Q4 2023 Grupo Aeroportuario del Centro Norte SAB de CV Earnings Call
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<unk> and answer session will follow the formal presentation.
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As a reminder, this conference is being recorded it.
It is now my pleasure to introduce your host Emmanuel Camacho Investor Relations Officer. Thank you you may begin.
Thank you Bill and Hello, everyone welcome to <unk> fourth quarter 2023 earnings Conference call.
[music].
We're delighted to have you join us today as we discuss the company's performance and financial results for the past quarter.
Participating today are CEO Ricardo Duenas CFO of our best view.
Please be reminded that certain statements made during the course of our discussion today may constitute forward looking statements, which are based on current management expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially including factors that may be beyond our control.
Yeah.
And with that I'll turn the call over to the global Williams for his opening remarks.
Thank you Amanda and good morning, everyone. We appreciate your presence on this call today. This morning, Groupon, who will review our annual at 40 operational and financial results and then we will be pleased to answer your questions.
I will start by discussing our full year 2023 highlights and then I will move on to our main fourth quarter results.
<unk> achieved another exceptional financial and operational performance setting New records for the full year 2023, we achieved record breaking results in passenger traffic revenues adjusted EBITDA with an impressive adjusted EBITDA margin of 78, 4% and then consolidated net income.
Our full year performance was propelled by a robust increase in both aeronautical and non aeronautical revenues underpinned by our successful cost control strategy.
During 2023, the airport that contributed most of the growth of passenger traffic was Monterrey, which grew by almost 22% during the year.
Performance of passenger traffic from Monterrey to the Metropolitan area of Mexico City, including Mexico, CD, iPhone and Deluca airports as notable during the year traffic in the market represented 15% of our total passenger traffic and grew collectively by almost 600.
Passengers, an increase of 18% as compared to 2022.
It is also important to highlight the positive performance on routes from Monterrey to Kitted Battle, Camborne, while <unk>, Houston, and the climate, which collectively at almost 700000 passengers in the year and grew by 19%.
As a result of our performance 12 month passenger traffic stood at a new record level of $26 8 million passengers, which represents a 15% growth as compared to 2022.
Regarding our financial performance, our aeronautical and non aeronautical revenues reached again, a record levels in 2023 growing 27% at 18% respectively versus 2022.
As a result, our adjusted EBITDA for the year was $9 1 billion pesos, an increase of 28% and we set a new record of our adjusted EBITDA margin at 78, 4%.
Consolidated net income for the year reached a record of 5 billion pesos and increased by 28% compared to 2022.
In reviewing the significant events over the past year. It is clear that we face both challenges and opportunities. We have remained consistent in our commitment to transparency sustainability and operational excellence.
I think our dedication to generating long term shareholder value.
Throughout 2023, we achieved notable milestones, including the opening in June of wing, one in the Monterrey Airport as part of a major expansion project to enhance our capacity to serve passengers and accommodate growth in the airport.
We also made significant investments in improving and expanding our diversification activities such as the completion of the remodeling of the NH terminal two hotel in Mexico City Airport and the construction of six industrial warehouses at our industrial Park in Monterrey are which we have completed two.
In addition, we opened three new <unk> premium laundry facilities at a peak rate Nossa and <unk> airports.
Furthermore, in 2023, we effectively managed regulatory adjustments as shown by our proactive approach in response to changes in our basis for tariff regulation.
Despite challenges such as Hurricanes that impacted our core airport, we demonstrated agility and determination of ensuring minimal disruption to our operations.
As we move forward, we remain focused on delivering value to our shareholders, while maintaining our commitment to sustainability and operational excellence.
We are aware of the challenges posed by the capacity reductions in aircraft due to the Pratt <unk> Whitney engine recall program affecting two of the most relevant Mexican airlines, however opportunities persists, particularly in terms of near shoring in northern Mexico, and the potential for increased commercial revenue per passenger.
I will now move on to our fourth quarter performance.
OMA delivered.
Another strong financial operational performance in the quarter of 2023 in the fourth quarter of 2023, adjusted EBITDA grew 16% in the quarter to $2 3 billion pesos and adjusted EBITDA margin reached 77.7% largely as a result of the increase in both aeronautical and non aeronautical revenues as well.
As our continuous cost cost cost efficiencies.
In the fourth quarter almost passenger traffic reached $6 8 million, an increase of five 2% versus the fourth quarter of 2000 to.
It is worth noting that excluding Acapulco passenger growth in the quarter was seven 1%.
Outstanding results in the quarter were guided by the performance in Monterrey, which contributed with 996% of walnuts total passenger growth as compared to the fourth quarter of 2002.
The router Monterey that experienced the highest growth in terms of passenger volume work that work to correct that.
Both the quarter and he got leaked ciulla to Luca and Cancun.
Which collectively accounted to 47% of the traffic growth during the quarter and grew by 20%.
Primarily as a result of the strong passenger traffic performance, our aeronautical revenues grew by 13% in the quarter to $2 2 billion pesos.
Commercial revenues increased 14% as compared to the fourth quarter of 'twenty due driven by restaurants parking and VIP lounges.
Our restaurant line item benefit from the operating of new food and beverage shops across the across our airports as we have sought to optimize and increase the revenues from leased commercial space as well as from participation of sales.
Additionally, as part of our strategy to directly operate and renovate our existing all my preview allowance facilities. We have also increased the number of markers available at our airports.
In the fourth quarter of 2003 revenues benefit from three openings that occurred during the year today. We operate 12 bound just in terms of our airports occupancy rate for commercial space stood at 95% at the end of the quarter.
On the diversification front revenues increased 15% OMA cargo contributed most of this growth mainly as a result of an increasing the number of tonnage handled particularly for service related to storage and custody in both ground and air and Port cargo.
In the fourth quarter of 2003 occupancy radar of terminal two NH was 92%, while the Hilton Garden Inn Hotel had an occupancy rate of 68%.
Regarding the industrial park in Monterrey, we have initiated the construction of two new warehouses for 6000 9000 square meters respectively.
These warehouses are projected to begin generating revenues in the second half of 'twenty four.
With the addition of these warehouses the lease there will expand to approximately 131000 square meters, representing 95% of the total leasable capacity of the industrial Park.
On the capital expenditure front total investments in the quarter, including MVP investments major maintenance and strategic investments were 1 billion pesos.
During the quarter some of the most relevant projects. We're working on are the expansion and remodeling of the Monterrey Airport terminal a building as well as the <unk> wireless door Houlihan and Durango terminal buildings.
Reconfiguration of the MISO <unk> terminal buildings.
Major rehabilitation and reconfiguration of platforms and taxi weeks in several airports and construction of for industrial warehouses.
Finally, I'm delighted to share that we have achieved airport carbon accreditation level certification in our 13 airports.
This achievement signifies not only our commitment to reducing our carbon footprint, but also aligning with global sustainability goals goals and maintaining our role as leader of the aviation industry efforts to combat climate change.
Now I'd like to turn the call over to Luca <unk>, who will discuss our financial highlights for the quarter.
Okay.
Thank you Ricardo.
Everyone.
We review our financial results for the quarter and then we will open the call for your questions.
Turning to almost fourth quarter financial results.
Analytical revenues increased 13, 4% relative to Q2, driven primarily by the five 2% increase in passenger traffic and higher revenue per passenger.
Both aeronautical and non aeronautical revenues as well as our continuous cost cuts or cost efficiencies.
In the fourth quarter almost passenger traffic reached $6 8 million, an increase of five 2% versus the fourth quarter of 'twenty two.
<unk> revenues increased 13, 9% with commercial revenues, increasing 14, 3% on the facilities with the highest growth where restaurants car parking VIP lounges and retail.
It is worth noting that excluding Acapulco passenger growth in the quarter was seven 1%.
Outstanding results in the quarter were guided by the performance in Monterrey, which contributed with 996% of walnuts total passenger growth as compared to the fourth quarter of 2002.
Restaurants rose three 8%, mainly due to the opening of our spaces.
Mentioned earlier in the Monterrey, and some people airports as well as higher revenue sharing.
The router Monterey that experienced the highest growth in terms of passenger volume work that work to correct that.
<unk> increased 4% as a result of an increase in passengers and highest penetration in Monterrey San.
Both the quarter and he got leaked ciulla to Luca and Cancun.
So luis potosi until around airports.
VIP lounges increased 45, 6% as a result of increasing passenger traffic and the opening of the Durango launched during the quarter as well as at the peak of Lounge opened in May of 2023, and the Reynosa one opened in August of 2023.
Which collectively accounted to 47% of the traffic growth during the quarter and grew by 20%.
Primarily as a result of the strong passenger traffic performance, our aeronautical revenues grew by 13% in the quarter to $2 2 billion pesos.
Diversification activities increased 14, 9%, mainly due to higher revenues from our Mcdonough.
Commercial revenues increased 14% as compared to the fourth quarter of 'twenty due driven by restaurants parking and VIP lounges.
Our hotel services.
Total.
<unk> revenues grew 13, 5% to $2 9 billion pesos in the quarter.
Restaurant line item benefit from the operating of new food and beverage shops across the across our airports as we have sought to optimize and increase the revenues from leased commercial space as well as from participation of sales.
Structural revenues amounted to 805, new vessels in the fourth quarter.
<unk> of 27% relative to a simple answer over last year as a result of lower MVP investments in the quarter.
Additionally, as part of our strategy to directly operate and renovate our existing all my preview allowance facilities. We have also increased the number of boundaries available at our airports in the fourth quarter of 'twenty three revenues benefit from three openings that occurred during the year today, we operate 12 boundaries in 10 of our airports occupancy rate.
Because of airport services and G&A expense remained flat relative to the fourth quarter to three two.
With a decline in payroll, which decreased 10%, which was offset by an increase in other costs and expenses as a result, primarily of higher information technology expenses in the larger <unk>.
<unk> for commercial space stood at 95% at the end of the quarter.
Also contracted services grew 13, 7% due to the beginning of operations of Woong won the Monterrey Airport and higher unit cost charged by third party service suppliers for cleaning and other services.
On the diversification front revenues increased 15%, while Mackay will contributed most of this growth mainly as a result of an increasing the number of tonnage handled particularly for service related to storage and custody in both ground and air and Port cargo.
Major maintenance provision was $95 in vessels as compared to 41 million versus last year.
Almost fourth quarter adjusted EBITDA was $2 3 billion of vessels and the adjusted EBITDA margin reached 77, 7%.
In the fourth quarter of 2003 occupancy radar of terminal two NH was 92%, while the Hilton Garden Inn Hotel had an occupancy rate of 68%.
Or financing expense was 20.
Regarding the industrial park in Monterrey, we have initiated the construction of two new warehouses for 6000 9000 square meters respectively.
244 million.
Million pesos, mainly due to higher interest expense as a result of additional debt issuance during 2023, and the higher average cost of debt.
These warehouses are projected to begin generating revenues in the second half of 'twenty four.
Consolidated net income was $1 3 billion business in the quarter, an increase of 11% versus four Q3 two.
With the addition of these warehouses the lease there will expand to approximately 131000 square meters, representing 95% of the total leasable capacity of the industrial Park.
Turning to our cash position.
Cash generated from operating activities in the fourth quarter amounted to $1 7 billion vessels and cash at the end of the quarter stood at $2 6 billion doses.
On the capital expenditure front total investments in the quarter, including MVP investments major maintenance and strategic investments were 1 billion pesos.
The end of the quarter total debt amounted to $10 7 billion vessels and we ended the quarter with a <unk> net debt to adjusted EBITDA ratio of 0.9 times.
During the quarter some of the most relevant projects. We're working on are the expansion and remodeling of the Monterrey Airport terminal a building as well as the <unk> wireless door Houlihan and Durango terminal buildings.
This concludes our prepared remarks does fleets to open the call for your questions.
Reconfiguration of the MISO <unk> terminal buildings.
Thank you ladies and gentlemen at this time, we'll be conducting a question and answer session.
A major rehabilitation and reconfiguration of platforms and taxi weeks in several airports and construction of for industrial warehouses.
If you'd like to ask a question you May press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue you.
Finally, I'm delighted to share that we have achieved airport carbon accreditation level certification in our 13 airports.
You May press Star two if you would like to remove your question from the queue.
For the participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
This achievement signifies not only our commitment to reducing our carbon footprint, but also aligning with global sustainability goals goals and maintaining our role as leader of the aviation industry efforts to combat climate change.
Our first question comes from the line of Rodolfo Ramos with Bradesco BBA. Please proceed with your question.
I would now like to turn the call over to Rupert, but as player who will discuss our financial highlights for the quarter.
Thank you good morning, I got a little room for Brian.
Thanks for taking my questions.
Okay.
Two questions on my side.
Thank you Ricardo and good morning, everyone.
The first one is more of a conceptual one I'm just trying to understand.
Briefly review our financial results for the quarter and then we will open the call for your questions.
What to expect from your MVP negotiation with this new tariff regulation and now having seen our suits MBP concluded I mean do you expect that in giving your circumstances in your situation that a similar capex increase would have to happen for you to see a tariff adjustment of that magnitude.
Turning to almost fourth quarter financial results.
Analytical revenues increased 13, 4% relative to Q2, driven primarily by the five 2% increase in passenger traffic and higher revenue per passenger.
<unk> revenues increased 13, 9% with commercial revenues, increasing 14, 3% on the facilities with the highest growth where restaurants car parking VIP lounges and retail.
And whether you see the capex needs at your in your in your airports.
And the current airport infrastructure that you currently have.
<unk> rose three 8%, mainly due to the opening of our spaces.
So that's my first question I have a second one I don't know if I should postpone or.
This was earlier in the Monterrey, and some people airports as well as higher revenue sharing.
Yes. Please.
<unk> increased 10, 4% as a result of an increase in passengers and highest penetration in Monterrey.
The second one is on.
On this private Monterrey northern that airport.
So luis potosi until around airports.
On the military intentions to to operate commercial operations. There. So so we had a conversation with the operation staff, there and they believe they can receive large narrow bodies.
<unk> increased 25, 6% as a result of increase in passenger traffic and the opening of the Durango launched during the quarter as well as at the peak of Lounge opened in May of 2023, and the Reynosa one opened in August of 2023.
Aircrafts.
The approach <unk> don't actually conflict with with your airport.
Diversification activities increased 14, 9%, mainly due to higher revenues from our Mcdonough of hotel services.
When they will certainly made investments on the terminal building side.
A lot of infrastructure investment, but what is your view on this and how could it impact your Monterrey Airport.
Total <unk> revenues grew 13, 5% to $2 9 billion vessels in the quarter.
Construction revenues amounted to 805, new vessels in the fourth quarter, a decrease of 27% relative to a simple act of last year as a result of lower MVP investments in the quarter.
Given the timeline.
Don't know if this is something that perhaps will happen this year, but do you see you.
Are you incorporating this in your the potential impact of this on your on your MVP.
Because of airports surfaces, and G&A expense remained flat relative to the fourth quarter of 'twenty two.
Thank you.
Starting to thank you all for starting with your the second part of a question.
We have do decline payroll, which decreased 10%, which was offset by an increase in other constant expenses as a result, primarily of higher information technology expenses in the larger <unk>.
Nothing official that Hasnt been an announcement most of the headlines actually with one headline until the end of the year was in the context of Mexicana.
Also contracted services grew 13, 7% due to the beginning of operations of wing won the Monterrey Airport and higher unit cost charged by third party service suppliers for cleaning and other services.
But there is no official announcement of a new airport.
Being constructed as you know that have worked well in order to have been there for decades. It has been for private operations. It was taking now bye Savannah.
Major maintenance provision was 95 million vessels as compared to 41 million versus last year.
They would have to extend the runway that would have to build a new terminal there would have to buy acquire additional land.
Almost fourth quarter adjusted EBITDA was $2 3 billion of vessels on the adjusted EBITDA margin reached 77, 7%.
Or financing expense was 22.
There is no budget allocation for an airport at this point in time, so we will be monitoring the situation but.
224 million pesos, mainly due to higher interest expense as a result of additional debt issuance during 2023, and the higher average cost of debt.
Nothing official on that front.
Now the regulatory model allows you to obviously adjust your tariffs accordingly to the traffic that you would eventually lost so that financial returns remain.
Consolidated net income was $1 3 billion presents in the quarter, an increase of 11% versus four Q3 two.
Turning to our cash position.
At the same but it's too early to assess.
We generated from operating activities in the fourth quarter amounted to $1 7 billion vessels and cash at the end of the quarter stood at $2 6 billion versus <unk>.
We generated from operating activities in the fourth quarter amounted to $1 7 billion vessels and cash at the end of the quarter stood at $2 6 billion versus <unk>.
And regarding the MVP.
We're still working it's a two week.
As you know, we're presenting our MVP at the end of next year. So we have failed two years.
At the end of the quarter total debt amounted to $10 7 billion pesos and we ended the quarter with a healthy net debt to adjusted EBITDA ratio of 0.9 times.
<unk> ahead.
We're looking for an optimized capex, we're looking for efficiencies. The fact that <unk> is working very closely with us is going to help us.
This concludes our prepared remarks.
Have a very optimized.
Those fleets to open the call for your questions.
MVP, but we're still working on it and it's too early to give some indication of where we believe it's going to end.
Thank you ladies and gentlemen at this time, we'll be conducting a question and answer session.
If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you.
Thank you I appreciate it.
Okay.
Our next question comes from the line of Jeremy Mendez with J P. Morgan. Please proceed with your question.
You May press Star two if you would like to remove your question from the queue.
For the participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Good morning, and he carload ROFO Manuel Thanks for taking my question. My first question is on the traffic front, so take into account the breath and with the impact from the low cost carriers in Mexico. What is your current base case for terrific performance domestically internationally.
Our first question comes from the line of Rodolfo Ramos with Bradesco BBA. Please proceed with your question.
Thank you good morning, I got a little room for them.
In 2024, and the second question.
Thanks for taking my questions.
Two questions on my side.
Related to the previous one in terms of tariffs. So we saw the discounts implemented during the fourth quarter and the understand is that there shouldn't be any.
The first one is more of a conceptual one I'm just trying to understand.
What to expect from your MVP negotiation with this new tariff regulation and now having seen our sewers MVP concluded I mean do you expect that in giving your circumstances in your situation that a similar capex increase would have to happen for you to see a tariff adjustment of that magnitude.
Price increase in real terms until the next MTBE just wanted to make clear that the it is the case.
Or if you have a room to get closer to the 100% level of your current MTP before 2025. Thank you.
And whether you see.
See the Capex needs at your in your in your airports.
Hi, Jim this is.
Louisville.
And the current airport infrastructure that you currently have.
With respect to tariffs.
In terms of our airports.
So that's my first question I have a second one I don't know if I should postpone or.
The passenger charge we implemented.
Discounts to starting November the first.
Yes. Please.
For the lumber in December.
The second one is on.
In January we apply inflationary increases to all of our targets, including.
On this private Monterrey northern that airport.
Those that were discounted.
On the military intentions to to operate commercial operations. There. So so we had a conversation with the operation staff, there and they believe they can receive large narrow bodies.
Also apply inflationary.
Increases in January of 2025.
We'll have to see what the impact is of the MVP negotiation that we'll have to adjust our targets accordingly.
Aircraft.
Based on that outcome.
The approach route don't actually conflict with with your airport.
With respect to.
Terrific performance.
Renewables certainly made investments on the terminal building side and you know a lot of infrastructure investment, but what is your view on this and how could it impact your Monterrey Airport and if given the timeline you know I don't know if this is something that perhaps it will happen this year, but do you.
2024.
Yes.
Our main airlines are subject to the recalls of Brent the Whitney.
I think the.
Based on what we know at this time and we have little visibility of what the recall calendar was going to be for the rest of the year. At this time, we would be expecting flattish traffic as compared to last year.
C a.
Are you incorporating this in your the potential impact of this on your on your MVP. Thank you.
Starting to thank you all for starting with your the second part of the question. There is nothing official that hasnt been an announcement.
Perfect. Thanks.
Let's see.
Our next question comes from the line of fully by Nielsen with Citi. Please proceed with your question.
So the headline is actually with one headline have been the end of the year within the context of Mexicana.
Hi, guys. Thanks for taking my question.
But there is no official announcement of a new airport.
The first one was already answered or I'll keep on only on the second one.
Are being constructed as you know that have worked well in order to have been there for decades. It has been for private operations. It was taking now bye Savannah.
To what extent do you see government the governments new airline our new foreign Airlines starting to service your airport installations, and how do how do you see that.
They would have to extend the runway that would have to build a new terminal that would have to buy acquire additional land.
Impacting your traffic going forward.
<unk>.
Hi, Philip.
We don't there's no budget allocation for an airport at this point in time, so we will be monitoring the situation but.
At this time the impact has been marginal there are.
Destination certify mexicana planes.
Nothing official on that front now.
Now the regulatory model allows you to obviously adjust.
A couple of silicone therefore.
Monterey and.
Tariffs accordingly to the traffic that you would eventually loss so that financial returns remain.
One destination.
And the trucking embed glass.
At the same but it's too early to assess.
Started operating in the 26th of December So last quarter, there were probably less than 500 passengers in total.
And regarding the MVP.
We're still working it's a two week.
On the.
As you know, we're presenting our MVP at the end of next year. So we have sales two years.
The recovery the numbers are still low.
Not significant but based on their plans for growth and.
<unk> ahead.
We're looking for an optimized capex, we're looking for efficiencies the fact that BG.
The acquisition of new planes.
Become irrelevant there down the road, but at this time, it's little contributions lower operations.
Is working very closely with us is going to help us.
Have a very optimized.
Great. Thank you.
MVP, but it's we're still working on it and it's too early to give some indication of where we believe it's going to end.
Our next question comes from the line of and dress up <unk> with UBS. Please proceed with your question.
Thank you I appreciate it.
Okay.
Okay.
Our next question comes from the line of Jeremy Mendez with Jpmorgan. Please proceed with your question.
Hi.
My name is Nolan and thank you for taking my question. So my first question is just a follow up on the tariff. So you mentioned that.
Good morning, and he Cardona ruefully Manuel Thanks for taking my question. My first question is on the traffic front so take into account the.
He has implemented a free already dean.
Two our discounts in the first quarter, so just trying to understand each other.
Threatened with a impact on the low cost carriers in Mexico. What is your current base case for terrific performance domestically internationally.
The tariffs that were signed in the first quarter.
She does discount for the whole quarter and weekend at Michigan assume yes inflation fell down from there.
During 2024.
And the second question kind of related to the previous one in terms of tariffs. So we saw the discounts implemented during the fourth quarter and the understanding is that it shouldn't be any.
And my second question.
Regarding margins.
I think that the company continues to show a positive.
Since your gains and cost controls.
Price increase in real terms until the next MTBE just wanted to make clear that it is the case or if you have a room to get closer to the 100% level. Okay with current MTP before 2025. Thank you.
What will be our norm.
Expectations for 2024, thank you.
Sure.
Regarding the tariff.
These costs were implemented in November and December.
In general.
Hi, Jim This is <unk>.
On the level of the discount the tariffs we applied the inflationary Inc.
Withheld.
With respect to tariffs.
Increases.
10 of our airports.
The discount we're in 10 of our 13 airports. So it was a 10% discount.
Passenger charge we implemented.
Discounts to starting November the first.
Take away the three airports around eight 9%.
For the number of December.
For the whole Omar and we added inflation as starting January one.
In January we apply inflationary increases to all of our targets include Inc.
Regarding emerging.
Those that were discounted.
Based on our.
Also apply inflationary.
Our current expectation of traffic.
Increases in January of 2025.
We'll have to see what the impact is of the MVP negotiation that we'll have to adjust our targets accordingly.
The inflationary increases the capital just.
<unk>.
Starting January.
Just on that outcome.
The cost.
With respect to.
Cost inflation.
Terrific performance.
<unk> as well.
2024.
Don't see.
An expansion opportunity for next year.
Yes.
Our main airlines are subject to the recalls of Brent the Whitney.
Obviously, there will also be an impact related to the increased consumption tax.
I think the.
But based on what we know at this time and we have little visibility of what the recall calendar was going to be for the rest of the year. At this time, we would be expecting flattish traffic as compared to last year.
Okay.
Our next question comes from the line of Pablo recall D. With Santander. Please proceed with your question.
Hello, everybody and congrats on the results I have two questions.
Perfect. Okay. Many thanks.
I was wondering Tom on dividends I don't know if you can provide some color on what are you expecting for dividend this year.
Let's see.
Our next question comes from the line of fully by Nielsen with Citi. Please proceed with your question.
One is labor costs, we saw a sharp decrease in labor cost I know there was a provision last year, but do you have to understand how should we see labor costs going forward.
Hey, guys. Thanks for taking my question and the first one was already answered or I'll keep on only on the second one.
To what extent do you see government the governments, new airline or new foreign Airlines.
Hi, Pablo.
So with respect to dividends.
Turning to service your airport installations, and how do how do you see that.
We are still assessing the.
Right the Mt.
During the capacity on traffic outlook for the year, we still don't have a proposal, but that should be presented.
Impacting your traffic going forward. Thank you.
Hi, Philip.
Soon at the end of March.
At this time the impact has been marginal.
March where we call for the shareholders meeting.
For April.
Sure.
And with respect to labor cost the levels that you see in the fourth quarter are reflective of the of the Q&A.
Destination certify mexicana planes.
A couple of silicone therefore.
Monterey and.
Levels.
One destination.
We are enduring.
And the trucking embed glass.
On top of that you'll have to us.
It started operating in the 26th of December So last quarter, there were probably less than 500 passengers in total.
Wage adjustments for 2024.
Okay perfect. Thanks.
On the recovery the numbers are still low.
Congrats.
Thank you.
Not significant but based on their plans for growth and.
Our next question comes from the line of Isabela Salazar with GBM. Please proceed with your question.
The acquisition of new planes.
Become irrelevant there down the road, but at this time, it's little contributions lower operations.
Hello. Thank you for taking my question I actually have two.
That's correct. One is I was wondering if you could shed some light on which are frankly quite the contrary.
Great. Thank you.
Our next question comes from the line of and dress up Dorado with UBS. Please proceed with your question.
So at this point.
Okay.
And intended to discount what is the current percentage of the Mexican I'm curious how you are charging derived from that and the second question is.
Okay.
Hi.
My name is Nolan and thank you for taking my question. So my first question is just a follow up on the tariff. So you mentioned that.
Have you had any new initiatives regarding your commercial segment as a new projects in the horizon or anything.
He has implemented a full you're already doing.
Can you repeat it.
Two our discounts in the first quarter, so just trying to understand each audience.
Please your first question, we were not able to completely.
The terrorists have you signed up in the first quarter already confidence discount for the whole quarter.
And our weekend and if you can assume yes inflation felt some jump there.
Hello.
It looks like the NIM it looks like it looks like we lost her so the next question comes from the line of Gabriel <unk>.
And my second question.
Regarding our margins.
<unk> <unk> with Scotiabank. Please proceed with your question.
I think that the company continues to show a positive.
Efficiency gains and cost control.
Hi, good morning.
I will be your margins.
Hum.
The margin expectations for 2024.
About <unk>.
You.
<unk>.
Sure.
Regarding the tariff.
Dominion.
This consumer implemented in November and December.
We cannot.
<unk>.
Italy.
In general.
It's possible if you can get closer to the microphone.
On the level of the discount the tariffs we applied the inflationary Inc.
On the wall.
Increases.
No no.
The discount we're in 10 of our 13 airports. So it was a 10% discount.
Okay.
Okay.
Take away the three airports around eight 9% a quarter.
Okay.
Okay.
For the whole Omar and we added inflation is starting January one.
Okay.
Oh, we lost Gabriel our next question comes from the line of Fernand.
Regarding emerging.
<unk> with BTG Pactual. Please proceed with your question.
Based on our.
Our current expectation of traffic.
Yeah.
Hello.
Oh, the cargo for intermodal I will thank you for taking my question.
The inflationary increases.
But just the <unk>.
My question is more regarding the a S R.
Mentioned that.
Starting January.
Airport, we know that there have been some changes in terms of these laws.
Uh huh.
Cost inflation pressure.
The Airlines also there were some change regarding the fact that you have for me or just.
<unk> is well we don't see.
An expansion opportunity for for next year, obviously, there will also be an impact related to the increased consumption tax.
Wondering how do you see all these changes that have been growing at your park impacting our airport.
That's it from my side. Thank you.
Yeah.
We took production are you talking about for Linda.
Okay.
Okay.
Our next question comes from the line of Pablo recall D. With Santander. Please proceed with your question.
Sure.
The Mexico City International Airport.
Yes.
So.
Hello, everybody and congrats on the results I have two questions. The first one is on dividends I don't believe you can provide some color on what are you expecting for dividend this year.
Yes.
You know a store gains.
In January of this.
This year.
However, the operations were.
Reduced from 53 to 42 per hour.
Second one in terms of labor costs, we saw a sharp decrease in labor cost I know there was a provision last year, what do you have to understand how should we see labor costs going forward.
And that has.
Cost of airlines to seek alternative.
Routes.
The Mexico City.
Hi, Pablo.
Airports and that was that they have shown a decline of 11% in the January numbers.
So with respect to dividends.
We are still assessing the.
Actually in the in the routes core for Omar.
Right the Mt.
During the capacity on traffic outlook for the year, we still don't have a proposal, but that should be presented.
About the 9% decline.
For the month of January and if you include the effects the growth of to Luca and ISR.
Soon at the end of March when we quoted for the shareholders' meeting.
The total metropolitan market for agenda are you asked about.
For April.
And with respect to labor cost the levels that you see in the fourth quarter are reflective of the of the Kulin.
A 2% reduction in January just so most of the of the reduction in the capacity of Mexico City is being captured related to Luca.
Levels.
But we are enduring.
On top of that you'll have to add.
<unk>.
<unk>.
Wage adjustments for 2024.
We also should expect although it's difficult to measure it.
Okay perfect. Thanks.
Some traffic that will be diverted to our Monterrey hub as well.
Congrats.
Thank you.
You are also starting to see an increase in load factors in the Mexico City Airport.
Our next question comes from the line of Isabela Salazar with GBM. Please proceed with your question.
Okay.
Thank you, it's clear and if I may just a follow up on the traffic for Jack you mentioned that you're expecting a flattish.
Hello. Thank you for taking my question I actually have two.
That's correct. One is I was wondering if you could shed some light on what you guys might be a hypothetical.
I'm, sorry pardon me.
But just wondering how do you see the normalization of our cocoa.
Yes.
When should we expect the airport should become positive in terms of the growth trend.
And intended discount what is the current percentage of the Mexican I'm curious that you are charging you like to come back and the second question is when.
We're currently at a point, where operating around 50% of the levels of pre pandemic.
Have you had any new initiatives Youre guiding your combined ratio segment as a new projects in the horizon or anything.
That recovery really garner the patent on the recovery of the city, which is slightly out of our control.
Can you repeat the similar please your first question, we were not able to completely.
The airport is already fully operational.
There is some still some works in the next couple of months, but we're already expecting some international flights coming in May and in June.
Hello.
It looks like it looks like it looks like we lost her so the next question comes from the line of Gabrielle.
But recovered we will have to see how the recovery of the city.
<unk>.
<unk> <unk> with Scotiabank. Please proceed with your question.
Our next question comes from the line of Federico.
Hi, good morning.
Hum.
<unk>. Please proceed with your question.
About an hour.
Yeah.
Hi, guys. Congrats on the results again to two questions quick question more related with Monterrey.
Dominion.
We cannot.
Here you go.
As long as you continue to have the.
Ali.
It's possible if you can get closer to the microphone.
Now at least with the numbers of November December and January were level.
Oh.
In the <unk>.
Paul.
No no.
I'll say at airports in Mexico.
Okay.
Gotcha.
Okay.
Yeah.
Yeah.
We lost we lost you also recall, we can't hear me.
Okay.
Oh, we lost Gabriel our next question comes from the line of Fernand Rich.
Hello.
People don't listen.
Breccia with BTG Pactual. Please proceed with your question.
You can.
How do you view.
Yeah.
Hello.
Alright, and rotorcraft Saturday, but you've heard me now.
Ricardo <unk> for an amount of I will thank you for taking my question.
Yes, now we can hear you.
My question is more regarding the ASM Eric.
Okay perfect perfect. Thank you know youre viewing in Monterrey and per partner they did not the number that we shouldnt be somebody.
Airport, we know that there have been some changes in terms of these laws.
The Airlines also there were some change regarding the passenger fee.
In January in particular.
You're adding particular weakness ablation and Oct, and we'll see that when we see the international.
So just wondering how do you see all these changes that have been going on at the airport impacting our airport.
Traffic continued to grow at double digits.
That's it from my side. Thank you.
Yeah.
So.
We took production are you talking about for Linda.
I think that our Monterey for games and people will continue to be the driver of our results.
The Mexico City International Airport.
Certainly we see a lot of the effects of the near shoring investment.
Yep.
So.
Yes.
You know start gains.
Underlying demand.
In January of this.
This year.
<unk> long term growth.
However, the operations were.
In the short run.
<unk> will have to take into consideration.
Reduced from 53 to 42 per hour.
<unk>.
Maybe.
And that has.
Cost relates to seek alternative.
The result of the PNW.
<unk> W recall, but we do believe that.
Routes.
The Mexico City.
Monterey will continue to be above average the rest of our airports for this year.
Airports announced that they have shown a decline of 11% in the January numbers.
Okay, and the second question and engaging in Montana right.
Actually in the in the routes core for OMA.
After all the new space that letter.
About the 9% decline.
Yeah.
For the month of January and if you include the effects the growth of to Luca and ISR.
The increase in the commercial space or the English for Bcf and the change in category in particular.
What do you expect for this year in the commercial side again, Montana bumpy going on there.
The total metropolitan market for gender or you asked about.
A 2% reduction in January just so most of the of the reduction in the capacity, obviously capacity is being captured related to Luca.
Okay.
So.
In the commercial side.
You'll see the benefit of the newer spaces that are associated to the wing one which was opened in June. So this year, we will have a full year effect of on those.
And.
We also should expect although it's difficult to measure it.
On those new outlets and also as part of our commercial strategy and not all of it.
Some traffic that will be diverted to our Monterrey hub as well.
You are also starting to see an increase in load factors in the Mexico City Airport.
Generally for them and they'll just four months arrays.
We are.
Doing tenders of outlet come to exploration.
Okay.
Thank you, it's clear and if I may just a follow up on the traffic project, you mentioned that you're expecting a flattish.
Appreciate them in better commercial terms are with better proportional of participation of sales. So so we are confident that the commercial revenue per box.
I'm, sorry pardon me.
But just wondering how do you see the normalization of a couple cool theaters when should we expect the airport should become positive in terms of the growth trend.
We'll we'll continue to.
To grow this year and particularly in the case of Monterrey, we'll see.
In the face of the new areas that we are still under construction, probably a certain towards less locked into mid 2025 or beginning of 'twenty six.
We're currently at a point, where operating around 50% of the levels of pre pandemic.
And I mean that you'll finish all the changes that I'm a relation that you did.
That recovery really is going to read the patent on the recovery of the city, which is slightly out of our control the.
And it won't be in place.
<unk> is already fully operational.
That is the reason of medicine.
There is some we're still some works in the next couple of months, but we're already expecting some international flights coming in May and in June.
We are we're expanding the.
We finished the expansion of the one of the bonded warehouses in.
Monterrey, we have.
But recovered we will have to see how the recovery of the city.
Developed for this year and plan to target aggressively in new clients and new new new oil cargo airlines to get to monitor rates. So yes. We are content that literally will also have.
<unk>.
Our next question comes from the line of Federico collapsed.
Lastly, <unk>. Please proceed with your question.
Growth in Canada.
Hi, guys. Congrats on the results again to two questions quick question more related with Monterrey.
Not to the levels over the previous years, but still in the <unk>.
So.
Okay again, thank you and congrats on the results.
As long as you continue to have the.
At least with the numbers of November December and January were level with them.
Thank you.
Our next question comes from the line of Isabela Salazar with GBM. Please proceed with your question.
The <unk> well.
See what airports in Mexico.
Kelsey.
Hello can you hear me I'm, so sorry, my call self care.
Okay.
We lost we lost you also illegal gambling.
Yes, we can hear you.
Right.
That's perfect.
Hello.
Okay. So my question is.
Repeat your question.
You can.
And if you could please.
Okay.
Shed some light unemployed brachia pipe at 10%.
Yeah.
Alright, and rotorcraft Saturday, but you've heard me now.
But taken in <unk>.
Introduced in November.
Yes, now we can hear you.
And from that discount what is the current percentage of the maximum tariff that you are tracking derived from that.
Okay perfect. Thank you know youre viewing in Monterrey and per partner they did not the number that we shouldnt be somebody.
Sure. So so all of the airports have.
In January in particular for directions, adding particular weakness situational and fever, when we see the international.
The decline except for three airports in those three airports, where must learn and see what the nipple in Zacatecas.
Traffic continued to grow at double digits.
<unk>.
For the full year of.
So I think that our Monterey for games that people will continue to be the driver of our results.
2023, we ended at 97, 5% of maximum tariff compliance for the whole of OMA.
Certainly we see a lot of the effects of the Nearshoring investment.
Perfect. Thank you.
Underlying demand.
<unk> long term growth certainly in the short run capacity will have to take into consideration.
There are no further questions in the queue I'd like to hand, the call back to management for closing remarks.
We would like to thank everyone for participating today in today's call. We appreciate your insightful questions engagement and continued support rootworm on island I always available. If you have any further inquiries will require additional information. Thank you once again and have a great day.
Maybe.
The result of the PNW recall, but we do believe that.
Monterey will continues to be above average the rest of our airports for this year.
Okay and the second question.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation.
In Montana right after.
After that all the new space not the latter.
You may disconnect your lines at this time and have a wonderful day.
Yeah.
The increase in the commercial space or the English part of PCF and the change in Glasgow in particular.
What do you expect on PCR in the conventional side again, Montana in particular there.
Okay.
So.
In the commercial side.
You'll see the benefits of all of the newer spaces.
That are associated to the wing, one which was opened in June. So this year, we'll have a full year effect of on those.
On those new outlets.
And also as part of our commercial strategy and not all of it.
Generally for them and they'll just four months arrays.
We are doing.
Doing tenders of outlet come to exploration.
We negotiate them in better commercial terms or was that better proportion of participation of sales. So so we are confident that the commercial revenue per Pax will will continue to.
To grow this year and particularly in the case of Monterrey, we'll see.
In the face of the new areas that we are still under construction, probably a certain towards less of the mid 2025 or beginning of basics.
And in that you'll finish all the changes that I'm a relation that you did.
And it won't be in place.
That isn't the reason of medicine right.
We're expanding the ore.
We finished the expansion of the one of the bonded warehouses in.
Monterrey, we have.
Developed for this year and plan to target aggressively in new clients and new new new oil cargo airlines to get to monitor rates. So so yes, we are a content that luxury will also have.
Growth in Canada not.
Not to the levels over the previous years, but still in the <unk>.
So.
Okay again, thank you and congrats on the better sense.
Thank you.
Our next question comes from the line of Isabela Salazar with GBM. Please proceed with your question.
Hello can you hear me I'm, so sorry, my call health care.
Yes, we can hear you.
That's perfect.
Okay. So my question is.
And if you could please.
Shed some light unbleached brachia pipe at 10%.
So that they can and introduced in November.
And from that discount what is the current percentage of the maximum tariff that you are tracking right in that.
Sure. So so all of the airports had.
The decline except for three airports in those three airports, where must learn and see what the nipple in Zacatecas.
<unk>.
For the full year of.
2023, we ended at 97, 5% of maximum tariff compliance for the whole of OMA.
Perfect. Thank you.
There are no further questions in the queue I'd like to hand, the call back to management for closing remarks.
We would like to thank everyone for participating today in today's call. We appreciate your insightful questions engagement and continued support rootworm on island I always available should you have any further inquiries and require additional information. Thank you once again and have a great day.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation.
You may disconnect your lines at this time and have a wonderful day.