Cementos Argos S.A.

Good morning everyone. Thank you for being here with us today to discuss our fourth quarter results. My name is Carolina Velazquez. I am Cementos Argos investor relations officer and I will be hosting today's call. On the call today are Juan Esteban Calle, our CEO, Felipe Aristizabal, our CFO, Manizabela Echeverry, the VP of Legal Affairs, Carlos Giusti, the VP of the Columbia Division, Gustavo Uribe, the leader of Central America, and Jason Titor, the newly appointed CEO of Argos Materials. First, I would like to ask you to carefully read the legal disclaimer that is currently being projected on the screen, which is also available on the presentation that is posted on our website. Please consider that all the discussions of the financial and operational results held during the call will be based on the adjusted figures, excluding non-recurring and non-core operations. For a detailed reconciliation of the adjustments, please refer to the annexes of our presentation. Today, after the initial remarks, there will be a Q&A session. If you have a question, please raise your hand by pressing the icon at the bottom of your screen at any time during the conference. We will record this session and upload it to our webpage. It is now my pleasure to turn the call over to Juan Esteban.

Thank you, Carolina, and welcome to everyone joining us today. 2025 was an exceptional year for us and I would like to highlight three key achievements. First, our LATAM operations, which showed remarkable resilience in overcoming challenges across core geographies, emerging stronger and more efficient to capture future opportunities. In other markets, we leveraged favorable dynamics, deep industry expertise, and long-standing client relationships to deliver a differentiated value proposition. As a result, we delivered an EBITDA of 1.28 trillion pesos, achieving a 25% margin one year ahead of schedule. This accomplishment was supported by a highly sustainable operation reflected in our score of 86 out of 100 in the 2025 S&P Corporate Sustainability Assessment, a rating that positioned us among the top performers in our industry. We feel immensely proud of this result as a reflection of the unparalleled execution capabilities of our teams. Strategically, we are well positioned for continued growth across the region, including Venezuela's recovery, where our brand already enjoys strong recognition. In preparation for a transition in Venezuela, we started positioning our brand in the market since 2023. Today, we export nearly 1,000 tons of white cement each month and are ramping up the exports of gray cement to about 900 clients covering 23 states and the districts of Caracas, with the goal of exceeding 5,000 tons per month very soon. We are convinced that with our proud operational experience in the country and the pending liberal claim that we have for the expropriation of porcelain assets in 2006, we are in a prime position to take advantage of the eventual reconstruction of the country. for our shareholders. 2025 was a record year in distributions, with over 3.5 trillion pesos returned through dividends, buybacks, and the spin-off of Puru Pulsuda's shares, boosting total shareholder returns to over 700% in U.S. dollars since the launch of the spring program through January of 2026. Third, our U.S. expansion will re-enter the market through the launch of our aggregates platform, successfully advancing the first phase of our growth strategy. Our first shipment of 47,000 tons arrived in Tampa, and we secured two additional port positions on the southeastern coast of the U.S. Akim Alston was the appointment of Jason Titor, a CEO of Argus Materials LLC, Jason brings extensive leadership experience from Vulcan Materials and Lafarge USA with a proven track record in strategy and business development, operational excellence, discipline growth, and commercial strategy in the U.S. aggregate sector. We are thrilled to have Jason on our team. With this brief overview, I would now like to invite Jason to introduce himself and share his perspective on our US strategy.

Thank you, Juan, and good morning, everyone. It is with great pleasure that I today join my first earnings call as part of the Cementos Argos team. As I have said, it is an honor to assume the role of CEO of Argos Materials at such a relevant moment for the company. Cementos Argos has a clear vision, a strong culture, strategic assets, and an exceptional team. I'm excited to build a world-class team to lead this new phase and contribute to creating a differentiated platform that delivers high quality, high impact solutions for our customers in the United States. I want to start this short intervention by reminding everyone of the great opportunity that lies before us. Aggregates is a large industry in the U.S. They are the backbone of concrete, asphalt, and infrastructure projects. Its production is closely related to population base and follows population growth. Combined, construction aggregates made up over 50% of the total U.S. industrial minerals value, surpassing cement, that represents around 16% of all other segments. Its main attribute is the constantly compounding growth of its price throughout the last 24 years, with an average growth rate per year of 4.9% between 2000 and 2024. This performance is supported by four drivers, scarcity of reserves, market dynamics that enable the formation of micro-markets shaped by logistics, operational characteristics, and high barriers to entry. Argos has the right capabilities to capitalize on this opportunity, with premium source assets in Central America and the Caribbean, a unique firepower to acquire and develop synergistic assets in the U.S., expertise and robust network of import sources and a strong reputation and extensive experience in the U.S. market. It is strongly positioned to become a relevant market player and generate value to its shareholders. We have a goal of building a business in the next five years that will earn more than $200 million. The strategy is a hybrid approach combining organic and inorganic growth with an aggregates platform focused on imports and local supply capabilities. We will get further details on the business plan soon and keep all the market informed about our advancements. Thank you.

Thank you, Jason. Now I would like to invite Felipe to walk us through the performance of our Sprint program.

Thank you, Juan, and good morning, everyone. 2025 and the first few weeks of 2026 have been extraordinary for Sprint. By the end of January, we achieved a cumulative total shareholder return of 763% in dollars since the program's launch in February 2023, reaching $1.2 billion in shareholder distributions. We believe this momentum will continue supported by the strategic objectives outlined in the fourth edition of the program and our strong position as an issuer poised to benefit from the emerging markets cycle already underway. I'd like to introduce Supreme 4.0 and provide detail on its pillars, which now extend over a two-year period to incorporate initiatives requiring longer execution timelines. In the first pillar, in terms of financial results, we are already operating at a top-tier industry level in terms of margins and return on capital. We acknowledge that presidential transitions in key markets such as Honduras and Colombia may challenge further margin expansion in the short term. Our goal is to maintain profitability between 24 and 26%, enabling us to deliver an EBITDA between 1.3 and 1.4 trillion pesos by 2027. We also expect to sustain a ROCI above 16% over the next two years. For the second pillar, related to distributions to our shareholders aiming to boost the TSR, we rely on two mechanisms, dividends and share buybacks. For dividends, we're considering an ordinary dividend of 430 pesos per share, representing an 11% increase vis-a-vis the ordinary dividend paid in 2025, distributed in four equal installments, and an extraordinary dividend of 150 pesos per share, payable fully in April. For buybacks, we're proposing to roll over the program and top it up to 450 million pesos for the next two years. These distributions underscore our commitment to delivering tangible value to our shareholders while preserving ample flexibility to advance our growth agenda. Our third pillar consists of our shared liquidity. We remain highly optimistic about the inclusion in the MSCI Emerging Markets Standard Index in the near future, as our share has exhibited its strong performance this year. We surpassed the highest nominal price in the company's history and closed January at 13,820 pesos, a 30% year-to-date return. Moreover, our average daily trading volume increased by 13% vis-a-vis the 2025 average, a clear reflection of growing investor interest, market visibility, and LATAM equities momentum. To further strengthen liquidity and support both existing and new investors, we're implementing a dual market maker model in which two independent firms with differentiated strategies will operate simultaneously. Finally, under the fourth pillar of this new phase of Sprint, along with our strategic priority to expand in the U.S. market, we are introducing key milestones to enhance visibility and enhance monitoring of progress across both organic and inorganic initiatives as Jason mentioned. For organic growth, we reaffirm our target of generating approximately $100 to $115 million in additional EBITDA by 2030 with investments of less than $500 million. The milestones enabling this include securing DOT certification in all operating states, enhancing logistics efficiencies through the development of a proprietary port in the Dominican Republic and obtaining two additional marine terminals in the U.S. southeast coast. scaling production from our Dominican Republic and Panama inquiries to exceed 3 million tons dispatched by 2027. And finally, achieving a positive EBITDA by the end of 2027. In our inorganic strategy, we aim to complete a medium-sized acquisition that provides local U.S. presence, along with more than three bull ton transactions, seeking to generate an additional $100 to $200 million in EBITDA by 2030. Additionally, in 2025, our cash flow has generated an average return of sulfur plus 17 basis points, totally around $100 million, through a strategy executed with global asset managers under the parameters set by our board of directors. In conclusion, with our clear strategy, a strong balance sheet, and disciplined execution, we are well-positioned to capture opportunities and generate long-term sustainable value.

Thank you, Felipe, for your intervention. I would like now to comment on our consolidated results. Since the beginning of the year, our core markets such as Colombia and Panama exhibited signs of complex dynamics. We had to rapidly adjust our business model for these conditions. In this short but profound reinvention process, we found ourselves developing cooperational and commercial capabilities and strengthening our relationship with main stakeholders. Today, we feel proud of the results achieved and moreover of the solid foundations we have built for growth when the time comes. During the entire year, we dispatched 9.3 million tons of cement remaining flat versus 2024 as a result of mixed performances with a particularly sharp decline in exports from Colombia due to our decision to shut down kiln number three in Cartagena in August of 2024 and a contraction in demand from the U.S. last year. Including mix, we dispatched 2.3 million driven by the slowdown of the housing segment in Colombia and still affected by the lack of housing subsidies from the Ministry of Housing and the transformation in this business line strategy in Panama. However, four-quarter volumes went up year over year, both for cement and rodent mix, with growth rates of 3% and 2% respectively, reflecting an improved environment. We achieved full-year revenues of 5.2 trillion pesos and adjusted EBITDA of 1.3 trillion pesos, expanding 6.6% versus last year and aligned with the upper limit of our full-year guidance. This EBITDA performance was complemented by an adjusted margin of 25%, which meets our guidance one year ahead and entails an expansion of 215 basis points versus last year. The fourth quarter consistence on profitability focused initiatives was key for the consolidation of the results as we delivered 347,000 million pesos of EBITDA representing a 27% margin. Moving into the regions, we find positive results overall. We have seen a clear recovery of the industry in Colombia that ended up with a solid growth despite sharp first-month decreases, strong economic fundamentals, driving up consumption in Honduras and Guatemala, and still robust demand in the Dominican Republic. Now I would like to invite Carlos to discuss further on the financial and operating results for Colombia and our market's strategic perspective.

Thank you Juan and good morning everyone. Since May 2025, we've seen a clear recovery in the Colombian-grade cement market. With volume spreading abroad after several months of contraction, industry demand reached 12.7 million tons at 5% year-over-year. And as we mentioned in our last call, the retail segment has been the main driver growing 11% year-over-year, fueled by self-construction. Our total cement volume for the year reached 3.9 million tons in the local market and 1.2 million tons in exports. The decline in exports versus 2024 was given mainly by lower dispatches to the U.S., affected by the weakness in demand in these countries. In red mix, in line with the industry recovery observed since September, we had our first positive quarter of the year, contributing to a total of 2.1 million cubic meters for 2025. Quarterly revenues came in at 735 billion pesos, with a big gap of 226 billion pesos representing a 9.3% increase year-over-year and a 30.7% EBITDA margin. In addition, I'd like to emphasize that fourth quarter delivered the best historical EBITDA per ton with ever recorded, reaching $53 per ton. This underscores the consolidation of our profitability strategy, supported by stronger operational reliability and the positioning of our value proposition, which continues to deliver top-level products and services to our clients. For the full year, revenues reached 2.8 trillion pesos and adjusted EBITDA of 812 billion pesos, up 3.6% versus 2024, with margin expansion of 182 basis points, reaching 28.4%. Despite a challenging start of the year to capture efficiencies across the value chain by approximately 70 billion pesos, focused mainly on tax costs, delivering positive consolidated results, and building a solid foundation to leverage the ongoing market recovery. Our free cash flow conversion ratio reached 76% of EBITDA, underscoring the strength of our cash management strategy. This, together with our EBITDA margin, and return on capital employed at the highest levels of the last decade, reinforcing the strength of our results. Looking ahead, we expect the semen and red mix market to continue the recovery path driven by demand in major cities and further momentum from self-construction. In the mid-term, we remain optimistic supported by housing sales growth of 25% year-over-year and a robust pipeline of more than 100 projects, including Tudel de Oriente, Arena Primavera, and Metro de la Chalda. Regarding the recent minimum wage increase, we are conducting a thorough review of our operations to identify efficiency initiatives that can offset this impact and would already obtain encouraging results. Nevertheless, we foresee some short-term impacts derived from the higher than usual increase. We have developed a best-in-class operation and are confident in our ability to further strengthen performance and enhance profitability by capitalizing on market upside operating leverage and potential price interaction with the goal of reaching an overall EBITDA increase of $60 million in the next three to five years.

Thank you, Carlos. Now we would like to invite Gustavo to comment on the results of Central America and the Caribbean.

Thank you, Juan, and good morning, everyone. In the region, cement volume showed solid growth, reaching 1 million tons in the quarter and 4.3 million tons for the year. This represents a year-over-year increase of 12.6% and 8.6%, with most of our operations outperforming their markets. In Remix, the downward trend continued, aligned with industry contraction and our strategic decision to scale back this business line in Central America. Fourth quarter revenues were $132 million, bringing the full year to a total of $554 million, a slight decline versus 2024, mainly due to Panama's contraction. EBITDA reached $34 million in the quarter and $141 million for the year, with margins of 25.6% and 25.4%. The 30 basis point margin expansion was driven by the Caribbean, where the Dominican Republic and Puerto Rico delivered record profitability. Now let's turn to Central America. Cement volumes in the fourth quarter rose 8.4% to 441,000 tons, supported by strong demand in Guatemala. Revenue is reached 59 million. with EBITDA of 19 million and a margin of 33.1%. While slightly lower than last year, this margin remains the highest among our regions, breaking it down by country. In Honduras, despite the current stoppage in the first half, volumes recovered, ending with 1% growth and margins above 30%. Operational Excellence Initiative reduced clinical use to 45%, and maintain our kiln OEE above 90%, and cut carbon emissions by nearly 20%. In Guatemala, the market grew 18% by November, supported by stronger emittances and higher cement prices. We captured record EBITDA and continued positioning ourselves as a local alternative to imports. In Panama, industry volumes and prices declined. However, efficiency measures offset the impact. We reduce fixed costs by $1 million and SG&A by $2 million, while expanding contributions from premixed materials aggregates and terminals, driving 10% operating EBITDA growth. Now, let's move to the Caribbean. Cement sales reached 376,000 tons in Q4 and $1.5 billion for the year, up 4.1%. Revenues were at $67 million in the quarter and $275 million for the year, aligned with the volume growth. EBITDA margins stood at 19.7% in Q4 and expanded to 21.1% for the year, thanks to efficiencies across the value chain. By Country In the Dominican Republic, volumes grew 7% despite currency evaluation and increased competition. EBITDA reached record levels supported by a 30% capacity expansion completed early in the year. In Puerto Rico, industry growth slowed, but we achieved a 20% EBITDA increase and reinforced market leadership with capital light model. In our Caribbean operations, Haiti moved from negative to positive EBITDA, while Suriname quadrupled its 2024 results. Together with Frank Gugiana and TNTs, these markets contributed over 10% of the original EBITDA. To wrap up, 2025 was a year of portfolio optimization and operational right-sizing. We consolidated the best models to serve each market and strengthened our leadership position in the region. Looking ahead, we are confident that these foundations will support continued positive performance.

Thank you Gustavo. Thanks to the strong contemporary results and corporate initiatives, we successfully met all the objectives outlined in our 2025 guidance. Building on these achievements and considering the near-term outlook for the markets where we operate, we are presenting the following guidance for 2026. EBITDA margin. We expect to maintain a margin between 24% and 26% within the next two years, supported by the consolidation of our commercial, operational, and logistical efficiency initiatives across our geographies. Profitability. We aim at further enhancing profitability, targeting Aroshi above 16% for the next two years. CapEx. In 2026, we plan to invest between $80 and $100 million in Datan, with at least $65 million allocated to maintenance CapEx and around $80 to $100 million in our growth plan in the U.S. Adjusted EBITDA. We project adjusted EBITDA to our range between 1.4 trillion pesos, or the equivalent of approximately $350 million, representing a midpoint increase of 6% compared to our 2025 results. Net debt to EBITDA. Taking into account our current cash position, we have set a mid-term target of two times net debt to EBITDA, which we expect to reach within the next three to five years as our growth plan advances. We remain confident about the road ahead and reaffirm our commitment to meeting our mid-term targets. This outlook is supported by improving market conditions, the effective execution of our optimization strategies, and our disciplined focus on sustainable high return investments that will secure long-term growth. Carolina, we can now proceed with the Q&A section.

Thank you Juan. We will proceed now with the Q&A session. Please remember that in order to ask a question, you need to raise your hand using the icon that is at the bottom of your screen. I will say your name and company and will enable your microphone. Take into account that you need to unmute your microphone before you speak. Please note that Jason has recently joined and is currently reviewing the business plan for the U.S. Therefore, any detailed questions in this regard will be addressed in future sessions. First question comes from Alejandra Obregon from Morgan Stanley.

Hi, good morning, everyone. Thank you for taking my question. I guess I have two. The first one is on the ADR listing. I was just wondering if this is contingent on any particular milestone of your strategic path and what's the timing for these or what do you have in mind here? And the second one is, so you mentioned that this first phase of your strategic review will become EBTA positive by 2027. So I was just wondering if you can perhaps walk us through the cadence of investments and the path to EBTA growth in the earlier years and what are sort of like the key milestones and the gating factors in the process for these aggregates or exports platform. Thank you.

Thank you, Alejandro. Even though, I mean, Jason is just in the onboarding process, I mean, he's more than ready to take your second question, so I would like Jason to start by answering your second question.

Alejandro, nice to meet you, and thank you for the question. In terms of the cadence of investment, we're, as Carolina said, we're currently and I'm currently going through the plan. and adjusting that. But I would expect, in terms of the import platform, for the majority of the capital to be spent probably in the second half of 2027 and in 2028 and maybe a little bit in 2029. But all that is subject to change based on engineering and timing of permits and all those kinds of key milestones, as you talked about. In terms of the key milestones, as you know, we've already put one shipment into Tampa. We're currently commercially working on that. And then throughout this year, we will have a few more shipments likely into Houston, New Orleans, and also Tampa. So I think those are the early key milestones that we're looking to achieve. And then internally, we're working on, obviously, the detailed engineering plans and permitting work in the Dominican Republic. And so those will hopefully happen, and we'll have clarity on all of that later this year.

Just to add to Jason's comments, I mean, the operation will get a bit positive once we have the ports and terminals in place in the Dominican Republic. I mean, as you know, we will start using some ports that are not our long-term ports. We will build a private port in the Dominican Republic, I mean, because the volume that we are expecting to handle is significant. So, the first couple of years, we will be using two alternatives, which are not ideal from the standpoint of our long-term competitive plan, Alejandra. And Felipe will take your first question regarding the ADR.

Good morning, Alejandro, and thank you for your question. As you mentioned, the potential ADR listing is subject to the progress on the X business plan. We expect that we will be ready to pursue that path in around two or three years. But that is the end game of this whole strategy is to pursue that path and have the market recognize the full value of that business plan.

Thank you very much, and nice to meet you, Jason.

Thank you, Alejandra.

Next question comes from Gordon Lee from BTG Pactual.

Hi, good morning. Thank you very much for the call. Two questions, both related to the U.S. business, and one is a little bit of a follow-up on Alejandra's question. You mentioned the cadence of investment, but I was wondering if you could share with us what you expect the total investment to be, including with the 80 to 100 million that you disclosed for 2026 through 2030 to produce that platform that would generate the $200 million to $300 million in EBITDA. And the other question I had is I was wondering if you could share with us in your EBITDA guidance for 2026, what is the EBITDA drag from the U.S. business? In other words, can you share – what you expect the EBITDA loss to be from the U.S. business in 2026. Thank you.

Sure, Gordon, and I can take on the first one. I mean, the total capex that we are foreseeing for the first phase of the aggregates platform is $500 million to get us to probably $150 million of EBITDA, which is going to be phase one. We will complement that as we have been explaining with Boltons in the US and Greenfields as well. So this phase one is $500 million. in CapEx and we expect that CapEx to get us to $150 million of EBITDA by 2030. And Felipe, we'll get your second question regarding the drug and the deployment of this new business plan for Axe.

Good morning, Gordon, and thank you for your questions. EBITDA drug for coming from the Axe business for 2026 is expected to be $6 million.

Perfect. Thank you. If I could just have one quick follow-up just to the CapEx, the 500 that you mentioned, sorry. How much of that CapEx has already been expensed through 2025?

It's just a small portion of that.

2025, we probably invested around $3.5 million. Okay. All right. So minimal.

Great. Super. Thank you very much. Thank you, Gordon.

Thank you, Gordon. Next question comes from Marcelo from Itaú.

Hello, guys.

Good morning to you. Yes, Marcelo. We can hear you well. Okay. Thank you. Thank you so much for taking the question. My questions are three. The first one is just a lot for the U.S. division. If you guys could share a little bit, you mentioned that both acquisitions will be in the pipeline for the next months and years, about the U.S. growth.

You are not sounding that clear, Marcelo. Can you repeat your question, please? Because we can't hear you well. Yeah, sure.

Can you hear me better now? A little bit better.

okay uh so my my first question is a follow-up regarding the us division so if you guys just play a little bit regarding the quotation book positions in terms of size so what what would be the sizes to expect for this future mnas and my my second question is related to the columbia division so you guys can share what is implied for 2016 in terms of my response for the division so if you guys are still working on cost efficiency and so forth And the third question is related to being included in the MSI index. So if you guys could just give more details regarding what are the next steps or what is the current stage of being potentially included in the MSI market index. So these are my questions. So if you guys could hear me. Thank you.

Thank you, Marcelo. So Jason, we'll take your first one.

Hi, Marcelo. Nice to meet you. In terms of M&A and the size, I think that's going to vary both in size and in timing. Over time, as you know, that ends up being opportunistic in nature. But I can tell you we will have a very robust pipeline and already have some potential targets in our pipeline that we will be diligently working on. In terms of the size, as you know, we have significant, I'll call it firepower, from the liquidity event with Quikrete. And so we will be looking to deploy that capital in M&A over time.

Regarding Colombia, we're extremely happy with how the year ended up. Strong fourth quarter, as you saw in our remarks. Very strong margins, good volumes, and 2026 started the same way. So I would like Carlos Horacio to give you a little bit more color on our milestones for 2026. So go ahead, Carlos.

Okay. Hi, Marcelo. Like Juan was mentioning, the idea is to continue in the same line that we ended the 2025. And we are delivering now some different strategies in terms of sales in the different regions of Colombia. We are capturing really a very good volume in the massive segment. For that reason, we are expecting a very good first quarter. and for the rest of the year in the same way. Working as well and continuing as well in the line of capture more reliability or more synergies in our operations.

Thank you, Carlos. Now Felipe will take the question on the MSCI. So go ahead, Felipe.

Good morning, Marcelo. So, honestly, we were somehow somewhat taken aback by the announcement. Last week, we were expecting to be upgraded to be a standard section of the MSCI based on our calculations. I mean, we're very close to reach the overall market capitalization and flow-adjusted capitalization. We are probably the most liquid stock in Colombia when compared to market flow-adjusted capitalization. So, I mean, we would expect for this upgrade to happen in 2026. We're right there. We're very committed to delivering on this promise, and this is still something that we really want to achieve in the context of the screen program.

Thank you, Marcelo.

Thank you, Marcelo. Next question comes from Gabriel Perez from Credit Corp Capital.

Hi, guys. Can you hear me? Yes, Gabriel.

Really well. Go ahead.

Thank you. First of all, thanks for the presentation. I have three questions, mostly for the Colombian segment. The first would be that over the last two quarters, EBITDA margins in Colombia have been around 30%. How do you expect to sustain these high margins, particularly considering the impact that higher minimum wages could have on the sector? Also, in line with the higher minimum wages, what do you expect the impact to be in the cement demand taking into account that higher construction costs could affect the construction recovery expected for 2026? And finally, in the earnings report, you mentioned that the absorption of Concretos Argos will be pursued to achieve additional operating efficiencies. So, could you elaborate on how this transaction will translate into these efficiency gains, please?

Sure, Gabriel, and I would like Carlos Horacio to answer your two questions. So, Carlos, go ahead.

Hi, Gabriel. Starting with the first one, we are expecting a pretty similar EBITDA margin for the 2026. Obviously, we have some impact from the increase of the minimum wage. But we are working from January the 4th, how to mitigate this impact in our cost. Really working more in efficiencies, but obviously it was a real impact, but we are working on it. In terms of the impact because the minimum wage in the demand in the 2026, we have to split in two, probably in the retail segment, probably the volume increase because there is more circulant in the street and probably impact positive in the demand in the retail segment. in the construction segment or in construction center more in the housing sector we are still analyzing or the sector is still analyzing what will be the impact in terms of the in the cost in the since the constructions but as well what will be the impact because increasing the market and the mortgage rate in the in the mortgage rate really now is not so clear how can how big could be the impact in the next in the next months and the third one is is what about the merge the cementos into, the concretos argos into cementos argos. Really, it could give us some efficiencies. The principal or the most important efficiency is because we sell cement from cementos argos legal entity to concretos argos legal entity. And when after the merge, we optimize the Impuesto de Industria y Comercio, the ICA. In the case of Colombia, you know very well, the ICA. a transaction within the same legal entity. And as well, some other efficiencies in terms of optimizing the transaction between these two legal entities. Obviously, it helps us, but the capture of these efficiencies will be more for the 2027.

Okay, guys. Thank you. Thank you very much. Thank you, Gabriel.

Next question comes from Marian Goñi, also from Credit Corp Capital.

Hi. Thanks for the presentation. I have two questions. My first question is related to Venezuela. I see that the company is targeting a 2-3% market share this year, but given the country's economic context, what demand signals are you currently seeing that support expanding operations at this stage, rather than taking a wait-and-see approach? My second question relates to the impairment recorded this quarter. Could you clarify if it's related with the Panama or the Puerto Rico operations? Additionally, should we expect further impairments over the course of the year?

Thank you, Marianne. Thank you for your questions. Regarding Venezuela, the reality is that we are extremely bullish about Venezuela. Yes, the market has decreased in a significant way. I mean, from a 10 million tons market per year to probably 1.5. last year, but the reality is that, in our opinion, the reconstruction of the country, starting with the oil and gas sector plus the electricity sector, will need significant volumes of cement and concrete. And we consider that we will have a first mover advantage. As you all know, we have a pending legal claim with the Venezuelan government for the expropriation of our cement plant in 2006. And we are completely sure that Venezuela is going to become one more significant market in Latin America. On top of that, I mean, what we have been doing since 2023 is just repositioning our brand in the market. So far, the product is getting a lot of traction, and Carlos can expand a little bit more about our current strategy. But the reality... is that we are forcing a future in which Venezuela is going to be an important part of our footprint. And we are being extremely active with the U.S. government and in Venezuela in order to, with that, first move in the cement industry. The reality is that the cement industry will have to be rebuilt. And we see ourselves as the natural players to make that happen. So a lot of, you know, hope and optimism regarding Venezuela. And then, Carlos, can you explain a little bit more? I mean, so far, from a commercial standpoint, the traction that we are getting in Venezuela to complement?

Okay, Juan.

Marianne, we started with exports to Venezuela about three years ago, like Juan mentioned, and really started just exporting white cement. Since the last part of 2025, we started with the export of grey cement. Really the reliability of the plants in Venezuela are really low. The current plants in Venezuela that are operating are really low. For that reason, we are taking advantage of that situation and we establish a very good relation with a very good clients in Venezuela that has a big network of customers across the 23 states there. And we are increasing month by month both products, the white cement and the grey cement. And as well, not just exporting the product, but giving as well some how to apply better the product that really we have a very good expertise technical support and for that reason we are very confident that we can increase like one mentioned in the first part of this call that the idea is to take from export to Colombia by the end of the year about three percent three to four percent of the local market there We are seeing a very good opportunity for us because our quality, the reliability of our products and the technical support that we are, our value proposition really is very, very strong to gain market share there.

Thank you, Carlos. And now Felipe will take your second question, Marian.

Good morning, Marian. Regarding the improvements that we have announced, during 2025, these are non-recurring transactions. They don't have any negative impact on the capital generation ability of the company. On the contrary, particularly the improvement in Puerto Rico, given the existence of certain capital taxes in Puerto Rico, this improvement actually reduces the tax burden in cash terms going forward. So, yeah, we would expect positive impact coming from these, yeah, from these impairments, and we're not expecting any further impairments going forward in any of the businesses.

Thank you. Just a follow-up question. So, the impairment recorded this quarter is from Puerto Rico, not from Panama.

Okay, so in Panama in particular, that impairment refers to a clinker inventory that was acquired and has a cost that is above the current market price. So it is not currently economically feasible to exploit that inventory. So we are writing down the value of that inventory to account for that reality. This is an inventory that was acquired a few years ago. And given the evolution of the market, we believe that the most sensitive approach is to write it down and then wait for market conditions to maybe change in the future. And eventually that clicker inventory might be economically feasible to exploit and commercialize in the market.

Just to complement, Felipe, Marianne, it was the result of a take-or-pay contract like 10 years ago that we had to take some additional clean care because we didn't meet the required volumes. And it will be used. I mean, now with the write-off, the reality is that we created full incentive for the to consume the clinker because it will be more cost-efficient for them to start consuming that clinker as an addition to cement than to add limestone. So the reality is that it is an economic decision to create incentives for Panama that would not have any impact in our cash flow. But thank you for the question.

Thank you. Thank you, Marianne. Next question comes from David Gomez from Diario La Republica.

Hi, guys. Thanks for your time. My first question is, this year, what's your goal of production or shipping to rival two U.S. this year? And the second one is, are you exploring to arrive to new countries in this year?

Thank you, David. I mean, correct, like the forecast for export to the, in general, out of Cartana, close to 1.2 million tons. That is basically the capacity that we have for exports. They will go mainly to Puerto Rico, the U.S., and the Caribbean. So that is our forecast of export for 2026. and the realities that we have defined at the north of Latin America as our target market. But currently, we are foreseeing to continue putting our operations in all our current geographies. We have been having a very good performance in Guatemala, and we are looking at some options in that market. And as I mentioned a little bit earlier, Venezuela is the other geography. that in our opinion will start becoming important in our footprint. So those are our plans for Latin America in 2026. Thank you.

Last question comes from Javier Villegas from Bancolombia.

Go ahead, Javier.

Good morning. Do you hear me?

Yes, Javier. We can hear you well.

Okay. Good morning. Thanks for the presentation. I have two questions. First one is concerning the pressures facing the construction sector in Colombia at the end of 2025. What do you think will be the main challenges for this year? And the second one is about the decline in the cement export segment in Colombia. Could you give us more details about that decline recorded in the quarter? Thank you.

Thank you, Javier. I'll take the second one first. I mean, we shut down a wet kiln in Cartagena in 2024, in August of 2024. So the reality is that we lost a little bit of capacity for export, but it was the right economic decision. So the only explanation is that one. We are using our full capacity to export out of Cartagena, but it decreased with the shutdown of kill number three. And second, in Colombia, for 2026, we are extremely optimistic. I mean, the reality that we see all the investors looking at Colombia as a significant opportunity, and hopefully politically we will have a a good um you know a good change in um in the in the in the current situation and the country has a significant potential you saw uh what happened with a little bit more volume with our numbers in the in the fourth quarter of the year and once uh demand start the trend that it was having in the past, that the reality is that we see that Colombia is full of opportunities. And consumption, as Carlos mentions, will continue to be a significant driver of demand, especially during the first half of the year. Going forward, the reality is that what will drive demand will be all the fundamentals in Colombia. I think that there are plenty of investments waiting for a better political situation.

Thank you.

Thank you all. Juan, there are no more questions.

Okay, so once again, thank you so much for your interest in Cementos Argos, and we continue to be extremely bullish with the future of the company. Thank you so much, and have a great day.