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

Good morning. My name is Celine, and I will be your conference operator today. At this time, I would like to welcome everyone to our earnings call of the fourth quarter 2024 of Sites LATAM. [Operator Instructions] We have on the line Mr. Gerardo Kuri, CEO; Mr. Hector Noriega, CFO; and Mr. Luis Díaz, COO. You may begin your conference.

Thank you. Good morning, everyone. This is Hector Noriega, and I'm going to make a summary of the results. At the end of the fourth quarter of 2024, sites reported a portfolio of 36,661 sites distributed across 6 Latin American countries. During the fourth quarter, 460 new sites were added to our portfolio and 155 additional site square in advanced stages of construction. During the last 12 months, we have built 1,526 new sites and this growth was driven by the Andean region, Brazil and Central America, contributing 612, 450 and 371 new sites, respectively. Brazil continue to be our biggest market accounting with approximately 23% of our total portfolio. Throughout the year, we continue registering consistent increases in the number of construction and colocations. The Andean region continues to show an outstanding operating efficiency, contributing with 612 new sites. In Central America, we have seen a solid pace of construction during 2024, adding 371 new sites to our portfolio during the last 12 months of operations. At the end of the fourth quarter of 2024, sites consolidated tenancy ratio stood at 1.21 tenants per tower. The last 12 months, we have observed favorable trends in our occupancy rates. Central America concluded the period with 1.24 tenants per tower. Brazil registered a location rate of 1.27, demonstrating a continuous effort of our commercial team and the Andean region registered a rate of 1.12 tenants per tower. While the Caribbean closed this quarter with 1.16 tenants per tower and Argentina, Uruguay and Paraguay region with a rate of 1.23, consistently improving its past records. Consolidated revenues for the year totaled MXN 15,271 million representing a 60.3% increase year-over-year, while tower lease revenues for the year registered MXN 9,241 million, an 18% increase year-on-year. At the end of the fourth quarter, total revenues amounted MXN 4,295 million, an increase of 36.6% year-on-year driven by the consolidation of our portfolios favourable FX trends. During the fourth quarter, tower lease revenues had a strong performance across our regions, reducing consolidated tower lease revenues of MXN 2,439 million, an increase of 36% year-over-year, driven by an outstanding performance in the Andean region and Central America. Our consolidated EBITDAaL for the quarter was MXN 2,202 million, registering a consolidated margin of 9.3%. An expansion of 12.5 percentage points compared with the previous year. This was driven by a solid tower lease revenue performance, a successful implementation of cost control policies throughout of our operations. EBITDAaL increased consistently across our regions with Brazil remaining SITE's biggest market, contributing with MXN 689 million to the consolidated EBITDAaL. While Central America contributed with MXN 533 million. The Andean region posted MXN 560 million, while Argentina, Uruguay and Paraguay region contributed with MXN 351 million. And finally, the Caribbean reached MXN 130 million, and all of them reduced increases when compared to the last year and successfully expanding their margins. During the fourth quarter of '24, SITES announced a capital increase in the amount of MXN 3000 million and the issuance of 1 million shares. The proceeds were used to strengthen our financial structure and support our growth strategy. Also during the fourth quarter carried out an international issuance and placement of debt securities in foreign markets for a principal debt amount of $650 million. These placements will allow us to convert short-term debt allowing the company to support our strategy without incurring new debt. At the end of December, our new debt stood at MXN 56,370 million, and it was equivalent to a net debt-to-EBITDA ratio of 6.77x. Thank you, and we can begin with the Q&A session.

[Operator Instructions] Your first question comes from the line of Andres Coello with Scotiabank.

This is Andres Coello with Scotiabank. First, if you can give us guidance on the number of new towers that you're planning to build this year in 2025. That's my first question. And my second question is we saw that in Mexican pesos coming down between Q4 and Q3, Mexican peso that came down. And I'm wondering if that is part of the process to relocate debt from Mexico to South America.

Yes, Andres, we are planning on building 1,800 -- somewhere between 1,650 to 1,800 new sites this year. This number can change depending on the carrier situation during the next 3 months. But we think it will be no less than 1650 for the year, at least and most probably 1800 site. Regarding the debt -- we were planning on looking in Brazil, as you know Brazil complicated on tax rate and inflation on December. So we're looking on other options in our markets in Chile and Peru. And this is a big part of the plan of the company to bring this debt down to local markets in Latin America and get the most possible way out of the [indiscernible]

[Operator Instructions] Your next question comes from the line of Eduardo Nieto with JPMorgan.

I just wanted to follow up on growth for this year. Are you guys considering M&A at all? Are there any options to buy towers? Or are you still focused on organic growth and the second question is on the tenancy ratio. Is there any number that you're guiding to that you expect to reach in the next couple of years as it's been quite flat at the 1.2 kind of area. So any guidance there would be appreciated.

So the first point, I would say, we are not looking into M&A. Consolidation of [indiscernible] Latin America with the Telefonica situation tends to be happening. So we don't want to be in the M&A world right now. We're comfortable in [indiscernible] . Second one would be, I would say we have worked on the tenancy ratio, but you can remember, we have the [indiscernible] situation. So everything we work to maintain the tenancy ratio Central America something in Brazil. Now we are going to start expanding. So our close to 1.25, 1.3 and our midterm 5-year term, where we think we can stabilize it somewhere between 1.4.

[Operator Instructions] There are no further questions at this time. Mr. Gerardo Kuri, I turn the call over back to you.

So thank you very much for your interest. We remain available for you guys for any follow-ups. Thank you very much and have a nice rest of the day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.