Megacable Holdings

Good morning and welcome to Megacable's first quarter 2021 earnings conference call. With us this morning from Megacable, we have Mr. Enrique Yamuni, CEO, Mr. Armando Fernandez, Deputy CEO, and Mr. Luis Zetter, CFO. Let me remind you that the information discussed in today's earnings call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risks and uncertainties. Megacable undertakes no obligation to update or revise any forward-looking statement. I will now turn the call over to Mr. Enrique Yamune. Sir, you may now begin.

Thank you very much and good morning, everyone. Thank you for joining us today. Despite the persistent effects of the health contingency, Megacavali kept posting a solid performance supported by both the resilience that has characterized the telecom sector during the pandemic and a very competitive offer, attractive rates, and a dedicated customer service. At the end of March, unique subscribers achieved its highest annual growth rate of the last four years, almost reaching the 4 million mark. As the effort deployed to improve the quality of service and affordable tariffs, a higher number of subscribers across all services. We are proud of the growth of unique subscribers as a company, with growth in the three services of the mass market, with broadband at the forefront. One of the reasons for this growth is that our turn rates remained below their annual comparatives in a similar levels of the previous quarter. As the progress in vaccination will allow people to return to a regular mode, thus Improving the economy and creating a recovery opportunity for some businesses, we believe that the need of connectivity is here to stay, and the services we provide will remain essential for our subscribers. As a result of the previous mentions, total revenue in EBITDA reached a record high figure for a single quarter. Similarly, quarterly EBITDA margins stood at the highest levels of the last three years also. On the corporate side, we continue to strive to return to levels before the pandemic. The good news is that we have recorded growth on the annual comparison, so we are positive about recovery in the coming periods. The future for Metro Carrier looks promissory, given the need for connectivity, connectivity together with higher bandwidth requirements. Regarding our cutting-edge XView Plus and XView platforms, we have already surpassed 1.4 million subscribers, meaning we have already almost 40% of our total subscribers base with this service, capable of putting together the content of the most recognized on-demand streaming services in a single application, to a universal search engine. As of this point, we record approximately 30 million viewed assets per month, each month. Further, personal to our goal of consolidation, consolidating our position as a leading provider of internet services, during the quarter we continued transferring our subscribers to the FTTH network. making more visible the benefits of this newer technology despite the related challenges. The project continues. As of today, we have already migrated close to 280,000 subscribers to the new network. We are proud of the progress that we have reached on this task that is a company priority. The MVNO platform maintained its upward trend in terms of subscribers. that should continue in the following periods. Meanwhile, in the HFC network, we continue planning its relocation to other regions over upcoming quarters. Also, it is important to mention that despite the investments that we are doing, including the strategic project of network evolution, interactive video, and expansion to new territories in the corporate segment, the company continues with its strong cash generation, which has resulted in the lowest net debt levels in the last two years. Wrapping up, I would like to emphasize that while we will remain cautious and vigilant to the performance of our key operating metrics, we are also confident that the further progress of the GPON migration, coupled with the gradual expansion of XView+, will provide us the required momentum to achieve our growth prospects. Finally, I am pleased to announce that at the General Ordinary Shareholders Meetings, shareholders approved yesterday a dividend payment of 2.2 billion pesos, representing 20% of 2020 consolidated EBITDA, in line with our dividend policy and a little bit over that. The payment will be carried out in our installment in May 20th. With this, I conclude my remarks and pass it along to Raimundo. Please, Raimundo, go on.

Thank you, Enrique. Good morning, everyone. We entered this new year with the growth trend achieved on the mass market over 2020. These great results were based on the 25% bandwidth speed increase that we provided to our customers. the attractive bundles with the most accessible rates of the market, the launch and consolidation of our advanced video solution, our customer service operation, and of course, the essential nature of our service. The company has taken a serious commitment to keep up with the consumption trends, both in terms of increasing bandwidth capacity and providing reliable broadband services. And regarding the TV service, increasing the content available for our subscribers to enjoy whenever and wherever they want. We believe the subscribers' growth reflects that we have been successful at meeting such targets, and we are certain that our GPON migration endeavors will allow us to continue with the same trend in the future. With these strong fundamentals, we were able to reach the largest annual increase of the last four years in unique subscribers, that posted an annual growth rate of 8.9%, fueled by 327,000 net additions of subscribers, thus allowing us to close the first quarter of 2021 with about 4 million unique subscribers. Shown rates once again remain stable on a sequential basis, recording 1.7% for broadband, 1.9% in video, and 2% in telephony. These rates remain at very healthy levels, despite the economic situation and aferrous competition. However, our higher speeds and low rates prove the preference of our subscribers. Breaking down by service, the incremental bandwidth capacity of our network has strengthened the quality of the internet service, attracting more customers. As reflected in the 80,000 and 444,000 sequential and annual net additions, record during the first quarter. Therefore, as of the end of March, internet security plays at the service with the largest number of subscribers, totaling 3.6 million. It is important to mention that seeking to capture the demand of home broadband for entertainment, education, and e-commerce trend, Megacable is diligently advancing in the required infrastructure to migrate subscribers to FTTH. as well as enhancing the capabilities of its remaining HFC network through DOCSIS 3.1. Our GPON project continues as planned during 2021. As of March 2021, approximately 50% of our subscriber base is demanding broadband speeds of 30 megabits or more, compared to only 35% a year ago. Going to the video side, 203,000 and 24,000 net additions were gained going from 3.23 million subscribers in the first quarter of 2020, and 3.41 million over the last quarter, to 3.44 million during this quarter. Proof that despite the maturity of this market, our unique platform continues to provide satisfactory results. As a consequence, the subscriber of our next generation platforms, XView and XView+, reached more than 1.4 million. represented more than 500,000 net additions on an annual basis, out of which 247,000 were recorded during this quarter, representing the best quarterly growth for this product. These results reaffirm the investment thesis behind the XBO Plus launching, which is oriented to reach a better absorption of the OTT demand, as well as the demand for interactive services from the existing pay TV subscribers. Content integration is the key for consumer loyalty and absorption. Meanwhile, telephony arose as the service with the highest net additions on a sequential basis, with 101,000 totaling 2.7 million subscribers as of quarter end. The MVNO platform, which complements our fixed offer, reports quarterly net additions of 35,000 and annual net additions of 191,000. thus reaching 209,000 subscribers as of the end of March. Turning to REUs, following our triple play packages commercialization strategy, REUs grew at a faster rate than unique subscribers, amounting to 9.8 million at the end of the quarter, 13.9% above its annual comparative, becoming the record high of the last two years. Consequently, REUs per unique subscriber were up from 2.34 in the first quarter of 2020 to 2.45 during this period. On a sequential basis, ARPU per unique subscriber continued to increase to reach 411.4 pesos. This was due to the increase of REUs per unique subscriber, the absorption of interactive video, and higher speeds in the broadband services. Across the three segments, segment units, broadband and telephony also posted higher sequential levels, while video remained flat. Going to the corporate telecom segment, Metro Carrier continues recovery, increasing 8% in an annual basis, a trend that we expect to gain traction during the following parts, to reach a double-digit road rate, not only because of the organic operation, but also due to the expansion to new territories. On the other hand, Both MCM and OLAP recorded an annual decrease of 5%, a trend that we expect to shift on next quarters through a better alignment of the operation to current market conditions. Finally, during this quarter, the expansion of our network continues, reaching more than 9 million homes past and having built more than 450 kilometers of additional network during this period. The company expects to increase the trend of construction according to MetroCurrent and Megacables expansion plans. With this, I conclude my remarks. Now I would like to hand the call over to Luis, who will provide a deeper analysis of financial results.