Good morning, everyone, and welcome to Ferreycorp's First Quarter 2026 Earnings Conference Call. Joining me on the call today is Mrs.

Mariela García, our Chief Executive Officer, and Mrs. Patricia Gastelumendi, our Chief Financial Officer.

We will begin the analysis of the company results with an overview of the quarter. At the end of our prepared remarks, we will open a Q&A session.

At that point, if you wish to ask a question, please use the chat box located below your screen or raise your hand and we will announce you. In the meantime, we kindly ask all participants to keep their microphones off.

Please note that this call may include certain forward-looking statements. These statements related to expectations, beliefs, projections, and other matters that are not historical facts and are therefore subject to risks and uncertainties that may affect future results.

With that, I now would like to turn the call over to Mariela García. Please, Mariela, go ahead.

Thank you, Milagros, and good morning, everyone. As always, we will review a brief presentation, which is available in our website, to support the discussion of the company's results and key highlights for the first quarter of this year, according to the financial statements that we published yesterday.

Before we move on, I would like to highlight an important event that occurred after our last call. On March 25th, we held our general shareholders' meeting, where a cash dividend of 282 million was approved, representing 60% of our 2025 free disposal profits and reaching the upper limit of our dividend policy.

Given that we had paid two advance payments of $200 million in September and January, the remaining payout was 88 million, equivalent to 0.0949 soles per share. The payment is scheduled for next May 8th, and the record date was April 27th.

Now let's go to slide 4 in our presentation. I am pleased to report that Ferreycorp has started 2026 with strong commercial momentum.

For the first quarter, we achieved consolidated sales of $578 million, representing an 8.3% growth in US dollars compared to the same period last year, while our revenue in local currency, nuevos soles, remained flat at 1,980 million due to currency translation. It is vital to emphasize our growth in US dollars, our primary currency of business.

This growth really demonstrates the underlying resilience and robust demand we are seeing across our strategic sectors. This commercial momentum was primarily driven by Caterpillar machine sales in the large-scale mining and also in the infrastructure sectors.

Furthermore, our profitability remains healthy, as evidenced by an ROIC of 8.3% and an ROE of 13.5%. It is important to highlight our disciplined focus on operational efficiency, which led to a 10.4% reduction in SG&A expenses compared to the same period last year.

Since our sales, procurement, and financing operations are primarily denominated in US dollars, this quarter results were influenced by significant currency volatility. At the end of March 2026, the exchange rate closed at 3.495 soles, representing a 5% appreciation of the sol compared to a year ago that was 3.677 soles.

That's why sales in soles look smaller than last year, but in dollars, as we have already explained, are higher. At the same time, the average exchange rate of the period was 3.393, that was lower to that of the first quarter in '25, 3.74.

However, we have seen an upward trend during the quarter and compared to December, for example. That increase, that upward trend, has created some additional distortions, and we see an exchange loss in the quarter.

There's two effects, no? The comparison to the average in first quarter 2025 that affects sales numbers, for example, and at the same time, an upward trend in the last months that generate the exchange loss that we are recording.

Therefore, for an accurate assessment of our business performance, we recommend focusing on the adjusted figures that we present for comparative purposes. Now let's go to slide 5.

Turning to the political landscape, while we're currently in a transition phase between presidential election rounds, Peru's core economic framework remains stable. The first round of the presidential election on April 12th—so we had the first round in April 12th, and the second round is scheduled for June 7th.

Therefore, there's still uncertainty on the final winner and in the future economic policies. However, we are still confident on Ferreycorp's resilience and also opportunities for growth, which are rooted in the mining opportunities in the country and the need to make investments to close infrastructure gaps, which is the reason we have successfully navigated diverse political cycles throughout our 100-year history.

We are closely monitoring the environment, but our primary focus remains today on supporting our customers' operations and driving shareholder value independent of these short-term political rhythms. Looking at the first quarter of 2026, the country has maintained a resilient economic performance, with GDP growth reaching 2.7%.

At the same time, inflation has remained stable at 2.4%, which provides a predictable and healthy environment for business operation. This economic momentum is primarily driven by strong activity in the private sector, highlighted by a 12.5% expansion in the construction industry and a significant 11% increase in private investment, factors which together provide a very solid foundation for our ongoing growth.

Please now turn to slide 7 to discuss financial highlights as of March. As mentioned before, in the first quarter, consolidated sales amounted to 1.98 billion, representing a 0.3% year-over-year increase in local currency.

As we already mentioned, in dollars, the growth is 8.3%, $578 million compared to $533 million last year. The sales mix for this first quarter was led, as always, as we are seeing through the years, by spare parts and services that represent 46% of sales.

However, the stake of prime products has increased, the 46% of parts has been followed by a prime product participation of 41%, other business lines of 8%, and rental and used equipment of 5%. This composition reflects that machinery sales have seen significant momentum in this first quarter.

In this first quarter, we have seen increased customer demand for this new equipment, and that pushed the participation to 41%, as I just said, compared to the 32% last year. Notably, deliveries of large-scale units for mining also has increased her participation.

It has almost doubled, reaching 14% compared to 8% a year ago in the first quarter. Similarly, the share of construction and allied equipment grew to 27%.

This robust machinery sales growth effectively expands our installed base for aftermarket sales in the future. Now let's go to slide 9.

In spite of the solid revenue growth, our operating expenses amounted to 271 million soles, representing a 10.4% reduction compared to the 302.6 million recorded in the first quarter last year. As a percentage of sales, operating expenses improved significantly to 13.7%, coming down from the 15.3% in the previous year.

This performance clearly demonstrates the result of our strategic focus on cost optimization and continuous efficiency that was announced in our last calls when a lower gross margin was explained, I remember back in third and fourth quarter calls. Furthermore, it underscores the corporation's agility in adapting to a new competitive landscape, effectively offsetting that gross margin compression observed during the quarter.

Regarding the operating profit for the first quarter of 2026, profit stood at 170 million soles, representing a 14% decrease year-over-year. If we look at the adjusted operating profit after excluding the impact of the foreign exchange fluctuations, profit stood at 188 million, representing a 13% decrease.

As previously discussed, these margins reflect the impact of currency volatility, the current business environment, and a sales mix that differs from the previous year. EBITDA for this quarter amounted to 247 million and 265 when consider adjusted numbers, both showing a decline of 8% compared to the same period of the previous year.

Regarding margins evolution, gross margin for the first quarter was 22.1% compared to 25.4% in first quarter '25. Operating margin stood at 8.6% compared to 10—to 10, again, to first quarter '25, while net margin was 2.7% compared to 7.3%.

Similarly, the EBITDA margin reached 12.5%, down from the 13.6% a year ago. It is critical to note that our nominal margins are subject to the distortions we just mentioned and, moreover, in periods of more currency volatility.

Therefore, as I said before, we recommend evaluating adjusted figures. When analyzing adjusted metrics, we observe a more moderate reduction across our margins, a performance that remains consistent with the trends observed throughout the second half of 2025.

As stated, this quarter results were primarily influenced by the sales mix, and it is important to remember that margins in our machinery lines are naturally lower than those in spare parts and services, which are captured through the equipment life cycle. These margins differences reflect that the differing operational complexities involved in importation, distribution, and workshop servicing for each of these businesses.

Now I will turn the call over to Patricia Gastelumendi, our CFO, to continue the discussion on the financial results of this quarter. Please, Patricia.

Thank you, Mariela. Moving to the net financial expenses, this amounted to 25 million soles for the first quarter of 2026, representing 1.6% of sales.

This is a slight increase from the 23 million recorded in the same period '25, reflecting two distinct dynamics. First, we saw a strategic rise in our leverage to fund the inventory expansion required to meet robust customer demand.

Second, this volume increase was partially offset by our proactive liability management. We successfully optimized our cost of debt through proactive liability management, reducing our average interest rate to 4.64% despite a higher leverage level of 4.86%.

This decline was attributed to a reduction in average short-term interest rates, which fell from 5% in first quarter '25 to 4.26% in the first quarter '26. These strategic moves were part of a continuous evaluation of market conditions and diversified financing alternatives aimed at containing the growth of financial expenses while positioning the company to capitalize on the expected downward trend in interest rates.

Ultimately, this underscored our ability to maintain financial discipline and access to competitive funding even as we scale our operation to support future growth. I will now move to FX results.

Now let's go to slide 13. As we have mentioned before, our company has a natural hedge against exchange rate changes because most of our sales, invoices, and debt are denominated in US dollars.

Consequently, the impact of currency fluctuation is primarily a temporary matter of valuation timing. This occurs because we record inventory at the exchange rate at the time of purchase, while our dollar-denominated debt is updated monthly.

During the first quarter, we recorded an FX loss of 67.2 million. This was driven by 3.6% devaluation of nuevo sol as the exchange rate moved from 3.368 at year-end 2026 to 3.495 as of March 31, 2026.

This contrasts significantly with the 35.2 million gain reported in the first quarter '25. It is critical to emphasize that these fluctuations represent noncash accounting effects.

Now let's move to the slide 14 to review the net profit during the first quarter 2026. Net profit during the first quarter reached 53 million, a 63% decrease year-over-year.

This result was primarily driven by, first, an FX loss of 67 million compared to an FX gain of 35 million in the first quarter '25; second, a reduction in EBITDA equivalent to 33 million; and third, lesser depreciation and amortization totaling 6.1 million. These factors were partially offset by a decrease in income tax.

When excluding the foreign exchange impact, adjusted net profit stood at 110 million, representing 17% decrease compared to the 133 million reported for the same period last year. As previously noted, exchange rate trend was significantly different in these two years we are comparing.

While the sol devaluation across the first quarter of 2025 positively impacted the bottom line, the adjusted results provide a different perspective. Please let's go to slide 15 to review financial resources and fund leverage.

Total debt for the first quarter of 2026 amounted to $755 million, higher 22% than the $619 million reported last year. 61% is short-term debt and 39% is long-term debt.

In this quarter, we restructured a portion of debt, and additionally amounted will be restructuring during the year as we maintain our financial discipline by securing medium-term debt. During the first quarter of 2026, the company had a negative free cash flow of 248 million soles, mainly because of higher working capital in the quarter.

Leverage ratio net debt/EBITDA as of March 2026 stood at 2.70. Additionally, the adjusted net debt/EBITDA ratio amounted to 1.59 times, way below our covenant limit of 3.5 times.

Now we will move to slide 16 to review our total assets and cash cycle. As of March 31, our total assets reached 5,701 million, representing a 4.8% increase compared to the first quarter of 2025.

This growth was primarily driven by a 317 million expansion in inventory, mainly dedicated to mining trucks scheduled for delivery in the coming months. Additionally, accounts receivables increased marginally by 12 million, reflecting strong sales performance during March.

Meanwhile, net fixed asset rose by 85 million year-over-year. The increase of fixed asset was mainly composed by infrastructure investment, new equipment acquisitions, and the inclusion of more units into the rental fleet.

Regarding our operational efficiency, the cash conversion cycle stood 159 days compared to 149 days in March 2025. This trend was influenced by inventory days, which rose from 144 to 149 days as we strategically expanded our stock to meet anticipated demand.

Additionally, payable days decreased from 41 to 37 days during the same period, while our collection days remained stable and healthy at 46 days. Finally, our asset turnover ratio was 1.12 at the close of the quarter, slightly below the 1.17 achieved in the previous year.

Now let's turn to slide 17 to discuss our CAPEX. As previously mentioned when explaining the variation in main assets components, net investment in fixed asset as of March reached to $12 million.

The main items were, first, $6 million in infrastructure investment; second, $3 million in machinery and equipment for workshops; third, $3 million net investment in rental fleet. I will turn the call back to Mariela now for the closing remarks.

Thank you, Patricia. I would like to close today's presentation with some final reflections.

During this quarter, we continued to deliver robust results, demonstrating a deep expertise and comprehensive understanding of the market we serve that is unique to our 100-year history. Regarding our value proposition, the robust demand for our machinery serves as a powerful indicator of our underlying business health and the deep trust our customers place in Ferreycorp as a strategic partner.

Our market leadership is further reinforced by a world-class aftersales infrastructure and highly specialized technical teams. Central to our resilience is a disciplined approach to operational efficiency, which led to a significant reduction in operating expenses this period.

Furthermore, we remain dedicated to the active pursuit of synergies across our portfolio and the continuous optimization of our processes. Lastly, I want to emphasize that despite global dynamics and currency volatility, our financial strength, clear strategy, and operational adaptability have successfully protected our core business.

We are a company built to last, as Caterpillar products, and this enduring resilience allows us to continue delivering consistent value to our shareholders. Our results this quarter demonstrate that Ferreycorp remains well positioned to navigate external headwinds while maintaining our commitment to long-term profitable growth.

This concludes our presentation for today, now we will open the Q&A session. Please raise your hand or write through the chat and we will give you the word.

Thank you. I think mics are available, any of you that want to make a question, just put on your mic and we are ready to listen to you, if there's any questions today.

Hector, please, Hector, go ahead.

Hi, Mariela, team. Good morning.

Thank you for the opportunity. I was hoping you can expand a little bit on the sales, parts and services division.

It's the first time in quite a while that we've seen a decrease of that magnitude. If you can help us better understand kind of the drivers behind that decrease, that would be incredibly beneficial.

Thank you.

Thank you. Yes, first of all, we had some comparison to first quarter last year, we had this five-year-term contract with a customer where we had the autonomy trucks, and at the beginning, we forecasted the way the repairs were going to be made, and we accrue.

We receive the payment every day, every hour the trucks are running, we receive payment, but then we accrue the income and cost of sales and profit according as the moment of each intervention of the truck. There was some changes of our forecasting back last year, last year we had more revenues coming from that.

At the end of the year, we also had a closure of that contract and we entered to a second period of the contract. We renewed the contract to a second period, by the end of the year, we also accrued for some of those income that had been registered as deferred asset until we concluded the contract.

That gave us a boost last year, and also some postponements in this first quarter of repairs that are going to be closed for the second quarter. We should regain the growth in the quarters to come.

Thank you, Hector.

Thank you, Mariela.

Could you please give details on strong demand for new equipment in large-scale mining?

Yeah. Christian, we are reading your question around large-scale mining, if we can give some detail on the stronger demand.

As we have explained in previous calls, we have had lower cycle of prime product for mining. We have seen years low at $100 million, and then we see years that increase to $150 or so.

For this year, we are expecting more trucks to be delivered in the country to different customers. It's more brownfield projects, no, to existing mines that we have been already serving.

For this year, we are expecting something in the area of $200 million. It's coming as brownfields from different customers.

As we explained before, the only greenfield that is Tía María, we didn't win the large trucks. We won all the auxiliary equipment, and we also delivered equipment to contractors that are building the mine, but we didn't win the large trucks.

Most of the demand we are getting is brownfields from existing mines, no? We are expecting to see what happens with the end result of the elections, and we expect to have some momentum for greenfields to happen in Peru.

As of today, it's mostly brownfields from all the customers that we serve. We are in all the mining companies on the mining projects in Peru.

Thank you. I see some questions here from Gerard.

Thank you, Gerard. "How should we think about the spare parts and services as a percentage of revenues for the full year?

Do you expect a recovery toward historical levels of 50%, or is this more a structural shift?" As I just mentioned, that the prime product sales to large mining will go to this arena of $200 million, we will continue to see a higher percentage of prime product, and therefore, spare parts and services in the area as we have seen in the first quarter.

We're expecting a similar sales mix for the remaining of the year. Also very strong demand on equipment for construction and infrastructure, both in Ferreyros and Unimaq and Orvisa.

Then Gerard has another question on working capital: "Inventories increased during the quarter. Could you clarify how much of this inventory build is associated with already signed contracts or firm commercial commitments versus inventory that Ferreycorp is holding on balance sheet to improve delivery times and capture demand more quickly?"

As we mentioned in the call, most of the inventory increase that we have had by March is coming from mining trucks, that are going to both be sold or rented. We have been explaining in the last couple of years that apart from our traditional rental business, which is carrying units in our rental fleet for two, three years and renting them on short-term contracts, let's say one month or three months or six months, that can be renewed, no, and mostly to contractors, so that's a traditional rental business, but on top of that, we started renting large mining trucks to mining customers a couple of years ago when we brought for the first time the largest truck, the 798.

We started with a rental to one customer, then customers started to like that rental approach, which brings some burden in the assets, but also brings the ability to create confidence in the customers with that new product. We have brought some trucks.

Some of them are coming to be sold, and others are going to be kept in our fixed assets for a one, two-year, three-year—I think it's three-year rental to, for example, Antamina, one of the customers. Then the increase in inventories for large mining products are going to be sold in the next quarter or so, there could be some reduction in inventories.

Then Sebastian from Ashmore, you have a question on more info regarding the process around Tía María and the fact that the company didn't win the large truck that was behind this. "What was behind this, and how does this affect your budget guidance for 2026?"

I think this subject was also raised in our shareholders' meeting. We are not a monopoly, we are here to compete with other providers, and in the business of a large-scale mining, it's mainly between two of us.

We win some deals, they win some deals. That's a competitive market and how we operate.

We lost Tía María. There's several elements that customers consider when they decide what to buy.

This week, we also won a deal with Bambas, for example. We are very happy with that.

Tía María was lost last year, and so it was not included in our budget. It was not included either in the guidance that we gave back in December.

Just to finish on the large mining operations, no, we are present in all of the opportunities, we compete in all of the opportunities, and we reinforce the value proposition of our offering, which is having the best product, high technology. We have the first autonomy fleet here in Peru.

That's something very important for customers in the years to come. We also show all of our product support capabilities with inventories.

That's why inventories are also always so important in our balance sheet, with inventories of parts and components. Remember that the value proposition in mining is that the trucks don't need to stop when there's a component to be rebuilt.

We just exchange that component with a new one in a 24-hour time, and then we bring the component for repairs. Having the components, the parts, the people in the sites is part of our value proposition in implementing new technologies in the trucks, efficiencies on fuel consumption, efficiencies in giving a consultancy to our customers not only the health of the equipment, but the way the trucks are running in the site.

We have a control center where we monitor all the fleet in Peru. We have a control center both for mining and also for infrastructure, for construction equipment, where we monitor what is happening and we give advice to customers on when to stop the equipment.

We think we have the best value proposition, but as we always have in competitive markets, customers can have a different view to what we offer. Again, we have also won some deals and we won a lot of brownfields, and we just won a deal with Bambas.

You are also asking on profitability: "ROIC and ROE has been deteriorating over the last quarters, while leverage is trending up. Can you comment on this and what is the outlook ahead?"

Yes, as we have been discussing in this hour, there has been impact in gross margins that we are trying to offset through a cost in SG&A. Then this impact in the inventory growth that we just commented with the previous question that has impacted in the quarter, but it should level off for the rest of the year.

Then I see a question here from Cristian Choquecota. Thank you, Cristian.

"To better understand the margin contraction in the last quarters, could you please provide an approximate EBITDA margin range for the Caterpillar mining trucks and machine segment versus the spare parts and service segments?" We don't give exact information on this due to competitive landscape, no?

We are an open company, and we publish a lot of information that our competitors don't publish. In general terms, gross margins can be two or three times of what we have in prime product, in general.

I don't want to go into details in each line of business, no? Then the same in EBITDA margins, it's not two or three times, because as we just said and we always explain, the gross margins are higher in aftermarket because the complexity of running that business brings more cost.

EBITDA margins, of course, in spare parts and services are somewhat higher than Caterpillar equipment. Then Serge D.—I don't know who is Serge D., but hello, Serge.

Thank you, Serge: "To build on Cristian's question, when do you expect margin to stabilize and start picking up?" We are seeing that margins for the remainder of the year are going to be more in the 23% range.

I think we anticipated a little of that in our calls by the end of 2025, and we will continue to show adjustments in expenses as we have shown in this first quarter to try to level the margins that we're seeing in this first quarter, with some improvement in asset turnover that we expect to control inventory increase. Thanks to all for all your questions.

We are very happy to see your interest in the company. We always thank you for being attracted to Ferreycorp, to the business that we serve, our customers.

Shareholders are with us serving customers and building progress to Peru and to the other countries we serve. Thank to all of you for your participation in today's conference call and your interest, and we will remain as always at your disposal for further inquiries.

Thank you. Thank you, Cristian, and all of you that participated today.