Q2 2021 Grupo Aeroportuario del Pacifico SAB de CV Earnings Call

[music].

Yeah.

[music].

Good morning, and welcome to GAAP second quarter 2021 conference call all lines have been placed on mute to prevent any background noise.

After the presentation, we will open the floor for questions and at that time instructions will be given if you would like to ask a question.

It is now my pleasure to turn the call over to Cap's Investor Relations team. Please go ahead.

Thank you and welcome to the Dupont at a book Claudio and stuff.

Quarter, 2021 conference call.

Presenting from the company today, we welcome Mr. Olga <unk>, Chief Financial Officer, and Mr. So yeah that Chief Financial Officer. Please be advised that forward looking statements may be made during this conference call. These do not account for future economic circumstances industry conditions the company's.

For months or financial results as such statements made are based on several assumptions and factors that could change, causing actual results to materially differ from the current expectation for.

Please note on forward looking statements. Please refer to the quarterly report issued Wednesday.

For the pandemic in 2020, comparing 2021 results versus 2020 results would reflect the extraordinary growth that is not a clear indication of real book.

The company will be comparing second quarter, 2021 result versus the second quarter 2019 instead.

The company believes that this will.

Because better understanding of the financial and operating performance trends for GAAP and thus on more realistic indicators.

At this point I would like to turn the call over to Mr. For what it sounds for his opening remarks go ahead Sir.

Yeah.

Good morning, everyone on.

On behalf will go.

Providing each of you for joining us today and we hope that you are doing grille, obviously retail piece of this board because we had over a year since the beginning of the pandemic.

The world per for them to Charlie's for gap, how do you just see because of these countries.

We're on sure.

Okay.

But we have worked to successfully bugged them.

He told me for your step up on worked on.

The overall benefits of the group on our customers on planes.

We monitor what the only to book I'll do a cute, but we also learned many lessons for a long delay.

And that sounds that made us a stronger or better.

<unk> for the future.

On wells got passenger traffic continues to be impacted by the pandemic.

We're all encouraged by deposits with travel or the economic strength and vigorous work day vaccines rollout is supporting the recovery of the economy. However, we are not losing sight of the continuous all cycle that we made on it.

During the second quarter of 2021.

Transport 11 million passengers throughout our 13 airports b from old.

Representing a decrease of 42, 7% versus the second quarter of COVID-19.

It was on extraordinary recoveries that was driven mainly by the consolidation on.

But you don't foresee that improves Michigan from a relative traffic as well as a boom of international travelers domestic on Asia destinations.

Both of which have been paid off since the beginning of the pandemic and pretty good.

We also see significant number of Mexico traveling to the U S.

If he can obtain their COVID-19 vaccination.

His work.

Sure.

A copy of the quarter on a book.

Despite the closure of Cvs sales.

Last year has already surpassed per pandemic passengers' traffic for them.

Sure I'll start where we are on the right but in terms of.

For the rehab for them, but in the coming years.

With regards to domestic passenger traffic.

Demand is focused on leisure travel destinations with the business market recovery are lagging behind.

Despite these like more business travel demand showed signs of recovery, which we believe will be key.

2 passengers traffic recovery expenses.

While the higher.

On the other hand, there a rapidly around the category downgrade for the Mexican ideas for any industry.

This downward prohibits Mexican airlines to open any new route or App fragrances are you investing.

So for the time.

Ill begin.

In 2010.

Mexico also received for downward, which only last for months what's happened at that time was that the U S. Airlines took advantage of the unattended demand operating new roads and not be for cause us to various Mexican destination.

As of.

Today on international routes operated by Mexican carriers are fully operational das the imp.

Back of the downward at the moment has been no.

Looking at it where it won't pick up truck more international routes and we are encouraged by the overall positive trend in our network.

Well.

The lifting of travel restrictions in most countries.

That's basically we expect a recovery of the Canadian market for the winter season, potentially boosting profit throughout the Montego Bay are part of our GAAP to airports.

In the end the passengers' traffic trends continue for the second half of 'twenty or 'twenty, 1 with respect.

Closer to the 2019 levels more quickly that revenue anticipate.

Bobby.

Financial performance I will now take our revenue increased by 17, 3% driven by the increase in the maximum tariff approval for the 'twenty 'twenty 'twenty 4 B b.

This was however.

To be offset by a total passengers' traffic decrease throughout gap's network up from 49, 6% in the second quarter of 2021.

The continued discount program, we offer our turnover has been successfully.

Commercial revenue decreased by only 3.8 per cent basis.

2019.

Most of this increase was from the advertising on VIP Lounge line is this.

This offset by an increase in the duty free food and beverage on leasing office based operations.

Regarding cost.

We achieved $1.4 per se on lower cost of services compared.

Let's just pick on quarters 2019.

Equity keeps on the cost of salaries decreased by $9.7 per cent.

The decrease was mainly driven by <unk> 27 per cent decrease and maintain them from and a decline of 42 per cent and other expenses, which was comprised mainly of for expected credit losses professional.

2 is on services travel expenses among older.

This was offset by a 25 per cent decrease in personnel and security services, mainly due to a higher number of its tough contracted on.

Well on the recognition of labor provisions in accordance with our response to the Mexican labor low.

Yeah.

As a result of break for surplus marketing strategies aimed at growing passenger traffic.

Commercial revenues in addition to our cost control policies.

EBITDA was $2.8 billion pesos for the quarter.

For an increase of $15.2 compared to the second quarter 2019.

Professor who is on EBITDA margin of 17.71 per cent.

We are still maintaining a strong balance sheet in the currency pressure.

Cash on cash equivalents reached a total of 55 billion pesos as of June 30.

During the second quarter of 2020.

On the 1 we issue for 5 billion on patients in both certificates.

A portion of these proceeds was used to pay.

Non banking loans.

For our corporate purpose.

Cause trying to on second quarter of 2020 for a total of 1 billion pesos debt.

Payment of the GAAP 60.

I'm, sorry to vacate for $1.5 billion pesos as a reminder, performing debt mainly in our Mexican airports committed for this year.

During this quarter, we also by 8 to be ambitious in a capital reduction approval at the shareholders meeting held on April.

April 2021.

<unk> bought a reminder, when we restarted the share repurchase program on March 1st of this year.

And as of today, we have repurchased $8.7 billion shares.

For a total of $1.9 billion pesos, we will continue with their purchase program during the following months.

Moving on to the Capex during the quarter. It got the hit to capital expenditure for approximately 874 million pets.

This position us for Boswell to comply with the challenging market development program that we have in place debt.

Construction on the second we're almost day 1 of her book.

On this underway.

Well on the construction of the new commercial complex on the Guadalajara book was really good a new hotel corporate office and commercial spaces.

At this point.

Per the beef complex was already in the year of 2023.

The new business line on additional commercial revenues.

Continue the Quanta will give you the credit with the construction of a terminal policies are building, which is a 16% complexion on which we believe will be a great complement to the CV eggs and a game changer for Europe.

Tracking more flattened from international markets.

Building will be.

Operations during 2022.

We also continue with expansion from a Scottish International terminal building as well as the project can be science for just the containment building book value.

Would you, which will be agreeing structure integrates our sustainability goals.

Yeah.

Beginning to publish our 'twenty consistent ability to report in our webpage.

Did you take a look I need to learn about the ESG a profit on the latest performance.

Before I conclude I want to take a moment to thank everybody who has reported to US with these difficult times is that you should do the hard work.

On the education that our team has shown me that executing on our comfort zone for protect GAAP financial position and ensure there is a standard of health and safety for our partners on.

So we used to talk our clients their loans and tenants on their trust and commitment.

Have been instrumental for our Colbert.

Now I ask the operator to please open the floor for your questions.

Thank you at this time, if you would like to ask a question. Please press the star and 1 on touched on salary.

Draw your question at any time by pressing the pound key.

Once again to ask a question please press the star.

And why are you touched on selling.

On a pass on a woman.

Thank you.

And well take our first question from Pablo <unk> with Barclays. Please go ahead. Your line is open.

Hi.

Good morning.

Alrighty, Thanks for taking my question.

On my my.

My first question is on the tariffs what percentage of your low increase west reflected already in this quarter and.

Whether you expect to fully reflect the Mexican tariff at some point. This year. That's the first 1 on the second 1 is if you can share with us for some.

Revenue.

For any goals or objectives that you have for the commercial expansion that you have in Guadalajara. Thank you.

Okay.

Okay. Thank you Pablo this is howard well regarding to targets, we expect to fulfill the 100 <unk>.

Use of the tariff of proof for these we haven't reached this level until the second quarter.

And we will be able to reach this level at the end of the year. Therefore, we are very confident.

Good day.

On the level of the tariff will be fully implemented at the end of the year.

And regarding the revenue at on our own if you want to say up.

So with that thank you Pablo. Thank you for your question in terms of the commercial revenue in the case of while a higher per who have 2 main projects happening right.

Percentage.

Weighted we did mixed use building.

Building that incorporates on wholesale.

The office expenses on <unk>.

First on the area.

For a project is dead on the changed from layouts.

Into the terminal 1.

We will have.

Now some additional space itself for <unk> book.

Yes, we expect that we'll be operating around the.

The second quarter of 2023 reduced gross projects, we expect to.

You generate something really close to around 200.

<unk> vessels.

And I would say 12 months period.

Around the B additional rents that we are expecting for for diesel for future proof.

Yeah.

Okay perfect. Thank you very much.

Yes.

Well take our next question from Javier <unk> with GBM. Please go ahead.

Uh huh.

Hello, and thank you for taking my question.

Yeah.

I wanted to get a sense from you guys from the buyback program that.

Implemented.

If you can share with us the trigger on the on the rationale behind it.

As you mentioned in your remarks, you expect this to continue going forward.

Management expecting to reach the pool.

Allowed program a buyback.

The year or or.

Just understanding what is the rationale behind it would be very very very.

Very helpful and on my second question is regarding the commercial revenue.

And you mentioned that you.

You've done some discounts for tenants and you've been doing some reshuffling.

You guys put it in that regard then I just wanted to get your view on on on how.

GAAP.

Commercial portfolio today versus.

<unk> 2019, do you think that on the company's portfolio is better or are you getting better tenant credit.

<unk>.

Just.

Again understanding the strategy on but that would be great. Thank you.

Yeah.

Hi.

This is Howard.

Regarding your question about debt buyback program, we will continue with the total amount approved by the.

The cash.

Again shareholders meeting.

We expect to continue.

With this trend we have been very active in the last 8 weeks and we will continue in that path.

Obviously, it's something that is helping.

Our share is something that is we see very very productive.

Productive.

For the company and we are aligned with the instruction of the show.

Holders' meeting.

Great.

Okay.

On the commercial revenues.

The older program of discounts to tenants, who do records.

Related we did.

The comparison of the result of the month.

Versus the same month on on 2019, so I could tell you that for your sales force.

July.

We will have only 6 out of course that will continue with these comps we've seen that in the club in the coming months.

Or at least for the end of the June half between 8 to 10 airports debt could be almost zero discount.

Count, but in general terms that I can share that the recovery on commercial revenue are doing really good things that in terms of passenger on the first 6 months of the year versus 2019, a decrease of -23, 4% on in terms of new iron ore now.

Revenue were up on 16.

15.8%, So Mcdonald's U S GAAP.

Sometimes I would say that.

We are.

That's on this class passing the recovery of passengers for the to the commercial revenue and we think that these trends will continue on on.

From coming months I'm for sure there is some of each day.

Commercial areas that will be it.

On operations on day 1.

On the coming months I will say that for instance, the quanta due to the opening of the new.

Oh, sorry, sorry.

When I hope if somebody's share everything on spaces also for the case of <unk>.

Goggles.

International Third me on that you do.

We are working really fast on on.

On a tension all de la yards that will give us on how you feel especially.

As for withheld on food and beverage all these expansion on change or delay out of of Cabos will be fully in place today next summer.

For the coming year, but sadly these on these.

Third we went out and at least.

B part of these new retail area for for Cabo share for itself.

Other net of the day right. We are seeing is that we.

We will see.

An important growth.

On commercial revenue on the coming months on them.

Who's competing scene.

The same trend of passing on all the increase of passengers for the commercial commercial revenues.

Thank you and anybody I just have a kind of a follow up on the on the buyback thing.

On understanding the trigger for the for.

Restarting the buyback program is it.

Related to that.

Basically that you guys are seeing are for the company trading on our undervalued or is it more related to a return to shareholders.

For.

Maybe compensate the previous the 2020.

Uh huh.

Distribution.

Just on understanding the strategy, there and I don't see if you could.

Share with US what is the approved buyback program debt that you guys have from the shareholders' meeting.

Oh, yes, well, it's both it's not on the.

<unk> that the price.

It is related with the on the value of a price and went on leave that.

We believe that a given support.

In continuing with the program is important for the price that is not the only target for for us.

Yeah.

We believe that he sold saw a return to the shareholders. That's the main the main target I mean, the main point, we understand that difficult times, we pass through and we understand that in 2020, we couldnt make any distribution. So it's in some way to give.

We returned to the shareholders, so and that just traded E approved by the shareholders meeting and we will continue with that instruction.

Okay, well. Thank you so much guys and congratulations on the results.

Yeah.

Well take our next question from Alejandro stomach going on with Credit Suisse. Please go ahead.

Thank you very high relative to some of them. Thank you for the call.

Just a follow up question on how do you ask a question regarding the commercial business. So I just want to.

Trying to understand how the contract.

So it's it's a monthly revision.

Uh-huh sponsored understand I mean, what's what's the first quote.

But 3 years the end of the discount because when you mentioned debt.

So airports are not easy.

6 airports you on ramping them in these accounts.

So I guess.

Most b.

On all levels, but I just want to confirm with you guys.

Okay. Thank you on.

Yeah E. B I mean, all the program is related with the same month of buffer of 2019 and it goes.

Words, so always 1 month behind I would say for instance.

For July.

We were not close on the low number of passengers Republican day in the coming days, but at the end of the day, what's going to happen is up.

So we will give additional day.

So these accounts in terms of the result of the July month for 2021 versus July Manav total 2019.

19, Indaba way a OLED.

1 month behind but what we are expecting is that rather than leave more of them.

We have a few of these tons and we'll see what we are talking only about for instance to about June on June <unk>.

For you or W have positive numbers there since 2019.

1 on Morelia and Cabos by Yamaha.

So we've seen that these trends will continue for July it will be 6 airports on for the end of day of the of the U S.

We expect that good a b C.

At least 2.

From 9 to 10 airports would say few of discount but the ideas.

Our loans is completely aligned with the.

<unk> sales recovery so.

They are for that group could continue with some kind of discount on the on the on the fixed part of the of the contract.

B.

We have a small discount.

The other day.

I'm, Joe since almost day.

Airports that have not fully achieved the patterns of the debt.

To help him, but he did.

Okay got it so traffic I mean in terms of the trust home profit most b a golf tournament team levels Nevertheless to stop.

Top ramping those discounts right.

Yeah.

That's correct on the size tablet size for discount he's related would be.

The percentage.

The airports to be behind their debt.

We felt 2019, so I gave the example of June.

Okay got it.

Uh huh.

Can you share me I'm sorry.

Hello.

And we are experiencing.

Difficulties. Please for me.

<unk>.

Okay. Thank.

That's the kind of the period.

Yes.

And you May continue.

Thank you so.

Sorry for D C.

There is a partner, but we are back.

So anyway, Alex the B.

On the discount will continue on the size of the of all.

On the part of the of the decrease of passengers on.

Non-GAAP fully recovery so for instance in June.

If we would have on airport, we are I would say a 7%.

Below the traffic of 2019 for the month of July that we will obtain the same.

On the same 7% on discount so gradually all the airport will have really is more of more discount on on the rents for for the for the coming months selling graduate gradually we will have this D. C I will say that.

Program will ramp gradually in the coming months.

Yeah.

And we will go ahead and take our next question from Francisco Suarez with Scotiabank. Please go ahead.

Good morning, Fellows I will enhance thanks for the call and congrats on there are great for yourself.

Months, great execution and debt.

Having said on what on a hot on.

Had been there personally on few questions for the last 3 months deal on like DVD in what are kind of some precedent value piece from the rice.

Really more than happy to see that you are just 5% behind on.

I'll finish on traffic in Guadalajara would.

Would like to hear from you. Your overall views on what is driving these sort of recovery, particularly too on the horror.

And on GAAP Sands are called Mac to understand each day and of course it has.

And they tend to do a lot with your overall incentives programs, but it seems that theres something else something happened inherently in debt demand side. So anything that you can walk us on what explains the increase in overall mobility and the C. D. The level of business activity on and describe a international.

For the traffic as well on.

And lastly on also on was on a hot up do.

Do you have already on our plate or for the plant in a hold bandage on older week that you have under construction on currency.

Thank you so much.

Thank you Francisco.

And because of what I.

I would tell you that.

The different on routes our comedy in India for bumps, but we said that are related with measure that are mainly generate in Guadalajara to go into for you for Mexican beaches.

For doing.

For the group and say the road to Calgon carbon.

Come on by the artifact order work and be pretty nice.

The second biggest market for folks who for 1 of the biggest market for the corner of items related.

The VFR market.

I would say that also are doing.

It brings group I mean, they're.

They're different routes for South, California.

B group and also the their routes to deployment.

That is B E..1 out of the CBS Cros.

Disclose for <unk> for Mexican CV Jed so.

And that is particularly grew up with for instance, how soon on the of the border will ground bolted on to Quanta will open again, we especially on bolt on boost from that specific group.

The 2 routes or.

The part of the of our net Meanwhile, on kind of that in some way our recovery.

Recovering at a slower pace is that 1 related with business.

Business traveling.

As you remember for US comes a on the hurdle is.

Has the the Big Convention Center, you know lumpy momentum.

Good day.

On the export.

The Dod to export or do you also on on will generate on important.

B.

The bulk of all of our report on demand.

Hum passengers related business, we are suffering on the on.

On the Mexico on I got.

I mean, the well ahead on Monterey Route also.

Also we do most of your water so mainly what we are seeing is.

There's lower recovery that we expect is related with the with the business market.

For sure.

We are optimistic that these markets will recover.

Gradually book.

Up.

Everybody on it.

Some ways.

He can give you the warranties, which cannot be the impact on the long term.

All these.

In COBOL fees.

Due to our work.

How could be affected on the long term for day for the business market, but and the ones that you're still optimistic and I see that it would be grubhub is a recovery.

And in some months, we'll get a fee from <unk>.

Somebody on results from these routes.

Additionally, I will start abuse for specific with us while Mexico was the number 1 on number 2 a per air those doing 19.

Just to be there just on that on Mexico.

So simple get everybody knows that we are off that that all for right now.

At this time.

For the kitchen.

Mexico Day, you also asked in the middle of the chapter 11 behalf on important.

<unk> got in there in their offer of seats.

On the last month's on Wix, we are seeing an interest on recovery of the offer from from Mexico.

On Sundar de received the 737, Max the IBM 2222 to fly again on or more frequency from de Mexico.

So in the time, losing that B, we're going to see a better recovery on that specific market on.

Business.

Sure.

Thank you so much for for much insight, but just for.

Slow up on this and B.

International travelers to order ahead on Egypt.

As Victor in language overall 2018 levels already.

Yeah.

Uh huh.

B.

As you remember all the VFR market.

And mainly the the other California American has been really really.

Sure.

In some way.

<unk>.

Strunk on on the bulk of the real fact propulsion.

So we have this huge zone dial us.

On a more business on more lasers from for Mexican to for instance, you for by.

Price of the of all of the U S and in that space. We are also seeing that demand.

The Mexican Furthermore, flagging for installation.

On domestic markets rather than down.

International.

I would say debt partially in terms of the <unk>. We are seeing also.

Uh huh.

Yep.

So oh sorry.

So there's a zone.

Yeah.

Yeah.

In that way I will share that we are we are seeing.

Bolt on recovery, but we're on review for instance, E. B a couple of years for the all the first half of international passengers, Russia, We're still 25 per cent.

Below the.

The numbers on.

Back on display is Mexican debt.

Moving less leisure.

In international markets part of this plain comes from Houston and Dallas.

For the I would say business.

<unk> routes.

Partially we have a part of this plan is covered.

Some part of the of the South, California travelers may only be a first debt that you're seeing.

<unk> E T D U S citizens that are usually more b.

Juan.

To flat well ahead on rather than for the international.

For the origins from from Southern California.

Mainly the the biggest the beer trends on on.

And on while they tried to international markets.

Thanks for the color once again and congrats again on their self check ins.

Okay.

And we'll take our next question from Alex for mask with Bradesco B B I. Please go ahead.

Good morning from someone.

Thanks for taking my question.

Just 2 on my side. The first 1 is on on.

On the traffic impact on you might have seen.

For let's say on a slowdown on the recovery as a result on this third wave.

I know that we will be seeing the numbers in a few days for if there's anything that you can comment there.

B greatly appreciated and the second question is on.

On the facility on the international passenger handling facility.

1 I think you mentioned that you expect it to.

Operating incentive prices in 2002, if you can confirm that and if there's any color that you can share on on what's the addressable market relative.

For the current international traffic.

For now.

It's a little bit difficult with the pandemic, but any color there would be helpful. Thanks.

Thank you Rodolfo.

Is there something for what we are seeing on the on the reinsurance side, we are seeing.

He was recovery on on <unk>.

Rachel multiples, but waterfall.

On Gobbles also we are sitting on.

<unk>.

Randall.

On a positive number for field deployed for Morelia corner also.

We see more positive numbers for.

Moving from our current debt.

Mrs.

This is Kelly.

That will set up talking about our net we have seen this day.

Our recovery on business whoops, mainly our impact while on.

But he'll on.

So I would say in terms of what.

It's going to happen day really short term b.

About the facility in Tijuana, we seem that we could begin operations.

But they're really beginning of 'twenty 2 b.

So January.

Even if the b.

Sales of construction of a construction.

As a percentage.

I think that we are having today.

On a habit on on December, but we are on that on.

Which market with good could be a black I always said that the buildings have to 2 main goals the first or the first day I would.

Bob B B.

The comfort for the for the passengers on the deal.

What do you do that they've got a big Hoo.

Yes.

<unk> b process on the on would be our debt crossing for U S. Mexico for Mexico to the U S. We'd much much better so I would say debt in the first day.

The impact will be in comfort on that could attract additional passengers that we are in some way bring them from San Diego Airport on Lusaka surplus to decline. So that is the first bite on this.

Co related with international markets, but we thrive on.

Again this is the kind.

Gross that we are on the market that we will try to do 2 to attract with you for another life book.

Central America routes as could be Guatemala, San Diego San Jose hang.

And also Paramount.

That would be our first.

I would say our first step on day 1.

Okay.

And in the medium term I will say that.

Mainly actually on routes.

You remember the quarter.

Joe C before the commodity used to operate a direct flights to and from selling to Shanghai.

On that when you fly to Virginians a moment.

So we also spend that would be in the mid term we will have some.

From a return on routes on some routes through to Asia, but I would say that at least a day in the short term I will go with.

<unk> b to a throughout central American markets.

Ferrous markets.

All regions on Central America, the beef it firsthand circled generation on those.

In Central America comes out as the U S agencies on leaves in the southern California.

Thank you.

And once again it is star 1 on your touched on for me if you would like to join the queue start Antoine.

Moving next Twitter when might that on with GBM. Please go ahead.

Hi, Thanks for the call I was wondering if you could give.

Give us some color on the dynamics are on them on take away Yankee Starbucks recovery.

Hi, and thank you for you for you.

This is all well and we have seen a celebration of that recovery for <unk> something we all suspect.

But once a day.

The Canadian government it relieves the restrictions equal the speed that the recovery.

In any case.

Due to the level of vaccination from U S. We saw on.

Strong month of June and we are expecting to continue with debt.

Yep.

Great. Thanks for that for the color.

And moving them off next spreads.

Yeah Man.

This with Jpmorgan. Please go ahead.

Hi, good morning.

Morning, and thanks for taking my question I have 2 questions. The first 1 is a clarification on B truck recall brand in Mexico. You mentioned that you were a little bit more optimistic than before in terms of how fast you could reach to 19 levels.

I recall in some past calls you mentioned about being fully back only by 2023 and also by.

It doesn't feel good for so just wondering how do you see this.

On these Rick over now shaping up if you could see a 19 levels on a consolidated basis already in 2022 and the second question is related to margins we saw good improvement.

And then on the second quarter just wondering.

If you could give us more color in terms of what could be.

I can normalize it or like as people will have on margins for the second half and for 2022 as well. Thank you.

So for the lab.

In terms of the recovery of Mexico.

Sue.

Everybody remember on.

On our first view of traffic, we felt that the recovery of discretions would be more on.

Aligned to 'twenty to 'twenty 4.

The labels that we are seem to day, a dovish on seats that are arriving to the market them for instance for domestic airlines.

As more low eases a bit on roofs are growing there.

And also right on Mexico, we are more optimistic about the performance on on home on coming months.

You said that we're seeing that will be fully recoveries for 2023.

Again, it will be.

Yeah.

We share a mixed recovery for instance, today, we have declined a little more ADR that today are fully recovery. So.

I will I will say that in the commodity income due 2022, we will see some water for our airports on would be.

Completely.

TD recovery on.

Then for the 'twenty to 'twenty 3 we will see more their reports are that shows some kind of lack of recovery related with the wood.

With the business the business travelers.

We're fully recover for 2023.

Okay.

Thank you.

Regarding your question about the margins and we saw a very good EBITDA margin, excluding <unk> 12, with a 71% for the second quarter tiny 1 however at the end of the year it will be normalized at the level that we have.

Yeah.

On below that we had in 2019 it is because we will.

To start providing more resources to the air force for maintenance for cleaning for security et cetera, So in some way.

On the recovery of traffic.

It is providing some.

On a stressful in the level of service in our airports then we will start releasing mark.

<unk> expense for for the second half of the year, therefore dividend module will be broadly on that.

Slightly.

Slightly below the level of 2019.

Okay. That's very clear thanks, guys have a great day.

At this time, we will take the webcast questions I will now turn the call over to management.

Thank you everyone Hi, this is alessandra.

Total IRR.

Company average.

Have a question and the strength.

First 1 is from sales.

So for asking is there any way to estimate how significant was a topic for the U S. GAAP.

And for the mass vaccination program.

Oh, sorry.

Yes first question, but I will try to do my wishes for free.

Ladies and I will say that day.

The offer of seats for instance to Houston do you think the same line that we used to have patrolled dip on them.

We know that some of the business travelers are not flying today.

Day.

The demand.

It does roots mailings to choose from from a heel from Guadalajara for what's going on.

It's true for all our all of our airports.

It's still the same ofer and that we said on the sides of the demand on this.

Same level of demand so.

Assume that an important part of these.

I would say recovery on traffic will come from from from the vaccination.

On a process of Mexico, flying mainly to Houston, and San Antonio All scheme.

From some other students actions, but again.

But really our assumption on it's really difficult to 2.2 to 2 to do some kind of on.

Number, but I can say that the demand on those routes.

Important.

At the same level of debt reduced you had from 2019.

Sean.

Douglas cover he's not or we can see that is related with <unk>.

Fully with business minded that used to fly on them.

On those routes.

Thank you Ron actually we have another 1.

<unk> from Nomura BNP from Canada.

He's asking what type of level of fed funds, a flexible working and working from home.

There are a total route changes from the business travel.

I wish it at least for the short term debt.

That would be on.

On a change.

I really don't have.

Enough data to say that he's going to be on.

Complete the structural change.

Because 1 of the things that we are seeing.

The older days on the news from them.

More companies.

Is that thinking more on the hybrid method of working rather debt only.

For more fees, so and Bruce your debt is gonna be upfront debt.

In some way.

That is true.

2 O change on.

More on the line that is going to be a.

A lack of recovery book in the.

Coming months, we will be.

<unk>.

Our plant of recovery of these of the routes I mean for instance.

For a sales man.

Bruce difficult to filling that they accrue a class.

Class a sale to a bill from 2.

So I'm on a.

I am probably more aligned up the b the face to face business, who b recovery.

He's going to be a matter of time.

And we also have another 1 coming on.

He is asking.

Can you give some color update U S Mexican border restrictions and if yes.

But after a lot of restrictions are lifted people for fly.

Our total Mar on ROA and Ram trucks.

Yeah.

I think that in case of the U S Mexico border restrictions for this.

Yeah.

Can you hear the case of GAAP it will be a great a great news the moment that day. This distinction for for for the 1 question will be.

B, we used it because at the end of the day and important market that we have into 1 of these mexicans going for leisure and business to southern Cal.

It came up in every day.

Gross and so for US we will see a really important on recovery on unusual growth on day.

Why not sooner beef B, Scotland.

The rest of day hour hour, our debt and you said that there are.

For you from the B.

For Julie.

Sure on route in terms of the size.

For GAAP.

But all of a sudden fields.

We are talking about 2.4.

Good.

3500 kilometers for a while I've heard up to low sunkist is localized.

I'm not too low.

I would say.

The use of the Guy to go over there so on.

Leasing that we are not seeing any kind of impact.

I would say.

We don't see any kind of made out to be impactful.

For for the opening on off of.

The board.

The other hand, we are seeing a really great upside for day, 1 out soon on the border is something again for Mexico.

Thank you Raul.

We are done with their webcast questions.

Yeah.

Okay.

Thank you everyone again for joining us today on our second quarter results conference.

We are per surgery interest in our company on and we look forward to bring on this on our business if you need for pizza de becoming available.

In the meantime, the team remains of all of a drug for energy.

For steel that you may have from.

On behalf of GAAP.

We wish you a great day, thank you everybody.

This does conclude today's conference. Thank you for your participation and you may disconnect at any time.

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