Q4 2023 Grupo Aeroportuario del Sureste SAB de CV Earnings Call
Operator: Sponsored ADR Class B Good day, ladies and gentlemen, and welcome to SULR's fourth quarter 2023 results conference. My name is Doug, and I'll be your operator. At this time, all participants are on a list of... We will conduct a question and answer session towards the end of today's conference. If you'd like to ask a question, please press star 1. We'd like to withdraw your question at a start. If you are using a speakerphone, please lift the handset before making a selection.
Yeah.
Good day, ladies and gentlemen, and welcome to our source fourth quarter 2023 results conference call.
My name is Doug and I'll be your operator.
At this time all participants are in a listen only mode. We will conduct a question and answer session towards the end of todays conference if you'd like to ask a question. Please press star one.
If you'd like to withdraw your question at any time, Please press star two if.
You're using a speaker phone please lift the handset before making a selection.
Operator: As a reminder, today's call is being held. Now I'd like to turn the call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead.
As a reminder, today's call is being recorded now I'd like to turn the call over to Mr. Adolfo Castro Chief Executive Officer. Please go ahead Sir.
Adolfo Castro: Thank you, Doug. And good morning, everyone. Before I begin discussing our results, let me remind you that certain statements made during this call may constitute forward-looking statements that are based on current management expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially, including factors that may be beyond our company's control. Useful additional details about our quarterly results can be found in our press release, which was issued yesterday after markets closed, and is available on our website in the Better Relations Sector. Before getting into the discussion of the quarterly results, let me start today's call with a recap of recent developments. A significant milestone for the quarter was the December 2023 approval of the 2024-2028 mass development plan for our Mexican airport.
Thank you Bill.
Good morning, everyone before I begin discussing our results, let me remind you that certain statements.
During this call may constitute forward looking statements, which are based on current management expectations and beliefs.
And then subject to considerable risk and uncertainty.
So two because materially.
Factors that can be beyond our company's control.
Factors that can be beyond our company's control.
Are you some additional details about our quarterly results.
Can be found in our press release, which was issued yesterday after market close.
On our website for at least one sector.
Following my presentation I would be available for Q&A.
Before getting into a discussion of the quarterly results. Let me start today's call with a recap of what we just did.
Governments.
A significant milestone for the quarter what December 2020 for me.
'twenty 'twenty four 'twenty eight micron settlement.
Well in Mexico.
Adolfo Castro: This approval occurred under the government's new regulations and increase of the concession fee to 9% from 5% of total gross revenues, starting from January 3rd of this year. Some key highlights of the new MDP include: The efficiency factor used to analyze jobs; the maximum time is increased from Season 4 A, 2.72, and 0.8 in the prior MVP. The methodology to calculate the discount rate is now based on the weighted average cost of capital compared to the cost of equity before.
You said proven procured under the government's new regulations and the increase of the completion of 9% from the Barclays Center.
Those revenues.
Starting from January.
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Some key highlights of the new MVP.
The efficiency factor used annually it jumped the Mexican tiny increase from <unk>.
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Seven eight.
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The prior MVP.
The methodology to calculate the discount there if you can update on the weighted average cost of capital.
Costa Verde with you before.
Adolfo Castro: The new MDP 2024-2028 also calls for a total capex commitment of $28.5 billion in December 2022 terms for the five-year period. Of this five-year capex, 75%, equivalent to 21 billion pesos, or approximately $1.4 billion, will be invested at Cancun Airport. 70% of which would be allocated to expansion work. Key projects include the second phase of the expansion of the International Terminal 4, which includes additional four boarding gates that have been delayed due to the pandemic. And you've worked connecting the terminals to the major trains.
Then you MVP 'twenty 'twenty four 'twenty 'twenty also calls for total Capex commitment.
28, 5 billion measure in December 2022 patents.
For the five year period.
These five year Capex, 75% to Q2, 'twenty 1 billion passenger approximately $1 billion will be invested.
Okay from the airport.
70% of which we will be allocated to expansion works.
Key projects include the second phase of the expansion will be the natural born.
Which includes additional full board engaged capital.
Due to the pandemic.
And you won't connecting the Permian wants to get trained.
We also plan to appeal.
Adolfo Castro: We also plan to rebuild and expand Terminal 1, as well as to expand Airport Road. This investment supports a new growth phase for Cancun in the years ahead. The remaining 25% will be allocated across our eight smaller airports in Mexico, with approximately 7% allocated to Oaxaca, where we plan to reconstruct and expand the terminal building. Finally, minor terminal expansions at 4 of VLS.
Just have one.
As well to expand the airport groups.
These investments support our new route based footprint.
Three years ago.
The remaining 25% will be allocated across our eight just wonder airports in Mexico.
We had approximately 7% that's great it dwarfs what.
We plan to records.
An expanded building.
Finally minor tenant expenses at Ford.
Hello.
Adolfo Castro: For 2024, we plan to invest a total of 3.5 billion pesos, 73% of which will be invested in Cancun. Also note that the new MDP rebalances the impact of the recent opening of Tulum Airport. At the end of the year with a 98.2% maximum tariff compliance, which includes the effect of the 10% passenger fee discount granted during November and December as a result of the agreement reached with the Mexican government. During the quarter, we concluded negotiations with our strategic partner, ETA, March 8. Starting January 2024, the technical assistance fees have been reduced to 2.5% from 5% of the EVDA generated by Mexican operations. On December 21st of last year, the Supreme Court of Justice rejected the appeal filed by Aeropuerto Internacional Bávaro against a judgment that suspended the permit to start construction previously issued by the Civil Aviation Unit. More recently, on January 5th, the President of the Dominican Republic issued a decree cancelling the previous decree issued by the previous president, which had approved the establishment of Babor International Airport. On January 19th, an appeal for constitutional review was brought before the Constitutional Court against the Supreme Court of Justice, notified in December last year, on the Sustainability Front.
For 2024, we plan to invest a total of $3 5 billion.
73.
3% of which will be impacted.
Also note the opinion MTBE rebalanced the impact of the recent openings.
Yeah.
We ended the year with a 98, 2% in Mexican tax compliance, which includes the effect of the 10% passenger fee discounts granted during November and December and that shows the victory to reach with the Mexican government.
You had this quarter, we completed negotiations with strategic partner.
Bike week, starting January 2024.
Let's see.
Four 5%.
5%.
EBITDA generation and Mexican operations.
We just didn't 21st of last year. The Supreme Court of Justice rejected the appeal Slide you had up would've been progressing our bimodal.
Okay judgment, that's intended to permit to start construction.
Disney issued by the <unk>.
Recently, Jeremy the peak.
The breadth of Dominican Republic issued decree canceling the previously issued guidance previous precedent, which had approved the establishment of the national airports.
January 19th and appeal for Constitution review was Bob.
Before the constitutional Court I guess at the Supreme Court of Justice.
Goodbye.
Yeah.
So it's the mobility from during the fourth quarter, we completed the installation of solar partners.
Adolfo Castro: During the fourth quarter, we completed the installation of solar panels in the airports of Tapachula and Huatulco, which will generate a combined output of 1.5 million kilowatt hours in the first year of operation. These, in addition to the solar panel projects already completed in the airports of Cancun, Mérida, and Oaxaca, will generate a total of nearly 132,000 kilowatt hours of solar energy during As part of our continued sustainability efforts, our airports in Mexico renewed their certification at level 2 under the Airport Capital Accreditation Program. This program is organized by the Airport Council International to provide a framework for measuring, reducing, and compensating cargo emissions. Also, in the fourth quarter, we became signatories of the science... based on its initiative with the goal of establishing a roadmap to achieve zero emissions by 2050. Among the community projects we were involved in, we provided support to promote ecological tourism activities in the Malian-speaking rural communities in the northern region of the state of Yucatán. Locals are provided with training and equipment to supplement their income from traditional fishing activities.
In the airports.
We'll generate the combined outlook, the $1 5 million kilowatt hours.
Yeah.
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In addition to the solar panel projects already completed key airports.
Okay.
We generated a total.
432 times.
You know what ours.
Energy during the fourth quarter.
As part of our continued WPZ efforts.
Airports in Mexico to renew their certification of collateral under the airport capital Great patient program.
These programs are organized like airport.
To provide a framework for measuring reducing and compensating nishu.
Also in the fourth quarter, we began seeing the toys.
Science.
They started with it.
All of establishing a roadmap to achieve.
Zero emissions by 2000.
And among the community projects.
Well, we provided support to promote ecological tourism activities, even imagine speaking the world communities.
North of breaching of what they do.
Locals have provided you with training and we've been disciplined in their income from traditional fishing activity.
Adolfo Castro: By the close of 2023, 49 tourist sites with approximately 100 economic dependents were provided with training, and we intend to scale up these activities to additional communities in 2024. We plan to publish our 2023 Annual Sustainability Report next month and encourage you to read it. Let's review Azusa's operational and financial performance for the quarter. As usual, all the comparisons discussed will be here. Castro, are you there?
Close of 2023, 49 guidance with it to meet them.
Approximately 100 economy dependent we're providing training and we intend to scale up.
Two additional communities in 2024.
We plan to publish our 2023.
And the ability to report next month.
George you to read it.
Interviews with the operational and financial performance for the quarter.
As usual all comparison these costs would be.
Mr. Castro are you there.
Okay.
Operator: One moment, ladies and gentlemen. It appears that we have lost Mr. Castro. I'm going to try and re... Transcript by Rev.com Page of, Sponsored ADR Class B. Thank you for joining our dofflecast. Thank you, Doug.
One moment, ladies and gentlemen, it appears that we have lost Mr. Castro I'm going to try and reconnect.
[music].
Yeah.
Rejoining held off on Katz Sheryl.
Thank you for the electorate views towards operational and financial performance for the quarter.
Adolfo Castro: Let's review Azusa's operational and financial performance for the quarter. As usual, all comparisons in this course will be year-on-year unless specified otherwise. Starting with traffic, we saw nearly 18 million passengers travel across our airport network, the highest level for a fourth quarter.
Passing this club will be year on year unless specified otherwise.
And starting with traffic, which drove nearly 18 million passengers traveling there somewhere airport network.
The highest level for fourth quarter.
Adolfo Castro: Even at the growth rate, this accelerated to 1%, totaling over 70 million passes, with an annual increase of 10% in Mexico, 18% in Puerto Rico, and partially offset by a decline of nearly 10% in Colombia. Looking at the quarterly performance per region, Puerto Rico delivered the strongest growth, with traffic up nearly 13% driven by a solid performance in both domestic and international traffic. In Mexico, traffic increased 4%, supported by a low single-digit growth in domestic and international taxes; traffic to and from the United States and Canada remains the key growth engine. While domestic traffic is increasing, the initial effects are threatened with new engine problems.
Even at the crude rate basis generated 1%.
Total traffic for the year.
Hi.
Over 70 million passengers with an annual increase of 10% in Mexico.
18% to 30, cool and partially offset by a decline of 10% in Colombia.
Looking at quarterly performance by region, but the Rico delivered the strongest growth with traffic.
Nearly 13% driven by solid performance in both domestic and international traffic.
In Mexico traffic increased 4% supported by a low single digit growth in domestic and international passengers.
Traffic to and from the United States, and Canada remains a key growth engine while the.
Domestic traffic is explains the insurance sector.
And Jamie Feldman.
Adolfo Castro: Also, not working, as from January the 8th, Mexico City Airport reduced its air traffic movements per hour to 43 from 52. This airport accounted for 45% of the domestic passenger traffic in 2023, and it is also expected to negatively impact domestic traffic this year. Additionally, the strength of the Mexican pesto has been impacting results for the quarter. Lastly, Colombia posted a 13% decline in traffic, and domestic travel remained impacted by the suspension of two local airlines in February of last year.
Not working as from January.
The Mexico City airport reduce truck air traffic movements per hour.
43.
Easter accounted for 45% of the domestic passenger traffic in 2023.
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Additionally, the strength of the Mexican peso has been impacting results for the quarter.
Lastly, Colombia posted a 13% decline in traffic.
Domestic travel remain impacted by the suspension.
Airlines in February of last year.
Adolfo Castro: Partially offset by a 2% increase in international travel. Recall that these two airlines accounted for 20% of our traffic in Colombia in 2022. Adianca and Latan Airlines have been absorbing some of that traffic starting this May. In March, we expect to start seeing a recovery of traffic, building permits. Announce learning to the TNN as a reminder or reference to revenues and costs excluding construction and code revenues. Total revenues increased nearly 5% to just over 6 billion pesos in the fourth quarter. As well, the Mexican Columbia was partially upset by a weaker performance in Puerto Rico due to the exchange. Mexico, which accounted for 74% of the revenues, posted a 36% increase in the top line. Driven by the need to see high single-digit growth with our renautical services up 5% and non-renautical services increasing 7%, may be reflecting higher passenger traffic. Puerto Rico, which accounted for 14% of total revenues, reported a 1% decline in revenues mainly due to a 4% decrease in aeronautical revenues, partially offset by a 2% increase in commercial revenues.
Partially offset by a 2% increase in international travel.
Both of these two earnings accounted for 20% of all drugs Columbia important.
Uh huh.
Things have been absorbing some of that traffic.
Starting this march.
To start seeing a recovery traffic.
It will be prolonged.
Now turning to the P&L.
A reminder, on record revenues in school.
Chemical drippings.
Total revenues increased nearly 5% to just.
Over 6 billion persons in the fourth quarter.
This will be Mexico, Colombia was partially offset by weaker performance in Puerto Rico due to the exchange rate.
Mexico, which accounted for 74% of the revenue posted a 6% decrease in the top line.
Even by me.
Single digit growth.
This is up 5%.
Good service increasing 7%.
Mainly.
Reflecting higher passenger traffic.
With the recall, which accounted for 14% of total revenues reported a 1% decline in revenue mainly due to the 4% decrease.
Revenues, partially offset by a 2% increase in commissions.
Adolfo Castro: Lastly, Colombia, which represented 11% of revenues, posted a mid-single-digit top-line increase, supported by the growth of 3% in aeronautical revenues and 8% in non-aeronautical services. Reflecting our sustained focus on expanding our commercial offering across our airport network, commercial revenues were up 70%, above the 1% increase in passenger traffic, driven by the high single-digit increases in Mexico and Colombia, both up 8%. Together, we were 3% exclusively Puerto Rican.
Lastly, Colombia, which represented 11% of revenue.
Most of the mid single digit topline increase.
Posted by the growth of 3%.
Revenue and 8%.
Guest services.
Reflected reflecting our sustained.
We've been expanding our conventional operating across our airport to airport commercial revenues were up 7% above the 1% increase in passenger traffic driven.
Driven by the high single digit increases in Mexico and Colombia.
Up 8%.
Together with a 3% growth.
Adolfo Castro: On a per passenger basis, commercial revenues reached $119,000, of 6% on a consolidated basis. And good news, in Mexico and Colombia, commercial revenues per passenger increased 4% and 20% respectively, while Puerto Rico decreased nearly 9%. In Lafayette County, Puerto Rico, and Colombia posted increases in commercial revenues of $15.2 and $1.2, and in commercial revenues per passenger of approximately $2.4 and $19.1, respectively. These increases partially reflect our initiatives to continue enhancing the passenger travel experience. These include the opening of 65 new commercial spaces across our airport network during the last 12 months. Of these, 17 were opened in Mexico, 4 in Puerto Rico, and 44 in Colombia. Comparable consolidated EDA, excluding other non-recurring income in the year-ago quarter, increased 1% to 4.1 billion pesos.
On a per passenger basis commercial revenue reached 190 basis.
6% on a consolidated basis.
Country, Mexico, Colombia, commercial revenues per passenger increased 4% and 20% respectively.
We're pretty good at nearly 9%.
In local currency.
Colombia posted increases in commercial revenues.
15.2 and one.
And in commercial revenues the passenger of approximately 2.4 19.1, respectively.
This increase is partially the drink or initiatives to continue to change the passenger travel experience. These include the opening of Dupont's, New convention space are central to our airport network.
During the last 12 months obese 17.
Opening in Mexico.
Great.
44 in Colombia.
Comparable consolidated EBITDA, excluding all the nonrecurring income in the year ago quarter.
1% to $4 1 billion pesos.
Adolfo Castro: Recall that the fourth quarter 2022 results included a one-time hour income of 300 million pesos in Puerto Rico in connection with a federal judgment in connection with the right to charge a fee for each gallon of aviation fuel dispatched at the airport between 2013 and 2021. Mexico remains the main driver of profitability, with EVDA up 5% for West Puerto Rico with a 1% comparable increase. By contrast, Colombia posted a 23% drop in EVDA, impacted by disrupted passenger traffic.
Recall that the fourth quarter.
Results included a onetime other income of 300 Panthers in Puerto Rico in connection with the private bank.
Judgment in connection with the right to charge a fee for each gallon of aviation.
These factors the airport between 2013 in 2021.
Mexico remains the main driver.
With EBITDA up 1%.
With 1% comparable increase excellent Colombia posted a 23% drop in EBITDA.
Despite the softer passenger traffic.
Adolfo Castro: In turn, Compatible Adjusted EVM Margin, which excludes construction as well as other non-recurring income in Q4 2022, was nearly 68 versus a 20% Compatible margin in Q4 2022. Last, moving on to the balance sheet, we close the year with a strong cash position of nearly 16 billion pesos and a negative leverage ratio of 0.2 percent, 0.2 times. Wrapping up, we'll finish 2023 on a very solid note, which we believe puts us on a solid path going into 2024 and 2025. Our long-term opportunities, supported by our ongoing investments to further enhance the travel experience of passengers traveling to our airports, continue to expand our commercial offerings and extend capacity to support future growth while maintaining a balanced use of cash. This ends my presentation. Dogs, please open the floor for questions.
Hum.
Comparable adjusted EBITDA margin, which excludes construction as well as the.
Other non recurring income in the fourth quarter was nearly 68 branches are compatible.
St Maarten Jager fourth quarter 2022.
Moving on to the balance sheet, we closed the year with a strong cash position of nearly 16 billion passengers and then Megan treat your obviously your point to your 0.2 times.
Wrapping up we finished 2023 on three.
Note, which we believe put us on a solid path going into 2024, and 2025, our long term opportunity to support it.
Our ongoing investments to further and kids.
It's been said passengers traveling through our airports.
Continuing to expand our commercial offerings and extend conducted to support future growth, while maintaining a balanced use of cash.
This ends my presentation.
Open the door for questions.
Thank you ladies and gentlemen at this time, we'll be conducting a question and answer session. If.
If you'd like to ask a question you May press star one on your telephone keypad.
Operator: Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star 1 on your telephone. Kate, you're live.
Information tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the starkey.
Operator: Star 2, Our first. 1. Modesto BBI. Please proceed with your questions. Hello, good morning, everybody.
Our first question comes from the line of Juan pumps with Bradesco.
Please proceed with your question.
And I'll call them wanting everybody. Thanks for taking my question. So I have two questions one on traffic and the other one on expenses.
Modesto BBI: Thanks for taking my question. So I have two questions, one on traffic and the other one on expenses. On traffic, how much of an impact are you seeing in domestic traffic from this Pratt & Whitney? Inspection Schedule. We just saw Borales say that they secured additional capacity for the impact. So what are you seeing on the ground?
On traffic.
How much of an impact are you seeing in domestic traffic from this patent with the inspection schedule, but we just saw bodies say that they secured additional capacity to compensate for the impact. So so what what are you seeing on the ground how much if you can quantify the impact that youre seeing.
Adolfo Castro: How much? If you can quantify the impact that you're seeing for domestic traffic in Mexico, that would be great. And then my second question would be on operating expenses. We did see them go up more than expected this quarter. I just wanted to get some more color on where you're seeing the margin for this. Good morning.
Domestic traffic in Mexico that would be great and then my second question would be on on operating expenses, we did see them.
Go up more than expected this quarter.
Just wanted to get some more color on where youre, where youre seeing the margin.
For this year, thank you very much.
Hi, Good morning. Thank you for your question as well in the Kiss of death in the <unk> setting the Mishopin box youre seeing at weaker.
Adolfo Castro: Thank you for your questions. Well, in the case of Captain Whitney, as I said in my initial remarks, we are seeing a weaker passenger traffic on the domestic side. How can we measure this?
Passenger traffic from the demand side.
Hey, how can we measure it is it's very clear when we see offered seats and what we see.
The load factor.
Very clear for me that one that has had some prepaid load factor and then the yields have increased their rates.
Adolfo Castro: It's very clear when we see upward seats and when we see the increase in the load factor. It's very clear to me that Bollardes has increased their growth factor, and they have also increased their rate. And, of course... The other thing that is extremely important from now on, from January 8th, is what I just mentioned in the case of Mexico City. The case of Mexico City, reducing their air traffic limits per hour from 52 to 43, and, of course, that is also having an impact on our passenger traffic. These both things, I believe, will be seen during the first quarter of this year. In terms of expenses, well, the main increase in expenses was coming from Colombia, and in that sense, it was due to increasing salaries.
And of course.
Is creating less amount of passengers indication domestic that is lumpy piece of feedback so all indications veeva.
We're able to increase the younger seats and also the increase in passenger traffic, if we're not able to offset the decrease.
The only thing that is extremely important from now on from Jonathan.
He is what I just mentioned in the case of Mexico City.
The case of Mexico city, reducing their air traffic moves, but I went from 52 to 43.
And of course that is having.
Also an impact on our passenger traffic. These both things I believe would be seen during the first quarter. This year.
In terms of expenses well the main effects are the main increase in expenses was.
From Colombia.
In that sense it was due to an increase in salaries.
Adolfo Castro: We adjusted salaries, thinking that we were not... That is why the increase in the case of Colombia is so strong. But, of course, together with the passenger traffic decrease, the results in Colombia don't look good.
We adjusted salaries being that we were not.
Doing all that we stop doing because of the situation.
That is why the increase in the patient.
So Colombia is so strong.
But of course together with passenger traffic decrease the resorts in Colombia.
Yes.
What what I hope is that this year with the <unk>.
Adolfo Castro: What I hope is that this year, with the end of this situation with the two airlines, as from March, we will see different situations. You got it, very clear. Monsivais, Whitbark, Hi Alberto, thanks for taking my question. The first one is if you can provide the amount for each project that you have in mind. 1.
And the situation with that.
Florida in just four months.
C defensive.
Yeah.
Got it very clear thank you.
Our next question comes from the line of Pablo <unk> with Barclays. Please proceed with your question.
Hi, Thanks for taking my question I have two on my side.
First one is if you can.
Can provide.
For on each project.
It's certainly not one.
Adolfo Castro: And also, my second question, I heard you say something about the Dominican Republic, but if you can tell us again... What's the update there? Well, in the case of the project, as I said, $21 billion, it can cool in 70% of direct expansion projects. Those expansion projects are the expansion of Terminal 4, which will add the four additional gates that were not completed during COVID-19. By March 2021, the delay in CAPEX or the performance in CAPEX will be nearly two billion times. Also, in the case of Cancun, we will reconstruct and expand Terminal 1. Those are the three major projects in terms of terminal expansions plus the additional connection to the minor train and the road to the airport. In the case of the airports in the Latin Republic, the situation is... that are legal, that was a legal process that stopped the beginning of the construction. And that was confirmed in December, December 16 last year.
Our division on page.
And also my second question I heard you say something about that.
But if you've got a it sounds like.
What's the update there thank you.
And then the pizza.
Got it.
As I said 21 21 billion as it's been more than 70% of that is expressing projects.
Those expansion projects are lumpy.
The fact that for which we've been at that for additional gains that were not completed in copied if you go back to wants to anything.
The delay in Capex or the woman Capex wasn't really competing pencils.
Also in the patient.
We will mix reconstructing spend coming out of the one.
Don't have a clean electric projects pencil expansions draws. The addition in connection within like a train.
The votes to be airport.
In the kitchen.
Airports in Dominican Republic depletion is.
Dan on the legality of what the legal process and.
I stopped at the beginning of the construction.
And that has been confirmed.
In December.
December 16 last year.
Adolfo Castro: Also, on top of that, the president issued a decree cancelling the previous decree that was issued by the previous president authorizing the airport. We have presented legal recourses for both things, and we will have to wait and see what... What is the outcome of these legal processes, but it's clear for me that the project has been put on hold, at least for the next 12 months. Thank you very much. You're welcome. Our next question comes from the line of Anton Morton-Cotter.
Also on top of that.
The precedent issue of degree.
To me the previews.
That was the issue by the previous President Actualizing the airport.
We have presented legal recourses.
Good thing and.
We will have to wait and see what.
And what.
What is the outcome of these pumps since it's been clear to me that the project has been put on hold at least for the next 12 months.
Okay. Thank you very much.
Youre welcome.
Our next question comes from the line of Anton Morton Cotter with GBM. Please proceed with your question.
Adolfo Castro: Sponsored by the U.S. Department of Transportation. Hi Adolfo, thank you for taking my question and congratulations on your results. I just have a quick one: any thoughts about capital allocation, maybe an extraordinary dividend or maybe some buybacks now also considering the potential savings from the reduction in the technical assistance? Well, it's two different things.
Hi, Adolfo. Thank you for taking my question and congrats on the results I just have a quick one.
And it talks about our capital allocation, maybe on the stores not a dividend or maybe some buybacks now also considering the potential savings from the reduction in debt and the technical assistance.
Well, it's two different things one is the case, so whenever the capital allocation.
Adolfo Castro: One is the case of capital allocation. We will review this once we have completed, we have finished the year, and we will review the results and the current situation, the future capex tax, and all of that, and we will make our proposal to the board of directors, which will have a meeting in the first week of March, and then to the shareholders' assembly. In the case of the technical assistance fee, it was in accordance with what we received from the Mexican government during the negotiation process. So basically, we were able to negotiate with ETA a 50% reduction in the fee. Sorry, just to know, see if I hear you right.
We will do is once we have completed.
Okay.
Yeah, and we will review the results in the current situation the future Capex tax and all of that.
And we would make our propulsion can vote directors that.
I have a meeting because we took March then the shareholders' assembly.
The case of the thinking at this point.
We then that it was in accordance stuff what we.
We see from the Mexican government during the legislation process. So basically we were able to negotiate with.
The adjustment in the feed by 50% reduction.
Oh, sorry, I just didn't know I'll see if I heard you right. So the the reduction in the technical assistance fee was something that was also discussed with the Mexican authorities and incorporating them the pit.
Adolfo Castro: So the reduction in the technical assistance fee was something that was also discussed with the Mexican authorities and incorporated in the MDP? for the Mexican authorities in their new rules. They've reflected a reduction in the recognition of the Angelosistas, and that is why we have to negotiate with each other.
Well the Mexican authorities.
Are there new rooms, they've reflected that'd be adoption in the recognition.
So that is why we have condensate with it.
Yeah.
Yes.
Okay. Thanks.
Adolfo Castro: Okay, thanks. You're welcome. Our next question. Line of Ungrasso Verrato with UBS. Hi Adolfo, thank you for taking my question. I have two questions on my side. The first one is: how is the implementation of the new maximum tariff going so far? If you can provide maybe a timeline that you are expecting to reach the maximum tariff, and I have a question about Colombia, where we saw a passenger drop but an expansion in both aeronautical tariffs and non-aeronautical revenue per passenger.
Youre welcome.
Our next question comes from the line of <unk> with UBS. Please proceed with your question.
Okay.
Hi, Hello. Thank you for taking my question I have two questions on my side. The first one is on.
And how hobby implementation of the then your maximum Calvin is going so far you can provide to them.
Mcgee a timeline that you are expecting to reach that the maximum tariffs.
And I have some question on Colombia.
Let me fall.
Passenger jobs, but.
And expansion.
Oh, no, it's called Savage and non aeronautical revenue per passenger.
Adolfo Castro: So just wanted to know what is driving that and also if the stronger cost expansion in Colombia in the quarter includes any non-recurring events. That's it from my end. Thank you. In the case of the new maximum rate, the increases that we saw from the OMBP, we have already started the process for that. It will take more or less four months, so I do believe that as from the month of April, the new, inclusive tariffs will be in place. So if you're in the press quarter, you will see and know the details, and the increases will come as from April. In the case of colonial law, we do not have any non-recurring expenses; it is important to see the Colombian Numbers in Colombian pesos, and then you will be able to understand better the situation that exists during the quarter. The Colombian Peso appreciated against the Mexican Peso, and that was the first quarter in the last couple of years.
Just wanted to know.
What is driving that and also each day.
A cough fixation in Colombia in the quarter.
Each E C.
<unk> any no at Kirby.
Is that I think from my end. Thank you.
Okay and in the case of then.
The next bill.
Maximum rate increases that we felt from day one BP.
We have already.
The process for that.
It will take more or less four months, so I do believe.
That's from the month of April next and then the new.
In closing times will be in place.
During the first quarter, you will see and known pieces.
The increases will come from as from April.
In the case of Colombia normally do not have any great not good.
It is important to see.
At Columbia numbers in Colombian pesos, and then you will be able to understand better the situation.
During the quarter.
Colombian peso appreciated against the Mexican peso and that was the first quarter over the last couple of years. So if we see what is happening.
Adolfo Castro: So if we see what is happening there in Colombian pesos, let me go into the case of the passenger. The passenger, as I said before, in Colombian pesos, the increase was really important during the quarter. So, I would recommend you to do the analysis in a compatible way. I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28, Perfect, thank you very much, Adolfo.
In Colombian pesos, let me go into the case with passenger equation.
The passenger as I said before and Colombian peso.
The increased loss was pretty important during the quarter.
So I would recommend you to make the analysis in a compatible.
Basis.
Yeah.
The FX.
Okay.
Thank you very much.
Our next question comes from the line of Isabela Salazar with GBM. Please proceed with your question.
Adolfo Castro: Our next question is on the line from Isabella Salazar with GBM. Hello, thank you for taking my question regarding the technical assistance fee reduction. I understand that this is a very positive action. However, I was wondering if you could give us more color behind the rationale for the reduction because I would like to understand if it will result in some costs moving to the affordable level or if it will be a direct savings. Well, it depends on how you measure this.
Yeah.
Hello, Thank you for taking my question.
Regarding the technical assistance.
And reduction I understand that this is a very positive action. However, I was wondering if you could give us some I call it behind the rationale for it a reduction because I would like to understand it.
Isn't it will result in some cost moving to the export met coal or if it will be.
Susan.
Currently it depends on how you measure this view.
Adolfo Castro: If you see the new maximum rates, well, those are the ones that are going to be in place from this year. If your forecast was considering this year 5%, then you can place a 2.5% instead of the 5%, and then it will be, for you, a reduction or a saving. Thank you. Our next question comes from the line of Gabrielle Himmelfarb with Gosha Bank. Please state your question.
You see the new maximum rates.
Well those are the ones that aren't gonna be plagued us from Goodyear easier.
You have your forecast once confusing with each year, 5%. Then you have you can place a two 5% to densify and then it will be for U S reduction or safety.
Thank you.
Our next question comes from the line of Gabrielle.
With Scotiabank. Please proceed with your question.
Adolfo Castro: Sponsored ADR Class B, Gabrielle, your line is live. Hi. Thanks for the call. Sorry, my line was on mute.
[laughter].
Okay.
Okay.
Gabrielle your line is live.
Hi, Thanks for the call sorry, if my language.
Adolfo Castro: Just a quick question about the dividend policy. Are you planning to propose a higher dividend or keep the dividend stable? I know it's up to the board, but what's the company's strategy for the dividend for this year?
Just a quick question about the dividend policy.
Planning to propose a higher dividend or keep the dividend stable and I would say up to the board, but what the strategy of the company seeking for the dividend for this year. Thank you.
Adolfo Castro: Thank you. Hi Gabriel, well, you know that we do not have a bit of a policy in lighting, that we review that thing every single year. And once I finish with you, I will start referring that proposal to the board and then to the shareholders assembly, as I said before. Our next board of directors meeting will be the first week of March.
Hi, Gabriel.
You know that we do not have a dividend policy in lighting.
We reviewed that playing every single year and once I finish with you Yeah I will.
Start repairing that proposal for that board and then to the civil business and as I said before our next board of directors will be the first week of March.
Adolfo Castro: Thank you. Thank you. Thank you. I do believe that by the first week of March you will figure out what I have proposed and what they have accepted. Okay, thank you. You love me.
Good.
I do believe that defense with the module you would figure out what our peoples and what they expect.
Okay. Thank you.
Youre welcome.
Adolfo Castro: As a reminder, ladies and gentlemen, it is Star 1 to S... Our next question comes from the line of J... Citibank. Thanks, guys. I'm Jeff Jason calling in from Stephen Trent's group. I just want to ask two questions on my end. The first one is, what are you seeing in tourism bookings to southeastern Mexico? And my other one is, you know, should the authorities block the airport project in the DR? Will the store be looking at any other overseas investments? And, you know, what seems to be going wrong with the process right now? Thank you. Could you repeat your second question? Sure. So should the deal or the airport project in the DR get blocked, would ASUR be considering any other overseas investments?
As a reminder, ladies and gentlemen, it is star one to ask you a question.
Our next question comes from the line of James Jang with Citibank. Please proceed with your question.
Thanks, guys, just Jason <unk>, calling in from Stephen Trent Group I just wanted to ask two questions. On my end first one is what are you seeing on tourism bookings to southeastern Mexico and my other one is sooner should this tortillas block the airport project in the D. R will sort of be looking at any other overseas investments and you know what seems to be going wrong.
The process right now thank you.
Could you repeat your second question.
Sure So should the deal or the airport project in the D R get blocked.
We will be considering any other overseas investments.
Adolfo Castro: And if so, you know, what seems to be going wrong with the process right now with the Dominican Republic? Well, let me go first with the bookings. In the case of bookings, as I said in my initial remarks, we are seeing very good bookings coming from the U.S. and Canada. It's not the case of domestic, with the problems we are having with President Pratt and Whitney and the case of Mexico City Airport. Just to say that, in terms of domestic traffic to and from Mexico City, around 100,000 lost, no? So, that will have an impact. These 100,000 are not willing to go to Santa Lucia. Yes, Santa Lucia is growing, but it is not absorbing all of these passengers. In the case of the Dominican Republic, as I said before, until we get the final rulings on these legal procedures, we will not be able to start the construction of the airports.
And if so you know what seems to be going wrong with the process right now with the Dominican Republic.
And let me go first with the bookings won't indication because as I said in my initial remarks, we are seeing very good bookings.
From U S and Canada is not the case.
Domestic problems.
Problems, we are having with Pratt <unk> Whitney and the case of Mexico City Airport.
Just to say that during.
During the month of January we lost it in terms of domestic traffic to and from Mexico City at Rone hundred Thompson.
So that that will have an impact to the transit times and are not willing to brokers and <unk>.
Yes, she is growing but not absorbing what'll be center all of these.
That's what gives me the kitchen, Dominican Republic efforts had before when can we get the final rulings on these legal proceedings, we have that we will not be able to start the construction.
Yeah.
My expectation is that... All of these, at least, will last the whole year. Awesome. Thanks a lot. There are no further questions in the queue. I'd like to hand the call back to Mr. Castro for closing. Thank you, Doug, and thank you all again for joining us today on this four-quarter 2023 conference call on behalf of us all. We wish you a good day. And goodbye. Now you may disconnect. Ladies and gentlemen, this does..., telecom, on your part. Disconnect your lines at this time and have a wonderful day.
And my expectation is that.
All of these at least the last.
Yeah.
Awesome, Thanks, a lot.
Yeah.
There are no further questions in the queue I'd like to hand, the call back to you Mr. Castro for closing remarks.
Thank you Don and thank you all look at all of you again.
Johnny Day in this fourth quarter 2023 conference call on behalf of mushroom.
We wish you a good day.
By now you may disconnect.
Yeah.
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.