Q2 2023 Grupo Aeroportuario del Pacífico SAB de CV Earnings Call

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Good morning, and welcome to Gap's 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 <unk> Investor Relations team.

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Thank you and welcome to Blue part about the Olympics. If he goes second quarter 2023 conference call presenting from the company today. We welcome Mr. Elder was Oh, Gosh, Chief Executive Officer and Mr. So Olivia that Chief Financial Officer. Please be advised that forward looking statements may be made during this conference call. They do not account for.

Future economic circumstances industry conditions company performance or financial results.

Such statements made are based on several assumptions and factors that could change it could cause actual results to materially differ from current expectations for a complete note on forward looking statements. Please refer to the quarterly report that was issued by the company at this point I'd like to turn the call over to Mr. Long for Wednesday for his opening remarks.

Against that.

Thank you Bobby.

Well first of all can we walk through journal our call today to review <unk> second quarter of 2043.

The only real jobs transported nearly 16 million travelers to all over the world 14 airports.

She was looking for him to talk or some decrease compared to 'twenty, 'twenty, two which I'll it to the first quarter.

Our original profit ROE guidance for the year.

Edwards popping up doing required for domestic and four international will skull led the way with junior Woods, followed by Paul.

No.

Maybe Kelly among people with one each.

Also worth mentioning.

Perhaps on some of the profit growth during the quarter were down 2% increase.

It's related to domestic market growth of 19%, mainly due to the new whoops went away.

First of all jobs.

As well as higher load factors from Beaver ruin somebody lives if there's much of a profit center for.

From an increasing frequency and keep U S market, So Charles in New York.

Before them that routes, Los Angeles, San Jose and Oakland.

As a result, the Russell topic grew by 17% during the second part.

The quarter continues to be one of our main traffic generators books about the cross border Xpress, which have captured 32% of the airport's total truck.

Binational terminal continues to be a fundamental part of the airport's growth.

Work older o'clock for such a good near shoring.

Perfect.

Did you have to nurture.

We don't let the perfect muscle during football season is traffic a piece of tissue.

The gross rent up until I got on the scaffold is very few that given our strong domestic market fueled by the increasing load factors.

In terms of international Puffing additional Chicago, we opened up two new routes.

As well as the official on ebay to Jetblue.

First of all you have to open a bookstore.

My whole life.

Chocolate was like Jetblue.

We'll start to Sherwood yogurt news regarding passengers development for the whole network.

In the coming months, we are getting.

More than 40, new domestic routes and July operated well.

I'll be glad to.

Now moving on to our now because revenues do you need an increase by 14% driven by Puffiness traffic, while gap's network.

In the case of our Mexican airports being crude was offset by the increase in the photos Bravos price index, excluding petroleum, which has led to the only place you think reaching maximum tariff upgrades in our Mexican airports approach, where we're able to reach 99% compliance of our maximum tariff.

In addition, because over here some of our Jamaican airports hopper.

Impact due to the upper section of the Mexican peso by almost 12% over the Georgia law that has affected the revenue increase just to remind you the Jamaican or pushed Robinson, 15% of the total kind of a multiple of revenues.

At this point, let's take a look.

I will now take our revenues would you reflect it at all.

Performance was led by a 10%.

There was so good and up 10% in Greece, and none of them actually got revenue per parcel.

Most of the increase was attributable to the opening of New York, because otherwise I'll call them on people who are younger sculpsure.

The increase was also partially yourself in for Colby.

I wasn't able to see a sort of complex conditions with the tenants.

It's worth mentioning that the bulk of nearly 12% up refresh older patients, which affected one supports our total revenues. Another one that took a readiness and push yourself off the bottom you're sofie inquiries.

In terms of business unit.

Bear with US increased by 27% is outstanding for four months, plus molinos goggles worked well.

While I'm on people who are here.

For example, key U S basins, where incorporated.

People over here.

Additionally for the upcoming months, we are working on the opening up the tariffs otherwise.

Hi, Oscar roof top food and beverage space.

Would you expect to be completed in November .

We spun that probably 80% of them.

Communism doors revenue increased by 71%.

To expand our business and we opened up three convenience stores during the last six months and your spouse a work over one morning, well huh.

Jos.

Cabos represent 20% of the total income from this business that I think is worth mentioning that one of their source of international terminal.

However revenue for their network stores.

This brings the total number of convenience is starting out in that first 249.

Do you do for each increasing by 9% because below passenger traffic rose by mainly due to the Mexican peso appreciation.

So the revenues from this business are in dollars.

So it's affected by the temporary closing of the walk through duty free story well.

Due to the construction programs that I can promise at the time.

Advertising grew by 71%.

New client catchment broadly increase which put us on track to recovery following the call.

That'd be around you.

And of course, there's like 14%, mainly due to the launch of <unk>.

Sure George destination that continues to be that the business that you know each other well I was going to read a modernized grandmotherly international be up your lunch and we are all sorts of cool wake up free when someone's question International belong channels calls due to the higher than expected the non throughout 2020.

With the bulk construction for years to come through next year.

What we know today.

Our results.

The 12% up with their show of the peso and the almost no inflation in the quarter.

He got region, four 5 billion peso sort of acquired yeah.

Margin of 17, 4%.

This was led by the passenger traffic recovery on solid commercial revenues and was partially offset by the 15.

15% increase in the cost of care.

I look up revenues, despite our best efforts to comply with our cost control policy, we will not have to deal with it.

Sure Mike.

Hey, How're you know how your shelf personnel changes in labor law, a minimum wage increases.

Foster has affected not only salaries, but also they don't talk that are linked to personnel such as janitorial security and other things.

We just got higher costs further the underlying nuclear site in terminal a expansion you know this.

Jump to the inflationary effects.

Moving on to other topics. It continued to be carried out in accordance with the Master development program, along with commercial and business doing.

During the first six months, we'd have to deploy them for $5 60 Olympics was which was olive garden and.

Mainly due to a lot of hot off portfolio something quite out in its culture.

Just to remind you that got the second portion of the of.

These you're giving them for $3 71 per social on July 13th birthday resolution made although.

After our annual shareholders' meeting.

Before I conclude my presentation, I would like to announce that they revised their revised guidance figures for the 'twenty to 'twenty three 2022.

For the property with an increase for 10% to 12%.

For that one out because it got revenue an increase between 13% to 15%.

For the non aeronautical revenue will start to increase between 16% to 18%.

For our total revenue increased from 14% to 16%.

EBITDA between.

12% or 14%.

Margin from 70% plus minus 1%.

Capex because of the wall for all the Geos to 11 9 billion.

Passenger traffic congestion is basic on the consolidation of roofs that are live today.

It also includes increasing load factors and Theyre landslides frequencies on pizza.

With information that is currently in public.

Total radio has kind of been adjusted based on expected changes in traffic performance.

A couple of buffering your speeds.

Cushing problems.

Supreme Petroleum and the Mexican peso appreciation.

Users can now reach them reopening of hemostasis.

The negotiation of contracts, we're entering commercial agreement as well as the development of all their business guns operate great operated directly by the company.

The question the cost of services reflects the operating requirements needed to meet the airport services demand.

You shouldn't do that it reflects infrastructure expansion in service quality improvement I'd have to higher inflation minimum wage increases and additional personnel required for operations maintenance security and cleaning.

Capex reflects committed investments and got their first burden Master development program.

Many commercial spaces.

The person the person talked about quite a lot is moving really quickly and we are at one 7 billion pesos to the original guidance amounted to a total of 3 billion pesos for land acquisition.

At this point that would be for my remarks, I do like the operator to open the floor for your questions.

At this time, if he would like to ask a question. Please press the star and one on your Touchtone phone you may remove yourself from the queue at any time by pressing the pound key well once again that is star and one if you would like to ask the question.

Take our first question from commodity Mendez with J P. Morgan Your line is open.

Good morning, everyone and thank you for taking my question first question is a follow up to the comments on on the guidance. If I may just provide a little bit more color of what is it behind the traffic a update I understand D did those sectors, India, they've still got battery from the airlines just wanted to pick your brains on which regions are performing better to domestic.

Stick.

International or maybe some sort of price on Jamaica going forward and then on the Capex. If it's only related to the land acquisition in Guadalajara, or something something else just to make it clear.

And the second question is related to the expected that's great to category one of the Mexico Aviation agency. So what is the latest on that and what is the company's expectation in terms of the timing for each thank you.

Central to this is our first I will go into the car.

Traffic performance.

We are seeing a really for dressing growth on profit in some airports.

Maryland, palpable now you're talking about.

Some new routes as could be mexicali or whatnot buckle.

One of them, we're saying if you're not willing to asking more men or boosting the domestic traffic for instance in the leisure destination.

So I got that Hum gala.

He for sure in some routes and sugar Ray regions.

That will be more I.

I won't say effective or more in line with the new sharing as could be one of them he cali or even in Bahia in Guadalajara.

We expect that begin to see more domestic truck traffic happening because.

If this trend continues we're asked him.

Better wages better salaries, that's kind of Oh for employment in the region.

We're bringing more money to the public so please.

People are on the shelf. So we went a few more traffic for east cancellation on domestic Crawford flying from one o'clock of Los Cabos for two.

He's kind of Tropic.

We expect to increase due to the fact of better employment in the area that is.

Yeah.

The first part.

Those are the ones that is not completely clear.

How much of a reach trough Oh, how many of these additional frequency.

Well, that's true, but you're going to have an opinion on the on the on your own.

Last month.

We will be fully operating in the future.

All of the categories one could be recovered.

Another one is the other works the other way.

Okay.

Well I'll send you a ruse hybrid fifth.

New planes have increased their sleep well.

They could not put to fly on Internet on Europe .

Mark has got legs. So they are putting that capacity for the moment on domestic market, but one of the things that we're gonna have to change in some way.

Soon that they kept it where are you.

Here's a recovery for Mexico.

I see some kind of shift from song from song with domestic.

Domestic markets.

Two international markets do.

Due to the fact that go lives, we gotta wheels.

Cool.

Could you could that frequency of phone on their future for for the U S market.

According to the category I would say that.

The last visit of the if the Lady on the Jewish authorities to Mexico.

The the oldest progress although in the different observations to the Mexican authority.

I think that we are in the line and we are in the left.

Part of year long process.

We expect that this for the fourth quarter of this year.

The category could be recovered.

Well again, we are talking about public information.

How old they are totally decided companies journeys all day all.

The progress in this process.

For the loss related to the Capex.

The general change on the Capex, we are just adding.

Above our original plans.

So much confusion of land for the Guadalajara Airport.

We are preparing to be a long term reserve over the airport.

Our goal is to have a.

For people.

As it turned out number three on the future uneven.

Demand is there the third the third runway for the for what the specifics are the most important part of that.

Our biggest off it.

We are preserving the value for the future at quite a reserve for four four like Maximo and capacity growth in the coming years, having the long term.

That's Super clear road. Thank you very much have a great day.

Well take our next question from Rodolfo roadmap.

The mouse with Bradesco <unk> your line is open.

Good morning, Thank you for taking my question.

I have a couple if I may.

The first one is oh.

When you think about this faster are recovering profits.

You've seen them.

How does this.

How do you how do you think.

The main variables that you will be discussing with regulators.

But mostly next year as part of your of your on your part of your development plan.

And also having in mind you know the investment requirements that you will need to accommodate that that higher passenger growth.

And then the second one is you talked a little bit about the impact of the Mexican peso appreciation on your commercial revenues.

Can you talk talk us through your thought process on how it can impact your your business side on the iron ore now.

Optical revenues. Thank you.

Thank you Rodolfo.

Zero.

I mean.

For sure the increase of passengers when you put it on projects Jones.

There will be some additional pressure for.

Possible decrease on the maximum time talking to yogurt.

What do you bring these kind of forced the Tropic you will need.

For additional capex.

Additional expenses for forgiving.

For data correct quality service.

Or to go to comply with the quality standards of our.

Concession.

Even that way we have seen the next negotiation of the Master plan.

Completely pay something the methodology.

When the three framework that we have.

We will see.

Important amount of Capex just to catch up then you've got the airport.

Hard to say in terms of the new passenger ropes.

Another important factor that we must.

They're stack is that.

The changes on the fleet not only.

The number of planes that were lagging from Nevada, where she's bringing to them.

Market.

We lost we lost it.

Joe.

The amount of traffic in the future.

Also our effective the peak hours of our terminal efforts of our terminal buildings did is important to understand because they're first time the terminal buildings.

I keep saying burns off peak hours.

And we've got this peak hours is changing really fast you would have thought.

After that the growth of the top.

Of the absolute amount of passengers and then we go a little deeper on that for instance, when we just signed.

A new area for a gate for a for a plane.

We say okay.

Would need.

And fifth a 50 seat.

Isn't it.

Uh huh.

This amount of places where do you do you have a month of spring around the gate.

Is it possibly stuff will get through 'twenty.

We used to have on Alberta.

Plainfield, So hungry about 1500 uncertainty you can coordinate it fits for Brooklyn.

What is happening with the new grew 21 of Veeva.

And while I use that word peak hour changes really fast so.

In the past we used to receiving this fall in the same gate on hungry out 50 lengthy itself there yet.

In the same route in the same hour in the same get too bad we are receiving an eight three 'twenty one or 'twenty.

Plenty of 45, six from Veeva have swung goes out and so that is that completely change.

And how we design our terminal.

Oh for sure for sure for the coming years will need to bring additional investments for growing our out of our terminal so in general terms.

That is what we are thinking in terms of the of the Master plans I know if you will.

About the the impact.

Commercial revenues, yes. Thank you.

So this is all together.

Well the main effect in the commercial.

Okay.

Exchange rate.

The acquisition of their pets always affecting only in our commercial revenues in Mexico is around 12% agreed that consolidation.

Jamaica and airports the the total effect is publicly traded.

The percent of the tour revenues it means that.

And we should be growing 12% more of that 20% of all of that revenue. So what we are expecting is that according to the macroeconomics to headlines and stabilization of the of the exchange rate around 17, 17, 50, and that's moving.

Our our budget, that's why our guidance.

Total revenue is not growing at the same pace of the traffic of the traffic growth that is in general how would be the effect in the commercial and the consolidation of the connectors.

And of course talking about either an uptick in revenues.

Let me tell you that they introduce rice index in Mexico is almost flat if we compare the last 12 months of June 'twenty to 'twenty two the inflation less 9%. If we look at the inflation of the producer price index in that six months.

As of June 23 is <unk>.

Nine so you said defend affecting also the effect of the <unk>.

The Indian Iron ore revenues in general just the effect of.

The exchange rate in their revenues is the consolidation of the Jamaican airports in the other hand, our Mexican airports, we have a fulfillment of 99% of maximum.

Mexican tariff, which benefits in the store and upset.

The decrease even due to the inflation and due to the exchange rate that we are in a generality.

Thank you Phil.

Well take our next question from Anton.

Martin Carter with GBM Your line is open.

Hello, guys. Congratulations on your results and thank you for taking my question I have just some follow ups on the Capex front.

Just hoping to understand the increase in the land acquisition, how much how much sand wash it and is it is all of this related to the.

Well a lot of airports, where it falls under named Pete just trying to understand if it has been already talked with the authorities do something with us in a bunch of investment on the MVP commitments or how does will be treated.

I guess, the only thing that I was.

Yeah.

For sure it was previously.

We received a fairly loose the previews.

I was going to finish off there.

Oh really.

This call will be in advance of the new Master plan.

We have already received the they'll tortilla chips.

We are.

I'm absolutely find acquisition.

They sometimes this is all going to be close to.

250.

First for the airport.

And we are just expecting to finalize the Topco acquisition all of these lands for the end of this year or maybe the first months of the of the of the coming year.

The most important part here you've got all these roundup Christi Shaw is part of the Master plan is already outdoors, we already have the authorization of the of the of the authority on its own.

It's important to say that this land.

We can show.

And with historical.

The problem with that he doesn't support that.

Around the airport that is yes.

Some remember we we weren't in the middle of all of our legal processes for the last 25 years without a single so one of the points that we saw three important new stuff. We are not all the acquired that we set up for the future.

But also we are finalizing all these great mothers are legal insurance would be well supported.

Well I had to.

That's pretty useful thank you.

Just another one of the if you could provide some breakdown on the capex to deploy.

Uh huh.

Mostly on the conventional from.

Well.

Hi, Anthony this is Don.

As we have talked in previous conference calls.

We have a very ambitious program of commercial investments during the year, we will have the mainland business seemed a constriction of the mixed use building in Guadalajara, which is a very important project with 180 rooms of our hotel we have.

More than 5000 square meters of offices.

We have a commercial retail.

We also have the expansion of the parking lot in Guadalajara with more than 2000.

It's basis just in these in these phase two week out with expansion in other airports in terms of the parking lots. So we have also.

And we are opening additional business lines.

Our business is basis for our convenience stores and we are in the expansion of VIP launches. So all these.

The amount will be around $2 3 billion pesos during the year, including some.

Activities in commercial areas in which you are right that we are also adding a space and we are also a leading a rehab rotation of some of some commercial areas. So that's there now.

In the commercial and also just.

Just kind of mind that the MVP in Mexico would be around $5 6 billion during the year. It is the peak of our investment.

Our Master development program, and we will do investments in Jamaica for ground pencils and four four for land will be around 3 billion. If we consider that to the project.

If you remember in the.

The beginning of the year, we're announcing the guidance because as you know Glenn we're around one 2 billion pesos and now we are almost $1 8 billion pesos of additional land.

That's really useful thanks.

Thanks, a lot.

Uh huh.

We will take our next question from Pablo months' debates with Barclays. Your line is open.

Hi.

Thanks for taking my question I'm sorry, he by if you answered this already but just wanted to comment on update on the <unk>.

M D. P agreement wage I mean is there any.

Update on that thank you.

Hi, Pablo.

Well, we we have almost a.

And if you remember we are we have already received from the authorities and notification we are in middle of the find out of the conversation just to try to to have the formalization of the changes in the concession agreement is not yet.

Our Fisher so we cannot.

I'll set it yet but as soon as we have the formal notification from the authorities, we will announce that we have almost <unk>.

The final stage of this of this process a couple of weeks either.

One month, and a half where hyperscale vishal.

The final irresponsible cause the Jamaican authority and so we went up maybe public yes correct.

Great.

If I can squeeze one more question.

On the call.

Operating facility.

As of now.

Can we I mean.

Our operations already.

Normalized I mean, the the increase in fixed expenses are already dilutive with additional passengers or there's.

Still some.

Hmm.

Gotcha process there I mean, what is currently the normalization a timeframe for when these are we already there or we'll do a few quarters away from that thank.

Thank you.

Thank you Paolo I mean integra.

Forgive us if there are perfect for buildings.

<unk>.

We are in some way, but I mean, we went our announcement a couple of months are coming back on November 2nd in November and then they're less well.

In international operations.

Well he's had a great news.

One of the key parts that we need.

To begin to see some also additional international.

<unk>.

Frequencies from what's happening in the in the terminal building on quite a number of new International terminal B why not used.

If they have the they got they only one from from from from the U S government to the Mexican government.

Because some of the routes that we have.

Yeah.

The market is there to begin operations are also.

The euro area, our fault for fall.

Why not put in the U S market could be Oakland and San Francisco.

Yes, that's the most important markets that got enough fair bit from promptly quiet.

Well the key point here is going to be.

The third me all these.

Complete and ready for the operation.

Now to international.

We are seeing the first.

Plain comment on international again in November .

And that as soon as we can tell we're equal would I see them more dynamic of new of new routes on the international area.

All of your partner so.

<unk> said that the.

41, nine not only this puts us all we're building for the old area.

We are really optimistic.

Because that area is growing there's whole economy of employment. So the natural thing that we're gonna fee or the natural the way to see the Cornell.

That means in the midterm would be really interesting growth.

Because.

The population of ALS.

More money in their pockets in this moment Jos.

We are big.

Impact happening already where do you do in fact of the of the New show you need in the area. So I think that if that will come great news from from Tijuana Airport on the midterm and long term of course you.

Great. Thank you guys.

We will take our next question from Stephen Trent with Citi. Your line is now open.

Yeah.

Good morning, gentlemen, and thanks for taking the question.

Just two quick ones for me.

The first question is about your domestic traffic slow have you seen any disruption at all.

And your domestic connectivity with Mexico City Metro area.

It's already started pushing some traffic to Philippe Angeles Airport.

I've always said this.

No Jeff.

Seems that day.

A flag today is too because it actually is.

He's operating in reaching the process or the ramp up for more more opening.

What we are seeing if we see the complete market of.

Mexico Metropolitan area that is Philippe Atlas loss, the Mexico City Airport Blaster Luca Airport.

We've put altogether I would say that increasing the traffic is really.

Low digits.

Around 3% to 4%.

I will see that at least for the moment, we are seeing some kind of gradual shifting for Mexico City Airport.

Two pretty calculus, and even to Toluca so.

<unk>.

But in general terms I would say that's the area.

We need to see it like a hawk three airports.

We have seen that is.

Along with these low digit growth.

In general terms.

Okay. That's that's great. Thanks, very much for that role.

And just one other very quick one.

I mean, a little bit of a follow up to rockdale for almost as question earlier.

When you think about the totality.

Hum.

The movement in that.

Mexican peso against the dollar.

Any high level of sensitivity.

Two Oh, you know, what's the impact on EBIT margin.

For every 1% or 5% move in the peso against the dollar.

Thank you.

I will walk through the seven first in terms of the revenue. We are thinking we are talking about 20% of the total revenues I think subways impact by Dave by the by the appreciation of the peso.

Hey.

In general terms, I will say that it can be expensive.

Expensive type that in some way.

Offset some part.

The biggest part of the of the extensive in Mexico.

Now did you make them for sure but at least 40 for the case of the Mexican airports disbursements are mailing vessels. So we don't really have you lost some kind of upset because one of the question that everyone says okay. If.

Some kind of decrease of revenues due to the to the fixed rate or that person myself, but you've got in some way.

We compensated with some savings.

Oh for <unk>.

Imports or some kind of thing so.

On our services, but the truth is the Dod.

Therefore, it's our daily.

Business really tight on an air force personnel Napoli.

Directly personal wealth gap, but also personnel from a security you for maintaining that for cleaning. So I would say that we are in the middle of a moment, where we have a big impact coming from the reviews of the minimum wage in Mexico.

We think we saw some benefits on holidays.

A better world.

Labor law they below.

These kind of things so what we have seen at least from the company.

At least part of this year or maybe they are coming to Europe , there's some pressure.

Coming from the labor market in our extensive and purpose.

For sure on the on the on the area of the revenues it will depend a lot of what would've happened with their with the Central Bank in Mexico at the rates, we will begin to see some kind of.

Depreciation of the peso coming.

In coming months booked.

I always said that we are just in the middle of that sandwich.

Some way gave us some pressure to the to the margins.

Oh I'm sorry.

Secondly, we have two effects and in fairness when is the date.

Reduced price index affecting aeronautical.

You mentioned, Mexico, Mexico that is offset by the and fulfilling of the maximum tariff.

99%, which is good but in the other hand, we have the application of the peso of around 12% affecting the 20% of our total revenues and as Joe said.

In terms of expenses, we don't have a significant contracts denominated in dollars.

Can say that around 99% of the total expenses in Mexico and denominated in peso. So we don't have any compensated effect.

Okay. That's super helpful. I really appreciate that guys.

Well take our next question from Gabriel Himmelfarb with Scotiabank. Your line is open.

Hi, Thanks for the call just a quick question about cargo.

So that cargo unit.

Over a year. So can you give us a bit of color on why you did.

The decrease and also.

Can you provide us a bit of a color on how much capacity will be added to the deep cut on air.

Airport once the plenty of investment are finished thank you.

Okay.

When it comes to a parallel of you can say.

Cargo is the griffing I mean, mainly the Christian a lot a higher booked.

What is important to understand what is really happening with the categories.

In the cable industry, it's like two kind of self geico wombat as cold wet title.

Drive powerful right now.

Electronics, and this kind of high value.

Recall that.

All right.

And Christine are growing a lot higher.

Due to the near shoring or shopping in the electronic the dynamic of the industry did not make them on there.

In the other hand.

What cargoes that are mainly.

The foods they get the bold flowers need all this kind of production.

Is the question.

But the interesting here is that.

<unk> gone up.

Nick's wet and dry cargo in the same daily.

So what is happening is that all.

Tony I'll have a much higher yield for the cargo airlines.

Yes.

Moving or changing the trend for.

Or offer of other shall offer for four what cargo setting on the other.

What's the total volume on the water higher airport categories decreasing because the value of the cargo is increasing.

So the planes are going fully with electronics.

They are not moving at the same level of fruits and vegetables that juice drop is just I will say I have time for one more.

Until the airport house.

Additional capacity in every channel planes and additional.

It will absorb what category that could not be in the same plane that dry powder.

Got you.

There's things like it happened in a while.

What do you see the arresting gear with jewelry Steve.

When you review the results of the yields of the Carnival eats increasing are you seeing that.

I started California right now.

The value of the cargo in the airport.

In the in our records the value not volume.

But I mean generally playing off of that.

In terms of the Comstock team.

How much of it.

Well the Hunter for primarily the most important part so far.

In capacity during these master plan, usually related with their site because we are putting our own operations the second runway.

Doug will give us around 65% to 70% additional.

Capacity per hour on the on the wrong way.

We also expanded our April for commercial for General Aviation. We also act all day all day.

In the area for hanger.

In the airport.

All these movements of the general aviation hangers.

Through our new land in the in the airport will give us the chance to begin the construction of the Satcom terminal building.

In the coming year.

The idea of the beginning of the construction come in come in here is that the that new terminal will be on operation.

After three years before we.

We began with this construction so we are thinking that.

Around the end of 'twenty six we're going to have the satcom.

Somehow lean operations.

Another part that will bring additional capacity to the airport of La right now you're related with the parking lots in December we will open. The first 2000 additional spots for for the party look that would be a great relief to the.

To the to the area to the experience of our passengers from their book, but also to the commercial the commercial revenue, which is strategic on the passing of today.

Today, we are.

Hungary portion load factors when we talk about the parking lot in Guadalajara, but so these additional 2000, if spot where that gave us the chance to capture additional demand that we are not going to widen out so.

Now it sounds like all the the main.

Capacity that will be added to how long the in the coming months.

Okay, and one peak capacity added that 65, 70% is added how much time will it take to reach such capacity until you have to add even more capacity or how much will that additional capacity be.

Thank you.

Okay I mean.

On jewelry.

Because again it depends on the tower the size of the plane. So there's not many of them buy a whole food to dogs will adopt is not like a plane or flat times worked for Ford Raptor sticking points.

When we have the second runway on operations and we have.

The second terminal the Thermo terminal and number two also operating with both of you.

That's it.

We will not have our own 37 to 40 million passenger capacity.

Is that is that.

An important time.

But to understand that we called it depends on the demand and depends on how fast growth in the coming years the traffic, but the idea is that we will not be really close to your 40 million passengers.

In terms of the capacity when we entered the old the old one.

Brian in date on the economy.

The Master plan.

The other point interesting to understand because.

In some way always is important to remember that.

When do you have.

Because a bigger building or a bigger of April so bigger is better.

Everything wrong with everything.

In the future you will need to see in some moment.

Increases in cost because you have more areas to clean more agents to maintain.

But also on the Capex, because you're going to have bigger weapons.

Repetition of all full capacity on the coming years, because the AC systems equal having an operational seven to 10 years, you will need to change the some of the for instance, the air bridges that path.

Normally operates only 10 years. So the thing is we are.

Funding our capacity.

But that's.

Never gone I mean.

You will not have additional capex.

Or are you saw capex requirement in the future just to have in mind for four four I wouldn't say everybody.

Okay. Thank agreement.

Okay.

We will take our next question from Andre subs in auto with U S. Your line is open.

Yeah.

Hi, Good morning, everyone. Thank you for taking my question have two on my side. The first one is if you could provide an update on how are the constructions of the Michigan state in Midtown Manhattan.

Growing and when can we expect it to be operational and my second question is on the international traffic in our leisure destination. So we are seeing Los cabos and pickup, but I think that last month's tomorrow to flattish to in fact make dropping so I was wondering what is your view.

Behind that thank.

Thank you very much.

Thank you Andrew.

And first in terms of how long.

This is the third the second World War and Godaddy in operations from the first quarter of the coming year.

The hotel the building Norfolk, Southern and mixed use building will be operated in January of the coming true.

The pack in the first stage of the parking lot expansion will be operations also in December of this year.

The tariffs that if biscotti expansion with food and beverage area outside of her for good idea of full operations on November of this year.

And that's I would say that the biggest unfortunately, the new Hungary, Serbia will be fully operating on November <unk>.

This year.

On that subject about the construction working.

For the second one while you're talking with government by Yahoo.

Slight increase on Boston Yours.

I won't give up.

I'll step back for 'twenty and 91.

When we compare for instance may of 2023 versus May of 2019.

An increase of 37% on the amount of seats for the region.

For vote for Cabozantinib.

So that was a completely boost on the capacity.

A study in some way.

Put out a lot of sulfur sulfur airports for one day to another.

In that moment.

Yes.

Mainly it.

Related expertise.

The future for the U S surveys.

Note offering to draw upon to the Caribbean.

In the middle of the Covid crisis.

So they ship a lot of their seats to Mexican Destinational Carlos country.

That give us this week peak or increase on buffers.

So I would say that it's natural to see some rough months.

Until the Destin has shown.

Completely.

Okay.

Yes.

All of these big amount of seats.

I worked for us in other ways.

It's a great news.

That all these studies show a capacity that the Jewish carriers shifting from the Caribbean and Mexico markets.

Still in place to do.

That would be my my.

My My my My My first view I would say we catch it.

Long term.

In the first instance, what I term for a shifting of capacity so what would cause that is.

A couple of slacker months.

Around one year.

We expect to begin to see a game.

An increase.

Sheets capacity and is also related with the hotel.

Kicked capacities.

The room capacity.

On the market.

We will begin to see.

The opening of new.

A hotel development.

E. The fear of dose wholesale at the first quarter of 2025 that will bring them to a big amount of additional <unk>.

Keith all the.

All the new developments.

All the way to a couple of point and what I mean.

The key point here is that the market.

Carlos.

The answer is really healthy in terms of the airlines deals of the hotels.

We will not see gradually.

They should all federal hotels coming into the area that would bring us additional passengers that Mr.

Perfect. Thank you very much.

We will take our next question from Alan Macias with Bank of America. Your line is now open.

Hi, Good morning, and thank you for the call just one question on on your guidance and traffic guidance.

I guess it implies that you're expecting single digits.

Year on year growth in the second half of this year and I just wanted to understand the drivers behind this.

Is it mainly a more challenging comparison base.

Inflation of traffic.

Or are you expecting also a decrease in GDP growth.

And also if you're seeing any any other factor.

A stronger peso.

Making a mexico less attractive for us.

Or any other factors. Thank you.

Thank you.

I almost forgot the first part is the second half or second half.

I hope the gear, we don't have them most.

If you go to a more tough comp comparison basis.

In 2022.

It is important to remember that during the second half of 2022 for you first.

Where's the first month that we begin to see possibly or positive numbers from Guadalajara for instance.

So what are our feet on the second half of the juice is a comparable or more tough comparables.

Tough comps in traffic in general in general the way.

Okay.

Also for sure.

Uh huh.

Some pressure on the winter season, mainly in.

Carlos on imports have I got that.

A related bleeds that Mexico could be used to be a really.

Some kind of extends here I know, there's this to michelle's into Korea for instance, so.

And the last part because we need to see happening.

Yeah.

The additional fleet.

Coming from Veeva or B Riley.

So all things that will be the lever from from B Riley.

We've got a couple more to the end of the year that in the summer.

So you end up all the dynamics of this.

A change or or give her available.

Awesome.

Numbers.

Closer so around.

Seven eight.

Eight four cents for the second.

That's a second half or did you.

I mean does that does it the specific drivers of what would've happened on.

Traffic for the coming months.

Yes, and in terms of.

So we're an island.

In terms of their GDP growth, we do not expect this.

This acceleration on the countries and these stick.

To maintain the performance of the GDP in the first half of the year.

But he has explained the effect on the traffic is up because they're going to be it is because the comps of the previous year.

That's what will be a less attractive for Americans just for sure but we are.

Sure that there's an effect there.

Passenger traffic trends from international not only because the the currency, but also because our second home effect that we have seen in the last years. Many Americans are having.

A second homes.

It is more attractive the beach destinations for Americans in general.

We saw.

Boom of real estate.

Beach destination, so we do not expect any negative effect from the.

A stronger peso.

Okay.

Thank you.

What are the upside risks.

Or traffic.

In your airports.

Are you seeing the Mexico recovering a category one.

So the U S authorities.

Is that.

One thing that could happen this year or.

Or not.

It is what I like that are benefiting from near shoring and if youre seeing that as a medium long term.

Driver.

Thank you.

I mean, it's happening there first.

The best way to see how the new sharing company.

If the backend the backend fee on the industrial Park.

I mean everything that is.

Yes.

Development in peso industrial parks.

Already.

Just by the market.

And it's a big part of the government right now.

And just dropbox hopping.

Really close to the airport in the central area. So we're seeing that the hold and you're showing the effect.

At the beginning and we can see it right now can one company mainly in the electronics manufacturing.

Hey, Doug.

Are they factoring in some of the plants up.

Have been operating in Guadalajara for the last 10 or 20 years.

Expanding their line to stop operations.

For a response there.

Their production so I think that we are seeing it.

Coming months of yourself directly results for the economy of at least.

Yeah.

[noise] category one.

Yeah.

Well there was one.

We were fifth.

The last quarter of this year in terms of the public information of Mexican authorities that it could happen.

At the end of this year.

Yeah.

Thank you.

And once again that is star one if you would like to ask a question, we'll pause for a moment to allow further questions to queue and we will take questions at this time.

Okay.

Hi, Thank you and we have two questions related with the land acquisition.

Pat.

The first one is from Vietnam, or even from Goldman and she was asking and well vis a vis your all Catholics Upsilon acquisition being kind of in the MVP.

Yes.

<unk> included a final thoughts here shown in advance.

For the Master plan coming so we already received the 30 Sunshine and will be count this amount of land acquisition will be count.

The calculus of the new Master plan.

Over the coming months, Thank you Roland and the other one is from Rob what do you see her from Brown advisory.

Let them run for a shade falls into 2024 has there been any changes pertain to any for our Capex plans.

You can expect a similar capex per passenger.

Previously expected in 2023, it is likely for the next time the Piazza.

Yes, we.

I mean, the only main change on the on our Capex plan was related with the with the Alliance acquisition.

We are still seeing for the for the for the Colombian Master plans, a certain level of Capex for.

Per passenger that we have seen on beef.

Thank you very much.

And I believe that this is the last question in the webcast. However, turn back the call to the operator.

And we will take our final question on the line from Fernando Ricotta with BTG. Your line is open.

Hi, Thank you for taking my question a very quick here on land just might actually here in the latest update from them was intention to reform the federal laws.

Congress is expected to resume activities in September so just wanted to hear your updated thoughts on this topic and also if you expect these to bring some impact on the MDT region. Thank you.

Hi, Fernando.

We're starting to see her nothing from the authorities regarding the initiatives changes that were announced last March and we would be looking for where any and changing and as soon as we have more information in any case it affects or has some.

Potentially affecting <unk> two O with physicians, we do.

Some statements, but for now we don't have any additional information they said in April .

For September .

Send it back to the Congress for now we don't have more more information and.

In the case for the next MVP, we do not expect any any change.

The revision of the M b or the maximum tariff determination, but for me, it's pretty clear that regulatory framework is pretty clear they have seen a two hour out of the numbers and we will continue with these proceeds that takes around.

Around two years, so we do not expect any any change on that.

Great. Thank you.

We have no further questions on the line at this time I will turn the program back over to our presenters for any additional or closing remarks.

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

The team remains tough, although with ones, where any question you Mary Haak. Please enjoy the rest of the day. Thank you very much.

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

[music].

Okay.

Okay.

Uh huh.

Yes.

[music].

Okay.

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