Grupo de Inversiones Suramericana S A : 2023 Q3 Webcast results Audio transcript

Grupo de Inversiones Suramericana S.A

Medellín,Colombia.Cra.43A#5A-13t

AUDIO TRANSCRIPT - WEBCAST Q3

This document may contain forward-looking statements relating to Grupo SURA and its subsidiaries which have been based on assumptions and estimates made by the Senior Managements of these Companies and therefore may present variations.

Daniel Mesa:Good morning to you all and thank you very much for joining us for Grupo SURA's third quarter earnings presentation. Today´s session shall be divided into two sections, the first will consist of a part of the financial results that is pre-recorded and then we will move on to the question and answer section which will be live. On behalf of the Company, we are joined today by Gonzalo Perez, the Company's CEO as well as Ricardo Jaramillo, Chief Business Development and Corporate Finance Officer, Juan Luis Múnera, Chief Legal Affairs Officer, and on behalf of SURA AM, Carlos Oquendo, Chief Corporate Finance Officer, and Juan Fernando Uribe, Chief Finance and Investment Officer from Suramericana. At this point. I will give the floor to Gonzalo Pérez to begin with the presentation and I wish to remind you that you can ask questions during the entire duration of this conference call.

Gonzalo Perez:Many thanks Daniel and a very good morning to you all. I would like to start by talking about some of the issues that are relevant to our different stakeholders, beginning with the good operating results of our Companies at the end of this past Q3. YTD revenues reached COP 25.6 trillion, showing a year-to date increase of 28%, which means that Grupo SURA has produced additional revenues of close to COP 6 trillion Colombian pesos over the last 12 months, all of this organically. This shows the growth capacity of our Company and that of our entire portfolio. We would also like to highlight the 45% growth in our operating earnings, which ended up at COP 3.4 trillion Colombian pesos for the first nine months of the year, thanks to improved levels of performance on the part of both Suramericana and SURA Asset Management.

On the other hand, we would like to mention the progress made with the Nutresa transaction, where the Company continues to strive to meet the estimated deadlines for carrying out this operation, part of which involves obtaining the various approvals which are needed in order to complete the transaction. On the one hand, we are awaiting the Colombian Superintendency of Finance to approve a spin-off from Nutresa while at the same time we are awaiting approvals from different countries, having already obtained some of these, such as an approval on behalf of the Mexican competition regulator. We also continue to make headway with structuring the Tender Offer and on the financing front, where the Company has been accumulating cash and negotiating with local and international financial institutions in order to have the necessary resources for implementing this transaction.

Over the next few days, we expect to finalize the terms of the amendments to be made to the agreement relating to the exchange of Grupo Nutresa shares, as we recently announced to the market. These amendments, announced on September 15 through the relevant information channel, shall allow us to move forward that much more expeditiously in meeting the objectives of these

agreements. We shall continue to advance with the various stages of the transaction, keeping you and the market informed in due course.

Another relevant issue to mention is the well-known situation of our Mandatory Health Care Subsidiary (the EPS in Spanish); and as we have mentioned in the last quarters, the current structure of the Colombian health care system continues to present important challenges. This subsidiary has experienced significant impacts due to large-scale transfers from other mandatory health care entities that have shut down as well as the insufficient tariffs due to having included most of the services that were never part of the basic health plan. All this has maximized the deficit and has led to a deterioration of the Company's equity, with claims rates reaching as high as 106%, which Ricardo shall be discussing later on. Suramericana is therefore implementing different plans to address these challenges. Firstly, the Company has been advancing a preventive health risk management plan; working with the healthy population on a company level, since claims frequencies have increased due to an inadequate use of the system. In this way we are delivering better health care, but at the same time we are controlling the operating health care costs. For this purpose, conversations have been held with the business community throughout the country to promote and encourage the proper use of the health care system, as previously mentioned, from the standpoint of preventing illness and following the treatments as prescribed, seeking more effective models of providing business health care services from the point of view of health risk management and obviously from the point of view of the health of our own subscribers. Secondly, we have been working with our entire service-providing network to implement operating models and awareness in the use of resources; the aim of which is to discuss ways of understanding and negotiating while designing new ways of dealing with all those providers involved, this together with savings initiatives and a more effective risk management, all this without undermining but rather improving the health of all our subscribers. We have also had different technical discussions with the Colombian Ministries of Health and Finance addressing the lack of resources at year-end as well as increasing the CPU (Capitation Payment Unit) which is the value payable to the Health Promoting Entities for each of the members of the social security health system. Finally, a proposal has been submitted to the government by Suramericana for the financial risk be assumed by the State and that the health care managing entities assume the health and operating risks through a commission tied to patient health conditions, which allows for the articulation of efforts to guarantee that patient health outcomes are well-managed. The Company also continues to submit to the Colombian Government its proposals for improvements based on its experience and the current reality of the health care system this to be considered as part of the bill that is currently being debated. We also reiterate the importance that the operating and business models of the health care managing entities clearly recognize the operating and financial conditions that encourage a real improvement in the health status of the population, as mentioned so many times before, as well as greater efficiencies in administrating the network. We shall keep you informed in our next conference calls of the progress made in this matter.

Finally, we would like to mention the status of the divestitures in Argentina and El Salvador, which were announced to the market on August 11 and 14, respectively. The transaction in Argentina was completed in October, while the sale in El Salvador is still pending approval by the Panamanian regulator but is expected to be finalized before the end of this year.

Next, we will go into greater detail on the different non-recurring impacts that the Nutresa transaction as well as the divestitures in Argentina and El Salvador are having on our financial statements, as well as the higher claims rate on the part of our Mandatory Health Care subsidiary (EPS). As previously mentioned, the operating results of our Companies have continued on an uptrend, and it is important to mention several non-recurring effects associated with transactions and circumstances that should be taken into account when analyzing the results for this period and how they compare with those of last year. The first effect has to do with a greater depreciation of the Colombian peso against the rest of the regional currencies, which continues to be a factor that is reflected in our financial statements and will always be reflected; secondly, we have the fact that the pension fund management subsidiary, Protección, was consolidated in November of last year, which as we have been showing during the course of this year, affects the comparability of the figures posted, and thirdly, we have the effect of the Nutresa transaction, as mentioned on several occasions, which has had significant effects on our financial statements with the reclassification of investments in associates to non-recurring assets held for sale. On the one hand, in June of this year we recorded a deferred tax of COP 618 billion, which does not as yet represent a cash item; also, and as of this quarter our financial statements do not recognize Nutresa's revenues as Revenues Obtained Via the Equity Method. Fourthly, the sale of Suramericana's insurance operations in Argentina and El Salvador, which were announced in August and were completed in Argentina in October with El Salvador expected to be completed in December; with these transactions the Company expects to receive a total of USD 52.4 million dollars in cash, these operations shall allow Suramericana to make a strategic reallocation of capital, thus strengthening its presence throughout the region, where it will want to remain in all seven countries where it is present today. As a consequence of this, the results of the transactions in Argentina and El Salvador began to be recorded as Earnings from Discontinued Operations and are excluded from the other items on the income statement. Also, a loss of COP 104 billion has been recognized in the financial statements for this quarter, which for Grupo SURA is equal to COP 85 billion in Controlling Net Income. As a consequence of these two divestitures, we expect the total impact to reach COP 127 billion, of which COP 66 billion correspond to taxes payable on the transaction and another COP 62 billion corresponding to other impacts such as the impairment to the Other Comprehensive Income statement as well as non-recurring administrative expense. Fifth and to conclude, the higher claims rate on the part of our Mandatory Health Care subsidiary, EPS, which resulted in a loss of COP 176 billion for the quarter and COP 210 billion so far this year, continues to exert a definite pressure on the Company's results.

But let's examine the results for this period in more detail. Total revenues continued to show double digit growth rates thanks to the good levels of operating performance on the part of our investments. As we have already mentioned, at the end of this past third quarter the Company's consolidated revenues rose by 28% compared to last year, this means new revenues of COP 5.8 trillion to stand this past Q3 at COP 26.5 trillion. As we have already mentioned at the beginning of this presentation, this is due to good levels of sales on the part of Suramericana, which continues to show a double- digit growth in premiums. Furthermore, Sura Asset Management showed a growth in fee and commission income thanks to improved levels of performance on both the job and capital markets compared to last year. Operating earnings showed a notable increase of 45% compared to last year,

reaching COP 3.4 trillion due to an operating leverage produced by an increase of 221 basis points in revenues over costs and expense; this was largely due to an improvement with the operating results reported by both our subsidiaries and associates, the latter reaching COP 1.5 trillion pesos at the end of Q3, in the form of Revenues Obtained via the Equity Method, where it is important to mention that due to the Nutresa transaction, as of this past quarter our financial statements no longer reflect the results of Grupo Nutresa as recorded via the equity method, so this figure shows a drop of 5% so far this year and we will continue to see this effect in our results for the remainder of this year. It is to be noted that Grupo SURA's controlling net income, excluding the tax effect associated with the Nutresa transaction and the non-recurring effects associated with the operations divested in Argentina and El Salvador, which represent COP 85 billion for us, and assuming the recording of Nutresa´s revenues via the equity method for COP 41 billion, our pro forma controlling net income would have shown a growth of 35%, reaching COP 1.9 trillion pesos at the end of this past quarter, and if we again look at our Controlling Net Income, this would have shown a growth of 68% compared to that recorded back in 2019 before the years affected by the pandemic.

On the other hand, based on our strategic vision in which we strive to generate more sustainable levels of profitability, it is of fundamental importance to view these results in a more comprehensive manner, incorporating the vision of our different types of capital. One of the means used to evaluate our performance based on this comprehensive vision is by analyzing the sustainability evaluations we receive from external rating agencies, which allow us to identify our strengths and challenges, as well as to complement our understanding of our risks and impacts, while identifying the key issues on which we should focus our performance. In this regard, we would like to share with you that so far we have received ratings from MSCI, Sustainalytics and Standard & Poor's, which show good levels of performance in terms of sustainable investments, climate risk, carbon footprint and reporting practices. We have also identified challenges relating to public emission reduction targets, increasing the coverage of ESG-based products as well as the structure of our Board of Directors. As for the ratings issued by Standard & Poor's and Sustainalytics we were placed in the 98th and 99th percentiles respectively. With regard to MSCI we are in the top quartile in sustainable investment and human talent. These evaluations coupled with our internal analyses allow us to guide our comprehensive handling of our four capitals, economic, social, human and natural, in an effort for our Company to become increasingly more effective in the short, medium and long term. I shall now give the floor to Ricardo Jaramillo, who will give us an in-depth look at the income statements of Grupo SURA and both its subsidiaries.

Ricardo Jaramillo:Thank you very much, Gonzalo, and a very good morning to all of you who are joining us on this conference call. To continue, we shall now turn to page 9, where we will start with a summary of Suramericana's consolidated results at the end of this past quarter, and then we will elaborate more on a segment by segment basis so as to analyze the Company's performance in greater detail. Due to the divestitures in Argentina and El Salvador, as Gonzalo mentioned, the numbers we are seeing are the figures from both of these two companies that are posted as earnings from discontinued operations, having excluding these from the other accounts of the financial statements. Suramericana's written premiums reached COP 7.1 trillion for the third quarter showing

a growth of 14%, largely due to double-digit growths in the life insurance and health care segments, with an increase of 18% in the year-to-date premiums compared to Q3 last year. The claims rate has increased by 93 basis points with respect to the YTD figure at the end of the same period last year, now reaching 73.4% due to the higher claims rate recorded by our Mandatory Health Care subsidiary (EPS) given higher frequencies and severity of such. Consequently, for this past quarter this subsidiary´s claims rate reached 74.5%, which represents an increase of 154 basis points with respect to the third quarter of last year. The technical result shown in the graph for the quarter closed at COP 418 billion, for an increase of 7%, thanks to the increase in premiums in the different segments during the quarter. On the other hand, investment income increased by 45% for the quarter compared to the same period last year, for a total of COP 501 billion. These results are due to higher rates of return on inflation-indexed assets in Colombia, as well as greater volatility with alternative assets and fluctuations with exchange rates, which offset the rise in interest rates at the end of the quarter, thereby affecting the performance of local fixed income assets. We have seen this same pattern throughout the year, whereby at the end of this past quarter, investment income increased by 69% compared to the YTD figure last year.

We ended up with a loss this past quarter due to the expense relating to the sale of our former operations in Argentina and El Salvador which amounted to COP 104 billion pesos; however, if we were to exclude this one-time effect, earnings for the quarter would have stood at COP 66 billion pesos. On a YTD basis, the Company's net income ended up with a growth of 71% at COP 433 billion pesos, which, were we to exclude the aforementioned effects, would have amounted to an income of COP 537 billion. These results led to an adjusted return on equity over the last 12 months of 11.6% with an adjusted return on tangible equity of 14.9%.

Now let´s turn to the individual segments. Here the idea is to tell you all the relevant facts in each of these and to elaborate on the numbers in our financial report line by line. Let's start then with the life insurance segment. Here, written premiums for the quarter reached COP 2.1 trillion for a growth of 12%, thanks to the amount of portfolio renewals carrying the highest premiums in Colombia and Chile, as well as a good level of performance with the health care solution. The occupational health and safety solution continued on an uptrend, recording a growth of 14% given the increase in the number of insured workers, and this same trend can be seen with the YTD figures at the end of Q3, where we see a growth in written premiums of 15% in total. The claims rate for the quarter came to 64%, that is to say a drop of 303 basis points compared to the same quarter last year, due to lower adjustments to the reserves corresponding to the life and occupational health and safety solutions, given the increase with the minimum wage in Colombia, which we expect to reach lower levels than for last year. Another important factor that is driving the performance of this segment is investment income, which represented an increase of 48% compared to the third quarter of last year, to stand at COP 346 billion pesos, mainly thanks to investments held in Colombia, where inflation continues high , and also given higher returns from certain alternative assets. It is important here to mention that in the economies where we are present we have already reached maximum inflation levels, so we expect a lower contribution from this line item in the coming quarters. On the other hand, the 56% growth in investment income for the first nine months of the year was also due to cuts in interest rates, which had a positive impact on investments classified at market prices. This led us to end up

with a net income for this segment of close to COP 222 billion pesos, for a growth of 403% compared to the same period last year and with net income on a YTD basis closing at COP 732 billion pesos.

Let's turn to page 11 which features the Property and Casualty insurance segment. Written premiums rose by 8% for the quarter and 14% so far this year, thanks to the voluntary car insurance as a result of the updated tariffs as well as corporate solutions, which showed a double-digit growth, thereby offsetting lower sales of the Mandatory Road Insurance as well as certain other solutions offered in Mexico. The claims rate in this segment improved by nearly 285 basis points compared to the third quarter of last year, reaching 49%. This lower claims rate is explained by the voluntary car insurance solution, which showed a drop of 15.2 percentage points going from 74% in the third quarter of 2022 to 59% this past quarter, as shown in the graph to the right. This drop is the product of our profitability and technical management strategy which we have been extending since last year and has allowed this indicator to reach levels below the average recorded in recent years, except for 2022, when costs increased due to disruptions in the supply chain thereby causing claims to exceed normal levels for this segment. Investment income rose by 36% compared to the third quarter, last year, reaching COP 109 billion pesos, given the appreciation of fixed income assets, as well as income from exchange rate fluctuations, due to the upward movements recorded by our regional currencies. Consequently, the segment's net income increased by 108% for the quarter, reaching COP 102 billion pesos, with the YTD figure amounting to COP 250 billion pesos.

Let us now turn to the health care segment, where we continue to see some important challenges facing our Mandatory Health Care subsidiary, the EPS, which as Gonzalo mentioned at the beginning, have led to a loss for the quarter. On the one hand, this segment's written premiums reached COP 2.8 trillion, for 25% increase. This growth is explained by a 25% increase in the EPS as a result of the increase in the CPU (Capitation Payment Unit payable by the Government to the Health Promoting Entities for each of the members of the social security health system) at the beginning of the year as well as the increase in the number of policyholders or subscribers for this quarter. This segment's claims rate was close to 100%, affected by the Mandatory Health Care Subsidiary, the EPS, which reached 106% compared to 102% for the same period last year. As you can see in the graph on the right side, and as mentioned in previous conference calls, the EPS and the industry as a whole, are showing increased frequencies and severity in terms of claims given the growing demand for both low and high complexity health services. Consequently, this segment ended up with a loss of COP 164 billion pesos for the quarter with the YTD results at the end of Q3 posting a loss of COP 183 billion pesos.

To summarize what we have already discussed, going through Suramericana's results for the first nine months of the year, we can see that the Life together with the Property and Casualty segments have helped with the growth seen with the Company's results, thanks to an improved claims rate with these solutions as well as higher investment income. It is important to underscore the good levels of performance with the Property and Casualty as well as the Life insurance lines of business, which represent a growth of COP 534 billion pesos in earnings; however, the losses with the health care segment increased by COP 151 billion pesos due to the impacts sustained by the Mandatory Health Care subsidiary, EPS. Likewise, the expense incurred with divesting the insurance subsidiaries in Argentina and El Salvador is having an impact on the Company's results. Were we to exclude these

non-recurring effects, the Company would have recorded a growth of 112%, with net income reaching COP 538 billion pesos, as can be seen in the graph.

Suramericana's year-end results, as we can appreciate from the trend seen this year, shall largely depend on how the Mandatory Health Care subsidiary, the EPS, fares during this last quarter, since this has impacted the Company's results to a significant extent and could lead us to anticipate that at the end of the year the Company's net income could well be a little below what we initially estimated at the beginning of the year.

Now let's turn to page 15, for the results posted by Sura Asset Management. Firstly, the Company remains on an uptrend in terms of its results, reflecting the improved operating performance of the Savings and Retirement segment as well as higher returns from its legal reserves. In order to make these figures more comparable, we hereby present the pro forma variations assuming that Protección had been consolidated in 2022, as well as others, but excluding foreign exchange effects, so that we can analyze the Company's operating results. Fee and commission income for the quarter amounted to COP 978 billion pesos, showing a pro forma increase of 4% upon excluding exchange rate effects, thereby reflecting the growth in the Savings and Retirement business, as a result of the increases with the basic wage as well as assets under management. This same dynamic is reflected in the Company's consolidated results, which rose at a pro forma level of 4%, upon excluding the exchange rate effects, reaching COP 3.1 trillion pesos at the end of this past quarter. Operating expense ended up at COP 701 billion for the quarter, where we continue to see the efforts made by the Company during the year, in securing a drop of 1% compared to last year. Upon analyzing the proforma variations, excluding the exchange rate effects, this drop is all the more notable since it occurs in spite of the prevailing high levels of inflation and at a time when fee and commission income shows a positive growth. The same was true for the year to date figures, with pro forma growth, excluding foreign exchange effects, amounting to 1%. On the other hand, the Company's legal reserves for the quarter showed a negative performance, however an uptrend still remains on a YTD basis with this line item ending up at COP 122 billion pesos, which represents an annualized return close to 4% in contrast with the loss sustained last year, thereby reflecting an improvement with the financial markets on a global level during the course of the year. Operating earnings rose by 45% for the quarter, reaching COP 305 billion, and for the first nine months of the year COP 1.3 trillion. These results are largely explained by a recovery with returns from the Company's legal reserves, the uptrend with fee and commission income, the Company's efficiency in managing its expense, as well as a higher depreciation of the Colombian peso. As a result, controlling net income for the third quarter reached COP 151 billion pesos and for the first nine months of the year COP 645 billion pesos. This translates into a significant improvement in the adjusted returns on equity and tangible equity for the last 12 months, these standing at 9% and 27.1%, respectively.

Let us now turn to the next page for a more in-depth discussion on the individual segments. Let's start with the savings and retirement segment. AUM increased by 1% at constant rates for the quarter thanks to higher individual worker contributions, as well as a recovery with the returns obtained. As can be seen in the graph to the right, we continue to see an uptrend with the wage base, which is the driver that generates our commissions, this showing a growth at constant rates of 10.5% versus the same period last year. Fee and commission income for the quarter amounted to COP 819

billion pesos, for a proforma increase of 4% with the consolidation of Protección and excluding foreign exchange effects. This growth is the result of a 10% increase in AUM, driven by this growth in countries where commissions are paid on the volume of AUM or assets under management held, mainly in Mexico where AUM is growing at a rate of 12.5%, thanks to the change in the contribution rates for individual accounts as a result of the 2020 reform, which is the J curve that we have talked about on other occasions, which went from 6.5% to 7.5% this year. Also, in countries where wage- based commissions are charged, there was an 8% increase, mainly due to wage increases in Chile and El Salvador. During the first nine months of this year, fee and commission income recorded a pro forma growth of 5%, upon excluding exchange rate effects and the consolidation of Proteccion, the Company's legal reserves showed a loss of COP 76 billion pesos, given a change in market expectations that predicted higher interest rates over a prolonged period of time due to a slower convergence of inflation levels towards central bank objectives. During the first nine months of the year, revenues from legal reserves came to COP 121 billion pesos, for an annualized Yield of approximately 3.8%. Finally, operating expense continued to reflect the Company's efforts in search of greater efficiencies. During this past quarter, expense came to COP 460 billion pesos, for a growth of practically 0% upon excluding exchange rate effects, recording a growth of only 1.6% on a YTD basis.

Let us now continue with the voluntary pension segment. Firstly, AUM reached COP 99 trillion for the quarter, for a growth of close to 24% upon excluding exchange rate effects. This growth was largely due to having obtained new insurance mandates carrying commitments with new infrastructure funds, as well as a recovery with financial returns and the strengthening of the Company's commercial offering. In spite of the challenges facing the investment industry throughout the region given high interest rates, the Company has maintained a sound level of performance incorporating new investment alternatives such as structured funds, closed-end alternatives with guaranteed returns among many others, which is reflected in a net fund flow at constant rates reaching COP 17 trillion since the same quarter last year. Fee and commission income for this past third quarter reached COP 157 billion pesos for a drop of 0.4% at constant rates compared to the same quarter last year, this trend was due to lower fee and commission rates given changes in the mix of segments and a greater share of the total on the part of the amount of AUM corresponding to insurance mandates that carry lower commission rates. Another effect that has been occurring throughout the year is the change in the structuring of the assets contained in client portfolios with a greater participation of fixed-income products that generate lower commissions. Likewise, the declines with the voluntary pension business in Mexico and Colombia have brought about a lower growth for this segment. On a YTD basis, fee and commission income showed a growth of 4% at constant rates duly adjusted for the effects of having consolidated Protección. Operating expense for the quarter rose by 2% on a pro forma basis, excluding foreign exchange effects and 1% year to date, again reflecting the Company's efficiency efforts to mitigate the challenges the segment is facing and its ability to adjust expense in line with business conditions.

To conclude this section of SURA AM's results and looking at them from a graphical point of view, on a YTD basis at the end of Q3, we saw an increase of COP 499 billion in net income compared to last year, this driven by the performance of the Savings and retirement segment, as well as by the Company's operating efficiencies, as we have mentioned in the last two segments. This has allowed

it to close with a controlling net income at the end of September of COP 645 billion pesos, as we can see at the end of the graph.

Let us now turn to page 20 for results posted by Grupo SURA. Let´s begin by talking about Revenues Obtained via the Equity Method, which at the end of the third quarter, ended up at COP 399 billion pesos, for a drop of 23% compared to last year, this due to the absence of revenues from Nutresa for this past quarter.

Now let´s look at each of our investments, beginning with Bancolombia. Bancolombia contributed COP 365 billion pesos, for a drop of 8% compared to the same period last year, this due to the current economic slowdown, higher interest rates affecting loans as well as an impairment to the Bank´s loan portfolio. The Company ended up with a Controlling Net Income of COP 1.5 trillion for the quarter, for a decline of 8% and a ROE over the last 12 months of 16.7%. Grupo Argos contributed another COP 33 billion this quarter for a 24% growth, this thanks to a positive level of performance in the real estate cement business with the Company reaching a net income of COP 190 billion pesos. On the other hand, although we see that Grupo Nutresa is featured, I would like to make it abundantly clear that we are not including the corresponding revenues given the corresponding accounting change. However, upon comparing these revenues against the same quarter last year we received COP 78 billion pesos and in this case were we to have taken this into account we would have received COP 41 billion. Consequently, Revenues Obtained via the Equity Method on a year to date basis would have stood at COP 1.5 billion pesos added to Grupo SURA´s net income or revenues.

Now let's see how Grupo SURA's net income for the first nine months of this year has evolved from a graphical standpoint. Firstly, after reviewing the performance of our Companies we observe the strength of our portfolio, which has generated earnings totaling COP 2.7 trillion on a year-to-date basis, in the midst of an economic environment marked by high inflation rates, rising interest rates and an economic slowdown. Consequently, we see that the five investments added together represented COP 2.7 billion pesos in earnings. Subsequently, to arrive at the respective accounting profit we subtracted interest, expense as well as the deferred tax relating to the Nutresa transaction, which led to a net income of COP 1.4 and a net controlling income of COP 1.1 . Now, if we were to disregard the impact or effect relating to the deferred tax on Nutresa's revenues via the equity method as well as the impact associated with the divestments in Salvador and Argentina, we would have a net income close to COP 743 billion pesos to reach a figure comparable to that of last year of COP 1.9 trillion. This represents a 35% growth in net income for the first nine months of the year for the Company.

Finally, we invite you to look at Grupo SURA's adjusted returns , particularly its adjusted ROE, you know that we have a methodology aimed at reflecting the performance and value creation for each of our lines of business as well as the Company's portfolio as a whole. In this case, when we stop at the end of Q3 of this year and disregard the impacts associated with the aforementioned transactions, we can see that the Company achieved a profitability or is achieving a profitability of 11%, 100 basis points higher than that observed last year, this enables us to see that both the Company and its different lines of business are moving towards a greater level of profitability and