Sitios Latinoamérica, S.A.B. de C.V. (LASITE) Earnings Call Transcript & Summary

Good day, everyone. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to our earnings call of the second quarter Sites Latam. [Operator Instructions] I would now like to turn the call over to Paloma Vertiz, Investor Relations Officer. You may begin your conference.

Thank you. Good morning, everyone. Thank you for joining us today to discuss our second quarter financial and operating results. We have on the line Mr. Gerardo Kuri, CEO; Mr. Karla Ileana, CFO; and Mr. Luis Diaz, COO. Gerardo will make some initial remarks now.

[indiscernible] Right now, our broadcast is muted, but mic is not unmuted.

Okay. I all may say initial remarks because we are having some problem with the line -- with Gerardo's line. So just a brief summary of the results. On June 30, Site concluded the second quarter of operations of 2023. During this period, we consolidated our operations in 15 subsidiaries, and we started to pay [indiscernible] within the Colombian territory. Also, the second quarter of the year was the first full period of operations for the complete portfolio of Sites Latam in the Dominican Republic. Total revenue at the end of the period equaled MXN 3,418 million, 8.5% above last quarter. During the period, Site registered MXN 2,077 million from tower lease revenue, an increase of 9.1% as compared to last quarter. At constant exchange rates, our tower lease revenues increased 18.8%, reflecting a strong revenue generation, largely driven by the addition of the Peruvian and Dominican Republic portfolio. Brazil contributed with 39.2% of Sites totaled tower lease revenue. The Andean region accounted for 20.7%; Central America, 19.4%; Argentina, Uruguay and Paraguay, 15.2% and the Caribbean representing the remaining 5.5%. EBITDAal at the end of the period reached MXN 1,741 million, 13% above the previous quarter. Our EBITDAalmargin came in at 83.8%, reflecting an expansion of 3.5 percentage points. At constant exchange rates, Sites consolidated EBITDAalwas up 23.6% during the quarter. Mainly driven by the acquisition of the Colombian portfolio and the good operational performance of Central America, Brazil and the rest of the Andean countries. Organically, EBITDAalwould have expanded [ 5.1% ], mostly driven by the effectiveness of our cost control policies, the reduction of some expenses and the incorporation of new tenants. Our gross debt to MXN 52,632.5 million, while our cash position amounted to MXN 2,037 million. Our net debt equals 7.36x EBITDAal. At the end of June, Sites reported a portfolio of 34,240 sites. During the quarter, 124 new sites began to operate mainly in Ecuador, Peru, El Salvador and Honduras. By the end of the period, 211 sites were in advanced stages of construction, primarily in the Andean region and Central America. As expected, the construction pace has naturally picked up as the year progresses. At the end of June, we accounted for a total of 41,392 individuales Sites agreement. Sites' consolidated tenancy ratio came in at 1.209 slightly above the 1.198x from the previous quarter. Our co-location ratio has reflected a faster recovery than expected after the incorporation of new portfolios, both the Andean region and Central America contributed significantly to the recovery of the ratio. Thank you. We can begin with the Q&A, please.

[Operator Instructions] We have a question from [ Ricardo Aliado ] with GBM.

First of all, I just wanted to know a couple of months into your -- to a new company, how would you say the operation has been going against your overall expectations? And also, congrats on results, the margin expansion was quite impressive. Do you have any guidance and expectations going forward, we should see your margin standing?

Thank you very much, Ricardo. I think after several months working in the company, some things like the [ De Sites ] program has been slower than we always have liked at the beginning. And we think this is very natural with the companies just beginning to work, we also announced with Claro. And also they are not investing year-to-year program, but some of the starting half part of the year saying that maybe they're going half '23 to half '24 [indiscernible]. In margins, we think we are going to keep doing a very good job in making the better, giving numbers we do not like, but there's still run to -- for better margins, and we're still working hard toward it.

Understood. If I may follow up. I will saw an increase in your fee per tenant. I understand this is to inflation escalators. But how should we think about this? Do all escalators kick in, in the first half of the year? Or is it more smooth throughout the year?

This has been complicated because as you know, we have been incorporating towers in different moments. And what we usually is going to do now is in January, we're going to put them all in inflation and then we're going to try to escalate every January. Also that would be smarter to see how it goes and I wish for everybody to project. Obviously, there have been some big increases because inflation has been a little higher than usual.

[Operator Instructions] there are no additional questions. I'd like to turn the call back over to our speakers for any additional or closing remarks.

Well, thank you, everyone.

Thank you very much, everyone, and we will still be updated for anything that happens and we are more than open for calls or one-to-one, whenever you want. Have a very nice day. And if you're going at summer, have a nice summer.

And that does conclude today's presentation. Thank you for your participation, and you may now disconnect.