Hello, and welcome to today's third quarter 2023 results conference call and webcast. My name is Leslie, and I will be your event specialist today. All lines have been placed on mute to prevent any background noise. Please note that today's conference call and webcast are being recorded. During the presentation, we will have a question and answer session. To follow the conference online, please visit https://consorcioara.transmission.com.mx. The word transmission is with one S only. If you would like to view the presentation in a full screen view, please click the full screen button in the upper left-hand corner of your screen. Press the same button to return to your original view. It is now my pleasure to turn today's program over to Alicia Enriquez, Co-Chief Executive Administrative and Finance Officer. Please go ahead. Thank you, Leslie. Good morning, and a warm welcome to our conference call on the third quarter 2023 results of Consorcio Ara. This call will be also transmitted via webcast, accompanied by a slide show for visual support. Leading the call to discuss the results are Germán Ahumada Russek, Chief Executive Officer and Chairman of the Board, Luis Felipe Ahumada Russek, Vice Chairman of the Board, and Miguel Lozano, Co-Chief Executive Operating Officer. I want to alert everyone that certain statements and comments made during the course of this call must be considered forward-looking statements as defined by the Securities Litigation Reform Act of 1995. Consorcio Ara believes that such statements are based on reasonable assumptions, but there are no assurances that current outcomes will not be substantially different from those discussed today. All forward-looking statements are based on information available to the company on the date of this call. The company is under no obligation to publicly update or revise any forward-looking statements as a result of new information that may become available in the future. As usual, at the end of our prepared remarks, there will be time for Q&A. We welcome you then to open the queue for questions. I will now turn over the call to Germán Ahumada Russek, Consorcio Ara's Chief Executive Officer, for his morning remarks. Please. Good morning, and thank you for joining us on this call. Results for the third quarter of 2023 compared to the third quarter of 2022. We feel satisfied with our third quarter results, first, because our revenues continued to grow while earnings advanced at double-digit rates with stronger profitability, and second, because we position ourselves for a good close to the year and are within sight of our goals for the year. Housing revenues totaled MXN 1.67 billion in the third quarter of 2023, 5.1% higher than in the same quarter of last year. These revenues came from the sale of 1,490 homes at an average price of MXN 1,120,800, an 8% increase over the average price for the same period of 2022. Revenues in the affordable entry-level housing segment came to MXN 513 million, a slight 2.3% reduction from the third quarter of 2022, primarily due to the completion of two developments, along with a delay in titling of about 80 homes in one of our largest developments, which have already been sold and will be titled in the fourth quarter. Middle-income home sales in the third quarter totaled MXN 685 million, a solid 11.1% growth over the year earlier period. In the residential segment, revenues came to MXN 472 million and grew 5.5%. Revenues from other real estate projects, mainly from the sale of land and shopping center leases, totaled MXN 79.3 million, 21.2% lower than the third quarter of 2022, due to lower sales of commercial land. Total revenues, meaning the sum of housing revenues plus revenues from other real estate projects, came to MXN 1.75 billion in the third quarter of 2023, a growth of 3.5% compared to the same period of the preceding year. Looking at the revenue mix in the third quarter of 2023, affordable entry-level homes contributed 29.3%, middle-income homes 39.2%, residential 27%, and other real estate projects, 4.5%. Between July and September of this year, operating income totaled MXN 200.5 million, a growth of 29.6%. Net income was MXN 184.5 million, 20.3% higher, and EBITDA came to MXN 275.2 million, rising 23.3% year-over-year. These solid double-digit growth were primarily to a stronger gross margin and the absence of one-off expenses we reported throughout 2022. With all of this, our profitability saw a marked improvement in the third quarter of 2023. Our operating margin was 11.5%, 206 basis points higher than in the same period of last year. The net margin was 10.5%, a 140 basis points increase, and the EBITDA margin was 15.7%, recovering 250 basis points. You may also be interested to hear that we have increased our share of homes titled under INFONAVIT Line Three credit. These are called Build with INFONAVIT loans and allow enrolled workers to build their own home individually or through a developer in an authorized housing complex, comprehensive mode. This type of loan offers a number of benefits to the borrower, including a qualification score of just 880 points, which is lower than they need for a traditional loan, plus they can choose from one of our plot types, and we will deliver the home in a maximum of six months. During the construction period, the developer receives installments as the work progresses under the supervision of a managing financial entity. As of September 30, 2023, we have MXN 85.3 million worth of titled homes under INFONAVIT Line Three program, pending recognition in our revenues. This is because, according to IFRS standards, the revenues can only be entered at the time a home is delivered, and this takes place in a maximum of six months. When construction is completed, I should mention that these homes are primarily affordable entry-level units, a segment where we have seen a contraction in recent years. Results for January, September, 2023, compared to the same period of last year. In the first nine months of the year, total revenues, which is the sum of housing revenues and revenues from other real estate projects, came to MXN 5.24 billion, a 2.7% growth compared to the same period of 2022. Housing revenues totaled MXN 5.04 billion, 3.4% higher than in the first nine months of the year, corresponding to the sale of 4,325 homes, with an average price of MXN 1,164,500, a year-to-year increase of 11.5%. Revenues in the affordable entry-level segment between January and September 2023 totaled MXN 1.50 billion, down 7% from the same period of last year, for the reasons mentioned above. Middle-income home sales totaled MXN 1.97 billion, a solid 10.9% growth. Residential home sales reached MXN 1.57 billion, a year-over-year increase of 5.6%. Revenues from other real estate projects, mainly from the sale of land and shopping center leases, totaled MXN 203.3 million, 11% less than in January to September 2022, due to lower sales of commercial land. As for the mix of revenues in the first nine months of this year, the affordable entry-level segment accounted for 28.6%, the middle-income segment, 37.6%, the residential segment, 29.9%, and other real estate projects, the remaining 3.9%. In the first nine months of this year, operating income totaled MXN 584.9 million, a 24% growth over the same period of last year. EBITDA totaled MXN 782.0 million, a 13.5% increase, and net income was MXN 525.3 million, a 16.3% low. These improved results were reflected in stronger profitability between January and September 2023. Our operating margin was 11.2%, 190 basis points higher than in the same period of 2022. The net margin was 10%, an increase of 110 basis points, and the EBITDA margin was 14.9%, a recovery of 140 basis points. Although free cash flow to the firm was slightly negative in the third quarter, it remained positive for the first nine months of the year at 144.9 million MXN, and we are expecting stronger cash flow generation in the last quarter of the year. The financial position as of September 30, 2023. At the close of the third quarter of 2023, the balance of cash and equivalents totaled MXN 2.69 billion, a 14.4% reduction from the balance on hand as of December 31, 2022, due largely to dividend payments totaling MXN 200 million. As of September 30, 2023, accounts receivable totaled MXN 704.2 million, a 6.8% increase against the close of last year. The result of the higher volume of titling in the last weeks of the quarter. Accounts receivable turnover remained fairly healthy, however, at 1.2x. Total inventories as of September 30, 2023, amounted to MXN 16.26 billion, 4.5% higher than at the close of the previous year. At the end of the third quarter of 2023, interest-bearing debt came to MXN 2.27 billion, a 2.2% reduction from September 31, 2022, due mainly to the repayment of simple unsecured loans from short-term maturities, meaning debts coming due in the next fifteen months, made up 54.2% of interest-bearing debt, and long-term debt, 45.8%. As of September 30, 2023, 65.7% of our interest-bearing debt was in the form of the ARA 21-X and ARA 21-2X notes. 18% were simple secured loans for our shopping centers, 9.9% were simple unsecured bank loans without real estate collateral, and the remaining 6.4% were lease liabilities. At the close of this year, this year's third quarter, net debt remained negative because the balance of cash and cash equivalents exceeded our cost-bearing debt, resulting in a net debt position of negative MXN 426.1 million. Our basic leverage levels remain at fairly healthy levels. Cost-bearing debt to EBITDA shrank from 2.45x at the close of 2022, to 2.18x as of September 30 of this year, while the net debt to EBITDA ratio was negative by 0.47x. We are currently in the process of issuing unsecured notes on the Mexican market for up to MXN 1.2 billion. We plan to use the proceeds for investing in our financial real estate and structure projects aligned with the sustainable bonds principles, as we did the last two sustainable issues. With this, ARA reiterates its commitment to sustainability as an essential condition for ensuring our presence in the long term. As I have mentioned in other occasions, we are convinced that we cannot speak of good economic performance. We are also speaking of good social and environmental results. To keep our debt at moderate levels and maintain an interest-bearing debt to EBITDA ratio of less than three times, which has been our financial policy for a number of years, we will be paying down MXN 1 billion from the ARA 21-X issue, which expires in October 2024, using our own cash on hand. This new issue of notes will help improve our debt maturity profile. Consorcio Ara receives a rating upgrade. On October 16, HR Ratings upgraded its credit rating on Consorcio Ara from HR double A to HR double A plus, reiterating its stable outlook. At the same time, it confirmed the HR triple A rating with a stable outlook on ARA 21-X and ARA 21-2X issues. In its report, the agency said the rating upgrade was based on the company's cash coverage of debt service, maturity profile, and our negative net debt. This report can be viewed at www.consorcioara.com.mx. Housing industry performance. According to Mexico's National Institute for Statistics and Geography, or INEGI, as of August 2023, in annual terms, overall industrial activity grew by 5% compared to the previous year. Construction industry growth was 30.1%, and as in 2022, it was driven by civil engineering works and the building subsector, which includes housing growth, 4.6%. According to data from the Unified Housing Registry Group, in the twelve months ended in September 2023, 162,735 homes were registered, a 13.2% increase over the same period of last year, and 128,763 homes were produced, 9.3% lower. Regarding mortgage lending between January and July 2023, based on data from the Ministry of Agrarian, Territorial, and Urban Development, or SEDATU, INFONAVIT granted 81,828 loans for the purchase of new homes, a 2.6% increase compared to the same period of last year. These loans represented an investment of MXN 61.6 billion, 20% higher. The average size of a home loan in the first seven months of the year was MXN 630,000, a 16.9% increase compared to the same period of 2022. FOVISSSTE, for its part, granted 9,005 loans for new homes in the first seven months of the year, a 30.5... 35.9% decline from the same period of 2022, and the investment in this totaled MXN 7.11 billion, 29.8% lower. The average price of a loan granted between January and July of this year was MXN 790,000, a 9.4% advance over the same period of the year before. As for commercial bank home financing, in the first seven months of 2023, 58,755 mortgages were granted for the acquisition of new and used homes, a 14.3% reduction compared to the same period of last year, and the investment in this totaled MXN 128.6 billion, 1.5% lower. The average size of a commercial mortgage loan granted in January-July 2023 was MXN 2.11 million, a 15% growth over the same period of last year. In the first nine months of the year, 46.8% of our revenues came from homes financed by INFONAVIT, 13.9% from FOVISSSTE, and the remaining 39.3% from commercial banks and homes purchased without financing. Shopping centers. In the third quarter of 2023, shopping center revenue totaled MXN 110.4 million, a 7.8% growth over the same period of last year, while net operating income was MXN 78.3 million, 11% higher. Revenues in the first nine months of 2023 totaled MXN 316.9 million, a 7% increase over the same period of last year, while net operating income was MXN 290.2 million, a growth of 8.7%. These results correspond to shopping centers that are 100% owned by Ara and are consolidated in, into our financial statements. Centro San Miguel, Plaza Centeia, Centro San Buenaventura, and Plaza Caraí, the uni and mini centers, as well as 50% of Centro Las Américas and Plaza Ventura, according to our stake in those properties, which are entered under the equity method. Total gross leasable area in our six shopping centers and [inauduble] and mini shopping centers is 205,409 square meters. The occupancy rate as of September 30, 2023, remained at 95%, a very competitive level. Dividends. As we mentioned in our previous conference call, on August 9, we paid a dividend of MXN 200 million. This dividend was approved in the general ordinary shareholders meeting, held on April 20 of this year. This amounts to a dividend of 0.1634 MXN per share and a yield of 5.11% based on the closing price of 2022, which was 3.20 MXN. Ara recognized as an EDGE champion. A year ago, we announced that we have received preliminary EDGE certification. EDGE stands for Excellence in Design for Greater Efficiency. For 4,104 homes located in three developments in Mexico State and one in Hidalgo. Early in 2023, we also received preliminary certification on 736 homes in a development in Cancún. To obtain this certification, the builder must prove that the home design allows for minimum savings of 20% in energy, 20% in water, and 20% in energy embedded in materials against a local baseline. In 2023, we completed the final certification of 722 homes in two developments in Mexico State, of which 658 were awarded EDGE Advanced Certification for incorporating energy savings of more than 40%. We're proud to let you know that the International Finance Corporation, the private arm of the World Bank, recognized Ara as an EDGE champion, citing its commitment to the design and construction of projects that make efficient use of our planet's resources, and for having built more than 2,200,000 square meters of EDGE-certified space. We are committed to obtain EDGE certification for 6,000 homes in the next two years. Ara's team will formally accept the distinction next week at the international IFC headquarters in Washington, D.C. Conclusion. As I remarked in our previous quarterly conference call, housing demand is holding steady. There is a continuing supply of mortgage loans, inflation has slowed, and interest rates are unchanged since March of this year. As I said at the start of this call, we are looking forward to a strong close to 2023. We believe revenues in the fourth quarter will be the most representative of the year. Ara has everything needed to close out the year on a strong note: experience, financial solidity, operating developments that meet the needs of various market segments, geographic diversification, and above all, a great team of employees committed to achieving our goals. Thank you, and we will now move on to the questions and answers. We will now start the Q&A session. We would like to take any questions you might have for us today. If you would like to ask a question over the audio line, please enter star eight on your telephone keypad. In case your question has been answered, you may cancel it by pressing star eight again. If you have been listening to the webcast and would like to ask a question, you may type your question using the chat area located on the right-hand side of your screen and click Submit. We will begin by answering questions from the audio line, followed by those we received from the webcast. The first question from the audio lines is from Isabela Salazar from GBM. Please go ahead. Hello. Thank you for taking my question. My question is regarding the new line pay mortgage instrument. We saw you already have mortgaged 85 million pesos under this new instrument, but how do you expect this to affect long-term dynamics? Could you share more color on that, please? Well, we believe that this is going to be very, very popular. As you already know, the smaller developers do not have access to credit from banks and from other means, so it is going to be much easier to get loans from this type of product. On the other hand, with a reduced points from 1,180 points with a regular credit, this one has only 880 points, so it's going to be easier to sell. So a lot of, including us, a lot of people are going to go towards this type of credit, because on, on... First of all, it's going to be much easier to sell with the 880 points. On the other hand, the money for the construction is going to be put by INFONAVIT. As a bridge loan. As a bridge loan. But without interest. Without interest, and so it's going to be a very good credit. On the other hand, there is one thing that is not so good, because we are going to title the home, we are going to build the home, we will have... In order to title the home, we are going to need the buyer. But we cannot report the income until we deliver the home. So it's going to take us six months to be able to do that. But in the future, it's going to be a revolving method of credit. Does that answer your question? Yes, it does. Thank you very much. Thank you, Isabella. Thank you, Isabella. Thank you very much for your question. Our next question is from Felipe Barragán, from BTG Pactual. Please go ahead. Hey, guys, thanks for taking my question for the call. I have a couple of questions. One is on the Danhos announcement we saw yesterday. They're going into the industrial real estate space, and I know you guys have talked on different conference calls, you guys were looking into that. What's your take on that now? Are you guys still thinking about maybe going into industrial real estate space? And my second question is on land bank acquisitions. I think you had also discussed earlier, not today, but in other occasions, about the near-term effect. And I see that your land bank, a good portion of it is, isn't in the northern states, you know, Nuevo León and Chihuahua and whatnot. Is it in the strategy to get some of that land bank replenished in those states where it might be a little bit hot further down the line as mission picks up? Thank you. Well, regarding our projects about the industrial park, we are working on that. Maybe on the following years, we will have more news and a exact date of on when it's going to start this project. We are working on still on that. Regarding land bank, we are in the process of closing some land in Tijuana. And of course, we are going to keep working on getting some land in Nuevo León. The problem is that those places are difficult to get land with location and well with the right location and the right price. But we are working on that. Great. Thank you very much. Thank you. Thank you. Thank you very much for your question. Our next question is from Juan Macedo, from GBM. Please go ahead. Hi, thanks for the call, and congrats on the results. My question is regarding your current EBITDA margins. Do you expect this to be a normalized level? And if you have a 2024 guidance, it would be really appreciated. Well, regarding the EBITDA, yes, we think that it could be around 14.5%-15%. So I think it's stable level. And for the following year, we are working on that. So for sure, in the following call, we can share with you our projections. We are going to have our annual meeting, but we are working already on that. That's good to hear. Thank you. Thank you. Thank you. Thank you very much for your question. As a reminder, if you have a question over the audio line, please enter star eight on your telephone keypad. Okay. Well, let me, we can, go to the questions in the webcast. We have just two. The first question is from Benjamin from Signum Research. He says, "Congratulations on the results. My question is regarding the future projects. What can we expect from the developments and the acquisitions of land? Well, we have several projects that are going to be opened in the year. There is one residential project in Colinas de San José, that's in the state of Mexico. We have already opened one that we have mentioned at the beginning of the year, in the state of Mexico, Real Imperial. We are going to open-- We have already opened another one in the state of Mexico, Jardines Santa Inés. Very near from the new one. Very near, yes, very near from the new airport. And we are working on. Well, we opened also Safiros Residencial in Nayarit. That is near Puerto Vallarta. We are working also in a middle-income project in Residencial Altavela Diamante. Nayarit. Nayarit, which is also in the same area. We are working on the title, on the permits, on Los Volcanes Residential in the state of Puebla. And we have already opened in Quintana Roo, Paseo del Zafiro, and that is the affordable entry. And we are going to open the Quintas Paraíso in Veracruz. The total number of units with this project are going to be around 18,000 units. And so that is going to be for next year. Some of them have already opened, and the others are going to be for next year. We have 11 projects, with the ones we started, we mentioned this probably in the previous conference call. There are a couple of them that are more, we have to be working more closely on the permits, but we have, we have, we cannot open, we cannot tell about the projects where we are just buying the land. All of these projects have already the lands acquired. New land we are buying in Tijuana, and we are going to look for land in Nuevo León. Well, there's another question from Fernando Dobele, from Dola Capital. He says, "Hello, thank you for all the information. I want to follow up on the opportunity that the company has to sell real estate not related to housing. I understand that in 2020, the company was in the process of selling a plot of land in the Riviera Maya for $50 million, but the deal didn't go through. What is your position trying to sell these excess plots of real estate and return value to shareholders through a special deal? Well, we are offering the land, and we have had some people that are looking into the, into that. The future for... well, I think the future is, it looks good for tourist, most of those piece of land are for tourists, hotels and things like that. So we believe that that we can do it, we can sell them. We are offering them, I don't know how long it's going to take, but definitely we are working on that. Yes. The last question is from Carlos Alcaraz from Apalache Research. He says: Thank you for taking my question. Firstly, I would like to ask about the growth in income towards 2024, given this slowdown in consumption in Mexico. Will you maintain a dynamic of this about price increases that will boost income, or will you seek to increase the volume of displaced housing? It's the first question, and he has other questions. Well, the first one, yes, definitely we are going to increase the prices, according with inflation. But also we are going to have more volume with the projects that we that I had mentioned a while ago. With the opening of those, none of these, with exception of only one in the State of Mexico, we have not shown any of these projects in the results. Because we started them towards the middle of this year, and we have to finish the projects and start selling. So definitely both are going to help us. Well, unfortunately, the inflation has still... It has been lower than before, but still we have some inflation. We will keep on increasing the prices, not at the rates of the previous year and this year, but the prices are going to be increased a little bit. Yes, Carlos, and I think we are positive talking about the housing demand, because as you know, there has been a decrease or there is a lack of production of new houses, and we have the demographic bonus. So, we are positive about this dynamics of housing new demand. And the second question is, would be regarding the affordable entry-level segment. Has there been any approach by the teams of the candidates to the presidency in 2024 to develop a policy that encourages the development of social housing? Thank you, and congratulations for the results. Well, we have been talking with them. Of course, as you know, they cannot... They just want to know the basics, and right now, we don't have a candidate as such. We already know who are going to be two of them, most likely, but there might be another one coming soon in... And when they are already being the candidate, most likely we will have more talks on that. We are working as an industry in a document that is going to be presented to them in when they are in the roadshow. There's a last question again from Fernando from Dola Capital. He says: What is the company's position on investing more capital to expand the development of new commercial properties? Well, Fernando, in the last years, we have been investing. In fact, the biggest investment it was in Centro Las Américas, where it is a very, very successful shopping mall. The shopping mall is doing very well. In fact, all our portfolio is working very well. They have a great occupancy rate, so they are like the new parts of the shopping malls are like in a process of maturity. They are very doing well, doing very well. So that's what we are doing with our commercial property. In the short term, we don't have like a clear investment plan for this division. The last question is the same from Fernando. He asks: What is the company's position on increasing the dividend payout ratio? Well, as you know, our policy is to pay up to 50% of our net income, but in a significant part, it depends on the free cash flow generation. But we think that for this year we are going to have positive free cash flow generation, so it depends on that, but well, our policy is to pay up to 50%. It hasn't changed. I think it's the last question, Leslie, so please we can finish the call. This concludes the question and answer session for today. Consorcio Ara would like to thank you for participating in today's conference call and webcast. You may now disconnect.