Millicom International Cellular - Earnings Call - Q1 2020

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to the Millicom Q1 2020 results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session, and to ask a question during the Q&A session, you will need to press star and one on your telephone. I must advise you that this conference is being recorded today, Thursday, 30th of April, 2020. I'd now like to hand the conference over to the first speaker today, Michel Maurin. Thank you. Please go ahead.

Michel Morin (VP of Investor Relations)

Hi everyone, and welcome to our Q1 2020 results conference call from home. As usual, we're going to be referencing some slides which are available on our website, and if you will please turn to slide two for our safe harbor disclosure. We are going to be making forward-looking statements today, and these involve risks and uncertainties which could have a material impact on our results, so please take a look at the details here. On slide three, we define the non-IFRS metrics that we will be referring to throughout the presentation, and you can find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me turn the call over to our CEO, Mauricio Ramos.

Mauricio Ramos (CEO)

Thanks, Michel. Good morning and good afternoon to everyone. We hope each one of you is safe and in good health, and we wish you all and your families the very best in these difficult times. Our call will, of course, be a bit different today. We are living, as you know, through unprecedented times, so I will focus most of my remarks on COVID-19, how we have responded, the impact it has had on our business, and how we're preparing for the future. Tim will go over our Q1 results in more detail. Let's start on slide five with a timeline of our response. In phase one, which started more than two months ago, we activated our crisis management response, and we moved quickly to ensure the safety of our employees and the continuity of our service.

In phase two, we have essentially replanned our business for the year. We have laid out some guiding principles to help streamline our decision-making during this crisis, and we have set up a task force to adapt to and learn from the new realities, to share best practices across our markets, and to capture opportunities as they present themselves for the future. Phase three will be the market recovery. It is hard to imagine that right now, but it will come, and we will be ready for it. We will come back to this later, but first, let's take a closer look at the last two months beginning on slide six. I will not go over every single point on this slide, of course. The key point here is simply that we have accomplished a lot in a very short period of time.

We have got the bull by the horns, if you will. We operate in emerging markets, so we're used to move and adapt quickly. For more details on our approach to dealing with the crisis, I invite you to read the CEO letter that we published today, along with our earnings release. It will help you understand how we're addressing this crisis proactively and carefully, and with heartfelt sympathy towards our community and our customers. Now, moving on to slide seven, on the chart on the left, you can appreciate that our markets seem to be at the earlier stage of infection, much more so than many other markets globally. Most of them are doubling cases every three to five days, and the curves do appear to be flattening now.

It is still too early to tell whether this reflects real progress or simply a lack of testing and/or unprecise reporting. Only time will tell. It is very true that most of the governments in our markets reacted and acted very quickly. Most of them closed their borders, the schools, and implemented severe curfews and very strict lockdowns very early on. The result of these measures is that there are still only very few confirmed cases in our markets today. As you can imagine, the lockdowns are causing a major drag on economic activity. You can imagine the sequence here. No mobility means no need for prepaid mobile, and lockdowns have made many of our points of sale closed, which has made it harder for us to sell. Let's expand on this on the next slide, number eight.

The challenges we have faced in the last two months can be grouped into four main categories. One, as I just mentioned, the fact that people are very limited in their ability to move around has been very disruptive to demand for prepaid mobile and for our sales and distribution channels. It's all about the lockdowns. In some countries, as many as 50% of our points of sales have been closed for the past month or so. Tim will show you later the obvious correlation between the severity of the lockdowns and the impact on mobile prepaid. It really is all about the lockdowns. We have dealt with this challenge by promoting the use of our digital channels and by quickly finding new and creative ways to reach our customers. We're adapting every day, and so are our customers, and in turn, we adapt to them.

For example, customers have now adopted doing the top-ups at the times of their days when the lockdowns allow some mobility, so maybe every time a couple of days, or to get the top-ups from friends. Most of our countries have now set target dates for partial or gradual reopening of the economies. Those target dates are on the slide we are providing you, but note that these are targets, and of course, they can be moved. Again, it is all about the lockdowns. Two, we have been working closely with governments to support our communities in this time of need, and we have been doing a lot of that. Governments have naturally asked us not to disconnect customers who cannot afford to pay.

We're very empathic to this, and we understand that we do have a key role to play in making sure that our communities do stay connected through this time of need. We have rolled out lifeline products with very minimum features that allow us to keep our customers connected and loyal to us during the lockdown, while also incentivizing customers who can't afford to pay for their services to continue to do so. This approach is smart, and it is helping us maximize our collection while keeping our customer base there and loyal to us for the future. Because we want to minimize bad debt in the future, we have also quickly moved to make sure that we charge installation fees for any new home or business customer installation.

We have had increased demand for residential products, no doubt, but we want to make sure this is good and lasting demand. It's all about stewarding our capital properly. The third challenge we have faced is that our customers are almost all at home almost all the time. They're spending a lot more time on our fixed network to work from home or for virtual classrooms or simply for entertainment. We have seen traffic surge by 40-50% across our fixed networks. The good news is that our networks have been coping really, really well. Remember that we have built state-of-the-art fiber networks over the last five years, so they're coping very well. To make sure this continues, we're redirecting our CAPEX to focus on network reliability and capacity, and I will expand on this in a minute.

We do have the network that gives us an advantage on our own business. Fourth and finally, it is still too early to assess the impact that this pandemic is going to have on the economy. We actually do not know its duration or its severity yet, but, and this is very important, we are preparing, as we should be, for a very severe global recession and for the effects of the same in our markets and the prospects of greater currency volatility. That is why we are taking very quick and very decisive steps to protect our cash flow and preserve our strong liquidity position that we have today. Tim will expand on this later. Now, please turn to slide nine for a summary of how this is impacting our business today.

As of mid-March, there had been little to no impact up until that point on our business, and we were tracking to budget. Things changed very quickly in the second half of March as many of our countries started to close their borders, close schools, and impose very severe curfews or lockdowns. The situation is still very fluid, and it varies from country to country, depending mostly on the severity of the restrictions that have been put in place in each of those countries. The restrictions or prohibitions on citizen mobility, in particular, have a material impact on our prepaid business because they severely disrupt our distribution channels, and because, as I said earlier, less mobility simply means less need for mobile.

Postpaid has been a lot more stable on our mobile business, but the continued and sustained growth that we were having in the past few quarters is now almost gone because we usually sell these subscriptions and do upgrades throughout their stores, and a majority of these are now closed, and users are naturally more cautious now, preferring prepaid over postpaid. Again, it is all about the lockdown and the ability it has on our distribution and sales channels. The good news is that churn is down significantly on postpaid mobile. Now, the story is much more positive in home. In home, we are still growing our customer base and still growing our service revenue, and churn is down also a lot. The key challenge for us in home, as you can expect, is to make sure that our customers continue to pay us on time. So far, so good.

We have had quite a bit of success with our lifeline product in helping us keep the customers for the long term while maintaining very strong collections. On B2B, the impact has been mixed. On the one hand, we have had the large enterprises and the governments who rely on us now more than ever, even if some of them are hurting, for connectivity. On the other hand, we have the small businesses who have had to shut their doors and simply do not need or cannot afford to pay for our services anymore. Here, churn and non-pay is much quicker to occur. When you put all of this together, we began to see the impact of COVID in the second half of March after a first quarter that had largely been on track. The impact worsened in April as the mobility restrictions became more severe.

We estimate the impact to be around 6-7% in terms of organic service revenue growth. Now, please take this number as an indication only. Take it as a well-meant attempt at transparency on what we're seeing in the business. April indeed may end up being a bit of an outlier because we had Easter in there and because everyone was just getting used to the new reality, so there may be a lot of noise in there. In fact, we have seen the trends improve a little bit after Easter, and we have seen customers begin to adapt to the new reality. Again, it's all about the lockdown and for how long it will stay on. Precisely because of that, we also need to be careful because the macroeconomic situation is going to be more difficult in the new months to come.

Take this number as an attempt at transparency, but use it cautiously, and naturally, it has the tendency to change. As you can imagine, digital has emerged as a key tool during this crisis, and it will surely stay as part of the new normal. The quarantine is forcing our Latin American culture to adapt digital tools much faster. We were already making significant progress on digital, but now our users have had to embrace the idea of having to top up their prepaid digitally and to pay their bills digitally. The numbers on the screen speak for themselves. Our subscribers are now more likely to use our mobile apps and interact electronically with our agents rather than coming to our store or calling our call centers. More importantly, we are seeing people embrace the use of digital wallets, including our own Tigo Money.

In Paraguay, for example, the government is actually using Tigo Money to disburse COVID subsidies to the neediest citizens. As you can imagine, we are eagerly redirecting our spend into digital. The benefits of this enhanced effort will stay with us and with the business for the future to come. That was just mostly phase one, a very intense couple of months. We are now in what we call phase two of our response plan. We know that we must prepare for a much more challenging macro environment than what we were expecting before, and I do not think I can overemphasize that. You can easily see the significant change in growth expectations for our markets on this slide. The World Bank is now forecasting a recession in 2020 in all of our markets and in the broader Latin American region, followed by a strong recovery in 2021.

We are preparing ourselves for a very rough 2020 because we want to be in a very strong position once we begin to recover in 2021 or later. Now, our reprivating the business for the crisis has been fast, and it has had some very strong key guiding principles. We want to share some of those with you. First and foremost, our employees' safety comes first. We are an essential service in these times of increased need for connectivity, so we need to keep ourselves safe, not only because it is the right thing to do for our employees, but also because we need to be healthy so that we can keep our communities connected. For critical and frontline functions like field services, call centers, stores, and network maintenance, we are protecting our colleagues by introducing new safety protocols and by distributing sanitary and protective gear.

75% of our workforce is now working from home, but frontline installation, maintenance, and service teams have all stayed out there on the streets with protective gear and safety protocols, but most importantly, with a strong sense of purpose and pride in what we are doing for our communities. Internally, we call this Sangre Tigo. The CEO letter we attach today to our earnings materials will give you a good sense of what that means and how important it will be. At a time when families worry about their future, we also know that our customers need us more than ever and that our teams are the ones making all of this happen. We want them to know that we need their continued commitment to keep and enhance our strong brand equity value during the crisis.

Just as importantly, to help us be ready with them for the rebound. We want to hit that rebound quickly and swiftly. With respect to the market and our commercial activities, we have shifted our focus from net gain to customer service and retention. Our key goal is to protect our market leadership and our market share. If we stand by our customers and communities in this time of need, we will protect our base and our share, and we will enhance our brand equity value into the future. This approach will also allow competitive environments to be less aggressive during the crisis as we are beginning to see them behave. Finally, from a financial standpoint, we are very fortunate to be in a very strong position with about $2 billion of liquidity at hand. We know that the world has changed and that 2020 will be challenging.

That's what we've been saying. Liquidity, we think, is now king, and being as cautious is its queen. We have made a number of decisions that are aimed at protecting our strong cash flow generation and preserving our strong liquidity. Let me expand on this on slide 13. First, as you can see on the left, one of our main goals is to protect our operating cash flow targets for the year. Obviously, if our revenue is impacted as we expect it might be, then we need to offset this with some meaningful and smart reductions to both OPEX and CAPEX.

We have already started to change our CAPEX decisions, only approving network investments that help to, one, ensure network reliability, two, expand capacity to deal with increased traffic, and three, keep plowing ahead with strategic network deployments like the ones we have in Colombia and Panama and El Salvador. We expect this will allow us to reduce our CAPEX by at least 20% or around at least $200 million this year. We have also taken decisive steps to reduce OPEX. Some of this will, of course, naturally happen given the lower levels of activity that we expect, but we're also looking to take additional costs out of the business. This will be an additional $100 million in cash flow improvements at least.

Second, as you can see on the right on this slide, we have decided not to recommend a dividend for 2020, and we have decided to suspend buybacks for now. In total, this measure should produce more than $550 million of additional cash flow relative to our initial plans, which further support our existing $2 billion in liquidity and we think make perfect business sense for these times of crisis. We will give you details in a few minutes. Now on to what we call phase three of our response to COVID-19. Needless to say, the sun is not out yet, and no rainbows are visible yet behind the rain. It is indeed a little bit difficult to imagine how anything good can come out of this strategy, but think about all the adjustments that businesses, individuals, and societies are making over the past few months.

It is remarkable how businesses across many sectors of the economy have responded and are quickly adapting, and how consumers are doing the same. Schools have moved online, parents are working from home, consumers are buying everything online, requesting delivery through digital apps, and they want to pay digitally. Even family reunions and rock concerts have moved online. All of this will further require our connectivity and our services. Over the past two months, businesses have put their continuity plans to the test. Every company and every board of directors is going to take a closer look at those plans, and they will beat them up. Cloud service and cloud security and robust connectivity will be an essential part of those plans, and all of those require our services.

In our markets, some companies might finally embrace the need to move their infrastructure and their mission-critical data to the cloud. They might even be willing to invest to make sure that their employees are equipped with laptops and are set up to work remotely from home, something we have not seen so far in the markets. Some companies might even pay to make sure their employees have reliable broadband connections at home. All of this, of course, will require next-generation networks and connectivity, the kind that we have been building and providing for the past few years. This crisis places a bright spotlight on the companies with strong cash flow and strong liquidity like us, particularly in emerging markets.

Some of the weaker players in our industry may not survive this crisis, which we expect will accelerate the ongoing trend towards having only two and sometimes three players in every country. Maybe a few more governments will recognize the need to have fewer, stronger, and better capitalized facilities-based telecom operators like ourselves. With that, let me turn it over to Tim to go over our performance in Q1.

Tim Pennington (CFO)

Thank you, Mauricio. I'm going to start by looking at Q1 on slide 15, and then I'll focus on the financial aspects of our response to COVID-19. Basically, COVID-19 did not impact our business until mid-March, as Mauricio said. We were pretty much on track until that point. Bear in mind that last year, our first quarter was our strongest quarter.

This left our LATAM service revenues broadly flat on an organic basis, as you can see here. Around the same time, we also saw the currency impact of oil prices in Colombia, and that left us with a 3.5% FX hit, although this was offset by revenues from acquisitions. On a reported basis, our service revenue ended up at 5.5%. Organically, EBITDA fell by 2.5%, although half of the fall came from a one-off charge in Nicaragua related to the acquisition. OCF was 3.9% lower. That was basically due to the EBITDA one-off as well as phasing differences in CAPEX execution. As you have heard from Mauricio, we are targeting measures to maintain the OCF for the year. This is important as we search for measures to accelerate our deleveraging activities.

If I pick up now on how we've seen COVID-19 impact on slide 17, the indicators on this slide give you a sense of what we're seeing, but note it is still very fluid. On the left-hand side, you see the components of our organic service revenue growth, and perhaps unsurprisingly, it's prepaid and B2B that have been most affected. In prepaid, as Mauricio said, it really has been the lack of mobility and the correlation between the severity of the lockdown and the impact on revenues. You can see this on the chart on the right-hand side. This shows this correlation. Very much Bolivia and Honduras have had the most stringent lockdowns, and we've seen the biggest impacts there, whereas Guatemala and Nicaragua are less of a lockdown, less of an impact.

Now, across our subscription business, postpaid has seen a significant fall off in new sales, and we've lost a tailwind from upgrades from prepaid. As Mauricio did say, home has been much more stable, and we are still selling in home. Revenues are still growing there. Finally, across B2B, we felt the impact mainly in the SMB segment with some offsetting demand from larger corporates. On a see-through basis, our small businesses represent round about 7% of LATAM service revenue. It is noticeable but not meaningful at this point. Okay, let me now look at how it shook out in Q1 on slide 18. Guatemala continued to show strong revenue growth. Note, this is largely mobile performing well, whereas in Panama, we did see a more challenging quarter, again, mostly due to B2B being lower than the very good quarter last year.

If you recall, we've got a higher proportion of our revenues coming from B2B in Panama. Home, by contrast, had a very strong quarter commercially, adding around 200,000 to use onto our HFC network. This was offset by some falloff from our DTH revenues, which is generally a less profitable business for us in any event. Let's look at EBITDA in more detail on slide 19. These numbers show the organic movement, that is the like-for-like EBITDA performance by operation. We saw the main challenge coming from South America in Bolivia, which is still recovering from the turmoil in Q4. This was largely impacted by prepaid mobile offers. In Colombia, where EBITDA fell by 2.3% organically, our results were impacted by the loss of the Avantel revenue. Note, without this, our organic EBITDA growth would have been positive.

I think it's also note that the weaker peso had an impact on dollar-based costs, such as programming. That was one of the causes for the margin, EBITDA margin, to worsen by 1.5 percentage points to 33.3%. In fact, similar impact in Paraguay, falling 10% organically, partly due to increased commercial activity, but also from the impact of the weaker guarani on dollar-based costs. Both Paraguay and Colombia faced large FX devaluations, which had a significant impact on the translation of our EBITDA. We see that on the next slide on slide 20. The Colombian peso devalued 22% year on year, and Paraguay devalued 7%. This had a $15 million drag on, sorry, an $18 million drag on our revenues, roughly 3% on, sorry, $15 million drag on EBITDA, 3% of LATAM EBITDA.

As you'll see later, the local currency financings have partially mitigated the impact of this on our leverage and debt. Organically, EBITDA down 2.5%, the one-off $8 million charge relating to the acquisition in Nicaragua explaining half of that problem. Okay, now I want to turn our attention to how we've adapted the business to the crisis on slide 21. As Mauricio said, we moved pretty quickly to protect the business. To protect OCF, we have revised our CAPEX and OPEX plans, reducing both materially. To protect the balance sheet, we secured liquidity. We focused on cash and looked to mitigate FX and seek opportunities to deleverage. Let me start on protect balance sheet on slide 22.

Firstly, although we entered this crisis at a higher level of leverage, nevertheless, we've got a very strong liquidity position, and we've taken further steps to enhance our liquidity, reviewing contracts, payment terms, collections, withdrawing on our OCF, etc. In short, today we hold around $2 billion of cash and credit facilities within the group, of which more than $1 billion of cash sits in the group HQ. Further, as you can see on the slide, we have very limited maturities. In fact, we only have $111 million left to refinance this year, and next year it's only a little over $170 million. Secondly, we have a strong, robust cash flow, and you'll see that on slide 23. This is showing the trailing 12-month OCF. On a run rate, our OCF, and that's EBITDA minus CAPEX, is around $1.4 billion.

Of this, nearly 70% is coming out of Central America, which is remaining fairly robust so far with little FX volatility in Q1. The balance comes from South America, with Colombia accounting for around 15% of group OCF and Bolivia, 6%. Now, we're not complacent about this, which is why we have acted to reduce our CAPEX spend, as you said, by nearly $200-$300 million. What we've done here is we've postponed our network expansion activities, both in cable and in mobile. We've canceled non-critical IT projects, and we've been seeking better terms on the CAPEX we will still fulfill. In addition, we're looking at cost savings of at least $100 million. That will be through hiring freezes, reducing subsidies, cancellation of non-business critical activities, and seeking reductions on contracts that will no longer generate returns.

With all with the aim, as Mauricio spelled out, of maintaining the group OCF. Finally, I want to look at the net debt and leverage. Usual slide on chart 24. We finished the quarter with underlying net debt of $7.2 million, which was largely in line with where we ended the year. That is after $122 million of new spectrum acquisition, plus we did complete $10 million of the share buyback program before suspending it. Finally, to note, the equity-free cash flow is typically negative in Q1, as we see large working capital outflows. I want to point out that the use of local currency funding in Colombia, Paraguay, and elsewhere contributed to reducing our net debt by $175 million during this quarter. Also note we rely on local currency funding to fund most of our operation in Bolivia.

Looking at the leverage impact of this, at the end of Q1, we had proportional leverage of 3.25 times. That was up marginally from 3.19 times at the end of 2019. On an IS17 basis, leverage was 3 times. As I said, we are making it a priority to bring that leverage down, which is why we are suspending the dividend and the buyback programs for 2020. With that, let me pass back to Mauricio to wrap up.

Mauricio Ramos (CEO)

Thank you, Tim. Before we take your questions, let me just conclude by saying that I am incredibly proud of how our teams have responded to the challenges we have faced in the last two months. Never been as tired as I am today, but never been more proud of the long hours that everybody's putting in there.

You have heard me talk about our strong culture, that passion that we bring to work every day. We refer to it internally as Sangre Tigo. This Sangre Tigo has kept us focused on our customers throughout the first phase of this crisis. That is what will make the difference: purpose and passion and motivation and keeping close to our customers, very close to our customers. Financially, we are in a strong position. This will also make a difference. We can and we are protecting our cash flow targets. We have ample liquidity and no meaningful maturities, and we are taking quick, decisive, and relevant measures to accelerate the leveraging. The next few months will be challenging. We know it.

We do not want to sugarcoat it to you, but we have really quickly refocused the business to, one, protect our employees; two, keep our customers and communities connected, keeping our market share and positioning ourselves for a quick rebound; and three, preserving our cash flow. It is as simple and as focused as that. If we do this well, we will strengthen our brand equity and value for the long run and will be positioned to rebound very, very quickly. This is important because this crisis will pass, and we will be there, and our users will be there. We will be closer to them. What will ultimately matter is how we behaved in this process towards our consumers. With that, we will take some questions from you. Maria, we are ready for questions. All right.

Operator (participant)

Ladies and gentlemen, to those who wish to ask a question, please press star and one on your telephone. Once again, star one if you wish to ask a question. Your first question comes from the line of Johanna Albee from SCB. Please ask your question.

Yes. Good morning to you. I think I have two or three questions. The first one, if I get you correct, you aim for flat OCF for 2020. And I'm just wondering, does that also include working capital? Because I guess you will face quite what the risk is, at least, that you will continue to have a negative working capital throughout the year given the payment terms for customers that you discussed. The second question relates to, if you can say, how much of data top-ups that are done through digital channels today?

If we can get sort of the base, is it a minor share or any flavor on that would be helpful? I think I start there. Thank you.

Mauricio Ramos (CEO)

Yeah. I'll take the second one, and then perhaps you can provide some color on number one. It has doubled. The amount of digital top-ups have doubled in just a few months. It is still a very minor percentage, around 5% or so still. We are seeing continued improvement, but it is still a very slow base. Prepaid is still a physical distribution of business. We are ahead of our competition, but it is still low numbers.

Michel Morin (VP of Investor Relations)

Yeah. On the working capital points, Johanna, it is complicated. I accept that. We will see working capital move around a lot. We are seeing some offset there.

We've pushed payment terms out with large suppliers, so there is a balancing impact taking place on that. Our inventory will run up a little bit as we go through the summer, but it will come down towards the end of the year. I don't see any impacts on that. Although it's very difficult for us to predict at this stage, I don't expect it to be a defining feature for us for this year.

Just to maybe make that clear, do you aim for a flat OCF 2020 over 2019?

Yes, we do aim for that over 2019. Look, it's an aim, not a promise. There are a lot of moving parts for us. It's allowed us to corral the organization around the target, which is achievable, and focus where revenue is tough at the moment.

It is very important that we focus on the cash flows, and I think that's what we're doing internally and externally. There are some variables that are outside our control, but the ones that are inside our control, we are targeting to focus on the OCF in that way.

Mauricio Ramos (CEO)

Let me add to that, Johanna, because you're sort of focusing on something very important. Thank you for that. This is a pretty bold statement we're making. Quite bold because we don't hold any particular crystal ball here that's better than anyone else's. We see the importance of saying to all of our shareholders that we are aiming and we think we can protect that operating cash flow target for the year. It's a pretty bold statement, and it just gives you an idea of how focused we are on that.

Give us some wiggle room because we have no crystal balls, but it is a very important target that we set ourselves to protect our investors. Thank you. All right.

Thank you.

Operator (participant)

Your next question comes from the line ofStefan Duhonj from DNB Bank. Please ask your question.

Stefan Duhonj (Financial Services Advisor)

Yes. A couple of questions for me. First of all, on the cost savings, you talked about that you had some savings coming. I think you're aiming at the subscriber acquisition cost due to lower churn. Is that included in the $100 million cost savings, or is that coming on top? Secondly, you talked about that Paraguay was impacted by a high commercial activity in the quarter. How has that developed after the COVID-19 crisis hitting the market?

Thirdly, you had a very different performance in Colombia versus your peer, América Móvil, in terms of subscriber development and service revenue development. Can you elaborate on this difference? Thank you.

Mauricio Ramos (CEO)

All right. Why do we not do this jointly, Tim, because there may be bits and pieces that you may want to just add to this.

Tim Pennington (CFO)

Thank you, Stefan, for the question. First and foremost, on what we call the replant, by the way, for the year, that is the internal word we use for it, on the OPEX part of it, which I think is your question, not the CAPEX, which is we are at least targeting $100 million. It is a straightforward question. The larger part of that, 50%-60%, is a reduction in commercial activity.

It does include lower churn, lower activity, less truck rolls and field services, lower sales commissions, lower sales subsidies, lower marketing and advertising spend, of course, which is significant. It is indeed all included in there. There's an additional element of that, some 20%-25%, which is direct savings. That's programming, bandwidth, et cetera. As you can imagine, we're working with our vendors to help and chip in, if you will, during this situation. The rest is G&A and other stuff that is very important. Hopefully that gives you a lot of color on number one. Number two, the straightforward answer on Paraguay is life or the commercial aggressiveness within COVID, if there's a silver lining to this, is that we're not seeing the impact on COVID and continued competitive aggressiveness. Quite the opposite.

The reaction from our competitors has actually been to roll back their network rollouts, to be much less aggressive on the marketplace, and focus on also just protecting their business. We are not seeing a continuation of an aggressive commercial activity in Paraguay. That is good because we do not have to battle two fronts at the same time. I hope that answers Paraguay quite completely. In Colombia, there are perhaps three layers to what is going on in Colombia. The first one is the part that is just noise in our numbers. I use the word noise for lack of a better one here. Our numbers for Q1, and I mean this from help from Tim here, basically have the loss of our wholesale business, largely the Avantel contract that we were happy to let go as we were not being paid.

That has an impact on our numbers vis-à-vis our competitors in the market. If you were to correct for that, our mobile business would be growing mid-single digits. There is just the noise of that effect. That is number one. Number two is right in the middle here, the B2B business. As you know, in Colombia, we are much more exposed to government contracts than our competitors are in our B2B business because we have a larger B2B business. In fairness, even before the crisis, we had already begun to experience some of those government contracts slowing down. There is a difference in our B2B business. The last bit, the third layer of this, is that our business in Colombia, which is quite strategic on home, remains very, very solid. You have seen the numbers.

We had solid net adds for the quarter, and our business in home grew mid-single digits for Q2. We are very happy with that. There is a mix back there that explains why this is not a direct apples-to-apples comparison. We remain extremely focused on our strategic developments in Colombia. We are happy with our HSU rollouts. We have seen how relevant that is in the middle of the crisis. As you very well know, we are plowing along on the deployment of our 700 MHz spectrum network. Actually, last week, we just announced that we had closed on the first tranche with the government and that we are already deploying it. That will be the first to have that 700 MHz spectrum commercially deployed, which, as you know, has cost reductions and indoor penetration benefits and increased coverage for us.

That's one of the projects that I was referring to as strategic that we're not holding back on. That's it. I don't know if I missed anything on that one.

Stefan Duhonj (Financial Services Advisor)

No, I think that was very clarifying. Thank you. Okay. Bye. Okay. Thank you.

Operator (participant)

Your next question comes from the line of Esumis Veta from New Street Research. Please ask your question.

Soomit Datta (Equity Research Analyst)

Yep. Hi, guys. Hope everyone's keeping well. Two or three questions, please. One is maybe a bigger picture question, which is we've seen a number of PM Tocco's report now. I'd say the commentary from yourselves and the outlook seems to be much worse than we've generally seen in the sector. Questions that I've had this morning are, is there something specific about umbilical markets, which is meaning that things are worse here?

Obviously, I guess the main point you're making is lockdowns are impacting businesses, but those lockdowns are happening the world over. What is it which is really having such a dramatic impact that maybe isn't happening elsewhere? I referenced América Móvil, who we heard from yesterday, and things are definitely tough, but they seem to be much better there. If you could help us understand that, that would be very helpful as a first question. Maybe I'll ask that, and then I can come back to another one.

Tim Pennington (CFO)

You can imagine that we have been questioning ourselves quite a bit. Is our view overly cautious or overly green vis-à-vis perhaps the story that others are painting out there? I think there's an element that we simply do not like sugarcoating things, and we like to preserve our credibility.

There is an element that we do think things are going to get tough in our markets, and we'd like to call it early rather than late, even if that causes this gap in perception. There is also an element that our markets have had much, much stricter lockdowns, and some of them started very early. If you look at the dates of the lockdowns in our markets, they started earlier than they did in some of the markets, even in the U.S. We were very attuned to it. The word lockdown is perhaps not correct. These are curfews. These are 24-hour curfews, with the exception of Nicaragua and Guatemala, in which people are not allowed to even walk their dogs on the streets. I'm not making up this. This is the way it is. You can go single person.

You cannot be double person in some of these markets. These are very, very strict lockdowns. I tell you, we see the correlation immediately. We have network tools that allow us to, from the network, see the mobility in our markets and the correlation to top-ups and the correlation to use. It is a very, very strong correlation. There are some differences across jurisdictions. Some of our competitors do operate in markets that have not had these very significant lockdown measures. Speaking of the countries themselves, Mexico has not had a lockdown, and Brazil, as you know, has not had a lockdown. There is a difference between the approach our regulators and our governments have taken, and that may be permeating our own views on this. As I said earlier, this is all about the lockdowns.

The minute we see the lockdowns ease off, like we've seen in a couple of days in Honduras, we see top-ups immediately come back up.

Mauricio Ramos (CEO)

I think most of our companies are in here. A lot of our competitors have reported that they've been reporting backwards, kind of as we have seen. We've only seen a couple of weeks' impact on Q1, which is not that impactful on us, whereas it was effectively 0.7% or $10 million. I mean, what we're trying to do is give you a picture of the future and giving you what we're seeing in April. As much as you said on the call, April has got Easter in it, so it may not be representative of the future. We can't bank on that, and therefore we have to prepare the business for what could be a significantly long extended period.

Once the lockdowns have gone an extended period where we have to put the business in the right place in order to weather that storm. We have a strong market position. We have a strong business, but we have to put it in the right place for that. That is really why we were giving you this indication of what we are seeing currently. This has been an internal debate, and luckily we have a board that has been very supportive of our view. If we are being overly cautious, great, because we are protecting the business. We are doing all the right things. Everything we are doing, we are preserving the ability to come back really, really quick. If you read the CEO letter, if you read our prepared remarks in detail, we are keeping the teams. We are keeping the commercial distribution. We are protecting those.

We're picking the strategic projects so that we're ready for a strong comeback. Should it be that indeed these things are not as green as we think they may be, then we'll be ready right there for the comeback, having protected the subscriber base, the business, the liquidity, and our teams. That's our strategic approach, and I really thank you for this big picture question because it does allow us to tell you what we're doing and why we're doing it. I think we're putting ourselves right in the middle of protecting the business, preparing for the worst, but being really ready to come back very, very quickly. Okay. That's really clear. Thank you. Maybe just, I mean, just as a follow-up, it sounds like the biggest factor is the lockdowns.

It has been stricter and maybe a little bit longer in those countries, so that is maybe a differentiator. Presumably, and hopefully within some weeks or a month or so, you come out of lockdowns. The guidance you have given from Maple suggests about a $30 million hit to revenues. You have a couple of months where you lose $30 million, $60 million. I guess the response seems somewhat disproportionate. You have cut the cash returns by $250 million. You are cutting CapEx by $200 million-$300 million. You are looking for OpEx savings, I think maybe $40 million-$50 million away from the commercial savings. If we are going to bounce back from these lockdowns, is not the response—and if the lockdowns are the bigger driver—is not the response on the sort of cash flow side somewhat disproportionate? No.

Tim Pennington (CFO)

As I said—

Mauricio Ramos (CEO)

sorry, go ahead, Tim.

Tim Pennington (CFO)

I mean, we have other factors as well. We have an FX impact in Colombia and Paraguay at the present time. We have still around 35%-40% of our revenues coming out of prepaid. We see already slowdowns in remittances. As much as I've said, I think this is a better position for us to be in, to be slightly more prudent now and then maybe prove wrong towards the end of the year when it's easier for us to change direction again. If we did it the wrong way around, it would be very difficult for us to manage the business.

Mauricio Ramos (CEO)

Guiding principles are, we're going to protect that operating cash flow, that we can do, and that we're gaining. We're going to be very, very cautious on protecting liquidity.

I think that's the most important, the savviest thing we could do, and the most prudent thing we could do. Now, I don't know that we can call the moment when things are going to go back to normal. That's why we need to be more cautious. We just do not have that crystal ball. We're not approaching it in that way. We're approaching it in the sense of protecting the operating cash flow, being cautious, preserving the liquidity, because we do not know when things will go back to normal. I think that's a key point.

Soomit Datta (Equity Research Analyst)

Okay. Helpful. Thank you.

Operator (participant)

All right. Thank you. Your next question comes from the line of Mark Henderson from JPMorgan. Please ask your question.

Hi. Good morning. Good afternoon. Thanks for taking my question. Hope all of you or your families are well.

The first question is about the SME exposure. You mentioned that SME is taking a relatively large hit. How much of your revenues broadly are exposed to segment? That is the first question. The second question is about the potential Costa Rica deal not closing if the conditions are not fulfilled tomorrow. How much of the synergies that you attributed to the acquisitions do you think you would lose if you do not have synergy potential you would lose if you do not actually close that deal? Thank you.

Michel Morin (VP of Investor Relations)

Can I jump quickly, Mauricio, with the small business? Yeah. I did mention in my script, we see about a 7% see-through contribution from small businesses in the LATAM service revenue. It is 7% of our LATAM service revenues. It is noticeable but not meaningful, I would say.

Mark Henderson (VP)

Perfect. Thank you. Yeah.

Mauricio Ramos (CEO)

We did not quantify the synergies per country for the Costa Rica acquisition. Perhaps the most important thing I can say is, as much as we would definitely want to have fixed and mobile in every market we operate, and that has always been part of our strategy, at this point in time, it is a lot more prudent given that we have the absolute legal right not to go forward, not to extend the terms of that contract, and not to go forward. It is really a very sound and prudent business decision. The largest synergies, by far, were in Panama and are being attained in Panama rather than in Costa Rica. As you very well know, our business in Costa Rica, being very factual here, our existing business in Costa Rica is relatively small.

Mark Henderson (VP)

Okay. Thank you.

Operator (participant)

All right. Thank you.

Your next question comes from the line of Cesar Medina from Morgan Stanley. Please ask your question.

Cesar Medina (VP and Equity Analyst)

Hi. Thanks so much for taking the time to discuss the results. I have two questions. First, a follow-up on Costa Rica. Can you please clarify or as much detail as you can possibly provide what are the specific hurdles that prevent the transaction from being closed? Second, throughout the call, you have mentioned you expect a strong comeback eventually, etc. Maybe clarify the comments pertaining to the long-term goals that you have in reviewing them, and where is the risk in the receipts? Your long-term goals go over or under what you were expecting before? Thank you.

Michel Morin (VP of Investor Relations)

Okay. Listen, I'm Costa Rican. Thank you for all the questions. I'll try to address them here with a little help from my team.

A little bit on the Costa Rica. For your clarity, as you can imagine, these are contracts that are very heavily negotiated in New York. They are black and white. They are clear. They are agreed by the parties. Like every standard contract, they have provisions on what approvals need to be attained, and they all have a long date on them. This contract does as well. Ours has a set of regulatory approvals and a process for that regulatory approval that are to be obtained by May 1, tomorrow. After May 1, either party has the right to terminate, basically not to extend the contract. We have been very clear that if all those regulatory approvals are attained, we will fulfill our obligations and we will close. No doubt about that.

If they're not, we have the legal ability, and this is crystal clear, as does Telefónica, not to extend. Those regulatory approvals, and it's a number of them and in process, have not been attained as of today. If they're attained before tomorrow, we'll go ahead and close, of course. If they're not attained, we will and have notified Telefónica that we will not extend. As I said earlier, it's the business decision that we think is best fit to the times that we live in. As I said earlier, it's just the right prudent business decision for us to take. Now, Telefónica may have a different view on what their legal rights are.

If they do and they wish to proceed in courts in New York, of course, they have the right to, and we will defend our rights there because the contract is black and white. That is the Costa Rica bit of it. I did not write number two, but I am sure Tim can help me on that one.

Tim Pennington (CFO)

It was about the long-term goals and kind of whether they have changed. I will give you my quick two pennies. In a sense, no, they have not. Obviously, we need to be cautious at this point in time. In many ways, I see the demand for our product enhanced out of this rather than diminished. I think what everyone around the world is realizing is the importance of broadband. We are the provider of broadband currently to 11 million households in the footprint area.

There are 30-odd million households in our markets. We see no reason to see why that would diminish over this time, if anything, possibly enhanced. Mauricio, I do not know. I expect you have the same view.

Mauricio Ramos (CEO)

Listen, absolutely. The only thing I would add to that, and I hope this comes across forcibly, is we expect to lead the comeback in our markets. We expect to be strong in our position once the crisis is over at all levels. The employee teams in place, the operating cash flow protected, the balance sheet strengthened, the commercial teams kept, the network deployments also ongoing so that we can lead our markets when the recovery is there for us. This is a matter of timing. We cannot be. We do not want to be ahead of where our markets are. This does not make sense.

We just need to be ready for when they come back. We will pounce back quickly, swiftly, and we will lead that comeback. We just do not know exactly when it is going to happen. Thank you.

Operator (participant)

Okay. Thank you. Your next question comes from the line of Bill Miller from William Blair. Please ask your question.

Bill Melka (Wealth Advisor)

Gentlemen, well done. I am glad you are all safe and sound. Getting back to Costa Rica, how much do you save by not going forward with the acquisition? How many hundreds of million? Yeah. The purchase price is very public. It is just a little north of $570 million.

Mauricio Ramos (CEO)

Obviously, there is a little bit of a chip there in our buildup of mobile over fixed in Costa Rica. As I said earlier, these are times when you have to make the sound business decisions.

This is, without hesitation, without doubt, the right business decision to make. The number billed is 576, I believe, is the exact number. I may be corrected, but somewhere in there.

Bill Melka (Wealth Advisor)

Secondly, in the larger context with a strong balance sheet with the number one or two market share positions in most of your markets, how are you going to take advantage of that? Will there be others that fall by the wayside and you can pick up their assets free for nothing? Tim, you said you were going to be able to grow faster than you had been able to grow historically. How much faster? Do you think it is because competition will wilt? How do you make that statement?

Tim Pennington (CFO)

Yeah. Listen, a couple of things will definitely occur here.

People will be competitors, that is, will be a lot more cautious with the returns and demand on their capital because they will be much more pressured by their own liquidity constraints and their less strong balance sheets. Some of the existing competitors indeed will have to ease off the pressure, change their plans, ease off on the rollout plans. As a result of that, we do believe that there'll be a better industry structure coming out of this. It always happens. Now, we're one of the stronger ones out there. As a result of that, everything we're doing positions us for that. I also believe, and I strongly believe this, that regulators will also change their views, and that's what I said in my prepared remarks.

Because they are realizing right now, as we speak, that it is the stronger companies, the multinationals with the ability to invest and be there for their consumers, that are the best bets for them to keep for future times in their markets. I do believe that this will cause them to understand that much more than they have before. Those two things, I think, will lead to better industry structures.

Bill Melka (Wealth Advisor)

That's great. I look forward to that.

Operator (participant)

Thank you. Your next question comes from the line of Sergey Blusevsky from VTB Capital. Please ask your question.

Good morning, guys. Thank you for taking the question.

Looking at your markets, obviously, you have touched on this already, but as you look at the range of your markets, which markets do you believe have had the most effective response to the pandemic, and which markets do you worry somewhat as you look at the events unfolding?

Mauricio Ramos (CEO)

Wow. I have to be honest with that. If somebody has a better answer, I think time will tell in just about every country in the world, not just our own markets. Whether severe lockdowns were the better public response, public policy response, or whether a light-touch response to lockdown was the better market response. With our responsible hat on, I do not know the answer to that. I do not think just about any policymaker around the world knows the answer to that. We're all looking for it, I tell you.

In a year, two years from today, we'll all look back and try to figure out what was the smarter way to go about this. This is true, not for our markets, just for every market. I don't want to step into shoes that are bigger than the ones we can feel that are stronger.

Michel Morin (VP of Investor Relations)

I think it's fair to say that the governments reacted very quickly to this. I think they've all, by and large, reacted fairly quickly to it. We cross our fingers and hope that's a good solution.

Great. Thank you. One more follow-up on Costa Rica, I guess, from kind of market dynamics and competitive landscape there, assuming that you don't close on that acquisition. The fact that you won't purchase mobile assets there, does it mean that you would look for an MVNO agreement in that market?

How would you look at Costa Rica without mobile assets there? Would you look to exit that market? Just your overall assessment, where you stand in Costa Rica if you do not close on that transaction? Yeah. Great question.

Tim Pennington (CFO)

Thank you for that. Listen, I have always said, we have always said that, of course, we think fixed and mobile in a converged environment leads to an enhanced strategic position. No doubt. This does not change that. I have also said that I am happy, we are happy to have cable standalone because cable standalone is very resilient. You are seeing it through this crisis. It does not immediately need a mobile solution. It does hold the stronger long-term strategic card because those networks are very, very resilient and capturing the bulk of the traffic.

We think with cable standalone, we're in a good position, in a good strategic position to evaluate other options, which includes the ones you're mentioning.

Right. My last question is on kind of non-core, non-strategic assets. Obviously, you have mentioned a lot of measures to improve cash flow and liquidity. You did not mention kind of dispositions of some of the assets that you have, which I believe are always an option. You have a stake in Helios Towers. You have JV in Ghana. What are your thoughts on the timing and eventual monetization of some of those non-strategic assets?

Mauricio Ramos (CEO)

Two quick comments on that. Of course, those are out there. No doubt. Whether it's Tanzania or HTA, no doubt they're there. They're options. Number two, we have a ton of liquidity. It's $2 billion plus these measures.

Internally, I call it to the team the big bazooka. I basically tell, "It is important that we go into this with the biggest bazooka we possibly have because we don't control the timing of this." That is outside, but we can control how big a bazooka we have. It is big. It is really, really big. What I tell the team is we need to know that because then that would allow us to make all the commercial people's strategic decisions with the ability to not be constrained by that. That big bazooka is really, really important for us to have peace of mind.

Now, with all that in the mix, the things that we've shown you today are the things that we can act on, that we have acted on, that are within our ability to decide, not the ones that may or may not happen, which they may or may not happen, so that we can give you certainty on what the bazooka is today and how much we can add and are already adding by our own decisions to the bazooka. That is what we wanted to highlight to you today.

Okay. Great. Thank you.

Operator (participant)

All right. Thank you. Your next question comes from the line of Lena Osterberg. Please ask your question.

Yes. Good afternoon. I have two questions, if I may.

First of all, as I understand it, the impact that you've seen now, early April, and you expect on service revenue decline, that's been mainly related to market closures and constraints because of COVID-19. If markets start to open up and people can move around freely, do you expect an improvement, or do you think that the next impact will be the hit on the real economy? In that case, when do you expect that to come? How big will that impact be? It would be very interesting to hear what you're seeing now in Colombia with consumer confidence dropping massively on the oil price decline and how you think that will sort of translate over the next couple of months for your business as well. Also, on cash flow and liquidity, it is indeed a big bazooka that you're building up.

I'm just wondering, how scary a scenario should we expect given the size of liquidity that you're building up now?

Mauricio Ramos (CEO)

Good. Perhaps, Tim, I'll defer to you on the FX and oil matter first because not only are you an expert on that, but some of the measures that you've been taking in the last few years have made a difference on our balance sheet. If you want to start with that one, and then we'll go to the bigger picture. Oh, sure. Yeah. Look, kind of the big impact we've had is being in Colombia. Obviously, that currency's devalued by 22% year on year. It's now trading at COP 4,000. We were budgeting at COP 3,400 for this year. We're not expecting COP 4,000 to change materially. It's not going back anytime soon.

I mean, you guys are better judges of the oil price than I am, but this is not looking like it's going to recover quickly. We are preparing for a world where we are around about 4,000 in Colombia. Paraguay's had a little bit of a hit as well. Central America, on the other hand, has been very solid. These economies are very dependent on remittances. We are already seeing remittances down, around about 10%. That could have an impact. It may not. In the global financial crisis, there was some devaluation. It actually was not in the Colombia levels. We do not know, Lena. That is why we are taking these actions. When you have uncertainty, you need to be prudent. That is why we are doing this.

Yep. I think I will build on that to tackle the other part of your question.

The answer to both of your questions is actually you're correct. Yes, the lockdowns have a significant impact. The minute the lockdowns go away, we'll see immediate renewed consumption of mobile. That's true. It is also true that these lockdowns are having a meaningful impact on the economy. That macro effect, I don't think we're seeing just yet. That's still to happen. Both things are true. Obviously, the longer the lockdowns stay on and the more pronounced they are, the bigger that impact will be. What you're hearing from us, which I think is a responsible thing to hear, quite honestly, is that we do not know when or if these lockdowns will be effectively lifted, whether they'll come back, and what the response to this pandemic will ultimately need to be. It is a responsible thing to be very cautious in this environment.

I think Tim said it earlier. I've been adamant with my team, been adamant with my boards, that if I had a crystal ball and I knew exactly what the damage to the economy is today, and if I knew exactly that it is over and that we've gone now already into recovery mode, I would be taking a different view. No one knows that. As a result of that, the responsible thing to do is to tell you, "We can protect the operating cash flow, and we're going to move to do it, and we're going to build." I'm going to keep using the term because it seems to have hit a nerve. A big bazooka. We do need it. We do want it.

What I tell the team on and on is, "If you're going into a desert and you do not know if you're going to be in it for a day, two days, a week, or three months, you put as much water into your jeep as you possibly can." That is what we're doing. I hope you get that because I think it's a responsible thing to do. Actually, I think the other thing which maybe is important to distinguish here between developed markets and developing markets. Most of our customers, most of the people in these countries are not salaried. They need to go out to work. They need to go out to get cash. If they don't work, if they don't go out, then they don't have disposable income. Clearly, they need disposable income to buy our products.

I want to say an obvious thing also because I think this is part of the big picture that we're talking. It is important that we understand our approach to this. If indeed we're being overly cautious, if indeed we have built a big bazooka, perhaps too big, if indeed the lockdowns ease off next week or next month, and there is a way for the economies to come back quickly and strongly, no harm will have come to us at all. I want to be very clear to that because we've kept the teams. We've kept the commercial distribution teams. We're keeping the strategic projects, and we're ready to bounce back immediately. Immediately. This is what the teams have heard from me. No harm will come to us.

Because we do not know that that is necessarily the outcome, it just makes such business strategic sense to protect ourselves. If it is longer, we are going to be the strongest if it lasts longer. That is our strategic mindset. I am convinced this is the right approach.

Cesar Medina (VP and Equity Analyst)

Can I just have a follow-up on that? The cash flow boost that you are getting from all these actions and potentially by not doing the Costa Rica acquisition, should we see sort of that you expect a negative cash flow in a similar magnitude? Sorry. Lena, a similar magnitude to what? To the savings that you are doing because you are doing them to offset something. Are you assuming that you will have a COVID-19 will be a $550 million hit on your cash flow if you did not do these things? I do not think you can assume that.

Mauricio Ramos (CEO)

I don't think you can assume that. I think the way we've looked at this is to say that what are the levers we can pull today which either will not damage the business or are frankly not required because there's no one out there to buy the product? That's what we've done. We have pulled back hard on those levers. We have pulled back hard on the capital distribution piece. All of these things, ultimately, we can reverse. At this point in time, with the lockdowns that we're seeing, with the macro impact that is on the way, the fact that our economy is cash-based, we think it's a prudent thing to do. To recognize Matthew's points, we're going to sort of manage this ship to what the wind's blowing. We will move it. We'll move it. We're moving it slightly daily or weekly.

It is really to make sure we come out of this in a strong place. Okay. Thank you. Thank you. All right.

Michel Morin (VP of Investor Relations)

Not surprisingly, we've spent more time than we normally do. Thank you for all your big picture questions. They've given us an opportunity to tell you how we're thinking about things. I think that's more important than anything else. I do want to tell you that the team is extremely motivated, really focused. We've never acted more tightly and more swiftly. It's one of our strategic advantages. We can react and adapt very quickly with a very, very efficient team. We're doing the things that we think are right. We're keeping our subscriber base, and we're keeping it close, connected, and enhancing our equity brand value with them by protecting them. We are keeping our operating cash flow targets to protect you as investors.

We think the right thing to do here today is to adapt to create more liquidity to help preserve our strong balance sheet, the big bazooka that we're talking about. Because we are uncertain about the longevity of this crisis, but very optimistic and very certain about the future. We talked about that. We talked about phase three during our prepared remarks. We're really diligently preparing for that. There will be good changes. All of those changes point to those digital highways that we've been building being more essential than ever. If anything has come out of this crisis, it is that there will be a renewed, enhanced, not-to-turn-back digital wave in our markets.

We are doing everything to be, on the one hand, cautious, but on the other, really ready to pounce back and lead that recovery because we think the approach that we're taking will make us emerge even stronger than we are today. I hope you appreciate that our strategic stance makes a lot of business sense.

Mauricio Ramos (CEO)

Thank you for dialing in today. I hope everyone's staying safe, you and your families. We look forward to interacting with you continuously. Thank you.

Operator (participant)

Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.