Grupo Aeroportuario del Pacífico S.A.B. de C.V. Q1 2023 Earnings Call

Approximately two minutes.

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You broke them into about to begin.

Okay.

Good morning, and welcome to Gap's Conference call.

<unk> have been placed on mute to prevent any background noise.

The speaker's presentation, we'll open the floor first question I know that time, he's structures will be given if you would like to ask a question.

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

Thank you and welcome to the Blue part of portfolio and see if he goes first quarter 2023 conference call presenting from the company today, We welcome Mr. Walter Wolfgang Katz, Chief Executive Officer, and Mr. Hao, Olivia 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 future performance 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 export.

Patient.

Please note on forward looking statements. Please refer to the quarterly report that was issued previously at this point I would like to turn the call over to Mr. Where's that for his opening remarks. Please go ahead Sir.

Thank you Maria Hello, everyone and welcome.

Sure to start third off a strong we don't have a great performance across key operational and financial metrics.

The number of passengers do squares lost almost 16 million Bucks from your saw an increase of nearly 24% compared to 2020.

Supporting this passenger traffic growth was solid demand experienced at the Montego Bay.

First of all I got that.

As well one of them.

Number of routes and frequencies across our network.

For a comparison purpose when we look at January and February of 2022 there.

Impact of the Army Crumbaugh yen did affect us.

Or coffee, which was not the case he was waiting 33.

As a result.

Revenues increased by 31% driven by our passengers' traffic recovery throughout Gap's network as well of the maximum tariff increases, which fulfilled almost 99% of the maximum tariff in our Mexican airports.

Important to note that the benefit of a day.

And airport consolidation is not fully reflective here because of the effect of a penetration of Mexican peso falls, 9% colored U S dollar, which impact the increasing revenue.

Yeah, I'm, making or force, representing 15% total increasing our relative to revenues.

No look our revenues rose by 26% most of the increase came from food and beverage we celebrated shows leasing office space on duty free.

Oh, you have mentioned in previous calls where they will show that there are several contract with Richard.

Nacho can ensure that we're more positive for the company.

The only business line that continues to lock in.

Gotcha without minus 24% versus 2019.

However, compared to 2000 22 billion grew 74%.

Several other structures is because we are working to reach and surpass 49 through revenue, including the Florida did all of them men of digital advertising.

You seem to alcohol airport spaces through enhanced brand experience as well as the juice of marketing showrooms.

As we mentioned before depreciation of the Mexican peso is affecting the northern Africa revenues in the contract that doesn't mean that enjoys.

That'd be about reaching four 7 billion pesos for the quarry, we're not EBITDA margin of around 72%.

This was the result of the outstanding passenger traffic recovery how is your thought on solid commercial rights.

Were partially offset by the 28% increase in cost of service.

Working hard to maintain our cost control policy, but we're facing the changes in the labor law that not only affects the overall costs for salaries, but also that the contract.

First of all I'll start Charles Janitorial security and maintained.

Also we expect some higher costs further down the line in accordance with the air side certainly all expansion in addition to the inflationary effects.

And financial for four months Gosh, I'm curious Scott with Allianz inquiries about almost 12% Richard adult Allo S T.

<unk> 9 billion pesos.

Does that figure, which at 444 billion pesos in the first quarter due to the drought dawn.

$6 4 billion pace do.

This included a credit facility from Citi Banamex, one 1 billion as well as the issuance of another two tranches of label depth bonds at the Mexican market for a total of 5.4 billion pesos.

The proceeds will be allocated a stalwart mandatory capex for this year.

A portion will be used to pay the bond maturity in June of 16.

66 to 200 million pesos.

This is where our third come for labor with box.

Dr sustainability linked bond.

Evidence of our commitment to sustainability and specifically the direct control of reducing carbon emissions.

We look forward to further updating these market.

What is the Receptiveness and continuing to really do you see the philosophy.

Into our operational infrastructure projects.

In accordance with these figures will continue to maintain healthy liberate us level, reaching a net debt to EBITDA ratio of one three times for the trailing 12 months, thus complies with all our debt covenants.

Capex continues to be carried out in accordance with the comedian Master development for us.

Out of the commercial business the deployment has been and will be our biggest challenge in their five year periods.

Because of the size of the investment.

<unk> costs increased due to a higher inflation.

We have made the highest investment for a single acquired since the beginning of our concession reaching a total of four nine.

Yeah.

Moving on to another topic.

I want to mention that our ordinary and extraordinary shareholders meeting took place last week.

A dividend payment of 14 point Eddie before.

For outstanding share walks up with it.

The mean, the creation of a sustainability comedy Salzhauer prevent which put us in the right track to fulfill our strategy. It's something it's just things that we really plan to research.

Right well I, just got a rectification of our designation of the first ones that will serve as independent members of the company's board of directors.

As he noted by the series B.

Well the resignation of an independent member of the nomination and compensation Committee.

Both points were withdrawn.

As mentioned shareholders me.

In order to have a new ordinary shareholders meeting that will be held on May 22.

It was announced yesterday.

In the first quarter of 'twenty three released with of course, where do you suppose sudden initiative presented to the Mexican Congress to reform various federal laws enacted by the Mexican peso.

This will provide among other additional capacity for the Mexican government to revoke concessions on permits.

It also provides a mechanism to speed up private property expert base, you'll spud this state.

He felt Peter where are the Congress will pass is bill <unk>.

Passive the impact it could have of the Mexican economy, and the company operations.

This school violate fundamental rights, establishing the constitution on international treaties.

Such a directed towards equality.

There were plenty of nor retroactivity of the law of the freeze on all right.

We will keep your eye on the video on you for me any relevant updates to our shareholders.

To conclude back in March when we carry out a very successful who's got date or the New York stock exchange.

I want to give a special thanks to all day I know they sell in their stores that attended as well as to our team who put it together.

That's a great opportunity for us to catch up with all of our colleagues.

And to do that next one on one of our airport locations.

At this point.

That is for my remarks, I will ask the operator to please open the floor for general questions.

At this time, if you would like to ask a question. Please press the star and one on your Dutch downtown you might withdraw your question by pressing the pound Keith once again to ask a question. Please press the star and one on your Touchtone phone.

And we'll take our first question from Florida, I'm always weighted Bradesco BBA. Please go ahead.

Thank you for taking my question.

Morning.

Just a couple on my side. The first one is in Shanghai.

You had a strong start of the year and you're running at a rate higher than you got it.

Boston data. So just wanted to see you know how how are you looking out for the rest of the year, what kind of upside and ACC.

Hum.

And the comparable basis starts getting tougher.

The next of the year and then my second question was just on a follow up on your comments on this reform.

Hum.

Some reforms.

They actually didn't disclose one is the one you mentioned and just wanted to just to make sure I mean by looking at the taxes. It seems that this wouldn't be this will only apply to.

New concessions.

So just wanted to confirm that your view.

And do you foresee I mean this is something that.

That shouldn't impact on your.

Next year's MVP negotiations I just wanted to see.

Is that could be the case.

And as I said.

And a second part of this question is.

D.

Yeah.

D D.

Yeah.

The form that was there was consensus.

Cabotage.

Q1 was what was removed whether you see this actually pending through in Mexico.

Mexico regain in category one as a result.

Thank you.

Okay.

Thank you Robert.

On the first question related with the profit, yes, we're having a really strong beginning on the first acquire it is important to take into account that the the quality comparison basis will be tougher in the coming months.

Okay.

We're still doing really well.

While sitting in their phone probably shall seats that we were gonna see on the market.

We are still seeing.

A number that will be.

A little bit below the double digit, but we'll still see growth in first time go out in our airports.

Got it.

<unk>.

In terms of again the base of comparison.

Some airports Oswald.

That's what I have great. The first half of the jurors will be a really.

Oh, great bread performer, just based off the shelf for sure but also taking account the base of comparison.

We have for example, quanta that we all see how these royalties.

We're seeing a robust demand, but we will not begin until she talks.

For comparison base Dod we'd already in some way begin to move there.

So the growth of that therefore, more to I would say lower double digits, rather than the higher double digits that we have seen in the in the in the past months or even years for the case up to quota.

Yeah.

We must keep an eye on it.

Yeah, Sean.

Sean.

Call me and place them somewhere in Mexicali economy on the U S economy.

Today I will we will have I will say completed that ought to understand.

If he is going to happen you've got Avi.

Soft landing or how good I believe that but I mean, we we need to really keep an eye on.

What could happen and they are in the cycle households did you.

In terms of their reform.

That's why I say the build that represented by the Mexican precedent to the to the Congress.

Yes.

I will say that in terms of the Mexican law.

The retroactivity of their low.

No I love it.

They didn't even know they work.

In theory.

This change of the law with no apply to new concessions.

But it's important to know that.

The retroactivity of Pablo.

Do you need to.

Fight it.

We judge is no there's nothing that has happened.

You know dramatically way.

You'll need to ask for or at least the gate for that retroactivity.

So.

It's difficult going forward here.

Which could be the impact or not of these reforms.

First has enough.

Discuss us yet.

Satcom.

Really unfortunate information is that.

All these variance period of the Congress, we landed there last day of April .

And the next period periods of the Congress could have young September .

So I will say, it's gonna be enough time.

To discuss with the Congress months.

To discuss.

Right through to two dorms are starting in a much better way this reform.

I would say in the coming months so.

My personal view, we have enough time.

To first understand and so satcom right to act in any point that in some way could affect things.

The compression.

It is difficult to understand.

And to know it.

This will have some impact in the next MVP negotiation.

I will say that the first differ.

The first.

Example of these off you believe that's going to happen in the real Scots-irish negotiation.

In the middle of the negotiation on this year.

Actual.

And lastly.

The relation with the Cabotage, Yes, hi, Jeff Gary lost remove if in the last version of the on the on the change of the low fare per ton seaborne Sean.

For sure is lost something.

Really importantly, forget the category one.

But it will be a part of it with the Mexican government has to implement.

Different.

Related to this no.

So in our personal view, we continue to see that the cut that where you are going to happen in some moment between the third and fourth quarter of this year.

Around that.

We don't see any kind of I will say.

These should all service that's already short routes.

They kept their already with the recovery of the cut that we won in the last half of the year because they are allowed to say at least six months to plan and put the planes to two I would say to get into a new market. So what are you going to begin to see positive results.

In terms of additional seats or additional capacity to put into the U S from the Mexican airlines on the first half of the coming to you.

Okay very clear thank you very much.

Yeah.

Thank you. Our next question from Fernanda. Thank you with B T. G. Petrol. Please go ahead.

Hi, Good morning, everyone and thank you for taking my question I have two on my side. The first one is actually a follow up on the previous question regarding traffic trends.

So if I understood correctly I'm looking for a common chooses to see supply our chief traffic trends.

Should actually lead you to some fad guidance.

They do provide an increasing by six or 8% on a year over year basis, because if we look at Q1, you already Ah is on 6% for the year sort of judgment that you understand what has been demand drivers of are there than expected traffic. If there is any near shoring.

Trend that hasn't been surpassing that there hasn't been.

Some positive news.

On traffic.

And second on Joe My God, just month or two a year and that's data regarding the rebalancing how do we need cushion and when do you expect you to have a resolution. Thank you.

Thank you Fernando.

Yes.

Oh, yes, we know of jewellery my barrel guidance your software.

From the number of seats that we're bullish.

For their lives and the slots that we in some way we're authorized by the body.

Airports at the moment that we do.

Put in place the the guidance.

For sure at this moment or disburse. The these first quarters.

Bob.

Hey.

I will say some kind of easy comparison.

So airports osmose people away.

Kingston.

Even while I highlight airport.

Good.

So I would say that if you.

Italy.

Thinking move our our our guy that.

What for sure I'd be happy.

Did you we will.

Calculate all the numbers see the trend on the number of additional slots as additional seats.

I'm of the lever your fleet and then we could move forward with that information to talk to you in some way in the case that we will need to change that guidance.

For <unk> for the moment.

We are still thinking that the guidance going out to eat.

Are they sort of passengers numbers.

Did you.

Going around going to be around got beaten.

We can see.

It is six to eight on total passengers too for for the full year.

Yes.

Hi, Fernanda and she's so regarding to your question with the Netherlands and processing in Jamaica, we are working with the with the theme of the designated by the government.

We are planning to close by the end of June isn't the best estimation as we have mentioned before.

Colds.

Any kind of I E.

Balancing resource to have the approval from the cabinet.

So that's a defendant in Mexico. So it represents a huge effort to socialize and revised.

The deeper the figures in order to have that flow from the carriers so be it.

They are a couple of months more.

I'm just reading a prototype.

It doesn't go anywhere.

There were two for nowadays, we have some kind of near shoring effect today on the traffic, it's really early to understand that one.

What we are seeing some of our airports.

Or a round of hardware purchase.

Really has an army of real estate on the indoor stroke packs.

But he or she.

They're adding one so I was just authority.

The first five of what could be the near shoring effect.

Cummins years, but again it's.

Really early to understand the size of the fed Andrew if we are beginning to see some part of that.

And somewhere in the boxes.

Okay.

Yes.

Great. Thank you and then I.

Okay.

Okay.

Well take our next question from either at the mine area with UBS. Please go ahead.

Yeah.

Hi.

Thank you Paul.

I'd like to go deeper.

Uh huh.

The last the past your MVP and you cant remember we always had.

Reading the tea leaves.

<unk> service.

That was that's dropped.

And for this next round up.

Sure.

The brass tacks, who wish you well.

And I would also go up.

Oh, Oh Oh.

You bet.

So at this moment, how cheap the next and.

The negotiation, that's one surprises for the larger amount of off topic.

You can see the standup muscle so even hired for that.

The next one.

And we also see that it is.

Please for their next.

The next round.

And the last one for Omar or absolute.

Welcome Mike.

For next year.

Sure.

The government or the next one thank you.

Thank you Tom I mean.

Yeah.

Talking about the Master development plan negotiation.

I will say that.

First in terms of the Capex.

We have if you review our last master plans.

<unk>.

The number of the Capex.

The passenger.

It's almost like we're seeing the same in the same level I mean could you just need to extract some.

One time capex could be the second wrong way of Guadalajara.

So in general terms.

We got our feet.

A master plan.

That's good I E.

Without it.

Investment.

In the same line.

<unk>.

Investment for passengers that we have seen that.

For sure. The total number we have grown our fee increase.

On Capex in absolute numbers.

Because we are I mean, just doing quick numbers on.

On the last negotiation, we began with 48 million passengers.

Feraheme continues in the same trends, we're going to be around the 60 million passengers for the case of Mexico at the end of the five year period.

Just that increase.

Major they need to deploy.

No capex for Monday.

Quality service of the service.

All day all day.

All their needs in terms of quality services that are included in the in the concessions. So.

We're gonna see a master plan that would be higher capex. That's the one that is running right now.

In terms of tariff I will set that is today is difficult and it's early to talk about about that Bob.

As we mentioned in our.

<unk> got a management presentation.

We are more in the flat to.

Minus 5%.

Chris.

I'm, sorry, but I can't.

Certainly we need to understand which could have easily just conveyed how would have in the market.

How are we going to close the the number of passengers.

How do we move the forecast for the coming years.

Barely but.

We're seeing that.

So I'm gonna be around around that from flat to magnify.

For the family.

All the jurors always happens the same first that's all that is happening right now.

And after that.

For the case of gap.

We will officially present, the master plan to the authority.

In June of 2024.

That will be with these sudden illustration.

So we will not have saved the day.

Really sharp or will be piped to close the negotiation because.

Even though this year is what.

Normally happens exactly what's there shouldn't runs from June when you made your fares.

Filing to the I'm sorry, Pete.

Onto the end of December .

Stay like six months.

On the next year that change on the government.

Gonna happen on September 30.

They're not September so we're going to have.

Even though some but really tight times trying to close the master plan with discover.

The reason that it is important to note that the master plans has been negotiations negotiated.

<unk>.

All the difference.

<unk> remains centered around lift right.

No hassle with Greg completely with respect.

With respect.

The mobile <unk>.

Discussion or did the Muslims Mcdonnell the G M framework and the discussion has been completely.

Technical discussion.

For the moment, we are still seeing that that's gone up either way.

So with this government.

Or with the new government.

The technical guys.

We think that will continue into India. Indeed, I mean, the ministry of Communications and transportation. So at least with the information that we have.

We are not foreseeing any.

Major changes in the way of mythology that the government has used in the past.

For the for the set of the Master plan.

Yeah.

Fantastic.

Sounds good.

I got myself.

Well take our next question from Filipe Nielsen with Citi. Please go ahead.

Hey, guys.

Good morning or afternoon.

For taking my questions.

I have two questions on our side.

The first one would be what are you seeing in terms of our wholesale and resource operation.

Jim in your regions like the regions that you operate you see.

The level of activity in terms of our hotels and resorts expanding and the second one would be.

If you see any opportunities for established industrial parks are at or near your confessions.

In but you are elsewhere.

Things are more intense manufacturing.

Thank you.

Hi.

Well, what we have seen close to our operations in our properties.

Figured that the economy in Mexico is improving due to the new shoring due to the ultimate teeth the industry due to that.

Brian .

Activity in England.

Related we they we called Silicon valley, because that that the number of companies related with this this activity. So we are very positive in that in that site.

We believe that.

I would think that the business passengers will continue growing we haven't recovered to the level, we have a hand in Guadalajara.

While I hate that we leave that in general the activity will be expanding in the following years, obviously that is sharing will be in pools in it.

And boosting the person so I think it is important to mention that.

The new sharing.

Kris of industrial parks activity is growing in five of our 12 airports in Mexico, which is very very important.

This is a pretty big laterally.

Couple of entities.

Hello.

I think that is really important and.

More for for for all our best to surrounding all these outside Mexico.

[noise] perfectly understand.

That is growth of the Mexican GDP.

He's really a completely different between regions.

So on the center of the country.

We have a heel when a plateau or how do you call that place where he is.

We have more than 25 years of 30 years.

GDP has been almost.

The double growth of total growth.

Versus the national growth on the GDP.

We are seeing on this area.

In the quarter for sure.

Great.

Ghansham in sort of an industrial park real estate additional.

New for Indian bathroom, Aaron's dotcom AOE for the near shoring. So we've really come to you.

Computer really positive on that.

We think that is.

It's happening so one of the key factors too.

In some ways have a better understanding of what's going to happen in coming years and what.

What's what are the trends is to cause he continually seeing what is happening in terms of state GDP.

The creation of new employments in the in.

In the different regions for instance, shari scope the stairways why FERC.

Whilst on this first quarter or the last sort of in the first and the last.

Half of the year of 2022, and what the number one state in terms of creation of new employment.

No.

It seems that the dynamic of the economy in Mexico.

Changing really fast.

But he's changing in a really deep.

Different pace, depending there yes, okay.

Got it.

In terms of the cycle question, if we have any opportunity to establish industrial power can you sort of concessions.

I think that.

We'll continue to see.

Different opportunities as always we will analyze the opportunities.

Well one of the key parts to them there's.

Always there's this company is that we are really.

We have five where do you supply to only in death.

In in opportunities.

Be a creative force for the value of the company.

So I will say that yes, we have reviewed the first opportunities as some of our airports.

We're thinking of some kind of additional development.

For real estate and just Dropbox.

Not always.

It will pass through.

With this review of awful.

How do.

I created for value could be for the company. So.

To conclude yes, we've reviewed different opportunities but.

But again.

We will keep our discipline.

Beckman.

So to all of the breeding.

The opportunities that create value to the company.

Great. Thank you very much guys.

So we will take our next question from Antoine.

Morten CDR with G. P. M. Please go ahead.

Okay.

Hello, guys. Thank you for taking my question and congrats on your results.

I was just wondering if you could provide a breakdown on the 3 billion capex deployment.

For the quarter.

Sure.

Expectations on your investments on the commercial front are the same as you showed threesome. She oversees everything that is moving on the path.

Thank you.

Thank you and somebody says Oh, I will begin with the I mean in terms of the Capex deployed during the quarter. Let me begin with we charged that Maine.

Okay.

Buildings or or Investor tour that we are developing right now we have difficult rodeway are well ahead of that is happening and if it continues or there.

Development and career ready for operations by the end of this.

Sure.

But also we are right now.

Building the second terminal by Gaslog, sorry, social are really being having four time.

Investment for the company in size for sure.

And the impact on Capex.

And the third Big project.

What happened.

The required.

Related with the land acquisition for the future reserve salt, while I called out airports.

Okay.

Yes in that regard.

We have invested around $1 4 billion pesos.

Well pause for land and we are a investing mainly in Port authority you have that for the new the new terminal in the second runway and whatnot.

So.

And these are the main projects in indeed in this quarter, we reached the highest level of investment is historically in the company with almost almost 3 billion peso seen one quarter. So that the the most important thing is that a that the land reserve.

We are we already have quiet, which is very very important for future growth in the world at airports.

And regarding.

Regarding to your second question, we couldn't hear you very well can you repeat it please.

I just don't understand each day unfolds. It also.

I'll steward investments I mean, your expectations on the Liberty subject commercial.

Diversification activities has changed or are you.

Just go ahead and I suspect.

So we got to use the same line.

We are developing additional commercial areas in.

Meanwhile, the hurdle.

With a full time forever at Ash and what.

He stepped into operations from <unk>.

And then of the summer of this year.

Also in terms of size we are Jos.

We just finished the increase of commercial areas seem to establish airports.

It also for sure we're developing the hotel as well.

We are ready for operation of the first quarter of 'twenty.

24 of them.

We've talked in general terms, we continue on the same line of the neural net revenues.

<unk> to bring additional square meters with better conditions, some better experience for four hours for our passengers.

All of you the best way to two two to increase however, our North Dakota.

Yeah.

For sure we are working really really hard to be.

More efficient as possible in the lungs that are directly operated by GAAP to convenience stores, so the VIP lounges or or the parking lots, but you'll have to ask I will say that will continue in the same line of the development of the commercial.

They're not run out take our revenues and our airports mainly in that the same business pieces that but as I say, we always gone up twice too.

Review.

Opportunities different experience for our passengers.

If the return is the correct one is the.

Just kind of use as long as we're moving through.

To the company.

Yeah.

That's pretty clear I mean, if I may ask.

So quick question just with the increase in <unk> during the quarter, what what level of your maximum studies did you reach.

Almost 99.6 really close to a 100%.

Perfect. Thank you guys. Good luck.

Thank you.

Once again star one for your question well.

We wait what would take their waste to ask questions I will turn the call over to management.

Thank you Nikki.

We have two questions.

Learning from what do you say more from Brown advisory.

And the first one is is there an update on the timeline for review their rating downgrade for Mexico.

And I would say we continue thinking that you could have even between the third and fourth quarter of this year Greg.

We will begin to see it.

Impact on additional routes to our airports from the Mexican airlines in the first half of the of.

The coming year.

Thank you and the next one.

And where it could not narrow much higher revenues per passenger reached in the next five years.

Good question, because I mean.

For sure we will try to time, our foreseeable D C. Rachel.

But for sure it depends on how big.

Or how.

The amount of additional square meters that we could bring to the table.

Negotiation.

For sure we would have the effect of the new the new first of all I got.

They're now building that's going to be a great opportunity to reform would experience in terms of commercial.

The activities in the in the airport.

I mean, the best way to understand that we have.

A great opportunity to expand gotti's when you compare the Rachel scovell samples Unfortunately at the airport.

But we have a big gap to some way to improve portfolio.

Airport commercial revenues.

It will come from terminal, but also the additional square meters from Guadalajara, The hotel the new hangar.

The new.

Sure Yes.

With vivo.

First on commercial.

But again you could have a key factors to.

Perfectly understand how how good I E.

The.

The increase on.

The square meters for the next period of five years, but I mean.

Roughly number.

<unk> gone out to eat.

Between hundreds.

And then 220 basis I mean, there is a lot of variables to see what he will be there.

The next five years Bob.

There will be some number in that.

In this area.

Thank you Kelly.

And then the last one that we have in the webcast is from Audi or withdraw from a and vice versa.

Can you please repeat your guidance on EBITDA and Capex for this year. Please.

Yes.

Hey, maybe we should.

Yeah.

We'll be growing in the range of 10% to 12% comparing to 2022 and the EBITDA margin will be close to the 70%.

In terms of Capex, our target is to reach 10.2 billion versus at.

At the end of the year.

Thank you Phil.

I believe that we can pass again.

The clock ticking.

Thank you and we are showing one more question over the phone comes from Guillermo <unk> with JP Morgan. Please go ahead.

Morning, So thank for taking my question a quick follow up on the on the cost front you mentioned about some pressure on costs going forward and think about your EBITDA margin guidance. It just makes it about 70% compared to the 72 that you posted in the first quarter, but what kind of.

Insulation fresh ore of kind of cost breakfast do we see going forward that something we should already see on the second quarter or more towards the second half of the of the year. Thank you.

Hi, good evening.

Well there are several factors.

If we talk about the in terms of salaries.

In addition.

Additional head count increased to 53.

We have also have to consider a change in law in terms of additional vacations or holidays.

And for that I am pleased that you have to consider the impact in the social contributions regarding the <unk> study.

John effect in.

Insulated, which effects also in terms of security in terms of cleanup in terms of maintaining so in general terms. They they change on an LOE will be affecting the because you are right the theres something regarding the inflation, but.

But we have all sorts of course here the the effect that we will have 100% operation that new 10 minutes you quite enough. We all finished lots here in may but less operating fooled by that last quite a big year for 'twenty to 'twenty. Three we will have the full operation that implies additional cost as we have mentioned.

Before every time, we have spun determine how to respond at their site and we have to of course the.

The new main maintaining so in general terms that the reason that that will be affecting the EBITDA margin also we have to consider the effect of M. P. J in terms of their concession fees and we have a credit line regarding the additional concession fee that's why supply.

In 2022.

For <unk> the entity will be.

If theres no downgrade line, so we will have to painful.

The additional construction those are the main effects, obviously, we have the different effects in each property in general does that main reason.

Clear. Thank you very much and have a good day.

Okay.

And we have a last question on the webcast from Eddie Leung from Santander.

When do you expect to deliver the second terminal in whatever yes.

Okay.

We expect that we'll get.

We'll be ready for operations in December of 'twenty four.

So any effect are you.

Commercial revenues and will not be in <unk>.

<unk> 25, because I mean.

That's real operates two of the last week so.

Separately.

Thank you Robert.

So there is no any additional question. So we will progress for the final remarks.

Thank you everyone again for joining us today at our first quarter results conference. The team remains available to answer any question that you may have please enjoy the rest of today. Thank you very much.

And this does conclude today's program. Thank you for your participation you may disconnect at any time.

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