Q1 2024 Grupo Aeroportuario del Pacífico SAB de CV Earnings Call
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Operator: Please stand by. Your program is about to begin. Good morning, and welcome to GAP's conference call. All lines have a mute in place to prevent any background noise.
Yeah.
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Speaker Change: Good morning, and welcome to <unk> Conference call.
Speaker Change: All lines have been placed on mute to prevent any background noise. After.
Operator: After the presentation, we will open the floor for questions, and at that time, instructions will be given if you would like to ask a question. It is now my pleasure to turn the conference over to GAP's Investor Relations team. Please go ahead.
Speaker Change: The presentation well open the floor for questions and at that time instructions will be given if you would like to ask a question.
Speaker Change: It is now my pleasure to turn the conference over to <unk> Investor Relations team. Please go ahead.
Operator: Thank you and welcome to the first quarter 2024 conference call for Grupo Aeroportuario del Pacifico. Presenting from the company today are Mr. Raul Revuelta, Chief Executive Officer, and Mr. Saul Villarreal, Chief Financial Officer.
Speaker Change: Thank you and welcome to the first quarter 2024 conference call for the quarter, but again a typical.
Speaker Change: Cause I think from the company today, we welcome Mr. Pablo that was felt that's chief Executive Officer and Mr. Stat would be yellow Chief financial Officer. Please.
Operator: Please be advised that forward-looking statements may be made during this conference call that do not account for future economic circumstances, industry conditions, the company's future performance, or financial results. As such, statements made are based on several assumptions and factors that could cause actual results to materially differ from the current expectation.
Speaker Change: Please be advised that forward looking statements may be made during this conference call. These do not account for future economic circumstances industry conditions, the company's future performance or financial results as such statements made are based on several assumptions and factors that could cause actual results to materially differ from our current expectations.
Operator: For a complete note on forward-looking statements, please refer to the quarterly report issued earlier this week. At this point, I'd like to turn the call over to Mr. Verwysdael for his opening remarks. Please begin, sir.
Speaker Change: For a complete note on forward looking statements. Please refer to the quarterly report issued earlier this week.
Mr. Her: At this point I'd like to turn the call over to Mr. Her wisdom for his opening remarks, please begin sir.
Mr. Verwysdael: Thank you and good morning. As always, it is a pleasure to be with you in another choir with you.
Her Wisdom: Thank you and good morning, it's always a pleasure to be overhearing another acquired would you.
Mr. Verwysdael: We appreciate your taking the time to join us. I'm going to briefly review operational and financial figures before taking your questions. In this query, the total number of passengers reached nearly 16 million, which was almost flat compared to the first few months of 2020. As many of you are aware, we have experienced a slight deceleration in passenger traffic since the fall quarter of 2020, due to the preventive sections of the problem within the... This session will continue throughout 2020.
Her Wisdom: Preceded your taking the time to join us today.
Her Wisdom: I'm going to briefly review a pressure NOLA, how that's a few years you feel fifteens real questions.
Her Wisdom: I mean this quarter the total number of passengers, which nearly 16 million, which was almost flat compared to the first few 20th century.
Her Wisdom: As many of you are aware, we have experienced a slight deceleration in passenger traffic since the fort worth putting pretty.
Her Wisdom: Due to the prevention of restrictions of the broken with meetings.
Her Wisdom: You just those shows will continue throughout 2024.
Mr. Verwysdael: Today, Volaris Airlines, which handles most of our passenger traffic, has the highest number of grounded aircraft. As 2024 progresses, we will continue to monitor the availability of seats and passenger traffic trends in order to keep the market updated at any time. Despite the slowdown of the domestic market, the international market has been growing double digits. As we look ahead to the rest of the year, we will expand our market beyond the U.S. and Canada with new routes to Europe and Asia.
Her Wisdom: So kind of muscle how it ultimately is tracking towards the high number of longer term.
Her Wisdom: I was wondering if any for prepared foods, we will continue to monitor the availability of seats and Boston as traffic correct.
Her Wisdom: Just to keep the market up there that are pretty cheap.
Her Wisdom: This doesn't slow down the domestic market the international market has been growing in double digits as well.
We look ahead to the rest of the June, Wisconsin, where market jumped a drift in Ghana.
Her Wisdom: With a view towards Europe and Asia.
Mr. Verwysdael: As of today, we expect to initiate at least 11 new international routes in 2024, nine of them to North America and two of them to Europe, which include Sanford to Los Cabos and back to Puerto Vallarta. Moving on to financial performance. On the top line, total revenue remained almost flat compared to the first Q23. Aeronautical revenues decreased by 1.3%, mainly due to the cost of passenger charges that are in place at 9 of the 12 airports in Mexico. Cops on the show.
Her Wisdom: Our subsidiary, we expect doing a check on this.
Her Wisdom: Other new Internet Charlotte pretty cold.
Her Wisdom: I love them to North America, and talk them through June.
Her Wisdom: So I'm working with Scott was a box to ports.
Her Wisdom: Well, we love to see natural for pharma.
Her Wisdom: On the top line.
Her Wisdom: Revenue was almost flat compared to the first Q 'twenty three.
Her Wisdom: Revenues decreased by one 2% mainly due to these calls to parking charges that are in place of nine of the 12 airports in Mexico.
Her Wisdom: I'll put myself well reached 97% of the maximum tariff afterward, well in the first quarter 'twenty three it was 99% up to maximum doors.
Mr. Verwysdael: We reached 97% of the maximum tariff approved, while in the first quarter of 2023, it was 99% of the maximum. Despite this, non-electrical revenue continues to be strong, achieving a 15.2% increase to reach 1.7 billion pesos. For the first time in the history of the company, we have reached 109 pesos per passenger. As we have previously discussed, we renegotiated several of the tenant contracts, which resulted in more than positive financial conditions for the company.
Despite these known enough to grow revenue continuing the strong achieving up 15, 2% increase to reach one 7 billion pesos.
Her Wisdom: For the first time you hit throughout the company, we have rich holds up by nine vessels per person.
Her Wisdom: I will help rebuild this cook we went out there several of the tenor contracts, which resulted in more than box supernatural can be transported to coke.
Mr. Verwysdael: The main revenue generated for commercial revenues was the additional capacity at the airport, with an expansion in terms of square meters. This includes the new terrace with a huge food and beverage area in Guadalajara, which is surrounded by a top restaurant and offers a stunning view of the room. Those of you who attended the gap day had the opportunity to walk through this new area.
Her Wisdom: The main revenue generator for commercial revenues once the additional capacity at the airports, we have with expansion in terms of square meters.
Her Wisdom: Do you think the Mr Church, food and beverage everywhere.
Her Wisdom: Which is surrounded by a couple of restaurants, having offered starting to view of the wrong way.
Speaker Change: That was your question to pick up here you have the opportunity to walk towards these new area.
Mr. Verwysdael: There are several other strategies on the commercial side that are being worked on in addition to large-scale areas. This is through new business lines, such as the Nick Hughes Building, which can also be found at the Guadalajara Airport, with the opening of a new hotel in March of 2045. On the expenses side, this increased by 10.3% compared to the first year. While we remain focused on maintaining speed cost control, the current changes in labor load affect all major cost lines. The salary cuts have been greatly impacted as well as other major personnel contracts such as cleaning, security, and maintenance.
Speaker Change: There are several others try to get the commercial side that I've been working in addition to large scale carriers.
Speaker Change: It is true new business lines, such as the mixed use buildings, which can also be found in the Guadalajara Airport with Al can you talk a new hotel in March a third party.
Speaker Change: On the surface side this increases by 10, 3% compared to the first you're twenty-three while we remain focused on maintaining a strict cost control the colon trying different labor law I pick up all familiar coastline.
Speaker Change: The salary costs have been greatly impact as well as all of our major personnel contracts, such as cleaning security and maintenance.
Mr. Verwysdael: Downline with respect to higher costs that correlate with air, fire, and thermal expansion, in addition to an inflationary effect. Regarding the concession fee in Mexico, which is the amount that concession holders such as GAAP must pay for the use of federal airports, you may remember that in January, these fees increased from 5 to 9%, in accordance with the new rules for tariff regulation. The payment made over those included in the last tariff review will be added to the reference value during the next review of the maximum tariff. However, this only applies to debt-regulated revenues.
Speaker Change: <unk>, we just got higher costs that correlate with their five thermal expansion you know you shouldn't have to have inflationary effects.
Speaker Change: With regards to the professional fees in Mexico, which is a month that concession holders such as GAAP must pay for the use of Federal Air Force you May remember that in January these fees increased from 5% to 9%.
Speaker Change: Of course within Europe Rose four target population.
Speaker Change: Man made over dose, including left over you will be added to the referenced by which we're.
Speaker Change: Doing the natural yield the maximum tax.
Speaker Change: However, the solar glass for care related revenues.
Mr. Verwysdael: [inaudible] The 4% difference paid over the analytical revenue in the first quarter of 2024 was recognized as an intangible asset under IAF 38 and will begin its amortization in January 2025 and will continue until the end of the concession period. The amount recognized as an intangible asset in the airport concession during the first quarter of 2024 was $175,000. 0.5 million pesos. On the other hand, the 4% additional payment over the non-insurer menu was recognized as a... That's a result.
Speaker Change: Your language.
Speaker Change: The 4% difference third overdone optical revenue in the first quarter Glencore.
It's recognized as an intangible asset on the <unk> 38, and will begin amortization generally claim 35, we'll continue altogether of the concession.
Speaker Change: The amount recognized as intangible asset and the airport concession during the first quarter 'twenty four.
Speaker Change: 75.
Speaker Change: One 5 million pesos.
Speaker Change: On the other on the 4% doesn't show up and they know where they are not in school and then you'll recognize that expense.
Speaker Change: As a result.
Mr. Verwysdael: EBITDA reached 4.6 billion pesos with an EBITDA margin of 69.8%, which differs from our guidance released in January mainly due to the recognition of the intangible assets I just mentioned. On the debt front, total debt reached 4.5 billion pesos in the first quarter of 2020. In March, we issued another two tranches of labeled debt bonds on the Mexican market for a total of 3 billion pesos. The proceeds were used to pay down the GAP-19 bond maturity match for the same issue for the same month.
Speaker Change: That'd be that reached $4 6 billion pesos without everything about you know 69, 8%.
Speaker Change: You've heard from our guidance released in January mainly due to the recognition of deductible losses I just mentioned.
Speaker Change: Oh did upfront.
Speaker Change: Rich 4.5 <unk>.
Speaker Change: That's up from their first park 94 in March where you use it usually one or two tranches of labels that bonds of the Mexican market for a Bogo three Bureau business.
Speaker Change: The proceeds were used to pay down the government bond maturity in March for the same issue a month.
Mr. Verwysdael: These were on the fifth and sixth level funds that are sustainably legal, and the Red Tower, Reducing Travel Demand, thus for the demonstration of our commitment to enhancing sustainability and ethical. We look forward to continuing to update the markets on these initiatives, and we will continue to bring this philosophy into our operations and infrastructure projects. Following these figures, we continue to maintain healthy labor levels, reaching a net-debt-to-editor ratio of 1.7%, for a current of, does comply with all our tech covenants.
Speaker Change: These were on the fifth and sixth label upon that.
Speaker Change: Sustainability.
Speaker Change: And the red door, reducing carbon emission, thus sort of demonstration of our commitment to Hudson sustainability as a company.
Speaker Change: We look forward to continue to update the market.
Speaker Change: This isn't something we will continue to radian philosophy throughout.
Speaker Change: Through our operations and infrastructure.
Speaker Change: All of them with these figures.
Speaker Change: Do you have to maintain a healthy liver I believe of reaching a net debt to EBITDAR ratio of one point.
Speaker Change: Kevin.
Speaker Change: For the trailing 12 months compared with all our debt covenants.
Speaker Change: Got it.
Speaker Change: Moving on to the topic.
Speaker Change: <unk> got the total capital expenditures, reaching approximately one portfolio.
Speaker Change: He was supposed to say like well to comply with the challenging Master development program that is in place.
Speaker Change: Before I conclude I want.
Mr. Verwysdael: Moving on to the CAPEX, during the quarter, CAPEX will have capital expenditure reaching approximately 1.4 billion, and it is positioned as well to comply with the challenging master development program that is. Before I conclude, I want to mention that our Ordinary and Extraordinary Shareholders Meeting will take place tomorrow, and we will be proposing a capital reduction of 13.86 pesos per outstanding share. I would like to express my gratitude to all who attended our GAP Day in Guadalajara on April 10th.
Speaker Change: You mentioned that that we're supporting our young extraordinary shareholders' meeting will take place tomorrow, and we will be proportionate a reduction of 13 point 86 bushels per outstanding share.
Speaker Change: I would like to express my gratitude to all our GAAP there are a lot of hiring.
Speaker Change: On April trends.
Speaker Change: It was a great event, where we are able to mature the newly expanded commercial opportunity that's area there for fire station and even if they are the new Hilton Garden Inn Hotel that is just starting.
Speaker Change: That's not where you're from magna in principle.
Speaker Change: I'll close up or who were able to join US live with a sense of all the hard work and commitment we have.
Speaker Change: Where our markets are for the growth of our call.
Mr. Verwysdael: It was a great event where we were able to tour the new expanded commercial and passenger area, the airport fire station, and even stay at the new Hilton Garden Inn Hotel that is just steps away from the main entrance of the airport. I hope that all who were able to join us left with a sense of all the hard work and commitment we have for our markets and for the growth of our company. I would like to open the floor to questions.
Speaker Change: With that I will.
Speaker Change: I'd like to open the floor for questions.
Speaker Change: And at this time, if you would like to ask a question. Please press. The Star then one on your telephone keypad.
Speaker Change: You may withdraw your question at any time with Bernstein the palanquin.
Speaker Change: Once again to ask a question. Please press the star and one what are your telephone keypad.
Speaker Change: Our first question from Rodolfo Ramos with Bradesco <unk>. Please go ahead.
Rodolfo Ramos: Hi, Good morning, everybody. Thank you for taking my question and congratulations on the results.
Operator: And at this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw your question at any time by pressing the pound key. Once again, to ask a question, please press star and 1 on your telephone keypad. We'll take our first question from Rodolfo Ramos with Bradesco BPI. Please go ahead. Uh, good morning.
Rodolfo Ramos: One question on my side.
Rodolfo Ramos: Two part question and then just wanted to get a sense of.
Rodolfo Ramos: Your MTBE negotiations that are going through.
Rodolfo Ramos: Coming along with the authorities.
Rodolfo Ramos: Comment on the tighter side and also on the Capex side.
Rodolfo Ramos: And on the Capex I just wanted to understand I mean, you have airports that are well above that.
Rodolfo Ramos: The 10 million passenger threshold amount per year.
Rodolfo Ramos: You also have cobbled that is close to $10 million. So just wanted to see it seems like the new.
Rodolfo Ramos: One question on my side, and it's a two-part question. I just wanted to get a sense of how your MVP negotiations are going, are coming along with the authorities. I would like to comment on the tariff side and also on the CAPEX side. And on the CAPEX side, I just want to understand. I mean, you have airports that are well above, you know, the $10 million passenger threshold per year. You also have Cabo, which is close to $10 million. So I just wanted to see, you know? It seems like the new name of the game is the CAPEX side. You know, we saw that in a source MVP.
Rodolfo Ramos: The new name of the game is the.
Rodolfo Ramos: The Capex side now we saw that it was going to be so just wanted to get a sense of what your your capex needs could be kind of going forward. If you see any any major.
Rodolfo Ramos: Projects.
Rodolfo Ramos: These main three airports.
Rodolfo Ramos: Good.
That could help you out in this in these negotiations.
Speaker Change: So that would be my question. Thank you.
Yes.
Speaker Change: Thank you.
Speaker Change: We have to look I mean, we are still working with adults.
I mean percent deferred.
Speaker Change: The first graph of our Master plan.
Speaker Change: We are just in the process of.
Speaker Change: The befits with Delta T or the critical piece itself all the airports a review of all the deeper in.
Speaker Change: <unk>.
Speaker Change: Investments that we are.
Speaker Change: Pursuant to the authority.
Rodolfo Ramos: So I just wanted to get a sense of what your CAPEX needs could be going forward and if you see any major projects at these three main airports that could, you know, that could help you out in this negotiation. So that would be my question. Thank you.
Speaker Change: As we have.
Speaker Change: The last.
Speaker Change: Conference calls.
Speaker Change: We are expecting an increase of the maximum tariff.
Speaker Change: Around 520% to 5%.
Speaker Change: Why do you can buckle laughing mine is.
Speaker Change: I mean, yeah.
Speaker Change: We could not that sure.
Speaker Change: Complete which will now.
Speaker Change: So we need to see how the mainly the discount rate change in the coming in the coming months.
Raul: Thank you, Rodolfo. This is Raul. As we have talked, I mean, we are still working with the authorities. We have, I mean, presented the first draft of our master plan, and we are just in the process of the visits with the authorities for the physical visits at all the airports and review of all the different investments that we are proposing to the authorities. As we have said in the last conference call, we are expecting an increase in the maximum tariff, around 5% to 0% to 5%. But what is important to have in mind is, I mean, we cannot completely assure you which will not be the result.
Speaker Change: After that we will have the <unk>.
Speaker Change: You'll remember in terms of the airport low.
Third we have them all day long.
Speaker Change: The last day of the year December 31, two have unlocked a refresher.
Speaker Change: We are working with them.
Speaker Change: Brian 222 to manage cost effective as possible if we thought the recession a lot of working working just just sometimes.
Speaker Change: In terms of the Capex that we are expecting we are.
Speaker Change: And then turning to fill the same level of Av.
Speaker Change: And definitely Gary that we have in the last four years.
Speaker Change: A master class that is under a.
Speaker Change: Good vessels for the.
Speaker Change: We're talking here, whereas expecting to have this.
Speaker Change: Same level of investment per passenger.
Raul: We need to see how, mainly the discount rate, will change in the coming months, and after that, we could have the number. And you remember, in terms of the airport law, the authority has until the last day of the year, December 31, to get an authorization. We are working with them, trying to get this authorization as fast as possible, and we are working just on that.
Speaker Change: <unk> been mined.
Speaker Change: So most of the airports that should need some of.
Speaker Change: This should all the stages, what he should all terming out for big investments or some way for our fans.
Speaker Change: Yes.
The increase from passengers will be.
Speaker Change: Water.
Speaker Change: For sure we are.
Speaker Change: Looking to the authority at Comed.
Speaker Change: <unk> new.
Speaker Change: Brian.
Speaker Change: Ill turn it out to 40 for Gulfport.
Speaker Change: For the case of Cabos. We also know that we need to respond that worked in the old building.
Raul: In terms of the CAPEX that we are expecting, we are maintaining the same level of investment per passenger that we have in this period of the master plan, that is around 110 pesos per passenger. To have in mind some of the efforts that should need some.
Speaker Change: Second they're not being in the international terminal building.
Speaker Change: They're not one that I think.
Speaker Change: The domestic terminal building in Kabul.
Speaker Change: For the kids talk about yet, but as you know on these master plan, we are developing the secondary.
Speaker Change: So if I got that.
Speaker Change: We will continue the expansion of dock.
Speaker Change: Part of the company here, Bob will not be included.
Raul: Additional stages, additional terminals, or big investments or, in some way, to attend to the increase of passengers, will be Tijuana. For sure, in Guadalajara, we are proposing to the authority a completely new brand terminal, Terminal 2, for the airport. For the case of Cabos, we also know that we need to expand our terminal building on the second terminal building, the International Terminal Building, and Terminal 1, that is the domestic terminal building in Cabo.
Speaker Change: Some additional investment for four for the New Master plan. So you get all terms of concluding the biggest investment that we will see.
Speaker Change: That will be our airports.
Speaker Change: Will be expansion of terminal, one that and you're talking about.
Speaker Change: And expansion from turning up to a one on those caps.
Speaker Change: For sure for all directors will have some expansion for the move.
Speaker Change: The main expansions talking about getting our buildings will be on dose of those airports.
Speaker Change: Alright. Thank you and then just a follow up on that.
Speaker Change: You mentioned that they have authorities have until the last day of this year.
Raul: And for the case of Vallarta, as you know, on this master plan, we are developing the second terminal of Puerto Vallarta. We will continue the expansion of that during part of the coming year but will not be included as an additional investment for the new master plan. So in general terms of including the biggest investment that we will see on our bigger airports will be the expansion of Terminal Tijuana, a new terminal in Guadalajara, and expansions on Terminal 2 and 1 in Los Capos. For sure, for other efforts, we'll have some expansions. But the main expansions, talking about terminal buildings, will be on those services.
Speaker Change: So I'm, assuming that you will be concluding your negotiations would be.
Speaker Change: Next administration is that correct.
Speaker Change: Okay.
Speaker Change: At this moment Rodolfo would cause I'm not sure if we do something special for the coming out of these pressure.
Rodolfo Ramos: We're working on all day.
Rodolfo Ramos: Technical approach of the Master plan, just think for a second.
Rodolfo Ramos: Our master plan.
Rodolfo Ramos: Darker months debt forgiveness of God could be at home.
Rodolfo Ramos: Sure.
Rodolfo Ramos: Yes.
Rodolfo Ramos: We got a lot of Oh.
Rodolfo Ramos: Blueprint and a lot of technical work so for sure we're working today with the technicians of the of the.
Rodolfo Ramos: Zach.
Rodolfo Ramos: Are there other than we will try to just josias negotiation as soon as possible.
Rodolfo Ramos: Today as good not assure you whatever you would do.
Rodolfo Ramos: Do you have some discretion are becoming administration, what what for sure.
If you could tell that we are working all have all the technical approach on the studies for the catastrophe NV and the new investments on the master piano havoc in the table that Gary.
Rodolfo Ramos: Thank you, Raul, and just a follow-up on that. You mentioned that they have authorities until the last day of this year, so I'm assuming that you will be concluding your negotiations with the next administration, is that correct?
Rodolfo Ramos: And we would expect the correct timing for the recession.
Speaker Change: Great very helpful. Thank you very much and congrats on the results.
Raul: At the moment, Rodolfo, we cannot assure you it's going to be with this administration or the coming administration. We are working on all the, I mean, technical aspects of the master plan. Just think for a second that a master plan is documents that, in the case of GAB, will be around, I don't know, 2,000 pages, with a lot of blueprints and a lot of technical work.
Speaker Change: Yeah.
Speaker Change: Thank you and we will move next to Stephen Trent with Citi. Please go ahead.
Stephen Trent: Good morning, everybody and thanks for taking my questions. The first if you could.
Stephen Trent: Excuse me I'm, sorry, if you could give us some indication on that you make in airports.
Stephen Trent: And the timing of.
Speaker Change: The regulatory she was in.
Speaker Change: And what chance do you see that.
Raul: So, for sure, we are working today with the technicians of the FAC, and at the end of the day, we will try to close this negotiation as soon as possible. But today, I could not assure you it's going to be. This administration or the coming administration, what's for sure, it's on the table that we are working on how all the technical approaches and studies for the capacity and the new investments in the master plan, and we will have it in the table of authority, and we will expect the correct timing for the authorization.
Speaker Change: It may be a saturday it could possibly extend those concessions.
Speaker Change: Yeah, Wendy what have you guys done.
Yeah.
Don: This is Don.
Don: Thank you for your questions, we will be working very well with the with the Ford piece Indeed in the gap that we had.
Don: The minister of the transportation.
Don: Transportation and Jamaica.
Don: And that communication in the relationship is very good we have been working and we have a final proposal.
Don: However, we haven't.
Don: Ashish.
Don: Find out document signing to be apply so where we have a good news that we cannot disclose yet because it's not possible because we don't have the the officiate at all coming from.
Don: The importance of Jamaica, but we feel very comfortable with both a resource in the negotiations for both airports. So we are fine for now, but we cannot disclose yet there were soaked up their negotiation.
Rodolfo Ramos: Great, very helpful. Thank you very much, and congratulations on the results.
Stephen Trent: Thank you. And we will move next with Stephen Trent and Citi. Please go ahead.
Speaker Change: Okay I appreciate that color. So thank you.
Stephen Trent: Good morning, everybody, and thanks for taking my questions. The first, if you could... Excuse me, I'm sorry.
Speaker Change: And just a follow up.
Speaker Change: Something you you mentioned in the prepared remarks, I believe you mentioned Ah.
Stephen Trent: If you could give us some indication of the Jamaican airports, you know, and the timing of the regulatory reviews, and what chance do you see that maybe authorities could possibly extend those concessions when the review is done?
Speaker Change: Nine new routes to North America, and two new routes to Europe, if I'm not mistaken.
Speaker Change: And just wondering if I got that right and to.
Speaker Change: What potential you might see for a new Asian routes.
Saul: This is Saul. Thank you for your questions. We have been working very well with the authorities. Indeed, on Gap Day, we had a
Speaker Change: Yeah, Hi.
Speaker Change: I mean that they love of Asia.
Saul: the Minister of Transportation in Jamaica, and the communication, and the relationship is very good. We have been working, and we have a final proposal. However, we haven't
Speaker Change: Betting partner of the year.
The operational.
Speaker Change: We are not sure today, what are the two or whatever you want.
Speaker Change: Destination with China from Taiwan.
Speaker Change: We're close to have shown some announcements.
Saul: to be applied so that we have good news.
Speaker Change: We are expecting for example, jerious at least one.
Saul: [inaudible]
Saul: This is yet the result of the negotiation.
Speaker Change: One directly fly from China to Quad.
Speaker Change: Okay.
Stephen Trent: Okay, I appreciate the color. So thank you. And just to follow up on something you mentioned in your prepared remarks, I believe you mentioned nine new routes to North America and two new routes to Europe, if I'm not mistaken. And just one, if I got that right, and two, what potential you might see for new Asian routes.
Speaker Change: Okay perfect. Thanks for all appreciate that.
Speaker Change: Yeah.
Speaker Change: Thank you and we'll go next.
Speaker Change: Next week Monday.
Speaker Change: This with J P. Morgan. Please go ahead.
Speaker Change: Thank you and good morning, Rosso and I'll hand, it off thanks for taking my question.
Speaker Change: My first question is on the guidance I know you mentioned at the beginning about the effect of the of how the contingency was accounted so cleared yours and there was some upside on the EBITDA margin reported in the first quarter, but just wondering if you see some kind of upside for your full year guidance. If you should expecting kind of changes from here.
Raul: Yeah, hi, this is Raul. I mean, the tariff of Asia, what we are expecting for the end of the year is the operation of We are not sure today if it's going to be two or going to be one destination to China from Tijuana. We're really close to having some announcements, but what we are expecting for the end of the year is at least one. One direct flight from China to Tijuana.
Speaker Change: And the second question is regarding the bidding process for the Turks and Caicos airports.
Speaker Change: You mentioned in the fourth quarter. It means that you would foresee Peter on the process just wonder if there's any kind of updates on this thank you very much.
Speaker Change: Yeah.
Speaker Change: So yeah.
Stephen Trent: Okay, perfect. Thanks, Raul. I appreciate that.
Speaker Change: For your first question and we we have just said.
Guilherme G. Mendes: Thank you. And we will move next with Guilherme Mendes and JPMorgan. Please go ahead.
Speaker Change: We have to revise our guidance.
Speaker Change: But we.
Speaker Change: We want to wait for a new idea of that pedigree knee E N genes with you and be monitoring the traffic trends in the following months.
Guilherme G. Mendes: Thank you and good morning, Raul, Saul, and Alejandra. Thanks for taking my question. My first question is on the guidance. Raul, you mentioned in the beginning about the effect of how the contingency was accounted for. So, clearly, there is some upside on the EBITDA margin report for the first quarter. But just wondering if you see any kind of upside for your full-year guidance, or if you should expect any kind of
Speaker Change: With respect to <unk>, we have more visibility of the until the end of the year, we will release, a new guidance, but we wanted to wait until the second quarter in order to update it.
Speaker Change: We got into some very close we havent.
Speaker Change: We don't have any advance it yet we don't have any update from the authorities we are very.
Speaker Change: And attending any kind of meetings, where they would be with the government, but we have a any any other advantages that we believe that we were selected.
Speaker Change: That's up either.
Speaker Change: Okay very clear thank so.
Guilherme G. Mendes: And the second question is regarding the bidding process for the Turks and Caicos Airport. You mentioned that the fourth quarter means that you were participating in the process. Just wondering if there's any kind of updates on this. Thank you very much.
Speaker Change: They can deliver.
Speaker Change: We will move next week.
Speaker Change: Alejandro Fuchs squeeze Keto group. Please go ahead.
Alejandro Fuchs: Oh I'm.
Alejandro Fuchs: So we're going to have that team so people pay for the question and congratulations on the results very quickly to one from my side the first one.
Speaker Change: The list slots year over year and stuff so that was mentioned.
Saul: Hi Guilherme, this is Saul. For your first question, we have, as you said,
Alejandro Fuchs: Even though you mentioned that the two.
Alejandro Fuchs: Was it was down for 90 airports, so wanted to get a sense of how the.
Saul: We have to revise our guidance, but we want to wait for a new idea from Pat Gwinley and Gene's review and monitor the traffic training.
Alejandro Fuchs: Revenue was flat year over year with slots.
Alejandro Fuchs: Passengers also performance.
Saul: Of course, until the end of the year, we will release a new guidance, but we want to wait until the second quarter in order to update it.
Alejandro Fuchs: Lower to what you said that you're.
Alejandro Fuchs: At target, maybe a higher percentage of the maximum tariffs maybe you wanted to understand.
Speaker Change: That correctly.
Saul: Regarding Turks and Caicos, we don't have any progress yet, we don't have any update from the Afoges, we are very... Attending any kind of meetings with the government that we have, any other advantages that we can release that we were selected as a bidder. Okay, very clear, I think so.
Speaker Change: Thank you.
Speaker Change: Hi, Alex.
Speaker Change: With regard to what we already apply that the discounts are as we mentioned we are applying for 90 airports that 6% discount over the two.
Speaker Change: We have a different factors.
Speaker Change: As inflation and exchange rates.
Speaker Change: In order to fulfill the maximum tariff.
Speaker Change: Our expecting until the end of the year to be close to 90, 798% of the of the maximum tariff.
Alejandro Fuchs: We will move next with Alejandro Fuchs of Itau Group, please go ahead.
Alejandro Fuchs: Very quickly, two from my side. The first one is on aeronautical revenue. There were fluctuations year-over-year, as Raul was mentioning, even though you mentioned that the PUA was still down for nine airports. I wanted to get a sense of how the aeronautical revenue was fluctuating year-over-year, which affected passengers' performance with the lower PUA. If you're charging maybe a higher percentage of the maximum tariff, maybe you would want to understand that correctly and have a follow-up. Thank you.
Speaker Change: We are expecting a acceleration.
Speaker Change: Or or opposition of the exchange rate.
Speaker Change: And if that happens it will be benefit for the for the fulfillment of their maximum that if we have another another issue regarding the international passenger traffic, which you see in U S dollars.
Speaker Change: What are your thoughts that provides a higher end.
Speaker Change: Amount in multiple stability to reach the 100% of the maximum date, but for now our base approaches 97% at the end of the year.
Saul: Hi Alex. Well, regarding the TUA, we have already applied the discounts. As we mentioned, we are applying a 6% discount over the TUA to nine airports.
Speaker Change: Thank you that was very clear.
So maybe just a quick follow up.
Speaker Change: I wanted to see if I got this breakeven.
Speaker Change: But on the <unk>.
Speaker Change: <unk>.
Speaker Change: 750 million doses.
Saul: 2012 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Office of Communications and Creative Services
Speaker Change: This quarter wanted to make sure that.
Speaker Change: This includes the 4% increase even though this is Bob.
Speaker Change: Okay.
Speaker Change: Awesome.
Speaker Change: As well so we did see this through the P&L and it's included in the EBITDA.
Speaker Change: Cut off a little bit.
Saul: 97-98% of the maximum tariff. We are expecting acceleration or opposition of the exchange rate.
Speaker Change: Hey, Joe.
Joe: Explaining so maybe you could explain so neat that that'd be very helpful. Thank you.
Joe: Yes, Alex.
Joe: The concession tax is.
Saul: for the fulfillment of the maximum tariff. We have another issue regarding international passenger traffic, which is in US dollars, a higher tariff. That provides a higher amount in more possibility to reach the hundred percent of
Joe: Mandatory to be paid to the government.
Dave: It is Dave.
Alex: The two months. So we were paid the first two months of that of a year that we have to make a uh huh fruition of the all the full March so why do you see in the financial statement.
Alex: In the income statement is only the concession tax at 9% for the non aeronautical revenues and 5% for the I don't know if you could revenues be friends is a it is recognized as acquisition asset as an intangible asset.
Saul: to reach 100% of the maximum type. But for now, our best approach is 97% at the end of the year.
Alejandro Fuchs: Thank you. That was very clear. Maybe just a quick sum up.
Saul: Yes, Alex. The concession tax is mandatory to be paid to the government. It pays every two months, so we repay the first two months of the year, but we have to make a provision for... for March. So, what is in the financial statement, in the income statement, is only the concession tax at 9% for the non-aeronautical revenues and 5% for the aeronautical revenues.
Speaker Change: I'll explain.
Speaker Change: We disclosed in the press release it was recognized that according to the international standards. So we will be amongst the.
Speaker Change: The amortization of this asset during the depth that the period of a concession so just to be clear it is a.
Speaker Change: Our cash flow for dementia in food.
Speaker Change: That recognition in the income statement is 9% for the non aeronautical and 5% for the I don't know because just the 'twenty 'twenty four is there anything inside everything will be a nine person.
Saul: We recognize it as a concession asset, as an intangible asset, as Raul explained, and as we disclosed in the truth list.
Speaker Change: Thank you very much say to yourself. Thank you.
Speaker Change: Well move next to Pablo <unk>.
Pablo: With Barclays. Please go ahead.
Saul: recognized according to international standards. So we will.
Pablo: Hi, Thanks for taking my questions just a quick one on the cost side.
Saul: will be the amortization of these assets.
Saul: during the period of concession. So just to be clear, it is a cash flow for the 9%, full. But the recognition in the income statement is 9% for the non-aeronautical and 5% for the aeronautical. Just for 2024; in 2025, everything will be at 9%.
Pablo: You have mentioned.
Pablo: Uh huh.
Pablo: Our teacher costs.
Pablo: That has been the case for <unk>.
Pablo: Did you see any extra pressures or head count increase.
Pablo:
Pablo: The pressure on the cost side.
Pablo: For them this year. Thank you.
Pablo: Hi, Pablo.
Pablo: Yep.
Pablo: Just for the operation of the hotel.
As you do you know in the update we have I don't know if theres a business unit and you need the the head count 40 for the full operation.
Alejandro Fuchs: Thank you very much for your time. Thank you.
Pablo Monsivais: Thank you. We will move next with Pablo Monsivais from Barclays. Please go ahead.
Pablo: Obviously, the pressure on the labor front.
Pablo: The labor is clear and not in all in Mexican airports.
Pablo Monsivais: Hi, thanks for taking my question. Just a quick one on the cost side. You have mentioned that the labor law is impacting your costs, and that has been the case for 40 years. Do you see any extra pressures or headcount increase that could put a pressure on your cost side for the year? Thank you.
Pablo: Making methods.
Pablo: An increase significant increase.
Pablo: For the minimum wages are around 40% is not relevant because the substitution of the Jamaican airports. It can do and get all of your debt.
Saul: Just for the operation of the hotel, as you know, on GAP day, we have another business unit, and we need the headcount for the full operation. Obviously, the pressure on the labor from the labor shortage is clear, not only in Mexican airports; for Jamaican airports, we have an increase.
Pablo: At the end it is relevant for the gross expense increase but we wanted to be clear that the idea and those who follow our company as management is to maintain the cost control, we are not going too high ambition I hit them just for.
Pablo: Florida, I hope there and in case, we opened additional business lines or more units.
Saul: A significant increase in the minimum wages, around 40%, is not relevant because the participation of the Jamaican Air Force in the total ADR, but it is at the end relevant for the cost expense.
Pablo: Additional head count if not we are not we're not wanting to hire additional headcount.
Saul: [inaudible]
Pablo Monsivais: Perfect. Great. Thank you very much.
Speaker Change: Perfect Great. Thank you very much.
Gabriel Himelfarb: Thank you. We will move next with Gabriel. Thank you, Melford. If we could just go ship them, please. Gabriel Himelfarb with Scotiabank. Your line is open.
Speaker Change: Thank you we will move next to Gabriel.
Gabriel: Chemotherapy with Scotia Bank. Please go ahead.
Gabriel: Hello Gabriel.
Gabriel: Scotiabank.
Gabriel Himelfarb: Hi, good morning. Thanks for the call. Just a bit of an update about the product we need. Have you seen, do you think that this year, the last quarter's capacity could be limited due to engine failures and engine maintenance? We saw that Bolares yesterday said that most of the peak of the capacity will be in the third and the fourth quarter. So do you see that this could affect passenger traffic in the last two quarters of this year? Thank you.
Gabriel: Your line is open.
Gabriel: Hi, good morning, Thanks for the call just to beat up on an update about the issue of the Pratt and Whitney have you seen.
Speaker Change: You think that are.
Speaker Change: These here.
Speaker Change: Great.
Speaker Change: For the next quarters capacity could be.
Speaker Change: Limited due to the U S.
Jean failures be inching.
Speaker Change: Maintaining we sell other Larry said yesterday did that did most of the peak of the of the capacity will be one.
Speaker Change: The third in the third quarter. So do you see that the dispute that.
Speaker Change: Passenger traffic for the last two quarters of this year. Thank you.
Raul: Thank you, Gabriel and Raul. I mean, when we present our original data. We consider around 200 days for the period of maintenance for each one of the grounded planes. As you mentioned, as you said at the conference yesterday, they are expecting the worst part of this peak in decrease in capacity for the third and fourth choirs. We are on the same page. Our guidance... but that the worst part of this supply crisis will happen in summer.
Speaker Change: Thank you Robert.
Speaker Change: I mean, when we present our regional guidance.
Speaker Change: We consider the around 200 days.
Speaker Change: For the period of maintaining himself H why don't think Rob the plane.
Speaker Change: As you mentioned.
Speaker Change: A lot of as you said on their call yesterday, they are affecting the world.
Speaker Change: Despite a tough day off here.
Speaker Change: All of these.
Speaker Change: Peak.
Speaker Change: <unk>.
Speaker Change: Decrease on capacity for four or declare a full choir.
Speaker Change: Right.
Speaker Change: Same page our guidance.
Speaker Change: Expect that the worst part of this.
Speaker Change: So like I said, we'll.
Speaker Change: Happen.
Speaker Change: On summer.
Raul: And after that... I will say that gradually, maybe in November and December, we will begin to see some of the comeback of the first planes that were grounded in September of last year. So I will say that, in general terms, we have stayed the same number that we originally presented in our title. And at this moment, we consider it that part, that the worst part of the decrease in ground displays will be in the third and part of the fourth quarter.
Speaker Change: And after that.
Speaker Change: I will say that gladly, mainly in November and December we will begin to see some of that come back off the first claim that were grounded on.
Speaker Change: In September of last year.
Speaker Change: No.
Speaker Change: I will say that in general terms, we have stayed the same numbers that we originally presented malware network data.
Speaker Change: And at that moment, we will consider it that that's part of it.
Speaker Change: The worst part of the retiree health grounded planes will be.
On the first part of the fourth quarter.
Gabriel Himelfarb: Okay, and do you think that this supply ship could, somehow, be used for the next MDP for the passengers, like compensated for the next MDP?
Speaker Change: Okay, and then do you think that they stick to the supply side could be somehow.
Speaker Change: Can be used for the next MVP for passengers.
Speaker Change: Compensated.
Speaker Change: The decrease for the next 30 minutes.
Raul: The point here, Gabriel, is that, in general terms... As we have mentioned, this is a supply side crisis so as soon as the fleet recovers and can fly again, we will have a recovery like in a hockey stick because of the man still there.
Speaker Change: Yes.
Speaker Change: One here.
Speaker Change: Got you know things.
Speaker Change: We have mentioned this is a.
Speaker Change: Our supply side crisis, so as soon as the us.
Speaker Change: Of the day.
Speaker Change: The fleet recover I'm, sorry, again, we will have a recovery like hockey stick because the demand is still there.
Raul: This is not something that will not change the trend in the long term. I mean, at that point, we are not considering changing our needs for CAPEX or our forecasting for the long term in terms of passengers in our airport. So what we are saying is... We expect a recovery in 2025 for traffic. And for the long term and the midterm, the increase in traffic will be really, we are optimistic. That goal will be strong. And in that way, our master plan reflects the needs of that demand for the new capacity that we are expected to deploy.
Speaker Change: Oh.
Speaker Change: This is not something that will not change the trend from the long term.
Speaker Change: And that point, we are not considering to change how our need for capex of our backyard.
Speaker Change: We're forecasting for the long term in terms of passing rushing hour or so.
Speaker Change: What we are saying.
Speaker Change: We expect a recovery during 2045 of the traffic and for the long term in the midterm.
Speaker Change: The increase in traffic will be.
Speaker Change: Really we are optimistic that growth will be strong in that way, our master plan, reflecting it.
Speaker Change: That demand.
Speaker Change: On the new capacity that we are expected to be plugged in our airports.
Gabriel Himelfarb: Okay, thank you very much.
Speaker Change: Okay. Thank you very much.
Antoine Mortenkoger: Thank you. Our next question comes from Antoine Mortenkoger with GBM. Please go ahead.
Thank you. Our next question comes from the line of.
Morgan Cologuard: Morgan Cologuard with GBM. Please go ahead.
Antoine Mortenkoger: Hello guys, thank you for taking my question. I'm looking to understand if the increase in non-idle per pax was driven by the improvements in the commercial areas of your airports or maybe if it had some relationship to the real estate investment, so I was wondering if this quarter's non-idle revenues had some contribution from the mixed-use facilities and the hotel. I'm thinking maybe some advance payments from the mall or something similar?
Morgan Cologuard: Yes.
Morgan Cologuard: Hello, guys. Thank you for taking my question I'm looking to understand if the cruising on idle for Fox was driven by the improvements in the commercial area. So of your airports or where maybe if you'd had some relationships. So we just had investments. So I was wondering if this quarters revenues had some contribution from the mixed use facility.
Morgan Cologuard: Just on the wholesale I think and maybe somewhat sense payments hold from the mall or something similar.
Morgan Cologuard: Yeah.
Saul: I don't know if you saw it, but the increase in...
Speaker Change: Hi, Antonio if you sell it well they do.
Antonio: The increase in royalties per passenger.
Saul: I think you are referring to aeronautical and non-aeronautical, which in this case is around 2%. It is basically because the increase in the non-aerial UR ride is part of the new revenues, the new contract that arrived in Guadalajara, the new commercial retail and food and beverage area that was opened.
I think the airframe for I don't know I'm thinking I know, neither an article which indeed is around 2%. It is basically because of the increasing denominator.
Antonio: You are right. It is part of that of the new revenues and it confirms that there is in the heart of the new <unk>.
Antonio: Commercial retailing.
Antonio: Retail and food food and beverage area southwest open a bit.
Antonio: The hotel.
Saul: The hotel was...
Antonio: It was up in and.
Saul: around March 26th, so it's not relevant in the figures, but it is the new areas and retail, the renovation of the contract, the renewal of the contracts, also the opening of some commercial retail in Montevideo Bay. Also, at the end, commercial revenue showed an extraordinary increase in this quarter, around 15%, but the past year it was around 2% in total for non-aeronautical and aeronautical revenues. If we are talking about aeronautical revenues, we have a decrease of around 1.5%. This is because, as we mentioned, the discounts into the...
Antonio: [noise] around March 36, so he is not relevant in the fears that is it is the the new areas and redo the renovation of the of the contracts that are in the world contracts also.
Antonio: The opening of some commercial return in Montego Bay. So in at the end of the commercial revenue a.
Antonio: So oh, it's totally nutty E E increase in this quarter around 15%, but there's nothing here it was around 2% in total.
Antonio: Non non aeronautical.
Antonio: Revenue, if we're talking about a either not because remedies, we have that decrease of around 145%. So it is because as we mentioned the deep discounts.
Antonio: Do the two of us.
Saul: As we mentioned, the discounts to the two of us for passing charges in nine of our Mexican FAs.
Antonio: Passing charges.
Antonio: No forward Mexican Mexican airports.
Antonio: Okay.
Thank you.
Andressa Varotto: Our next question comes from Andressa Varotto of UBS. Please go ahead.
Dresser Corrado: And our next question comes from and Dresser Corrado with UBS. Please go ahead.
Andressa Varotto: Hi, good morning; thank you for taking my question. I just have a follow-up here on the non-aeronautical side. You mentioned both other new projects that the company has been working on in the last few years and also the renegotiation of contracts with tenants. So I just wanted to know if you could break down how much each of these factors is contributing today to the non-aeronautical side and what is their expectation going forward about the contribution of these two factors?
Dresser Corrado: Yeah.
Dresser Corrado: Hi, Good morning household. Thank you for taking my question I just have a follow up here on the Nomura and optical side.
Dresser Corrado: I think you mentioned both are.
Dresser Corrado: Are there any projects that the company has been working for the last few years and also the renegotiation of contracts with tenants. So I just wanted to know if you could break down.
Dresser Corrado: How much is.
Dresser Corrado: Each of these factors are contributing today, Florida.
Dresser Corrado: Now to go side and what is your expectation.
Dresser Corrado: Going forward right about the contribution of these two factors. Thank you very much.
Raul: Thank you very much.
Dresser Corrado: Yeah.
Speaker Change: Thank you.
Speaker Change: I mean, there are apparently no aeronautical revenues.
Raul: What's growing in the aquarium mainly for the expansion of some areas in our terminals related to food and beverage in Guadalajara, and some special areas or additional areas of retail also in Guadalajara. But in general terms, I will say that in this quarter, what we have seen is an increase in some business lines, such as food and beverage. Because last year, we were negotiating contracts, for instance, in Los Cabos. In Guadalajara, Cabo and Tijuana.
Speaker Change: What's rolling mill in Macquarie, mainly for the expansion of some areas, where it started me all flash related food and beverage machine.
Speaker Change: Wow.
Speaker Change: Hum.
Speaker Change: So my speciality area, so additional areas of retail options.
Speaker Change: But I will say this.
Speaker Change: While we have seen is an increase in some business lines.
Speaker Change: Could be the food and beverage because in the last year and one of those sharing contract for instance in Los Cabos.
Speaker Change: Meanwhile, the hatter.
Speaker Change: Not at all.
Speaker Change: So what we are seeing right now is a reflect of some new <unk>.
Raul: So what we are seeing right now is a reflection of some new, new conditions, mainly in food and beverage, in retail. But also, we have seen the effect, an interesting effect, of the revenues that come from the business directly operated by JAP, as could be the parking lots that increase, even without the flax environment of passion. That is important to say because one of the revenues that are more or have a direct correlation with the number of passengers is the parking lot. So to a new target. Strategy, we obtained positive numbers on the parking lot, even with a flat number of passengers in terms of total passengers in the airport.
Speaker Change: New conditions, mainly in Belarus and retail.
Speaker Change: But also we have seen the effect.
Speaker Change: The effect of it.
Speaker Change: Rarely does that comes from the business directly operated by us.
Speaker Change: B the parking lot dot grief.
Speaker Change: Even without slack environment of passengers that is important to say because one of their revenues and more oh, how far direct correlation with the number of passengers or the packet loss. So.
Speaker Change: Our new target is three.
Speaker Change: Rapidly we obtained positive numbers on the.
Speaker Change: The Pacte law.
Speaker Change: Even we are flopped number of awful.
Speaker Change: Of passengers in Paris on top off of your CD in downtown So what is coming.
Andressa Varotto: So, what is coming? For sure, with new conditions on some of our... contracts. What we are expecting as soon as the traffic recovers in the coming years will be a robust increase in terms of revenue, because as soon as the consumption of the passengers arrives, we already have the correct layout, the correct contract, and the correct brand to bring the best possible results to the company. For sure, on the 25th, for instance, as soon as we have it.
Speaker Change: Sure with new conditions on some of our.
Speaker Change: Yes.
Speaker Change: Contract.
Speaker Change: What we are expecting that soon of the traffic recovers in the coming years.
Speaker Change: It will be a robust increase in terms of revenues.
Speaker Change: Because our phone.
Speaker Change: The consumption of the passenger side right.
Speaker Change: We already have.
Speaker Change: Correct layouts, the correct contract and the correct brands.
Speaker Change: To bring the best.
Speaker Change: The best possible results to the company so far.
Speaker Change: For sure on the 25 or you can start as soon as we have.
Andressa Varotto: The traffic coming back to the airports will continue with robust growth. But for the 24th, as we mentioned in our silence, we are expecting to increase the no idle revenues from 12% to 14%, and we think that we are aligned with that original guidance.
Speaker Change: The traffic coming back to the airports, we will have.
Speaker Change: We will continue with a robust growth, but for the 24th.
Speaker Change: Sure.
Speaker Change: We're sorry that we are expecting to increase that.
Speaker Change: While.
Speaker Change: Revenues from 12% to 14%.
Speaker Change: We are we think that we are aligned with that original guidance.
Andressa Varotto: Perfect. Thank you very much. And she could provide an update on the operation of the hotel and the commercial space that you're doing in Guadalajara.
Speaker Change: Yeah.
Speaker Change: Perfect. Thank you very much and she is could provide an update on.
On the on the operation of the.
Speaker Change: The hotel and on the commercial date that Youre doing in Guadalajara.
Andressa Varotto: If you repeat, I'm sorry; I lost you for a second.
Speaker Change: Yeah.
Speaker Change: Can you repeat.
Speaker Change: I lost you for a second.
Andressa Varotto: I'm sorry, so just wanted to know if the hotel and the commercial space are already operating and at what stage. Thank you.
Speaker Change: Yes.
Speaker Change: I am sorry, so does that you have to know the hotel and the commercial space already operating and at what stage. Thank you.
Raul: Yes, we just began the operation in the last week of March, so we are just working on some of the new areas of Guadalajara, mainly all the hotels, and we will begin to recognize revenues coming from the hotels just in this second quarter of the year in what we call the NICU building. We expect that in the third quarter of the year, we will begin to have recognition of revenue related to new tenants of the office building. And also, on the third floor, we will have full recognition of revenue related to the new food and beverage methane area in the building, in the Macy's building.
Speaker Change: Yes, we do.
Speaker Change: Yes.
Speaker Change: The operations of the last week of March So we are just.
Speaker Change: Working on the on some of the new areas.
Speaker Change: Mainly all the all the hotels.
Speaker Change: We will begin to recognize the revenues coming from the wholesaler.
Speaker Change: Just in the second quarter this year.
Speaker Change: What if we call the mixed use building.
Speaker Change: We expect that for the third quarter of the year, we will begin to have recognition of revenue related with new payments.
Speaker Change: <unk>.
Speaker Change: Guilty.
Speaker Change: And also on the.
Speaker Change: Therefore, we will have full recognition of revenue related to new food and beverage mezzanine area on the building on the on the mixed use building.
Andressa Varotto: Perfect. Thank you very much. Have a good day.
Speaker Change: Yeah.
Speaker Change: Perfect. Thank you very much have a good day.
Speaker Change: Okay.
Operator: Thank you. Now we will take the webcast questions. I will turn the call over to management.
Speaker Change: Thank you.
Speaker Change: We will now take the webcast questions.
Speaker Change: Turn the call over to management.
Operator: Thank you. We have one question from Bernardo Malpica from Santander. The increasing number of international passengers compensated for the fall in domestic passengers. Did you see any top-line benefits coming from this change in mix?
Speaker Change: Yeah.
Speaker Change: Thank you and we have one question from better medical might pick up from Santander.
Speaker Change: And then question international passengers compensate as far this fall in domestic passengers you just see any top line benefits coming from this change in mix.
Raul: Yes, Bernardo, I mean, in general terms... The change in needs brings us additional, I would say, tariffs. For instance, the two I's are related to dollars. But in general terms, I would say that depends on the, the, the, the Pesa-gola exchange rate, eh, but in general terms, I would say that B is positive. The change of the mix because, Also, there is no idle business. You could get some consumption from duty-free, for instance, but in the case of domestic traffic, you could not have it. So I would say that the general terms are positive, and it could have some additional benefits for the top line.
Speaker Change: Yes I.
I mean, yeah.
Speaker Change: No Sir.
Speaker Change: The change of the mix when we talk about hydro revenues brings us additional I wish I could tell.
Speaker Change: Sorry for the two hours where.
Speaker Change: Well it does when they looked at all of those boxes are out there.
Speaker Change: That depends.
Speaker Change: That's helpful.
Speaker Change: Exchange rate.
Speaker Change: But in general there will be that it's positive.
Speaker Change: The change in the mix because.
Speaker Change: Also the unaudited all goodness.
Speaker Change: You can get some consumptions of the duty free floating stuff that's in case of the domestic traffic.
Speaker Change: So I will say that in general terms, it's positive.
Speaker Change: You could have it could have some of.
Raul: Thank you, Raul. And the last one is from Areli Vileda from INVEX.
Speaker Change: Additionally banner.
Speaker Change: Benefits for the top line.
Speaker Change: Thanks Sharon.
Index: And the last one is from a relatively later from index I would like to understand amendment silver damage inflation related to the concession rights if the government record a nice high double charge, how does that affect you.
Saul: I would like to understand the amendment over the legislation related to the concession rights. If the government recognized a double charge, how would this affect you?
Saul: Finally, this is Saul. At the beginning, when...
Index: Hi, Anthony this is Phil.
At the beginning when the.
Saul: In the amendment or the change to the 5 to 9 percent, there was confusion, but again, it was clarified in the legislation, so we do not expect any double charge. There is no possibility to have a double charge.
Phil: The amendment in the heart of a change to the 5% to 9%.
Phil: It was a confusion.
Phil: It was clarified E.
Phil: The legislation so we do not expect any.
Phil: Any any double check there is any possibility to having double double charge.
Phil: Okay.
Phil: Yeah.
Speaker Change #100: Thank you tell them and those are the only question that we have a couple of other ones that are already answer but with the Q&A. So thank you. Thank you.
Operator: Thank you, Saul. And those are the only questions that we have. We have other ones that are already answered in the Q&A. So, thank you.
Speaker Change #101: Thank you and we show no further questions over the phone at this time I will turn the call back to Mr.
Speaker Change #102: For closing remarks.
Raul: Thank you, and we have no further questions over the phone at this time. I will turn the call back to Mr. Revolta for closing remarks.
Speaker Change #103: Thank you once again for joining us today for our first quarter results conference. Our team is available to address any questions. You may have have already thank you.
Mr. Her: And this does conclude today's program.
Speaker Change #104: For your participation you may disconnect at any time.
Operator: Thank you once again for joining us today for our first Quiet Results conference. Our team is available to address any questions you may have. Have a great day. Thank you.
Speaker Change #104: [noise].
Operator: And this does conclude today's program. Thank you for your participation. You may disconnect at any time.
Speaker Change #104:
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