Thank you, Leslie. Good morning, and a warm welcome to our conference call on the fourth quarter 2025 results of Consorcio ARA.

This call will be also transmitted by a webcast, accompanied by a slideshow for visual support. With me on the call to discuss the results are Luis Felipe Ahumada Russek, Vice Chairman of the Board; Miguel Lozano, Chief Executive Officer; and Felipe Loeza, Chief Financial Officer.

I want to alert everyone that certain statements and comments made during the course of this call must be considered forward-looking statements, as defined by the Securities Litigation Reform Act of 1995. Consorcio ARA believes that such statements are based on reasonable assumptions, but there are no assurances that current outcomes will not be substantially different from those discussed today.

All forward-looking statements are based on information available to the company on the date of this call. The company is under no obligation to publicly update or revise any forward-looking statements as a result of new information that may become available in the future.

As usual, at the end of our prepared remarks, there will be time for Q&A. We'll wait until then to open the queue for questions.

Results for the fourth quarter of 2025 compared to the fourth quarter of 2024: The solid financial and operating results we achieved in the fourth quarter of 2025 reflect the positive momentum of the three preceding quarters and round out a year in which results were the best of the past half-decade. Total revenues, which are the sum of housing revenues plus revenues from other real estate projects, came to 2.33—2.33 billion pesos in the fourth quarter of 2025, with an outstanding double-digit growth of 30.5% over the same period of the preceding year.

Housing revenues reached 2.23 billion pesos, 31.4% higher than in the fourth quarter of 2024. This came from the sale of 1,782 homes, a 25.8% increase, at an average price of 1,249,900 pesos, 4.4% above the average in the same period of the previous year.

Housing revenue growth was driven by the middle-income and residential segments. Middle-income homes totaled 1.08 billion pesos, a brisk 67.8% advance, and residential sales reached 548.9—0.1 million pesos, an outstanding 45.8% expansion.

Sales of affordable entry-level homes in the quarter sank 11.3% to 600.9 million pesos, due primarily to the completion of a development in Tijuana. As I mentioned in our previous conference call, this year we will already begin entering revenues from a new development in that city.

Looking at the revenues from homes delivered under the deal with Infonavit loan or Line 3 program between October and December 2025, the total came to 41 million pesos. The vast majority of these homes were in the affordable entry-level segment.

Revenues from other real estate projects, mainly from the sale of land and shopping center leases, totaled 99.9 million pesos, mainly due to higher revenues from land sales. As for the mix of revenues in the fourth quarter of 2025, sales of affordable entry-level homes accounted for 25.9%, middle-income homes 46.3%, and residential homes 23.5%, while the remaining 4.3% came from other real estate projects.

Operating income in the fourth quarter of 2025 came to 220 million pesos, rising 23.1% over the same quarter of 2024. EBITDA was 377.2 million pesos, 25.8% higher, and net income was 354.9 million pesos, a 93.3% growth, largely due to a credit from deferred income tax.

Our operating margin in the fourth quarter of 2025 was 9.5%, and the EBITDA margin was 16.2%, both of them 50 basis points lower than the same period of last year due to higher overhead costs. The net margin for the quarter was 15.2%, an expansion of 490 basis points, attributable basically to the favorable effect of deferred taxes.

In the last quarter of 2025, we generated positive free cash flow to the firm totaling 58.6 million pesos. Results for the year 2025 compared to 2024: As I mentioned at the start of the call, 2025 marked our best performance of the past five years.

Total revenues, which are the sum of housing revenues plus revenues from other real estate projects, came to 8.25 billion pesos in 2025, a 16% growth compared to 2024. Another highlight of the 2025 results was the 113-day reduction in our working capital cycle, which supported positive generation of free cash flow to the firm totaling 400.9 million pesos, 35% more than in 2024, and 98.2 million after interest payments.

Housing revenues in 2025 totaled 7.86 billion pesos, a growth of 15.4% over 2024. These revenues came from the sale of 6,213 homes at an average price of 1.26 million pesos, a 6.7% increase over the average price for 2024.

Breaking down our revenues for 2025 by housing segment: The affordable entry-level segment generated 2.29 billion pesos, 6.6% lower, mainly because of the completion of a development in the city of Tijuana and the second stage of a development in Mexico State. As I said earlier, this year we will already be reporting revenues from a new development in the city of Tijuana, and since last year's fourth quarter, we are also booking revenues from the third stage of the development in Mexico State.

Middle-income homes totaled 3.66 billion pesos, a 29.7% increase, and residential income came to 1.91 billion pesos, a year-over-year growth of 24.1%. Revenues from other real estate projects in 2025 amounted to 395.4 million pesos, mainly due to higher revenues from the sale of land and from shopping center leases.

As for the mix of revenues in 2025, the affordable entry-level segment accounted for 27.7%, the middle-income segment 44.4%, the residential segment 23.1%, and other real estate projects, the remaining 4.8%. Operating income in 2025 totaled 796.0 million pesos, 7.2% higher than in 2024.

EBITDA was 1.15 billion pesos, rising 11%, and net income came to 906.2 million pesos, up 31.9%, due to the reduction in deferred income tax. Our operating margin in 2025 was 9.6%, down 80 basis points from last year, and EBITDA margin came in at 14%, a 50 basis point decline.

These reductions were chiefly the results of higher general expenses. Despite this, the net margin was 11%, an expansion of 130 basis points due to the reduction in deferred income tax.

Financial position as of December 31st, 2025: The balance of cash and cash equivalents closed 2025 at 2.10 billion pesos, 10.2% lower than the close of the previous year. As of December 31st, 2025, the balance of accounts receivable stood at 709.7 million pesos, and rose 27.5% over its level on December 31st, 2024.

Accounts receivable turnover was 31 days. Total inventories as of December 31st, 2025 amounted to 19.37 billion pesos, 7% higher than at the close of the previous year.

At the close of the fourth quarter of 2025, cost-bearing debt came to 2.66 billion pesos, remaining basically stable compared to the close of 2024. Short-term maturities, meaning debt coming due in the next 12 months, made up 61.8% of cost-bearing debt, and long-term debt 38.2%.

I should mention that we will be refinancing the ARA 23X notes for 1.2 billion pesos, which comes due on November 25th of this year. At the end of 2025, 63.8% of our cost-bearing debt was in the form of the ARA 23X and ARA 21-2X notes, 14.1% were simple unsecured bank loans without real estate collateral, 11.9% were simple secured loans for our shopping centers, and the remaining 10.2% were lease liabilities.

Net debt at the close of last year was positive by 557.5 million pesos. ARA's positive results were accompanied by healthy leverage indicators.

As of December 31st, 2025, cost-bearing debt to EBITDA was 2.30 times, the net debt to EBITDA ratio was just 0.48 times, and the interest coverage ratio was 3.65 times. If we based this ratio on coverage of net interest, meaning interest expense less interest income, it would be 7.85 times.

On October 13th, HR Ratings issued a favorable opinion on the ARA 21-2X and ARA 23X sustainable issues in recognition of the sustainable solution we offer, as the proceeds were used to finance various developments. These developments incorporate homes built with ecotechnologies for water and energy efficiency and promote sustainable urbanization.

The opinion also recognizes the congruence of our sustainability strategy, its clarity, and alignment with the reference framework. The full report can be viewed on our corporate website.

Housing industry performance: According to Mexico's National Institute of Statistics and Geography, or INEGI, industrial activity in general grew by 1.5% in 2025 compared to the previous year. Construction industry expansion was 6.8%, and the building subsector, which includes housing and industrial base, increased by 9.6%.

Information from the Unified Housing Registry, RUV, indicates that in 2025, 310,518 homes were registered, a significant 73.9% increase compared to 2024, and 138,631 homes were produced, 8.2% higher than in 2024. Based on data from the Ministry of Agrarian, Territorial, and Urban Development, or SEDATU, between January and November of 2025, Infonavit granted 161,546 loans for the acquisition of new homes, an 8.4% increase over the same period of the previous year.

These loans required an investment of 123.2 billion pesos, 19.3% higher. The average size of a home loan in the first 11 months of 2025 was 763,000 pesos, a year-over-year growth of 10.1%.

FOVISSSTE, for its part, granted 12,339 loans for new homes between January and November of 2025, a 13.1% decline from the same period of 2024, and the investment in these totaled 13.7 billion pesos, 6.2% higher. The average size of a loan granted in the first 11 months of 2025 was 1.11 million pesos, a 22.3% advance over the same period of the year before.

As for commercial bank home financing between January and October 2025, 76,608 mortgages were granted for the acquisition of new and existing homes, a 5.8% reduction compared to the same period of last year, and investment in these totaled 187.8 billion pesos, 1.2% lower. The average size of a loan granted in the first 10 months of 2025 was 2.45 million pesos, a 4.8% growth over the same period of the previous year.

In 2025, 63.3% of our revenues came from homes financed by Infonavit, 11% from FOVISSSTE, and the remaining 25.7% from commercial banks and homes purchased without financing. Shopping centers: In line with the housing division's results, the shopping center division also posted double-digit growth in its numbers.

In the fourth quarter of 2025, revenues totaled 146.9 million pesos, 15.8% higher over the same period of last year, while net operating income was 104.5 million pesos, a solid 23.4% growth. In 2025, revenues totaled 546.6 million pesos, a 10.9% increase over 2024, while net operating income was 379.9 million pesos, an expansion of 10.8%.

These results correspond to shopping centers that are 100% owned by ARA and are consolidated into financial statements, as well as 50% of Centro Las Américas and Paseo Ventura according to our stake in those properties, which are entered under the equity method. Total gross leasable area in our six shopping centers and in mini shopping centers is 212,003 square meters, and the occupancy as of December 31st, 2025 was 94.8%, a very competitive level.

Dividends: Consorcio ARA has a policy of paying out dividends equivalent to up to 50% of its net income, subject to the following conditions: one, a sufficient balance in the net tax income account, and two, positive free cash flow generation. Yesterday, the Board of Directors proposed a dividend payment of 200 million pesos for this year, equivalent to 22.1% of net income in 2025.

This would be a dividend yield of 4.4% based on the share price as of December 31st, 2025, which was 3.74 pesos. As always, shareholders will be asked to vote on this proposed dividend in the next General Ordinary Annual Meeting of Consorcio ARA to be held in April.

Note also that the dividend would be paid out of the net fiscal earnings account as of December 31st, 2013, which means is not subject to income tax. Conclusions: For the current year, Infonavit projects a total of 262.2 billion pesos in loans for new and existing homes, while FOVISSSTE expects to distribute 33.6 billion pesos.

We don't have a formal estimate for the commercial banks, but we believe they will keep up a robust pace of mortgage placement. Encouraged by this outlook on mortgage lending in 2026, the expected stability of the macroeconomic climate, and a brisk demand for housing, our expectations for this year are positive, and we will be looking to replicate the revenue growth reported for 2025.

Thank you, and we will now move on the question and answer.

Hi. Good morning, everyone.

My first question is regarding volumes. Could you please explain what has been driving the significant increase in sales volumes from the middle-income and residential segments together with a relatively small increase in the average sales price is my first question.

Thank you.

I really apologize, Alejandro, but I don't know if it's the line, but it's very hard to understand the question. I don't know if it's the line.

Can you hear me better now, Alicia?

Yes, Alejandro. Now I listen to you better.

Excellent. My first question, as I was saying, is regarding volumes.

I'd like to know what has been the driver behind the significant increase in volumes from the middle-income and residential segments together with a significantly lower increase in the average sales price this quarter.

Yes, exactly. Alejandro, as I mentioned, the middle-income and residential segments had a very good performance in the fourth quarter and also in the whole year.

It has to be with new projects and also there was an increase, for example, in the middle-income segment and an increase in the average price. In the residential, it is a little bit different because we have another mix of projects.

For example, in the past, we had Paraíso Country Club that had a average price of around 6 million to 8 million pesos, and in the fourth quarter of 2025, we didn't recognize any revenues from this project. We have other projects with a lower average price.

That's why the average price was different, Alejandro.

Thank you. Basically, you're saying that this is explained by new projects with different price points rather than perhaps applying some discounts to sales this quarter?

Because I'm also surprised to see that the revenue mix is better, but profitability has not increased, though. I was just wondering if you applied some discounts this quarter.

Okay. Yes.

In some projects, yes, we have some discounts, but in general terms, we were able to transfer the increases in the costs to the price. There are some projects that, yes, we have some discounts in the sales price, but on general, we increase the prices in our projects.

We could do it.

Okay. Thank you, Alicia.

Second question is regarding your accounts payable. I was just wondering how you managed to increase the account payable days from your suppliers for two consecutive quarters, and I was wondering if this is sustainable or not.

Yes, it's sustainable. Our target is to have 90 days.

I think we mentioned in the previous conference call that we have a factoring program in place for our suppliers. In the past, it used to apply to certain types of work, but in 2025 are putting in place across all areas, all our suppliers.

In the past, it was just our construction suppliers, but now all our suppliers, it doesn't matter if it's the supplier of our administration area or commercial area, whatever area, all the suppliers are in this factoring program. Yes, as I mentioned, our target is to maintain 90 days, Alejandro.

It's sustainable.

Excellent, Alicia. Thank you.

Another question, if I may, is regarding your long-term strategy. Could you please repeat what are your medium and long-term goals for the company?

Also mention what are your leverage goals, since your balance sheet is still very strong, but leverage has been increasing recently? Also if you could also comment about your working capital requirements, since this has been improving, and I didn't know if this is a reflection of a change in strategy or not.

Thank you very much.

Yes, thank you, Alejandro. Talking about our working capital cycle, obviously our objective is to reduce.

In fact, as we mentioned, last year we reduced by 113 days, and for this year also we are expecting to have the same kind of reduction. Obviously, we are going to do it through increasing our revenues.

It's our main strategy to grow in our revenues and monetize our inventories. It's the main strategy, Alejandro.

Definitely, for the short and long term, we are going to be focused on that to reduce the working capital cycle. I don't know if you asked something else, Alejandro.

Yes, I was also wondering about the overall long-term strategy and also if you have any goals when it comes to balance sheet leverage, since even though you have a very strong balance sheet, but it's been increasing recently.

Yes, well, as and we are going to follow that strategy to manage in a prudent way or, yes, I could say prudently, our debt. We can grow, but also in a sustainable way with our debt.

The metrics that you saw at the end of 2025, we are planning to maintain those metrics. In terms of

net debt and

net debt to EBITDA.

Okay. When it comes to the overall strategy, would you say that you aim to improve profitability from operations and/or maybe increase the return on capital, or do you have any long-term goal that you could share with us as part of your long-term strategy?

Sorry, Alejandro, could you say it again, please?

Yes, I'm going to repeat my question. I was just wondering if you could give us additional information about your long-term goals when it comes to achieving a higher profitability from operations, or a higher return on capital, if there is anything that you could share with us regarding those lines.

You asked about our goals, if I understood, Alejandro? I really apologize, but I don't know really if it's the line.

I offer to have [laughs] one-on-one because I can't understand the question.

Alicia, can you hear me better now?

Is it possible, Alejandro, to have a one-on-one?

Okay. Thank you very much.

Thanks, Alejandro. I really apologize.

I don't know if it's my line.

Hi, Alicia. Thanks for the call, and congrats on the results.

I have a quick question regarding costs. We observed that a sharp increase in SG&A expenses during the period mainly attributed to promotional advertising.

Should we consider the expenses a one-off, or should we expect similar levels going forward?

Yes, well, Andrés, for this year, we are expecting to have also a growth in revenues similar to the last year. We think that we can improve our operating margin, mainly in the part of wages, because we have the structure to produce that level of revenues.

As we can have more revenues, we can decrease overhead costs as percentage of revenues. We think it's not going to be very significant.

We are not going to see a dramatic change, but at least we are not going to increase that percentage of general expenses that we saw last year.

Okay. Thank you, Alicia.

The second question, if I may, regarding a potential distribution. I'm not sure if you can comment on this at this stage, but should we expect any distribution to be announced?

If so, could you provide some color on the potential amount? Thank you.

Do you mean dividends, Andrés?

Yes. Yes, Alicia.

Yes. Yesterday, our Board of Directors proposed a dividend payment of 200 million pesos, the same amount than in the 2023 year.

This means a yield of 4.4%.

Okay. Thank you, Alicia.

Thank you, Andrés.

Thank you, Leslie. Let me read the webcast questions.

The first one is from Jorge Vargas: "Hi, good morning. Thank you for the call.

We continue to see middle-income and residential units gaining share relative to lower-income units. Could you please share your expectations for the sales mix in 2026?"

Yes, as I mentioned, we are going to open a new project for affordable entry-level segments. For this year, we expect that this segment represents around 30% of our revenues.

We are going to have an increase in their participation. Also, middle-income, it would represent around 40, 42%, and the rest, the residential segment, 20 sorry, 27%.

The next question from Aaron from Mindset Capital: "What explains the difference between homes registered and homes actually produced, and why is the gap so much higher from slide 12?" Okay.

This is explained by the registry of the program of the government. This program is called Well-Being Housing Program, or it's a government affordable housing program.

Since August of 2025, we saw a significant increase in the number of housing registration, and it's explained by this program. As probably the government goal is huge, is 1.8 million houses.

In this year and in the following years, we are going to see an increase in this number. We expect also that in the coming years, we are going also to see an increase in the housing production.

The following question, also from Aaron, is no, it's the same question. "What will be the dividend declared this year?"

I already mentioned, 200 million pesos, a yield of 4.4%. I think there are no more questions.

Thank you very much for your interest in Consorcio ARA, and have a great day. Thank you.