Megacable Holdings

Good morning. My name is Nikki, and I will be your conference operator. At this time, I would like to welcome everyone to the MEGA Cables earnings conference call. All ends have been placed on mute to prevent any background noise. There will be a question and answer session after the speaker's opening remarks, and instructions will be given at that time. Thank you. I will now turn the call over to Genia Vargas of iAdvise Corporate Communications for opening remarks.

Thank you, Nikki. Good morning and welcome to Metacable's first quarter 2020 conference call. At this time, I would like to introduce Metacable's management and today's presenters. Mr. Enrique Yamuni, Robles, Chief Executive Officer, Mr. Raimundo Fernandez, Deputy Chief Executive Officer, and Mr. Luis Zeta, Chief Financial and Administrative Officer. The gentlemen will be discussing the quarterly results prior to moving on to the question and answer session. It is important to mention that certain comments made today may constitute forward-looking statements which do not account for future economic circumstances, the company's performance, or financial results. These are subject to various conditions and could materially change throughout the year. Please review the complete disclaimer representing the financial learning report that was issued yesterday. You may contact us at 212-406-3691 if you did not receive the quality report or if you require any assistance. At this point, I will turn the call over to Mr. Enrique Yamone to begin his presentation. Please go ahead, Mr. Yamone.

Thank you, Kenya. Good morning, and thank you all for joining us as we review the results of the first quarter of 2020. As you are all aware, the first quarter of the year has been quite challenging for all of us. The health crisis generated by the COVID-19 virus and all the economic repercussions that have resulted have not only affected our everyday lives and our economics, but also promised to impact the plans that we have set for this year and maybe change our way of life. Regarding results, the company has been able to deliver even in this situation, achieving growth both operationally and financially, mainly due to our operational strength together with our capacity to adapt. During the quarter, we reached subscriber growth across the three major segments of the services, as well as in the number of unique subscribers, ARPU continues its solid growth trend, partly due to the added services, which effectively generate a value differentiation to our subscribers. Financially, we reached EBITDA growth that surpassed revenue growth, which means a significant margin increase It was due to our diligent focus on cost efficiencies and responsive investment given the challenging conditions. On the corporate segments, however, we saw the cancellation of some projects and others we saw delays in the implementation, which were not a surprise given the circumstances. We're working towards raising our current revenue base to turn back this situation, however, There is a lot of uncertainty about how this segment will evolve in the coming months, where a substantial drop in terms of government channel is expected and the recovery of SMB segment is in jeopardy, so that the situation of the segment in the short term remains unclear. About COVID-19, Megacavity has aggressively implemented the necessary measures and protocols to face this pandemic in the best way we can to ensure customers and employees safe, as well as the business continuity. All staff eligible to do home office are doing so, including our call centers, where over 1,000 people continue to work without interruptions. On the other hand, approximately 75% of all our employees continue operating inside and in the field. With the highest security measures, none of our services has been affected or will be affected by this situation. The company adequately plans in anticipation to the market and the contingency phases announced by the government The capacity increases required for the higher bandwidth consumption that users have registered to ensure the continuity and quality of its service. The telco sector is very resilient, and even more for this crisis in particular, due to the request to the population to stay at home. In order to face the change in our everyday life, our services have become critical. Both the residential segment, SMEs, and all businesses and professional services need connectivity for distance learning or for home office purposes. Not to mention recreation, which has been enhanced by the new trends in data consumption, like streaming and gaming. In the same line, having access to news or other sources of information is essential. Looking to the coming months, the repercussions on the economy are still uncertain. There is a decrease in GDP as expected, and it is expected to continue for at least the second quarter before starting a recovery, as well as a decrease in the income of families. However, our industry has already demonstrated its resilience in previous economic crises created for different reasons, which together with the need of people to remain in their homes allows us to think that we will be one of the companies that will be less affected and should be considered not only resilient, but candidate for a steady growth. Regarding the projects, we are carrying out the GPON, or Video Evolution Migration. It's interrupted. So it's uninterrupted, I'm sorry. That is, design stages are underway, and the execution will continue as planned. We will move on as we see the evolution of market conditions. And aside from a delay of a month or two as a result of restrictions in traveling and mobility of persons due to the sanitary emergency, the project is expected to be carried out as according in the plan. On the submarine cable, we have concluded its construction phase, and now it's fully operational. We are excited about the benefits that this infrastructure will bring to the company in terms of cost savings and better service offer, as well as for La Baja region by significantly improving their connectivity capabilities. Finally, I am pleased to announce that at the General Ordinary Shareholders Meeting Shareholders approved a dividend payment for 1.5 billion pesos, representing 15% of 2019 consolidated EBITDA in line with our dividend policy. The payment will be carried out in one installment in May 27. Thank you for your attention, and I now pass the word over to Raimundo. Raimundo, please go ahead.