third-party capital vehicles specific proprietary pipeline of nearly COP 6 billion and has demonstrated the ability to structure, finance and operate complex projects. The AAA rating obtained during the quarter reinforces the company's financial strength, which will be key and will instill confidence in the capital raising process that the company will lead by bringing together capital from local and global institutional partners. Under the structure presented to way, Grupo Argos will assume the role of capital allocation and subject to the relevant corporate and regulatory approvals, will directly hold stakes in the operating platforms to channel cash flow to the holding company. Additionally, to act as the Anchor LP alongside with Macquarie Asset Management, which is currently a partner in the platform's equity and has expressed interest in increasing its investments for its part, Grupo Argos. Management will be the business group sole asset manager responsible for identifying opportunities, structuring projects, managing assets and raising capital locally and international. Platform encompasses sectors such as railways, airports, water, energy and real estate income as well as other infrastructure opportunities that meet the portfolio returns criteria. The goal is to streamline operations, avoid redundancies and grow with a greater share of third-party capital. In this regard, during the second quarter of this year, Odinsa continued to make progress on the acquisition of TICSA and on preparing for its integration into the portfolio. The priority is to combine structuring, operational and commercial development capabilities to consolidate a platform specializing in water treatment, reuse and water solutions, thereby realizing the value proposition that underpin the transaction. We expect this transaction to be effectively closed this August so that TICSA will be consolidated in the financial statements starting in September. On the operational front, airport traffic grew 3.6% year-over-year during the quarter. Revenue from highway concessions rose 19%, and Odinsa achieved consolidated EBITDA of COP 39 billion, Additionally, the pipeline of private initiatives continues to advance in structuring with strategic projects such as El Dorado Max, the new Cartagena Airport, Conexión Centro and Perimetral de la Sabana. We see a concrete opportunity to mobilize private capital for our essential infrastructure, expand capacity and improve the country's connectivity without staggering public finances. In road segments, concessions recorded an average daily traffic volume of 110,000 vehicles, remaining stable compared to the second quarter 2025. In terms of total traffic, the concessions handled nearly 10 million vehicles during the quarter. Revenues reached COP 372 billion, up 21% year-over-year. EBITDA stood at COP 154 billion and net income reached COP 51 billion, up 120% compared to the second quarter of 2025. At Autopistas del Café, average daily traffic was 38,000 vehicles, a 2% decline attributed to temporarily social dynamics in the catchment areas during the election period. However, revenue grew 9%. At Túnel De Oriente, total traffic reached 3.4 million vehicles, up 2% and revenue increased by 52%, driven by construction activities for the second phase. At Pacífico, traffic grew 6% and revenue increased by 5%, reflecting stable and sustainable demand along the corridor. Meanwhile, the [indiscernible] road network recorded traffic for 2.3 million vehicles, representing a 1% growth, although its performance continues to be affected by the inability to collect tolls at La Libertad Toll Plaza. At airports, the total traffic reached 12.6 million passengers during the second quarter 2026, representing a 3.6% increase compared to the same period last year. Airport revenues totaled $198 million, up 12% year-over-year. EBITDA reached $89 million, an increase of 10% and the net income was close to $40 million, up 18%. In Opain, El Dorado handled 11.3 million passengers, a 4% increase compared to the second quarter of 2025. Domestic traffic reached 7 million passengers and international traffic, 4.3 million, growing 7%. Revenue totaled COP 518 billion, while EBITDA reached COP 173 billion, and net income was COP 84 billion, up 35%. At Quiport, Mariscal Sucre Airport handled 1.31 million passengers. Revenues reached $57 million, up 10%. EBITDA stood at $42 million, an 8% increase and net income was $14.7 million, down 14% due to the expiration of the free trade zone tax benefit in November 2025. In the urban development business, the priority we announced as part of the framework is to accelerate the monetization of assets and increase cash generation while moving forward with separation from Grupo Argos to provide a clear view of its performance and enable opportunities for value creation. In this vein, during the second quarter, we launched a call for proposals for a new multi-tier urban development project in Barranquilla, covering 14.4 hectares of developable land. In July, the process received bids equivalent to 7x the area offered, a strong indication of the value location and turnover potential of our land bank as well as the investment appetite in Barranquilla. This result reaffirms that we have a land bank valued at more than $500 million, which has generated more than COP 400 billion in cash flow over the past 5 years and has attracted investments totaling more than for COP 4 trillion. We expect to sign purchase and sales agreements during the second half of the year for approximately COP 226 billion with estimated cash flow of COP 48 billion in 2026 and COP 150 billion in 2027, thereby continuing to demonstrate the business ability to capture land appreciation and convert into cash. During the quarter, the company posted results that exceeded those of the same period last year, both in the income statement as in the cash flow. During the second quarter, cash flow from operations reached COP 52 billion, up 99% compared to the same period 2025. And net cash flow was positive of COP 23 billion. This performance allowed the company to close the quarter with a positive net cash flow of COP 23 billion, even after paying property tax and fulfill of obligation to customers. Year-to-date through June net cash flow was positive of COP 4 billion compared to a negative cash flow of COP 47 billion in the same period. In our income statement, revenue totaled COP 54 billion, up 123% year-over-year. Revenue from land sales reached COP 43.527 billion, an increase of 363% and EBITDA was of COP 17.843 billion. The results primarily reflect the activation of contractual clauses, the registration of 2 lots in Barranquilla and the account recognition of deferred revenue associated with the fulfillment of urban planning obligations related to the sales from prior periods. At Pactia, I would like to begin with the most significant event from ACE perspective. On July 31, the fund signed an agreement with Mallplaza to sell the Eight Grand Plaza shopping centers for COP 1.2 trillion. This is the first monetization of a mature stable asset that we have carried out under the third pillar of the program. Transaction was agreed upon at a value close to the asset's book value, which amounted to COP 1.22 trillion. This benchmark is important because it demonstrates the ability to monetize institutional assets close to their book value and convert the value into liquidity. For the fund's investment, the transaction represents liquidity for 689 billion during the second half of the quarter. After paying the debt and transaction costs, Grupo Argos will receive approximately COP 260 billion. This funds increased flexibility to execute our capital allocation agenda, including accelerating the share repurchase program based on the premise that these transactions will generate returns substantially higher than the cost of capital. The sale also contributes to the optimization of Pactia's financial structure. We estimate that the loan-to-value ratio could fall below 20% by the end of 2026 and that the interest coverage ratio could reach 3.1x in 2027. Finally, the monetization demonstrates the fund's ability to develop, stabilize and exit an institutional portfolio of income-generating real estate assets in less than 10 years. In its quarterly operational results, PAA reported gross cash revenue of COP 116 billion, up 3% year-over-year and EBITDA of COP 67 billion with an increase of 22%. On a like-for-like basis, gross cash revenue grew 6% and EBITDA increased 22% during the first half of the year. Occupancy for non-hotel portfolio closed 96.3% during the first half of the year. leases totaling 93,000 square meters were renewed and new leases totaling 24,000 square meters. The retail and Logistics segments posted growth, while the hotel segment was impacted by lower RevPAR during the quarter. We now turn to Grupo Argos' financial results. Before delving into the figures, it's important to note that during 2025, the portfolio underwent significant changes, including the monetization of the investment in the United States and the spin of Grupo Argos, which affect comparability between periods. For this reason, in addition to the reported figures, we will present analysis on a comparable basis that isolates the main extraordinary effects and provides a clear understanding of the recurring performances of the businesses. In this regard, for the second quarter of 2026, the separate results, we will present exclude the effects of the sales of Celsia shares carried out as part of its share repurchase program, while the consolidated results do not take into account the effects of the sale of small hydroelectric plants. In the pro forma stand-alone results, cumulative revenue through June totaled COP 387 billion. EBITDA reached COP 261 billion. With these results, the EBITDA margin stood 67%, reflecting Grupo Argo's operational cash generation capacity in [indiscernible] of greater focus efficiency capital. To facilitate this section or this reading in the second quarter of comparable we shared revenues reached COP 387 billion and EBITDA reached COP 261 billion and net income of COP 174 billion. With these results, the EBITDA margin stood at 67%. The restructure expenses increased 4% compared to the June 2025, primarily due to costs associated with the company's operational and structural transformation. These efforts are part of the evolution towards a more efficient holding company with simple structures and greater capacity to allocate capital. Finally, the separate net debt was placed in COP 225 million reduction of the same period of the previous year responds to less contribution of the participation method that Cementos Argos has and the effect that it had in 2025, the absorption with Grupo [ SURA ]. With the comparable base, [indiscernible] the revenue through June reached [indiscernible] further than the effects that compensate this effect, the quarter presents a holding that operates with a comparable EBITDA margin of 67%. It's a figure that's comparable in this phase of more focus and discipline in the capital allocation at the consolidated level. The revenues accumulated reached COP 5.5 trillion, maintaining stable with the same period in 2025. EBITDA closed in COP 1.4 trillion with a drop of 2%. The EBITDA margin was located in 25.8% over the comparable base that was presented, revenues reached COP 5.4 trillion EBITDA, COP 1.4 trillion and the EBITDA margin maintained itself in 26%. This analysis provides a clear view of the business requiring performance [indiscernible] the extraordinary effects that impacted the completion. The change in the EBITDA is primarily due to higher nonrecurring overhead expenses associated with the operational and structural transformation processes that Celsia and Odinsa have been implementing. At the same time, comparable basis, consolidated net income reached COP 362 trillion. At the same time, we continue to see progress in financial discipline. Interest expenses totaled COP 669 trillion, down 11% compared to the first half of 2025, primarily due to debt amortization and the impact of foreign exchange differences. This trend complements the evolution of the capital structure, which we'll detail later and help strengthen the organization's financial capability. Finally, the net consolidated debt was placed in COP [ 338 billion ] and COP 668 billion, in comparison to [ COP 2.4 ] of the first quarter of 2025 is determined mainly by the investment and the investment of SUMMIT Materials. Over the comparable base, we reached COP 336 billion and the controller of COP 161 billion. At the end of June, the consolidated net debt was located in COP 9.8 trillion, reducing 14% of 2025. By segment, it is composed mainly of COP 5.2 trillion in energy, and COP 2.2 trillion in the business materials -- in construction materials, COP 1.2 trillion (sic) COP 1.6 trillion in Grupo Argos and COP 215 billion in concessions. The consolidated net debt was located in COP 674 billion. In addition, the financial expenses dropped 24%, going from COP 1.1 trillion to COP 803 billion. This position offers capacities to execute the capacities without compromising the capacity of the company. In the holding, the net debt close to COP 1.6 trillion with a drop of 15% compared with June 2025. Net debt was placed at COP 1.1 trillion, with a reduction of 30%. The funding structure is composed by 60% in banks and 40% in bonds. 60% of the debt is reference to IBR, 30% (sic) 40% of IPC. Net debt was located in 3 years. And net debt over the portfolio was 7.5%, very low under the limit of 18% associated with the AAA rating. Net debt over dividends 1.2x (sic) 2.1x and the EBITDA adjusted was 1.2x, the maximum levels associated to the rating. These indicators show the flexibility of the company that we have to execute capital allocation and active asset management. In terms of the separated cash flow, Grupo Argos started the cash flow with COP 216 billion (sic) COP 611.971 billion and closed June 2026 with a cash of COP 526 billion during the company and received dividends for COP 297 billion and paid dividends for COP 246 billion. The urban development business contributed cash flow for COP 94 billion, while the expenses were COP 47 billion. The expenses of Grupo Argos reached COP 36 billion. The company also recorded taxes for COP 88 billion and net interest for COP 45 billion. The ending cash position maintains a conservative and profitable position. It includes investments in AAA-rated CDTs totaling COP 385 billion, denominated guarantees of approximately $23.6 million and dollar denominated investments for close to $3 million. The return of temporary investments in pesos was 13.4%, while investments in dollars yielded a return of approximately 3.85%. overall, the company maintains a robust liquidity position that is sufficient to meet financial obligations, preserve strategic flexibility and continues to execute its value creation. Finally, Fitch ratings and S&P reaffirmed Grupo Argos ratings with stable outlook. The main companies in portfolio also holds ratings at the highest levels in local scale. S&P highlighted Grupo Argos solid business position, which reflects the structural strength and consistency of its business strategy. The rating agency emphasized that investments in high-growth segments with attractive returns will continue to be pillars of the organization's financial sustainability. For this part, Fitch noted that the ratings reflected the solid capital structure, credit metrics that will remain healthy over the projected period. This reaffirmation confirms the quality of the Grupo Argos as the strengthening of its capital structure and the company's ability to continue executing its strategy for profitable growth.

Thank you, Felipe. And now that the results have been presented, I think it's important to tell you that we are doing in response to tragedy that occurred in Colombia with the August 10 earthquake. In response to the crisis, Grupo Argos and its companies are providing humanitarian aid to employees who were affected and have initiated a process for the rehabilitation of or reconstruction of their homes. In addition, we're advancing payments to suppliers in Choco, the coffee Region and Valle del Cauca to provide them with liquidity so they can weather the situation, and we are analyzing additional measures. Finally, we announced that Grupo Argos Foundation, and artist Nicky Jam have joined forces to launch Adopta un Hogar, a campaign throughout which they will donate COP 13 billion for the reconstruction of the homes with the aim of contributing to the well-being of the most affected families. The goal is to bring together individuals and companies so that we can raise a total of COP 26 billion and multiply the impact. This initiative completes the efforts made in recent days by employees and family members of Argos business group and the foundation who have contributed for more than COP 1 billion. These funds are being used to provide more than 70,000 liters of water and essential supplies in Choco, the Coffee Region and Valle del Cauca. For those who wish to join us, we have set up the website, www.adoptaunhogar.com, where you can sign up as volunteers and make your financial donations. Finally, concluding, I would like to reiterate that Grupo Argos is moving forward with a greater focus, efficiency and discipline backed by high-quality assets based on business operating sectors, essential to the region economic and social development. During the quarter, Cementos Argos made progress in building its Argos Materials and Argos Latam platforms while showing a recovery in volumes and growth in revenue and EBITDA. Celsia continues to execute its deleveraging and margin expansion plans while also preparing to address the current economic climate. Odinsa strengthened its role as an infrastructure asset manager, achieved a AAA credit rating and continue to make progress in its water business and project pipeline. The Urban Development business significantly improved its cash flow and Pactia announced a major transaction to monetize assets and optimize its capital structure. In addition, on August 12, Grupo Argos' preferred stock was included in the MSCI Small Cap Index, increasing its visibility among local and international investors and strengthening its position in the capital markets. This inclusion represents a significant step forward with the ACE framework and Grupo Argos' position in international capital markets. The results were reviewed today are consistent with the program and road map we have defined to bridge the gap between Grupo Argos' fundamental value and the value currently recognized by the market. This concludes our presentation of the second quarter 2026 results. Carolina, we can now open the floor for questions. platform.

[Operator Instructions] We'll start by giving the word to Santiago Villanueva who is part of Corredores Davivienda.

My question has to do with the consolidation of Grupo Argos's role in the asset management. In Celsia's conference call, there was a larger probability of selling the infrastructure sales, but [indiscernible] was less probable. Maybe if you could give us more information about which would be the assets that you would sell eventually.

Santiago, thank you for the question. As you say, we explained during the call, ACE Launch, we will have just one manager in the business group that's going to be the evolution of Odinsa towards Grupo Argos Asset Management when we expect to concentrate all the infrastructure verticals. Celsia has a compromise of deleveraging with the market at least for COP 1 trillion in 2026. And that's why it's exploring the disinvestment of some assets, including the platforms, C2 and Caoba. But this is a process that's completely open where we're seeking to maximize the value of those disinvestments for benefit of all the shareholders. What Asset Management and Grupo Argos Asset Management will do towards the future is having within its action universe, the infrastructure vertical also within energy. But this is a completely open and competitive process that seeks to maximize the value of those assets.

Now let's give the word to Gabriel Perez from Credicorp.

I wanted to ask if you have any schedule for the new Odinsa projects for the pipeline that you have? And how would this new projects enter the new Argos asset management structure?

Well, thank you, Gabriel, for the question. Let me give the word to Pierre, so he can tell us a bit more about the interactions that he's been having with the new government and what's the expectation around this schedule.

Thank you, Juan. Thank you, Gabriel. We have 4 IPs. We have one national one, which is the expansion of the Eldorado Airport, Cartagena Airport and Conexion Centro. We are in that process right now to include this also in the approval process, but we also have a departmental one that's perimetral de la Savana, all the concessions, all those private initiatives are right now in feasibility phase, and we are aiming with the best of our capacities and the will of all the involved stakeholders in this process to reach allocation at the end of next year. We're accelerating this following the commitment that the government has asked for how to deploy the strategic projects as fast as we can. So the conclusion is to try to take this until the end of the year, and we're hardly working with the Connection Centro in order for the to continue in this moment that's still required within the regions.

Thank you, Gabriel. And in terms of structures, as we said, Grupo Argos will be one of the ITs that would participate of the LP, sorry, that will be part of these processes, as Pierre explained, once these initiatives come to the market. So we want to be an anchor LP and Pierre and his team will be in charge of collecting capital that will include Macquarie Asset Management as another of the anchor LPs, but also local and international investors.

Thank you, Juan. We also have a question from Javier Vegas, [indiscernible].