So the ability to run not only a single network from the CapEx and OpEx side, so also in full your network is an important part of the savings from that JV. And on the question of leverage, you will be happily reassured that we have coincidence on our targets, institutionally. Sheldon?
Sheldon Bruha: Sure on average, I think, again, I’m very consistent what we said before Stefan on this point in our intermediate target remains two and a half times EBITDA. We haven’t made any progress towards that objective this year, for a variety of reasons, some of them are in our control, some that, even the work, but we’ve got several one offs, this period, things that unusual items, but also things that we’re doing and driving the business around the severance costs. Look, we see us making a lot of progress next year on this leverage, on this leverage reduction I mean, next year is going to be a big year for us for cash flow generation, and we say that is going to be the highest of the three years in our three year targets, in terms of what we’re going to be delivering.
It’s also going to be sort of cleaner of a lot of the one-off charges we’ve been taking, particularly this year, with regard to the severance charges. I will point out, we’re expecting, I think you’ve heard in my prepared remarks more severance charges in Q4, as we complete the budgeting processes and go to the country. So, there will be sizable charges again, which [tremendous] will be accruing in 2024. And currently this year, there’s kind of a lot of unusual in this a little bit around FX, that’s also, you know, ticked our leverage up a bit higher. In particular, Colombia has appreciated from a currency standpoint, now, a lot of that appreciations happened more recently. And so, in terms of the benefit on EBITDA, that hasn’t really slowed through LTM EBITDA last 12 months EBITDA, but it has hit us pretty quickly on market-to-market, the Colombian debts what I’m on a higher basis, on the debt situation.
So that should roll off, assuming that trends kind of remain constant on the currency that should also benefit us into 2024. So, we’re going to be making progress on the deleveraging. Certainly, in 2024. We told you on a previous call that, we expect to get to that two and a half times level, and by 2026, one year later than the previous given some of the adjustments, we’ve made our equity free cash flow. But look, as we’re going to make a lot of progress on that, and really see me in full progress in 2024. As it pertains to Lati in short – I think they I think we’re going to kind of hold off and sort of talking about proceeds in Lati until we have proceeds from Lati, right, so that we’re launching a process and we’ll have to see how that process, evolves in terms of in terms of what we were able to achieve.
And then we’ll assess the situation at that point in time and think in terms of what the best way to allocate those proceeds.
Stefan Gauffin: Yes, yes. Agree. Better to wait until they’re very soft before we sell the skin.
Sheldon Bruha: That sounds like the standard way of saying is their priority remains to [reduce average]. That’s the short answer.
Operator: So thank you, Stefan. So next we’ll go to Eduardo Nieto of JPMorgan. Eduardo?
Eduardo Nieto: Yes, thank you guys. So part of my question was already answered, but wanted to follow-up on the capital allocation strategies. Moody’s recently put you on a negative watch, basically, because of Chinese in Colombia, but also because of high leverage and governance concerns potentially having more aggressive financial policies. You partly addressed that, but curious on what your plan is to address those concerns about the downgrade. And my second question would be in Colombia. In terms of the 5G option, obviously, I’m just curious about how you will translate the EBITDA performance into cash flows and how you expect spectrum costs and all those items to behave going forward. If you see any other opportunities, we talked about inorganic solutions, securities, if you can give any more color on that?
Mauricio Ramos: Yes, listen on the part in light of that that has a little bit of a noise on Colombia, as you very well know, there was just a lot of noise there. But the reality is we came out of that process, with a well-capitalized business, a business that has expanding margins, revenue growth, OCF growth, and has, as we discussed earlier, a significant focus on driving the business towards being equity free cash flow positive as soon as we can. So, I think there was a lot of noise there. But the reality is the business in Colombia is improving significantly, at all levels, including a strategic optionality going forward. And as that relates to the group, but we discussed, and I’ll hand it over the Sheldon for additional.
Our focus remains on cash flow generation next year, as we have said, a number of times, and we’ll repeat that today. We think 2024 is the year of our cash flow. And with that, I think we will reiterate our focus on use of average and this [number] of times. By GM, Colombia, we’re reviewing the terms they just came up last night, obviously, we’ve been very involved in the process, we understand a lot of it. But I rather you know, answer that question, once we have full information on exactly what the details of that, it’s an ongoing process and those processes do tend to move around and shift around as they are being finalized with the authorities. Sheldon anything?
Sheldon Bruha: Well, our next question would add, I think in terms of terms of the Moody’s still, concerns that they’re highlighted, I think are the exact items that we probably have as our four priorities in terms of what we’re addressing as a company. So, we need to deliver stronger cash flow, we believe next year, and [shelter] deleveraging, we believe next year is going to be a big year for us on that front. And I go a long way towards addressing a lot of things that you guys have been highlighting to us at Moody’s has been highlighting to us. So I think we’ve kind of highlighted exactly where, what we expect, we expect from a cash flow perspective and deleveraging perspective. And I think now we just need to deliver on that and to address those issues.
Eduardo Nieto: Understood. Thank you very much.
Operator: Thank you, Eduardo. And next up, I think we have [Andre Salas from UBS] on the line. Andre, are you there?
Unidentified Analyst: Yes. Yes, everyone. Sorry about my camera there is being technical difficulties to make it work. Sorry. So hi, everyone. First of all, thanks for the presentation. And for taking my question here. Actually, I have two on my end. The first one is more like on a cash flow basis with soft one contribution year of working capital to free cash flow this quarter. Could you please give us a little more color on that what has driven this positive impact in this, we should expect the same trend to go in the following quarters. And the second. The second question is regarding a broad timeline year in Guatemala business. So when we expect that the improved spectral capabilities that you now have, which translates into better efficiency, and if it could mean investments here in the country in the upcoming quarters. There’ll be [optimist]? Thank you.
Mauricio Ramos: I’ll be brief on number two, and give Sheldon a little time to look up the numbers in detail. We’ve been working as I said, for the long run, long game as I described, I’m not ready for question on Guatemala. So we were readying up the network and getting ready for the great news of the new spectrum pretty quickly. So a lot of that has been done. And as a result of that, we have started subsequent commercial activities, as I said on September the 18th. So now really, it comes down to the marketplace Andre and standardization of the commercial activities in the marketplace. And as I eluded also some of the political last few weeks issues also the satellites. So it’s less of a network and it’s an information or more like commercial standardization now going forward. And as I said earlier, we took out prepaid price increase. We’re optimistic about it, and commercially we’re cautiously optimistic us to follow through on that one. Sheldon?
Sheldon Bruha: Sure. On the equity free cash flow performance for this quarter. I mean, look, I mean, you highlighted working capital. I mean I would highlight, I think strong performance across the board. I mean, OCF was a big contributor to us this quarter, in terms of driving equity, free cash flow. Taxes, I think was a contributor for us in terms of driving equity, free cash flow this quarter. Interest costs actually was not, as we’ve been talking just some of the higher interest rate environment that some of our countries. Working capital contributed as well. But to some degree, a couple items I would highlight there for you, though, we took we took our severance provisions, here about $22 million, this quarter, that’s going to be paid in future quarters.
