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

Good morning, ladies and gentlemen. Welcome to the SITES LatAm Second Quarter 2026 Earnings Call. [Operator Instructions] Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of company's exclusive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to the future events and therefore, depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry and other factors could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference, we have Mrs. Camila Mora, CFO; and Mr. Luis Diaz, COO. Now I will turn the conference over to Mrs. Camila Mora. Please, you may begin your conference.

Good morning, everyone. Thank you for joining us today. Before discussing our quarterly results, I would like to briefly address 2 important aspects that provide context for our performance. First, as we anticipated, the appreciation of the Mexican peso against the U.S. dollar, in which an important part of our revenue are generated and other regional currency against the Mexican peso continue to impact our reported financial results during the quarter. Since all our revenue are generated outside Mexico and translated into Mexican peso for reporting purposes, the foreign exchange effect match the underlying strength of our business, which remains stronger than what reported figures suggest. To provide a clearer view of our operating performance, we will refer throughout this call to our results on a constant currency basis whenever discussing growth rates. Second, we continue to make solid progress in executing our operational strategy. Demand of high-quality passive infrastructure across Latin America remains healthy, and we continue to expand our portfolio while increasing the utilization of our existing performance. We continue expanding our portfolio by adding 364 new sites during the quarter and 1,253 new sites over the last 12 months, reaching a total of 37,989 sites and a total of 48,652 individual site agreements and equivalents. At the same time, we continue improving the quality of our portfolio through higher tenancy levels. Our consolidated tenancy ratio reached 1.28 tenants per tower, supported by the consistent growth across most of our operations. Higher tenancy remains one of the key drivers of operating leverage and long-term value created for sites. Brazil remained our largest contributor to portfolio expansion, maintaining its positive leasing momentum, increasing its tenancy value to 1.33x, marking 7 consecutive quarters of sequential improvement, while Central America continued to deliver the stronger improvement in tenancy, reaching 1.33x. This trend reinforced the quality of our assets and our ability to generate increasing returns from our existing infrastructure. Turning to our financial performance. Reported revenue continued to be affected by foreign exchange translation. However, on a constant currency basis, total revenue increased 21.3% year-over-year, while tower lease revenue grew 17.9%, reflecting the continued expansion of our portfolio together with higher leasing activity across the region. EBITDA also continued to demonstrate the resilience of our business model despite the translation effect on reported figures. Profitability remained strong across our operations. Brazil once again delivered outstanding performance, maintaining an EBITDA margin above 90% of the seventh consecutive quarter, while the Andean region continued to improve both profitability and operating efficiency. Overall, our regional operation continue to demonstrate the scalability and operating leverage of our business. Regarding our balance sheet, we continue to maintain a disciplined financial strategy. Our debt profile remains stable with no material changes during the quarter. And our liquidity position provides sufficient flexibility to continue executing our growth strategy while maintaining prudent capital structure. Looking ahead, while we remain very constructive in the long-term fundamentals of the business, we are moderating our expectation for the remainder of the year. The pace of construction has remained healthy across our markets. However, the timing of serving customer deployment has shifted, leading us to modestly adjust our full year expectation for new sites addition. As a result, we now expect to deliver approximately 1,800 new sites during 2026, modestly below our original guidance. Importantly, customer activity remained robust. Our project pipeline continues to be healthy, and we expect construction activity to remain strong as we move into the year. The structural drivers and demand, including increasing mobile data consumption, network densification and continued 5G rollouts remain firmly in place, giving us confidence that our expansion strategy continue to be well supported. We also expect to maintain EBITDA margin at or around 90% levels, supported by the operating leverage of our business, while keeping our consolidated tenancy ratio around current levels of approximately 1.28x as we continue executing our leasing strategy. We remain focused on disciplined execution, profitable growth and creating long-term value for our shareholders. The combination of continued portfolio expansion and a stable tenancy should continue supporting sustainable cash flow generation over the coming years. Thank you all for joining us today. We appreciate you continuing your interest in SITES. If you have any questions following the call today, please feel free to contact our Investor Relationship team. We will be more than happy to answer your questions and provide an additional information that you might require.

No questions will be attended during this call. Please direct any questions to our Investor Relations team. No questions will be attended during this call. Please kindly ask the investors to address any questions directly to our IR team. SITES LatAm conference is now closed. We thank you for your participation, and wish you a nice day.