Grupo Mexico SAB de CV
BMV:GMEXICOB
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Grupo Mexico SAB de CV
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Good afternoon, and thank you for holding. And welcome to Grupo México's fourth quarter earnings conference call. With us this afternoon is our Vice President, Mr. Xavier Garcia de Quevedo; Mr. Fernando López Guerra; Mr. Oscar González; Ms. Marlene Finny; Mr. Francisco Zinser; and other executives who will discuss the financial performance of the company during the quarter, giving you a summary of the latest news and address any questions you may have at the end of the call.
Before we begin, I would like to remind you that information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties.
Actual results may differ materially and the company cautions not to place undue reliance on these forward-looking statements. Grupo México undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
All results are expected -- are expressed in full U.S. GAAP.
[Operator Instructions] So we will begin with Ms. Marlene Finny.
Hi, good afternoon, everybody. I am here in the company and with all the top executives of all of the 3 divisions. We are very thankful with you for your time during Grupo México's fourth quarter and annual earnings conference call. For today's conference call, we will be following the presentation that can be downloaded from our website or by accessing the webcast.
We will be looking at Slide #3, that shows the program that we will be following today. I'll begin by commenting on Grupo México's financial highlights. Then Mr. Xavier Garcia de Quevedo will move on to the Mining division, commenting on the mining economic environment, Mining Division's financial highlights and highlights, followed by Fernando López, who will detail the financial results and main events of the Transportation Division. Finally, Francisco Zinser will explain the relevant events of our Infrastructure Division. Then I'll end with a short closing remark, and the line will be opened for questions and answers.
Moving on to Slide #5, where we show our production profile for the past -- well, since 2010 until [ to slide of this ] 2019 and our estimate of production for 2020. So we are happy to announce that from 2010 to 2019, we have reached our first milestone of copper production, totaling almost 1.12 million tons in the 3 countries in which we operate. Out of the 2019 production, 52% came from Mexico, 37% came from Peru and 11% from the U.S.
Our production, as you can see on the graph, has grown 63% since 2010, and we expect production for 2020 to be in line with this year -- well, with 2019.
Slide #6 presents Grupo México's consolidated financial highlights. Sales reached $10.7 billion during 2019. This is almost 2% higher than 2018 despite lower copper prices, which were almost 7% down and zinc prices almost 13% down and moly prices 5% down. EBITDA totaled $4.95 billion in 2019. This is 1.2% higher year-over-year.
I am pleased to say that in commitment to our shareholders, we have been able to maintain our dividend for 7 quarters now. The Board of Directors has approved a quarterly dividend payment of MXN 0.80 per share. This represents a dividend yield of almost 7%. This is one of the highest in Mexican companies.
During 2019, we continued investing to pursue organic growth in our 3 divisions. We are very proud of what we -- of what each division has accomplished, and we are looking forward to deploy our CapEx plan for the 2020.
During 2019, we invested $1.1 billion in Mexico, Peru and the U.S. throughout the 3 divisions. And we are proud to say that the Board has approved almost $2 billion CapEx plan for this 2020, that we will be getting into the details of the different projects of the different divisions further on later on the call. But it's very interesting.
In the Mining Division, we reaffirmed our position as the lowest-cash-cost copper producer in the industry, with $1.07 per pound and the largest reserves of copper worldwide with fully integrated operations.
For 2019, as I mentioned before, our production reached almost 1.12 million tons of copper. This means an increase of almost 12% year-over-year.
Slide #7 shows our 2019 and fourth quarter main financial highlights. This is a guide for you, and then if you have any further questions and you want to go into one number in specific, we can go after the call during the Q&A session.
Moving on to Slide #8. I will comment on each division's main highlights for the year. Once again, we show here our production. This is a record figure for Grupo México and the record production. And that's why it is the first highlight that we see here. Also, after 11 years of strike, we are proud to say that after a major renovation, the San Martin operation restarted with an investment of $57 million. We -- last year, 2019, we produced almost 6,000 tons of zinc, 1,000 -- a little bit more of 1,000 tons of copper and 1.2 million ounces of silver. And we expect this year to have this mine fully operational and volume coming for this mine as well.
Another milestone was the Toquepala expansion, which we finished since -- during 2019. It became operational last year and increased our copper production by 88,000 tons of copper as well as our moly production by 3,100 tons.
Moving on the Transportation Division. We are happy to say that our EBITDA increased by 8% -- 8.2% due to the implementation of efficiency programs throughout the operation. On the operational side, GMXT's train length increased more than 3% and the gross tons per train grew almost 3%, reaching 6,000 tons. This led to increasing crew savings. We will go into this detail further on with Fernando. On the other hand, with full confidence in Mexico's growth and development, the Board has approved a CapEx plan totaling $466 million for this year. Also, Mr. Fernando will comment more detail further in the call.
In the Infrastructure Division, we successfully acquired a new 168-megawatt wind farm of clean renewable energy from -- and we expect to be fully operational by 2021. Another interesting new project for our Infrastructure Division is that we added this year the fuel storage terminals business. Our first 2 facilities will be located in Monterrey and Guadalajara and will have a combined capacity of more than 1.3 million barrels.
Lastly, the oil division revenue and EBITDA increased by 25% and 29% respectively, due to higher efficiency in our rigs and the Zacatecas rig that has reinstated operations during April 2019.
Continuing into Slide #9. Grupo México maintained a solid balance sheet. This shows a strong capital structure and generates value. We have a net debt-to-EBITDA ratio of 1.4, with 81% of our debt in dollars and 19% in pesos. 96% of our debt has a fixed rate and a very comfortable payment schedule with competitive cost of capital that has improved with our 2 issuance during 2019, one for the Mining Division and the other for the Transportation Division.
This year, we have -- we will be paying a maturity with our own cash flow from our operations and achieving an even more solid balance sheet. Reflecting on last year, I think Grupo México has proved once again to be a strong and solid company with state-of-the-art operations throughout the 3 divisions. We are very excited for 2020 to bring new interesting projects and sustained growth for all of our shareholders and valued stakeholders.
Now Mr. Xavier Garcia de Quevedo is going to comment on the Mining Division.
Thank you, Marlene. Hello, everybody. Thank you for your participation. Moving to the Mining Division's financial highlights on Slide 12. 2019 has been a remarkable year for Southern Copper Corporation products production-wise. We are very proud of what we have been able to achieve this year. Sales reached $7.9 billion, which translates into a 1% yearly increase despite the decline in copper and zinc prices. In the fourth quarter of '19, sales totaled $1.9 billion, 2.7% higher than fourth quarter of the year in 2018. EBITDA was USD 3.5 billion with a margin of 44.7% during 2019. EBITDA for the fourth quarter of '19 reached $809 million, in line with the fourth quarter 2018.
Copper production reached 1,119,000 tons in 2019, 11.7% higher than in 2018, given the Toquepala expansion and Buenavista higher production. In Mexico, production increased 4.8% yearly. And in Peru, the Toquepala expansion supported the 25.3% increase. In the U.S., production rose by 6%. And cost -- cash cost decreased minus 8.6% yearly.
The fourth quarter production reached 283,000 tons of copper, 5.5% higher year-on-year. During 2019, we achieved a consolidated cash cost of $1.07, a 3.7% decrease compared to 2018. During 2019, investments in the Mining Division totaled USD 757 million.
Moving on to Slide 15 (sic) [ Slide 13 ], our copper market outlook for this year. During the fourth quarter of '19, the LME copper price decreased from an average of $2.80 per pound in the fourth quarter '18 to $2.67, minus 4.6%. As of today, we are seeing prices in the range of $2.55, $2.60 per pound as a reflection of the worldwide concern regarding the effect of COVID-19 or coronavirus. The world is now starting to feel the financial and economic impacts from the outbreak, but at this point, it's difficult to assess the full effect of this event on copper demand.
If timely continued (sic) [ contained ], the outbreak would have a milder impact on the global economy, ending in a V shape recovery for copper demand. On the supply side, our view is that it will be growing at about 2% to 2.5% for 2020, contingent of being -- of not being affected significantly by this disease. If so, we would expect a mild copper market surplus for this year.
On Slide #14, we show our projects update. I'm sure you will familiar with all our group profile. So I will run through it very quickly. The Toquepala expansion has been operating at full capacity since the second quarter of last year, and we are happy to say that we were able to complete the significant expansion on time and in Peru. Then we started San Martín mine. Marlene has already commented on the progress for this operation that we were able to restart after a long period of time. In the first quarter of this year, we have started the new projects of the machine concentrator plant in the Buenavista facility and the opening of the Pilares copper mine in Nacozari, close to the La Caridad mine.
Lastly, I would like to comment on the Asarco operation in Arizona. In spite of the strike of the unions in the Arizona operations, Asarco managed to produce 125,000 tons of copper, translating into a 6% increase and achieving a 9% reduction in costs versus the previous year. Due to the strike, the Hayden concentrator and smelter units as well as the Amarillo refinery were temporarily shut down. The remaining units, Mission, Silver Bell and Ray, are operating at capacity, given workers' individual decision to continue working and some new hires.
As a result of the Asarco unions' decisions to go on a strike, for this year, we expect the copper production to reach 120,000 tons, in line with 2019 production with a reduction of $100 million in operating and administrative costs, to reach a cost per pound of copper of around $2.40.
I would like to reiterate our commitment to continue working to guarantee a long-term sustainable operation that will generate greater value for our shareholders as well as our commitment to the economies of Arizona and Texas through competitive jobs and direct participation with the local communities.
Moving on to Slide 15, you can see our short-term growth profile. That includes 3 interesting projects that add 90,000 tons of copper, as I mentioned before, in the next 4 years with significant improvement in our cost structure.
I would like to close reflecting on the year for the Mining Division. It has been a complicated year for the copper market. But in spite of that, we were still able to pursue growth and achieve higher sales and EBITDA. We will continue to focus on maintaining the operational efficiency and control cost strategy that has characterized us through the years.
I will now pass it on to Fernando, who will comment on the Transportation Division. Thank you.
Thank you, Xavier. Moving on to the Transportation Division, I will go through the financial highlights for the fourth quarter of '19 and the full year 2019 results.
Total revenues reached $2.5 billion, which translates in 4.4 -- 4.8% increase versus 2018, mainly driven by the industrial, agricultural and automotive segments. The industrial segment showed accrued 2019 annual growth of 12% in revenues, 5% in carloads and 6% in ton-kilometers versus 2018. The main growth was seen in consumer products. The agricultural products segment showed an accrued 2019 annual growth of 9% in revenues, 3% in carloads and 10% in ton-kilometers compared to '18, mainly through cross-border imports and also a raise in our market share of the central of the country and earned volumes in national crops.
Automotive segment grew 9% in 2019 in revenues. We had a drop with 3% in carloads and 4% in ton-kilometers. This was a change of traffic mix given the decline in consumption of automotive sedans and compact cars, offset by an increase in new clients volumes and in our share of volumes from light trucks plants.
For fourth quarter 2019, sales reached $627 million, 2.4% higher than fourth quarter '18. Transported volumes were 1% higher than in '18 and ton-kilometers -- and in ton-kilometers, we reached 1.9 -- 1.8 -- 1,800 -- yes, 1.8 million carloads through the year.
I am glad to announce that during 2019, we achieved almost $1.1 billion EBITDA, 8.2% higher than in 2018 due to operating improvements. For the fourth quarter 2019, EBITDA reached $278 million, which is almost 8% higher than fourth quarter '18.
Net profit decreased 13.8% due to the recognition of a financial loss by our affiliate, Ferrocarril Terminal del Valle de México, of which we are a partial owner and also from the exchange rate gain we obtained during 2018 from the revaluation of the peso when converting the U.S.-denominated debt.
The main highlights of the Transportation Division are shown in Slide 22 (sic) [ Slide 18 ]. Starting with the EBITDA growth that I already mentioned, but which has -- which was a significant increase versus '19, and we're very proud of it.
Moving on to the solid operating metrics that we achieved for the year. Train speed improved 7.2% and crew starts were down 9.3%, translating into material savings for our company.
Unfortunately, during the past year, we had to face some external challenges that impacted our volumes such as the blockade of Michoacán, which impacted all of our Pacific traffic coming in from Manzanillo and from the Pacific Coast itself into the center of the country.
Also, we were impacted by operating efficiencies on the U.S. carriers and Canadian carriers which impacted some of our traffic in the Florida operations and also a decrease of international coal prices, which dropped the coal exports from the U.S. into Asia Pacific that we're moving through some of our Pacific ports.
We also had to face financial challenges, including the recognition of a loss of our affiliate that we mentioned above. As you all know, we issued a very successful transaction to refinance 2 bank loans on better terms, improving our maturity profile during 2019. We issued MXN 7.8 billion in 2 tranches, a 10-year fixed rate and a floating 4-year certificate with an oversubscription of 2.2x and over 65 positions from a diversified investor base.
For 2020, we have a record investment program of $466 million. We will comment on the breakdown in Slide #20.
Slide 20 -- on Slide 21 (sic) [ Slide 19 ], we can see several segments that show increase during the quarter, led by metals, explained by reactivated import routes, increase on scrap metal volumes and new metal structure exports. We also grew in cement, which had new movements from truck-to-rail conversion as some of our customers continued to seek for more competitive alternatives.
Minerals, which recovered and increased in iron ore and also the export of copper concentrate. Ag, in agricultural products, the imports to Mexico are increased in addition to higher volumes from local crops. And in the industrial segment, we had higher exports for finished goods to the U.S. and new volumes.
Some of the segments that presented a revenue fall, including intermodal, chemicals and automotive and also the energy segment.
Our investment plan for 2020, shown in Slide 20. The Board authorized a new record investment plan worth MXN 9 billion -- over MXN 9 billion in different expansions and efficiency projects, which enable us to continue growing and improving our services as well as to keep raising our productivity indicators, out of what we're investing 41% in maintenance, 21% in efficiency programs and 24% in growth, including several terminal projects that will enable us to grow faster as we have become more efficient on our asset utilizations, we have a surplus of locomotives, a surplus of crews, a surplus and -- also in our network capacity. So we are investing heavily in origin and destinations in order to be able to grow faster and gain market share versus over the road.
Finally, we have 14% of our CapEx into strategic projects, such as Monterrey and Celaya bypass.
Now moving on to our outlook for the division on Slide 25 (sic) [ Slide 21 ]. We expect the volume to grow between 4% and 6%, with a revenue increase between 9% and 11%. We also see between a 200 and 300 basis point growth in our operating ratio as we expect the main growth drivers of the energy sector due to an increased imports of refined products as new terminals are coming online for -- to begin this year. Just -- Puebla started operations at a third-party terminal in Puebla, started operation as a transload, then Mexico City is going to come online on second quarter, the same for the port of Veracruz.
Going into metals, we also see an increase of flat steel imports and new trucks, new conversions from truck to rail and intermodal, to an improvement in the market share and the recovery of the cross-border traffic.
Closing and reflecting on the past year, it has been a great operational -- a year of great operational achievements, and we're looking forward to continuing improving during 2020 to reach the high threshold we have set for ourselves.
During 2019, we have lost some of the routes due to external factors, not losing them would have represented additional 4.6% volume increase in net ton-kilometers on this year's traffic. However, we're eager for 2020's growth drivers, especially in the segments that we commented above.
Thank you, everyone, and I will pass on the call to Francisco Zinser with the Infrastructure Division.
Thank you very much, Fernando. Good afternoon, everyone. Starting with the financial highlights of the Infrastructure Division. On Slide 23, during 2019, net revenues totaled $588 million (sic) [ $583 million ], a decrease of 7% compared to the previous year. This is due to a decrease in the revenue in the energy sector due to lower market conditions and a decrease in projects in the construction business.
EBITDA totaled $279 million, which is 1% higher versus 2018, with a margin of EBITDA over sales of 48%. The EBITDA for the fourth quarter of 2019 totaled $73 million, a 3.6% (sic) [ 6.3% ] decrease over the same quarter of 2018.
Lastly, net income totaled USD 47 million in 2019, showing a decrease of 2.9% year-over-year. We are also happy to announce an investment budget of $412 million for 2020, which is mostly for our new wind farm and the fuel storage terminals division that Marlene mentioned earlier in the call.
Moving on to Slide 24. During 2019, 3.6 million megawatt hours were generated in the energy division, which represents a 7.9% decrease over 2018 due mostly to lower market conditions. However, the EBITDA during 2019 totaled $117 million, which represents a margin of EBITDA over sales of 52%. This is 390 basis points higher than what was achieved in 2018.
During 2019, our Salamanca-León Highway revenues reached $43 million, a record. EBITDA was 5% higher, reaching $32 million and traffic totaled almost 21,000 units, which represents a 3% higher share than 2018. This is in spite of what happened early during 2019 of lower traffic volumes because of a shortage of fuel in the Bajio region.
Finally, I am happy to comment on PEMSA, our oil and gas division, which ended the year with 6 oil rigs in operation and an average efficiency of 99%. This helped us to achieve sales of 25% higher than 2018 and reaching $174 million, and EBITDA of $88 million, an increase of 29.2% versus the previous year. This is mostly due to operational efficiencies and to the incorporation of the Zacatecas Platform, which was reinstated in April of last year.
Thank you very much, everyone. Now I'll pass it on to Marlene for her closing remarks on the call.
Yes. Thank you so much for joining us today. I would like to close the call by commenting on the growth that Grupo México has had since 2010. We have achieved a 32% growth in revenue, almost a 25% growth in EBITDA, a 63% increase in copper production, 26% in tons kilometer transported and 17% in the number of employees. This proves once again that Grupo México continues to rank as a company with sustained growth that continues to generate value for its shareholders.
Thank you so much. And now we can -- can you please, operator, open the session of Q&A? Thank you.
[Operator Instructions] And our first question is from Alfonso Salazar with Scotiabank.
Okay. The question I have is, if you can help us to reconcile the production capacity of Southern Copper and Grupo México? In the press -- in the conference call this morning, Southern Copper provided guidance of 1.5 million tons by 2028. And in your press release, you say that you expect capacity of around 2 million tons by 2027. So just wondering, a part of Asarco and probably a little bit from Aznalcóllar, what is going to close the gap between these 2 numbers? And what's going to be the ramp-up of the projects that you expect to put in place in the next 5-year period, say? The other question is, if you have any plans to increase capacity of Asarco to close this gap.
Sure. Regarding your first question, Alfonso, we are aiming to reach almost 2 million tons by 2028 at the Grupo México level. This includes the operations from Southern Copper, Asarco and all the other operations. So it's closer to 2 million tons by 2028. Just to be clear on that. If we had a vague or wrong number, forgive us, but this is the right information. And...
Okay. And what are these other projects?
The question with regarding Asarco...
Yes. If you can provide some plants -- production numbers for Asarco in the coming years. You already provided 2020, but in further years. And then the other operations that you are talking about, I don't see any guidance on which plants you have for increasing capacity there. What are these projects? Any color on this would be very helpful.
For Asarco, we mentioned the 2020 number. For 2021, we would be around 150,000 tons basically with increased production and Ray mine is the main effect. And also -- in 2022, we will be around 179,000 tons of copper with more production also, but to remind you with better grades and working at more capacity.
Okay. And in other operations, that means that other operations will be contributing with a substantial amount of copper production, right?
No, not necessarily. We have other operations, those are included in Southern Copper's number. Besides Asarco, the other operation we have is Aznalcóllar, the operations in Spain, but that will contribute a little like 5,000 tons per year of copper. This is mainly a zinc operation, so...
Yes, but for the 2028 numbers, that has...
It has a lot of...
Los Chancas and Michiquillay and that's what makes the bridge...
And El Arco.
And El Arco.
And El Arco.
Right. Let me, let me...
But that will be included in Tia Maria.
Yes.
Let me interject, Alfonso. For 2028, Southern Copper alone has almost 1.8 million tons of copper as expected goal. So we mentioned the 1.5 million tons threshold because that's the corporate goal. But actually, if the projects that we are considering by then are okay, we will be even surpassing that amount.
[Operator Instructions] Our next question is from Carlos de Alba with Morgan Stanley.
So my question is, you could also give us some color as to the progression in the coming years for Asarco cash cost. And then if you could comment on how you see the legal situation regarding the strike and the labor contract at the San Martin mine. And then if we can move a little bit to the railway. I don't know if you could just clarify if the revenue growth of between 9% to 11%, suggested in Slide 21, is that in U.S. dollars? And how do you see -- beyond 2020, how do you see the growth in volumes and perhaps in revenues as well in that division?
Let's...
Yes. I'll start with the rail division. This is Fernando López. On the rail division, the 9% to 11% growth is in pesos as we report in GMXT, and we expect volume to continue on those same levels between 4 -- at to 4% levels and so on for the upcoming years. Was there another question for the rail?
That's it.
And regarding Asarco, Jorge, can you please comment?
Yes, of course. This is Jorge Lazalde. So on the -- regarding the legal issues with Asarco, we are already in the process of -- we just implemented our "last, best and final" offer by the end of last year, and we have been operating under the new terms of the "last, best and final." The union has already filed some ULP charges and there's an investigation going on about that. And obviously, the company will defend its "last, best and final" offer. The results of the "last, best and final" offer or the reason we reached that point is because we reached an impasse in the negotiation with the union. So this probably -- it -- maybe some of you will remember that in the live negotiation, that's exactly what happened, but we implemented our "last, best and final" offer, and there was a legal process that was run in on to the NLRB moved in our favor. So our expectation this time is exactly the same outcome that at the end of the day before we can present our facts with the worker before the NLRB. And we are hopeful and optimistic that the ruling will come in our favor as well. So that's the highlight of the legal situation with Asarco. I don't know if you want to ask for any other specific.
No. That's okay, Jorge.
On the cash costs, Oscar will comment on the cash cost question.
I guess, the guidance we're giving right now is 2020. We're working to improve it for further years, but due to the situation in Asarco, we're comfortable giving the 2020 guidance. And as things progress, we'll give you more guidance in the future.
Which we hope to achieve around $2.40, $2.40 cash cost per pound.
In 2021?
'20.
'20.
2020. Okay. Yes. Fair enough.
Midyear 2020, and hopefully 2021 and the further year are lower than that. But for now, we feel very comfortable giving this number.
And our next question comes from Thiago Ojea with Goldman Sachs.
My first question is regarding capital allocation. If you can describe what will be the priority for this year and maybe for the next 2, 3 years, if we should see more buybacks or the dividend yield seems quite high. If you imagine that this could be even higher than that. And if you can comment on -- we had already comps tough in copper, but if you can comment a little bit on the Michiquillay situation would be good.
Sure, Thiago. Regarding capital allocation, as we continue to grow, and all of our expansion projects kick in, then definitely, we should have higher cash flows coming from our operations and then we can discuss the dividend. As you know, we don't have a written-in-stone policy for dividend. So this is revised on a quarterly basis during the Board meeting, and depending on the CapEx needs and the cash that we have, we decide a dividend. I would say that also depending on the share price, then we will see if there are more buyback or more dividends. For now, we think the dividends have been very straightforward and given value for our shareholders. And as far as we know, for now, this will continue to be the case. We could increase or decrease depending on the cash flow, copper prices and CapEx needs. But as you know, our first priority is always to grow, to grow our operations. So this is revised after the CapEx we need to continue growing in our 3 different divisions. And then your second question was regarding Michiquillay, and I think Raul or Xavier would like to comment on that?
I comment on that, if you don't mind, Marlene. And this is Raul Jacob from Southern Copper. Well, we are -- we have been working with the local communities to get a good environment for initiating our drilling program in Peru. So far, we're currently doing the first steps of the environmental impact assessment. It's working fine. And we are -- we have a good understanding for an agreement with the local communities regarding social work that we're going to do and the work that we're going to do with them. So the project is moving forward in a nice way as we speak. And we expect it to be well, a future very good opportunity for Southern Copper in Peru.
Raul, do you know the time line for the project? Because when you bid for the project in 2018, I think the expectance was around 2022. Of course, we are not going to be done in 2022. So what is the new time line for that?
Certainly. Hold on a second, please. We're expecting to initiate production in Michiquillay by 2028. That means that we will be initiating construction in 2024, or at the most, 2025.
[Operator Instructions] Our next question is from Carlos De Alba with Morgan Stanley.
Just a follow-up, Marlene. Has the company -- has the Board considered establishing a set dividend policy or capital allocation policy that makes it a little bit more transparent for investors to assess the potential dividends or share buybacks, I guess, dividends really, more importantly, in the future? That's something that we have seen in other mining companies. And even though they don't pay anywhere close to the dividend that Grupo México pays, it has created some level of certainty for investors looking into the future. So has there been any considerations to this? Or what is the company's/Board position on the subject?
Sure, Carlos. I think this is a -- it is complicated because we have so many different projects in the different divisions that it is difficult to have a sense of the cash generation and the CapEx needed. So that's why we revised it. And as I said earlier before, our #1 priority is to keep an eye on our growth, organic growth and CapEx. And after that, give dividends. I think even though we don't have a written-in-stone policy, you can see our track record, and we have been paying dividends even when copper prices were very low, even when the situation was not the best regarding the mining industry. We have -- we kept on paying dividend. And I think that one of the best example we can give of a solid track record that will continue, it's not like we are going to stop tomorrow or change drastically. If something like that happened, we will let you know. But the idea is that track record we have created for more than 10 years, and we will continue and the strategy is to continue with that.
Fair enough. And then continuing on the capital allocation theme, the Grupo México in the past has made a few, for the most part, very successful acquisitions in different divisions. What is the appetite right now for the company or the Board to pursue that route of growth?
As you know, we normally prefer organic growth because of the CapEx intensity. For example, in the mining projects that we have, the CapEx intensity of building our own or developing our own project is lower than the valuations of acquisitions made in the industry. So normally, we'd rather go through organic growth. But if we see an interesting opportunity, like the one we saw 2 years ago in Florida -- as the one we saw for the Florida East Coast Railroad, we will move ahead. The thing is to find the right kind of assets that makes sense with our portfolio. That means Tier 1 assets in the mining industry in countries that we can relate with and that we want to grow and then be very opportunistic as well. For example, in the Infrastructure Division, we have been very opportunistic if we did something interesting at the right valuation. So we are not -- we are open to see different opportunities, but always keeping an eye on and giving priorities to our organic growth.
All right. So basically, bolt-on acquisitions rather than transformation and one similar, I guess, I mean, the company has grown quite significantly, right? So a transaction that was as transformational as when the company acquired Asarco, you don't see that happening?
No. It's difficult to see it right now.
And this concludes our Q&A session for today. I would like to turn the call back to Marlene Finny for her final remarks.
I would like to thank you, everybody, for joining us today. And then keep in touch if you have any further questions. Thank you so much.
And with that, ladies and gentlemen, we conclude today's conference. Thank you for participating, and you may now disconnect.