Sitios Latinoamérica, S.A.B. de C.V. (LASITE) Earnings Call Transcript

Good morning. My name is Danny, and I will be your conference operator today. At this time, I would like to welcome everyone to our earnings call of the third quarter and 9 months of the 2025 of SITES LatAm. [Operator Instructions] Thank you. We have on the line Mr. Hector Macias, CFO; and Mr. Luis Diaz, COO. You may begin your conference.

Thank you. Good morning, everyone. Before the Q&A session, I'm going to make a summary of the results. During the first 9 months of the year, SITES maintained solid operational performance, achieving revenue growth across all regions where it operates. Consolidated EBITDAaL showed sustained expansion driven by operational efficiencies, reaching margins close to 90%. Results in Brazil and the Andean Region stood out, continuing to position themselves as key drivers of growth and profitability. These results reflect the strength of the business model and the effectiveness of the optimization strategies implemented. Over the past 12 months, we have built 1,327 new sites, this growth was driven by the Andean Region, Brazil and Central America, contributing 554, 406 and 232 new sites, respectively. At the end of the third quarter, SITES registered 46,576 individual sites agreements and equivalent, an increase of 2,624 individual agreements when compared with the same period of the last year. Throughout the period, 229 new co-locations were achieved and SITES registered a consolidated tenancy ratio of 1.24 tenants per tower. During the last 12 months, we have observed favorable trends in our occupancy rates. Brazil concluded the period with 1.3 tenants per tower, accumulating 4 consecutive periods of growth. Central America registered a co-location rate of 1.28 tenants per tower. Meanwhile, the Andean Region registered a ratio of 1.15 tenants per tower. The Caribbean closed the quarter with 1.17 tenants per tower and Argentina, Uruguay and Paraguay with a ratio of 1.24 tenants per tower, consistently improving its past records. Consolidated revenues for the 9 months of the year totaled MXN 2,411 million (sic) [ MXN 12,411 million ], representing an increase of 13.1%, while tower lease revenues registered MXN 7,573 million, an increase of 11.3% increase. Our revenues maintained favorable trends in all regions where we operate, reflecting the strength of our operations and the stability of demand for connectivity services. Our consolidated EBITDAaL for the first 9 months of the year was MXN 6,763 million. This represents a 12.3% increase and registered a consolidated margin of 89.3%, an expansion of 0.7 percentage points. The stability of our EBITDAaL margin reflects steady revenue generation and the effective implementation of our cost and operating expense control strategies, highlighting the operational strength of SITES. During the first 9 months of the year, tower lease revenues increased across our regions, with the Andean Region increasing 24.1%, Brazil increased its revenues by 6.8% and Central America by 5%, while Argentina, Uruguay and Paraguay increased by 8%, and the Caribbean by 27.8%. All of them compared with the same period of the last year, reflecting a good operating and commercial performance. EBITDAaL increased consistently across our regions with Brazil remaining SITES's biggest market, contributing with MXN 2,280 million to the consolidated EBITDAaL, while the Andean Region contributed with MXN 1,595 million. Central America posted MXN 1,542 million, while Argentina, Uruguay and Paraguay contributed with MXN 1,047 million, and the Caribbean reached MXN 431 million, all of them registering increases when compared with the same period of the last year. At the end of September, our gross debt stood at MXN 53,266 million, and it was equivalent to the net debt-to-EBITDAaL ratio of 5.73x, marking the fourth consecutive quarter in which deleveraging has been recorded. This is our report, and we are open for the Q&A.

[Operator Instructions] Your first question comes from the line of Andres Coello with Scotiabank.

First, I would like to ask what is the outlook for new towers for next year, for 2026, if you can give us an update there? Perhaps also an update on co-locations. I think we saw strong co-locations during the third quarter. If you think that co-locations will continue and will remain strong in the next few quarters? And finally, the evolution of -- or the allocation of your debt by geographies, if there's any progress in the migration of debt from Mexico to South America, specifically to Brazil, if you've done any progress on that migration?

Yes, for sure. The plan for the next year is the same as this year, between 1,600 and 1,800 new towers. The co-locations will be increased in the next quarter and in the next year. The plan is, increased an important number of co-locations. We are working with many carriers in the region. So we expect that we grow in this aspect. And based on the debt of co-location in the countries, we are still working in that issue. Our initial plan was to co-locate our debt in Brazil. But as you may know, the rates in Brazil are increasing. So we have to change our plan, but we are working on that.

Your next question comes from the line of Eduardo Nieto with JPMorgan.

I just wanted to ask on the guidance that you just gave. I think it was similar for this year. It looks like you're going to end up being significantly below that. I think the pace of construction has been a little bit slower than we were expecting. If you can please expand on that. And then for next year, you just touched on the outlook for construction, but is there anything you can share for other kind of cash flow items and what we can expect next year, specifically on taxes, if you can share what you would expect to be paying in taxes next year as that has been an important item of your cash flow. So that's it from my side.

Yes. As you may know, the fourth quarter is the strongest quarter for building towers. So we will achieve our goals. So we won't be below the expectations. And the second part was...

I just wanted to know guidance related taxes, if you can.

Okay. About tax, we are expecting the same amount of taxes this year. We are not expecting some changes.

And can you share what's kind of the full year expectation for cash taxes?

It's about MXN 2 billion. It's pretty similar than last year until we allocate the debt, equally the same guidance, probably MXN 2 billion...

MXN 2 billion, yes.

[Operator Instructions] There are no further questions at this time. Apologies, we will take our next question from Gabriela Chaparro with BCP Securities.

I'm sorry if this question was already asked, but my line got disconnected. But I wanted to know more details about the press release you published yesterday about the subsidiary in Colombia. If you can give us more details on the transaction, how it's going to be paid, how much you expect to be paid and how much towers have you have sell in Colombia?

Okay. We sell 525 towers to Comcel, as you may know, Comcel is our anchor tenant and it makes more sense that they operate the total of the towers in Colombia. So that's why we sell our operations there. It's important to remark that, for example, our operation in Colombia only represents 22% of the total revenues. So it made more sense for them to operate the total towers. And obviously, we can focus on the other 15 markets that we are operating right now, and making more sense, for example, in the terms of debt because we have around USD 21 million or USD 22 million only for CapEx in Colombia and is not operational a good decision. So that's why we sell the total of our operations there.