Inretail Peru Corp

Good morning and welcome to In Retail Peru's fourth quarter 2025 conference call. At this time, all participants are in a listen-only mode and please note that today's call is being recorded. After the presentation, we will open the floor for questions. At this time, instructions will be given as to the procedure to follow if you would like to ask a question. Also, you can submit online questions at any time today using the chat function on the left side of the webcast platform and they will be answered after the presentation during the Q&A session. Simply type your question in the box and click send. Before we begin, I would like to remind you that today's conference call is for investors and analysts only. Therefore, questions from the media will not be taken. Joining us today from In Retail Peru are Mr. Juan Carlos Vallejo, Chief Executive Officer, Mr. Marcelo Ramos, Chief Financial Officer, and Mrs. Andrea Fabri, Investor Relations Officer. They will be discussing the quarterly report distributed by the company on February 27th. If you have not yet received a copy of the earnings report, please visit www.inretail.pe on the investor section, where there is also a webcast presentation to accompany the discussion during this call. If you need any assistance, please contact the investor relations team of InRetail Peru. Please be advised that forward-looking statements may be made during this conference call and they do not account for the economic circumstances, industry conditions, the company's performance, or financial results. As such, these forward-looking statements are based on several assumptions and factors that could change causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the quarterly report which was issued yesterday. At this point, I would like to turn the call over to Mr. Juan Carlos Vallejo, Chief Executive Officer of In Retail Peru, for his opening remarks. Mr. Vallejo, please go ahead, sir.

Thank you, John. Good morning, everyone. I'm Juan Carlos Vallejo. Thank you for joining In Retail First Quarter and In Score. Today, we will discuss the main highlights of In Retail First Quarter results for 2025. Joining me today are Marcelo Ramos, our Chief Financial Officer, and Andrea Fauri, our Investor Relations Officer. I will start with a brief activity summary and then Marcelo and Andrea will walk you through our ending presentation. Overall, during 2025, the Peruvian economy entered a progressive recovery, ending the year in a positive momentum, which has also resulted in an encouraging start to 2026. Condition gravity became more favorable for household consumption. Inflation remained low, the Peruvian soil continued to be strong, and consumer trade, as well as the former labor market, continued to increase. Additionally, the pension fund withdrawals provided greater drive starting November and during the initial weeks of 2026. As it relates to financial results for the first quarter of 2025, in retail posts, a solid growth in revenue of 6.3% and a moderate growth in adjusted VBA of 4.9%. Reflecting a recovery across segments, allowing us to end the year with a positive growth in revenue of 5.2% and a flat adjusted VBA. despite all the struggling effect impact mentioned in prior earnings calls. Our full retail segment posted a solid growth in revenues of 7.1% in 2025, despite the closure of several stores, particularly at the beginning of the year. Growth was driven by strong central sales in our mass and macro formats, and by the opening of our mass and plaza-based stores. Our farm segment maintained a stable year, posting a positive growth in both revenues and an adjusted VBA of 2.7% and 3.9% respectively, with a significant cash flow regeneration despite the anticipated decline in revenues in the distribution building in Peru, giving the strategic decision to exit non-core, low-margin, and high-carburetor intensive channels. Finally, our shopping mall segment had a very challenging year, giving all direct and indirect impacts from the interior in Grand Plaza to the mall. Nonetheless, as the year advanced, we registered a progressive recovery, as evidenced by the results for the first quarter of 2025. Ending the year in line with the guidance provided early in 2025 of a decline in adjusted VBA of around 15%, reflecting the stability and resiliency of our shopping mall business. Looking forward in 2026, we expect our business segments to perform positively, given the resilient and diversified nature. The current positive economic environment and the federal comparison data for 2025. Excluding the anticipated decline in revenues in the distribution units in Peru, We expect INRIPEC to achieve a high CFDA growth in consolidated revenues and in adjusted VDA. With that, let me hand the word to Marcelo, and as always, we look forward to answering your questions by the end of this call.

Thank you, Juan Carlos. Good morning, everyone. Thank you for joining us on this call. Today, we will review the main highlights of InVitel's fourth quarter results, as well as a summary of the full year results for 2025. Now, please turn to page 4 in our earnings presentation to start reviewing our main highlights for the year. During 2025, we advanced with the execution of our strategic pillars. We invested with purpose to accelerate growth, executing our planned expansions, In food retail, we opened 314 new map stores and two new plazaret stores, one of which represents the first modern food retail store in the city of Ayacucho, a historically emblematic city in Peru, evidencing our compromise to bring modern retail and better services across the country. We reach a total network of close to 1,700 stores nationwide. In our pharma segment, we opened 124 new pharmacies, reaching more than 2,500 pharmacies across the country. Finally, in our shopping mall segment, we inaugurated a new power center in the city of Tarapoto and completed two expansions in our malls in Primavera and in Priura. During the year, we also advanced in our multi-format strategies. In our pharma segment, we innovated and remodeled some of our existing formats with the purpose to capture high-growth, complementary categories, such as personal care and beauty care, adjusting to new customer needs and enhancing store experience. In mass, we persisted with the transformation of our format, with the objective to reinforce our value proposition of low prices, high-quality products and proximity through a lean and efficient operation. In line with that, we expanded our private label portfolio by launching over 30 new brands and we renovated more than 130 stores with an improved store experience and layout. On the logistics front, we strengthened our logistics platform to sustain future growth. First, we inaugurated our state-of-the-art distribution center in our pharma segment, located next to the main distribution center for our food retail segment. The new distribution center is one of the most modern and highly automated facilities in the pharma retail industry in Latin America. The project has 85,000 square meters of logistic capacity and can process one million units per day. We also opened nine distribution centers dedicated to mass to support the significant growth expected in that form. Finally, during 2025, we executed our capital structure strategy. aimed at increasing liquidity and at lengthening our debt profile. Our operations continue to improve in cash generation, ending the year with a consolidated cash position of 1.9 billion soles, including liquid investments. Additionally, we refinanced approximately 2 billion soles of dam debt and successfully replaced our existing retail shopping malls bonds with new issuances of around $500 million in aggregate value. As a result, our current portfolio of short-term debt stands at 5%. Now, please turn to page 5 to briefly comment on some of our ESG highlights for the year. InVITAL was included in the S&P Global Sustainability Yearbook for the fifth consecutive year. Also, supermercados peruanos and farmacias peruanas achieved top rankings from Great Place to Work, and all of our operations obtained Harvard corporate star certifications from MINAM for their progress in reducing emissions. On the social front, our flagship program, Bueno por Dentro, continued growing. In 2025, we donated more than 18 million food rations, equivalent to 72 million soles. Thanks to our program Penultación, which supported more than 290 participated entrepreneurs, we generated over 36 million solids of SME sales in 2025. Furthermore, we enhanced our supplier management program with 795 suppliers evaluated during the year on ESG criteria, reaching an accumulated coverage of 66% of our total supplier base to strengthen sustainability standards throughout the value chain. Finally, on the environmental front, we managed to save almost 4 million soles in energy. Additionally, we reduced our carbon footprint by 12%, in line with our environmental efficiency goals. Now, please turn to page 7 in the earnings presentation to review our consolidated financial results. As anticipated in our previous call, during Q4-25, there was a progressive recovery in consumer spending, partially explained by a temporary impulse starting in November from the pension fund withdrawals. In this context, InVital reported a 6.3% growth in revenues, with growth in all of our segments, including a solid growth in our food retail segment, a moderate growth in our pharma segment, and a slight growth in our shopping mall segment. We ended the year with a growth in revenues of 5.2%, despite all of the extraordinary impacts mentioned in our previous earnings polls. In terms of adjusted EBITDA, we reported a moderate growth of 4.9% compared to Q4-24, explained by the growth in revenues and the stable gross margin, despite the increase in operational expenses from the new stores opened, the new minimum wage, and the remaining impacts from the unfortunate incident earlier in 2025. As it relates to net income, we registered a 14.1% increase in the quarter, mainly due to a NetFX gain in Q4'25 compared to a NetFX loss in Q4'24, partially offset by one-time expenses related to the refinancing of our existing in retail shopping malls bonds. Overall, 2025 was a challenging year for in retail, given the slow start of the year and the impacts related to the unfortunate incident in Trujillo. Despite this, our operations demonstrated a resiliency, delivering growth for the most part. As a result, we ended in line with our consolidated full-year guidance of mid-single-digit growth in revenues, and slightly below our guidance in adjusted EBITDA. As Juan Carlos previously mentioned, in terms of guidance for EBITDA at a consolidated level for 2026, we expect to achieve a high single-digit growth in revenues, excluding the anticipated decline in revenues in the distribution operation in Peru, and a high single-digit growth in a just a little bit gap. The solid growth is supported by new sales area, positive same-store sales, and the consolidation of our multi-format strategy. Now, please turn to page... Now we'll discuss the results by segment. Please turn to page 10 to review the fourth quarter results for our full video segment. Our food retail segment registered a top-line growth of 7.4% in Q4-25, with a same-store sales growth of 4.4, an improvement versus Q3-25 given the recovering consumption partially explained by the pension fund withdrawals. All of our formats posted a positive same-store sales growth in the market. Same-store sales was driven by our mass format, with a growth above 10%, and by our macro format, with a growth of around 6%. Our Plazadea format, on the other hand, posted a same-store sales growth of approximately 2%, with an important growth in non-food categories, given the incremental exposable income in console. In terms of categories, our food categories experience a moderate strength-to-cell growth from the acceleration of our mass and macro formats, which have a greater share in food categories. On the other hand, our non-food categories registered a solid strength-to-cell growth, mainly in electronics. During the year, we opened 300 net new mass stores and two new Placeres stores, both of which opened in Q4-25. During Q4-25, we also opened 83 net new mass stores. This allowed us to end in line with our full year guidance for store openings. Our gross profit increased 9.8% with a gross margin of 24% above Q4-24 due to incremental rebates in our supermarket formats, partially offset by the higher participation of our mass and macro formats in the revenue mix. Food retail registered a solid growth of 7.9% in adjusted EBITDA in Q4-25 with a stable margin. This growth is mainly explained by the increase in revenues and the improvement in gross margin, despite the raise in operational expenses from the new stores opened, the new minimum wage, and the higher logistic expenses associated with masks, among other expenses. Overall, in 2025, our food retail operation proved its strength, with revenues increasing 7.1% ahead of competition despite the temporary closure of stores. As anticipated in previous earnings polls, the changing format mix, the progress made in our organic expansion plans and the investments made in the logistic platform formats involve incremental investments and expenses, some of which will remain through 2026 as we continue to execute our multi-port strategy. These are essential to establishing a solid foundation for delivering long-term growth and value in the sector. In terms of guidance for our food retail segment, for 2026, we expect to achieve a high single-digit growth in revenues and in adjusted EBITDA. This is supported by a low comparison basis in 2025, which included extraordinary impacts on closure of stores, and by a sudden growth in our emerging formats. A pressure in margins from the increased contribution of our emerging formats should be partially offset with higher fixed cost dilution and operational inefficiencies. Now listen to page 11. Our pharma techmen posted an increase in revenues of 4.3% in Q4-25, combining a solid growth in pharmacies unit with a decline in our distribution unit. Our pharmacies unit achieved a revenue growth of 6.2% with a sales total growth of 5.4%. positively impacted by the growth in both pharma and non-pharma categories, the latter as a result of a successful execution of our strategy to capture complementary categories. Additionally, we opened 23 new pharmacies in Q4-25. We surpassed our initial guidance for 2025, adding 109 new pharmacies during the year. Our distribution unit, instead, registered a decrease in revenues of 4.7%. As mentioned before, our distribution unit in Peru continues to reduce exposure to non-core channels with low margins and working capital requirements. Although these changes result in a material drop in revenues, affecting the consolidated revenues for our format segment, they have also created substantial efficiencies in working capital and in operating expenses. We expect this decline to continue as operation progressively finalizes these transformations through the year. In terms of gross margin, we registered a gross margin of 33.2%, slightly below Q4-24, mostly explained by a lower gross margin in both our distribution and pharmacist unit, the latter given the high comparison basis of last year, which included an extraordinary reversal of provisions related to shrinkage costs. These effects were partially offset by the higher participation of our pharmacist unit in the revenue swing. Our former segment recorded an adjusted EBITDA growth of 1.5%, affected by the slight decline in gross margin and by the rise in expenses related to the new stores open, the renovations of our formats, the gradual transition of our main logistics operations into the new distribution center, as well as to the challenging comparison basis in Q4-24. In summary, in 2025, our pharma segment delivered a stable growth of 2.7%, primarily driven by the positive performance in our pharmacies unit, offset by the declining revenues in our distribution units in Peru. Our operations, however, provided profitability and significant cash flow generation. In terms of guidance for our pharma segment, for 2026, we expect to achieve a low single-digit growth in revenues and in adjusted EBITDA, with some improvement in margin from operating leverage. We anticipate a mid-single-digit growth in revenues in our pharmacies unit, with the opening of 100 new stores in the year, and supported by the continuous execution of our format renovations. Revenues in our distribution unit in Peru, on the other hand, will decline this year. given the changes in the business model outlined before, affecting our consolidated revenues by approximately 200 million soles. These revenues did not contribute to adjusted EBITDA nor to cash flow generation. Listen to page 12 to review the fourth quarter results for our shopping mall segment. During 2-4-25, our shopping mall segment still experienced some remaining impacts arising from the unfortunate incident in Turquía. However, as anticipated in prior polls, this impact dissipated throughout the year, leading to a progressive improvement in the segment's performance. We registered a growth in revenues of 0.4%, mainly explained by the increase in GLE from the New Power Center and from the expansion projects in the malls of Primavera and Buda. Revenues were also favored by the increase in rental income, given the improvement in tenant same-store sales and an extraordinary income related to rent regularization. Our attendance registered a growth of 7.5% during the first quarter, with positive growth across categories, given a progressive recovery in consumption, partially explained by the pension fund withdrawals. Our gross margin was 66.8% this quarter, relatively stable compared to Q4-24. In terms of adjusted EBITDA, we reached 135 million soles, a slight decrease of 1.5% affected by the remaining impacts related to the unfortunate incident in Trujillo, offset by the improvement in performance in other modes. In general, 2025 was a difficult year for our shopping mall segment, given the extraordinary impacts throughout the year. Nevertheless, in 2025, our operation evidenced its resilient and predictable nature. Overall, we ended the year with a decline in adjusted EBITDA of 15.4%, very much in line with the guidance provided during our earnings call for Q125. In terms of guidance for 2026, we expect shopping malls adjusted EBITDA to return close to 2024 levels, a strong recovery given the low comparison basis. Now, please turn to page 13. During Q4-25, we advanced with the execution of our expansion strategy across all three segments. In food retail, we opened 300 net new mask stores and two new plaza de stores. In pharma, we also opened 100 net new pharmacies. Finally, we resumed our GLA expansion in our shopping mall segment, adding a total of 26,000 square meters of new GLA for the year. Q4-25 showed a progressive recovery in consumption, with an increase in disposable income, partially explained by the pension fund withdrawals. Consumption has maintained this momentum in the first two months of this year. Now, please turn to page 15 to review our consolidated net income results. In vehicle basis, a net income of $335 million solid in Q4-25, a 14.1% increase compared to Q4-24. The increase in net income is explained by the net effect gain compared to a net effect loss in Q4-24, partially offset by the increase in net financial expenses, mainly due to 42 million soles of one-time expenses related to the refinancing of our existing embedded shopping malls, including structuring costs, premium paid for the tender and redemption of existing bonds, expenses related to the market and unbinding of existing derivative financial instruments, among other effects, standard for this type of operation. Now, I will pass the word to Andrea, who will discuss our CAPEX, capital generation, and financial debt.

Thank you, Marcelo. Now, please turn to page 16. During Q4-25, we invested $401 million in CAPEX for our three business segments. This was mainly invested in the expansion of our physical network. CAPEX was also invested in renovations of our format and in scheduled maintenance of our existing stores and malls. Finally, a portion of the CAPEX was also assigned to our logistics operation, including to the new format distribution center and to the new distribution center's format. For the full year 2025, we invested approximately $1.15 billion in CAPEX for our three business segments. slightly above the amount of capex invested in 2024, largely explained by the increasing capex in our food retail and shopping mall segments. In food retail, we invested more capex in store openings, particularly in big boxes, in maintenance and renovations of our existing stores, as well as in the new distribution centers for mass. In shopping malls, we resumed growth and hence invested in expansion projects. including a new power center and preventive and corrective maintenance for our existing malls. In terms of cash balance, we ended the year with 1.9 billion soles in cash, higher than the end of last year's cash balance of 1.5 billion soles. The increase in liquidity results mainly from an improvement in working capital management in our food retail and pharma segments, offset by the higher capital investment, despite decreasing adjusted EBITDA, and one-time cash impact related to our refinancing of the shopping mall storm previously mentioned. Now, please turn to page 17 to discuss our consolidated financial debt. As of December 2025, InRetail had a consolidated net debt of $5,110 million, with a net debt to adjusted EBITDA ratio of 1.7 times. The decline in our consolidated debt balance during the year was favored by the decrease in the exchange rate. The short-term position of our consolidated debt stood at $377 million, representing approximately 5% of our total debt, significantly below the prior quarter as we successfully implemented our capital structure strategy during 2025. Please turn to page 18 to review our debt by segment. Our poor result segment ended the fourth quarter with a net debt of $2,373 million, below the previous quarter and below Q4-24. Net debt to adjusted dividends stood at 2.1 times, below the comparable quarter of 2020. In retail pharma, ended the fourth quarter with a net debt of 1,409 million soles and a net debt to adjusted EBITDA ratio of one time from a continued increase in cash flow generation. In retail consumer, ended the fourth quarter with a net debt to adjusted EBITDA ratio of 1.3 times below the previous quarter. Finally, in river shopping malls, ended the fourth quarter with a net debt of $1,514 million, resulting in a net debt to adjusted EBITDA ratio of 3.6 times, affected by a declining adjusted EBITDA and increasing financial debt related to the new bonds issued in October 2025. Now, I will pass the word back to Marcelo to discuss our cap experience.

Thank you, Andrea. Now, please turn to page 20. In total, for the next three years, we expect to invest around 2.7 billion soles. Excluding the investments in our new Farm Distribution Center, which is a project that does not occur frequently or every year, this amount is slightly higher than our recent historical investment level. The majority of the total CAPEX is expected to be allocated to business growth opportunities, primarily related to new store openings and renovations, expansion of existing shopping malls, and new power center openings. The remaining CAPEX is expected to be directed to the continued development of our logistics and IT infrastructure, as well as to the maintenance and refurbishing of our stores. In terms of allocation by segment, we expect to invest close to 50% of our total capex in our food retail segment. During 2026, we expect to open over 300 new stores across all formats. The majority of these openings are expected to be in our food retail segment, with one new supermarket and around 200 new mass stores. Additionally, we expect to open around 100 new pharmacies and one new power center. These future CAPEX investments are intended to accelerate organic growth and consolidate the value propositions of our format in our segments. This covers our presentation, and I will be glad to answer any questions you might have.

Thank you. At this time, we will open the floor for your questions. First, we will take questions from the conference call, then the webcast questions. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. Questions will be taken in the order in which they are received. If at any time you would like to remove yourself from the questioning queue, just press star 1 again. And again, to ask a question, please press star 1. For the webcast viewers, simply use the chat function on the left side of the webcast platform and type your question in the box and click send. We will pause momentarily to compile a list of questions. Our first question comes from Alonzo Aramburu of BTG. Your line is open.

Hi. Good morning, and thank you for the call. A couple of questions. First, if you can give us maybe an update on Trujillo, if there's any news on that front. And second, regarding MAS, the openings for this year, 200, slowdown from the last couple of years, just if you can walk us through why the slowdown. And if you can give us maybe some color on how the new stores are performing, the MAS stores, and any color also on the performance in Chile. Thank you.

Sure, thank you for the questions. So first on Tohio, honestly not much update there. It's pretty, it's not clear when the mall is gonna open. At this point, as you guys know, the formal investigations by the authority haven't completed yet and it's very unlikely that anything will happen prior To that, we've been continuing to collaborate with the authorities, but at this point, the decision doesn't depend on us. That on Trujillo. As it relates to the mass opening, has to do with a couple of things. First is 200 stores is still an important amount of openings. Remember that over the last couple of years, we've opened more than 600 stores, as I said, in the last 24 months. The main focus of management and of the organization in 2026 is to maximize productivity per store as it relates to revenues per store and also to the productivity in coal operations and logistics operations as well to improve working capital cycles. This is a plan that we started executing last year and it will continue in 2026. And the objective is to strengthen the value proposition of MAP in terms of low prices, high-quality product, proximity, and as I said, through a lean and efficient operation. It implies a series of other things and many important changes in the operation. which include, for example, a process to make math more independent without losing the synergies of the larger organization. Things like independent commercial teams for better private labor procurement, for example, a more independent logistic operation to better align with the format needs. Organizational changes as well to decentralize decision-making to the regions, to the stores. We will continue remodeling stores. We've remodeled 130 stores. We're going to remodel way more than that in 2026. And as I said, overall, these are important changes in our operation, and so management will focus on successfully implementing them, looking to maximize long-term value. That was the second question. The performance of the new stores, the new stores that we have opened are being opened with this new operating model. They're actually performing better than the openings that we did some years ago. So, yeah, that's on the new and old openings. As it relates to Chile, um look the operation is still very early stages at this point um last year we made a few um important initiatives in in in that business model as we mentioned in prior policy objective first was to take control um we did some cleaning in terms of uh implementing new systems we changed the the logistics operator that we had uh from when we bought the asset we were able to register the brand math and we change the brand in all of the stores. We removed a few of the stores, about 27 stores, and we actually opened as well some stores by year. Right now, we have about 55 stores. And similar to Peru, to be honest, the focus in 2026 will be to strengthen the value proposition of the model layer, try to bring the stores into closer to a true hard discount model and increase efficiency, increase the revenues per store in 2026.

Thank you, Marcelo.

Your next question comes from the line of Nicholas Lorraine of JP Morgan. Your line is open.

Good morning, everyone. Thank you for the call. Thank you for taking my question. I had a couple also. The first one is just a clarification on the consolidated guidance for the company. Sorry, I did not catch it quite clearly, but you mentioned that the guidance is excluding or including the expected decline you will see on distribution top line. That's my first question. And then the other one is in working capital. So we saw very relevant improvements, I would say, on the fourth quarter. of this year on food retail and also on the distribution. I understand, of course, that as we put more mass stores into the mix, these have better working capital, and also you've been working quite a lot on the distribution side to unlock further working capital gains. I wanted to see if there are any other maybe non-recurrings that help working capital, particularly on the supermarkets, on this quarter, or this should be another recurring level going forward. Those are my questions. Thank you.

Sure, Nicolás, thank you for the question. So in terms of the guidance, just to clarify, it's high single-digit growth in revenues, and that guidance excludes the decline of approximately 200 million soles in revenues in distribution in Peru, which is a decision that we've already made. It's an issue of a comparison basis in where Distribution in Peru, this year in 2026, will have about 200 million soles less in revenues. As I said in the poll, these are revenues that did not contribute to EBITDA nor to cash flow generation. So excluding that, growth will be high single-digit. And the high single-digit in just every day includes the whole consolidated numbers. That's for the guidance. The second question on working capital. The working capital that you see in pharma is pretty much what you should expect going forward as it relates to the cash conversion cycle. That has to do basically with the efficiencies made in distribution and also some efficiencies made in pharma. we had a slight pickup in inventory at the end of the year and starting this year so pretty much has to do with the new distribution center uh given that we sent security inventory to the new distribution center to make sure that that we didn't lose any sales but that's going to be temporary and should be uh should dissipate going on so what you saw in the fourth quarter should be pretty much what to expect going forward in pharma. And in food retail, it's a combination of a couple of things. One is efficiencies in working capital as well as mass growth, as you said, that's gonna favor the working capital cycle. But also in the fourth quarter, particularly in December, given the strong demand, there were also some stock outs in certain categories, which ultimately in the math calculation shows a decline in inventory levels and inventory days. That should increase slightly a bit. There is a factor affecting it because of the stokeouts and the high demand that we had in December. But still, versus the fourth quarter of 2024, there is a significant improvement in the working capital cycle in food retail.

Thank you. With no further questions on the telephone at this time, I would like to take questions from the webcast. Rafael?

Thank you, operator. Well, the first question says, what is driving the foreign exchange gains?

In terms of the effects, there's a couple of impacts. One that has to do with the U.S. dollar debt portion in the balance sheet, which is partially hedged through the hedging instruments that we have. But still, there is a portion that's not covered, and that creates some movements in the balance sheet. when the effect moves, but it's balance sheet, non-cash. And the second one has to do with the lease liabilities related to the rents and the leases that we have in the stores. In all of the segments, a portion of the stores are rented in US dollars. For example, in pharma, it's roughly about 45, 50% of the locations are actually rented in U.S. dollars. And given IFR 16, we have a liability for that, and that liability moves as the effects move. But again, it's non-cash as well.

Thank you. The second question, what were interest expenses higher, excluding the 42.1 million soles related to shopping center liability management?

So the higher financial expenses related to excluding the 42 million has to do with a couple of things. One is the incremental debt. Remember that when we refinanced the bonds in shopping malls, we issued a slightly higher portion than the actual refinancing for CapEx and general corporate purposes, which created an incremental financial expense for the organization. And two is we refinance as well 2 billion soles in local bank debt that we had from structured debt that was actually refinanced in 2021 when rates were pretty low. And so the refinancing was actually with rates that were a little bit higher than that. So it's a combination of incremental debt in shopping malls with slightly higher interest rates given the refinancing in the structured debt with the local banks.

Thank you. The third question, could you please give us more color on the recent arbitrary closures of intercorp stores in Miraflores? How many retail stores were affected? Are they going to materially affect 1Q26 results?

Sure. This was caused by a legal dispute between, you know, the controlling shareholders and the municipality of Mirasur, Flores. The stores affected were one plazarea, one vivanda, and two mass stores. As of today, the plazarea and the vivanda stores are open, and mass is expected to open probably this week or in the next few days. This will not have a material effect on our 1Q26 results.

Thank you. At this time, I'm showing no further questions. I would like to turn the call over to the operator.

Thank you. There appears to be no further questions at this time. I would like to turn it back over to Mr. Vallejo for any closing remarks.

Thank you all for participating in our first quarterly call. As a final remark, I just wanted to underline that 2025 was a challenging year for Invitae, given the unfortunate incident in Portillo. Looking ahead, we are confident that 2026 will be a good year for Invitae, expecting to recover solid growth in revenues and in the adjusted ETA in our cooperation. Thanks to the strength of our value proposition in our firm. If you have any follow-up questions, please do not hesitate to contact any of us.

This concludes today's conference call. You may now disconnect.