Megacable Holdings

Good morning. Welcome to MedaCable's first quarter 2025 earnings conference call. With us this morning, we have Mr. Enrique Yamoni, CEO, Raimundo 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 risk and uncertainties. MedaCable undertakes no obligation to update or revise any forward-looking statements. I will now turn the call over to Mr. Enrique Yamuni.

Sir, you may begin. Good morning, everyone, and thank you for joining us today. Our first quarter results once again demonstrate the strength and resilience of our business model. We continue recording subscriber revenue growth and delivered the highest EBITDA margin in the past 10 quarters. Despite ongoing macroeconomics uncertainty, including international trade tensions and lower GDP growth, These results reflect the strategic clarity and operational discipline that have guided our company through many cycles, positioning us as one of the most consistent performers in the Mexican telephone industry. Regarding our operating results, during this period we continued to grow our subscriber base within the expected range, maintaining a healthy pace of gross additions even with the price increase we carried out at the beginning of the period. A key driver of this performance continues to be the resilient support connectivity offering, particularly internet services, which has become an essential part of daily life for millions of people. Since the pandemic, it has proven its critical importance across multiple aspects of society, from remote work in education to entertainment and communication. This has positioned internet as a core product of our commercial strategy, consolidating its role as a fundamental service. The corporate results remain in the same level, with the connectivity vertical growing in line with the expectation, with a reduced contribution from special projects during the period. During this quarter, the integration of OLA, Metro Carrier, and NCM into NCM Business Tech Co. was carried out with the objective of generating greater synergies to maximize profitability. We are convinced that this new structure will allow us to better serve our corporate clients, strengthen our B2B portfolio, and accelerate market expansion across the segments. The increase in revenue, coupled with repetitive efficiencies and a tight controlling cost, were reflected in EBITDA growing faster than revenue, leading to highest EBITDA margin in the last 10 quarters. This, in line with the company's expectation of margin expansion, was driven by higher penetration in the new territories. We believe this trend will be sustainable in the short and medium term as we continue consolidating efficiencies across operations, both in legacy and new markets. Regarding our investment initiatives, during the quarter, the pace of network construction was lower, as we focused on consolidating recent builds and optimizing the use of our existing infrastructure. We anticipate increasing our goal of doubling the company infrastructure size compared to the end of October 2021. Our current strategy prioritizes capital efficiency, scale optimization, and deeper market penetration. This is reflected in the capex to revenue ratio, which is lower than in 2024. At the same time, we remain focused on our network evolution strategy, We're steadily advancing towards becoming a full-fledged company, keeping in mind that in a very competitive market, having the best and more advanced technology is key to succeed. Coupled with a preference for innovation and a culture of continuous service improvement, at quarter end, approximately 80% of our total network is already full-fledged. These results, together with those of 2024, contributed that yesterday at our annual ordinary shareholders meeting, the payment of a dividend for approximately 2.9 billion pesos was approved, equivalent to 20% of the EBITDA recorded last year. This represents one of the most attractive dividends yields in the market, close to 8%. Looking ahead, Our expectations for 2025 remain unchanged. We are confident in the resilience of our services, particularly Internet. Our current efforts are fully centered on completing our expansion plan. We anticipate that revenue and digital growth will accelerate in the coming periods, despite the challenging environments trading towards global digital levels. which in addition to the already lower capital revenue ratio will significantly improve our expectations for higher cash generation we face the rest of the year with clarity and focus supported by a scalable platform strong fundamentals and a proven ability to execute our strategies Before I hand it over to Raymundo, the co-owner, I would like to emphasize that, with no doubt, we are the best positioned telco company within the market with great revenue growth, low R2, high margins, great product quality, customer-oriented service, state-of-the-art network and technology, and finally, a great organization. Under this basis, great results should continue in the future. Now, please, Raimundo, go ahead with the rest of the information.

Thanks, Enrique. Good morning, everyone. During the first quarter of the year, our operating efforts were focused mainly on two fronts. Continue with a solid growth trend in our operating metrics and consolidate our corporate telecom segment into a single operation. We can proudly say that we have reached significant achievements in each of these lines. Regarding our first one, this quarter unique subscriber reached 5.6 million, growing 10% year-over-year, representing a net addition of 524,000 subscribers, of which 93,000 were registered this quarter. This growth is within the ranges expected by the company, including gross additions that remains at the same level of previous quarters and the effect of a slightly higher disconnection rate resulting from the price increase we made in February. By segment, internet subscriber increased 11% on a year-over-year basis to 5.4 million, equivalent to 539,000 net additions, of which 100,000 were added this quarter, a figure within the expected quarterly growth range of 100 to 150,000 net additions. Telephony subscribers grew 14% in a year-over-year basis, equivalent to 596,000 net additions in the last 12 months. of which 84,000 were recorded this quarter. Thus, the number of telephone subscribers exceeded the 4.8 million mark, benefited by our service bundling strategy. The MVNO segment registered almost 576,000 subscribers, representing an increase of 25% on a year-over-year basis, as a result of the net addition of 115,000 subscribers in the last 12 months. including 22,000 this quarter. Remember that this service is focused on rounding our value offering. On the video side, subscriber total 3.8 million, increasing 21,000 subscribers this quarter, a trend consistent with global industry shifts, and a sales mix more inclined towards double play. Nevertheless, our XView platform, a key part of our value offering in the video segment, continues to strengthen its subscriber base, reaching 3.5 million, which represents an increase of 15% year-over-year, equivalent to 458,000 net additions, of which 58,000 were registered this quarter, reflecting our efforts to match customers' digital preferences. Likewise, app subscribers grew 34% year-over-year to 1.1 million, representing 276,000 net additions. During this quarter, shunt rates increased sequentially, standing at 2.1% for internet and 2.5% for video and telephone, mainly due to the price adjustment carried out in January. In line with the above, ARPU per unique subscriber remained unchanged in both annual and sequential basis, totaling 417.5 pesos this quarter due to a higher number of double-plate bundles in relation to the unique subscribers. on the second front. As announced by the companies in January, we started integration between OLA, MetroCADR, and MCM. Therefore, as of this quarter, the results of these three subsidiaries are now consolidated within MCM business sector. This consolidation was way beyond reporting. So this quarter, we work in the integration of the sales force, consolidation of the backend and frontend support system, definitions of the new roles for the administrative personnel, and everything related to the infrastructure consolidation, among other relevant tasks. We are certain that the results of this study will soon be reflected in scenarios and value creation for our company. To close, I would like to emphasize that the trend of the company continues to reflect growth our key operating indicators remain strong at healthy levels, positive to continue bringing more and more families with the best connectivity towards our coordination network in a world where internet remains essential in the daily life. Thank you for your attention. I will now hand in the call to Luis in the financial review.