Alpek De Cv Aktie

Good morning, everyone. Welcome to Alpek's First Quarter 2026 Earnings Webcast. I am Barbara Amaya, IRO, and I am pleased to be here with Jorge Young, our CEO; Jose Carlos Pons, our CFO; and Rodrigo Prieto, our incoming CFO, who will be joining us for the first time.

Today's presentation will cover the following topics. Jorge will begin with an overview of the quarter. Next, Jose Carlos will review the company's financial performance, followed by an update of our outlook from Jorge. Then Rodrigo will share brief remarks as he transitions into the CFO role. And finally, we will conclude with the Q&A session.

Please note that the information discussed today may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to certain risks and uncertainties. Actual results may differ materially, and the company cautions the market not to rely unduly on these forward-looking statements. Alpek undertakes no obligation to publicly update or revise any forward-looking statements, whether it is as a result of new information, future events or otherwise.

We express our financial results in U.S. dollars, unless otherwise specified. For your convenience, this webcast is being recorded and will be available on our website.

Jorge, I'll turn the call over to you.

Good morning, everyone. Thank you for joining us. Over the last 3 years, we have executed key actions set on enhancing Alpek's global competitiveness, aligned to its strategic pillars, including cost reduction through global footprint optimization, reinforcing financial flexibility by prioritizing cash flow generation, and expanding our product portfolio through growth initiatives. These actions have positioned the company to respond effectively amid the ongoing volatility in the industry, allowing us to convert operational readiness into solid results. This was evidenced by our first quarter performance.

Market dynamics were positively influenced in March due to geopolitical tension in the Middle East, supporting higher margins. Importantly, during the quarter, our sites in the region did not experience material disruptions as we quickly adapted our operational strategies. We continue to actively manage risk and closely monitor the situation to ensure the safety of our employees, operations and supply chains. I would like to take this moment to recognize our teams, everywhere in Alpek, but especially in Oman, Dubai and Saudi Arabia, for their commitment during this challenging environment.

Regarding our global operations, Alpek had very solid performance in its core segments as most facilities run steadily, with the only exception being one of our PTA sites in Mexico, which experienced temporary production losses due to steam supply disruptions from a third-party provider. Additionally, in our emerging business segments, natural gas contributed with incremental profitability following the severe winter storm in the Gulf Coast region in January. As a result, comparable EBITDA reached $150 million, exceeding our initial expectations and a notable 50% improvement over the previous quarters.

Turning to key developments. We continued advancing our strategic priorities across our key pillars. We strengthened our core business by further optimizing our footprint through the shutdown of recycling sites in Reading, Pennsylvania and Pacheco, Argentina. These actions align our asset base with current market conditions, including increased demand for virgin PET while relocating rPET production to our other more competitive sites.

We reinforced our financial flexibility through the completion of the sale of the Beaver Valley site in Pennsylvania, marking progress on Phase I of our nonstrategic asset monetization plan. This will result in an increase of $10 million in free cash flow in the second quarter. In parallel, we are advancing actions across our broader portfolio to monetize additional nonstrategic assets in the U.S. and Mexico.

Regarding our Monterrey sites, land development and regulatory processes are ongoing. And as such, project monetization is not expected earlier than 24 months.

We also advanced 2 selective growth initiatives. First, the completion of an EPS extrusion project in the United States that will enable us to produce different grades, including grade EPS and product with recycled content. And second, the initiation of a $70 million investment over the next 3 years in our Polypropylene plant that is focused on expanding our portfolio of differentiated products.

Finally, we continue to make progress in energy commercialization, supporting diversification while creating additional value, additional avenues for long-term value creation. All these actions remain fully aligned with our strategy and our focus on disciplined execution.

With that, I will turn the call over to Jose Carlos.

Good morning, everyone. Let's delve deeper into financial performance. The first quarter reflected both strong execution across the organization and a more supportive market backdrop towards the end of the period. I'll start with the results for the Polyester segment.

Comparable EBITDA reached $76 million, driven by a stronger operational execution, improved volume levels and higher margins, particularly towards the end of the quarter. Additionally, Chinese reference margins, notably last month, averaged $246 per ton.

Moving to the Plastics & Chemicals segment. Comparable EBITDA increased to $60 million, driven by higher volumes and stronger performance, partially offset by lower reference margins.

In terms of our consolidated results, volume reached 1.1 million tons, an improvement of 9% on a quarter-on-quarter basis. Reported EBITDA totaled $162 million, benefiting from favorable inventory adjustment from higher raw materials prices offsetting restructuring costs. Comparable EBITDA reached $150 million, representing a substantial 50% sequential improvement and an 18% increase year-over-year, and as Jorge mentioned, ahead of our expectations. Overall, the quarter reflects our company's solid execution amidst favorable industry conditions.

Turning to cash flow and capital allocation. During the quarter, Alpek generated operating free cash flow of $90 million, driven by higher EBITDA and a marginal net working capital investment. CapEx totaled $38 million, primarily related to maintenance and the key initiatives within our Plastics & Chemicals segment, aligned with our long-term strategy to increase our portfolio share of higher-value solutions.

Moving to our balance sheet and financial position. Net debt was $1.77 billion. This included a significant $72 million reduction. As a result, combined with a stronger last 12 months EBITDA, leverage improved to 3.9x, compared to 4.4x at the end of the last year. These results represent a meaningful step forward in strengthening our balance sheet and highlight our commitment to deleveraging the strategy. Based on current performance levels, we believe we are well positioned to continue accelerating our path towards our target of 2.5x.

With that, I'll turn the call back to Jorge to discuss our outlook for the year.

Looking ahead, we continue to see evolving geopolitical dynamics influencing the petrochemical landscape. Let me discuss what we see across the industry.

Current market conditions reflect tighter supply levels, primarily driven by interruptions to petrochemicals and feedstock flows from the Middle East. These developments have led to operational disruptions across the world, but mainly in Europe and Asia, impacting trade dynamics and increasing global margins. At the same time, increased competition for available raw materials across regions has further tightened the market.

Regions with feedstock access and proximity to end customers like the Americas have been comparatively more resilient. Thus far in Q2, volumes are trending well. Chinese PET reference margins are approaching $300 per metric ton, while ocean freight costs to South America are hovering near $110 per metric ton. In addition, Polypropylene margins are expected to increase by at least $0.04 per pound in April.

In this context, Alpek has been able to leverage its global network, and we expect a relevant sequential improvement in second quarter performance with comparable EBITDA reaching or exceeding $200 million. While we remain well positioned to further capitalize current market conditions, our second quarter results will also be influenced by the duration of the supply disruptions stemming from the Middle East conflict.

Based on our current visibility, we would expect to reach or exceed the higher end of our EBITDA guidance ranges of $550 million. However, it is still very difficult to forecast the second half of the year. Thus, we are not providing yet full year guidance, and we'll provide an update next quarter should conditions allow.

Summing up our outlook. Our priorities remain clear: maintaining operational efficiency, reinforcing our competitive position as a reliable domestic supplier, sustaining our focus on financial discipline through cash flow generation, working capital management, capital allocation, and seeking growth opportunities as potential avenues for long value creations.

Before opening the call to your questions, I would like to take a moment to recognize Jose Carlos for his leadership and valuable contributions to Alpek over the past 7 years. During his tenure, Jose Carlos played a key role in several transformational milestones for the company, including the acquisition of Octal as well as the execution of the spin-off from Alfa and the subsequent merger with Controladora Alpek, which position the company as a fully independent, publicly-traded entity. Jose Carlos, I would like to thank you for your dedication and commitment, and wish you a great success in the future.

I would like to take this opportunity to thank all of you for the past 7 years. It's been my pleasure and my honor to work alongside Alpek's key stakeholders in advancing towards a stronger, and more competitive and independent company. Especially thanks to Jorge, the rest of the management team, our analysts, our key lenders and especially to our shareholders. Thank you all. I hope to see you soon in a different role.

Thank you, Jose Carlos. Thank you again. Now I'm pleased to welcome Rodrigo Prieto as Alpek's new Chief Financial Officer, who will be assuming the role as of May 1. Having worked with him for many years at Alpek, I'm confident in his ability to contribute meaningfully to advance our strategy for long-term value creation, and I'm looking forward to achieving great results together.

Thank you, Jorge. Hello, everyone. Glad to be here with you today. It is an honor to assume this new role at Alpek. Having been part of the organization for over 2 decades, I look forward to building on the solid foundation already in place and supporting the continued execution of our strategy, to further strengthen the company's financial position.

I am committed to maintaining clear and consistent communications for our investment community. And I look forward to meeting you all personally over the coming months.

Barbara, I'll turn the call back to you.

Before we begin, I'd like to remind you that the presentation materials webcast recording and transcript will be available on our website. We will now proceed with Q&A.

[Operator Instructions] Our first question comes from Thiago Casqueiro from Morgan Stanley.

And before I jump into the questions, I just wanted to say thanks to Jose Carlos for all the support over the years and wish you all the best in your next chapter. And for Rodrigo, congratulations on the new role. I wish you all the success in this new position also.

So my first question is on capital allocation. On the last earnings call, I asked about the likelihood of paying dividends this year. And at the time, you emphasized that deleveraging was the top priority, make dividends unlikely. I know deleveraging remains a key priority of the company. But given the recent geopolitical developments, could you update us on how are you thinking about shareholder remuneration for the year?

And then the second question is on the emerging segment. As per my understanding, the strong result this quarter was mainly driven by the storms in January, but I would like to know if you could provide more details on the dynamics that drove this very strong performance. And what should we expect for this segment going forward, specifically in 2026?

Thiago, first of all, thank you. I think it's been a pleasure -- I don't think, it's been a pleasure to work with you, and thank you for all the cooperation that we had for the last year. So I'll try to answer the first question regarding the dividend.

Yes, of course, this situation is improving. So we are on the positive side towards what we were expecting. We believe that we're going to be able to reach the 2.5x sooner than we originally expected.

However, for the conversation of a dividend to come we need to have a -- to be at 2.5x and have a forecast that gives us confidence that we will be on the long term toward meeting that level. So in that sense, if we're closer to that level of 2.5x, and we're confident that we have this forecast on a consistent base for meeting our target, I think the conversation of a dividend come back -- can come back.

And on the -- Jorge here. On your question on the energy commercialization on our emerging business segment. Yes, what happened is we -- during the storms, there was an opportunity to capitalize on daily pricing of natural gas. And so the business, let's say, benefited from an extra $3 million to $5 million, maybe closer to $5 million, in the first quarter. Those are -- those events are difficult to forecast, right? And there might be years where -- the last time we experienced something meaningful like that was in 2021. But it was, again, an opportunity to capitalize on daily pricing.

And the balance of the year continues at the pace that we -- I think we mentioned the last time here, circa $25 million on an annualized pace. So we might be above the yearly expectation because of this additional bump in the first quarter.

Our next question comes from Leonardo Marcondes from Bank of America.

First, as Thiago, I would like to wish Jose Carlos all the best in his future endeavors. And thank you for all the support and help here with us. And also wish all the success to Rodrigo in his new role at the company.

So my first question is regarding the PET spreads, right? So first, if you could share with us what are you seeing in terms of PET margins currently in this 3 to 4 week of April? And also, how are the current expectations for the PET integrated margins until the end of the year? I mean, we know that there has been a lot of volatility, but if you could share maybe the forecast from the consulting firms for 2026 and maybe 2027 would also help a lot.

And one last point regarding the PET spreads. If you could also share how much each $10 per ton increase in PET integrated margins could impact your EBITDA in a year.

My second question is regarding the PP spreads, right? They have also been up since the beginning of the war. And what are the levels that you guys are seeing for it right now? And what are the expectations for 2026?

Leonardo, thanks for the questions. Integrated PET spreads in China, which are very representative of Asia and the global dynamics, in April are trending towards $300 per ton. I think it's very uncertain. Honestly, I don't think anybody would give you a good forecast now. What you would expect is if the conflict in the Middle East, or the supply disruption rather, continues and finding feedstocks in Asia continues to be challenging, you would expect the PET spreads to stay elevated. And once the conflict is resolved, you would expect, obviously, a moderation. But that might take some time to normalize to spreads that we saw previous to the war.

If you look at the spreads in January and February, prior to the war, they were increasing already to like $160 and $170, driven by, I would say, very low margins, even the largest Chinese producers were starting to take action to address such low margins. And then the conflict came, and they have been increasing and trending because, again, the flows remain disruptive. They seem to be reaching $300. And from thereafter, it's a matter of when the conflict is resolved, how quickly the supply comes back, and it could be a matter of a couple of months or it could be a matter of a few more months, you have different opinions in the industry. So that's why we're hesitant to forecast the -- if we have a theory, we were already provided a guidance for the balance of the year, but we are still hesitant to provide that. So next quarter, I think we will have a much better basis to do so.

On the impact -- yes.

So just a follow-up on this regarding the -- I don't know if you guys could provide a sensitivity on how much at $10 per ton could increase your -- could impact your EBITDA guidance for the year?

Roughly about $10 million a year, roughly. I think right now, like, let's say, in this year, it might be a little more than that because we were not running all our assets completely full. So we have, again, some room to increase volumes. And so you might see also, again, some value because of additional volume at least during the immediate upcoming months, but on the margin alone, roughly $10 per ton corresponds to about $10 million per year.

And then you have a question on polypropylene spreads. Polypropylene spreads have been steady on the low side for the last couple of years, with many months the -- particular reference we show in our presentations to you all has been showing $0.13 per pound. And that is, just to clarify, that is the nonintegrated spread. That's the spread between polypropylene reference price and propylene monomer reference price. That is the one that in my remarks, I said it's likely to increase by $0.04 per pound in April, and perhaps more. It depends on how the conditions last.

You might be reading elsewhere that polypropylene margins are increasing more than that, and that is the case for somebody who has integration to monomer. And we show the one that is relevant to us or a nonintegrated produce. But like PET, there is a trend in the near future of increases, of course.

Our next question comes from Joao Barichello from UBS.

My first question is, if the conflict lasts for longer, what should we expect in terms of demand impacts and other operational challenges that Alpek might face, especially on the logistics and feedstock side? How is Alpek exposed to potential supply chain disruption or sourcing alternatives for key raw materials? And are there any contingent plans in place if these conditions persist?

And my second question is, if we see the escalation of the conflict, how long do you expect this better spread environment to persist? Additionally, has anything changed in the usual terms of volumes contracts signed post war? Would this scenario require a larger working capital consumption going forward? And if so, how material this could be? That's it.

Those were a lot of questions in -- but yes, of course, the -- if the duration extends, especially if the flows remain restricted, we would expect to see elevated margins to persist. And obviously, that's conductive of supporting our results.

As far as risks, I mean, we run a plant not too far from the conflict area. We have one of our key assets is in Oman. However, it's outside of the Persian Gulf. It's in the southwest of the country, but notwithstanding, it's in the region, we continue to run that site with significant agility and adaptation from our people, and for which I am very, very thankful.

But again, we are monitoring hour-by-hour developments. And so far, we continue to run again, not normally. We have made adaptations in our supply chains to manage that.

Right now, our feedstock position in general remains well supplied. We source most of our raw materials from within the Americas, but we still saw some secondary raw materials and a percentage of our -- especially our paraxylene supplies from overseas, including the Middle East, which currently is not flowing, but we have replaced with more supply from the Americas, from Europe. And we can still access raw materials from Asia.

So again, I would say those are our key risks identified, one facility that is closer to the geography of the conflict. And that in our supply chains, we still rely on some overseas imports, but not for the majority of our volume.

And our contingency plans, continue to purchase the raw materials, reach for alternative suppliers. In some cases, to access and to secure the raw materials, it implies an extra cost, but we have been willing to incur the extra cost to support our customers in our key domestic markets in the Americas and other countries. That continues to be our mitigation strategy to make sure we have a healthy supply chain of raw materials.

You pointed out a good point, working capital. We would expect to see a working capital increase in the second quarter. We're still determining the magnitude. We expect to be with some improvement in second quarter regarding the days of working capital, because this is an opportunity for us to sell slower-moving inventory, to maintain our inventory is very focused in our targets to ensure good supply.

But the overall prices are increasing. So it will be probably the overall levels of price increases will -- net of the improvement in days of working capital, at the end, we expect some investment in working capital, but we are yet working on that forecast.

And then your last question is about contracts. We have a combination of things. We still have some room in our facilities that it was not contracted, that is allowing us to increase volume and capitalize current market conditions. We also have volumes where the prices are linked to current market prices. So in those agreements, we also can take advantage or benefit from increased spreads.

And we also have an important volume on contracts that are tied up to the raw materials, with a fixed spread. So the raw materials increase, and we can pass through the increase in the raw material, but there is a fixed spread. However, we have had discussions and agreements with our customers. And I appreciate your support, in particular, in this regard to consider to different levels of degrees some surcharges, surcharges that allows to increase the price, but mainly to recoup the relevant costs that, as I mentioned, we are incurring to secure the supply of raw materials.

Bringing some raw materials from overseas is more expensive. Sometimes there are premiums over the spot prices, secondary raw materials. Again, there has been a very constructive discussion with key customers that have been very supportive in general, most of them, in agreeing to some level of additional pricing, but only to offset the extraordinary cost and disruption that we're seeing with the supply. So we are managing, but those remain our key risks in this period. Let me know if you have any questions on these remarks.

Our next question comes from Pablo Ricalde with Itau. [Operator Instructions]

Our next question comes from Chelsea Colón from Nuveen Asset Management.

Our next question is from Alejandra Andrade from JPMorgan.

I just have a quick one. Obviously, I mean, the outlook is much stronger than you were initially envisioning, and you'll have more cash at your disposal. You're saying that you'll trend towards a 2.5x net leverage quicker. And I was just wondering in terms of debt repayment, how are you thinking about what to prioritize in this market in terms of debt reduction, if any, to kind of lock in that deleveraging?

Well, it's a good question. The first, we need to deliver more cash flow generation in the upcoming quarters, as I mentioned in the previous question, we have -- we expect some investment in working capital. But the overall trend is what you say, from this event, is in the grand scheme of things for Alpek, the balance or the impact on our financials is going to be more positive. And once we have the cash flow generation, this came so quickly that we're still working on our decisions on how to reduce debt when the cash is materialized. There could be a combination on reduced debt in our maturities that are closer to us, and there could be other strategies, right, that we are still working. So that's still an early phase.

Okay. So we have a couple of questions through the Q&A. I will proceed to read them. These are from [indiscernible] from Forts Hill Capital. So the first question, it's related to the PP project. Can you give me more color on the $70 million CapEx in Polypropylene lines? How much can that improve your margins? And what is annual EBITDA contribution that you expect from this? Also, is this on top of the previous CapEx guidance?

The next question is related to working capital. Working capital, you were able to report almost neutral investment compared to prices that rallied in March. Do you expect any impact in the second quarter?

And finally, are you seeing any demand distractions or order delays given higher prices?

On the first question about the polypropylene project, I think this is a good opportunity for Rodrigo to provide his insight to this question, as his most recent assignment is from the Polypropylene business, including strategic planning. Rodrigo, please?

Sure. Thank you for the question. First of all, this is a $70 million CapEx. It's a multiyear. So specifically as to the question on guidance, yes, the allocation of the CapEx of the project for this year is included in the guidance. And this project considers the investment of a new extruder to increase our capacity to produce specialty products, specifically for polymers. It's not incremental capacity for the resin, but it's for specialty materials.

These materials incorporate ethylene into the reaction, and this creates improved performance such as impact strength, flexibility, thermal resistance. And they are used in applications such as automotive and home appliances. So these products achieve a premium pricing.

So in terms of the margins, this is a 3G project. We expect that after execution and running at steady state, we could see about $20 million to $30 million EBITDA increase.

And on the question about working capital, you correctly pointed that we did not have a material working capital investment in the first quarter. But we would expect to see that in the second quarter with increasing price levels. As I mentioned in the -- from the previous questions, we would expect to also improve our days of working capital, but I expect, I mentioned, net investment. We're still working on those estimates. And obviously, you will see the actual figures next quarter.

And on the questions about higher prices and impact on demand, for most of our products, demand is more resilient. I mean, PET has seasonality, but the overall level of consumption is less sensitive to overall prices, at least in the range we're seeing as of now. In our Polypropylene business, there are some segments that are also very resilient from others that could be less resilient, but our capacity in the plant is still around 30% or 40% -- represents only 30% or 40% of the Mexican market. So we would expect to continue to be able to sell, again, most of our production and capacity.

And our business that is more sensitive to economic cycles, particular, housing, because of insulation and construction, is EPS. But EPS, even at the higher prices as a percentage of the cost that it represents in a home, is still very, very small. So in that business, it's more about the recovery on housing than on the absolute prices yet. But again, we are monitoring. It's not for us like other industries, demand destruction because of higher nominal prices is not a major concern to us.

Our next question comes from Hinden Barredo from PGIM.

Just a quick question for me following up from a previous question. Regarding your contracts with your customers, you mentioned some contracts where pricing is via market pricing and some tied to raw materials with kind of a fixed spread. Can you just directionally give more color as far as what percent is customers with exposure to more market pricing and how much is tied with the raw materials and spreads?

Yes, it varies by product and segment. But let me give you maybe an overall Alpek answer. We're probably 50% to 60% more related to raw materials, 40% to 50% to market prices. Maybe in the current conditions, because we have some available -- still have some available capacity, maybe we are closer to 50-50. So we have exposure on both.

Our next question is from [indiscernible] from BTG, from the Q&A function. I will proceed to read it. You were able to sell the Beaver Valley facility in Pennsylvania on April. Is there any other asset sale that we can expect this year? Which sites are in your pipeline for that?

Yes, we would expect other assets to be sold later in the year. Probably the next ones will be during third and fourth quarter. We have a list of smaller assets, pieces of land. It would be still a long list to probably to name them individually here. But let's say, we would expect another $30 million to $50 million in the second half on asset sales. Potentially more, but these -- sometimes these are contracts that are still -- these are industrial properties. We -- these are subject to longer due diligence and -- but that would be our goal. I mean, we were -- I think in earlier -- in previous calls, we mentioned our goal to seek about $50 million. And I think we're still looking to meet that.

It's coming a little later, right? I'm very glad that we have one already completed and consummated. It actually happened earlier this week. And again, we expect more to come in the second half, again to add another $30 million to $50 million.

And this is, as we said in our prepared remarks, this now includes our Monterrey asset, which we just said is going to take probably about 2 years to complete all the preparation work. But based on all our analysis so far, we think that's the best strategy to maximize the value in about that time frame.

Our next question is from Luis Serrano from JPMorgan through the Q&A function. Can you provide an update on the credit lines you were working on to refinance debt?

Yes. As you know, we have sufficient credit lines revolving that are not unused, and they are basically there for any type of emergency for liquidity. The number varies a little bit, but it's in the order of $500 million.

Yes, there are some lines that are maturing this year. They mature until the second half of this year. We're working already with the lenders for renewing them. And we believe that by the summer, we will be able to renew them. So I think everything is in order, and we will be maintaining the liquidity as we have always did in the past.

Our next question is from Vanessa Quiroga from Eternal Capital. In case you haven't discussed this yet, how are your contracts renewal conversations evolving? Can you provide timing for renewals?

Yes. So most of the contract renewals follow calendar years. So for the most part, we have contracted 2026, discussions for 2027. Normally, those will take place towards the end of the third quarter, early fourth quarter. We might -- we are seeing some interest to start some discussion on -- some of those discussions sooner, but we are yet to start those. So I expect this year, it will happen over the summer.

And as I mentioned in the last time, we have a combination of contracts where the pricing is tied up to the current market conditions. So that means we can benefit from the increase in the margins. We have contracts where we are linked to the raw materials with a fixed spread. So in normal conditions, we don't benefit from the margin changes, but in this case, because of the extraordinary situation with the war, those costs that we have incurred to secure raw materials or additional freights and other things resulting from the war, we have had a very positive and supportive discussions from customers to capture those as well. So again, very appreciative to our customers in that regard.

For the timing, for 2027 and beyond, we'll probably start in the summer and peak in the third and early fourth quarters.

I think that's for last question that we had for today. I think before closing the call, I just wanted to make sure it's -- the following. Alpek remains very, very focused in the things that are controllable to us. That means running our plants well and safely. That means keeping our supply chains healthy and serving our customers very well. And that continues to be our -- clearly our focus. Of course, developing growth avenues and things we have mentioned today in our pillars.

The event of the disruptions coming from the Middle East is -- are providing tailwinds. And it's also our goal and objective to prove over this period of time that for those customers that have been relying more on imports, that we can be a better solution. And it's our goal also, besides the short-term aspects of the margins and volumes that this brings, is to, again, to grow and diversify our customer base and to prove our value as a domestic supplier. And that will totally depend on how we execute over the next few quarters.

But again, we are focused on what we can control, stay agile on all this volatility in the markets. And we're also seeking to prove our value to our customers and expand our relationships with them for long-lasting value creation.

On behalf of Alpek, thank you all for your participation and continued interest. You know that the IR team remains available for any question or follow-up. This concludes today's webcast. Have a great day.

Good morning, everyone. Welcome to Alpek's Fourth Quarter 2025 Earnings Webcast. I am Barbara Amaya, Alpek's IRO, and I am pleased to be here today with Jorge Young, our CEO; and Jose Carlos Pons, our CFO, who will be presenting today's material.

Today, we'll be covering the following topics. First, Jorge will walk us through the key highlights for 2025. Second, Jose Carlos will cover the financial results for the quarter. Third, Jorge will discuss our outlook for 2026, followed by Jose Carlos, who will delve into our guidance figures.

Then Jorge will outline our strategic priorities for 2026. And finally, we will conclude with a Q&A session. Please note that the information discussed today may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to certain risks and uncertainties. Actual results may differ materially, and the company cautions the market not to rely unduly on these forward-looking statements.

Alpek undertakes no obligation to publicly update or revise any forward-looking statements, whether it is as a result of new information, future events or otherwise. We express our financial results in U.S. dollars unless otherwise specified. For your convenience, this webcast is being recorded and will be available on our website. Jorge, I'll turn the call over to you.

Good morning, everyone. Thank you for joining us today. Throughout 2025, amid the continuation of a challenging environment for the chemical industry, our teams worked diligently on actions within our control to strengthen our financial position and solidify our global operations. Alpek's financial and operating results were largely impacted by global overcapacity, resulting in a difficult year, particularly for our Polyester business. We also executed several planned but longer-than-expected maintenance outages. By contrast, our Plastics & Chemicals businesses delivered a more stable performance. As a result, our full year comparable EBITDA totaled $489 million, down 30% from last year.

I would like to emphasize that our focus on strengthening our financial position has led to a sequential improvement in our operating free cash flow, which was $163 million, a considerable improvement of 57% from previous year, demonstrating the company's resilience and financial discipline.

We continue to execute our previously outlined 4 strategic pillars, which play a key role in reinforcing the company's competitiveness. First, strengthen our core business. We advanced on our targeted footprint optimization by ceasing PET operations at the Cedar Creek facility and relocating that capacity to more competitive larger assets.

As a result of this initiative, we expect to realize a benefit of approximately $20 million in 2026, which will partially offset broader macroeconomic headwinds. Second, financial flexibility. We maintained disciplined capital allocation, optimized our net working capital and executed debt refinancing. These actions strengthened our liquidity and extended our maturity profile.

Additionally, we also suspended the dividend and made progress in the monetization of nonstrategic assets, which are expected to materialize in 2026. Third, boosting growth. We advanced the development of high-margin solutions in our PET thermoform and EPS businesses and continued expanding our specialty products in our polypropylene businesses.

This supports portfolio differentiation while providing incremental EBITDA over time. And fourth, capitalizing on opportunities. Beyond the developments already discussed, we have been selectively expanding outside the petrochemical industry, mainly through our energy commercialization business, particularly by expanding recently to the power sector, which we expect will support growth over the coming years. Finally, a major milestone in 2025 was the successful spin-off and merger with Controladora Alpek, fully establishing Alpek as an independent entity with a streamlined corporate structure.

Now I will turn the call over to Jose Carlos to provide our financial performance in greater detail.

Good morning, everyone. Let me walk you through our quarterly results. Starting with our Polyester segment, volume was 836,000 tons, down 10% both sequentially and year-over-year, reflecting softer demand and longer-than-expected planned maintenance outages at several of our sites.

These operational factors weighed in on production in the short term. However, we have since resumed most of our operations. On an annual basis, seasonal effects were stronger alongside the strategic decision to exit low-margin PTA and PET exports. Polyester comparable EBITDA totaled $41 million, a 53% decrease versus the third quarter, pressured by lower volumes, weaker margins and historically low ocean freights.

On a year-over-year basis, oversupply, trade-related dynamics and global freight costs impacted performance. By contrast, the Plastics & Chemicals segment continued to deliver stable results. Volume was 184,000 tons, decreasing 6% quarter-over-quarter and 7% year-over-year, reflecting softer demand in both periods.

Plastics & Chemicals comparable EBITDA totaled $55 million, up 17% sequentially and 50% lower year-over-year as steady margins helped offset softer volumes and typical seasonal effects. Together, our segment resulted in a volume of 1.02 million tons, decreasing 9% versus the previous quarter and year-over-year.

Our reported EBITDA totaled $70 million, a 40% decrease quarter-on-quarter as a reduction in commodity prices and feedstocks resulted in a $29 million inventory adjustment, primarily in the Polyester segment as paraxylene saw a 7% sequential decrease. Relevant reference margins for our Polyester segment saw more stability compared to last quarter, yet remained pressure. For our Plastics & Chemicals segments, reference margins were steady.

Finally, comparable EBITDA was $100 million, a 27% decline versus the previous quarter. Looking at our full year free cash flow and capital allocation, we saw a net working capital recovery of $50 million, supported by optimizations and lower volatility in raw material prices. These efforts are aligned with our cash generation goals.

CapEx for the quarter totaled $51 million, consisting of $41 million in maintenance and $10 million in strategic CapEx, aligned with our priority and planned maintenance across multiple sites. This resulted in an annual CapEx of $170 million. Full year operational free cash flow totaled $163 million, a significant improvement of 57% on an annual basis, demonstrating solid cash generation and Alpek resilience amidst a challenging environment.

Moving to our balance sheet and financial position. Leverage ended at 4.4x net debt to EBITDA, reflecting lower last 12 months reported EBITDA amid sustained low margin levels. The company is implementing additional measures to strengthen its balance sheet as a prolonged cycle recovery is expected and deleveraging continues to be a top priority.

Notably, pro forma leverage would have resulted in 3.9x, adjusting for footprint optimization and restructuring costs. Net debt was $1.8 billion, flat versus the previous quarter, yet we were able to decrease it by $44 million versus 2024, a solid accomplishment in the current market context. We remain financially flexible entering 2026, given the successful debt refinancing, solid cash generation, available committed credit lines and disciplined CapEx management. I'll turn the call back to Jorge to discuss our 2026 outlook.

We approach 2026 with a cautious outlook as we expect macroeconomic conditions from last year to persist. Global oversupply continues to weigh on the industry. Although recent years have seen the initial progress towards capacity rationalization, further actions will be needed to improve the market balance. In parallel, we expect demand to remain soft.

We also anticipate ocean freight costs to remain at relatively low levels, consistent with the significant reductions observed towards the end of 2025. Notably, we expect greater operational and financial stability in our polyester business in 2026, forecasting a modest improvement and relative stability in reference margins.

Turning to our Plastics & Chemicals businesses. We expect profitability in this segment to be somewhat constrained in 2026. This is primarily due to capacity additions in North America, particularly tied to polypropylene, coupled with continued softness in EPS demand as construction markets have yet to show meaningful signs of recovery. Lastly, we expect our emerging business to remain on a growth trajectory with continued expansion and additional contribution to EBITDA in 2026. We remain confident in this segment's potential and we're targeting a doubling of its size over the next 3 years.

With that in context, Jose Carlos will walk you through the detailed assumptions and guidance ranges for 2026.

Our base case projects comparable EBITDA in the range of $450 million to $500 million based on the following assumptions: PET reference margins averaged $145 per ton, a 2% increase over last year's average. Ocean freight costs for South America at $75 per ton, a 40% reduction from 2025. Polypropylene reference margins at $0.13 per pound, a 7% margin compression and an exchange rate of MXN 18 per dollar, a 6% appreciation and minimal benefits from U.S. PET reciprocal tariffs.

It is also worth noting that our base case assumes minimal contribution from nonstrategic asset monetization. The acceleration of successful closing of any of these transactions will represent offset to our expectations. Moving to the rest of the metrics. CapEx is set at $130 million, following our disciplined approach and commitment to operational efficiency.

For the first time ever, we are now introducing a guidance figure for operating free cash flow, which is expected to be between $100 million and $150 million. This figure is further supported by our continuous efforts in cost control, capital allocation and net working capital optimization. And volume is expected to reach around 4.5 million tons.

Given the prolonged industry low cycle, we expect our leverage ratio to stabilize around 3.5x over the next 12 to 18 months, subject to market conditions. Our long-term target remains at 2.5x, and we will continue executing our deleveraging strategy to reach it.

Now in addition to the base case, there are potential drivers that could improve performance if they materialize. This include PET reference margins stabilizing at $155 per ton. I'd like to highlight that in January, the spreads averaged $171 per ton, recently reaching up to $190 per ton.

While we view the current price discipline in China as a supportive factor, it is still early to assess whether it will hold. We will continue to track market dynamics and provide updates as appropriate. Ocean freight costs at or above $85 per ton for South America and exchange rate closer to MXN 19 per dollar, the successful monetization of nonstrategic asset sales and greater capitalization from U.S. pet reciprocal tariffs.

Together, this represents a potential estimated upside of approximately $50 million to comparable EBITDA. It is important to highlight that these factors are not meant to be additive, and they will not occur simultaneously. Instead, they represent key variables that we recommend you track and they could contribute incremental value if conditions evolve in our favor. We will continue monitoring these elements throughout the year, and we'll update our expectations accordingly as visibility. Now Jorge will continue with our priorities for 2026.

With our 2026 guidance now established, I'd like to wrap up by sharing how we will plan to execute. We're building on the same strategic foundations that serve us well in 2025 and remain firmly aligned with our long-term strategy. In our polyester business we're taking a differentiated approach across the portfolio.

In the commodity segment, which includes PTA and PET resins, our focus is on integrated scalable assets serving attractive domestic markets, primarily in the United States, Brazil and Mexico. As such, we will continue to work on footprint optimization. A clear example this year is our decision to suspend operations and the Reading recycling facility.

Following the shift in demand towards virgin materials, we are allocating capacity to our Richmond facility, which offers a more cost-competitive network. The higher other value polyester, which includes PET sheet and thermoform, we're advancing targeted low CapEx investment to the bottleneck operations in the Middle East and strengthening our product development capabilities.

Second we're scaling our position in a fast-growing segment and increasing our exposure to higher margin application. Turning to our Plastics & Chemicals segment. Our strategy is to fully leverage our most competitive regional assets while expanding into higher performance and specialty solutions.

We will start ramping up investments made last year, particularly for EPS specialties. And we will also start a multiyear growth project focused on differentiated polypropylene. We believe this opportunity will become key EBITDA contributors moving forward.

Emerging business continues to improve, particularly in energy commercialization. We view this as a promising path to diversify our portfolio and reduce exposure to the petrochemical cycle. Financial flexibility remains the core enabler of our strategy. We remain committed to disciplined capital allocation, rigorous working capital management and the monetization of nonstrategic assets.

Over the past year, we made meaningful progress on this front, and we expect to finalize the first phase of sales during the first half of 2026. We have identified additional properties in our region for potential sales. We will share further updates as we advance. In summary, 2026 will be a year of focused execution, delivering on near-term priorities while continuing to invest in long-term value creation.

I would like to conclude by mentioning that Alpek has experienced difficult cycles over the past 50 years, and we have been successful at adapting and evolving the business as required. A good example of this is how we were able to exit the fiber businesses while moving into PET sheet business, which reflects a more attractive margin profile and value creation potential. We are confident that we will emerge from this low cycle successfully and that our focus on higher value-added products and specialty products will bring greater opportunities and growth over the following years. Barbara, I'll turn the call back to you.

Before we start the Q&A, a brief reminder, materials and the webcast recording will be available on our website. [Operator Instructions] Our first question comes from Leonardo Marcondes.

I have 2 from my side. The first one is regarding your guidance. Correct if I'm wrong, but I believe there was extraordinary OpEx spend in 2025 to improve operational efficiency that we should not see in 2026, right? So if you could walk us through your expectations in terms of OpEx for this year and if the lower expectation for freight rates have fully offset these lower OpEx that we were -- that we here we're expecting for this year.

Also, there is a discussion regarding the [ hake ] benefit in Brazil that is going on right now, right? So if you could also help us to understand a bit better of how much it could impact your guidance for this year, this potential improvement in [ hake].

My second question is regarding the supply and demand balance in China. I think it was in November when the Chinese government organized a meeting with PET and PTA companies to understand the issues of the market, right? So my question is what have you heard from the Chinese market and companies regarding this meeting? And if there was any change of the government's approach toward the segment -- I mean, the Chinese government, right?

Thank you, Leonardo. Thank you for your questions. Yes, regarding guidance in 2026, we're factoring some improvement in our operations. As we explained in 2025, we have some extended maintenance and some operational issues earlier in the year in 2025. But as you mentioned, some of that recovery is partially offset by our assumption of much lower freight costs that are very important to set the import parity prices. So that's the -- that, in general, would answer your first question.

Part B of your first question regarding the rake benefits in Brazil. I think that's an important development. First and foremost, recently, those incentives for the chemical industry, especially for those companies consuming basic petrochemicals and which in our case, our polyester business applies. Those benefits were confirmed for the period 2027 and through 2031. So that's a significant accomplishment.

Our support and participation in the ABIQUIM, the Chemical Industry Association was very meaningful. And we are very happy to that those were confirmed and those are important and meaningful. 2026 was not initially included in the package of benefits. But right now, there is an effort that might result in 2026 also receiving benefits for the chemical industry. We don't have those incorporated in the guidance.

And as you know, these programs of [ rate and persist ] have a combination of support on the acquisition of raw materials through reduced taxation and also support on selected capital investments. And the second question on China and yes, the efforts from the Chinese government and in general to adapt from this, what we call [ cutthroat ] competition that are driving margins to unsustainable levels.

I think the positive thing that we get at this moment is that there is more acknowledgment of the issue. And as Jose Carlos explained, some actions are already happening to begin 2026. We're not counting on those yet to be sustained.

And that's where we are. So on the positive there is acknowledgment actions on the overcapacity needs to be taken. And again, this is not only in our industry, right, in the industries that we participate like polyester and plastics & chemicals of Alpek. This is in general a petrochemical and polymer situation that applies to many products.

Yes. Just one follow-up regarding the [ hake]. Do you have any estimate on how much your EBITDA could improve for this year in case they approve the benefit of $5.8 million to the PIS/COFINS payment?

We are still working on those calculations because I mean, it could be perhaps I'm not rounding maybe another $10 million to that guidance for 2026. And hopefully, it's a little bit more than that. We're just working on the calculations to make sure the final percentages are defined. And then if you know the details, there is also an overriding cap on how much of the benefit applies for the whole industry. So once all of the things settle, we will have more details. But I would say order of magnitude for us, maybe around 10.

That's clear. That's clear.

And that's for 2026, right? And again, we would expect potentially similar or even slightly higher benefits for the period of 2027 through 2031. I think this was a major accomplishment for a portion of the petrochemical industry in Brazil, especially the one that consumes very basic petrochemical feedstocks like it is the case for us on paraxylene.

Our next question comes from Thiago Casqueiro from Morgan Stanley.

I have 2 questions here from my side. The first one, I mean, I know it has been a very challenging environment for the petrochemical industry and that the key goal of the company is to reduce leverage towards the 2.5x in the long term. But I would like to understand when would the company start like discussing the possibility of paying dividends this year if this opportunity appears in the future, obviously.

Would it be only when leverage target is reached or it could be discussed before that? Because despite all this the pressured environment we see right now, we also see that the free cash flow profile for the year looks quite healthy.

And the second question is related to protection measures. So kind of a follow-up on Leo's question. Well, we have seen in Brazil some government actions aimed at protecting domestic industry and preserving competitiveness recently, also with [ hake ]. So beyond the potential upside from the US PET tariffs that you mentioned in the release and today in the webcast, are there any other items on the government agenda, either in the U.S. or in Mexico that could represent additional upside to the guidance you provided?

Thiago, thank you for your question. Regarding your first question in terms of leverage, I would say that we would like to devote the free cash flow that we will have this year to deleveraging the company. That will be our top priority. We want to get closer for the 2.5x that it's our target. And therefore, we are not expecting to have a dividend this year.

I mean you know this industry, this situation and the circumstances could change all of a sudden. If we get closer to our leverage target and improved performance in the company. Well, certainly, that could be on the table, but we will devote the majority of our efforts to deleveraging now.

I will comment on your second question that pertains to, what you've mentioned, you define protection measures. And well, I think the efforts -- I mean, that's a very important area of focus for us, and we have efforts pretty much in all the countries where we participate. And again, it's not only something that we do as Alpek only, right? I mean this is something we do in conjunction with relevant industry on each country.

And you see significant activity happening across other petrochemicals as well. Just to comment on the one on US [ PET ] tariffs because there's still some uncertainty, I think as Jose Carlos mentioned, we are yet to see more benefits. That is something that we were able to capture going into 2026. Somewhat is masked by your assumptions on margins remaining at relatively low levels or ocean freight still coming down. But even with that uncertainty, I think we see interest on the current administration in the United States to protect local manufacturing.

And I think even if the Supreme Court comes with a ruling that doesn't confirm the tariffs, I think there will be parallel mechanisms. Again, we as an industry and as Alpek continue to work in evaluating other paths in parallel in pretty much all the countries where we are participating.

So some of these details, we will share as information becomes public. But as I mentioned, this is a very important area of focus across all our key relevant markets.

Our next question comes from Ben Isaacson from Scotia.

You hear me okay?

Very well.

I just have one question only. And the question is, is there a strategic or financial rationale for having both the Polyester and the P&C segments together? Do you think that your stock suffers from a discount that could be improved if those businesses were separate? What are the reasons to keep them together?

Thank you, Ben. Thank you for your question. This is Jose Carlos. Very good question. Certainly, we believe that as of today, we see benefits in having a larger company merging or having the both divisions together. We have efficiencies in SG&A and other operational metrics.

So clear, at this moment, the rationale and the benefits are better than having 2 split companies. But certainly, we're doing work in 2026 to review our portfolio and see if there are opportunities for us to divest, which implies that your question, certain portions of our portfolio, certainly with the key objective of deleveraging the company.

Our next question comes from Andres Cardona from Citi.

I have a quick question on the guidance. If you could help me to understand on the Polyester segment, how much of the volume has been contracted [indiscernible] for 2026? If I remember correctly, in an average year, it is around 60%. So just trying to understand how [indiscernible] the guidance is.

Yes, Normally, I would say 70% to 80%, especially in North America. And perhaps also in South America is a little bit less and the Middle East a little bit less in those percentages. So maybe all in all, it's about 60%. But coming back to North America, in that range of 70% to 80%, probably we're still more towards the lower end of the range, again because of the some level of uncertainty on what will happen, the visibility that what will happen with tariffs.

So yes, I mean, potentially in a more favorable environment on tariffs, there could be still some upside. And we did capture that in the -- together with other variables in the additional range that Jose Carlos described. As you know, we provided the guidance in a base case and we see this year more upsides than downsides on the guidance, and we encompass all of them together in the second [ quarter].

Thank you for the scenarios that you present. It's something that I find very helpful.

You're welcome.

Our next question comes from Tasso Vasconcellos from UBS.

I have 2 here. One, Jorge, moving back to the asset sales. Can you remind us exactly what assets would you be willing to divest the most? And if you have any expected amount that you would be targeting to raise considering all of these divestments?

And the second question is on that sensitivity that you released for the guidance for the year, the incremental EBITDA. In your view, what would need to happen in the industry, so those assumptions become a reality for the year? I have these 2 questions here.

Sure. And so here on the first question about the asset sales. Right now, we have 4 pieces of property in the United States that are all of them in different degrees of negotiations or document preparation to complete the sale. I mean these are -- again, 4 assets where we had operations in the past.

We have been working on those throughout last year. And I would say pretty much the 4 of them are converging right now into the, let's call it, the stretch time to finish the process. I think we have interested or counterparts that are concluding their due diligence. All those 4 property combines could potentially represent $50 million.

And again, we feel very confident those will materialize in the first half. Maybe some of those in Q1, but I would say more likely most of them by the end of the first half of the year. And it's a meaningful $50 million contribution to our cash flow. So that's more or less what we have.

On top of that, this is taking longer, perhaps more than 12 to 18 months. It's our largest site in Monterrey, where we used to produce fiber because that potentially has more value. But that is going to require -- is requiring more time as we need to -- that was an industrial site that needs to be prep for other potential uses.

So we continue to make progress on that one, but we don't see that yet within the 2026 time line. I mean we will push for that, but that will likely spill over into the future. And right now, we are focused on these 4 assets in the United States. And on top of that, we have another propylene that are coming in Mexico and Brazil. And so there will be perhaps not as large, but another bucket for the second half.

And just to complement, Jorge, we're planning to use all the proceeds of these sales to deleverage the company. That's our top priority. And everything that we get on those sales, we will use it to come back to our 2.5x target.

Yes. I think on the other part of the question, I mean, we laid out the key variables, right? What needs to happen? I mean, for example, in margins, global margins the industries in general are under significant pressure. Again, as we mentioned in the previous question, it's a positive signal that in China, even in China, there is acknowledgment that the margins went to unsustainably low levels. We see a small rebound to begin the year. So if that stays, that obviously that support for the guidance. And the other one important one if the uncertainty on tariffs it's removed and there is more certainty on tariffs, that will eventually drive more volume and margin opportunities that we will capitalize that process again is taking longer, right, given the lower visibility on tariffs, but that's potentially the other one.

We just mentioned the rate benefit in Brazil. We didn't capture that in our range, but that's going through the chambers now. So that's the other one. But more importantly for us is to focus on operating our assets very well. I mean, for us operating our facilities very safely and with pristine reliability is how we can best help ourselves. So that's [indiscernible]. Just to give you a flavor, right? So many variables combining into one range, but that's more or less what we see today.

Our next question comes from Alejandra Andrade from JPMorgan.

I just wanted to understand from you guys, what do you think the time line could be to realistically get back to your target leverage? And also, I'm just curious if you've had discussions with the rating agencies given your current outlook on how patient they'll be in terms of your delivery to get leverage down to your target?

Thank you, Alejandro. Thank you for your question. To be completely clear, we don't expect to get to the level of 2.5x this year. It's something that can happen in 2027. So we're working towards that. Of course, if we get some of the upsides that Jorge already pointed out. If we are successful in selling those nonstrategic assets that I already mentioned, and there might be a second wave of other divestitures. Well, that could speed up the process and maybe by year-end this year. But at this moment, our base case is that this could happen in 2027.

In terms of our rating agencies, we've had a close conversation with all of them. We have updated them on the performance of the company and our perspective for 2026. Well, the conversation is fluid, and we're working with them to see not only this year's performance, but all the things that we're doing to improve our leverage and the commitment that we're doing. So no decision from them, and we will continue to work together with them to keep us updated.

Our next question comes from Milene Carvalho from JPMorgan.

So I have 2 matters that I want to approach here. So first one is the diversification to power that you mentioned in the presentation. So what do you see as the benefit in this segment? How can you operate this? And is there any strategic CapEx forecasted for 2026 in the segment? And the second question is regarding severe weather conditions that we saw early this year. Is this somehow impacting your production? What should we expect in the first Q specifically into this situation?

On diversification to power I think for us, this is a very significant opportunity. We have amassed over the last decades significant know-how in energy markets, especially in Mexico by expanding into others like Brazil. But our focus has been mostly on being a very reliable supplier.

But more than a producer, we commercialize energy, both in more historically as natural gas and more recently we're incurring in electricity. For the most part, this does not require CapEx.

Again, I think over the years, it's a matter of developing know-how and having the right permits and certified experience because there are barriers of entry. And again, I think it's capitalizing on a strength that we have and it's becoming a very interesting area of focus for us. Would you mind framing again the second question?

Sure. So the second question was regarding the severe weather conditions that we saw earlier in 2026. So there was a lot of activities across U.S. that was just shut down. I wanted to understand if somehow this has compromised your production or first quarter expectations.

Did not disrupt our operations. I think there were 2 waves of very cold weather. In one, we took short proactive shutdowns in the United States, but are not going to be very material for our financial purposes. We will see though some impact on higher natural gas prices because the -- although natural gas prices have already come down again to where they were before the cold weather waves.

In the meantime, the February contract prices of natural gas in North America ended up on the high side. I think we will see that impacting our energy cost in February. But not -- I would say no -- I mean we weather the storm fairly, fairly well.

Our next question comes from Federico Galassi from Rohatyn Group.

Two quick questions. The first one is in your guidance and potential drivers you are using the FX at MXN 19 per U.S. dollar. The question is how is the sensitivity to the Mexican peso or U.S. dollar depreciation? This is the first one.

And the second one, in the guidance, are you including all the positive impact for the increase in tariff in Mexico last year? That's both questions.

Thank you for your question. Quick answer on the exchange, MXN 1 more or less it's equivalent to $15 million of benefit or cost depending on how you see it. And the impact, yes, we're including a portion of what we saw in Mexico on the protection against Chinese and other imports. So yes, that's included already in our forecast.

Our next question comes from Chelsea Colon from Aegon Asset Management.

I just have a few quick ones. Firstly, to clarify, you mentioned around 3.5x net leverage by the end of this year. Does that consider that $50 million-ish in asset sales? And also, is that calculated based on your comparable EBITDA guidance?

No. The short answer is yes. The 3.5x would require us to sell the nonstrategic assets, and it's based on reported EBITDA because that's the way our banks measure our covenant compliance.

Okay. Great. And then with regard to the emerging businesses that you mentioned, you're trying to double in size over the next 3 years. Can you provide some context as to how relevant those businesses are right now from an EBITDA perspective? And so what does like a doubling mean? Like how relevant is it?

On that question on emerging business, when you look at our numbers, we have our 2 key segments and then we have the line others. So it's commingled there with a few other corporate -- smaller corporate adjustments that we have. And it's our goal that maybe over the next 4 to 5 years, that line reaches closer to 50. So that will give you a good idea.

I think we expect to be perhaps in the 20s this year of 2026 and again, doubling for that. That will be our goal towards the 4 to 5 years from now. And obviously, we will be more ambitious than that. This is to give you a flavor of what we are seeing and flavor of the magnitude, but that doesn't prevent us for pursuing that goal faster or at a higher level.

And maybe a portion of those emerging businesses are within the -- already the polyester and the polypropylene, those -- because it was presented by Jorge that we're also entering into high value-added products within our core businesses, and that's not included in the others. So it's really just the power and some other things that we're doing in the others.

Okay. Got it. And then lastly, I'm just curious, with the closing of the Reading facility, you mentioned that there's more demand for virgin resin versus recycled. Can you just elaborate on like the reason for that? Is it just a cost issue for clients?

Recycling continues to be a very important priority for us and for our customers. It's very important for the sustainability of PET packaging. But yes, recently, I mean, there are some issues that we observed the prices of virgin PET are low. And again, some of the -- there is a growing path towards increasing recycling content. But sometimes that comes with some success.

And I think we see at least in the medium term, the opportunity for us to -- at least for our key customers to supply that recycling content through our other facilities, which include, as we mentioned, our Richmond facility in Indiana. And also we have recently increased our capability to add recycling content through a technology we call Single Pellet Technology, where we add recycling feedstock into a virgin PET plant and the final product is a PET with, let's say, 25% recycling [ content ].

So we're using those 2 tools or assets to continue this growth path. But to your question, there is also some shift -- small shift back to virgin given the economic pressures that the industry is facing and that reflects also the decision of some of our customers.

Okay. And at this stage, the idea to potentially open the running facility at some point? Or is that likely to be permanently closed? And then also, can you tell us how much you expect in cost savings from that? And also on the flip side, like any extraordinary costs related to the suspension like severance and whatnot?

Yes. I mean this -- I mean just to give you orders of magnitude, in the short term, it might represent maybe between 5% and 10%, maybe closer to 5%, mid-single digits, mid- to high single digits in terms of savings. We remain with the possibility to restart the asset. But in not very significant shutdown costs, some, but not very significant.

This is not a petrochemical plant and doesn't have the same complexities. But it will also -- our decision will come later, it will also depend on whether we can extract some value from those assets, right? So we will assess our options.

So what we chose right now is to suspend the operation, take on the savings to keep supplying our customers from the rest of the assets that include the other recycling plant, other avenues we have to deliver recycling content to the customers, including what we call our Single Pellet Technology. So we took the savings and we'll wrap up for more strategic decision later in the year.

Our next question comes from [ Andres Ortiz ] from BTG.

I would like to have a follow-up on Federico's question on the incremental EBITDA. I understand your disclaimer, but I just want to understand, you mentioned that $1 is equivalent -- MXN 1 appreciation or depreciation is equivalent to $50 million impact. And you said that you see $50 million incremental EBITDA from for several reasons, and one of them was MXN 1.

So I don't understand if you are seeing more incremental EBITDA from all this happening together or if every single one of them is $50 million, just to understand.

Thank you, Andres. I'm sorry if I did not make the right number. MXN 1 is equivalent to $15 million of impact or benefit depending on where we see it. And maybe just a clarification, we presented there several opportunities to improve our results. What you see here is an assessment probability weighted that they could materialize around $50 million. In a perfect world with every single line item would materialize, certainly, they will be more than 5-0, $50 million.

We received a couple of questions through the Q&A. I will proceed. First question was from [ Rodrigo Salazar ] from AM Advisors. Could you tell us where the spot metrics used in the guidance stand today?

Yes. In our guidance, we said reference margins, which represent China PET margins at $145 per ton. Year-to-date, they are approximately $170 and the last data point is in the mid-$180.

The next question that came to the Q&A comes from Pallavi Nagia from HSBC. Could you please provide an update on refinancing plans, particularly for the debt due in 2028 and 2029.

Thank you for your question. Yes, certainly, we're exploring opportunities to refinance what we have in '28. We have a couple of proposals at this moment that we're exploring. There will be facilities that would take the maturities even further than 2032 or '33. And that will, again, take out pressure on any maturity coming due in the short term.

We remain one of the key pillars of our financial strength is to have strong liquidity, which we have, a strong amount of committed credit lines, which we have and also not having any maturity due in the short term. So that's certainly one of the priorities. We are targeting to have that refinanced in the first half of this year. We'll keep you updated.

And the next question Historically, increases in the oil price have led to improvement in margins and increasing international shipping costs. My question is, do you still see a correlation with the recent increase in oil price? Do you expect to have a positive in the EBITDA?

It's a good observation. Yes, typically, oil prices will lead into higher raw materials, not necessarily shipping cost. Shipping cost, yes, oil is a variable that influences shipping cost. The shipping cost freight rates are mostly supply demand in that market. But oil prices will generally push raw materials a little higher.

I think this is the first quarter in a while where we didn't have a significant inventory adjustment. We have been last year going through an environment of falling oil prices and falling raw materials.

So this year, they stabilized. And if this rebound in oil continues, we should see, again, some support on higher raw material prices that will provide some -- potentially some improvement to our reported EBITDA on inventory restatements. However, our guidance excludes those effects, positive or negative, we are talking about comparable. But yes, definitely, it will be an influence of oil prices influence higher raw materials.

Thanks, everyone, for your interest. That is all the time we have available for today. The IR team remains also available if there are any follow-up questions. Thank you for joining our webcast. We look forward to seeing you soon at our shareholders' meeting. Have a great day.

Good morning, everyone. Welcome to Alpek's Third Quarter 2025 Earnings Webcast. I am Barbara Amaya, Alpek's IRO, and I am pleased to be here today with Jorge Young, our CEO; and José Carlos Pons, our CFO, who will be presenting today's material.

Today's agenda will cover the following topics. First, Jorge will provide an overview of the quarter. Then Jose Carlos will cover the financial results in greater detail as well as the process regarding the merger of Controladora Alpek with Alpek, following the successful completion of regulatory approval. Afterwards, Jorge will discuss the outlook for the remainder of 2025 and an update on [indiscernible]. Finally, we will conclude with a Q&A session.

Please note that the information discussed today may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to certain risks and uncertainties. Actual results may differ materially, and the company cautions the market not to rely unduly on these forward-looking statements. Alpek undertakes no obligation to publicly update or revise any forward-looking statements, whether it is as a result of new information, future events or otherwise. We express our financial results in U.S. dollars unless otherwise specified. For your convenience, this webcast is being recorded and will be available on our website.

Jorge, I'll turn the call over to you.

Thank you, Barbara. Good morning, everyone. Thank you all for joining us today. Alpek's financial and operating results show a 10% sequential improvement versus the previous quarter while still reflecting the challenging environment in the chemical industry. The Polyester segment reported a better product mix and steady volume levels following the resumption of our PTA operations at the facilities that have undergone shutdowns in the previous quarter. Meanwhile, the Plastics & Chemicals segment continued to deliver consistent results supported by stable regional demand seen throughout these months. Operating free cash flow was $68 million in Q3.

These financial results reflect Alpek's ability to partially offset the impact from global oversupply, which continues pressure in reference margins as well as lower ocean freight rates.

Now I will turn the call over to Jose Carlos to provide our financial performance in greater detail.

Thank you, Jorge. Good morning, everyone. Thanks for joining us today. Allow me to dive deeper into our quarterly results. Total volume was 1.12 million tons, increasing by 1% from the previous quarter and decreasing 8% on a yearly basis as it remained pressured from persistent market oversupply, particularly in the Polyester segment.

Reported EBITDA totaled $116 million, including a $21 million negative adjustment. This figure reflects extraordinary costs from the permanent closures of the Cedar Creek and the Beaver Valley site as part of our footprint optimization strategy. Comparable EBITDA resulted in $137 million, a 10% increase from the previous quarter, driven primarily by the Polyester business.

Moving forward to the [Audio Gap]

As operations resumed from prior maintenance shutdowns, yet still pressured by market oversupply, as mentioned previously. Asian integrated PET reference margins averaged $276 per ton, declining by 10% from the previous quarter and Chinese PET margins decreased by 14% to $134 per ton. Chinese reference margins stabilized during the quarter, a shift of the volatility seen in the first half of the year, however, continued to be at very low levels. U.S. reference for exciting prices increased 1% from the second quarter to $1,139 per ton, yet remained 8% lower compared to the same period last year. This narrowed the spread between North American and Asian prices to $253 per ton, an 8% decrease from the previous quarter.

Polyester comparable EBITDA reached $88 million, a 24% increase quarter-on-quarter, supported by a better product mix and operational cost performance. On a year-to-year basis, global oversupply, regulator headwinds and lower freight costs continue to have a negative impact.

Meanwhile, the Plastics & Chemicals segment continues to deliver a stable performance. Volume totaled 195,000 tons, up 3% from the last quarter and down 12% from the last year as normalized demand levels persist.

Moving on to industry references. Polypropylene margins remained flat in line with our guidance expectations at $0.14 per pound, while average propylene prices declined to $36 per pound, down 5% from the previous quarter. On the other hand, North American reference margins for EPS averaged $0.38 per pound, up 22% sequentially, while average styrene prices decreased to $0.44 per pound and 11% drop quarter-over-quarter.

Plastics & Chemicals comparable EBITDA was $47 million, an 8% increase quarter-on-quarter and 25% lower year-on-year as improving reference margins were offset by a slightly less favorable product mix.

Looking at free cash flow and capital allocation. Net working capital improved by $38 million compared to the previous quarter, driven by better inventory management and targeted optimization efforts. This positive trend was further supported by a more stable raw material pricing environment, particularly for property. We remain on track to achieve a full year recovery in the range of $60 million to $70 million.

CapEx for the quarter was $32 million, including $28.5 million in maintenance and $3 million in strategic investments, consistent without the ongoing focus on disciplined capital allocation. As a result, operating free cash flow totaled $68 million, a 41% increase from the previous quarter, totaling $123 million year-to-date. I would like to highlight that Alpek continues to generate significant positive cash flow and maintains a strong free cash flow yield despite the challenging industry backdrop.

On our balance sheet and financial position, net debt was $1.8 billion, up 2% year-over-year, yet declining by 3% from the previous quarter. Last 12 months, reported EBITDA totaled $458 million, resulting in a net debt-to-EBITDA ratio of 4.0x, an increase from the previous quarter as anticipated. Notably, if we adjust for nonrecurring items related to cost structure improvement and footprint optimization initiatives seen through the year, the pro forma leverage would have resulted in 3.7x.

As we approach year-end and as market conditions are taking longer than originally anticipated to recover, Alpek expects leverage to remain at higher levels and we will continue to be focused on taking the necessary measures to reduce its leverage through the following actions: one, footprint optimization. We're taking decisive action by closing 4 facilities to date and are continuing to assess marginal sites as part of our cost discipline efforts; two, divestiture of non-core assets with a focus to maximize value for our shareholders, we are progressing with the potential divestiture of several nonproductive assets; three, continuous debt profile improvement. Thus far, we have successfully refinanced $690 million, improving our average debt maturity to 4.6 years, and we successfully refinanced all of our 2025, '26, '27 debt maturities and we're currently exploring opportunities for the remaining debt in '28 and '29; fourth, free cash flow generation to net working capital and CapEx optimization; and finally, foregoing a dividend payment in 2025.

Through these actions and amid challenging industry landscape, Alpek reiterates its commitment to continue its deleveraging efforts in line with our priority of maintaining a strong investment grade profile.

And finally, I am very excited to share that a key development for Alpek. The National Banking and Securities Commission, or CNBV, has recently given the company the approval to merge Controladora Alpek with Alpek. Earlier this morning, we called for the extraordinary shareholders' meeting to be held on November 25 to request approval for the merger between both entities. We also would like to remind our shareholders that in order to legally install the shareholders' meetings, we require the attendance of shareholders would represent at least 75% of the capital stock. Therefore, we invite you to make sure that your shares are represented and that the respective vote is exercised. Your participation is very important to ensure that the merger is approved promptly and becomes effective once the legal process has been completed.

This is an important step in order for Controladora Alpek and Alpek to be listed as a single entity. Additionally, with 100% free float, Alpek could become a candidate to join the Mexican index or IPC, among other indexes, which could generate additional shareholder interest. Together with our continuous execution to prioritize competitiveness, Alpek is confident in its ability to deliver long-term value for its shareholders.

With that, I'll turn the call back to Jorge.

Thank you, Jose Carlos. Moving forward to the outlook for the remainder of the year. Overcapacity will continue to be the main challenge in the industry. As a result, reference margins are estimated to remain pressured alongside low ocean freight costs, which are also expected to continue impacting our performance. In light of these dynamics, the company is revising its full year comparable EBITDA guidance to approximately $500 million. We expect fourth quarter results to reflect lower demand from a typical seasonal effect alongside plant maintenance shutdowns in several of our sites.

Looking ahead, we have a very significant development regarding trade regulations in the United States. Through an executive order effective September 8, PET resin has been removed from the list of exceptions on reciprocal tariffs, meaning that imports for both virgin and recycled PET into the U.S.A. will now carry an additional duty at the levels negotiated by the U.S. government with numerous countries, including the key Asian countries exporting PET into the United States.

This change is expected to create a more balanced competitive landscape for domestic producers. While we welcome this news, it is still early to quantify the impact of the new tariffs. Notwithstanding, we're optimistic that we will see favorable impact to Alpek starting in 2026 and adding in 2027, as contracts are negotiated and by gaining volume through displacing imports. We will provide an updated view when we issue our 2026 guidance concurrent with our full year 2025 results release this coming February.

Barbara, I'll turn the call back to you.

Thanks, Jorge. Before we start the Q&A session, I would like to restate what Jose Carlos mentioned regarding our upcoming extraordinary shareholders meeting for the approval of the merger of Controladora Alpek and Alpek. Your participation is extremely important to ensure the merger is effective. As in order to legally install the shareholders' meetings, we require the attendance of shareholders, which represent at least 75% of the capital stock. So we strongly encourage all shareholders to participate in both, whether by registering and attending the meeting or through proxy voting. If you have any questions, please reach out to me or anyone in the IR team. We would be happy to assist you.

[Operator Instructions] Our first question comes from Thiago Casqueiro from Morgan Stanley.

I know this tends to have kind of a lagging effect on prices and you mentioned the impact only in 2026 and 2027, but with the U.S. government removing PET from the tariff exemption list, have you noticed any impact yet in new contracts or spot sales? So basically, is it possible to see the effect flowing into 4Q results already?

And the second one is related to volumes. I know we have the seasonality effect on volumes in the fourth quarter and also the maintenance you mentioned. But what trends have you observed in demand and volume so far in October? And what are your expectations for 2026?

Yes, thank you for your questions. Those are very good questions. Yes, indeed, the -- what we said is that we expect to see the impact of the reciprocal tariffs more into 2026. There are some relatively small positive reactions in the fourth quarter. But for the most part, we will see the effects in 2026 as contracts renew and also consider that imports had been heavy throughout the first 9 months of the year. So the market needs some time to absorb and still digest that pipeline.

So yes, some small positive signals in fourth quarter, the most relevant will happen in 2026. In particular, the fourth quarter, we have the low seasonality, which is typical of the fourth quarter. I would say the last 2 or 3 years has been more acute than what we had seen in previous decades, I would say. More also compounding effects from the heavier levels of imports in the first 9 months of the year. That's the -- that mostly explains the more weakened view in volumes in the fourth quarter.

Our next question comes from Ben Isaacson from Scotiabank.

Can you hear me okay?

Yes.

Great. I just have one question. When you Think about your key chemicals, PET, PP, EPS, et cetera. Can you rank them in terms of 2 different things. One is through cycle return on invested capital. And then number two is free cash flow conversion. Can you just explain which of the chemicals are kind of more efficient from a use of capital point of view?

But generally speaking, our plastics and chemicals, polypropylene and EPS are more efficient in return of capital throughout the cycle. I think we have some more elements for differentiation and less exposure to -- a little bit less exposure to other markets. Most of our footprint is in North America in those 2 businesses.

So just to be clear, you would have a better return on capital, a better free cash flow conversion in the P&C segment. Does that mean that it deters you from investing capital in the Polyester segment in the future?

Not necessarily. I think the Polyester segment has very interesting opportunities to still improve its technologies and its cost. And I think we are nurturing and working into those projects as we speak. And when they're ready, we will revisit our cash flows, and they will likely be still financed within the cash flows from the Polyester division, but that's something we would see in due time.

Maybe just in addition to that, the way that we have also been able to compensate in the Polyester segment is through acquisitions. We've made very attractive acquisitions in the past at below replacement cost of capital, and that compensates what Jorge just indicated.

Our next question comes from Leonardo Marcondes from Bank of America.

I have two from my end. Regarding the readjustment guidance, right, I would like to understand a bit better. I mean, as you have already said, right, volumes in the first quarter are usually lower than in the third quarter. So I would like to understand if all this revision of the guidance for this year is mainly attributed to these lower volumes, right? Because at the end of the day, October -- spreads in October have been stronger than the third quarter average, right? And there is also this PET import duties that, okay, we should see the effects a bit better in 2026, but maybe in the first quarter, there should be also an impact there, right? So my first question is if the downward revision in guidance can be only attributed to lower volumes, right?

And the second question is regarding the PET market itself, right? I mean, if you guys could provide any update regarding the market dynamics? And mainly, if you have seen any new announcement in shutdown capacity? And what could we expect from this regard for the next year?

Thank you for your questions. I think in fourth quarter, while there is a small uptick in margin on reference margins, they still remain at a very low level. The other important variable is that ocean freights have come down from the second and third quarter levels. And also in third quarter, demand was -- when it was steady and robust in some of our segments, it was somewhat below what we had expected earlier in the year. As I mentioned, in a very important market for all like the United States, imports of Asian products have been very heavy in the first 9 months of the year. There was a significant wave of imports before April when the reciprocal tariffs dynamics were evolving. So that still put pressure on third quarter. And that's basically the reason of our reduced expectations.

As far as PET market dynamics, look, I think we can see that several plants in Asia and in Europe are under tremendous pressure. There are rumors and discussions, but nothing that we can say specifically at this time.

Just maybe one follow-up here. Regarding the narrative of the anti-involution in China, do you expect any impact on that -- from that on the petrochemicals or so far, what have been announced has been softer than initially expected?

I think that's just an emerging discussion, I think still, there has been, again, in many products, even beyond petrochemicals, discussions how to deal with the excess of capacity in China. And in the chemical field, the anti-involution is being discussed in the context of plants that are either 15- or 20-year old or older must be scrapped.

Honestly, I don't know exactly to what extent that is still -- if indeed is happening. If at all, there will be a modest effect, I believe. I think we are bracing for a tough cycle and for actions on having the right footprint, having the high focus on cost efficiencies in our balance sheet. For us, that's the way to go. We still have some selective opportunities to add investments in product differentiation and some debottlenecks, we will share some of those early next year. But this is navigating in a tough environment on a tough cycle. That is our assumption. If indeed, some of these closures happen and happen at a higher magnitude or pace, that's potentially an upside for us, we think.

Our next question comes from Pablo Ricalde from Itau.

I have two questions. The first one is a follow-up on Leonardo's question on the guidance. I just want to ask if your $500 million assumes some benefits coming from the new like reciprocal tariffs or that's an upside risk in case these new tariffs helps in the PET margins.

And the other one is on the negotiation of contracts. If I'm not mistaken, you usually negotiate them around October, November. So I don't know if you can provide how are those negotiations evolving?

Yes, Pablo, thank you for this question. Yes, I think in the guidance, we are factoring everything we know. But as we have said earlier, the market is going to take some time to continue to digest the relatively large level of imports that came through the first 9 months and is in the slowest quarter of the year. That's why the effects are relatively small, and those are already factored.

And the negotiations, as you just said, they are just beginning. This is a period of where negotiations normally happen in the industry. A relevant portion of the volume is normally up for negotiation year after year. And that's just beginning. That's why we prefer to see how that process evolves. And then we go from there and we'll let you know more quantitatively in the beginning of the year.

But just some facts, imports from Asia in an annualized pace through September, is close to 800,000 tonnes into the United States, like 760,000 tonnes. And on the 5 or 6 main Asian countries that bring product into the United States, the change in the tariffs was between 15% and 20%. So I think that will, again, provide us more opportunities to capture volume, potentially increase margin, but we want to navigate those quarters. I think it's just early. And again, the demand is quite soft to close the year. So I think we'd like to take more time.

Our next question comes from Joao Barichello from UBS.

I have two very quick questions from my side. Could you provide an update on the current divestment plans in terms of how material potential movements could be and their timing. Moreover, considering the increase of leverage to 4x net debt EBITDA, do you maintain the 2.5x target? And if so, when do you expect Alpek to reach this goal? Could you consider a resumption of dividend payments out of next year's radar?

Thank you, Joao. Very good questions. Well, first of all, the divestiture of nonstrategic assets, as we have already indicated in previous calls, we have around 3 sites that we shut down in the U.S. We're exploring the opportunity to sell those assets. There are ongoing processes in 2 of them. And we're progressing as fast as we can, but it takes time to be able to close the transaction. So no update on the potential time frame for closure. However, we're doing whatever we can to proceed as fast as we can. That could be a smaller contribution, probably around $30 million to $50 million all together, those 3 assets.

On the other hand, the Mexican -- the Monterrey site, we continue to evaluate opportunities for that asset. It seems less likely that we will be able to sell it as it is. So we might need to think of further options on splitting the asset to or developing a little bit further. We are working on those options and evaluating the potential requirements of capital and we will continue to give you updates on a quarterly basis. So no further uptake, but it's a valuable asset that could contribute. We're not in the mode of fire selling that asset at this moment.

In terms of leverage, yes, our target continues to be 2.5x. Unfortunately, our leverage increased in this quarter. So what we have done as indicated in my initial comments, everything we can, and it's in our hands to improve and to reduce the impact of different factors that have impacted us. We expect to continue deleveraging throughout 2026. We expect that we will be closer to the 2.5x by year-end. And of course, we will continue to find avenues to reduce the leverage.

And one item that we will evaluate potentially in the second half of the year, it's a dividend. Of course, it will depend on where we are and how do we see the environment and the performance of Alpek. At this moment, it seems difficult to give you a precise answer, if there's a dividend in '26 or not.

Our next question comes from Rodrigo Almeida from Santander.

Just one from my side. If you could give us an updated view on what you expect in terms of direction in working capital for the fourth quarter and perhaps for early '26 as well, if you can, just so we have a sense of your expectation in terms of cash generation for the next few quarters.

Yes. Thank you, Rodrigo. Yes, as we indicated, the third quarter was positive, and we were able to capture opportunities to reduce working capital. So the majority of our expectation has already been delivered. And by year-end, total benefit is expected to be in the order of $70 million to $80 million. So that would include the benefit of what we already been achieved.

Our next question comes from Pierre Dresser from SMBC.

This is Laura from SMBC. In terms of guidance, you've mentioned $500 million for 2025. And I know this is a little bit early, but do you have any idea of how EBITDA in 2026 will be impacted, how would the margins look like and the CapEx for next year as well?

Not yet. That's we'll share on those details in our call in February. However, this event of the reciprocal tariffs is important, it's relevant, and we would expect some sequential improvement, but we like to go over the process of how the markets actually evolve on that topic. Again, it's a positive event, but we will quantify for you all in February.

And we will see the benefit of some cost reductions that we have done in '25 and yielding results in '26. So that's something also positive for our results in '26.

And where do you see the margins as of the end of the year?

Reference margins, we continue to see them steady on the low side. Reference margins, we mean the Asian margins. The ocean freight, which is important for us because ocean freights are correlated clearly to the import parity pricing of competing products from Asia also remain on the low side. So we would expect that environment to continue. I mean it's volatile, right? And I think I'd like to say that both being on the low side, there might be opportunities for some upside. But limited, I would say.

The key difference again in our market is the one that results from changes in trade activity, the main event being that is applying to Asian origins in the United States, right? And but even the reciprocal tariffs are going through some challenge in the court. I think it's our expectation from all the canvassing of opinions we've gone throughout the industry and many industries that they will remain. But even that event is still to be seen. That is also a reason for us to -- once we are in the beginning of the year, we will have the full picture.

Thank you. That was the last question in the queue. So thanks, everyone, for joining our webcast. We look forward to seeing you on our shareholders' meeting. Have a great day.

Good morning, everyone. Welcome to Alpek's Second Quarter 2025 Earnings Webcast. I am Barbara Amaya, Alpek's IRO, and I'm pleased to be here today with Jorge Young, our CEO; and Jose Carlos Pons, our CFO, who will be presenting today's material. First, Jorge will provide an overview of quarterly results and relevant events. Then Jose Carlos will cover the quarterly financial results in greater detail. And afterwards, Jorge will provide greater insight into our revised guidance and how it reflects today's environment, and outlook for the remainder of the year. Finally, we will continue with the Q&A session.

Please note that the information disclosed today may include forward-looking statements regarding the company's future financial performance and prospects, which are subject to certain risks and uncertainties. Actual results may differ materially, and the company cautions the market not to rely unduly on these forward-looking statements. Alpek undertakes no obligation to publicly update or revise any forward-looking statements. whether it is as a result of new information, future events or otherwise. We express our financial results in U.S. dollars unless otherwise specified. For your convenience, this webcast is being recorded and will be available on our website.

Jorge, I'll turn the call over to you.

Thank you, Barbara. Good morning, everyone. Thank you for joining us today. For the second quarter of 2025, Alpek's financial and operating results reflect a solid performance in the Plastics & Chemicals segment, as margins and volume remain in line with our original guidance. This helped to partially offset continued volatility in the Polyester segment, where global oversupply and trade-related disruptions continue to exert pressure on margins.

In addition, a combination of extended period of maintenance downtime and unplanned outages at our sites, particularly in our PTA operations contributed to lower-than-expected results. With operations successfully resumed, we expect performance to trend closer to our original expectation for the second half.

With respect to our long-term pillars, let me provide a quick update on two of them. First, solidifying our core business. As part of our ongoing efforts to enhance productivity and strengthen competitiveness, we're advancing proactive initiatives aligned with our long-term vision of integrated scale-driven hubs. To achieve this, we announced the closure of the Cedar Creek facility, which will begin at the end of this month. PET production will be reallocated across our global network, but primarily to our other U.S. facilities.

We will continue to enhance efficiency and ensure reliability for our customers, focusing on operations on our most competitive facilities. Additionally, progress continues on the divestiture of nonstrategic assets, also aligned with our long-term financial strategy.

The second pillar I want to talk to you today is stability through consistent financial flexibility. During the second quarter, we strengthened our liquidity position by successfully refinancing $340 million in debt, originally maturing in 2027 and 2028. And we expect to complete the refinancing of an additional $200 million due in 2027 by the end of July.

These actions will extend our average debt maturity from 3.5 to 4.7 years, further reinforcing our commitment to financial flexibility and disciplined cash flow management. As we continue to execute our four strategic pillars, we are confident we will be able to navigate the near-term uncertainty and better position the company for long-term growth.

Now I will turn the call over to Jose Carlos to provide details of our financial performance in greater detail.

Thanks, Jorge. Good morning, everyone. Thanks for joining us today. Now allow me to cover our quarterly financial results.

Volume was 1.1 million tons, down 7% from last year and flat from the previous quarter. As Jorge mentioned, this reflects the impact of an extended period of maintenance downtime and unplanned outages in our PTA operations, which offset stabilizing demand levels. Reported EBITDA was $102 million, including a $23 million negative inventory adjustment. Notably, during the quarter, we saw a significant decline in raw material prices in our Plastics & Chemicals segment, which accounted for $14 million of this adjustment.

Alpek generated $125 million in comparable EBITDA, decreasing by 21% on a yearly basis and remaining flat sequentially, reflecting the challenging environment influenced by global oversupply, trade issues and operational disruptions, particularly in the Polyester segment. We estimate that under normal production conditions, comparable EBITDA would have been approximately $15 million to $20 million higher. We continue taking proactive measures to mitigate these effects and strengthen profitability.

Now moving forward with the Polyester segment results. Volume was 927,000 tons, a 7% decrease year-over-year and a 1% sequential increase. PTA production during the quarter was affected by several factors. One, we advanced the annual maintenance outages of our Brazilian facility, which was originally planned for the third quarter. Two, our facility located in the south of Mexico was also taken offline for planned maintenance activities. And three, our largest facility in Altamira, Mexico experienced unexpected operational disruptions. All the facilities have returned to normal operations without further disruption.

Asian integrated PET reference margins averaged $308 per ton, up 11% from the previous quarter, while Chinese PET margins increased 12% to $155 per ton. While average margins improved overall, they were marked by pronounced fluctuations throughout the period. Additionally, U.S. reference paraxylene prices rose 2% from last quarter to $1,132 per ton. Yet they are 16% lower compared to the same period last year. This resulted in a spread between North American and Asian prices of $276 per ton, a 34% decrease from the previous quarter. Polyester comparable EBITDA was $71 million, a 31% decline year-over-year, reflecting global supply challenges and tariff-related headwinds.

Favorably during the quarter, the results for the Plastics & Chemicals segment remained relatively stable. Volume totaled 190,000 tons, a 6% decline both year-over-year and quarter-over-quarter, reflecting a return to normalized demand levels as market players increased their inventories last quarter, anticipating a potential tariff impact amid the current political landscape.

Turning to reference margins. Polypropylene margins remained flat at $0.14 per pound, yet in line with our expectations for the year, while average propylene prices declined to $0.38 per pound, down 16% from the previous quarter. And North American reference margins for EPS increased slightly to $0.31 per pound, up 6% sequentially, while average styrene prices decreased to $0.49 per pound, a 5% drop quarter-over-quarter.

Plastics & Chemicals comparable EBITDA was $51 million, a slight decline of 1% from last year and a decrease of 7% from last quarter, as higher reference margins for EPS and stable conditions on polypropylene spreads offset the drop in volume.

Turning to free cash flow and capital allocation. For the second quarter, net working capital resulted in a release of $9 million, an improvement over the previous quarter as inventory levels decreased. We continue to expect normalization in the second half of the year as raw material prices are expected to continue decreasing. As a result, we forecast a net recovery for the year overall, and we remain committed to strict working capital management.

Operating free cash flow reached $48 million, up $40 million from the previous quarter. Alpek remains on track to deliver positive cash flow for 2025, underscoring its resiliency amid the challenging macroeconomic environment. CapEx totaled $58 million during the quarter, including $21 million in maintenance CapEx and $37 million (sic) [ $36 million] in strategic CapEx. This includes a nonrecurring item of approximately $20 million from the release of an escrow account associated with the Octal acquisition upon completion of agreed terms and completing our obligations related to this transaction. Additionally, we don't foresee declaring a dividend payment for 2025. We remain focused on preserving financial flexibility and prioritizing disciplined capital allocation.

Moving next to our balance sheet and financial position. Net debt was $1.9 billion, up 10% year-over-year and 1% from the previous quarter. Last 12 months reported EBITDA was $540 million, resulting in a net debt-to-EBITDA ratio of 3.5x. Last 12 months comparable EBITDA basis, the leverage ratio resulted in 3.0x. Alpek continues to implement measures to leverage to approach our target of 2.5x by 2026.

With that, I'll turn the call back to Jorge.

Thank you, Jose Carlos. As we close the first half of the year, Alpek has revised its comparable EBITDA guidance to reflect the persistent uncertainty and evolving dynamics across the industry landscape. Ongoing tariff-related issues have extended beyond initial expectations, reducing visibility and delaying strategic decisions. Additionally, in the United States, PET has remained excluded from reciprocal tariffs, while facing a 10% duty currently on its key raw material paraxylene, which has led to an unfavorable condition for local producers. We have proactively but partially mitigated this impact by reoptimizing raw material flows. Moreover, PET sheet rolls imported from Oman are subject currently to 10% reciprocal tariffs compared to 0% before April 2.

Adequate conditions are needed to ensure the competitiveness of the industry. We have presented the case of PET pertaining reciprocal tariffs to key branches and agencies of the U.S. government and Congress. As a result of the above factors, our updated comparable EBITDA now ranges between $525 million and $575 million, contingent on how key external factors continue to evolve.

The high end of the range assumes stable reference margins in the second half of the year, supported by capacity rationalization in the polyester industry and improved trade conditions with ocean freights remaining at current levels. The low end reflects the potential impact of continuation in volatility and uncertainty, which could further pressure reference margin levels in combination with lower ocean freights.

Neither scenario reflects an impact on trade between U.S. and Mexico. Based on our understanding, the recently announced 30% tariffs do not apply to products compliant with USMCA provisions. Accordingly, our exports from Mexico into the United States are expected to be excluded and unaffected.

In line with this outlook, we're also updating our CapEx guidance to a range of $130 million to $150 million, underscoring our disciplined approach to capital allocation and our ability to adapt investment plans to market dynamics. At the same time, we continue to mitigate external effects by proactively taking measures on factors we can control, including cost optimization, supply-demand alignment and preserving financial flexibility. Looking ahead, we'll remain committed to transparency and will provide a refined outlook if needed for full year results as market conditions evolve.

Before opening the call to your questions, I'd like to briefly update you on the merger between Controladora Alpek and Alpek entities. Based on our current progress, we expect the process to be finalized before year-end, but still subject to government regulation.

Barbara, I will turn the call back to you.

Thanks, Jorge. [Operator Instructions] Our first question comes from Leonardo Marcondes from Bank of America.

I have two from my side. The first one is related to Alpek's capacity. You have recently shut down some PET capacity, right? You mentioned this in the release. So I was wondering if you could provide more color if you continue evaluating the possibility of shutdown other plants? And if so, if this should be from the Polyester segment as well or not? My second question is regarding the divestment plan, right? I was wondering if you could provide an update on that front and maybe more details on the timing for that.

Thank you for your question, Leonardo. On your capacities, at this moment, we don't have other assets that we are planning to shut down. However, this is an ongoing process as we have already shut down a fiber plant and two PET sites and one EPS sites. I think we have made significant progress in optimizing our footprints. Most of our remaining facilities are the ones that we consider stronger, because they have raw material integration or they have higher scale or are very close to key markets.

However, this is a process that is always continues. And depending on market conditions and industry conditions, we will look into that at all times. I'll ask Jose Carlos to talk to you about our divestment plans on the nonstrategic assets.

Thank you, Leo. Thank you for your question. Yes, as we have shared with the market, we have several assets that we're looking at divesting, mainly coming from plants that we have shut down. We have the asset in the Beaver Valley plant. We are actively pursuing an opportunity. We are in conversations with a potential -- a couple of potential interested parties. So that's ongoing. I don't know if we will be ready by this year, but that's a conversation that is ongoing. And hopefully, we'll have good news sooner.

There are a couple of other sites in the U.S. that we're exploring the opportunity to divest, and that's a preliminary conversation. So hopefully, we'll have more news by the next quarter conference call. And the other one, the more relevant, it's the one that we have shared with the market, the Monterrey site, which is close to 45 hectares in this downtown area. As we have shared, we are preparing different alternatives: one, divesting it as soon as possible, and the other one potentially contributing it to someone that could develop.

Because of the size of the asset, we are not yet having a lot of progress in divesting the asset as it is, but we will continue to update. That's an alternative that we like, but definitely it takes too time, as I say. We need to have someone interested in the asset. There are interest, but the amount of the value of the asset is high. So it's an ongoing effort. It's very high on the priority list. However, we're making some progress gradually.

And I'd like to add Jose Carlos, it's not until very recently where we have begun to reach out to third parties. I think a lot of effort so far has been on our side to take care of the equip or sell the disposed assets, take care of the land environmental assessment. So we feel very good about the asset, and we are just reaching out to the market and third parties. It's a huge asset, and our expectation on value is high. So the universe of potential buyers is going to be limited. But again, the location is in a prime spot in the center of Monterrey City.

Thank you, Jorge, for the clarification. We made a lot of progress in putting this asset ready to be sold. So there was a lot of work, bureaucratic work on that.

Our next question comes from Tasso Vasconcellos from UBS.

First, I would like to get some additional view on the sector, globally speaking. We know there has been several uncertainties, reason for the adjustments on the guidance here. You already mentioned a little bit about the tariffs from the United States. But looking forward, Jorge, where do you view the highest risks for Alpek? What could make spreads or margins deteriorate from now on? And on the opposite direction, where could you see some upside risks on the sector here? Where do you view some opportunities, if any, amid this challenging environment? Just trying to better understand here, looking beyond the guidance, how are you evaluating the market and how is the company positioning itself?

Second question is related to the company's expectation for cash flow this year. What are you expecting for the second half of this year? Also trying to separate the leverage from here, what will come from the EBITDA buildup and what will come from cash flow? Still on this topic, can you also help us better understand the assumptions for the CapEx this year? What is maintenance, what's eventually being delayed? And how much could it actually increase in 2026? Those are my two questions.

Yes. Tasso, on your first question, it's a very good question because, obviously, our industry is facing challenges, right, like many chemical products regarding overcapacity. Sitting where we are today, as far as reference margins, thinking about Asian spreads, we think they are in the very low point. I personally don't see significant downside. However, at the same time, I have to tell you, I don't see also significant upside because the overcapacity is going to last at least for another couple of years.

Right now, on ocean freights, we saw an increase in the second quarter. For the most part, it has come down close to what it was before. The one exception is in Latin America, where the ocean freights have remained elevated. So that potentially -- if they stay elevated for longer, that's an upside for us. If they come down quicker than what we think today, that could be potentially some downside in the short term.

As far as -- however, the bigger issue right now that we have faced this year and that's embedded in our guidance is the impact of tariffs in the United States. As we have mentioned since the last call and earlier in our prepared remarks, PET does not enjoy the reciprocal tariffs. So PET remains with the tariffs that were applicable prior to April 2. So that has not changed for PET. While some of the inputs that are needed to make PET are facing the reciprocal tariffs. So we don't think that situation can get worse from what it is. And again, that's -- we have factored that in our guidance.

But right now, one of our key priorities and efforts is to make sure the PET case is understood well and clearly by the U.S. government officials. I think obviously, they will make the right decision for the United States, but we are -- we just want to make sure the facts are understood and presented well for PET. In the event PET enjoys the reciprocal tariffs like most of the other polymers and chemicals in the United States, that could provide an upside for us, particularly in volume, potentially margin. I mean, local competition in North America remains very, very strong. But if PET becomes another product that for which the reciprocal tariffs do apply, that's certainly our most significant upside. And that will be important not only for PET resin, but also for PET sheet rolls whose price -- which the price of PET sheet rolls tends to follow the price of PET resins in the United States.

So hopefully, that gives you the flavor of the ranges that what we view. Certainly, it's very dynamic and volatile times and very uncertain, but those are the three key aspects I would mention. I'll have -- I'll ask Jose Carlos to help us with your question about cash flow.

Thank you, Tasso. Thank you for your question. Thank you, Jorge. Well, very good question. First of all, I would like to highlight that free cash flow from operations on the first half of the year has been strong, has been -- we've been able to compensate some of the downfalls in EBITDA by reducing other elements of the free cash flow. So therefore, that's kind of a highlight and continues to strengthen the message that we've been conveying that the free cash flow from operations from Alpek is very resilient, and that's something that we will expect to have for the full year.

More or less for the year, we're expecting around $200 million of free cash flow from operations. And as we already indicated in the call, we're not expecting to pay a dividend. So that's going to be very close to the entire free cash flow of the business.

In terms of CapEx, we will continue to be very disciplined on how we allocate CapEx. As we already shared, our range is $130 million to $150 million. Around $100 million would be related to maintenance CapEx. We have not delayed any single project or relevant maintenance activity in our facilities. That's a key priority for ourselves. And we're only making strategic investments on the most critical and the most profitable investments that we have.

So I hope that answers the question. We still see a strong free cash flow for the year. And hopefully, we'll continue to do so as we have already indicated on the resiliency of our free cash flow.

Our next question comes from Bruno Montanari from Morgan Stanley.

I have a follow-up and a question here. Just to double check on the CapEx guidance. Is the strategic CapEx from Q2, including the $20 million related to Octal included or excluded from the $130 million to $150 million guidance? And then my question is, can you comment a little bit on demand and volume evolution in July? And any signals or early signals you're seeing for August now, so we're able to gauge how your volume looks like in the third quarter?

Bruno, so related to the CapEx guidance, yes, the Octal payment that we did $20 million are included in the guidance we've provided for strategic. And regarding the volume outlook, Jorge, would you like to comment?

Yes. I think it depends on the product. For example, PET, one of our key products, the second quarter began actually very strong since late March, April, first part of May. Then in June, we felt weakness, and that weakness has extended into July. I think there was probably more purchases than the underlying demand. We think the underlying demand remains steady, perhaps on the low side, but steady. And now we have signals that we might see some improvement into August. So sitting here today, before even July ends, the Q3 might be close to the Q2. But obviously, we will continue to watch. I think all in all, for PET, the summer season has been a little bit below our expectations.

In other products like in plastics and chemicals, I think the demand remains cautious. I think we -- obviously, we feel that there could be upside when eventually items like housing comes back with more improvement that will demand for EPS. Polypropylene demand has been also somewhat slow, but steady. The feedstocks for propylene, as Jose Carlos explained, we had inventory adjustments in the second quarter. The feedstocks to make polypropylene did come down during the quarter.

And that keeps the market or the customers, many of them at least at bay, right? They are waiting for the prices to stabilize. So now we are in the low point of prices. And they're not rebounding, but now that we see the demand normalizing. So I would say, in summary, similar demand into the Q2, but I feel we still might have eventually upside, especially when housing and the perception that the bottom has been reached, that might trigger some extra demand.

Our next question comes from [ Laura Costa ] from SMBC.

I have a follow-up question regarding the tariffs for the feedstock, the peroxide that you mentioned, the 10%. Two things. Are these reflected in the high end of your guidance for the rest of the year? And also, would these tariffs mean that you would reshuffle production in the U.S.? Or how do you see this playing out in terms of volume and revenue?

Thank you for your question, Laura. Yes, in our high end of the guidance, what is factored is that we have and something that we have already executed is that for the feedstock paraxylene, which now is subject to a 10% duty, 0% before April 2, we have now redirected our sourcing mostly or I would say, pretty much all by now to U.S. sourcing. So that will avoid the tariffs.

However, sourcing paraxylene in the United States, the production plants are in the U.S. Gulf Coast in Texas, mainly. So the intra-U.S. logistics is more challenging, it's more expensive. It's better than facing the tariff, but that leaves us with a lingering effect on non-optimal logistics.

Before the tariffs, the -- pretty much all the U.S. paraxylene that we were buying, it was being shipped to Mexico because that shipping route is very competitive, and we have made it very competitive over the years. So now obviously, it's going to take us probably some time to optimize the intra-U.S. logistics. We needed to react to what was available. So again, it's better than facing the tariffs, but it's not yet optimized to our full satisfaction.

And what is your expectations in terms of adjusting that cost in logistics and the impact in working capital and how you manage? Because I saw that you had like a improved working capital of plus $9 million. But how do you see that playing along in the rest of the year?

Yes. In the second quarter, I think it was a result of normalizing our inventories to some extent. I think in the grand scheme of things, I would say, from the tariffs, the effects on working capital. The other might be some because the transit time is a little bit longer. But they will probably not materially affect us in the grand scheme of things. It is our expectation in the second half of the year to still harvest meaning reducing -- releasing some working capital to some extent in the second half of the year.

And again, we don't expect our debt to increase. We are seeking to reduce our debt because we will have a trailing 12 months more challenging EBITDA, right? So the -- in order to protect the ratio, we are very focused on maintaining working capital efficiency. And again, that's what we expect to accomplish in the second half. So in spite of the complications that we have to face from the tariffs, we still have opportunities reducing our inventories of finished products and other aspects of working capital, and we expect some improvement.

Our next question comes from Regina Carrillo from GBM.

I was wondering about Octal. Do you think you could give us more color on what the performance of Octal has been recently, especially relative to the business in the Americas? Like does it affect -- does it get affected by the same pricing and freight cost as your business in the Americas?

For Octal, it's been 3 years since we completed that acquisition. So far, we have been very pleased and satisfied with the performance of Octal. Initially, we were able to capitalize on peak conditions. And since then, it's been at or better than our expectation in what we call our project book for valuation of the project. The asset is very competitive and very flexible in the feedstocks and the logistics, normally, it has an advantage.

The one -- the recent situation on tariffs is creating a headwind for Octal asset because now PET sheet rolls that are imported into the United States are facing a 10% duty. And obviously, that's a setback and we need to address that situation, and we're working on that. But for now, that's something we have to address. And so that -- other than that, the asset has been performing very well. It's very competitive. It's very as competitive as the largest Asian facilities.

And again, the reciprocal tariffs is the one issue that we're facing, especially because PET resin, which has -- which is a different product than PET sheet rolls. PET sheet rolls are much more value-added product. PET resin in the United States does not enjoy the reciprocal tariff yet. So if PET in the United States could enjoy the reciprocal tariffs, there will be an opportunity for the PET sheet rolls to benefit a little bit from that as well. So that's the current situation on Octal. And hopefully, that was clear, Regina.

Our next question comes from Melissa Marcus from Jefferies.

This is Nico Fabiancic from Jefferies. You've discussed it a little bit, but I just wanted to clarify in terms of the guidance, the implication is a significant improvement in second half. I think it comes out to like 36% at mid, better second half '25 versus first half '25. And I just wanted to unpack that a little bit in terms of volumes, the impact of maintenance and then the assumption embedded there for spreads.

And then second question is on M&A. I mean, you've discussed a little bit the asset sales, possibilities and progress there, but I wanted to check on your outlook and any opportunities in acquisitions. Given the weak part of the cycle, maybe some opportunities that are popping up. It was mentioned here in the press, the possibility of Alpek taking a look at Braskem Idesa, which has its own challenges, both at the asset and at the shareholder, Braskem. Is this something that could fit with your portfolio? How do you look at these kind of opportunities to be more proactive as Alpek has been in the past?

Thank you, Nico, for the two questions, very good questions. I think in the second half of our guidance, I think for the most part, we expect improved operational performance from our side. Perhaps a mild, but not very significant either recovery on reference margins and that we can enjoy that the elevated freights that we're seeing now in South America extend maybe for another couple of months. And so I would say those are the main items.

In one of the previous questions, I mentioned that the item that could have the most impact in our results and if PET could enjoy reciprocal tariffs. So that's something that is still to be determined. But yes, those are the main items that -- again, you have to factor an improved operational performance. I mean, Jose Carlos did mention that cost of $15 million to $20 million in the second quarter. And we don't expect to see that impact in the second half. And again, we have -- we are factoring, again, the impact of the reciprocal tariffs or not enjoying the reciprocal tariffs and somewhat elevated freight rates for the midpoint.

And as far as the M&A, yes, I mean, we have been looking into opportunities. We have received a number of teasers and prospects, mostly for other regions. And so far, we have not found anything specific that has been appearing to us, but that's an ongoing process. We really don't have anything to comment on the Braskem Idesa. That's a product that, to some extent, is close to one of our products, polypropylene. It's in the current market. We study many companies, but nothing -- really nothing to comment or report at this time.

Our next question comes from Pablo Ricalde from Itaú.

I have a follow-up on Jorge's comments on the merger with Controladora Alpek. I don't know if you can share more details on which milestones you have to achieve before reaching the final merger between Controladora and Alpek. I know you comment, you expect something before January 2026. But I don't know which percentage of the process or if there's like an upside risk in case you can manage to do it maybe by the fourth quarter of this year?

Thank you, Pablo, for your question. I'll try to answer your question. Well, as we have already informed the market, we're making progress towards the merger. It's something that is very important for us, and we're giving very high priority to this activity. We work with the National Bank Commission here in Mexico. We need to submit certain documents. We have already submitted the first draft of those documents. They came already with some comments, and we're in the process of sending them back with the adjustments that the authority requested.

We're trying to be in the next session that they will have to, hopefully, that's aggressive, but that's our target. And we feel comfortable that we will be able to do it this year. It seems likely that it's going to be in the fourth quarter. Hopefully, we could surprise you and achieve it earlier. But at this moment, it's difficult to forecast because not all the things are in our hands.

We have a couple of questions coming in through the Q&A. I will proceed to read them. So Declan Hanlon from Santander asks, can you update us on the ongoing noncore asset sales in terms of scale and timing? I think we covered that. And the second question was, also please update us on total and available credit line availability.

Declan, thank you for your question. I think on the disposure of assets, we already answered. If not, contact our IR team, and we can clarify. On availability of credit, I'll take this opportunity to update everyone, which was already done, but we've done a strong effort on refinancing our entire debt portfolio. You saw that we increased the maturity of our debt, which is something very relevant, and it's one of the key elements for the ratings that we are having at this moment and enjoying at this moment. So that's something that we will continue to do, and that's a key activity.

We've also renewed some of the revolving credit and committed credit facilities that we have. They are in the total of close to $600 million, and they are completely available. And well, that seems -- it's one of our key actions that we have to protect our liquidity. And the other thing is cash. We operate between $200 million and $300 million of cash that is available, which is also another source of liquidity. Hopefully, that answers your question.

So we had another question coming in through the Q&A. I will proceed to read it. Your volume guidance remain unchanged, but with a softer-than-expected first half and now your comments on flat volumes for 3Q, how do you expect to achieve it?

So here, what we are foreseeing is, as we mentioned, an improved performance during the second half. As you remember, this quarter, we were impacted by planned and unplanned outages, particularly for polyester, which will not be part of our second half performance outlook. And in terms of numbers, it's just a 10% increase versus the first half. So again, we're seeing normalized demand, and we're not far from achieving our target for the year.

We have another question through the Q&A, I will proceed to read it as well. What's the plan for refinancing the $200 million of debt by the end of July?

I'll answer that question. Thank you for the question. Yes, we are working with a bank, an American bank from the continent to refinance. It's going to be a bilateral. And we are in the final steps of just signing the document. So it seems that we will be able to achieve it by the end of July. So of course, we're not in the end, but it seems very likely that we'll be able to do this, this month.

That was the last question in the queue. Thank you, everyone, for joining our webcast. Have a great day.