Megacable Holdings

Good morning, and welcome to Megacable's first quarter 2023 earnings conference call. With us this morning from Megacable, we have Mr. Enrique Yamuni, CEO, Mr. Raymundo 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 Yamuni. Sir, you may begin.

Thank you very much. Good morning, everyone, and thank you for joining us today. The special study that we have outlined in the company's determination to keep performing in a competitive market have led us to start this year with a stronger pace in net ads than that of the previous year. Recording the highest quarterly figures of net additions in unique subscribers in RGU's in the last two years. This quarter we have entered into seven new territories and expanded our network coverage to more than 900,000 additional homes, on track to meet our goal of 2.5 million homes for the full year, thus sustaining the growth in subscribers for the coming periods. The expansion strategy is now consistently being reflected in the number of kilometers we activate which during this quarter also reached a record high figure in the company's history. I want to highlight that following the announcement of this ambitious initiative at the end of the third quarter of 2021, we have effectively activated more than 16,000 new kilometers of fiber network and added nearly 3.2 million new homes passed. Also, during this period, we have already incorporated nearly 440,000 new subscribers, including a big portion in the new territories. We believe that these results are quite encouraging, especially considering that 80% of those subscribers signing up in the last nine months. We are thrilled about it and we are thrilled also of what we can achieve in the next periods. Also, very relevant, the company's balance has remained at a very healthy level despite the investment we have carried out. The company leverage remains well below when compared to other players in the industry thus providing Megacavali with flexibility to carry out its investment plans. The significant investments made to reach new markets and modernize our network has played a significant role in subscriber growth, which has occurred in the midst of a competitive environment. Our legacy territories have continued to grow on the back of a unique value of our product offering. Both territories have contributed to the subscriber growth we have achieved, which, as said, is the largest figure in the last two years. We have always been committed to providing our service through state-of-the-art technology in order to meet the growing connectivity and video needs of our subscribers. Such is the case of our video service, which, thanks to our integrated XView and XView Plus platforms, has positioned itself as the best in the market with unmatched integration capabilities. We are now certain that our customers recognize and value our service, which continues to have excellent feedback as well as user metrics. As of quarter end, XView is recording more than 90 million interactions on a monthly basis. And that is considering only the native content that Megacablet provides to its subscribers. On top of that, we have all the content coming from the other OTPs that can be integrated into our service, which at quarter end accounts for more than 670,000 users. Regarding the MVNO business, During the quarter, we were able to revert the trend we saw during 2022. The active lines growth is now more visible, and it should rise at a faster pace in the next periods. It is also important to highlight that MVNO articles have become one of the highest in the industry due to the business's focus on postpaid services. Despite the company's expansion during this quarter, we managed to reach another record high EBITDA figure, which proves that even in this investment scenario, we have not lost focus on efficiencies and cost savings, which has been part of the company's DNA since the beginning. As we continue to increase the penetration in new territories, we expect margins to recover in the coming period. Before concluding, I would like to announce that at the General Ordinary Shareholders Meeting held yesterday, the shareholders approved a dividend payment of 2.5 billion pesos representing 20% of the consolidated EBITDA for 2022. The payment will be carried out in one installment on May 25th. Wrapping up, our results continue to improve in line with the expectations driven by a strong execution of our strategy. Despite persistent economic headwinds, our financial strength and disciplined capital allocation have provided the flexibility to accelerate critical investment projects and save high return growth opportunities while growing our shareholders' future value. I will turn the call over to Raimundo to discuss our operational performance. Raimundo, please go ahead.

Thanks, Enrique, and good morning, everyone. During this period, key operational metrics show faster growth than previous quarters, reflecting the solid pace of additions in both new and existing markets, as well as the attractive value proposal of our portfolio of solutions. even in the face of a challenging inflation environment and increased competition. As Enrique mentioned, we remain focused on expanding our coverage, which is already consistently reflected in the kilometers of network that we have added in recent quarters. We will continue to work to ensure that this growth can be replicated in the same dimension in subscribers and revenues growth for the company. Both of them will grow at a higher pace in the next period. Unique subscribers growth has been outstanding. We are truly very happy about it. In the organic territories, mega cabling not only retained the highest market share with a very strong penetration, but also managed to increase subscribers. While for the expansion cities, we are already achieving close to 20% of market share, with some of the old neighborhoods even higher. Our strategy is based upon great quality of construction, outstanding product based on the XView platform with the Android TV interface, and operation efficiencies. Furthermore, the market perception and our research studies validate the increase of our NetFlow model score among existing subscribers, recognizing speed migration and XView usage. I would like to highlight that, in line with the current footprint expansion, but also supported by the growth achieved on the existing footprint, the figure of gross ads for the quarter was a record high in the company's history for the three services in the mass segment. We continue to apply a very aggressive sales strategy, focusing on highlighting the benefits of our services and the value proposition we offer to our customers. Moving into results, unique subscribers for the quarter increased 9% year-over-year, the highest figure in the last two years, reaching 4.5 million with 361,000 net additions, including 142,000 that corresponded to this period. By segment, internet subscribers grew 10% compared to the first quarter of 2022, totaling 4.3 million. resulting in 392,000 net additions, out of which 147,000 correspond to this period. We are aware of the bandwidth consumption trends, which will require higher speeds for a satisfying navigation experience. Therefore, we continue to do speed increases in all of our bundles. At Quaternion, 65% of our subscriber base has speeds of 50 megabits or higher. compared to a little above 50% in the same period of last year. At quarter end, 52% of our subscribers already received their service through an FPTH network as a result of the deployment of fiber in new territories, but also deconversion we continue to carry out in other HFC territories that we consider necessary. Currently, 50% of our network is already FPTH. Video subscribers reached 3.8 million, growing 6% and adding nearly 220,000 versus the first quarter of 2022. In the sequential comparison, it gained 86,000 net ads. Our XView Plus platform maintained a solid growth rate, going from 2.5 million subscribers at the end of the first quarter of 2022 to 3.7 million this period. an increase of 46% or more than 1.1 million net additions. The telephony segment recorded 3.6 million subscribers, growing 16% compared to the first quarter of 2022, representing 489,000 net additions, of which 174,000 corresponded to this period. The MVNO services totaled 377,000 subscribers, Down year-over-year, but up 6% against last quarter, with 20,000 net additions. As we stated in the previous quarter, the growth in terms of new lines is now visible, considering that we have already concluded the clean-up strategy. We are proud of the subscriber mix that we have achieved, including mostly post-paid services, with a very attractive revenue contribution. thus making us one of the companies with the higher ARPU among the MVNOs and also MNOs. Shown rates improved on an annual basis, with broadband at 1.9%, video at 2%, and telephony at 2.1%. In this line, it is worth noting that despite the entry to new territories, the shown rate for this quarter remained below first quarter 2022. At the end of the quarter, REU totaled 11.6 million, 10% more than the 10.5 million for the first quarter of 2022, supported by a stronger growth of subscribers, mainly derived from our expansion and reflected in the REU's per unit subscribers, which went from 2.52 in the first quarter of 2022 to 2.56 this period. Both metrics are expected to steadily grow over the next quarter as infrastructure development advances in new markets. ARPU per unique subscriber was 420.4 pesos, remaining stable compared to past quarters. This is mainly due to successful marketing campaigns that have offset the promotional bundling fees we are offering in the new markets, which are temporary. so we can expect their full contribution to the company's revenues in the following months. Turning to ARCO by segment, broadband remained practically unchanged compared to the first quarter of 2022. Video rose by 2%, telephony decreased 17%, and MVNO increased 40% as a result of the customer-based optimization. Regarding the corporate telecom segment, Revenues for the quarter grew 17% when compared to the same quarter of the previous year, with Metro Carrier, OLA, and MCM recording annual growth rates of 17%, 24%, and 14% respectively. This was mainly due to better revenue coming from the corporate and government segments in Metro Carrier and OLA respectively. I want to highlight that the company is not only focused on the expansion initiative, but we are also committed to reinforce the value proposition in our existing territories, as we continue with the network conversion and strengthening of the HFC network. Our vision remains to have the best technology and network infrastructure, so our conversion plan remains in its course. To conclude, I would like to emphasize that the company's strategy remains oriented toward providing an attractive value offering, featured by its quality of technological edge, all the above leverage on operating efficiency through the execution of our expansion plan and the migration of existing territories and the continuous development of our video service. With this, I conclude my remarks. Now I would like to hand the call over to Luis, who will shed broader color on the financial results.