Louisa Rodriguez: And the next question comes from the webcast from Adrian Huerta from JPMorgan. Regarding deleveraging, last year, you reduced $300 million in net debt, and the implied free cash flow for this year looks around $300 million to $400 million. Will this pose a risk for your deleveraging pace for 2023 and to obtain the investment-grade rating soon? Do you expect additional divestments and use proceeds to continue paying down debt?
Maher Al-Haffar: Fernando, do you want me to start that and maybe you can weigh in? So again, I think it’s very important to clarify to you and to everybody else on this call why is investment grade is so important for us. Investment grade on its own is not the issue. It’s what it implies, which is the strength of our capital structure, lower volatility, our ability to generate more free cash flow per dollar of EBITDA, be able to eventually, as a consequence of that, but consider returning capital to shareholders. So for us, investment grade is not just getting an investment grade. It’s really continuing this journey of strengthening and bulletproofing our capital structure and our business model. And so in that direction, my expectations is that, yes, we will continue to reduce debt and potentially deleverage as well.
Now I’m not going to comment on your number of free cash flow. But I will turn over the call to Fernando to kind of share with us potentially some ideas on where we’re likely to be able to continue this journey to reducing debt and potentially deleveraging. Fernando?
Fernando Gonzalez: Yes. Thank you, Maher. Thank you, Adrian. A couple of comments. I think what you have observed is pretty well aligned to the adjustments that we announced early 2020, adjustments to our strategy. Just to remind them a little bit is to strengthen our portfolio in the U.S. and Europe, to include what we are calling Urbanization Solutions as a fourth leg in our portfolio and strategy, to continue reducing our leverage ratio and making some divestments in emerging markets. So if you review what has happened in the last couple of years, that it’s precisely that. The divestments we did, it’s Costa Rica, Salvador, Neoris and some other small divestments are aligned with that idea. The investments that we have announced recently in the U.S., the aggregate business in Canada to serve markets in Florida and in general, the East Coast of the U.S., some ready-mix businesses in Texas, another aggregate business in Europe, those investments are also aligned with that strategy.
We are also taking the opportunity to invest and increase our EBITDA in one of the issues that have proven very useful and profitable, which is alternative fuels. Last year, we finished and putting in operation for investments, one in Russeldorf (ph) and another one in Rugby (ph), one in Tepeaca and in Mexico. And those, even though they were not fully operational for the 12 months, they were very helpful for our increase of 6 percentage points in alternative fuels and very profitable. You compare they were very profitable when we thought and planned them. But nowadays, with the current cost of primary fuels, they are — they have extremely good paybacks. So what I’m saying, what you see is pretty well aligned to what we have announced. And what do you — what is not doable or what we think we have to be flexible is that given that this involves investments and divestments and there is uncertainty in the events, we — in short terms, in quarters or even in a year, we don’t have the, let’s say, the proportion that we would like to have between debt reduction and the growth investments.
So if you take a couple of years, you will see that the proceeds we use for debt reduction and for growth investments are very similar, are almost half and half. If you take one year, it might be a different story. But we want to keep this pace of strengthening our position in the U.S. and Europe, divesting in some emerging markets, increasing and growing our Urbanization Solutions sector and doing more and more portfolio management. Now our leverage ratio, it’s below 3 times. We were, last year, upgraded to BB+. We continue having the objective of getting to investment grade. And we have to consider that a set for the investments that in cement expansion like the one in solid or Marcel or Tepeaca. The rest of investments are the both on the type of investments that we started making mid-2020, with the characteristics of having high returns, short paybacks and related to our current business base.
So as we commented last year, those investments already contributed with 100 — more than $100 million of EBITDA and this year will be higher. So even those investments with those — with that profile will start contributing in a different manner with a different profile but will start contributing also in our deleveraging objective. So that’s what I can comment, Adrian. I hope that answers your question.
Louisa Rodriguez: Thank you, Fernando. And the next question comes from Nik Lippmann from Morgan Stanley. Nik?
Nikolaj Lippmann: Yeah. Hi. Thanks for the call and taking my question. I was wondering if you could provide a bit of color on the — how much you expect to import into the U.S. market. I think you’ve been talking about a third in 2022. If you can give us some color on that into ’23. And also, any potential color on some of the maintenance work that you’ve done in the U.S. and to what degree that’s going to be continued into ’23. Thank you very much.
Fernando Gonzalez: Let me start by commenting on maintenance that is related to the works we are doing to improve efficiency in our cement plants in the U.S. In the last couple of years, we’ve been developing an initiative. It’s cementing our future in order to improve the conditions of certain plants. There were some plants in the U.S. that, for many years, were not highly demanded. And now that we are at full speed, that there were and still are some investments needed to bring those plants to its highest capacity and higher possible reliability. So we think imports because meeting local production will be slightly higher this year. When you engage in these type of projects, and that was the case during last year, sometimes you need to make investments and you need to shut down your plant more than 15 days, which is more or less the average of our regular annual shutdown, impacting production.
This year will be in better conditions. So there will be two reasons for a moderate reduction in imports is markets potentially adjusting to lower figures and us being able to produce higher quantities of product locally. And what was the other part of your question, Nik?
Nikolaj Lippmann: Well, there was — if you could provide a bit of a sense, so you’re saying the import is going to be coming down a bit. That was the way I understood that from 30 to maybe 2020 (ph)?
Fernando Gonzalez: Exactly.
Nikolaj Lippmann: That was it. And I think you answered the maintenance question as well.
Fernando Gonzalez: Yes, okay. Very well. Thanks, Nik.
Louisa Rodriguez: Thanks, Nik. And the next question comes from the webcast from Vanessa Quiroga from Credit Suisse. Does the 10% increase in energy cost per ton at the consolidated level already incorporate higher pet coke costs resulting from the PEMEX contract expiration?
Maher Al-Haffar: Yes. Hi. Thank you, Vanessa. And it’s too bad that you’re not joining us on the call so I can talk to you directly. So the answer to your question is that, yes, the 10% increase in energy cost per ton that we have announced does incorporate the impact of those contracts not being there anymore. I think just very important to stress to everybody if you don’t — if you’re not aware. These — the benefit of those contracts really was part of our electricity generation part of our business in Mexico. And so that’s where we’re likely to feel that. But I think, again, I would point you to the guidance. We’re guiding towards total energy increase of 10%. That’s about $160 million. That’s for the whole company. And roughly 90% of that is electricity, and Mexico is roughly about a quarter of that. And that does include any impact that we may have from those contracts not being there. So I hope that answered your question, Vanessa.
Louisa Rodriguez: Thank you, Maher.
Maher Al-Haffar: Okay.
Louisa Rodriguez: And the next question comes from Gordon Lee from BTG Pactual. Gordon?
Gordon Lee: Yeah. Hi. Good morning. Thank you very much for the call. Vanessa actually beat me to the punch. That was going to be my question. So I’ll ask another question, Fernando, which is the — what’s the — how are you feeling generally in the U.S. on the sort of take-up and the speed of the infrastructure plan related projects? Are you seeing — I mean, I think when you spoke to sort of industry sources, people thought for the — that by the fourth quarter of this year, you will have sort of perceptible traction on that. Is that still more or less the timing that you’re seeing or do you think the sort of real infrastructure pickup will now likely not occur until 2024?
