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Good morning, and welcome to GCC's First Quarter 2026 Earnings Results Conference Call.

Before we begin, I'd like to remind you that this call is being recorded. [Operator Instructions]. Please also note that a slide presentation accompanies today's webcast. The link is available on the company's IR website at gcc.com.

I would now like to turn the call over to your host, Sahory Ogushi, Head of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining. With me today are Enrique Escalante, our Chief Executive Officer; and Maik Strecker, Chief Financial Officer. The earnings release detailing this quarter's results was released yesterday after market close and is available on GCC's IR website. This conference call is also being broadcast live within the Investors section at gcc.com. And both the webcast replay of the call and transcript will be available on the same site approximately 1 hour after the end of today's call.

Before we begin, I would like to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in yesterday's press release and in our quarterly report filed with the Mexican Stock Exchange. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events.

With that, let me now turn the call over to Enrique.

Thank you, Sahory, and good morning, everyone. The first quarter was a strong start to the year and a good example of how GCC performs when market conditions and execution come together across the network. We delivered strong top and bottom line growth, supported by favorable weather and strong project activity across both the United States and Mexico.

More importantly, the quarter reinforces the strength of our business model, a flexible network, diversified customer base and the ability to allocate volumes where demand is strongest while continuing to serve customers reliably. That execution begins with the capabilities we built across the organization. Our people strategy reinforces operations consistency, capability building and readiness that underpin the business. Safety remains our top priority, and we continue to make progress across the company with no serious injuries recorded during the quarter. This reflects the consistency of our safety culture and the discipline which is applied across the organization.

We also continue to invest in developing our teams with training programs focused on strengthening operational capabilities across our cement and ready-mix operations. During the quarter, we advanced training plans across key areas such as maintenance, production, quality and raw materials with a wide range of topics within each of these teams. This focus strengthens stable day-to-day operations and ensures our teams are prepared to integrate new capacity as we move into the next phase of growth.

Under our Planet strategy, we continue to make progress through a pragmatic approach focused on improving efficiency, strengthening operations and managing costs. During the quarter, we increased the share of biomass in our fuel mix and continue to expand the use of blended cement across our network. Blended cement production now represents approximately 76% of total cement volumes, reaching 84% in Mexico, reflecting steady progress in optimizing our product mix.

We are also strengthening our fuel flexibility by building natural gas pipeline infrastructure at select cement plants, improving access to lower-cost energy sources and enhancing supply reliability. These efforts support a more efficient and flexible operating model and position us to manage fuel price volatility more effectively over time.

Turning now to growth. This is where our focus on execution and network strength translates directly into competitive advantage and better performance across our key markets. The quarter in the United States benefited from favorable weather conditions in our regions, allowing the construction season to begin earlier than usual. This supported activity across our markets, where customers continue to report healthy backlogs, providing visibility into the coming months.

By segment, infrastructure remains at a sustained level of activity. We continue to participate in multiple projects across our footprint. And during the quarter, we added an additional interstate highway project in Texas, further strengthening our position in this segment. Residential activity remains under pressure. Mortgage rates increased during the quarter and affordability continues to be a constraint, which is reflected in current activity levels.

Ready-mix was again a key driver of performance in the quarter and continues to illustrate the strength of our integrated operating model. In energy-related construction, wind farm activity continues at a strong level this year. While we're comparing again an exceptional level of activity in 2025, we continue to participate in significant projects across Texas, Colorado and North Dakota.

During the quarter, we no longer had the contribution from the SunZia project, which was completed last year, but activity in other segments allowed us to offset that volume, reinforcing the diversification of our demand base.

We continue seeing growing interest in data center development across our markets. At this stage, we are supplying product for 2 projects and tracking a broader pipeline of opportunities. While most projects are still in early stages, we are following the segment closely and are well positioned to participate as activity advances.

In oil and gas, customer sentiment is improving, supported by the current price environment. Customer conversations suggest a more constructive outlook, and they are accelerating activity that was originally planned for the second half of the year. We continue to monitor how conditions evolve, but remain prudent. And at this stage, we are not changing our full year outlook for the segment. Operationally, volumes also benefited from the contribution of our new terminal in Texas and Arizona, which were not present in the prior year period. These assets continue to enhance our ability to serve customers more efficiently and expand our reach across the network.

From a commercial standpoint, pricing in the U.S. continues to reflect product, project and geographic mix dynamics, consistent with what we discussed last quarter. Pricing actions originally planned for the start of the year are now being implemented progressively through the second quarter. Overall, performance in the United States reflects the effectiveness of our commercial strategy and our ability to capture opportunities across multiple segments, supporting continued momentum into the year.

Turning to Mexico. The first quarter showed a clear improvement compared to last year, with volume growth supported by stronger activity across segments on a normalized comparison basis. What we're seeing in the market is a broader recovery in activity, particularly in housing, self-construction and infrastructure, which gives us a constructive view of the year. In housing, private demand remains strong. The federal housing initiative has also started in certain regions. And while execution has progressed more gradually than initially anticipated, we are prepared to scale shipments as activity expands, particularly in key markets such as Juarez and Chihuahua, where a significant portion of the program within the state will be concentrated. Nonetheless, important projects already started in smaller cities like Delicias and Jimenez.

Infrastructure is also showing solid momentum. We are currently participating in a broad set of bridge projects and additional paving projects have been announced at the state level, supporting a favorable outlook as execution accelerates through the year and into 2027.

In the industrial segment, activity remains in the early stages of recovery, but customer behavior is moving in the right direction. Land preparation, permitting, and early development work continue to advance and confidence around activity in the coming months is improving. There are approximately 20 new industrial buildings and warehouses under planning and construction phase as we speak. And we continue to expect this segment to strengthen in the second half of the year as visibility improves.

As discussed in our last call, a price increase was announced at the beginning of the year, and it has been successfully implemented mostly in every segment and region across the state. Overall, we are optimistic about the outlook in Mexico and are positioning the business to capture the opportunities that are developing across housing, infrastructure and industrial activity.

Turning to operations and cost management. Fuel costs are increasing at some of our plants in line with our expectations. However, our flexible fuel strategy continues to be a key advantage in managing this environment. We actively optimize our fuel mix across operations to support cost efficiency.

Turning to growth and capital allocation. The Odessa expansion is nearing completion. We are approaching the start-up phase with commissioning activities underway as we prepare to fire up the kiln and begin ramping up production. As we have discussed, 2026 represents a transition into the next phase. The ramp-up will introduce incremental freight cost during the second quarter as we ship additional cement from Pueblo and Samalayuca into the market to maintain uninterrupted supply and protect customer service as new capacity is brought online. This initial temporary increase will be offset by network permanent freight optimization in the latter part of the year.

Our M&A approach remains focused and disciplined. We continue to evaluate cement opportunities in the U.S. while maintaining our strategic and financial criteria. In the current environment, our priority is to remain patient with greater emphasis on bolt-on opportunities that strengthen our downstream presence and expand our footprint in attractive markets. We also continue actively searching for aggregate opportunities, both organic and inorganic, to further grow and enhance our presence in this segment.

During the quarter, we completed the acquisition of aggregates, asphalt, and ready-mix operations in El Paso, Texas and Southern New Mexico, reinforcing our presence in key markets and expanding our downstream capabilities. This transaction enhances our ability to serve customers more efficiently, supports long-term supply to high-quality reserves, positioning us better for opportunities in the data center space. These acquisitions are expected to contribute positively to cash flow generation during the second half of the year.

In summary, the first quarter reflects a good start to the year, supported by favorable operating conditions, strong execution and improving activity across our markets. Our focus remains on delivering reliable service to customers, bringing Odessa online successfully and positioning GCC to capture the opportunities developing across our network.

With that, let me now turn the call over to Maik for a review of financial results.

Thank you, Enrique, and good morning to everyone. Starting with consolidated performance. We delivered sales of $295 million in the first quarter, an increase of 19.8% compared to the same period last year, reflecting strong activities across both the United States and Mexico.

In the United States, revenues increased 15.9%, supported by favorable weather conditions and volume growth in both cement and concrete. Cement volumes increased 10.6%, while concrete volumes increased 15.9%. Cement pricing declined by 2.6%, consistent with the product, project and geography mix dynamics we discussed previously. Overall, the quarter reflects stronger activities, the contribution from new terminals and continued execution across multiple demand segments.

In Mexico, revenues increased 28.2%, supported by volume growth in both cement and concrete. Cement volumes increased 12.8%, while concrete volumes increased 5.9%. Cement pricing decreased slightly, reflecting a lower share of specialty products, while ready-mix pricing increased 1.2%. Results reflect a stronger comparison base and improving activity across housing and infrastructure segments.

From a cost perspective, cost of sales as a percentage of sales increased by 70 basis points, reflecting higher fuel and power costs, a lower contribution from our oil well segment and higher transfer freight associated with supporting the Odessa ramp-up as well as additional transfer freight associated with the new terminal. As Enrique mentioned, these logistics costs are part of deliberate efforts to maintain uninterrupted supply to customers while new capacity is brought online in a controlled manner and as we continue expanding our reach across the network.

SG&A expenses increased by $3 million, driven primarily by the appreciation of the Mexican peso against the U.S. dollar and the annual salary adjustments. As a result, EBITDA for the quarter totaled $87 million, an increase of 18.3% compared to the prior year period with an EBITDA margin of 29.5%. As expected, margins declined slightly year-over-year, reflecting the cost and mix effects we discussed earlier.

Free cash flow for the quarter totaled negative $10 million, primarily driven due to working capital requirements and higher cash taxes. In terms of capital allocation, we continued to fund strategic investments with capital expenditures totaling $38 million during the quarter related mainly to the Odessa expansion. We also returned $5 million to shareholders through our share buyback program.

We ended the quarter with a strong balance sheet with cash and equivalents of $857 million and a net debt-to-EBITDA ratio of negative 0.47x, preserving flexibility to support growth investments and maintaining disciplined capital allocation.

In summary, the quarter confirms that volume growth, expense discipline and capital deployment are supporting the next phase of growth. even as the Odessa transition introduces temporary cost pressure.

With that, I will turn the call back to Enrique.

As we look ahead, our expectations for the full year remain unchanged. The first quarter was a good start to the year, and our forecast for 2026 continues to reflect the same market assumptions we outlined previously. Our focus now is on executing the priorities already in front of us with Odessa representing the most important operational milestone for the year, bringing this new capacity online successfully while continuing to support customers and manage the network.

It's central to how we are building the next phase of growth. With clear levers within our control, we remain confident in our ability to execute through the remainder of the year.

Thank you for your continued support. We will now open up the call for your questions.

[Operator Instructions] Our first question comes from Marcelo Furlan with Itaú.

Can you hear me?

Yes. We can hear you well.

So I have 2 questions. The first is related to the -- if you guys could provide a little bit detail regarding the overall impact from the war that you guys have seen in the company -- in the company's fundamentals like potential higher costs and also the supply dynamics in Texas with expectations of maybe higher oil well cement consumption or maybe lower cement imports in the states the company operate in the U.S. So that's my first question regarding the overall impact from the conflict.

And my second question is related to the free cash flow. So you guys still have the guidance of $200 million in growth for this year, but you guys disbursed $38 million in the first Q. So I'd like to understand if we could expect some acceleration for CapEx moving forward? And also if you guys could provide a little bit more detail regarding the accrual cash needs in the Q? So that's pretty much it from my end.

Thank you for your question. This is Enrique Escalante. Impact of the war, obviously, I mean, a little bit difficult to understand, I mean exactly what the visibility we have and the changing conditions every day. But I will say that, I mean, overall, yes, we are obviously experiencing some cost inflation, I mean, derived from it. As I mentioned, we have some fuel increase in some of the plants. Fortunately, our mix is still very adequate and very competitive. But concentration in other areas such as freight, it's obviously an impact. We implemented a fuel surcharge already for our ready-mix concrete deliveries. So we're trying to offset as much as we can all those fuel increases through fuel surcharges.

On the imports side, obviously, we're in the center part of the state and a little less subject to imports. But ocean freight, of course, has been increasing significantly. I don't think that even though it's increasing, it will decrease significantly the imports into the country because obviously, I mean, freight is a good component of it. But I mean the FOB price in Asia is still very low compared to what we have in the U.S. So I don't see a lot of change there except for, I mean, availability of freight and vessels and delays on shipments. But I think as the war, concludes, I mean, the factor of imports is still going to be a part of the industry dynamics.

I will turn the mic here to Maik for the -- to answer the second question on the CapEx.

Marcelo. Regarding the CapEx, so no changes. Our guidance remains. We started on the maintenance side kind of as planned, a little bit timing effect. But overall, that guidance of $70 million in maintenance remains. And similar to the growth, as expected, it's a little bit slower this year because Odessa is coming to completion. Nevertheless, our guidance of the $200 million in growth remains. So no changes on that.

Our next question comes from Alejandra Obregon with Morgan Stanley.

I guess the first one is on the ready-mix front. The performance was clearly outstanding. And I was wondering if you can explain a little bit more what's behind it. Wondering if it's just a function of the portable ready-mix plants. Is it the diesel surcharge that you just mentioned, or simply downstream catching up on pricing after multiple years of pricing in aggregates and cement? If you can talk about this a little bit.

And then on this surcharge for diesel, is this something that you're applying for all the products or only ready-mix? Do you think this is perhaps a practice all across the industry and something that perhaps is explaining why your guidance is unchanged, right? Like costs are up, but then your guidance change means that you're perhaps a little bit more constructive on the cost discipline front, volumes, pricing and everywhere. So those are my 2 questions.

Thank you for your question. This is Enrique. First, on the ready-mix, I mean, demand and the performance of our business, yes, as you mentioned, it's been a shining star for us last year and this year. And it's basically a result of demand for projects that we have been participating on. I mean wind farms, as we have said in the past, and we continue participating in 3 large projects this year. So this is one capability that we have developed for years in terms of shaping projects with this mobile ready-mix plant. So I just think that we have been at the right pace at the right time with these projects.

Importantly, too, it's, of course, I mean, the paving projects that we have had in El Paso, Texas. There's a little bit less activity this year compared to last year, but still, we're going to a new phase, this year that has some significant volumes there. So it's obviously, I mean, an overall demand effect for both mobile plants and fix plants.

The fuel surcharge, it's a practice that's well ingrained in the industry. Obviously, I mean, suppliers also pass on to us, I mean the fuel surcharges in the transportation of raw materials and other goods. And we, in turn, try to pass it along in the same way, I mean, to ready-mix and freight on projects. So that's, again, something that is well established and offset somehow at least partially the effect of diesel price increases.

In terms of pricing in the U.S., we're going according to our guidance. Basically, if you remember last year, we said we were going to be basically flat, even though we are increasing -- we announced an $8 price increase for the first quarter of the year that's been delayed to the second quarter. It's going, I mean, okay, according to guidance. And the main reason for us ending up with a flat price is the mix of our product segments, geographies and of course, a lot more project work in our pipeline that carries a little bit lower price than cement that goes to, I mean, the permanent concrete producers. So again, I mean, we feel pretty comfortable with this, and we're going again according to guidance, and we don't see a big change in either direction here. So pretty stable.

And if I may follow up on that last comment. So you mentioned that your expectations for a flat price mix for the year. But you also mentioned earlier in the call that you were seeing a shift in conversations and sentiment in oil well cement. So I guess the question is, what would you need to see to change your demand assumptions looking forward on the oil well cement front and therefore, on the price mix as well?

Yes. Thank you. Yes. And we also mentioned, yes, we're being prudent here in trying not to go too much ahead of time here with decisions on the overall industry segment.

Our next question comes from Adrian Huerta with JPMorgan.

My question has to do with margins in the U.S. where we saw some pressure during the quarter. Would it be okay to assume that second Q should be -- we should expect somewhat the same given that probably the increasing prices from these surcharges is also impacting margins and also the expenses that you are having related to Odessa. So once you're in the second half that you have Odessa operating, et cetera, should we see margins -- does it make sense to assume margins should be at least flattish in the second half and down in the first half in the U.S.?

Adrian, this is Maik. Thank you for your question. So regarding margins in the U.S., as we guided and explained, because of the introduction of the Odessa product and the early support that we have to give now to the network, again, where we support from Samalayuca where we support from Pueblo, we are increasing some of the cost aspects, specifically around logistics. And you will see that in the second quarter as well. And then starting in the third quarter, I think you see a little bit of a normalization. So that's kind of really the guidance we have. Nothing has changed on that.

In addition, again, the product mix dynamics, we still see that. Although Enrique mentioned, we see some positive signals on oil and gas. We're cautious there, as you said, what that really means from an overall pricing perspective for that segment. So again, you see a little bit of that mix effect. And therefore, again, guidance remains the same. First and second quarter, some pressure on the margins and then kind of normalization during the second half of the year.

And just a follow-up on the ready-mix, is that strong increase that we saw in pricing pretty much related to these surcharges that you implemented in the quarter?

Yes. Ready-mix pricing is totally related to project work, Adrian. So yes, that's also included in our guidance.

Our next question comes from Carlos Peyrelongue with Bank of America.

Congratulations on the strong results. My question is related to capital allocation. As you mentioned, you've completed most of the CapEx for the Odessa expansion. You have close to $850 million in cash and the net debt, net leverage of minus 0.47. Free cash flow is likely to be growing double digits going forward.

So the question is all the extra cash, you have ample room for acquisitions as well. Are there other potential uses of your capital, more dividends, buybacks? Just trying to get a sense of with the CapEx of Odessa behind us, are you going to focus on a similar dividend policy? Or are you considering potentially paying more dividends as cash flow keeps on coming in actually stronger going forward than in the last 18 months?

Carlos, this is Maik. Again, thank you for the question. So regarding capital allocation, so we continue to be, of course, finishing with that, but there's still some capital to be spent. That's why you see that $200 million of growth for this year in the forecast. Also, we're continuing to work on network improvement. So we'll need a little bit of CapEx to take care of that.

Then M&A, as Enrique mentioned, we were successful to close the deal in the first quarter, but we have a few more deals in the pipeline, and they look very promising that we can actually action them during that remainder of the year. And the goal would be to utilize the cash on hand to finance these. So that's part of the growth strategy.

Then regarding the share buyback program, you saw us a little bit more active. Again, we see an opportunity with our valuation. So you will see us continue being proactive with the share buyback program, and we're going to allocate some capital there. And then finally, on the dividend policy, yes, so no changes. expect us being very consistent on that front as well as we've done it over the last couple of years.

[Operator Instructions] Our next question comes from Yassine Touahri with On Field Investment.

I would just try to get an understanding of the volume that were absolutely excellent in cement in the first quarter. Is it fair to assume that you're trying to build a bit of market share in Texas ahead of the opening of your plants and you're maybe like selling cement a little bit further away, let's say, in the Dallas-Fort Worth area or in the San Antonio area. I see that, for example, your volume in Texas in Q1 were nearly 40% when the rest of competitors that have published, the volume only up 10%. So it looks like you're gaining market share. Is it fair that it's a strategy to prepare your market share for the launch of the Odessa plant?

And my second question would be on your ready-mix pricing, which was amazing. Do you have a sense of what was the price excluding mix? So if you look at the price increase that you've announced, what was it approximately? I suspect it's not 20% plus.

This is Enrique Escalante. Let me answer first on the volume of cement in the U.S. increase. No, I mean, I would not say that this comes from market share gains. It's more directly related to what I explained on the project work. Yes, we are getting a little bit more volume in Texas, as I mentioned. But we're being very prudent in the way that we allocate the new volume from the startup of the Odessa plant. We know it's a difficult market situation. So we don't intend on trying to gain a lot of market share here and then have a negative effect on the overall business. It's more, again, related to project work, but it's where we have been loading up the pipeline, and it's been working pretty well for us.

In terms of the ready-mix pricing, I will say, I mean, your question on the pricing, it's exactly the same. It's related to project work. If you exclude that project work, I would say that the prices in ready-mix are going according to precisely our guidance. So the effects that you see now are specific projects.

So according to guidance would be the prices in Q1 would be like up a little bit like 1%, 2% like-for-like. Is it the right way to look at it for ready-mix?

In cement plus in ready-mix a little bit around inflation.

Okay. And when you're saying that you're spending -- you have a logistical cost, isn't it that you're trying to sell cement a little bit further away, which means that you're entering market that you were not before?

Yes, I can take this. This is Maik. Again, when Odessa comes online, we will be able to kind of optimize the network. So the additional logistics costs really come using suboptimal distribution link to feed those markets and to manage demand because we have product available in the Samalayuca and Pueblo plants and to reach those markets that in the future will be serviced by Odessa, it costs us a little bit more. And that's just the cost effect there. And as we explained, once Odessa comes online, then the task for the team is to optimize that and then to bring the network into an optimized stage, which then helps us in the later part of the year from a margin perspective. So that's kind of the context on the logistics cost.

And then the very last question. So I think price increase of like $5 to $12 have been announced by most cement producers all across the U.S. Do you have any -- I think it's like the negotiations have probably started because those prices were effective on the 1st of April. Do you have any sense of the realization, any pushback? Or is it easier to have those price increase being successful in a context where you've got a lot of oil-related inflation?

Yes. Our price increase was $8, if you remember for the first quarter. And as I mentioned, it's been delayed. And that delay a little bit part of that pushback and adjusting to what other competitors are doing in the market. But I would say, mostly speaking, it's going according to guidance. And yes, there's always some pushback, but there are other customers that are really aligned with us on the price increase.

So overall, I mean, our mix effect, as I mentioned before, will result in a flattish, I mean, price for us, but that includes increasing the price to most of the customers in most of the regions, but the product mix, the geographic mix and the project mix is what is resulting in a flattish increase for us.

But I think you were mentioning that prices in Texas would not increase this year, but that it would increase maybe like $4, $5 elsewhere. Is that the right way to think about it?

No, I would say that, I mean, it's going again according to what I mentioned. I mean, there have been increases in Texas, too, but it's the overall mix that it's not showing it directly, I mean, probably in the specific areas.

And -- sorry, the very last one on Mexico, the outlook looks for the -- like we've seen a nice recovery in the first quarter. Is it weather related? Or is it something that could continue for the rest of the year as the activity picks up?

No. In Mexico, we are very pleased to see, I mean, more activity than what -- probably than what we expected, not enough to change our guidance yet, but it's -- we're certainly more optimistic than what we were at the last quarter about Mexico. We are seeing increases across all segments in volume. And so that has also helped our price increase implementation. So Mexico is looking, I mean, I would say, pretty good.

Our next question comes from Francisco Suarez with Scotiabank.

Congrats on these great results. Two questions, if I may. The first one, is it fair to assume that overall drilling activity in the Permian is likely to remain flattish for the rest of the year? Is that a fair assumption?

Francisco, this is Enrique. Well, I mean, that's what we're assuming. I mean, so far, although as we mentioned, we are obviously staying very close to market dynamics there. We have talked to some customers in the area, of course, and from the beginning of the conflict and asking them what could we expect. And all of the answers we get it, I mean, they need time to see where things stabilize. more medium term because they are not going to, I mean, overreact also, and they are also seeing what -- how things evolve.

So that's why we're cautious there. I'm not changing our guidance. But I mean, if you ask me, I mean, there may be the possibility of, I mean, a better outlook there if things continue as they stabilize and then we continue seeing a higher oil price compared to what we had last year, but consistent and with not a lot of swings in the market. So we need more time to see things -- how things stabilize in order to become a little bit more optimistic here.

Got you. The second question relates with the overall cost that we've seen for the year. And thank you very much for being very clear on the initial effect on the commissioning of the new kiln that is very, very helpful. But what I want to understand a little bit better is to what extent that increase in cost related with the new shipments coming from Pueblo and Samalayuca and so on, is likely to mask the overall potential benefits or cost reductions in your -- in energy that you may have this year because you have been mentioning that not only you are adding more projects and the ability to substitute fossil fuels in your plants in the U.S., but you are also investing in ways that you will be having a cheaper source of natural gas in some of your plants.

So can you elaborate a little bit more on isolating the initial effects on logistics on the ramp-up of your new capacity in Odessa compared to the overall pathways on your on energy costs on the back of these initiatives that you are making this year?

Francisco, this is Maik. Again, thank you for the question. So maybe a little bit on the production cost to give a little more context. It's a little bit dynamic there as well. So for example, on natural gas costs, they're relatively stable in some plants, slightly better than last year and other plants, slightly elevated. So there's a little bit of natural gas effect.

On the power side, we see a little bit more pressure on increase in costs, and we see that specifically in the U.S. network. So it's a little bit too early to exactly say where we land on that, but it has some impact on the cost structure. And of course, we're trying to mitigate that with the small projects that we have in place, so we utilize solar power and so on.

And again, it's a little bit too early probably to say here's the full segregation of the logistics impact versus the fuel and power impact. I think that's something as we're working through the year, we're going to continue to communicate around that and explain. Again, the big picture is in your models, think about the first half of the year with some pressure on the cost side, but really mainly driven by logistics, as already explained, and then kind of a normalization during the second half of the year.

Our final question is from Daniel Rojas with Bank of America.

Looking at the backlog you have for wind farm construction for the rest of the year, it has been a very healthy source of construction work. I was wondering if this is going to tail off this year or maybe we're going to see that also into next year. And I just want to get a sense of how big the contribution is to your work in the U.S.?

And my second question is on natural gas and maybe it's a follow-up from the last question. If you see the Henry Hub pricing, it's below $3 per million Btu and the Waha is even negative. So I'm trying to get a sense of if we extract and we take out all the logistic prices you've already talked a lot about, what would be the cash cost per tonne? And what will be the benefit of having this very low pricing for natural gas?

Dan, this is Maik. So regarding the backlog, we have a good strong backlog across the -- specifically the ready-mix business for this year. And we're fortunate some of these projects actually start early with the weather conditions being nice. So backlog is solid and really for this year. It's probably too early to talk about 2027. So all the backlog we're talking is really reflected in 2026, and that one is very solid.

Regarding the natural gas, like I mentioned, it's still a little bit too early. I think the early indication for us, when you look at the key plant like Odessa, our gas costs are slightly below last year in Odessa, mainly driven by -- there's a good amount of gas available. There's probably some challenges to get all that natural gas out of the country. So we're benefiting from that. But it's too early to say where the kind of the final year settles when it comes to natural gas across the network. Generally speaking, we're expecting kind of flat to maybe some slight increases when you normalize the full year, but nothing dramatic, nothing that puts -- is a concern at this stage for the natural gas for the plants.

And allow me to add a little bit on what Maik said, and I agree with him, it's difficult to forecast it exactly to the penny at this moment. But we have some positive, I mean, effects also from the natural gas in the form of power here in Mexico with lower power costs in Samalayuca definitely this year, precisely coming from a change of suppliers in power that are now passing on to us the savings on natural gas. And as we mentioned, with the Waha molecule sometimes being negative.

So we're benefiting from all of those effects that are offsetting some of the increases that we may have in some parts of the U.S. And also, I mean, we're very actively hedging constantly part of our gas consumption, too. So I think that we will be, I mean, very close to, again, what we guided in terms of margin, and we're going to end up the year very close there.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back over to Ms. Ogushi.

Thank you again for your time and continued interest in GCC. We look forward to speaking with you again soon.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Greetings, and welcome to the GCC Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] It's now my pleasure to turn the call over to Sahory Ogushi, Head of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining. With me today are Enrique Escalante, our Chief Executive Officer; and Maik Strecker, Chief Financial Officer. The earnings release detailing this quarter's results was released yesterday after market close and is available on GCC's IR website. This conference call is also being broadcast live within the Investors section at gcc.com, and both the webcast replay of the call and transcript will be available on the same site approximately 1 hour after the end of today's call.

Before we begin, I would like to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in yesterday's press release and in our quarterly report filed with the Mexican Stock Exchange.

Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. With that, let me now turn the call over to Enrique.

Thank you, Sahory, and good morning, everyone. At GCC, we manage the company with a long-term view. Our markets are cyclical and can move quarter-to-quarter, but our strategy is firm and gives us flexibility to adapt to short-term conditions without changing our mid- and long-term view. We focus on disciplined execution, operational reliability and capital allocation across cycles. And this approach guided our decisions throughout the year.

During 2025, we operated in an environment where external conditions influenced the pace and timing of customer decisions. As conditions evolve, we revised our expectations in the summer. From that point forward, our focus sharpened with an increased emphasis on cost management and operational discipline, and we delivered record sales for the full year of USD 1.4 billion, reflecting the strength of our operational model, disciplined execution across the network and particularly strong performance in the U.S.

These results demonstrate the resilience and demand across our markets. From an earnings standpoint, it is also important to keep perspective. 2024 set a record benchmark for margins and returns, and that level remains the reference point for where we expect the business to operate over the cycle.

While we did not replicate those record levels in 2025, we came very close, and we continue to position the company to move closer over time as efficiencies, cost actions, commercial initiatives and network investments take us to near records.

The fourth quarter did not introduce new dynamics. Instead, it confirmed the trajectory we have outlined earlier in the year. Our operations were reliable, customer [indiscernible] the same mix and activity dynamics we managed through 2025 with improved execution translating into record quarterly results.

Our people strategy remain a constant source of strength in 2025. We continue to invest in safety, training and leadership development, reinforcing a culture of operational discipline and accountability. Safety performance improved again in the fourth quarter and full year results reflected continued progress across key indicators with recordable incidents, including lost time incidents declining 10.5% year-over-year.

Our continued recognition as a Great Place to Work further reflects the strength of our culture and employee engagement and the consistency with which we have integrated these values across the organization.

Training is embedded across the company with structured programs aligned to specific plant and functional needs. Through the GCC Training Institute, we delivered more than 15,000 hours of training during the year. This investment supports reliability today and prepares our teams for the ramp-up of Odessa and the next phase of growth.

Progress on our planet strategy continued steadily. In 2025, we increased blended cement production, expanded the share of alternative fuel in our fuel mix and continue to reduce our clinker factor. These actions support cost efficiency and operational resiliency while contributing to incremental progress in environmental performance.

In addition, our Pueblo and Rapid City plants once again received ENERGY STAR certification, placing them among the top 25% of cement facilities nationwide for electricity efficiency. As we move into 2026, our focus remains on executing these initiatives pragmatically, prioritizing efficiency, reliability and long-term value creation.

Turning now to our growth strategy. Our focus on execution and network strength is reflected in how the business performs across our key markets. In the United States, ready-mix was the primary driver of growth in 2025, supported by strong project activity.

This project-led demand generated consistent downstream pull for cement and reinforce the strength of our integrated operational model. Ready-mix volumes reached record levels in 2025, increasing 31.5%, while cement volumes increased 2.6% during the year. As a result, we outperformed the U.S. cement market in 2025, driven by disciplined project execution and commercial management.

Operationally, this translated into high utilization across our operations, supported by investments in mobile capacity and execution capabilities. Energy-related projects, including wind farm and associated transmission continue to provide volume support throughout the year.

Infrastructure activity remained stable through the quarter and continues to provide visibility into 2026, supported by multiyear funding programs and ongoing execution at the state and local level. As we enter the new year, we remain proactive and focused in identifying project opportunities, reinforcing the depth and visibility of our commercial pipeline.

Residential construction remain under pressure. Mortgage rates have not sustainably broken below 6% since September 2022. As a result, we do not expect a meaningful improvement in residential activity during the first half of 2026. Oil and gas activity softened during the year and continued to soften in the fourth quarter, reflecting the current oil price environment.

This segment is expected to soften further in the near term before improving. While this affects mix, it does not alter our long-term positioning within the network as we rely on the flexibility of our plants to ship different types of cement and adapt to market demand.

Throughout the year, our commercial focus remains on protecting margins and returns. While market conditions limited pricing momentum during 2025, the pricing increases announced entering 2026 reinforce our focus on offsetting cost inflation and improving profitability over time.

In Mexico, fourth quarter performance was in line with our expectations. Residential demand and bagged cement continues to provide stability, supporting margins. The federal housing initiative is beginning to take shape in certain regions. And as projects move into execution, we expect to be able to quickly increase shipments as its impact materializes during the first quarter of 2026. Infrastructure in Mexico, it's an area of growing optimism.

Historically, the first year following election is complex. But during the quarter, we saw projects advance with a more meaningful contribution expected in 2026 as execution accelerates. In addition, mining-related comparisons normalized in November, removing a headwind that affected volumes last year.

We expect the segment to perform broadly in line with 2025 levels going forward. Industrial customers remain cautious, advancing projects gradually and using this period to prepare to move more decisively as visibility improves. We're cautiously optimistic about the industrial activity improving in the second half of 2026 as trade discussions become clearer.

Capital allocation in 2025 remain consistent with our long-term priorities. We continue to focus on ensuring that recent investments in cement distribution and aggregate operations across our network reach their full potential, allowing us to ship product to more destinations, easing the pressure to rely on single markets with a larger volume. In parallel, the Odessa expansion continues to progress on schedule and within budget.

Our M&A posture remains unchanged. We continue to evaluate opportunities that strengthen the existing network and meet our strategic and financial criteria while maintaining balance sheet strength and flexibility. As we look ahead, 2026 will be a pivotal year for GCC. With Odessa completing construction and entering ramp-up, the company moves into a new phase focused on integrating capacity, optimizing logistics and strengthening earnings power across the network. With that, let me turn the call over to Maik for a review of the financial results.

Thank you, Enrique, and good morning to everyone. For the full year 2025, we delivered record consolidated sales of USD 1.4 billion, an increase of 3% year-over-year, driven primarily by volume growth in the United States.

Fourth quarter sales totaled $360 million, up 7% year-over-year, consistent with the operating trends discussed earlier. During the year, the depreciation of the Mexican peso created some headwinds, which reduced consolidated sales by approximately $80 million on a reported basis.

In the United States, ready-mix volumes increased by 31% for the full year and 27% in the fourth quarter, driven by strong activities tied to wind farm and infrastructure-related projects.

Cement volumes increased 2.6% for the full year and 1.4% in the fourth quarter, supported by strong ready-mix activity and contributions from infrastructure and commercial projects across our network.

Average cement pricing in the U.S. decreased by 1.2% during the year, reflecting product, project and geography mix dynamics. The aggregate business performed well and delivered the results we expected when we acquired the assets, contributing positively to our EBITDA generation and reinforcing the strategic rationale for advancing our aggregates growth strategy.

In Mexico, cement volumes decreased 3% for the full year, however, increased 11% in the fourth quarter, supported by normalized demand in the mining segment and early execution of infrastructure and housing projects.

On the cost side, full year cost of sales as a percentage of sales increased by 2.5 percentage points, reflecting factors discussed earlier in the year, including the absence of the natural gas liability benefit we recognized in 2024, higher fuel and power costs, a lower contribution from the [indiscernible] segment and increased transfer freight as we ship products to new terminals.

In addition, during the year, we incurred higher freight costs as product was supplied from the Pueblo cement plant to support customers during the period in which the Rapid City cement plant was offline. While this resulted in higher transfer costs, it allowed us to meet customer commitments, preserve volumes and demonstrate the flexibility and competitive advantage of our distribution network.

In the fourth quarter, cost performance benefited from disciplined inventory management, which offset the unfavorable inventory impact we recorded during the first 9 months of the year. SG&A expenses declined modestly as a percentage of sales for the full year, reflecting a reduction in consulting services as part of our cost and expense optimization initiatives, partially offset by higher operating expenses.

As we move into 2026, we're placing renewed emphasis on cost discipline, particularly third-party spend, fixed cost and staffing optimization while maintaining our standards for reliability and safety. As a result, full-year EBITDA totaled $492 million with an EBITDA margin of 34.9%.

Importantly, the fourth quarter delivered record EBITDA margins of 39.6%, up 3.4 basis points with EBITDA increasing to $142 million, reflecting improved operating execution as the year progressed. The depreciation of the Mexican peso reduced EBITDA by approximately $6 million on a reported basis during the year. Free cash flow for the full year totaled $349 million, representing a conversion of 71% of EBITDA with a strong fourth quarter contribution of $156 million, driven primarily by higher EBITDA generation.

On capital allocation, we returned $45 million to shareholders through a combination of share buybacks and dividends. During the fourth quarter, we deployed $7 million in buybacks. We remain disciplined and opportunistic in balancing shareholder returns with investments for growth and keeping our financial flexibility.

Strategic capital expenditures totaled $309 million in 2025, reflecting continued investment in our Odessa project and logistics across our network. As of year-end, we have invested approximately $600 million in the Odessa project and associated logistics capabilities with the remaining $150 million planned for 2026.

We ended the year with a strong balance sheet with cash and equivalents of $969 million and a net debt-to-EBITDA ratio of negative 0.7x, preserving flexibility as we prepare for the next phase of growth and the ability to act decisively on future opportunities.

In summary, 2025 reflects a year in which we delivered record sales, observed mix and one-off impacts, maintained strong operating discipline and continued to invest in strengthening our network. With that, I will turn the call back to Enrique.

Thank you, Maik. As we look ahead, our guidance reflects a year focused on stabilization and execution, consistent with our strategy. We are entering 2026 with a clear operating backdrop, a stronger network and defined levers within our control. In the United States, we expect cement volumes to grow at a high single-digit rate, driven primarily by the contribution from new markets and the initial ramp-up of Odessa.

Cement pricing is expected to be flat, reflecting product, project and geography mix dynamics. In ready-mix concrete, volumes are expected to decline at a high single-digit rate, reflecting a high comparison base in 2025, while pricing is expected to be flat, reflecting product mix and the broader distribution of volumes across new markets.

In Mexico, cement and concrete volumes are expected to grow at a low single-digit rate, supported by increased infrastructure and residential activity. Pricing for both products is also expected to increase at a low single-digit rate.

At the consolidated level, EBITDA is expected to grow at a mid-single-digit rate, driven primarily by higher sales volumes. During the year, the one-off incremental logistics costs associated with the ramp-up will continue to weigh on margins, while cost discipline and efficiency initiatives will help manage the transition.

Turning to capital allocation. Capital expenditures in 2026 are expected to be $270 million as the Odessa expansion nears completion, and we will continue with logistics investments across the network. Free cash flow conversion is expected to remain strong and consistent with historical levels.

In closing, we remain focused on restoring margins towards the levels achieved in 2024, executing the Odessa ramp-up in a controlled manner and maintaining financial flexibility. While the pace of improvement will vary by segment and geography, we believe the actions we are taking position GCC to deliver resilient and improving performance through the cycle.

Thank you for your continued support. We will now open the call for your questions.

[Operator Instructions] Our first question today is coming from Alejandra Obregon from Morgan Stanley.

Perhaps the first one is for you, Enrique. So you mentioned 2026 will be a pivotal year for GCC. And of course, Odessa plays a big role, and if you've provided a little bit of color on that. But just wondering if you can walk us through the different milestones that you think that will make 2026 a pivotal year? Is it kind of like a new distribution setup, savings, energy growth? Anything that you think we will be seeing throughout the next quarters? And so that's the first question.

And the second one is perhaps for you, Maik, on CapEx. So you mentioned $150 million of strategic CapEx for, if I understood correctly, new investments on distribution. Just wondering if I got that right and if you can be a little bit more granular on where you think those $150 million are going in 2026.

Number one, in your question about 2026 pivotal comment. Of course, I mean, bringing a new cement line online in a challenging market is in itself a challenge, right? But we have a strong experience from what we did exactly under even worse conditions when we started up the Pueblo plant during the Great Recession.

So we have to obviously manage initially, I mean, a good start-up of the plant. It's a challenging business. It's always -- there are always things in those big equipment that we need to be in control of, and we expect to do that successfully. So that's the first part of this pivotal change.

And of course, as we ramp up, we need to have a very good coordination of how we start returning volume that Samalayuca is shipping into the region back as we start, I mean, switching customers, I mean, to the cement produced in the new country.

And this, of course, also has to have a good coordination with the series of terminals that we're setting up in several cities and towns to precisely have a more controlled entry into the market, I mean, cautiously, slowly, but with a firm mid strategy of how we will position that increased capacity over time in different markets. So there's a lot of moving parts at the same time as we introduce the new Odessa line during the year.

Very good. Alejandra, thanks for your question regarding the CapEx. So the $150 million, that is really primarily driven by the project, Odessa, and that's the heavy lift there. However, there's also some additional logistics capabilities that we're building out, starting at the plant level with rail and truck capabilities really to be able to ship that incremental volume and distribute that. That was always part of the scope, and it's now just the time to execute on that.

And then what Enrique just said, right, we're looking at several markets where we plan to distribute the volume. And for that, we need some logistics capabilities as well, smaller terminals, access again to rail and so on.

So that's kind of the scope of that $150 million for Odessa. In addition, as you saw, we guided for some additional growth CapEx as well. The total is $200 million, which is related to energy-related alternative fuels, continue to invest in the aggregates business to unlock potential there and so on.

Your next question today is coming from Garrett Greenblatt from JPMorgan.

I was wondering if you could give a little more color on the regional demand drivers, specifically around U.S. cement volumes up high single digits as opposed to pricing flat. I guess just wondering how those dynamics play out and then for Mexico as well.

Garrett, yes, as I mentioned, I mean, in my answer to Alejandra, it's a challenging year with a lot of different market or segment performance, right? I mean we are relying on the infrastructure segment more than anything to offset further decreases in short-term in the Oil Well cement market as that industry, I mean, gets more stability and more visibility going forward. So that's one offset. That's why one is growing and the other one is decreasing and one is offsetting each other, right?

Residential, as we mentioned, it's weak. It's continued at the same level, I mean, for us this year. There are some other segments like, I mean, obviously, everything that is commodities in the agricultural, I areas where we participate are having, I mean, a strong -- normal to strong, I mean, performance. So that's good for us that we have this mix of segments all the time. So we think that overall, I mean, there is going to be, of course, compensation from some segments with others. And that's why I mean we're basically projecting I mean a flat volume for the year.

Mexico, on the contrary, we're seeing some increases overall, pretty much, I mean, driven by housing. The federal government initiative, it's taking off now. I mean it seems like there is clear, I mean, funding and direction to build, I mean, the houses on that federal program. And we're already experiencing projects in several of our locations in Mexico. And we're already shipping volume specifically for that segment.

And as we mentioned, the mining segment, I mean, it's stable now. I mean we already stimulated. I mean, the volume loss from the couple of mines that ended operations, I mean, last year. So the conversion is, of course, it's going to be better. And at the local level, I mean, municipal projects, especially some state projects are taking off now. And obviously, I mean, with some growth over last year, it's also going to help, I mean, the improvement in the Mexican market.

Great. And maybe just a quick follow-up just on what you're expecting in terms of pricing in the U.S. Have you sent out any letters? Or do you plan to do midyear increases as demand trends progress through the year?

We are always, I mean, committed to recover at least our cost inflation through pricing in every market where we operate. We're very disciplined in that respect and very consistent. We announced an $8 price increase in the U.S. for January. There are always, I mean, conversations with the different individual customers about, I mean, their ability to take on, I mean, the price at this moment or delays a couple of months and then obviously, one-on-one conversations about, I mean, the total amount, I mean, to increase.

Everything I will say, so far, it's going well in those conversations, pretty normal, and we expect, obviously, to execute the majority of that price increase in the first quarter of this year. So that's a very good news. Now in our case, specifically, I mean, we're not in our guidance reflecting directly that price increase that we're going to execute because of several factors that we alluded to during our comments here.

Of course, we have a big -- I mean, mix effect here with, again, more cement going to construction segments and less to Oil Well cement, which obviously command different prices. And so that mix doesn't help in terms of the increase. We also have a lot of project work related to infrastructure mean that we mentioned.

And in some cases, that project work also has, I mean, a lower pricing than the regular ready-mix precast, I mean markets that are usually very stable. And of course, I mean, there's one third, I mean, factor here that is geography, right?

With the start-up of Odessa, and as I mentioned, we're going to do this, I mean, slowly and cautiously. Dispersing more cement to further away locations in smaller volumes, that commands higher freight, of course, and somehow that is reflected on a lesser, I mean, net price because one has to compensate on that incremental freight to be competitive in distant markets. So that's the third factor, I mean, that we have there.

And finally, I think that we had, some one-offs in last year that affected in our pricing strength with some segments and some markets derived from things that we disclosed, I mean, last year with some problems in the Rapid Plant during the winter of last year to start up on time because of an accident with there and then an issue with the ball mill that were in the Odessa plant that also delayed us a little bit.

So we needed to make some adjustments, I mean, to recover market share that we lost during those incidents. And we did that successfully, I mean, last year. That's why, obviously, we're running much better than the industry as a whole in terms of cement growth. And also comparing our own region, we accomplished that recovery of market share, and we got back basically to our normal levels of share.

We're going to, I mean, now run constant there. I mean we don't see any more need to continue, I mean, pressing on prices because of that reason. That's already behind us. So with all that said, with all those -- a combination of all those 4 factors, that's why we're seeing a flat price in our guidance.

I see -- I personally see this as a very positive, I mean, ironically because, I mean, I think that it takes us back to a very good solid platform, and it's only building up from this, what I call one-off because of all these reasons at the start of the first 6 months of 2026.

So we're very -- I mean, pleased and confident that this is the right strategy for GCC and it's going to be successful for us.

Next question today is coming from Carlos Peyrelongue from Bank of America.

I joined a bit late, so I apologize if you have answered this already, but I just wanted to get a bit more color on the status for demand for cement from oil -- from the Texas, in particular, from Oil Well cement. If you could comment a bit on that would be helpful.

Yes, Carlos, thank you for the question. Yes, we already comment on that, as you were pointing out. I mean, obviously, we're seeing still more pressure in the Permian Basin on demand for Oil Well cement.

I mean, given the uncertainty and lack of clarity of where, I mean, the oil price -- international oil prices and the segment is going to end this year. We believe, of course, it's transitory and cyclical as has demonstrated throughout history. And that's why we feel very confident that we really prepare a good, I mean, expansion of Odessa, taking those cycles into account and being able to capitalize on construction cement when the Oil Well demand is slow.

So having said that, that's why we're shifting more to, I mean, infrastructure projects. That's where we're concentrating, I mean, for the rest of this year, I mean, as our driver for demand in the U.S.

So it's work project, infrastructure, I mean, everything, I mean, related to that segment. And that's how we plan to set the decrease in Oil Well demand.

Understood. And have you given some guidance as to your expectation to utilize the new capacity that you build in Odessa in terms of what's the expectation for this year or next year to get to higher utilization rates on that new capacity?

Yes. Definitely, we lower our expectations compared to what we planned when we were, I mean, planning I mean the construction of the plant. The market conditions are totally different. If you remember at that time, I mean, all U.S. markets were basically sold out and so the conditions were very different.

And so that's why we're adjusting our ramp-up of the plant to a much more slower and careful introduction of the plant. The line is going to run at full capacity itself, the new line. So we capture there the decreases in variable cost compared to the current, I mean, [indiscernible] in Odessa.

And of course, the line run at full capacity will substitute all that Oil Well cement that is produced currently in that plant, plus the imports that we're bringing from Samalayuca into the area. So that's a way of optimizing, I mean, our cost structure and our network.

Where we're going to feel the pain, of course, of this slowdown is going to be in the Samalayuca plant that it's going to have to slow down its shipments to West Texas. And so we're, again, going slowly in the introduction based on those factors. But I think that's the best strategy for us at the moment.

Next question is coming from Marcelo Furlan from Itaú BBA.

My question is related now to capital allocation going forward. So you guys are guiding now for this $270 million of total CapEx for this year. So I'd like to understand if we could expect this level of CapEx, let's say, below the $300 million levels as the new normal for the company at least for the medium term.

And my next question regarding to capital allocation is regarding M&A. You guys have provided some color that the likelihood of guys likely seeking M&As in the aggregates business in the U.S. and so on and so forth would be likely to be the main driver.

So I'd like to understand if this strategy continues in terms of pursuing this type of M&As. And if you guys could give a little bit more color on potential size if you guys are expecting only small bolt-on acquisitions or if you guys could likely reach to larger M&A activities after due completion. So these are my questions.

Yes. Thanks for the question. Regarding capital allocation, as I already mentioned, out of the $200 million growth CapEx, $150 million is really allocated to finishing Odessa and the related logistics capabilities. Then the remaining $50 million also already mentioned, but we have some very high-return projects around fuel and energy that we want to execute.

Again, and that's in the context really to optimize these very important input costs for the company. A third element here is aggregates, right? We have the first year of the new aggregates business under our belt. We see some opportunities to optimize, to grow, to expand that will require some level of CapEx.

And we have some, again, very high return quick projects to execute on. So that kind of comprises the $200 million in growth. And then the $70 million in maintenance, it's in line with our previous years to really keep the cement plants, the network in new light conditions to really perform well for the market that's in front of us. So that's on CapEx.

Regarding M&A, yes, we are very active. We have a pipeline of more smaller midsized opportunities. I would call them bolt-ons to, again, the existing aggregates network that we now have within the cement network that we're operating.

Again, those are small and midsized acquisitions similar to what we have done in 2024. And again, now that we know pretty well how these markets perform and where the opportunities sit, you will see us throughout the year '26 being very active and focused on that. That's kind of the most actionable part.

Nevertheless, as we always stated, we remain very focused also on cement, looking at options for cement to grow the network across the United States, and that remains to be part of the focus as well.

Next question is coming from Emilio Fuentes from GBM.

First of all, congratulations on the results. I have 2 questions, if I may. First of all, on CapEx during the quarter, is it correct to assume that the downtick on CapEx is related to a postponement on the ramp-up of the Odessa plant given the current market situation?

And second, is -- are the extraordinary weather events seen during the beginning of first quarter 2026 in the U.S. already reflected on the guidance? Or is there any downside risk to the guidance given the rough start to the year given related to weather?

This is Enrique. I will take your second question first and then turn it to Mike for the CapEx. I think that the weather, even though it's been very severe in the U.S., it's not abnormal for us. So no, it does not affect our guidance at all.

I mean, for us, I mean, this is, again, in the regions where we participate, pretty normal, I mean, weather pattern. So we'll be fine in terms of our shipments for the quarter.

Yes. Enrique, regarding the CapEx for the quarter, it's a little bit of timing. The reason we came in lower than kind of what we had expected and also the Q4 of 2024 was purely timing.

We're -- from an Odessa perspective, we're in execution phase and everything is towards the defined time line to be completed kind of Q2 of this year. So you saw a little bit of timing effect there on the strategic CapEx in the quarter.

Next question is coming from [ Azeem Tori ] from Anfield Investment Research.

Maybe first a question on the ramp-up of Odessa. So you're adding a lot of capacity in the local market. Is it fair to assume that you will try to address some of the big urban centers of Texas like the Dallas Urban Center or the San Antonio Urban Center? And if you -- when you're talking about like new distribution or new terminal center, is it new terminal that you would develop to support the commercial strategy of this Odessa cement plant? That would be my first question.

And then second question on the price increase that you've announced of $8. Is it $8 price increase that you have announced in every single state, including Texas? And a last question around the cost inflation that you're expecting in your cement business.

I think we see a lot of data center being built around the United States. They are consuming a lot of electricity. Do you see a risk of electricity prices going up in the coming years in the U.S. that could potentially impact your margin?

Yes. Let me start with the question around the network and the additional volume from Odessa. As Enrique already kind of walked us through, the plan really is to distribute through several markets, small and bigger.

North Texas is a market that we see a lot of growth. And yes, we plan to participate in that growth. But we also see good levels of growth for Odessa closer to home. In that part of the country, there are some very interesting data centers planned. So we'll participate in that. And then as mentioned, we're looking at kind of small and midsized markets to establish distribution points agile with some level of CapEx, but not heavy CapEx load.

And I think through that distribution, the goal is to have that very focused and measured introduction of the Odessa capacity. So that's on that.

Regarding cost of inflation, as mentioned also, we're taking some proactive steps. We're investing in capabilities around power with solar projects. We're investing in some additional capabilities utilizing more natural gas, pipeline infrastructure and burning capabilities. So all of those, we see as kind of a proactive step to manage the future cost dynamics around fuels. So that's key for us. And I think with that, we should be able to manage accordingly what's ahead to come.

And the price increase... the $8 price increase, is it everywhere in every state? Or is there a difference from one state to another?

The price increase was announced in all the regions where we participate, including Texas.

And so far, the discussion is encouraging and you would expect to get part of this during the first quarter.

We will. I mean that's evolving dynamic and fluid, and we expect to get the majority of that announcement.

Our next question is coming from Enrique Soho from Fundamental Capital.

Could you give us some insights into your and the Board's thoughts into potential corporate action or financial engineering to further unlock value and decrease the valuation gap between you and peers?

Yes. Thanks for the question. I think, first off, our goal is really operationally to perform and to unlock the value by improving our margins. Again, our benchmark is 2024, the 36.6% and to get back to that level and to show that we get back to those very attractive margin levels, number one.

Number two, when you look at our kind of cash flow conversion, we maintain a very high level and push that hard, again, to show the value. And then as you have seen, we're looking at kind of the overall shareholder returns with buyback program. We're more proactive on that. You've seen the dividends continuously to be increased over the years. So all those are elements, how we demonstrate the value of GCC and where we push for further investments from shareholders. And yes, strategically, we get the question.

We're looking at what long term from a corporate structure, we should consider to further enhance kind of the value of the company and the value to all shareholders. That is a conversation that we have on a regular basis with the Board, with the team. And these topics are, for us, very long term and it's part of the tools and the portfolio of how do we increase the shareholder value for all participants.

Your next question today is coming from Alejandro Azar from GBM.

Just a quick follow-up and to clarify something on my end. Regarding the Odessa plant, the start of the plant remains second and third quarter of this year. What you are delaying is just the ramp-up or you are delaying the start of the plant?

And can you give us more color on delaying the ramp-up for you guys, what that meant before? Were you planning to reach full capacity in '28, '27, and that's where you're delaying? That would be my question.

I think that, I mean, the -- I mean, it's not delay the start-up of the plant. The plant is going to start up on time. We continue to run the project on schedule. So we should be, I mean, ramping up in the third quarter basically of. We're testing many of the equipment for commissioning, I mean, a good portion of the plant already. So things are progressing well there. So I think that what we are referring to here is entering at a slower pace, not delaying it on time, but entering at a slower pace overall for GCC.

And I'd like to reemphasize overall because for us, it's managing the whole network through the start-up of the Odessa new line. Again, I mean, I mentioned we plan to, I mean, as quickly as we can run the line at full capacity. That means probably shutting down both of the other [indiscernible] today at the plant in order to favor, I mean, running the more modern and efficient plant.

And the effect of that because we cannot put all that cement in the market today, the effect of that is a slowdown in other parts of the network in GCC, more specifically the Samalayuca plant. So again, I mean, where we're going to feel the pain or take the burden of the start-up of the line in Odessa is going to be in Mexico and part of the shipment that, that plant was doing in West Texas and other markets.

That's very clear. Just another clarification on my end, and that's implicitly in the 5% growth in the guidance, right?

Yes, sir.

Our next question today is coming from [ Matias Ostrowicz ] from Citibank.

I joined a bit late, so I apologize if you have already replied to this. But I'm just wondering about your price guidance in the U.S. market. Was your guidance relatively flattish considering your volumes are in the high single digits. Is it a mix situation? Or is it just softness in the market?

Well, I would say derived from the softness in the market, I mean -- and there are many factors that I already mentioned, Matias, of why we are going to experience a mix effect between segments.

Again, I mean, more construction cement and less Oil Well cement that affects negatively the average price. And geography, with more shipments to further markets precisely of that new, I mean, production in Odessa going to further different markets in every direction. So we keep it a smaller impact in dispersed market. So that's, again, another factor that is affecting obviously our price, our average mix price to be competitive in longer destinations or further away destinations.

And again, I already talked about, I mean, other effects, but it's basically, again, a mix and geography effect that it's putting pressure or that it's compensating the price increase that we're doing in every U.S. market.

We reached the end of our question-and-answer session. I'd like to turn the floor back over to Ms. Ogushi for any further or closing comments.

Thank you again for your time and continued interest in GCC. We look forward to speaking with you again soon.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.

Good morning, and welcome to GCC's Third Quarter 2025 Earnings Results Conference Call.

[Operator Instructions] Please also note that a slide presentation accompanies today's webcast. The link is available on the company's IR website at gcc.com.

I would now like to turn the call over to Sahory Ogushi, Head of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining. With me today are Enrique Escalante, our Chief Executive Officer; and Maik Strecker, Chief Financial Officer. The earnings release detailing this quarter's results was released yesterday after market close and is available on GCC's IR website. This conference call is also being broadcast live within the Investors section at gcc.com. And both the webcast replay of the call and transcript will be available on the same site approximately 1 hour after the end of today's call.

Before we begin, I would like to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in yesterday's press release and in our quarterly report filed with the Mexican Stock Exchange. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events.

With that, let me now turn the call over to Enrique.

Thank you, Sahory, and good morning, everyone. Over the past year, we have listened carefully to our teams, customers and partners. That dialogue sharpened our long-term direction, our vision, mission and anchor strategies. Our new 2030 vision is clear: to improve quality of life by creating a better tomorrow. We will deliver it by executing on our mission; to be the supplier of choice of high-quality construction materials, building stronger communities and creating lasting value for all stakeholders. And we will do so through our 3 anchor strategies: People; growth; and planet.

With that framework in place, let me turn to the quarter. 3Q '25 unfolded against a mixed macro backdrop. Both the U.S. and Mexico cut interest rates. And while the costs to date are not yet sufficient to fully restore activity, they are an encouraging signal for improvement in some segments. At the same time, credit rhetoric continued to influence project timing and investment decisions in some markets. Against this backdrop, we delivered 10% revenue growth.

For context, the third quarter of 2024 set a high bar with record margins and marked the launch of our proactive cost and expense program, which creates a tough comparison this year. Margin compression was steeper than what we expected in the quarter. However, we are executing targeted commercial and cost measures to support profitability into the fourth quarter and to set a healthier run rate as we enter 2026. This improved run rate will also be supported by the absence of a couple of one-offs that are not expected to recur next year.

Operationally, our plants run normal throughout the quarter, an important proof point following the isolated disruptions we experienced in the first half of the year. As part of our people strategy, we continue to invest in safety and training. We continue investing in strengthening our safety culture, guided by the vision of becoming a world-class safety organization.

During the first 9 months of the year, we reduced our recordable incidents, including lost time incidents by 18% compared to the same period in 2024. We certified 75% of our safety professionals in our Serious Injuries and Fatalities, SIF prevention system, enabling them to internally train and coach more than 450 GCC leaders. This initiative is now integrated into our formal training program.

Additionally, we began implementing new Enablon modules focused on safety, environment and sustainability. These modules supported standardization of key processes and enhance the integration and analysis of information, helping us strengthen our decision-making capabilities. Through the GCC Cement Training Institute, we have dedicated close to 12,000 hours of training year-to-date and are assessing needs to build more tailored plants for next year.

Turning to our planet strategy. Our alternative fuel substitution increased 3 percentage points in the quarter, led by our Pueblo plant, which reached 18.7% year-to-date to optimize use of tire-derived fuel. We also expanded the share of blended cement, driven by pozzolanic cement production at our Tijeras plant, where blended products now account for 83% of plant volume, up 55 percentage points year-over-year. As a result, our clinker factor improved by 1 percentage point, and we reduced our Scope 1 CO2 emissions by 2.2% year-over-year.

Finally, turning to our growth strategy. In the U.S., cement volumes increased by 6.4% and our concrete operations delivered a 52.7% gain. Momentum in wind farm projects continued, and our ready-mix plants run at capacity to support demand.

During the third quarter, we supplied 4 wind farm projects across North Dakota, Colorado and Texas, with additional projects scheduled to begin next year. Importantly, the projects in our pipeline are funded and proceeding, which gives us certainty in the durability of this work stream into 2026. These energy generation projects connect to the grid investment now underway. In Colorado, we are participating in the Power Pathway, a USD 1.7 billion program designed to enhance reliability and enable future renewable development. Activity is expected to run through 2026. Taken together, wind installation and transmission upgrades create a cohesive multiyear opportunity set for our cement and concrete businesses across the region.

Infrastructure demand remains steady. We continue to work on interstate highways near Odessa and El Paso, Texas and advanced construction at the Denver International Airport. We are wrapping up Loop 88 in Lubbock and beginning activity on Highway 27 near Amarillo, Texas, positioning the network well for a solid close to the year. By contrast, the residential segment remains under pressure.

Affordability is still considered constrained with a 30-year mortgage rate around 6.3%. Permits and starts remain subdued, and we do not expect a meaningful rebound throughout the first half of 2026. Recent rate cuts in the U.S. are a constructive signal but they have not yet translated into the level of affordability needed to reaccelerate housing.

Within oil and gas, activity softened as lower oil price and rig counts did not support higher production. As a result, oil well cement declined as a share of U.S. cement volumes by roughly 3 percentage points, reducing the contribution of a higher value product in our mix. That mix shift, combined with softer underlying demand and increased availability in certain markets, weighed on price realization, resulting in an average cement price decrease of 3% year-over-year for the quarter.

Looking ahead to 2026, we're maintaining a disciplined focus on offsetting cost increases and improving margins. We have notified customers of an $8 per tonne price increase for construction cement effective January 1. At the same time, our recent aggregates acquisition has been integrated. They are performing as planned, and our focus on operational and commercial excellence is lifting synergies.

Turning to Mexico. Conditions were mixed throughout the quarter. Industrial demand remains subdued and macro uncertainty kept decision-making cautious. Industrial developers are largely in a holding pattern for the same reasons we outlined earlier in the year. This is most visible in quarries, where customers have still yet to allocate available inventories built in prior years, while activity in Chihuahua has held broadly stable.

We're staying close to customers and have positioned ourselves to move quickly as confidence returns. And in that backdrop, cement volumes improved in September as the mining comparison base began to normalize. The segment performed in line with expectation. One customer's end-of-life mine closed in August 2024, is the year-over-year comparison in the third quarter.

With the second closure in November 2024 will still affect part of the fourth quarter. Importantly, we are nearing the end of that high base as we head into 2026. Despite this headwind and in contrast with our U.S. market, residential demand in the state of Chihuahua remained very robust, delivering a high single-digit growth year-to-date, even before any impact from the new federal housing initiative. Projects under that new program are now moving from planning into execution and should provide incremental growth on top of an already solid residential backdrop. We expect activity to begin in Ciudad Juarez before year-end with Chihuahua following next year.

On infrastructure, we sustained activity on the Bavispe highway connecting Sonora and Chihuahua state and the city of Chihuahua advanced the preparation phase for 3 bridges. We expect initial work to start in the fourth quarter with a larger share concentrated in 2026 as execution scales. The bulk cement remains robust and continue to contribute good margins to our Mexico results.

Overall, our focus in Mexico is on disciplined preparation for the next year, positioning GCC to capture an eventual recovery in industrial while continuing to leverage strength in residential and the visibility created by this year infrastructure programs.

From a capital allocation standpoint, the Odessa expansion remains fully on track. To date, we have deployed approximately $518 million of the total investment. The new line is expected to begin shipping cement in the summer of 2026. The new production line has the flexibility to switch between oil well cement and construction cement as market conditions evolve, an important capability given oil price dynamics.

Drawing on our experience, adding capacity to the market, especially under adverse economic conditions as was the case during our Pueblo plant start-up in 2008, we will enter the market slowly and deliberately dispersing new sales through multiple small terminals across several Texas markets, capturing savings in freight and distribution costs by shipping closer to the plant. In this way, we avoid market disruption and enhance value creation midterm. Odessa will assume lanes currently served by Samalayuca into West Texas and through Trenton, Texas. This redeployment expands our logistics network and unlock freight efficiencies across the footprint.

Finally, on M&A, let me be explicit. It is a top priority. We remain active in evaluating opportunities in both cement and aggregates that enhance our network within conservative leverage thresholds. Our approach is disciplined. We will deploy capital where it strengthens the network and meets our strategic and financial criteria. However, let me add, as we have been commenting, we no longer will limit our growth strategy to the region where we currently operate. We are now open to grow in other U.S. markets where we can start building a new network capturing value based on our current experience. We are prepared to move decisively when the right assets are available.

With that, let me turn the call over to Maik for his financial review.

Thank you, Enrique, and good morning to everyone. Starting with consolidated sales. We reported a 10% increase compared to the third quarter of last year, supported by volume growth in the United States and positive pricing trends in our U.S. concrete operations. In the U.S., revenues grew 14%, driven by a 6.4% increase in cement volumes and what continues to be a record year in concrete, where volumes rose 52.7%. Ready-mix performance remained closely tied to renewable energy work and related infrastructure.

Pricing dynamics in cement were more challenging. Average prices decreased 3%, reflecting a lower proportion of higher-value oil-well cement and in the mix and competitive conditions in several of our markets. By contrast, concrete pricing increased 11% year-over-year, supported by disciplined execution of our commercial strategies. In Mexico, revenues declined 2.1%, primarily on lower volumes. Cement volumes decreased 3.3% and concrete volumes were down 7.3%. Pricing was essentially flat for both products, consistent with market conditions during the quarter.

Turning to cost. Our cost of sales represented 63.7% of revenues, an increase of 5.3 percentage points versus prior year. The main drivers were higher production costs and expenses, a greater share of concrete in our sales mix, which carries a higher cost to sales ratio, softer cement price realization and higher transfer freight related to the Rapid City incident earlier in the year.

The comparison was also affected by the absence of the natural gas hedge benefit recognized in the third quarter of 2024 and by higher fuel prices versus an unusually low base last year. SG&A expenses were 6.9% of revenues, an improvement of 15 basis points year-over-year, reflecting lower third-party consulting and a shift in work in-house where possible, limiting nonessential travel via effective virtual collaboration and trimming discretionary spend.

Our expense optimization efforts have momentum, and we'll continue to prioritize simple and efficient ways of working. As a result, EBITDA for the quarter totaled $157.4 million with a margin of 35.9%. by segment, the U.S. delivered an EBITDA margin of 38% and Mexico reported 28.3%, each reflecting the mixed dynamics noted a moment ago.

Net financial income was $9 million, lower year-over-year due to a reduced average cash balance, partially offset by interest capitalization associated with the Odessa plant expansion. Consolidated net income was $100.9 million, translating to earnings per share of $0.31. Free cash flow totaled $132.4 million, up 8.9%, driven by lower cash taxes and accrual payments, partially offset by higher working capital needs and maintenance CapEx as we normalized plant operations during the quarter.

On capital allocation, we were more active in the share repurchasing program, deploying $7 million in buybacks. We will remain opportunistic and disciplined as we focus on overall shareholder returns. We also continued to fund strategic projects throughout the quarter, allocating $86 million primarily to the Odessa plant expansion and our terminal network.

We closed the quarter with a strong balance sheet. Cash and equivalents were $853.7 million, and net debt-to-EBITDA remained solid at negative 0.55x, providing flexibility to continue executing our strategies.

To sum up, we delivered top line growth, stable operations and disciplined cost control in a mixed environment. We're acting on the levers within our control, cost and expense discipline and focused capital deployment while preparing the network for Odessa's ramp-up and the associated commercial and logistics benefits.

With that, I will hand the call back to Enrique for his closing remarks.

Let me close with 3 quick thoughts. First, the direction is clear. We refresh our vision and mission and are executing to people, growth and planning. You can see that in this way, our plant operated reliably this quarter in the discipline of our commercial posture and in the progress we have been making on decarbonization.

Second, we're investing to strengthen our network for the long term. Trenton is online and serving growing markets, while several smaller terminals are in the planning and erection stages and Odessa remains on schedule. Third, we're staying disciplined on cost and capital, pushing our cost and expenses program, investing where the returns are clear and remaining disciplined on M&A leverage and expected returns.

I want to thank our teams for this focus and execution, our customers for their trust and our shareholders for their continued support. We are realistic about the environment, but confident in our plan and our ability to create more value over time.

With that, this concludes our prepared remarks. I will turn the call over to your questions. Operator, please begin with the first question.

Our first question comes from the line of Alejandra Obregon with Morgan Stanley.

I actually have 2. The first one is on your initiatives. So you mentioned you're implementing some initiatives to improve profitability run rates. So I was just wondering if you could elaborate on this, how much room for optimization have you identified, where it might come from? And when do you expect to see some results start flowing into the P&L? So that will be the first question.

And then the second one is on the Beautiful Bill Act. So I was just wondering if the Bill could bring some fiscal or depreciation benefits perhaps related to your latest A acquisition or maybe the Odessa investments. I mean I'm not sure if these assets could qualify or maybe any other, and if this could potentially trigger an acceleration on your M&A activity. So anything that you could be seeing here, that would be very helpful.

Alejandra, this is Enrique Escalante. Thank you for your question. I'll give you, I mean, a couple of examples of -- on your question on where our run rate will improve in 2026. Obviously, and we already mentioned it, of course, I mean, we have at least 3 one-offs that shouldn't repeat next year. The one on the conversion with the natural gas price and then 2, incident that we have at the Rapid City plant and at the Odessa plant earlier in the year. All of those situations were obviously corrected in the second half of the year, we're running very well in both plants. So that's one source of the margin improvement for next year.

I can give you a couple of additional examples of where we are, I mean, focusing a lot on energy and power, specifically in the Samalayuca plant, I mean, we just switched now -- we're currently switching during October, the supply of power to the Samalayuca plant to a market, I mean, provider different than CFE that we have been using the Samalayuca plant now for several years, and we have realized significant savings in our power cost in Chihuahua that we expect will repeating Samalayuca next year.

We're also working in the construction of a new gas pipeline for the Samalayuca plant that will connect us and give us the ability, I mean, to buy gas on the Waha index, which is more or less 1/3 of the chip Channel index currently. So we will not know exactly yet because we're about to start construction of the pipeline in which month but we should start realizing those savings next year.

And the third source of margin improvement, of course, is going to be with the entry of the Odessa plant. Obviously, we're going to try to produce a capacity in that new kiln to obviously realize the lower variable cost that the plant will have compared to the other lines that are currently producing there. And of course, to optimize our freight and logistics costs by selling as much as we can closer to the plant with low-cost product and taking Samalayuca shipments back to its source. So we are going to be obviously saving on the freight that we pay today from Samalayuca to Odessa to the Permian Basin and from Samalayuca all the way to Trenton, Texas and North of Dallas. So those are, I mean, 3 sources of improvement for our contribution margin next year.

Yes, Alejandra, to add, we continue also, of course, to look at our admin and SG&A costs. As I mentioned, we're very disciplined, what we can actually do in-house instead of outsourcing and consultants and third parties. We're reviewing kind of programs, initiatives that if they don't add immediate kind of impact value, we're looking at pushing them out or optimizing how we work those. And in general, right, we're trying to be very disciplined when it comes to hiring and new positions. So all of that will support regaining some of the share points -- margin share points we lost this year going into '26.

Regarding your second question on the Big Beautiful Bill, we have kind of from a project perspective, which is driving our business this year already very nicely. You saw that in our concrete volume increases really participating in energy projects, wind energy projects. We see that continuing. We have some good projects in the pipeline. They are funded. So we're going to execute on those.

Secondly, what we see really driven by the kind of push in the United States is data center, AI-driven data centers. We're fortunate many of those are in our footprint, and we're working hard to participate in those projects, not only through our concrete operations but of course, through cement with third-party customers. Now for our aggregate operations that we have. So you should see some good activity there.

And then regarding your last point, M&A, independent of the Big Beautiful Bill, as Enrique mentioned, it's top priority. We are active. And as you also mentioned, we're looking much broader today geographically and also from a product perspective. As we have shown last year, we invested in aggregates. We plan to continue to do that. We have a good pipeline on projects. It's now just a matter of -- again, it's always 2 parties to get to a final deal. But we have a very focused small team but focused dedicated team to make these deals happening. So that's how I would kind of give a little bit of voice over what we see driven by the Big Beautiful Bill.

Our next question comes from the line of Adrian Huerta with JPMorgan.

I wanted just to see if we can get a rough idea as of now what we could expect for next year. I mean you mentioned that residential is not likely to -- especially in the U.S., residential is not likely to pick up yet in 2026. But I would like to know your views on infrastructure demand for 2026? And more importantly, how should we think about oil well cement? If oil prices remain at the current levels until the end of next year, what we could expect in terms of demand for oil well cement? Just wanted to get a little bit of sensitivity with oil prices, et cetera, what we could expect from that segment as well?

And finally, if you can just share some comments on the non-res, especially with all these data centers, AI, et cetera, if you're having any exposure to that and if that's adding something significant or not really yet for volumes, especially for you?

Adrian, this is Enrique. Thanks for the questions. I mean we're being conservative, Adrian, you know us. I mean, we don't expect neither residential nor oil well cement demand to significantly change next year. as we mentioned, especially on the residential side, at least not in the first half. At the oil prices, we would expect demand to continue basically constant where it is, which is a good [Technical Difficulty]

Ladies and gentleman, please standby, while we experience some technical difficulties.

And ladies and gentleman, we're now reconnected. Please continue.

Sorry, I mean, so we got disconnected. But I don't know if you heard me, Adrian, I was saying that at the current oil prices, we expect more or less a constant demand at the levels we have, which is still robust. I mean it's not as high as it had been in the last couple of years, but it will continue at a very good volume for us. And of course, with the start-up of the new plant, I think that we're going to draw more confidence from customers in terms that we're going to be, I mean, obviously, the major, I mean, producer in the area.

However, given the strategic design of the plant to be able to switch back between construction and oil well cement, I think we're very well positioned, I mean, to take advantage of the cyclicality of the oil well industry that is, I mean, as we know, always there. So we're -- we feel very comfortable with that. We would like to have a higher volume, yes but we're going to be okay in 2026.

I think our brightest spot is going to continue on the infrastructure segment, as Mike already, I mean, alluded to. And we see more projects coming online from the big Jobs Act and through the DOTs. I mean they have still -- I mean this bill a couple more years and the funding it's constantly coming. So we're cautiously optimistic that, that will continue to support us pretty well.

But the icing on the cake, it's what you mentioned, I mean, this new segment of data centers and related, I mean, infrastructure for that, including power plants. We have been hearing that in the regions where we are, specifically El Paso, Santa Teresa, New Mexico, I mean, Abilene of course, I mean, there are several very large projects coming. Some of them we know have already been signed. And so that's going to be, I mean, a very, very large and constant demand for several years that we're very well positioned to capture. So we don't have any more detail at this moment in terms of potential volume there year after year but we're working precisely on trying to get that information to be able to put that in our projections.

Yes. And Adrian, what I would add is what also is evolving for us, our participation in those infrastructure projects where in the past, our main focus was supplying cement through contractors and ready-mix partners. Today, the capabilities that we have built with our mobile ready-mix division being able to really take on more challenging projects technically sophisticated projects, that's a benefit. And as I already mentioned, adding the aggregate opportunity to be really a broader product solution provider allows us to really participate at a much larger share in those projects.

So we're excited about that. And we're working hard to get these across our footprint. Enrique mentioned Texas but we're also working on projects further north, Colorado, in the Dakotas. So we are actually very positive around this topic of infrastructure.

Enrique, if I may just add a quick question on that on the ready-mix. Where are you primarily right now on ready-mix? And where are the markets where you could be growing on that?

So we're primarily in the El Paso, Texas area and then Northwest Iowa and Southeast, I mean, South Dakota and Northwest Minnesota. So those areas there from the -- on the agricultural belt and of course, a lot of the dairy projects, swine projects, I mean, a lot of agricultural projects are constantly there that have been carrying us very nicely, plus all these energy projects that have been also, I mean, now traditional for us in that area.

So we have built this specialty, I mean, concrete and ready-mix trucks that are mobile, and we're chasing these projects throughout the development in different states now. And as Maik mentioned, we're in North Dakota, in Texas, we've been in New Mexico and in other markets. So this mobile units, I mean, can chase projects very efficiently. And that's how we are planning to also tackle new projects like data centers and other large infrastructure projects like that. I mentioned, I mean, power plants. I've been in meetings in those markets where they are talking about building these data centers and building the necessary power plants behind them to supply the power. So there is a lot of infrastructure that we're very positive about it.

Our next question comes from the line of Francisco Suarez with Scotiabank.

You have guided us very well on the overall pathway on this year, and thank you for that. And particularly on the Permian region, I was wondering if you see any differences between drilling and completions in the Midland region compared to the Delaware formation? And if perhaps looking ahead, do you think that it's possible even at current prices to increase prices for oil well cement for next year?

Thank you, Francisco, for your questions. The difference between the Midland, I mean, the Permian Basin and the Delaware Basin, I'm not very privy about those specific geological differences. What I know, Francisco is that the Permian has been traditionally the most competitive area, the most competitive basin in the U.S. And they have been very good at developing efficiencies and getting more cost advantages, and we don't hear or read any change in that regard. So as oil prices remain low and tight, we still trust that the Permian is one of the first regions to continue producing across the U.S.

In terms of, I mean, oil well cement price increase, of course, as I mentioned, we are very focused on recovering cost inflation and maintaining a better margins. So we'll be, I mean, during the year in continuous discussions with our customers there. We were not able to realize, I mean, the price increase that we have announced for that product in that market this year. And obviously, I mean, as a result of this lower demand. But we think that with things are more stable, there is openness about -- from our customers to have these discussions on pricing. So I believe that we will be able, I mean, to get some price increase.

Perfect. And if I may, a second question. On your energy metrics, you have the ability to switch from -- you are increasing your fossil fuel substitution rates. Interestingly, you have the option to use your own coal in your mine in Colorado. Now you were talking about using more natural gas from Waha. Can you guide us a little bit about the economics and the trade-offs between using your own coal and the natural gas and of course, increasing the fossil fuel substitution rates?

Yes, Francisco. At the current gas prices, we're doing everything possible to switch all the coal to natural gas for our plant. And that's how -- that's the beauty of our internal hedge with that coal mine. That coal mine, we have been operating now kind of in a variable way. I mean we have had, I mean, some furloughs to maintain our cost structure there, control inventories and just to regulate the need that we need in our plants, I mean, to complement the natural gas that we're buying.

Again, today, the view is to continue as long as the gas prices continue at those levels, that's why it's so important to have the new pipeline in the Samalayuca plant. And we'll continue, I mean, with all the options to purchase natural gas and obviously, I mean, do hedging on those prices and maintain our fuel cost as low as possible.

Our next question comes from the line of Isabella Pacheco with Bank of America.

I want to better understand your M&A strategy. So you said you are open for new regions to understand if you're looking for opportunities in developed markets or undeveloped or even both?

And the second question I have is if you could give more color on the size you're looking for like the price you're willing to pay or capacity you're looking to buy and how you plan to fund this through cash or externally? And I apologize if you have already answered this question. I had technical difficulties and got disconnected from your call.

Isabella, this is Maik. Thank you for the question. So when we talk about M&A and we talk about geographical openness, we talk about the United States. That's our focus market. So that's where we focus on, and we have defined that in our strategy. So as we're looking at that, we always start with cement opportunities, ideally close to our network, so we can connect it and build out that network. But like we said, we're now looking a little bit broader in the United States, East, West, where there are opportunities from a cement perspective or cementation materials perspective and so on.

Secondly, we're very clear now on aggregates. Aggregates, our starting point is a little bit more closer to the network because we see, a; more opportunities there. The market is still very fragmented, and b; we can lift some immediate synergies because we have people, systems, networks already. And we don't have yet the scale compared to cement on aggregates. So that's where we say the focus is kind of in network on aggregates where we can lift some synergies.

And then the third aspect is where it makes sense where we can pull through products, we would look at downstream, meaning ready-mix or asphalt on the ready-mix side, if we can pull through cement, aggregates, and then we would consider that. And on asphalt, if we can pull through aggregate products, we would consider that as well. So that's kind of our very clear and defined strategy when it comes to M&A.

Your question on the size of the deals, they're going to vary. We're going to look at kind of all opportunities that make sense for us. And from a funding perspective, we have a strong balance sheet. So we reduced some of our cash available. And we have very good dialogue with our key banks for financing, and we're very closely connected there. So we feel comfortable that the right opportunity, we can act fast. We have the right partners and execute on our M&A growth strategy.

If I could just add one more question. What is your minimal cash position you feel comfortable with?

We typically look at about 15% of our net sales. That's a good guiding point. That is, from our perspective, a conservative number. So that's how we look at that.

Our final question this morning comes from the line of Marcelo Furlan with Itaú BBA.

My question -- I have 2, as a matter of fact. The first is just a follow-up for the previous questions regarding the cost initiatives that the company has tried to make so far. So I'd like to understand once the cost and expense reduction initiatives are reached, how could you see or how could we expect in terms of margin evolutions for both the U.S. and Mexico going forward?

And my second question is related to given this change in momentum, especially for the oil and cement the very short term and also -- but also with some resilient performance in other divisions like in Mexico or also in other segments in the U.S. specifically, how are you guys seeing the company's likelihood of meeting the EBITDA guidance for this year of mid-single-digit drop? So these are my 2 questions.

Okay. Marcelo, thanks for the question. Regarding the cost initiatives, so as we explained, number one, we will see these one-offs not going to happen going forward. So that has a big impact, and I'm not going to repeat but the whole logistics aspect of supporting our Rapid City network was very costly this year. The Odessa small incident here in the beginning of the year with some of our equipment. So all of that will help to get the cost back on track and to support kind of that regaining of the margins.

Secondly, like we said, we're working diligently through our overall kind of initiatives and programs to really streamline those and be much more focused on what makes an impact on the day-to-day, what helps us to get more efficient in production, what helps us to get more efficient serving our projects and customers. So with that, the goal is really to regain the kind of the margin percentages that we lost this year.

Also a reminder, we came off a record year last year, but that's the ambition. Let's get back to that to that high level of margins. And we're going to work diligently very systematically over the coming days, weeks and months into '26 to get back on that margin level.

Marcelo, this is Enrique. Regarding the guidance, I mean, we're very comfortable to meet what we gave as guidance. September has been doing -- did very well in shipments, both in Mexico and the U.S., a little bit above our internal expectations and October is going the same way. So the trend seems to confirm that we're going to meet our guidance. Of course, in our markets in the U.S. up north, we're always subject to how fast and how strong, I mean, winter comes. But if we have just a normal pattern here with winter, we will be okay. So we confirm that what we said.

Thank you. There are no other questions at this time. I'll turn the floor back to Ms. Ogushi for any final comments.

Thank you again for your time and continued interest in GCC. We look forward to speaking with you again soon.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Good morning, and welcome to GCC's Second Quarter 2025 Earnings Results Conference Call. Before we begin, I'd like to remind you that this call is being recorded. [Operator Instructions] Please also note that a slide presentation accompanies today's webcast. The link is available on the company's IR website at gcc.com. I'd like to turn the call over to Sahory Ogushi, Head of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining. With me today are Enrique Escalante, our Chief Executive Officer; and Maik Strecker, Chief Financial Officer. The earnings release detailing this quarter's results was released yesterday after market close and is available on GCC's IR website. This conference call is also being broadcast live within the Investors section at gcc.com. And both the webcast replay of the call and transcript will be available on the same site approximately 1 hour after the end of today's call. Before we begin, I would like to remind you that our remarks today will include forward-looking statements.

Actual results may differ materially from those contemplated by the forward-looking statements. Factors that could cause these results to differ materially are set forth in yesterday's press release and in our quarterly report filed with the Mexican Stock Exchange. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. With that, let me now turn the call over to Enrique.

Thank you, Sahory, and good morning, everyone. This year has brought its share of complexity. Yet despite persistent inflationary pressure, evolving trade dynamics and the depreciation of the Mexican peso, we continue to execute with discipline and deliver a 1% increase in consolidated sales, driven by a 7.7% increase in U.S. sales, which totaled $272 million. We have successfully navigated similar environment in the past, relying on our operational agility, disciplined execution and long-term strategic focus. This foundation continues to guide our decisions today.

The second quarter of 2024 set a high benchmark with record margins. And while the margin contraction was more pronounced than initially projected, we are taking strict and targeted actions to strengthen our position for the second half of the year. It is also important to note that the second quarter 2024 included several one-offs benefits and timing effects that are not recurring or directly comparable in 2025. Among the most significant were a $4 million downward adjustment in natural gas costs, a higher proportion of lower-margin real estate sales for development this year and unscheduled outages at our Odessa and Rapid City plant. In addition, the depreciation of the Mexican peso contributed to a more difficult year-over-year comparison. On a like-to-like basis, EBITDA for the second quarter of 2025 declined by 1.5% compared to the same period last year.

We launched a company-wide cost and expense optimization program designed to adjust our cost structure in line with current market dynamics, improve internal efficiency and protect margins without compromising service, safety or long-term growth. The program includes targeted actions across our operations, logistics and support functions with clearly defined priorities and accountability to ensure we see a meaningful impact in the second half of the year. As part of this effort, we committed to a $12 million expense reduction, of which $5 million has already been realized. The remaining $7 million is on track for the second half. This is supported by the strength and commitment of our teams. We continue to respond with resilience, agility and a clear focus on execution. That's why our priorities around safety, development and workplace culture remain unchanged.

As part of our people pillar structure training program, 13 technical courses have been completed year-to-date with 19 additional sessions currently underway across our cement plant. Several of these courses are being led by former employees, helping transfer valuable operational knowledge to the next generation. Our commitment to a world-class safety company remains at the core of our operations. Our safety performance continues to improve. During the first half of the year, we achieved a 37% reduction in recordable incidents, including lost time incidents compared to the same period in 2024. This quarter, we partnered with Wolters Kluwer - Enablon, a leading software platform specializing in health and safety, sustainability and environmental management to upgrade our safety management system. This platform will enable us to standardize processes, better integrate and analyze information and enhance decision-making across the organization.

Our culture of progress continues to -- continues to be recognized externally. In the second quarter, GCC was ranked #26 in the category in the 2025 Great Place to Work survey in Mexico, a meaningful acknowledgment of the strong workplace environment we continue to build. Turning to our planet pillar. The second quarter reflected steady progress on our sustainability commitments. Clean fuel usage increased notably, supported by higher natural gas consumption and greater alternative fuel substitution, particularly at our Samalayuca plant. These improvements are the result of ongoing investments to expand fuel flexibility across our network. We currently have several projects underway to strengthen our alternative fuels program. This includes investing in a tire shredding operation at our Rapid City plant and a railroad [indiscernible] cheaper for Pueblo, both of which will support continued growth in our fuel substitution rate.

We also increased the share of blended cement in our product mix, driven largely by pozzolanic cement production at our Tijera cement plant. Blended cement now represents 78% of our total cement volume, up 3.5 percentage points from the second quarter last year. As a result, we achieved a 1% point reduction in our clinker factor and a 3.7% year-over-year reduction in Scope 1 CO2 emissions. As part of our strategy to further reduce our clinker factor and expand our low-carbon product portfolio, we are also advancing research into the use of calcined plates as supplementary cementitious materials at several of our plants with a pilot project underway at the Chihuahua plant. All of these actions reflect our broader sustainability strategy, which we detailed in our 2024 integrated report released during the quarter.

The report highlights our broader ESG priorities and strategy with transparent disclosure of our commitment and progress beyond what we have covered here today. Finally, moving to our profit pillar and market performance. In the U.S., cement volumes grew by mid-single digits, while concrete operations delivered strong double-digit growth, driven by renewable energy projects. Our ready-mix operations run at capacity throughout the quarter, supported by the investments we made earlier this year in portable plants, fleet expansion and personnel. We are currently supplying 5 wind farm projects across North Dakota, Colorado, New Mexico, with more scheduled to begin later this year. Infrastructure demand remains solid. We recently began the second phase of the 3-phase expansion of the I-10 highway project in El Paso, Texas and continued work at Denver International Airport, along with multiple other paving contracts across our network.

These projects contributed to a stable and consistent activity throughout the quarter. By contrast, the residential segment remains under pressure. Housing inventory is elevated nationwide and home affordability continues to decline with the 30-year mortgage rate well above the estimated 5.5% threshold needed to stimulate meaningful construction activity. Reflecting these headwinds, housing starts fell in May to their lowest level in 5 years and even markets that previously demonstrated resilience have begun to soften. We anticipate continued weakness in this segment until mortgage rates become more favorable. We also saw a shift in activity within the oil and gas sector. During the quarter, we experienced softer demand driven by declining rig counts and pressure on oil prices.

Additionally, the unplanned outage in one of the cement mills at our Odessa plant earlier this year led some customers to secure cement from competitors. While we have successfully regained those customers during the second quarter, oil well cement now represents a smaller portion of our overall sales mix. Given the premium pricing associated with this product, the change in mix placed additional pressure on average cement pricing. This, combined with softer overall demand, resulting in only partial acceptance of the spring construction cement price increase and gated product availability generated that total cement prices remained essentially flat year-over-year. We continue to monitor these trends closely and adjust our commercial strategy, accordingly, maintaining focus on execution, customer service and cost efficiency.

In addition to these commercial dynamics, we also experienced a temporary disruption at our Rapid City cement plant due to an incident during scheduled maintenance. The plant was offline for half of the quarter and has since resumed normal operations. Thanks to our integrated network of plants and terminals, we were able to redirect supply from our Pueblo and Trident plants to ensure uninterrupted service to our customers in the region, proving again the unique advantage of the network we have built. While this ensured continuity, the use of higher cost routes and reduced production volumes put additional pressure on our margins during the period.

Turning now to Mexico. Market conditions remained challenging throughout the quarter, primarily due to the ongoing softness in the industrial demand and adverse weather. Juarez recorded the highest wind speed in over 90 years, creating safety and quality challenges that impacted construction activity and our ability to deliver concrete consistently. Industrial developers remain cautious, influenced by persistent macro uncertainty and evolving trade policies. While tariffs have not directly impacted GCC, the broader environment continues to delay decision-making and project starts. The mining segment also remains muted as expected following the end-of-life closure of 2 key customer mines in the second half of last year. This creates a higher comparison base for 2025 and continues to affect volume performance. Despite this headwind and in contrast with our U.S. market, residential demand in Chihuahua has remained strong, posting double-digit growth year-to-date.

We're encouraged by the federal housing initiative targeting 1 million new homes in the next 5 years. Chihuahua stands to benefit meaningfully, and we're working closely with [indiscernible] to support the planning phase with construction anticipated to start towards the end of the year. Infrastructure also continues to present meaningful opportunity. On the plan Mexico, the government has prioritized connectivity, and we are participating in the Sonora-Chihuahua Highway project, one of the largest infrastructure investments in the region in recent years as well as supplying back cement for the construction of rural roads in the Chihuahua Mountain under the rural roads plan.

Overall, in Mexico, our focus remains on careful planning and preparation for the months ahead. We are actively participating in bids for infrastructure projects expected to begin in the coming quarters, ensuring we are well positioned to capture growth as market conditions improve. From a capital allocation standpoint, a key milestone achieved during the quarter was the completion of our new cement distribution terminal in Trenton, Texas, just northeast of Dallas. This investment directly addresses growing customer demand and strengthens our ability to serve the I-35 corridor between Dallas and Oklahoma City, one of the most dynamic markets in the country. The Dallas-Fort Worth area leads the nation in real estate investments and development, serving as a vibrant hub for financial and business activities.

Our new terminal positions us strategically to capitalize on this growth, particularly across the residential, office and industrial sectors. Operations at the Trenton terminal began in the first week of July, with cement initially supplied from our Samalayuca plant. Consistent with our conservative market strategy of dispersing small incremental volumes across several markets, the terminal, along with others currently in the planning stage, not only strengthens our service capabilities in Texas, but also prepares our network for the additional volumes expected from the Odessa expansion once it comes online. On that front, the expansion remains fully on track, both in terms of timing and budget. To date, we have deployed approximately $458 million on total investment with $174 million remaining for the balance of this year. With that, let me now turn the call over to Maik for his financial review.

Thank you, Enrique, and good morning to everyone. Starting with consolidated sales, we reported a 1% increase compared to the second quarter of last year, supported by volume growth in the U.S. and positive pricing trends in Mexico. Excluding the depreciation of the Mexican peso, consolidated sales increased 4% year-over-year. In the U.S., revenues grew by 7.7%, driven by a 4.2% rise in cement volumes. Our concrete operations experienced particularly strong performance, benefiting from renewable energy sector demand with volumes increasing by 20.7%. Pricing dynamics proved more challenging during the quarter. Cement pricing increased 0.6%, impacted by a lower production of oil well cement in our total sales mix. Concrete pricing continued to perform well, increasing 9.5% year-over-year. In Mexico, revenues declined by 14.8%, mainly due to the depreciation of the Mexican peso. Excluding the currency effect, sales decreased by 4.6%.

Cement volumes declined 6.2% and concrete volumes were down 13.1%. Pricing remained firm with cement and concrete prices up 4.2% and 3%, respectively. From a cost perspective, our cost of sales represented 66.7% of revenues, up 5.8 percentage points compared to last year. This increase was largely driven by one-off or timing-related factors, including lower production volumes due to the timing of planned maintenance and the Rapid City incident, which reduced inventory levels during the quarter, an effect that is expected to normalize in the second half of the year. Additional impacts included the absence of the natural gas hedge benefit recognized in the second quarter of 2024, higher transfer freight expenses related to the Rapid City incident, a greater share of real estate sales in Mexico, which carry a higher cost to sales ratio and increased fuel prices in general.

It's also worth noting that fuel costs in the prior year quarter were unusually low, widening the year-over-year comparison. SG&A expenses represented 8.3% of revenues, improving by 50 basis points year-over-year, thanks to our ongoing expense discipline and optimization efforts. As a result, EBITDA for the quarter was $118.4 million with a 32.5% EBITDA margin. Net financial income was $8.5 million, reflecting the impact of the Mexican peso depreciation, lower financial income due to a reduced average cash balance and the interest capitalization associated with the Odessa expansion. Consolidated net income reached $73.5 million, translating to earnings per share of $0.22.

Free cash flow for the quarter totaled $48.6 million, representing a 67.7% increase. This improvement was driven by lower working capital requirements, reduced maintenance CapEx and lower cash taxes. In terms of capital allocation, we returned $30 million to shareholders during the quarter in the form of dividends. And we continued executing on strategic investments with $88 million allocated primarily to the Odessa plant expansion. We closed the quarter with a strong balance sheet. Cash and equivalents totaled $827 million, and we maintained a solid financial position with a negative net debt-to-EBITDA ratio of negative 0.48x. In closing, we remain confident in our ability to manage through near-term pressures while continuing to build long-term value. We're laser-focused on what we can control, operational efficiencies, cost optimization and disciplined capital deployment. With that, I will hand the call back to Enrique for his closing remarks.

As explained, the second quarter brought a more difficult set of conditions that we initially anticipated and visibility remains limited. Therefore, we are revising our full year guidance. As we look into the third quarter, we expect activity in our U.S. markets to remain broadly in line with last year levels. As a result, we now anticipate cement volumes to finish the year flat. In the ready-mix business, strong performance in the first half led us to expect volume growth in the mid-teens range for the full year.

In terms of pricing, soft price increase traction and changes in the product mix with less oil well cement have led us to revise our expectations. We now anticipate cement prices will remain flat, while concrete prices are expected to increase in the mid-single digits. The pace of recovery in Mexico remains uncertain. Therefore, we now expect cement and concrete volumes to decrease mid-single digits. On pricing, we anticipate cement prices will increase in the mid-single digits and concrete prices in the low single digits. In light of these revised expectations, we are also adjusting our full year EBITDA guidance to reflect the pressure experienced in the first half and the outlook for the remainder of the year. We now expect a mid-single-digit decline for the full year.

Additionally, as part of our disciplined approach to capital deployment, we're also revising our full year CapEx guidance. We now expect to invest $400 million, primarily due to the project timing and the deferral of certain noncritical initiatives in 2026. While these adjustments reflect the cyclical nature of the construction industry, we remain confident in our strategy and in the resilience of the industry, especially of our organization. We have successfully navigated volatile conditions before, and we are drawing on this experience now. With that, this concludes our prepared remarks, and I will now turn the call over to -- for your questions. Operator, please begin with the first question.

[Operator Instructions] Our first question today is coming from Alejandra Obregon from Morgan Stanley.

I actually have 2. The first one on the cost side. It feels like there's multiple moving parts. There are several one-offs in the second quarter. So I wanted kind of to understand a little bit better what happened on the cost side in Mexico. Just -- I mean, you mentioned some real estate sales and some other moving parts that perhaps are not going to be a repeat into the second half of the year. So just wondering if you can help us break down the multiple drivers in the quarter and how to think of that on a reasonable basis for the remainder of the year. So that would be the first question.

And then the second one is, I guess, on the U.S. I mean we're seeing multiple positive news, I guess, on the non-resi starts. We have seen major projects being announced in some of what are your core markets in the U.S. So just wondering what does that mean in terms of your demand backlog in the ground on some of your core regions and how you're thinking of it for 2025 and 2026?

This is Enrique. Thank you for your question. I'll address first the second question, and then I will turn it on to Maik to be more specific on the cost side. Yes, we feel cautiously optimistic, I mean, about the volumes and especially infrastructure in the second half of this year. Obviously, the problem we already have because of the delay or that we had already in the first half, both with some weather and then with the effect of the scheduled outages that we had in a couple of our plants. All of that has been resolved. So yes, the second part of the year will be, I mean, of growth, and that's how we are going to get to a final flat number when we compensate for the volume that we missed in the first half.

This is Maik. Regarding the cost in Mexico, yes, there were kind of 3 key drivers that kind of one-offs and impacted us. The first one is the natural gas hedge that we had last year that really performed very well in that second quarter, which accounts for about $4 million that we benefited last year that we didn't have this year. The second, you already mentioned the real estate. We have still some properties here in Mexico that over the business course, we're divesting and selling. And they just carry a higher cost of sales, roughly impacting us in the quarter around $2 million on that one. And then last but not least, we had a little bit lower production, the inventory impact in the quarter kind of had the rest of the balance, which then you saw the negative cost impact for Mexico. Again, all 3 kind of timing and/or one-offs. So we should see none of that really happening in the second half of the year.

Got you. That was very clear. And if I can follow up, what is the FX assumption embedded in your new guidance?

Were your question about FX?

Correct.

Yes. Our assumption is around MXN 20 per dollar.

Next question today is coming from Adrian Huerta from JPMorgan.

Just wanted to ask on the acquisition of the 3 Aggregate quarries that you did. Any comments on how that is going, positive surprises that you have seen from that, new opportunities? Anything that you can share with us on how that new growth venue is going?

This is Enrique. Thanks for the question, Adrian. The acquisition of aggregates is going very well. Volumes are a little bit below what we -- I mean, included in the purchase projections. However, we have found several, I mean, price improvement opportunities that we have been acting on plus some savings in the operations. And so far, I mean, the EBITDA is going better than what we projected. We expect this trend to continue for the rest of the year. And these acquisitions that, if you remember, were around $100 million are going to perform, I mean, as we expected, I mean, for the full year.

Next question today is coming from Alejandro Azar from GBM.

Two quick ones. On the figures that you disclosed on the CapEx for the Odessa plant, I was just wondering if the $174 million remaining balance for the year, is that cash? And is that something that we will not see any more CapEx from the Odessa plant next year? That would be my first question. And the same also on the ramp-up of this investment. I mean, when it ramps up next year, would you substitute the imports from other plants in order to stabilize the plant? Any color on how should we expect perhaps utilization rates here in 2026 would help us.

Alejandro, this is Enrique. Thank you for the questions again. First, I mean, on your question on the CapEx, the $174 million that we're going to spend, I mean, the rest of the year, it's cash. I mean we've been financing, everything with our cash position in the company. And the remaining investment for 2026 to complete the budget, it's around $67 million to get to around the $700 million figure that we have disclosed all the time.

So again, everything is going well in terms of, I mean, timing and budgets, and we expect to make this final cash flow draws next year, I mean, around the first half of the year. In terms of the ramp-up, I'll address -- first, yes, strategically, what we try to do is to optimize our network. And since Odessa is going to have more capacity with Kiln 3, we are going to try to produce as much as we can to serve the local market instead of shipping cement from Samalayuca to that region. In that way, we optimize the system and save freight.

So yes, in addition to that, the freight, the network optimization, that's why we mentioned the smaller terminals that we're implementing that will really help us and should continue our margin improvement. The other aspect, of course, we have that incremental volume that we very strategically are placing in the market. And last, but not least, this expansion comes with very little additional fixed cost. So that's really helping us. Again, the plant will operate pretty much with the same crew with some few additions. So that's an important benefit that we're going to harvest when the plant comes online.

Our next question today is coming from Marcelo Furlan from Itau.

I have 2. The first is related to this ready-mix upward guidance revision that you guys mentioned for the U.S. So I just would like to understand what has been supporting this more bullish view for ready-mix in the U.S. for 2025. And my second question is related to Mexico. Now you guys mentioned that you have this cost efforts for the second half and maybe don't have the 3 headwinds that you have seen in the first half. So for Mexico specifically, what could we expect in terms of margins for the second half for EBITDA margins here? So this is my second question.

Marcelo, this is Enrique. Thanks for the question. Let me address the U.S. ready-mix in the U.S., and then Maik will give you some more specific numbers on Mexico margin. We, since last year, knew that there were several, I mean, wind farm projects on the horizon, and we expected to be able to capitalize on those given the experience we have already in that segment. So we decided to invest in several additional [indiscernible] plants and trucks and train additional people and chase those projects throughout several states.

And as I mentioned, we're now working in Colorado, North Dakota and New Mexico in projects. And we have several more that we're going to start soon. This will carry us even into 2026. That's why when you combine those incremental projects with a steady, I mean, work in our current regions in El Paso, Texas and the northern markets in Iowa and South Dakota, Minnesota, we feel that we'll continue, I mean, running almost at full capacity in ready-mix. That's what supports our growth and our margins in that business.

So yes, for Mexico margin outlook for the rest of the year, you should see and we should see a stabilization. Again, the one-offs will not reoccur. That inventory element will kind of work its way out through the second half of the year. So in your models, you can expect kind of back to normalization, typically second half of the year in the low 30%, that's where our Mexico margins are.

Next question is coming from Daniel Rojas from Bank of America.

I wanted to follow up on the wind farm question in the U.S. It's our impression that now that we have Trump's Big Beautiful Bill that part of this funding might tail off into next year. I just wanted to get your view on how these projects related to alternative energy might develop. And if we should expect wind farms to be something that is structurally going to stay with us and you guys are going to benefit from this.

Thank you, Daniel. That's a very pertinent question we hear, I mean, very frequently, obviously, with all the unknowns and uncertainty I mean, related to the policy. However, these projects that I'm referring to are fully funded, and there's total security that those are going to happen and are ongoing. Beyond 2026, it's difficult to say, of course, I mean, because of the low visibility that we just expressed that we have. But in terms of finishing this year full with those projects, it's unquestionable that we're going to achieve that.

And maybe to add to that, we're still actively looking for additional projects for 2026. So again, there are still projects in the pipeline that we're bidding on and actively working on. So like Enrique said, for this year, I think good planning security and even very active on looking at 2026.

And if I may follow up, do you think that spending at the state level might offset some of the losses at the federal level?

Our next question today is coming from [Ethan Cunningham] from On Field Investment Research.

I'm sorry, we're cut off a little bit. So I mean there's a question...

Yes. Just to quickly answer, sorry, we got cut off here. But on the state level funding, there's not yet 100% kind of visibility how that will all play out. Again, we have a good underlying base for infrastructure projects, but how the new bill will really impact kind of the outlook, it's a little bit too early to really make a specific statement on that.

Our next question is coming from [Ethan Cunningham] from On Field Investment Research.

The first one regards to your EBITDA contribution from Mexico, which you reported was 15%, which I believe is a historic low. Can you mind -- why was this contribution so low?

This is Enrique. Can you repeat the question because yes, I think, yes, we probably -- I mean, have a different numbers.

Yes. So...

I'm sorry, are you referring what -- I mean, the percentage contribution of Mexico to the total company EBITDA?

Yes. So you said that in your report, it's for Q2 -- for this quarter, Q2 2025, the EBITDA contribution was 15%.

Yes. I mean this is -- I mean, for this quarter with everything that we explained in terms of, I mean, especially, I mean, exchange rate and the mining sector, yes, this quarter was around 15%, which was abnormally low compared to the traditional -- I mean, EBITDA that Mexico contributes to the total.

And just to add on the exchange rate, the exchange rate in the quarter of Q2 2024 on average was 17.2%. And this past quarter in Q2 '25 was 19.5. So for us, that has an important impact and again, mainly then reflecting on Mexico.

So to be more specific, I mean, a very large portion of the like-to-like EBITDA of Mexico division was kind of wiped out by the change in the peso dollar rate.

Okay. That's extremely clear. May I just follow up? So it's again, staying in Mexico. It seems that you're looking at your peers, your volumes are below and you're also guiding that, but your pricing is also guided as positive. So I'm assuming that the strategy is to push price over volumes, but at the risk of losing market share. Is this a fair assumption to make? And if so, is this strategy -- will this continue moving forward?

Well, I would say the context for our market is, again, we have a little more tilted towards the industrial segment, which, again, from a volume perspective, is softer, as mentioned, because of the kind of the uncertainties that projects are facing, number one. Number two, we mentioned the mining segment also as we had anticipated, is lower, which then tilts our business more to that residential segment, which is more from a price perspective, more better for us. So that kind of explains softer volumes, but still very stable pricing for our Mexico business.

Okay. And just lastly, just moving to the U.S. I guess it's the opposite really. So your footprint doesn't seem overly exposed to seaborne imports, yet you're guiding on flat prices in cement. Are you seeing any pushback in prices from independent import terminals? And if not, what is the origin of your guidance of flat cement prices in the U.S.?

Well, as I explained, I mean, the majority came from a mix effect because obviously, oil well cement prices command, I mean, a very nice premium compared to construction cement. And of course, our volumes have been lower than what we expected in that segment. So that's one of the reasons. The other reason, yes, in construction cement, we did experience some pushback in several markets. So our price increase in the spring -- in April, I mean, went effective only on some markets and some customers partially. So that combination of the 2 factors is what I mean, it is leading us to basically remain flat compared to, I mean, the strong pricing that we had last year.

Next question today is coming from Enrique [indiscernible] from [Fundamental Capital].

I wanted to quickly ask about your U.S. EBITDA margin expectations for the second half of the year. Last year, second half margins were practically a historic high. And I wanted to see how much of that may be explained because of favorable energy costs or other factors that we won't necessarily see this year.

In terms of the U.S. market, in terms of volumes, as I already commented, we are again, I mean, cautiously optimistic and expecting, I mean, to run higher than in the first quarter, both because of, I mean, less internal issues, as I mentioned, with a couple of incidents we had in Rapid City and Odessa. And also because just naturally speaking, our geographic situation entitles to higher volume shipments in the second half of the year just because of the normal seasonality that we have. So the combination of both will give us a much better second half in terms of volume than the first half of the year.

Sorry, I was referring to margins, yes.

Margins, I mean, we don't see any -- I mean, negative effect on margins going forward. Again, all our prices for energy and fuel are, I mean, very constant and very well managed. So -- and obviously, we are beyond, I mean, all the maintenance averages for all the plants. So we just are seeing a much more steady operation of all our plants, I mean, as we speak, and we expect our margins to remain within budget.

Great. And just a quick follow-up, if I may. Once Odessa comes into effect, should we see significant efficiencies in margins?

We have obviously, I mean, an improvement in margin with the Odessa plant coming online. It's a much more, I mean, competitive plant, obviously. And that's one thing. And the other one, of course, is that what Maik explained that we're going to be saving on freight costs, which will obviously go all the way to the bottom line. So yes, I mean, margins are going to be better once the Odessa plant comes online.

I would maybe add there is going to be a little of timing into this, right? This is part of the longer-term strategy really to expand the margins. So again, these benefits need to work through the system. So you should see kind of the Odessa project helping us sustaining that and systematically building those out over kind of a 1- to 2-year period of time.

Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to MS. Ogushi.

Thank you again for your time and continued interest in GCC. We look forward to speaking with you again soon.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.