Earnings call transcript: Grupo Rhodoplast shows resilience in Q2 2025

Grupo Rhodoplast (RHOD) reported a slight decline in consolidated sales for the second quarter of 2025, down 0.9% year-over-year, but showed a 12% increase quarter-over-quarter. The company also saw a significant 77% rise in net income compared to the previous quarter. Despite challenging market conditions, the stock remained stable, with a minor dip of 0.38% in the latest trading session. According to InvestingPro analysis, the company appears undervalued at current levels, with analysts setting price targets ranging from $1.34 to $2.37.

Key Takeaways

• Net income surged 77% quarter-over-quarter.
• Sales increased by 12% sequentially.
• SG&A expenses decreased by 7%.
• The EBITDA margin improved by 110 basis points.

Company Performance

Grupo Rhodoplast demonstrated robust quarter-over-quarter performance, marked by a substantial increase in net income and improved EBITDA margins. The company’s strategic focus on streamlining operations and reducing inventory levels contributed to these positive results. However, the year-over-year decline in sales highlights ongoing challenges in key markets like Mexico and Argentina, affected by economic volatility and construction slowdowns.

Financial Highlights

• Revenue: 2.95 billion, up 12% quarter-over-quarter, down 0.9% year-over-year.
• Net income: Increased by 77% quarter-over-quarter.
• SG&A expenses: Decreased by 7%.
• EBITDA margin: Improved by 110 basis points sequentially.
• Net financial debt: Reduced by 3%.

Outlook & Guidance

Looking ahead, Grupo Rhodoplast maintains a cautious outlook for the remainder of 2024, focusing on expense control and cash discipline. The company is targeting a net debt to EBITDA ratio below 2.5x, with expectations of potential improvements in the Argentine construction sector. Continued investments in digital platforms and services are anticipated to drive future growth. As a prominent player in the Building Products industry, the company’s EV/EBITDA ratio of 9.2x reflects its market position. Get deeper insights into Grupo Rhodoplast’s valuation and growth prospects with InvestingPro’s comprehensive research report, part of the coverage of 1,400+ top stocks.

Executive Commentary

CEO Carlos Rojas Abimrod emphasized the company’s strategic direction, stating, "We’re building a more balanced and resilient business model." CFO Andres Pliego highlighted the financial strategy, saying, "We will continue to be very focused on being very disciplined with our financial approach." These statements reflect the leadership’s commitment to navigating economic challenges while positioning for long-term growth.

Risks and Challenges

• Economic volatility in key markets like Mexico and Argentina.
• Water stress and changing rainfall patterns impacting demand.
• Potential supply chain disruptions in emerging markets.
• Competitive pressures in the water services sector.
• Ongoing challenges in maintaining gross margins due to external factors.

Q&A

During the earnings call, analysts inquired about the timeline for Bevia’s breakeven point, with expectations set for the next few quarters. Questions also focused on maintaining U.S. market profitability and addressing gross margin challenges. Executives provided insights into the potential of water treatment plants in Argentina and Brazil, indicating future growth opportunities.

Grupo Rhodoplast’s Q2 2025 results reflect a strategic focus on operational efficiency and market adaptability, positioning the company for potential recovery in challenging economic environments. With analysts forecasting profitability this year and a beta of 0.68 indicating lower volatility than the market, the company shows resilience despite current challenges.

Full transcript - Rotoplas SA de CV (AGUA) Q2 2025:

Conference Moderator: Good morning, and welcome to Grupo Rhodoplast’s results conference call. Please note that today’s call is being recorded, and all participants are currently in listen only mode to prevent background noise. The host will open the floor for questions later. Today’s discussion contains forward looking statements. These statements are based on the environment as we currently see it.

And as such, there may be certain risk and uncertainty associated with such statements. Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially. The company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, further events, or otherwise. Please allow me to remind you that the company issued its earnings press release yesterday after market close. It can be found in the Investors section of its website.

Also, the presentation for the call and the webcast link are in the Investors section. Today’s call will

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: be hosted by Mr. Carlos Rojas Abimrod, Chief Executive Officer and Mr. Andres Pliego, Chief Financial Officer. I will now turn the call over to the speakers. Good morning, everyone.

Thank you for joining us today. We continue to operate in a volatile environment. And each quarter we’re proving that our strategy is working and that we can deliver sequential improvements despite of external headwinds. For this quarter in particular, we knew we were facing a challenging comparison base mainly for two reasons. In second quarter of twenty twenty four, we had record storage sales in Mexico due to the severe water scarcity in Central Region.

Also while in Argentina was already under macroeconomic pressure in the first two quarters of last year, the worst came in the second half. This explains the year over year sales decline in both Mexico and Argentina. That said, I want to emphasize the solid performance across the rest of the business. We saw growth and improved profitability in The U. S, Brazil, Central America and Peru.

Our services platform also continued its expected trajectory, reducing its losses quarter over quarter. I want to highlight the performance in The U. S, where we not only delivered revenue growth, but also achieved positive EBITDA for the quarter, a key milestone that reflects the progress of the Keep It Simple strategy, which focuses on streamlining our structure and enhancing operational efficiencies across e commerce, commercial teams and branch operations. At the consolidated level, group sales declined only 0.9% year over year. However, sequentially, net sales grew 12% compared to the first quarter of this year, reflecting good momentum despite the tough year over year comparison.

While we are not only yet where we want to be, this marks our third consecutive quarter of EBITDA margin improvement. In a context of soft demand, these results reflect our efforts to reduce expenses and focus on cash discipline, two areas within our control, unlike the broader economy or weather conditions. We’ve made meaningful progress optimizing working capital, particularly inventory levels in Mexico and Argentina and have taken a very selective approach to CapEx. We’ve also been active in managing our debt on which Andres will provide more details shortly. These will remain core priorities going forward.

Looking ahead to the second half of the year, we expect a softer comparison base. Still, we remain cautious and we’ll continue to manage the business with discipline, especially given the ongoing uncertainty around consumer demand in some of our key markets. Let me now walk you through the progress of our strategic pillars. In Mexico during the semester, we continued evolving our product offering with the launch of the vertical pinnacle and an IoT enabled water level sensor. Both have been well received by the market.

E commerce also gained traction supported by improved customer service through AI based tools. In The U. S, we delivered double digit year over year revenue growth and this quarter remained an important milestone. After five consecutive quarters of margin improvement, we reached positive EBITDA, clear evidence that our disciplined execution and commercial focus are paying off. Our service platform, especially Baby and RSA delivered strong results.

Baby has surpassed 155,000 active subscribers and continue to scale efficiently, thanks to improved unit economics. Service revenues grew nearly 17% this quarter. And while we’re at breakeven yet, we’re getting closer. And the sequential improvement in service margins confirms that our strategy is working, transforming Rotopas into a more resilient business with recurring revenues, better visibility and stronger, longer lasting relationships with our customers. We continued advancing our digital agenda including scanning our B2B and B2B2C e commerce platforms, launching a national logistics control tower in Mexico for better coordination and visibility, piloting the AI driven predictive sales tools to enhance customer engagement and planning.

These investments are laying the groundwork for tech enabled scalable growth. Beyond financial discipline, remain deeply committed to making a positive impact in the communities where we operate. In Peru, we partnered with SUNAS, the National Sanitation Regulator, to donate water storage solutions that benefited over 11,000 people across schools and shelters. In Mexico, we collaborated with Hurricane to deliver rainwater harvesting systems to community centers, positively impacting certified schools in Nuevo Leon. These initiatives reflect our core purpose and reinforce the importance of cross sector collaboration in addressing water access challenges.

Before closing, I’d like to share that yesterday, the Board of Directors approved calling an extraordinary shareholders meeting to propose a capital reimbursement of $0.25 per share in cash. As you might recall, this is half of what we have been distributing the last few years, which goes online with our cautious view going forward. To conclude, this quarter represents another important step forward. We’re building a more balanced and resilient business model, delivering sequential improvements in profitability and cash flow, while investing in technology and services that will fuel sustainable growth. We’re making progress and we’ll stay focused on the things that we can control to keep moving in the right direction.

Thank you. I’ll now turn the call over to Andres.

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Thank you, Charlie, and good morning to everyone. I will now walk you through the financial performance in more detail. Since the Agua Day, we’ve been clear about two key financial priorities, controlling expenses and managing cash with discipline. While we still have room to improve, I am pleased to report that we’re seeing encouraging signs for the second consecutive quarter. Despite the slight year on year sales decline previously discussed, our expense discipline is yielding results.

SG and A decreased 7% and as a percentage of sales improved from 36% to 34% year over year. This efficiency supported continued sequential EBITDA margin expansion even amid lower fixed cost absorption in Mexico and Argentina due to softer volumes. Net income was also influenced by lower operating performance, but showed notable improvement quarter over quarter. Looking at sequential progress. Compared to the first quarter, consolidated sales increased 12%, EBITDA rose 23% and margin improved by 110 basis points.

Net income jumped 77%. Additionally, we reduced net financial debt by 3% and shortened the cash conversion cycle by twelve days. Overall, while the year over year comparison was challenging, our quarter over quarter progress confirms we’re heading in the right direction. Regionally, as mentioned earlier, Mexico product segment faced high comparison base due to last year’s exceptional results. However, services continued to expand with Varia and RSA leading the way.

In Argentina, sales remained relatively stable. And while broad based recovery hasn’t materialized, we did see some improvement in volumes. In The U. S, we achieved growth both in local currency and Mexican pesos. More importantly, our streamlined operations and focus allow us to reach 8% EBITDA margin, marking another quarter of progress.

In other markets, Peru, Central America and Brazil, we posted double digit growth and healthy margins, highlighting the strength of our diversified portfolio. Looking at segment performance, services represented 10% of quarterly sales and continued to grow at a double digit rate. Bevia added over 11,000 new active subscribers during the quarter. And our water treatment operations in Mexico and Brazil maintained strong momentum. Although still negative, EBITDA losses are narrowing thanks to greater scale, stronger expense control and better unit economics, particularly in Iberia.

In Products, sales grew in all regions except Mexico and Argentina. As previously mentioned, profitability was affected by lower fixed cost absorption in two countries, despite the year over year reduction in expenses. As Charlie mentioned, disciplined cash use and debt management remain key priorities, supported by active working capital management and focused approach on strategic CapEx. Operating cash flow increased 28% year over year. Regarding liquidity, our cash balance remained stable and we reduced net financial debt quarter over quarter.

This reflects our consistent focus on maintaining a healthy financial position. Our net financial debt to EBITDA ratio stood at 3.2 per tons, primarily due to lower trailing EBITDA. We see this as temporary and expect to reduce this ratio below two times as EBITDA improves. Total debt stands at MXN 4,500,000,000.0, down 2% versus December. This includes $515,000,000 in short term debt, mostly for working capital and MXN 4,000,000,000 in long term debt, our fixed rate sustainability bonds.

Our blended cost of debt remained stable at 8.7%. CapEx in the quarter represented 4% of sales, 11% lower than the previous year. Most of the investments went to services in Mexico and Brazil, mainly building water treatment plants and purchasing various systems. As part of our disciplined approach, we’re prioritizing essential CapEx for our core business. In services, most investments are tied to revenue secured projects, meaning we deploy capital only after contracts are signed or clients are confirmed.

This ensures better visibility and a clear return on our investment. On the ESG front, we were proud to be recognized by CDP in their 2025 Supplier Engagement Assessment. Rotoplas received the highest global rating, reflecting our leadership in carbon measurement, emission targets and supplier collaborations. We were one of only two Mexican companies to be recognized. We also completed our first biodiversity analysis for Mexico.

This marks an important step in understanding our broader environmental impact beyond climate. The study assessed risks, opportunities and dependencies across our operations and supply chain, aligned with international frameworks such as TMFT. Before going to the closing remarks, I’d like to share with you some of the quotes of the people whose lives have been transformed to access to water. You’ll find them at the bottom of the slide. This impact is only possible thanks to the dedication of our team and continued trust of our stakeholders.

Together, we’re not just delivering solutions, we’re improving health, dignity and opportunities for thousands. This sense of purpose help us help to guide our decision. We remain focused on what we can control, cost efficiency, operational discipline and building momentum through sequential improvements. Thank you again for your attention. We’re now ready for your questions.

Mariana, Q&A Moderator, Grupo Rhodoplast: All right. Let’s get started with the Q and A session. Thank you all for submitting your questions. First question comes from Felix Garcia at Palaci Research. Hello.

Thank you very much for the call and for taking my question. And the first question is related to Veria and the investments that the company is making. Do you estimate that Veria will breakeven within the next twelve months?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Thank you, Felix. As you have heard us say, Devia is in growth mode, right? So we are investing a lot in Devia. We’re investing a lot internally in IT, in the actual filter systems. So we continue to grow significantly in the almost 30% to 50% ranges year on year.

So we continue as we continue growing, we expect that both top line and profitability to improve. So we do expect an improvement in profitability as we’re seeing. And we do expect Tuberia to reach breakeven in the next few quarters for sure.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you. We have the second question from Felix Garcia, and it’s regarding The U. S. Do you expect operating profitability to remain steady during the second half of the year?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Thank you, Felix, again. We do. We as you know, we have invested a lot in The U. S. As well within the team, within the systems, within efficiencies.

So we finally see a profitable U. S. Business, and we do expect to maintain that. We it was not an extraordinary event that happened. It was part of organic growth.

And so we do see that profitability to be maintained. I don’t know, Charles, if you want to add anything in these two questions.

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: Nothing else to add. We’re very excited about both businesses in their trend. Very happy to see that that is that close to being breakeven and happy to see that The US is at the breakeven level. And The U. S.

Is having still some difficulties in the market, in relevant markets such as agriculture, but other markets are demand is improving. There’s beginning to be some water stress where we’ve had a lot of rainfall in the past. And the business is performing

Mariana, Q&A Moderator, Grupo Rhodoplast: in

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: a much more efficient way delivering this breakeven. We see this trend going forward and we’re very happy about those results.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you. Let’s take a look at our next question. Martin Lara from Meander Global Research. Could you please explain the improvement in the cash conversion cycle to fifty four days in the second quarter from sixty three days in the first quarter? What can we expect over the rest of the year?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Thank you, Martin. So yes, we have put a lot of emphasis in working capital efficiency as well, not only on expenses but also on the balance sheet efficiency. We the main I would say that the main reason for the reduction was inventory reduction in Brazil in Argentina, sorry. We were coming off very high inventory levels in Argentina and also a more efficient inventory management in Mexico. So both Mexico and Argentina reduced inventory to more optimal levels.

We expect this to continue. We’re at 15% of working capital as a percent of revenues. So we’re betting very close to the target. But we will certainly continue to be very efficient in cash conversion cycle. So we’re also happy about what the team has done in those areas.

Mariana, Q&A Moderator, Grupo Rhodoplast: Now moving to the next question. Orlando Alcantara from BTG Factual. What was the main driver for positive EBITDA in The U. S? Can we expect lower EBITDA next year?

Same thing that happened in Mexico, first half of last year versus this 2025 comparable date? Or shall we expect this positive trend to continue?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: Orlando. Thanks for joining. Just related to what I had commented, it’s on this strategy about simplifying the business. It’s a business that has been operating in a much more efficient way. Efficiency is probably the biggest driver.

Is a business that is doing well in terms of profitability even in a challenging market. The market has not been very favorable. So we do expect going forward that this trend will continue and that profitability will continue for the rest of the year and for next year. Media is the business where we do want to continue to grow, so some investments might impact at some point the business. But for the moment, we do see this positive EBITDA trend going on for the future.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you. Moving on to the next question. Actually, we have three questions, but I’m gonna read them separately. The first one is from Roberto Nava, GBM. So that is what US sales up 21% year over year and EBITDA positive.

Would you be able to give us some more guidance as to the margin? And what can we expect for this region in the next few quarters? I think we already covered on this, but would you like to add something else, Andres or Charlie?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Not really. We are not giving any specific guidance at this stage. But we yes, we’re very optimistic about the future, we have mentioned.

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: Just the environment we’re operating in is more and more volatile. So guidance is something that we’re not doing at the moment. What we’re doing is we’re being very we’re keeping a very close eye at what’s happening in each market and we’re acting in a very agile way. So we do think that we can have stability in results going forward despite very volatile markets and we expect this to be the case for The U. S.

As well.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you. Roberto’s second question is about gross margin. Gross margin fell year over year. What portion of this contraction is structural versus temporary? And are further pricing actions planned?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: One of the biggest challenges in gross margin is that our two main markets, Argentina and Mexico, in the products business, which is the biggest business, demand has been slower. Construction has been much lower in these two markets. And in Mexico, particularly in the biggest part of the country, which is central part of Mexico, last year we had very heavy rains and this year was not an exception of that. These last two years, this year, five, and now year, ’24, have been the years with the most rainfall since we’ve been recording rainfall in Mexico, I mean, as a country, recording as a country. So these two challenges impact our ability to have better margins, and we do think it’s temporary.

Andres, anything else that you’d like to add?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Yes. Probably, it’s on the structural, it’s the opposite, right? We’re trying to be more efficient in our cost management. So it’s definitely external shocks and hopefully temporary rather than structural. Structural, I think, we’re compensating what we’re seeing in the market.

Mariana, Q&A Moderator, Grupo Rhodoplast: Okay. Moving forward. The next question that we have is in Argentina. Are you seeing early positive signs in construction? And how competitive is the market regarding pricing power?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: Argentina has improved a little bit, although it is one of the segments in the country that is most behind. There has been a lot more recuperation in the other segments. Construction is the one with the biggest

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: delay.

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: So even though it has recovered a little bit, it is still under the levels we have seen before the restructuring of Argentina. And we do think that it has a potential to have a much higher corporation. One of the things that is that may possibly happen is mortgages might become more feasible in Argentina, which would increase building in in in in the country very much. Andres, anything else that you’d like to share?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: No. Thank you, Charlie.

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: And just regarding pricing, yes, costs have gone up and demand has gone down. So that the real crunch in Argentina, which makes it difficult for markets.

Mariana, Q&A Moderator, Grupo Rhodoplast: Let’s take a look at our next question. It’s from Gerardo Santos, Signum Research. Do you expect margins to improve in the second half of the year? What key factors would support or confirm that improvement? And the second one that is also related to the first one is also what are your expectations compared with the second half of twenty twenty four?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: Gerardo, thanks for joining. Yes, like we said, it’s very volatile. And it’s been very difficult to be accurate in projections of this kind. For the biggest market in the company, which is Mexico, construction is very, very slow. We do think that it’s going to continue to be slow for the remainder of the year.

Water scarcity, which is a big factor for our business, we had the biggest the most amount of rainfall in July since we since the country has ever recorded any data rainfall. We do not know whether this will continue. It’s not necessarily going to continue for the remainder of the rainy season, and that would be a factor that would affect demand. But for our main market, Mexico, we do think that it is slow in terms of demand for the rest of the year. Now on the positive side, all of the emerging businesses are growing regardless of the situation.

And we expect to see that to continue.

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Andres, anything else? Yes. Probably just to add, regardless of market conditions, which Charlie explained, we will continue to be very focused in controlling what we can control, which is mostly expenses, CapEx, investments, working capital, costs as well. So regardless of the market, we will continue to be very focused on being very disciplined with our financial approach in general.

Mariana, Q&A Moderator, Grupo Rhodoplast: We have a follow-up question from Orlando Alcandara. On Pebbia, we observed average of 6,000 users added per quarter. Now we are observing a higher trend of apps. What is driving this services momentum?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: It’s it’s it’s a disruptive model for Mexico, Bevya. I didn’t get a chance to greet you Orlando alone. Welcome. Thanks for your question. So Bevia is a disruptive offering for Mexico compared to the traditional way of consuming drinking water.

And so as it gets more awareness in the market, it continues to grow because it offers significant benefits versus the traditional model of drinking water. And so, awareness is increasing and that increases demand just as any disruptive solution. We’re going from innovators to early adopters and now probably more into early maturity. So, the model is being validated in a very successful way and that’s why we’re very positive about Bevia. The other thing is that our capacity to serve customers is improving.

It’s a very digital business. That was our strategy and we’ve been developing digital capabilities. And as these digital capabilities continue to be deployed, we are able to serve more customers in a better way, offering a better experience to these customers. So, I think it’s both between the awareness and our capabilities that our ability to onboard new customers will continue to has been growing and will continue to grow.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you. We have another question from Rodrigo Salazar, AM Advisors. Could you detail how much CapEx is being allocated to the product segment? Why it’s lower than the previous year? And where the main cuts are?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Thank you, Rodrigo. Nice to read you. So yes, most CapEx has, as I briefly said in my remarks, most of the CapEx has been coming from services. I would say about 80% of the CapEx deployed in the first in the second quarter in the first half of the year was in services, mostly Bevia, water treatment plants in Mexico and water treatment plants in Brazil. The rest of the CapEx is on maintenance CapEx, which is a regular CapEx program.

Remember that we have done significant investments in our technology in brow molding. So we are coming off of a high investment period in the last couple of years. So there is no major need for CapEx for the products business at this point. So everything that we’ve been investing is more on the services growth part of the business.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you, Andres. There’s another question from Rodrigo, and it’s about the treatment plan. Could you update us on the water treatment plan’s pipeline and outlook?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: Can you repeat the question? Sorry, Mariana.

Mariana, Q&A Moderator, Grupo Rhodoplast: Sure. It’s about the treatment plants. Yeah. Could you update us on the water treatment plant pipeline and outlook?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: Hello, Rodrigo. Welcome. Water treatment plants in Mexico is facing some slow customer conversions as there is some uncertainty in the country, particularly in the tariff situation between The U. S. And the world.

Some decisions tend to be postponed. Still, some companies really need to implement solutions, so that’s working positively for us. But in Argentina, which is also part of the water treatments business, we’re seeing very strong demand. And so that continues to improve our treatment or water treatment plant business. Argentina sorry, in Brazil, as there’s been privatization of water services, these companies require a lot more services.

There’s a lot more discipline in enforcing the rules. And so demand for our kind of solutions continues to increase. Booking is something that improved in a big way last year. And this year, we expect it to continue to improve.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you, Charlie. We have a follow-up question from Roberto Nava. With the rising net debt to EBITDA to 3.2x, can you share what would be your comfort zone on your current macro conditions? Is a reduction achievable in this year, 2025?

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Thank you, Roberto. That’s, yes, probably the most important indicator. That and ROIC is probably the two most important indicators that we’re following. We’re definitely not happy with the 3.2. We expect it to reduce to be reduced in the following quarters.

Right now, the net debt so the numerator is actually not that bad. Continue to control and continue to expect to lower that as we move forward. The trailing twelve months EBITDA is what is impacting the indicator the most. We would feel obviously comfortable that below 2.5, below 2x as we used to be in the last in the history of the company. So we do expect to continue to follow that closely and expect to continue to bring that indicator lower for sure.

And if I may add on thank you, Roberto, for

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: the question. In the last twelve months, as we can remember, third quarter and 2024 and then the 2025 were very low quarters in terms of EBITDA revenues and EBITDA. So, we have three quarters of that EBITDA component, the last the trailing twelve months that affected in a negative way. If we were to use the last quarter, second quarter of twenty twenty five, which was a much better quarter, that 3.2 times of net debt to EBITDA would be much lower, would be closer to 2.5x. So we do expect that results will continue in a more stable way at these levels.

And if that’s the case, yes, we’re positive that this metric will improve.

Mariana, Q&A Moderator, Grupo Rhodoplast: Thank you, Charlie. So that was our last question. Thanks again for participating. We appreciate your questions. Please don’t hesitate to reach out if anything else comes up.

Would you like to say something else, Andre or Charlie?

Carlos Rojas Abimrod, Chief Executive Officer, Grupo Rhodoplast: No. I’m just grateful for your participation, and see you next time.

Andres Pliego, Chief Financial Officer, Grupo Rhodoplast: Thank you. See you

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