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Good morning, ladies and gentlemen. Thank you for standing by. Welcome to GRUMA's first quarter 2025 earnings conference call. During today's call, all parties will be in a listen-only mode. Following the speaker's remarks, the conference will be open for questions. If you have a question, please press the star followed by the number one on your touchtone phone. Please press star zero for operator assistance at any time. For participants using speaker equipment, they may be necessary to pick up your handset before making your selection. I would now like to turn the call over to Mr. Adolfo Fritz, Groomers and Best Relations Officer, who will present earnings results, and then we will open Q&A session where Mr. Raul Cavazos, Groomers Chief Financial Officer and team, will be available to answer additional questions. I would now like to turn the conference over to Mr. Fritz.

Thank you. Good morning and welcome to our first quarter 2025 conference call. We're pleased to have you on the line and thankful for the opportunity to share results with you. With me today, as always, are Mr. Raul Cavazos Morales, Gourmet CFO, and Rogelio Sanchez-Martinez, Gourmet's Corporate Finance VP. To start, we'll take a few minutes to discuss the fundamentals and results from the quarter, and then we'll open it up to any questions you may have. We're very pleased with the results for the first quarter of the year as our company once again has shown its resilience and ability to deliver the desired results despite challenges in the overall market. As you know, the start of 2025 has seen changing fundamentals and market dynamics, which have been proportional to the uncertain outlook for the U.S. economy and its potential effects on global trade and ultimately on the consumer. Thanks to Gruma's global footprint and geographical diversification, we feel we are in a privileged position to face the challenges that may be ahead as a result of these potential changes in the economy. In the U.S., there is clear evidence that the average consumer is more selective than a year ago. However, our better-for-you line performed very well and in line with historic growth, remaining the core driver of growth at the retail channel, as did other SKUs along the array of products we offered. In fact, when compared sequentially, our product lines experienced a slight acceleration, potentially indicating future growth despite today's economic environment. We continue to focus on recovering volumes in the tortilla food service channel, while in the rest of the world, Europe keeps expanding favorably, and results in Australia supported growth in our Asia and Oceania operations, even as China continues to experience volatility in terms of fully recovering demand. With these fundamentals as context, our tortilla operation declined by 1.4% in terms of volumes and mainly in the back of the evolution of the U.S. food service channel. In terms of corn flour, our Mexican operations saw temporary decline in volumes in the back of a few clients starting regular operations later than expected. However, our division in Central America performed very well and in line with our expectations to the extent there is a need for future investments to have capacity. The European corn milling business, meanwhile, threw volumes down with a tough comparative base and the now usual logistic challenges which we hope will subside in the future. In all, Consolidated volume for the first quarter of the year was 1 mm tons, or a 1.3% decline relative to a year ago. The effects of a weaker Mexican peso on reported financial numbers, coupled with mainly a decline of cornflower volumes at GIMSA and corn milling volumes in Europe, along with lower revenues at GIMSA, resulted in a 6% decline in sales, reaching $1.5 billion. Had the peso not depreciated relative to last year, sales would have been flat. Nevertheless, we achieved EBITDA of $276 million, representing 4% growth in the period or 8% growth without the effects of the Mexican peso depreciation. This resulted in 13% higher earnings, reaching $126 million. In terms of the balance sheet and working capital management, we increased inventories by 12% given the potential of a drier harvest with lower yields in Mexico. To mitigate this potential risk, we took an additional short-term debt and inventories grew proportionally. Nevertheless, our leverage, as measured by net debt to EBITDA, remains at very healthy levels at 1.2 times. At this point, we don't foresee any changes or meaningful shifts to our current leverage levels. This quarter, we focused our capital investments on our planned and needed capacity expansion in Central America, the replacement of manufacturing equipment, the purchase of additional land for a milling operation in the U.S., and overall global maintenance work that weighed on HIMSA. We invested approximately $50 million in the quarter and in line with our budget for the period. Moving on to the performance in each one of our subsidiaries in the U.S., although growth has been slower, we're still seeing growth in our retail channel despite market dynamics that have changed the overall environment. We've seen a weakening in consumer sentiment and uncertainty in the economic outlook, which have further supported consumer selectivity. This has resulted in increased competition within the category among our competitors and private labels as they seek to recover market share lost over the last eight months. It is important to note that this competition is more at the standard product level and not meaningful enough at this point in terms of value-added products. As a matter of fact, as I mentioned a minute ago, the performance of our Better For You product line has been in line with our expectations, and we are very pleased not only with its current results, but also with its outlook as a main driver for future growth at the U.S. retail channel. Our philosophy and strategy have not changed, but we will be ready to address the situation should it further escalate during the upcoming quarters. All in, the retail channel thus far is performing according to budget. Our expectations is still to deliver growth on an annual comparative basis and even more so on a sequential basis. In the food service channel, however, on a yearly comparison basis, the decline in volumes that took place in previous quarters is still dragging the revenue and volume results for the business units. However, we see encouraging recovery on a sequential basis as we have been able to recover important accounts since the start of the year. In the U.S. division as a whole, volume and sales declined by 2% and 3% respectively, while EBITDA still grew by 6% and EBITDA margins stood at 22% for the quarter. In Mexico, the overall picture of the subsidiary is that the environment is stable and the operation is yielding stable results, as it always has done in the past. That said, during the quarter, some of our clients delayed their usual start of operations in addition to volumes sold last year as part of governmental humanitarian programs related with the aftermath of Hurricane Otis in Acapulco. Therefore, we saw volumes decline by 2%. Notwithstanding the setback, demand for our product continues to be very favorable from tortilla makers and wholesalers alike, which we expect to continue over the course of the year. Revenues contracted by 2% and EBITDA declined by 1%. Our European division continues with its promising expansion into retail channels as it keeps adding more distribution across the continent. The single-digit growth achieved at this channel was overshadowed by the performance of the core milling business, where the marginal decline in sales volume reflects ongoing logistic challenges, and in this quarter specifically had a much tougher base of comparison relative to 1Q24, given extraordinary corn volumes sold last year that did not take place during the quarter. Had we not sold this core volume, the subsidiary would have grown by 4%. With these fundamentals, volumes decreased 3% as a result of the core milling operation's performance. Sales grew by 7%, and EBITDA expanded by 20%, supported by the results of the tortilla operation in this division. In Central America, demand for a product continues to be buoyant as we keep expanding innovative product offerings across the market to subsidiary serves. We have seen cost inflation in certain items such as fuel, freight, labor, and so many factory expenses, which has increased our usual costs, but nothing that kept this division from outperforming the first quarter of 2024 and delivering historic performance altogether. We're excited about the potential and outlook for this subsidiary. And in order to reach our goals, we will need to add capacity during the year to cope with the strong demand that has been accelerating as we expand our product offerings in this market. At the end of the first quarter of the year, volumes grew by 2% and sales increased 1%, with EBITDA growth of 5%. EBITDA margin was 16.8%. Asia and Oceania continue with the same trend we saw in previous quarters, with Australia and Malaysia outperforming China's lackluster commercial activity. At this point, we're assuming a similar performance from China for the rest of the year, but just as it happened this quarter, we're confident about the outperformance from our other two operations in this division. The growth in costs we experienced in the quarter was due to indirect manufacturing costs, which we believe will subside into future quarters, and higher labor costs. The costs will be absorbed once the full operation in China starts ramping up to normalized levels. Given these factors, the subsidiary experienced 2% growth both in volume and sales, but the rise in costs offset this growth resulted in an 11% decline in EBITDA. In all, We're pleased with the results for the first quarter of 2025, and we remain in line with our original budget and expectations for the year. As you know, there is a significant number of variables in the global economy today, some of which are far beyond what anyone would have expected in 2025. As we communicated in our last conference call, our guidance was crafted with challenges in the horizon during the year, and we're not new to operating with challenging environments, knowing that they also create opportunities. We have a defensive business model and product line and the best team to execute our strategy and find opportunities in this market. This is why we feel confident about overcoming the obstacles that may or may not come our way during the year and our ability to deliver solid results for our shareholders. With that, I'd like to open the call for questions from listeners today. Can you help with that, please, operator?

Thank you, sir. We'll now begin the question and answer session. As a reminder, if you have a question, please press the star followed by one on your touchtone keypad. If you would like to withdraw your question, press the star followed by the number two. If you're using speaker equipment, you will need to lift your handset before making your selection. One moment while we poll for questions. Our first question is from the line of Ben Thurr with Barclays. Please proceed with your question.

Yeah, good morning, and thank you very much for taking my question. Two quick ones. So number one, as we look into the U.S. business for now, I just wanted to understand if you can dig maybe a little bit more into some of the volume performance, the declines. You've highlighted the better for you line, but can you give us a little bit of a sense of, like, what is volume performance and better for you line? What is customer repeat rates in that line? So just a little bit of granularity as to the actual performance in the different categories. That would be my first question, and then I have a quick follow-up on the U.S. as well.

Sure. Thanks for your question, Ben. So in the U.S., really the one – factor dragging our performance, as I mentioned, as a food service channel. Volumes there probably have contracted on a year-to-year comparison close to 20%. So it's something that has been significant and we were trying to recover them gradually. That being said, Better For You has actually expanded quite favorably with the usual annual growth rate that we've been able to provide, which has been around 15% per year. We haven't seen any slowdown there. As a matter of fact, the composition that we have right now in terms of retail sales coming from these products is around 33%. And in terms of volumes, it's close to 13% now. So the evolution of Better For You has been very favorable. Right now, the hurdle that we have in front of us is really the competition that there is between private label and our own competitors. in the sense that, as you probably recall, private label was growing very rapidly last year, about this time of the year, to the extent that they almost reached their historic market share of 13%, and all that market share was taken away from our competitors. It was around 300 basis points, more or less. Our competitors today are trying to get that back, and they're being very aggressive in doing so, pricing some of their items even below private label levels. So, So that part of the portfolio, as I mentioned, is part of our standard product lines, which are products that have been slowing down, obviously, because of this dynamic. But it's something that we prepare to defend if need be in future quarters. We're still waiting on the sidelines to see if that's necessary. But if it's necessary, we're more than ready to do so. In regards to the retail performance, just as a whole, taking into consideration the growth that I just mentioned and better for you, in addition to the performance in the other products, growth there has been in low single digits. It's been slowing down relative to last year, obviously, but it's still experiencing growth that we believe is going to be accelerating because of the sequential performance that we've seen. over the next few quarters. So we're quite optimistic because of that. I know that on a year-to-year comparison, it still looks a little bit of a slowdown, but hopefully with the measures that we're ready to take, that will change in the upcoming quarters.

Okay, perfect. And then just real quick, following up on some of those incremental costs that you had, first marketing and then I was saying logistic and distribution costs related. In the U.S., because there was no commentary around that as to what to think about this going forward, is that something that you're going to continue to be investing into marketing and some of the distribution capabilities? Is it fair to assume that that is probably going to continue to be somewhat of a headwind in coming quarters from a cost perspective?

Yeah, I would say that from an SG&A perspective, you can count on probably similar dynamics and similar strategy. For obvious reasons, we are being a little bit more aggressive than we normally are in terms of marketing. So I would say that we will be engaging in more aggressive marketing during the next few quarters, relative to other years, that is. But relative to this quarter, I think that that it would be about the same level of investment or expense that is in marketing. Freights are also an issue as they've been for quite a while now, but that is totally economy dependent based on the supply there is of employees in terms of the logistic companies that we use. And that's something that we have to live with. We have to live with for quite a while now. So I would say that the only newer factor today in terms of additional expenses would be that we didn't have before would be the more aggressive marketing that we're doing.

Got it. Thank you very much. Thank you.

Thank you. And our next question is from the line of Antonio Hernandez with Actinder. Please proceed with your question.

Good morning. Thanks for taking our questions. Congrats on those results in the U.S. You reached quite solid margin levels. I just wanted to ask, what's next after this? What should we expect going forward? You clearly provided some guidance for the year, but in terms of the long-term perspective, what is your target profitability, and what can take you there? Thanks.

Well, thank you for your question. Well, in terms of long-term strategy, I think this company has been characterized by leveraging the existing opportunities at hand. We started with efficientizing our SKU line for almost seven years. Then we've leveraged efficiencies across a cost structure very effectively, depending on how the market is. I think that at a certain level of profitability we will have to given today's context we will have to increase probably our strategy related to volume pressure rather than profitability so that we can have a balance between the profitability that we have been able to create thus far and probably the volumes that are still needed for us to defend the brand itself and to penetrate the market further and I would say that in the long term, the picture doesn't change really that much. You can expect probably volumes in the low single digits, revenues mid-single digits, and EBITDA growth probably high single digits as a result of that. I would say that's the 50-foot overlook of what we are trying to accomplish in the future. But so far, as you can probably infer, we have our hands full with the demand that we're seeing in this strategy that we're implementing today, in addition to the competition that we're facing that I just described.

Okay. Thanks for the call.

Thank you. And our next question comes from the line of Enrique Moreno with Morgan Stanley.

Thank you. Hi, Adolfo. Hi, everyone. Thank you for taking my question. Just quickly on the gross margins in Mexico, the margins are still spending a lot on a year-on-year basis, but we've noticed some decline on a quarter-on-quarter basis and compared to the previous quarter's levels. So I just wanted to explore if you could provide some breakdown of the factors that contribute to that sequential slowdown margins. like if there were some pressures from the raw material standpoints or other COGS components, for instance, and how do you expect the gross margins to shape as we move forward in the year? Thank you very much.

Well, thank you for your question, Henrique. Yes, definitely. You know, gross profit margin, if you look at it on a sequential basis, will have an effect of the layering of inventories that we're using depending on the average cost of the corn that we're using at a particular point in time. So you will see fluctuations there. I would encourage you to look at it more. When it comes to COGS, sequential analysis might be misleading because of this, but it's part of the business. We use inventories in different layers in different plants around the world. So that is bound to happen not only in Mexico, but also in other operations. So that's really the reason why. So when you see that, please keep that in mind. But there is no other point along the COG structure that I can point out now that would be hampering our gross profit in the future. It's just that volatility that may or may not come depending on the inventories that we're using.

That's clear, Adolfo. Thank you.

Thank you for your question. And our next question comes from the line of Alejandro Fuchs with ITAL. Please proceed with your question.

Hello. Thank you, operator. Hello. Thank you for the space for questions. I have two quick ones on my end. The first one related to the U.S. business. I wanted to see if you can comment maybe on some of the competitive dynamics that you are seeing in the region, anything that caught your attention on the different categories. What do you expect You know, maybe after the quarter, I know that therefore you've been very well. Anything that the comparators are doing, you know, that maybe is a little more aggressive going forward. And the second one, very quickly, is the guidance. You got it for a margin expansion of 20 to 40 bps. Obviously, this quarter was much really more. Maybe some upside risk there. Any plans of maybe updating the guidance? Or you think maybe we can have some more volatility in the next couple of quarters? Thank you.

Thank you for your question, Alejandro. So, in terms of competitive landscape, right now, really, the highlight here is the competition between private label and our competitors and the pricing dynamics around those products that are being competed for for additional market share. That is probably bound to keep happening throughout the year. If that continues, probably we'll have to engage in discounts and and promotions along the way to defend those products that are within that segment of the market that we're trying to defend. It's really standard products that are both corn and wheat alike, but from the standard nature, not from the value-added product line that we have. So I think that along the way in the year, you can expect, I mean, we're not 100% sold on the strategy yet, As I mentioned, we're still on the sidelines, but we're prepared to engage in the discount strategy as well as the promotion strategy as we go forward, if that may be. Right now, the category as a whole, I mean, our main concern is the effects that this will have on the category and the perception of the consumer on the category as a whole, not necessarily our market share in specific, given the substantial difference in market share between ourselves and the rest of the competition, but We are ready to defend that at any point in time, and you can expect that from the pricing point of view. In terms of guidance, so far, normally we adjust guidance during our second quarter conference call. So far, we remain firm with the guidance we provided to the market. We don't see any changes at this point. We need to have more data to come to a conclusion of changing or adjusting guidance accordingly. But so far with the data we have and the way the operation's been looking in terms of its response to both the competition and the uncertainty overall in the U.S. economy, we still feel confident with the guidance that we provided to the market, and that's what we're operating under.

Super, Keith. Thank you very much.

No, thank you for your question. And our next question comes from the line of Tiago Arzu with the Citibank.

Hello. Good morning, Adolfo. Thank you very much for taking my question. I would like to explore two points here. The first one is, so what would you say are the main risks and impacts for grumet coming from the whole US-TAF discussion, right? We understand this is a very volatile and multi-layered discussion, but it would be very interesting to pick your brain to see what we should track for Guma. And the next question is, so looking into your operations here for Europe, very interesting, strong results. We saw a positive mix, right, coming from tortilla over corn milling. So just wondering if we could hear a bit more on what's behind this, the sustainability going forward for the rest of 2025. Thank you very much.

Thank you for your question, Tiago. So in regards to your first question in terms of risks because of the tariffs, So we've analyzed this back and forth, and we really don't have a meaningful impact on that. I mean, we opportunistically have exported product into the U.S., of course, but it is not something that's really that meaningful. Of all the scenarios we've looked at, probably 1% of console that it sales would be a bad situation. In terms of tariffs, if it gets to that, we really don't see it getting to that point. But the operation as a whole is very independent, as you will know, globally, not just in the U.S. So we feel pretty sheltered, if you will, relative to tariffs in this regard. Your second question, you caught up on my end. Could you repeat that, please?

Yes, absolutely. It was regarding Europe. We saw very interesting, strong results here. Positive mix coming from tortilla over corn milling. So just wondering what's behind this, if it's sustainable for the rest of 2025. Just whatever additional information you can give for us to try to better grasp the potential for the segment. Thank you.

Yes, definitely. I mean, Europe's been doing extremely well. We started a strategy a few quarters ago of expanding our distribution across Europe. That's been very successful. So as a whole, we've been successful at aiming the strategy more towards tortillas rather than corn flour and specifically retail tortillas. So by doing so and expanding the composition of of retail relative to food service tortillas, we've been able to expand the profitability there proportionally. If you recall, a few years back, we had probably a 20% composition in terms of retail relative to food service. Right now, it's closer to 50%, a little over 50%. And that will continue growing as we continue adding distributors across the continent. Our goal is to hopefully reach composition that is similar to the U.S., where it's 80% retail and 20% food service. It is probably a very aggressive goal, but definitely anything that we can do to expand our composition from its current levels to be closer to that composition will be accretive in our profitability over time. So It's the result that you're seeing, I think, that have been consistent with past few quarters, and that is because of that. And you can probably expect similar performance throughout the year, by all means.

This is fantastic. Thank you very much to both.

Oh, thank you. And our next question comes from the line of Felipe Ucros with Scotiabank.

Thanks, Operator. Good morning. First of all, a question on Mexico pricing. Looks like we saw some price stability after some quarters that were, you know, about two out of the last four quarters saw declines in local currency in Mexico. So just wondering if you feel like you have reached a bottom on the pricing cycle there. Also wondering if you could give us an update on hedging for 2026. Thank you.

Thank you, Felipe, for your questions. In Mexico, as you know, we're pretty in line and dependent on the traditional method. We really have, at this point, no outlook in terms of pricing. It's just obviously 100% depending on what they do and how the market is at a particular point in time. It relates also to your second question, which is our hedging in Mexico. And You know, the reports so far have a very, not a very solid outlook. They forecast a rye harvest, probably with lower yields. So, you know, we will need to see how the price of corn reacts to this, at least here locally in Mexico, to have a more solid base to our foundation to start a strategy around pricing relative to whatever the, or react to whatever the traditional method does in terms of these costs. But so far, we're not inclined to move any pricing forward. And we're just here as well on the sidelines to see if the traditional method reacts a certain way based on whatever the harvest is like in the summer. But we'll have to wait until the summer to decide what we'll do.

Perfect. That's very clear on the pricing front. And then for hedging, I was thinking more globally rather than just Mexico alone. Just wondering if you have started hedging 2026 or you're still waiting. And I'm asking because of the context of corn hedging. rising from middle of last year from four to about five on spot. So just wondering if you've moved on this front.

No, we haven't started hedging at all. There are a lot of moving parts that have made the press of corn, I'm not going to call it a spike, but it's an increase over time. But all reports point out to a good harvest in November 2020. And it is worth our while waiting a little longer until we start strategizing or hedging or not. But right now, with the current price levels, we feel that are not representative of the fundamentals that we're seeing and the fundamentals that we have reports on for the year. So we've opted to wait and see how... Did the harvest pans out with further reports of updates of the harvest in November? And depending on that, we'll engage in our usual hedging strategy, or we might just keep all our costs based on spot prices, depending on what happens with that. But we are aware of the increase in the cost, obviously, in the cost of corn. But there are a lot of variables that are outside from solid fundamentals for that to happen.

Okay, understood. And maybe if I can do a follow-up on Central America, it seems the demand has been very solid, right? It's good enough that you're going to have to extend capacity. So two questions here, like what type of, what percentage of capacity expansion are you guys thinking about for Central America? And then also, do you think there will be some disruptions to growth in the time being? If you've sort of reached your maximum utilization, does that mean that the growth is going to slow down while the new capacity comes in? Thank you.

Sure, thanks. Well, in terms of capacity in Central America, we're probably forecasting to invest around $20 million along the year to add that capacity. We're probably going to increase. With that, we're increasing capacity around between 10% and 13% in Central America alone, and that will provide us with enough leeway for us to keep expanding. As you very well mentioned, actually the numbers that you see this quarter and last quarter were limited by the capacity that we have existing today. So with that, that will give us a lot of breathing room to increase our volumes further and to increase the brand further along the region that subsidiaries serve. So we're looking forward to that, and we're looking forward to finishing the project as soon as possible. And in terms of global capacity utilization, we're currently at, an average of 84% capacity or utilization, sorry. So we're, I mean, we're fine in terms of utilization globally speaking. It was just Central America that was giving us a little bit of limitations because of the demand that we were seeing that was over the demand, over and above the demand that we were expecting. So, and that's thankfully so. So because of that, we reacted accordingly and that's why we were focusing our investments there.

Great. No, that's always good news. Thanks for the color there.

Thank you. And our next question comes from Fraulein Menendez with JP Morgan.

Hello. Thank you very much for taking my question. This is Fraulein Menendez from JP Morgan. I want you to understand a little bit How are you thinking into this sequential recovery in the U.S. on volumes? Is this coming exclusively from the food service channel? And if so, is that only because you are seeing better or you're grabbing incremental contracts or is this a recovery in the industry? And if there is something beyond that, could you give us more granularity on what you're seeing in the rest of the channels? to keep you confident, to keep the guidance given these sequential improvements?

Sure. Thank you for your question. Yeah. As I mentioned a minute ago, retail has been still growing. I mean, it's been slowing down, but still growing at low single digits if you look at it on an annual comparison basis. However, if you look at it on a sequential basis, you can see high single-digit growth. So that's the retail portion. If you look at food service, as I mentioned, the volumes decline on a year-to-year comparison close to 20%. If you look at it on a sequential basis, that's in the low-digit territory already. So it's two factors affecting each one of those channels or benefiting one of those channels, should I say. In the retail space, The marketing that we've done in the U.S., the expansion of Better For You, along with other value-added items outside from the ones that are being competed for between private label and our competitors, have allowed us to grow sequentially in that respect relative to the annual comparison. And in food service, throughout the year, as we communicated to the market, we've been working very diligently and hard to recuperate our volumes, and we've been able to recover some of the clients that left. They've come back because of quality concerns that they've had with other suppliers, and they've decided to come back to our roster of clients. So we initially thought it would be quicker than how it's happening right now, just because the economy outlook that we had when we forecasted the recovery of the channel was different to the one that we have today. So it's going to take a little bit longer, but we're already in low single digits. So we're almost there. And we're hoping that hopefully by the end of this year, we'll be able to recover the volumes in the channel fully. So things, as I mentioned, are looking quite solid in the sequential basis. It remains to be seen all these variables that are taking place as potential pressures on the consumer and the consumer sentiment overall, how that translates into staple foods and into future consumption over the year. So that is the one variable that is still out there. But so far, given the indicators that we have on a sequential basis, I would say that things are looking good.

From what I understand, on your comments, would it be fair to assume that it's more related to market share gains, these sequential improvements, rather than, let's say, the consumer is shifting towards the product, like the industry is growing? From what I understand, it's a little bit more exclusive to your case, to Gruma. Is that fair to say? Yes, correct.

That's more exclusive to Grumman-specific, correct.

Excellent. Thank you very much. Thank you.

And our next question comes from Fernando Oliveira with Bank of America.

Hi. Good morning. Thanks for taking my question. Just a follow-up regarding the question on Central America. Adolfo, is this additional capacity already considered in your CAPEX guidance for the year?

Hey, Fernando. Yes, it is included. In the guidance that we provided, the $320 million, all investments related to Central America, as well as maintenance work, water treatment plants, capacity expansion in Europe, as well as in Australia, is already included.

part of that or is it really included there so there's no change in that guidance at all okay thank you and my second question is really related to the strong increasing administrative and corporate expenses in mexico if you can give us more details on that and if such pressure can continue going forward thank you yeah we um i mean there it's uh

I would say, a bulk of items there. But overall, it's just administrative expenses that the subsidiary incurred in, the corporate as well. Some of them are legal fees. And I would say that at least for the next few quarters, just to be on a conservative side, I would include them in your models. We hope they will subside in the future. But just to be on the safe side, I would just continue assuming the same level of FCNA just as I mentioned in regards to the U.S. But yes, it was just a bulk of a lot of items embedded there.

Okay. And those legal fees to what are related?

Legal fees, some of them are related to the work that we had to do related to the , for example. Some of them, you know, so it's just, again, it's just a whole bunch of list of administrative and corporate expenses that they incurred. And that's why, for the sake of conservatism, just assume the same level going forward.

Okay. And do you have any update regarding the Cofesa issue?

No updates. We're still waiting for their response. As soon as we get an update from their end, we'll make sure to update the market accordingly.

Okay, perfect. Thank you, Adolfo.

Thank you for your questions.

Okay, with that, there are no further questions at this time. I'd like to turn the call back over to Mr. Fritz for closing comments.

Thank you again, guys, for being here with us this morning, and we look forward to seeing you in future market events. Take care. Have a good day.

Thank you. Ladies and gentlemen, this does conclude Groomless First Quarter 2025 Earnings Conference Call. Thank you for your participation. You may now disconnect.