Q2 2024 Grupo Aeroportuario del Sureste S A B de C V Earnings Call
Operator: Good day, ladies and gentlemen, and welcome to ASUR's second quarter 2024 results conference call. My name is Ziko, and I'll be your operator. At this time, all participants are in listen-only mode. We will conduct a question and answer session toward the end of today's conference. If you would like to ask a question, please press star 1. If you want to withdraw your question at any time, please press star 2. If you are using a speakerphone, please lift the handset before making a selection. As a reminder, your call is being recorded. Now, I'd like to turn this call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead, sir.
Good day, ladies and gentlemen, and welcome to <unk> second quarter 2024 results conference call.
Equal: My name is equal and I'll be operator.
At this time, all participants are in listen only mode.
Equal: 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.
Equal: If you want to withdraw your question at any time, Please press star two.
Equal: If you're using a speaker phone please lift the handset before making a selection.
Equal: As a reminder, today's call is being recorded.
Equal: Now I'd like to turn this call over to Mr. Adolfo Castro Chief Executive Officer. Please go ahead Sir.
Adolfo Castro: Thank you Jacob and good.
Adolfo Castro (CEO): 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, which 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. Additional details about our quarterly results can be found in our preferences, which were issued yesterday after market close and is available on our website in the inventor relations section. Following my presentation, I will be available for Q&A.
Adolfo Castro: Morning, everyone before I begin discussing our results let me remind you that certain statements made during this call may constitute forward looking statements, which are based on current management expectations and beliefs and are subject to a seven or a brief kind of uncertainty that.
Adolfo Castro: Girls active results to differ materially.
Adolfo Castro: Factors that may be beyond our company's control.
Adolfo Castro: Have you seen on details about Belo quarterly results can be found in our press release, which was issued yesterday after market close and is available on our web.
Adolfo Castro: Besides the Investor Relations section.
Adolfo Castro: Following my presentation would be available for Q&A.
Adolfo Castro: Okay.
Adolfo Castro (CEO): Before moving on to our performance for the quarter, let me provide an update on recent developments on the sustainability front. To begin with, we have complied with Bios EHE reporting requirements, including the Mexican Stock Exchange. The United Nations Global Compact and the Mexican Register of Carbon Emissions. We are also implementing a data collection process that will allow us to calculate our scope-free carbon emissions. This process is approximately 90% complete as of the end of the second quarter for the Mexican airport. We also renewed our social project with Clonatura, which supports local fishing communities and promotes ecotourism in the Yucatan Peninsula.
Adolfo Castro: Before moving on to our performance for the quarter, Let me provide an update on recent developments.
It didn't have any different.
Adolfo Castro: To begin with we have complied with by EOG reporting requirements.
Adolfo Castro: The Mexican stock exchange.
That is the nations global compact cars.
Adolfo Castro: The Mexican registered carbon emissions.
Adolfo Castro: We are also implementing a data collection process that we are allowed to calculate our scope pretty top of emissions.
Adolfo Castro: This is approximately 90% complete as of the end of the second quarter for the Mexican airports.
You're also bringing our social project with regard to that which supports local patient communities and promotes ecotourism company.
Speaker Change: Company is unique.
Adolfo Castro (CEO): The new scope of the project will include 40 additional Direct Beneficiaries and approximately 100 Indirect Beneficiaries. Additionally, we have been in discussions to strengthen our alliance with UNICEF and extend the activities of this agency to all airports across our group. Latin is also in the final stages of establishing a strategic alliance with ECPAC, a non-governmental organization that aims to prevent human trafficking. We look forward to providing more updates as we continue to advance on our sustainability journey, now starting with a review of the source operational and financial performance for the quarter. As usual, all compliance and discounts will be year-on-year unless specified otherwise.
We need to go.
Speaker Change: Project will include 40 additional.
Speaker Change: I'd like to make the sureties and approximately hundred indirect lighting fixtures.
Speaker Change: Additionally, we have been in compensation to strengthen I swear aligns with the UNICEF and extend the activities of these agency.
Speaker Change: All airports across our group.
Speaker Change: Lucky.
Speaker Change: Also in the final stages of establishing a strategic alliance with expert and nongovernmental organization that aims to prevent human trafficking.
Speaker Change: We look forward to providing more abates as we continued to advance our sustainability journey now starting with a review of operational and financial performance for the quarter.
Speaker Change: As usual all compliance will be schools will be year on year unless specified otherwise.
Speaker Change: Yeah.
Adolfo Castro (CEO): Passenger traffic was up 30% year-on-year to nearly 18 million passengers, a record high for a second quarter. Traffic growth in Puerto Rico and Colombia more than offset a softer performance in Mexico. By region, Colombia posted the strongest performance with traffic of 21 million in the year-on-year, driven by increases in domestic and international in the high teens and in the high 20s. Traffic in Colombia continues to benefit from easier comes following the suspension of two operators in February last year, which accounted for 20% of the traffic. We expect this positive recovery trend to continue during the remainder of the year as Avianca and LATAM airlines regain some lost ground.
Speaker Change: Passenger traffic was up 30% year on year to nearly 18 million passengers a record for second quarter.
Speaker Change: Traffic growth in Puerto Rico, and Colombia, more than offset a softer performance in Mexico.
That region.
Speaker Change: We have posted the strongest performance with traffic both 21 year on year, driven by increases in domestic and international in the high teens and twenties.
Traffic in Colombia continued to benefit from easier comps following the suspension of door creators in.
Speaker Change: In February last year, which accounted.
Speaker Change: 20% of the journey.
Speaker Change: We expect the positive recovery trend to continue during the remainder of the year cause of Yankton Airlines regain some lost routes.
Adolfo Castro (CEO): Puerto Rico delivered a 9% increase in traffic driven by crows in the high single digits and double digits in domestic traffic and double digits in international traffic. As anticipated, we are seeing a normalization in the traffic of Puerto Rico as last year benefited from the increased operations by Frontier Airlines. Lately, traffic in Mexico declined close to 5%, reflecting single-digit contractions in both international and domestic traffic. In terms of international traffic, we saw declines from all regions except Canada in the quarter.
Puerto Rico delivered a 9% increase in traffic driven by growth in high single digits.
Speaker Change: In domestic traffic and double digit in international traffic.
As anticipated we are seeing a normalization of the traffic of Puerto Rico.
Speaker Change: Last year benefited from the increased operations like Frontier Airlines.
Speaker Change: Lastly, traffic in Mexico declined close to 5%, reflecting single digit contractions in both international and domestic traffic.
Speaker Change: In terms of international traffic, we saw declines from all the regions, except Canada water.
Adolfo Castro (CEO): In turn, domestic traffic remains impacted by the initial effects of the present wooden engine problem experienced in the past few quarters, as well as the capacity reduction of air traffic movements at Mexico City Airport since early this year.
Speaker Change: In Germany domestic traffic remains impacted by each Olympics are threatened with an engine problem.
Speaker Change: In the past few quarters.
Speaker Change: Well as the capacity reduction of drastic movement of Mexico City Airport since early this year.
Adolfo Castro (CEO): As a reminder, Mexico City Airport accounted for 45% of Azul's domestic traffic in 2023, and we expect the situation to continue negatively impacting domestic traffic this year, which could cause a small decline in U.S. Now moving on to P&L. As a reminder, all references to revenue and cost are excluding those folks. Total revenues increased nearly 18% to 7 billion pesos in the quarter. Colombia stood out with a top-ranked goal in the 30s, mainly benefiting from the pickup in international class.
Speaker Change: As a reminder, Mexico city airports accounted for 45% of domestic traffic in 2023.
Speaker Change: We expect this situation to continue negatively impacting domestic traffic this year, which would go it's multi client.
Speaker Change: Now moving on to P&L.
Speaker Change: As a reminder, all references to revenue and cool.
Speaker Change: Excluding construction.
Speaker Change: Total revenues increased nearly 18% to 7 billion business in the quarter.
Speaker Change: Colombia speed out with the top ranked the third piece, mainly benefiting from good pick up in the natural dropping.
Adolfo Castro (CEO): Mexico Delivered Revenue Group in the high teens and Puerto Rico in the middle single digits. Mexico accounted for 74% of the total revenues, and posted an 18% topic line increase. Even as passenger traffic declined by percent, revenue was driven by 20 percent growth in aeronautical services, reflecting adjustments established in the recent mass development plan and the impact of the weaker desert, taking into account that international, That is our page on your domain. In turn, non-aeronautical readiness increased no single day.
Speaker Change: Mexico delivered revenue growth in the cloud.
Teams in Puerto Rico in the middle single digits.
Speaker Change: Mexico accounted for 74% of the total revenues posted a 19% top line increase.
Speaker Change: Even as passenger traffic declined 5%.
Speaker Change: Revenue was driven high twenties.
Speaker Change: And I was kind of services.
Speaker Change: Electing the adjustments systems into visa Master development plan and the impact of the weaker peso taking into account that you didn't mention them.
Speaker Change: Our Beijing.
Speaker Change: Yes.
Speaker Change: No no revenues increased low single digits.
Adolfo Castro (CEO): Puerto Rico accounted for 15% of the total revenues and delivered 5% growth in the top line, reflecting a high single-digit increase in non-aeronautical revenues, while aeronautical revenues increased by a low single-digit. In turn, Colombia, which represented 11% of revenues, posted a 35% increase in the top line, reflecting a good performance in both aeronautical and non-aeronautical revenues, which benefited from international As we continue to execute our strategy of expanding our commercial offering, we opened 45 new commercial spaces over the past 12 months.
Speaker Change: Puerto Rico accounted for 15% of the total revenues and delivered 5% growth in the top line, reflecting high single digit increase in none of them altogether.
Brian: Brian I don't know what the Conservatives in PS increased by low single digits in.
Brian: In Colombia, which represented 11% of revenues posted a 35% increase in the line.
Reflecting a good performance equal I dunno, because no matter, what not to cause revenue, which benefited from international traffic growth.
Speaker Change: As we continued to execute our strategy of expanding our conventional offering we opened 45, new commercial spaces.
Speaker Change: Over the past 12 months.
Speaker Change: Pete.
Adolfo Castro (CEO): 17 were opened in Mexico, 4 in Puerto Rico, and 33 in Colombia. As I was told, commercial revenues were up 7%, and more than double the crew in passenger trucks.
Speaker Change: 17 were opened in Mexico for in Puerto Rico, and 33 in Colombia.
Speaker Change: As a result commercial revenues were up 7% more than double the growth in passenger traffic.
Speaker Change: Reflecting increases of 4% in Mexico, 9%.
Adolfo Castro (CEO): cent in Puerto Rico and an impressive 40% price in Colombia. On a per capita basis, commercial revenue increased 5% year-on-year to nearly 128 pesos in the quarter. This performance was mainly driven by growth of 16% in Colombia. 9% was in Mexico, and Puerto Rico was relatively flat. Mexico reported record high commercial readiness per passenger at 154.5 pesos, beyond the typical levels achieved during the pandemic, benefiting from strong U.S. dollars. Moving down to the P&L.
Speaker Change: Central Puerto Rico, an impressive 40% price in Colombia.
Speaker Change: On a per passenger basis commercial revenue increased 5% year on year to nearly 148 business in the quarter.
Speaker Change: Performance was mainly driven by growth of 16% in Colombia.
Speaker Change: 9% was in Mexico.
Speaker Change: The recall was relatively mixed.
Speaker Change: Mexico reported record CAG commercial readiness passenger 154 five.
Speaker Change: That's just beyond the typical levels achieved during the pandemic benefitting from a strong U S dollar.
Speaker Change: Moving down to the P&L.
Adolfo Castro (CEO): Cost and expenses increased nearly 30% year-on-year; on a compatible basis, excluding the $252 million recovery in expenses in Puerto Rico under the Coronavirus Response and Relief Supplemental Appropriations Act, in the second quarter of last year, total costs were up 16%, slightly below revenue growth. By geography, costs in Mexico were up 18%, resulting from increases of 80% in the concession fees established by the Mexican government and 20% in minimum wages, mainly in cleaning and security, both effective January 1st. This was partially offset by a 50% reduction in the technical assistance fee.
Cost and expenses increased nearly 30% year on year.
Speaker Change: On a comparable basis, excluding the 252 million recovering expenses in Puerto Rico on the corner of my mind is the.
Speaker Change: Respondents I believe supplemental applications Act.
Speaker Change: In musical water last year.
Speaker Change: Both were up 16% slightly below revenue guidance.
Speaker Change: By geography cost in Mexico.
Speaker Change: 18%, resulting from increases of 80% in the concession fees established by the Mexican government and 20% in minimum wages, mainly in cleaning and security both effective January depressed.
Speaker Change: This was partially upset by a 50% reduction in the beginning it was a good thing.
Adolfo Castro (CEO): On a comparable basis, Puerto Rico reported a 10% increase in cost, which was below revenue growth, while Colombia... was up 19% above revenue goal. Gross Domesticated EVDA was up 18% year-on-year to $5 billion in net worth. However, One Adjusted DVM Margin, which excludes construction, was relatively unchanged at 69%.
Speaker Change: On a comparable basis, Puerto Rico reported a 10% growth.
Speaker Change: It was below revenue growth.
Speaker Change: Yeah.
Speaker Change: Were up 19% above revenue growth.
Speaker Change: Consolidated EBITDA was up 18% year on year to 5 billion barrels in the quarter.
Speaker Change: While adjusted EBITDA margin, which exclude construction was relatively unchanged at 69%.
Adolfo Castro (CEO): Note that on a comparable basis, excluding the recovery expenses in Puerto Rico in the second quarter of last year, DVDA would have increased 26%, and the adjusted DVDA margin would have expanded by 435 basis points year on year. This group's performance was driven by solid compatibility across our three regions of operation. Puerto Rico presented the strongest performance with comparable EVA out, and over 90% of Colombian pollutant was eliminated. 49% increase, while Mexico posted an 18% increase in UVDA.
Speaker Change: Note that on a comparable basis, excluding the recovery expenses in Puerto Rico in the second quarter of last year.
Speaker Change: EBITDA would have increased 26% and adjusted EBITDA margin expanded.
Speaker Change: My 435 basis points year on year.
Speaker Change: This performance was driven by a solid double digit growth.
Speaker Change: The regions of operation.
Speaker Change: With Politico presented the strongest performance with comparable EBITDA up over 90%, Colombia fall away.
Juan Ponce: 49% increase; Juan Mexico posted an 18% increase in the VA.
Speaker Change: 49% increase while Mexico posted an 18% increase in EBITDA.
Adolfo Castro (CEO): Turning to the balance sheets, we maintain a healthy financial position with cash and cash equivalents of nearly 15 billion pesos. After taking into account the dividend payments totaling of 6.3 billion pesos during the quarter, equivalent to a cash and cash-off dividend of 10.926 pesos per share and an extraordinary cash dividend of 10 pesos per share. Lastly, in terms of capital expenditure, we made investments of nearly 650 million pesos during the quarter and close to 820 million pesos in the first half of the year.
Adolfo Rivas: Journey to the violent shoots, we maintain a healthy financial position, with cash and cash equivalents of nearly 15 billion pesos, after taking into account the dividend payments total of 6.3 billion pesos during the quarter, a equivalent to a cash, a cash of 10.926 pesos per share, and an extraordinary cash payment of 10 pesos per share. Lastly, in terms of cash payments, we made investments of nearly 6.5 billion pesos during the quarter, and close to 820 million pesos in the first half of the year, who are currently in the process of project planning and covering out the green process of select contractors.
Speaker Change: Turning to the balance sheet.
Speaker Change: Being a healthy financial position with cash and cash equivalents of nearly 15 billion pesos after taking into account the dividend payments.
Speaker Change: $6 3 billion peso during the quarter and keeping them to our parents and kids.
Speaker Change: Well 10, 19 seats, that's for sure and an extraordinary cash dividend of <unk> per.
Speaker Change: For sure.
Speaker Change: Lastly in terms of Capex, we made investments of nearly 650 million peso during the quarter and close to 820 million sensors in the first half of each year.
Adolfo Castro (CEO): We are currently in the process of project planning and coming out of the green process to select contractors. Key projects include Akankung Airport, the expansion of Terminal 4, and the reconstruction and expansion of Terminal 1. And finally, the expansion of the terminal in Oaxaca Airport. Note that all construction work will take place outside the operating area and will not affect the patient, as we said. Wrapping up, we delivered a solid second quarter, with net majority income of 50% year-on-year to 3.7 billion pesos.
Speaker Change: We're currently in the process of project planning and carrying out the bidding process to select contractors.
Adolfo Rivas: Keep projects, includes a clear, clear put, the expansion of 10.4, and the construction and expansion of 10.1. And finally, the expansion of the 10.925 airports.
Speaker Change: Key projects include I think when airport expansion.
Speaker Change: And record production and expansion of terminal one.
Speaker Change: And finally, the expansion of the thing that I'm in Oaxaca.
Adolfo Rivas: Note that those construction works will take place outside the operating area, and do not affect the patient of these airports. Wacking up with a lever and a solid second quarter, we've met majority in the off 50% year and year to 3.7 billion pesos. This would be a performance also benefited from the point exchange thing, on nearly 9.5 million pesos this quarter. Resulting from the 10% quarter and the position of Mexican peso can be US dollar. Compared with a 3.1 billion F.X. loss, reported in the same quarter last year.
Speaker Change: Note that all construction works will take place outside the operating area.
Speaker Change: Not affect patient, let me circle.
Speaker Change: Wrapping up we delivered a solid second quarter.
Speaker Change: Net majority income up 50% year on year to $3 7 billion. This.
Adolfo Castro (CEO): This good performance also benefited from the foreign exchange swing of nearly 950 million pesos this quarter, resulting from the 10% quarterly and depreciation of the Mexican peso against the U.S. dollar, compared with a 350 million FX loss reported in the same quarter last year.
Speaker Change: This good performance also benefited from a foreign exchange gain.
Speaker Change: 950 million vessels this quarter.
Speaker Change: Resulting from the 10% water and depreciation of the Mexican peso against the U S dollar comp.
Speaker Change: Compared with a three course dinners on 50 million FX loss.
Speaker Change: Reported in the same quarter last year.
Adolfo Castro (CEO): This quarter was not without its challenges, notably the ongoing issues with Pratt & Whitney engines and the reduction of capacity at Mexico City Airport, but we navigated through these and delivered some resources required. These conclude my prepared remarks. SIGCO is open to the floor for questions. Thank you. Again, to the audience, it is a star, then one for questions. And again, please make sure your microphone is turned off or the answer is picked up.
Adolfo Rivas: This quarter was not without its challenges. Not only the only issues of pattern with the engines and the reduction of capacity of Mexico City Airport, but we navigated through these and delivered some results in the quarter.
Speaker Change: This quarter was not without its challenges, notably the ongoing aegis prepping Whitney engines and reduction of capacity in Mexico City Airport.
Speaker Change: But we navigated through these and delivered strong results in the quarter.
Operator: These are my questions.
Speaker Change: This ends my.
Speaker Change: So three months CECO is up and that's local questions.
Speaker Change: Okay.
Operator: Thank you. Again to the audience, it is star then one for questions. And again, please make sure you mute your function. It's turned off or the answer to expect up before pressing the corresponding digits.
Speaker Change: Thank you.
Operator: Again, to the audience, it is Star, then one for questions, and again, please make sure you mute your microphone, it's turned off, or the answer is picked up before pressing the corresponding digit. Our first question is from Rodolfo Ramos from Bradesco BBI. Please go ahead.
Speaker Change: Again to the audience. It is star then one for questions and again, please make sure. Your mute function is turned off or the handset. This picked up before pressing the corresponding digits.
Speaker Change: Yeah.
Rodolfo Ramos: Our first question is from Rodolfo Ramos. From Bradetsco BBI. Please go ahead.
Speaker Change: Our first question is from Rodolfo Ramos from Bradesco BBA. Please go ahead.
Rodolfo Ramos: Good morning, Adolfo. Thanks for taking my questions. Just a couple from my side. The first one is on traffic. I wanted to get your sense of where we stand in the recalls. I'm proud of Whitney.
Rodolfo Ramos: Good morning. Thank you for taking my question. Just a couple from my side. The first one is on traffic. One of the get your sense of where we stand in the recalls. I'm proud of Whitney. You're one of the least exposed. Just wanted to get your thoughts on where we stand there.
Good morning, Thanks for taking my question just a couple from my side. The first one is on on traffic wanted to get your sense of where we stand and.
Speaker Change: And in the recall some patent Whitney.
Speaker Change: No you're one of the least exposed.
Speaker Change: Wanted to get your thoughts on where we stand there and on traffic as well if you.
Rodolfo Ramos: And on traffic as well, if you would expect, given the rhetoric that we've seen so far from the US election campaign, whether we can expect a similar impact from what we saw last time around in terms of the US international bound traffic. That's my first one on traffic.
Speaker Change: If you would expect given the rhetoric that we've seen so far from the U S.
Speaker Change: Election campaign, whether we can expect a similar impact from what we saw.
Speaker Change: Last time around in terms of the U S International down traffic. So that's that's my first one on traffic and secondly, if you can just give us a sense so far of pricing of where you are where you currently stand.
Rodolfo Ramos: You're one of the least exposed. I just wanted to get your thoughts on where we stand there. So that's my first question about traffic.
Rodolfo Ramos: Secondly, if you can just give us a sense of pricing of where you currently stand, you had mentioned in the previous call that you increased prices in April. So just wanted to see where you stand versus your maximum tariffs on what to expect they're going forward. Thank you.
Speaker Change: You had mentioned in the previous call that you increased prices in April.
Speaker Change: So just wanted to see where do you see.
Speaker Change: <unk> versus your maximum tariffs on what to expect there going forward. Thank you.
Adolfo Rivas: I have a lot of good morning, well in the case of nothing with me, of course I do not have the exact exact exact exact data of what I understand. And the most effective is Polaris; they sent 19 airplanes at the U.S. Water and 26 in the first water. And you know the time of the recall is around 300 days, so we will see those planes coming back to production, I would say, at the end of September this year. So from now until the September, the things are not going to improve, and after that I will, I believe they will start life up to first quarter next year and then they should improve.
Speaker Change: Hi, good morning, well in the case of PREPA the Whitney.
Speaker Change: Of course, I do not have the exact and precise data, but what I understand.
Speaker Change: The most effect that these bladders they sense 19 airplanes.
Speaker Change: During the fourth quarter and 2016.
Speaker Change: That's why.
Speaker Change: And you know the time up there'll be call. It around 300 days. So we will see those planes coming back to production I would say at the end of September this year.
Speaker Change: So from now until mid September.
Speaker Change: The things are not going to improve.
Speaker Change: And after that I will I believe they will stabilize.
Speaker Change: Two first quarter next year and then.
Speaker Change: They should improve.
Adolfo Rivas: In the case of what you have mentioned, because of the elections in the U.S., yes, I do expect, and you can see that very clear. The Mexico, the Mexican situation will be there in all the country days, and they will be blaming all the problems we have here, and that may affect traffic during the fourth quarter. In terms of driving, we have a threat that I will drive this, so we are working towards to have a matching entire compliance of close to 99% for the year.
Speaker Change: In the case of what you have mentioned.
Because of the elections in the U S. Yes, I do expect.
Speaker Change: You can see that very clear.
Speaker Change: In Mexico, the Mexican CPI.
Situation would be that.
Speaker Change: And on the candidates.
Speaker Change: And they will be lagging all the problems, we have here and that may affect traffic.
Speaker Change: During the fourth quarter.
Speaker Change: Then subtracting we have adjusted our prices.
Speaker Change: We are working towards two.
Speaker Change: Have a maximum tax compliance with close to 99% for the year.
Rodolfo Ramos: Thank you very much.
Speaker Change: Thank you.
Speaker Change: Okay.
Rodolfo Ramos: Thank you.
Rodolfo Ramos: And secondly, if you can just give us a sense of pricing of where you currently stand. You had mentioned in the previous call that you increased prices in April. So just wanted to see where you stand versus your maximum tariffs and what to expect there going forward. Thank you.
Speaker Change: Thank you. The next question is from Hillerman Mendez from Jpmorgan. Please go ahead.
Adolfo Castro (CEO): Have a wonderful good morning. Well, in the case of Dr. Whitney, of course, I do not have...
Killer Memories: The next question is from Killer Memories from JB Morgan, please go ahead.
Adolfo Castro (CEO): The most affected is Bolares. They sent 19 airplanes. Act during the fourth quarter and 2016 in the first quarter, and you know the time of that we call is around 300 days, so we will see those planes. Coming back to production, I would say at the end of September this year. So from now until this September. And after that, I will, I believe they will satellize. Measuring Proof.
Killer Memories: Hi, I do have a good morning. Thanks for taking my question. I was wondering, in terms of the commercial revenues, as far as being surprising to the website on a per passenger basis, in a mention about opening a bunch of new commercial spaces in the three regions.
Guilherme G. Mendes: Hi, Adolfo good morning. Thanks for taking my question I was wondering in terms of the commercial revenues are sort of has been surprising to the upside on a per passenger basis.
You mentioned about the opening a bunch of new commercial spaces in the three regions.
Killer Memories: How should we think about this segment going forward, meaning in addition to the investments I'm going to make, and can come where for should we expect additional openings or ramp ups on the commercial front. And my second question is on traffic, following up on the previous one, but think about Puerto Rico and Colombia. You mentioned on the past conference call about a normalization on the trend of both Colombia and Puerto Rico, actually ready and decelerating. Just wanted to double-check if that's still your base case expectation.
Speaker Change: How should we think about this segment going forward, meaning in addition to the investments and you're gonna make and Cancun Airport should we expect additional openings Oh ramp ups are.
Speaker Change: On the commercial front and my second question is just on traffic falling up on the previous one but think about particularly when Colombia, you mentioned in the past conference call about a normalization on the trend of both Colombia, and Peru equal accelerating decelerating.
Speaker Change: I wanted to double check if that's still your base case expectation. Thank you.
Adolfo Rivas: Thank you.
Speaker Change: Yeah.
Adolfo Rivas: Well, in the case of commercial revenues, what you saw for the quarter, it wasn't the same party, and I know it's a good time. Those were the two winners for the quarter.
Speaker Change: Thank you.
Well in the future commercial revenues, what you saw for the quarter. It was an existing parking and also Catherine.
Speaker Change: Yeah those were the two winners for the quarter.
Adolfo Castro (CEO): In the case of what you have mentioned, because of the elections in the U.S., yes, I do expect, and you can see that very clearly. The Mexico situation will be there in all the candidates, and they will be blaming all the problems we have here, and that may affect traffic, during their fourth quarter. In terms of pricing, we have adjusted our prices. So we are working towards to have a maximum tariff compliance of close to 99% for the year. Thank you, everyone.
Adolfo Rivas: I have to say that, of course, in the case of Mexico, which has reached a record high of Colombia, the 54 pesos per passenger. And we were positive, in fact, by the Mexican peso's appreciation. In the case of the traffic to Puerto Rico and Colombia, yes, I do believe that Puerto Rico should normalize during the remaining of the year.
Speaker Change: I have to say that of course in the case of Mexico.
Which has reached a record high of 104 basis.
Speaker Change: The passenger.
Speaker Change: And we were positively affected by the Mexican.
Speaker Change: Peso depreciation.
Speaker Change: In the kitchen with traffic to Puerto Rico, and Colombia, Yes, I do believe that Puerto Rico should normalize during the remaining of the year and in the case of Colombia, what I do expect to ease the recovery process towards the end of the year.
Adolfo Rivas: And in the case of Colombia, what I do is that the recovery process towards the end of the year, what we have lost the last year with the ground of this war like that represented 20% of the traffic during 2022. Thank you.
What we have lost that last year.
Speaker Change: The ground of this work like that represented 20% of the traffic during 2022.
Speaker Change: Yes.
Killer Memories: Okay, thank you so much.
Guilherme G. Mendes: Thank you. The next question is from Guilherme Mendes from J.P. Morgan. Please go ahead.
Speaker Change: Okay. Thanks, so much have a good day.
Killer Memories: Have a good day. Thank you.
Speaker Change: Thank you. Thank you.
Ian Spies: The next question is from Ian Spies with Morgan Stanley Investment.
Guilherme G. Mendes: Hi Adolfo, good morning. Thanks for taking my question. I was wondering in terms of commercial revenues, Astura has been surprising on the upside on a per passenger basis, and you mentioned opening a bunch of new commercial spaces in the three regions. How should we think about this segment going forward, meaning in addition to the investments that you're going to make in Cancun Airport, should we expect additional openings or ramp-ups on the commercial front?
Speaker Change: The next question is from and speak.
Guilherme G. Mendes: And my second question is on traffic, following up on the previous one, but think about Puerto Rico and Colombia. You mentioned on the past conference call about a normalization on the trend of both Colombia and Puerto Rico accelerating and decelerating. I just wanted to double check if that's still your base case expectation. Thank you.
Speaker Change: With Morgan Stanley investment. Please go ahead.
Ian Spies: Please go ahead.
Speaker Change: Yeah.
Ian Spies: Yes, hello, Adolfo. Thank you for taking the time for the questions. I just want to ask on the realized tariff; I think you afforded 326 vessels. And doing some math here, we get that it represents around 95% off your maximum tariff if we waited by traffic of the individual airports. That's a sound about rise, or are we missing anything, and a follow up to that.
Adolfo Castro (CEO): Thank you. Well, in the case of commercial revenues, what you saw for the quarter, it was in parking and also car rental. Those were the two winners for the quarter. I have to say that, of course, in the case of Mexico, which has reached a record high of 154 pesos per passenger, and we were positively affected by the Mexican peso depreciation. In the case of the traffic to Puerto Rico and Colombia, yes, I do believe that Puerto Rico should normalize during the remainder of the year.
Speaker Change: Yes, Hello Adolfo. Thank you for taking the time for the questions I just wanted to ask on the <unk>.
Adolfo Castro (CEO): And in the case of Colombia, what I do expect is the recovery process towards the end of the year, regaining what we lost last year with the grounding of these two islands that represented 20% of the traffic during 2022.
Guilherme G. Mendes: Okay, thank you so much. Have a good day.
Speaker Change: Realized tariff I think you reported 326 vessels.
Speaker Change: Doing some math here.
Speaker Change: We get that that represents about 95%.
Speaker Change: After your maximum clarity, if we waited by traffic off the individual airports.
Speaker Change: Sounds about right or what are we missing anything and a follow up to that.
Adolfo Rivas: Are you, are you worried about the depreciation on the Mexican vessel or, I think better said, assert that depreciation the Mexican vessel, which could maybe result in a heightened risk of skew exceeding the maximum tariff and potentially having to give some discounts towards the end of the year. Well, in the case of the maximum tariff, there's a key part of it in the Mexican section that says what was the weighted average maximum rate obtained. Well, in basic rate obtained during the quarter, what I was saying last year, yes, we reached 95%, and what we are expecting is it's close to 99%.
Speaker Change: Are you I mean are you.
Speaker Change: Worried about.
Depreciation of the Mexican peso or.
Speaker Change: I think so.
Speaker Change: Net.
Speaker Change: A further depreciation of the Mexican peso, which may be resolved in the highest interest cost you're exceeding the maximum tariff and potentially having to give some discounts towards the end of the year.
Anthony: All indications are maxing Anthony.
Speaker Change: A good part of her in the Mexican infection that says what was the weighted average maximum rates.
Speaker Change: Well in beauty breakdown obtained during the quarter.
Speaker Change: What I was saying last year, yes, we reached 95% and what I, what we are expecting.
Speaker Change: Is it close to 99% of course that will depend on what you just mentioned in terms of the Mexican peso.
Adolfo Rivas: And of course, that will depend on what you just mentioned in terms of the Mexican vessel. Mexican vessel evaluation will help us to get these objectives, as the tariff's for the international flight type based in US dollars. So that the amount of that maximum rate is in vessels so that will help us to reach the objective.
Speaker Change: Mexican peso devaluation will oh.
Speaker Change: Two to get these objectives us that each sports international flights are based in U S dollars.
So that remember that Mexican related investments so that we'll have.
Speaker Change: To reach our objective.
Ian Spies: Okay, perfect.
Speaker Change: Okay perfect.
Ian Spies: And if I may just one follow up in terms of traffic, I mean, comparing it to what you forecast it within your tariff review, I think, I mean, we're not even close to getting to the 3% clock back hungry or any color of that. Well, in terms of traffic, what I would say is what we were expecting from Captain Whitney and the decreasing international traffic is being higher in comparison with what we were expecting at the end of the year. So they have been fired. Okay. They have not been done. Okay, higher but not close to 3% club; high in terms of more negative. So today, the current traffic is more negative as we were expecting.
Speaker Change: If I may just one follow up.
Speaker Change: In terms of traffic.
Speaker Change: I mean, comparing it to what you forecast it within your tariff review.
Speaker Change: I mean, we're not even close to getting to that 3% of claw back I agree or.
Speaker Change: And any color on that.
Speaker Change: Well in terms of traffic what I, what I would say, it's a what we were expecting from Pratt and Whitney.
Speaker Change: The decrease in international traffic.
It's been higher in comparison with what we what we were expecting at the end of last year.
Speaker Change: It will be higher okay.
Speaker Change: Nothing dramatic.
Speaker Change: Okay, higher but not close to 3%.
Speaker Change: Club.
Speaker Change: Hi in terms of more negative so today the great shopping is more negative as we were expecting.
Ian Spies: Okay, that's clear. Thanks.
Speaker Change: Okay, that's clear thanks.
Fernanda Recchia: Thank you. The next question is from Fernanda Recchia with BTG. Please go ahead.
Speaker Change: Thank you.
Ian Spies: The next question is from Ian Spies, with Morgan Stanley Investments. Please go ahead.
Speaker Change: The next question is from Fernando here with BTG. Please go ahead.
Speaker Change: Okay.
Fernanda Recchia: Fernanda Recchia may be asking to unmute your client. Please go ahead with the question.
Fernando: Fernando They kill me.
Speaker Change: Ask you too on mute your line. Please go ahead with your question.
Operator: As there is no response, may I request that be moved to the next participant?
Speaker Change: As there is no response may I request that we move to the next participant.
Speaker Change: Okay.
Jay Singh: The next question is from Jay Singh with City Bank. Please go ahead. Thanks for taking my question. I guess the first question I want to ask is, you mentioned earlier that Columbia and Puerto Rico traffic strength is team monitoring over. I also would ask the injectors has been raising capacity into Puerto Rico's market, so considering that you still see some degree of moderation or, you know, do you see it sticking around a little bit higher?
Ian Spies: Yes, hello Adolfo. Thank you for taking the time to ask the questions. I just want to ask about the Realized tariff. I think you reported 326 pesos. And doing some math here, we get that it represents around 95% of your maximum tariff if we weight it by the traffic of the individual airports. Does it sound about right, or are we missing anything? And a follow-up to that... Are you worried about the depreciation of the Mexican peso or, um, I think that is sad. Further depreciation in the Mexican peso, which could possibly result in a heightened risk of you exceeding the maximum tariff and potentially having to give some discounts towards the end of the year.
Speaker Change: The next question is from Jason.
Adolfo Castro (CEO): Well, in the case of the maximum tariff, there's a clear paragraph in the Mexican section that says what the weighted average was, the maximum rate obtained, and the implicit rate obtained during the quarter. What I was saying last year, yes, we reached 95%, and what we are expecting is it's close to 99%. Of course, that will depend on what you just mentioned in terms of the Mexican peso to get these objectives. The tariffs for the international flights are based in U.S. dollars, so remember that the maximum rate is in pesos. So that will help us to reach our objective.
Jason: With Citibank. Please go ahead.
Speaker Change: Yeah.
Ian Spies: Okay, perfect. And if I may, just one follow-up. In terms of traffic, I mean, comparing it to what you forecasted within your tariff review, I think, I mean, we're not even close to getting to the 3% clock back, aren't we?
Jason: Hey, Thanks for taking my question I guess, the person who wants to ask as you mentioned earlier that in Colombia, and Puerto Rico traffic strength, you've seen moderating a little bit.
Speaker Change: Jetblue has been raising capacity and support vehicles market. So considering that you still see some degree of moderation or do you just see it sticking around a little bit higher.
Ian Spies: and any color in that.
Jay Singh: Yeah, hello Jay. I cannot hear you well; could you speak louder? Sure, so you mentioned Columbia's and Puerto Rico's traffic strength and potentially moderating in the coming quarters, but the injector has been raising the capacity into Puerto Rico's market, so do you see that sticking around or do you still see it more likely? The most important effect in Puerto Rico last year was the entrance of the frontier, and they are expanding and creating a base in Puerto Rico. Of course, when you reach the comparable year to year, then it will not be easier to reach the 18% growth we go out of class yet.
Speaker Change: Hello, Jay I cannot hear you will could you speak louder.
Speaker Change: Sure. So you mentioned, Colombia, and Puerto Rico traffic strengthened potentially moderating in the coming quarters, but at Jetblue has been raising the capacity its Puerto Rico's market. So do you see that sticking around or do you still see it normalizing.
Speaker Change: The most important effect in Puerto Rico last year, what the influence of the four P M.
Speaker Change: They are expanding and creating a base in Puerto Rico of course, when you reach the comparables year over year.
Speaker Change: Then it will not be easier to reach the 18% growth. We got up last year. So that's why I'm, saying that it should normalize once we.
Jay Singh: So that's why I'm saying that it should normalize once we reach the talk months roll over when the entrance of frontier.
Speaker Change: We reach the took months rollover with late and it comes up from here.
Jay Singh: All right, thanks, and for my second question, I want to ask how much capacity can we expect on a consolidated basis and what would the split look like between the MDP and the non-MDP?
Speaker Change: Yeah.
Speaker Change: Alright, Thanks and for my second question I wanted to ask how much capex can we expect on a consolidated basis and what would the split look like between the MVP and the non DTA.
Adolfo Rivas: Again, I cannot hear you. Okay, how much capacity can we expect on a consolidated basis, and what would the split look like between the MDP and the non MDP? The MDP is forwarding years of 3.8 billion; of course, will have to be adjusted with a construction by index, and that's what we have to comply with. I have to say that at the beginning of the five year period, once the project has been approved at the end of last year, we have to wait until we develop the projects, make the Dean process, and find the contractors.
Speaker Change: Again I cannot hear you.
Speaker Change: Okay.
Speaker Change: How much capex can we expect on a consolidated basis and what was the split look like between the MVP and MVP.
Speaker Change: <unk>.
Speaker Change: The NTP fording gears around three 8 billion.
Speaker Change #100: Those would be would have to be adjusted with the construction price index.
Speaker Change #100: Back to what we have to comply with.
Speaker Change #100: And I have to say that at the beginning over that five year period. Once the projects have been approved at the end of last year.
Speaker Change #100: We have to wait.
Speaker Change #100: Until we develop the projects make the bidding process and buying the contractors.
Adolfo Rivas: And then they can start constructing. So that's why you are seeing the very low between brackets number for the first half of the year, the eight hundred and something medium, comparable with the 3.8 billion that we have to expand the year. Thank you.
Speaker Change #100: And then they can start constructing so that's why you're seeing the very slow.
In brackets number for the first half of the year, the 800 and something million comparable with the $3 8 billion that we have to spend during the year.
Speaker Change #100: Thank you.
Speaker Change #100: Welcome.
Speaker Change #100: Thank you.
Speaker Change #100: Yeah.
Pablo Monsivais: The next question is from the line of Pablo Monsivais with Buckley's. Please go ahead.
Speaker Change #101: The next question is from the line of Pablo <unk> with Barclays. Please go ahead.
Pablo Monsivais: Hi, Adolfo. Good morning. Thanks for taking my question.
Pablo: Hi, Good morning, Thanks for taking my question I just.
Pablo Monsivais: May I just ask if you can provide some color on your perspective for US traffic to conclude? We have seen some weakness, and the US Congress are saying that they are picking out the capacity. But what are your thoughts on these, and especially how deep or how prolonged can this be? That's number one.
Oscar: Oscar if you can provide some color on the on your perspective for U S traffic to Cancun, we have seen some weakness in the U S. Cargoes are saying that they are taking out capacity, but what are your thoughts on these and especially how deep or how prolonged candidly that's number one.
Adolfo Rivas: And number two, I would like to have more detail on your commercial revenues plan for Colombia and Puerto Rico going forward. Thank you. Well, because of the traffic too far, as you have seen in the first half of the year, it has not been nice, basically affected by the domestic situation of threatened with me and the reduction of the air traffic movement, Mexico City Airport from 32 to 43. I don't think that these two things will change, so that those two things will continue affecting the traffic to the second half of the year. And also the new negative effect is the reduction in the traffic from the US, as I have mentioned in my initial remarks.
Speaker Change #104: To Ah I would like to have more more more detail on your commercial revenues are flattened score of Columbia, and Puerto Rico going forward. Thank you.
Adolfo Castro (CEO): Well, in terms of traffic, what I would say is what we were expecting from Procter & Whitney and the decrease in international traffic is higher in comparison with what we were expecting at the end of last year. It's a little bit higher. Okay.
Ian Spies: Okay, higher, but not close to three percent.
Oscar: Well because the traffic of Greencore as you have seen in the first samples a year.
Speaker Change #105: Hey, guys.
Speaker Change #106: In line basically affected by the domestic situation that threatened with me and the adoption of.
The address it.
Speaker Change #106: Mexico City Airport from.
Speaker Change #107: 52% to 43.
Speaker Change #108: Yeah, I don't think that these are.
Speaker Change #108: Two things will change so that those two things will continue affecting traffic during the second half of the year.
Speaker Change #108: And also the negative effect.
Speaker Change #108: The reduction in the traffic from the U S. As I have mentioned in my initial remarks.
Ian Spies: Hi, in terms of more negative, so today the current traffic is more negative than we were expecting. OK. Yes.
Adolfo Rivas: As it was mentioned in the call during 2018, at the end of 2018, because of the elections of the US, where there was someone saying every single day that Mexico was a back place to be. Probably we will be affected from the traffic from the US, so not very high hopes of the traffic to can come up with you.
Speaker Change #108: As it was mentioned in the call.
Speaker Change #108: During 2018 at the end of 2018 because of the nature of the U S.
Speaker Change #109: Where there was someone saying every single day, but Mexico wasn't a bad place to be.
It probably will be affected.
Speaker Change #109: Effective from these traffic from the U S. So not very high hopes on the track to conclude locally yet.
Pablo Monsivais: Okay, thank you.
Speaker Change #110: Okay. Thank you.
Andresa Varotto: You're welcome. Thank you.
Youre welcome.
Ian Spies: Okay, that's clear. Thank you. The next question is from...
Speaker Change #111: Thank you. The next question is from and dress out where auto with UBS. Please go ahead.
Andresa Varotto: The next question is from Andresa; we're out of with UBS. Please go ahead. Hi, good morning. Actually, it's a bit of a little here from UBS team.
Speaker Change #110: Okay.
Operator: The next question is from Fernanda Recchia with BTG. Please go ahead. Ms. Recchia, may we ask you to unmute your line and please go ahead with your question? As there is no response, may I request that we move to the next participant?
Andreas Arber: Hi, good amount actually it's basketball that is here.
Jim: Yes, Jim.
Adolfo Rivas: I'll go for an election. I would like to know about the new airline in Mexico, Mexico and the desert. What do you expect from them if you have talked to them for some new routes to airport? And also, what should we expect from the industry of airlines next week? We should see an additional capacity. We know that we both give an evaluation with the President, the initial issue. But for next year and 20 teams, what would you expect from the domestic industry? Thank you very much. Very well, in the case of me, he cannot really assume what I have heard or what I have read in the news, and the numbers that have been provided by the Mexican government is they have transported around 100,000 passengers in the first five months of the year.
Speaker Change #114: I'm hopeful.
Jay Singh: Hey, thanks for taking my question. I guess the first thing I want to ask is, you know, you mentioned earlier that Colombia and Puerto Rico's traffic strength is moderating a little bit. I also want to ask, you know, Check Blue has been raising capacity in Puerto Rico's market. So considering that, do you still see some degree of moderation? Or, you know, do you just see it sticking around a little bit higher?
Speaker Change #115: How would you like smaller boats.
Jay Singh: Hello Jay, I cannot hear you. Could you speak louder?
Speaker Change #116: The new ally, Mexico, Mexico, that's shown what we should expect from that you have.
<unk> talked to them for some new routes through two law.
Speaker Change #116: At four <unk>.
Speaker Change #116: And also what should we expect from the industry.
Speaker Change #116: Mexico, we should.
Speaker Change #116: C.
Speaker Change #116: Additionally, a buck so do we know about.
Speaker Change #117: Both Veeva and Oh, yeah.
Speaker Change #117: The niche.
Speaker Change #117: No issue, but fall for Nexgen <unk> Wow.
Speaker Change #117: We expect from that.
Speaker Change #118: Our industry. Thank you very much.
Speaker Change #118: And it will indications of Miki came out areas.
Speaker Change #118: When I.
Speaker Change #119: Uh Huh curry or what I have read in the news.
Speaker Change #120: The numbers that have been provided by the Mexican government.
Speaker Change #121: As they have transported around hundred thousand passengers in the first five months of the year.
Adolfo Rivas: So if we compare that with the 8 million from Bolaris, 9 million from Viva, and probably another 8th from Hermitico, it doesn't mean too much. As we have seen, Viva, Bolaris, and Hermitico have been adding some additional planes to their fleet. This is also in the case of Bolaris and Viva mitigating the fact of proper Whitney. Remember, this pattern, we need. Situation is a temporary situation, so we should see the strong recovery from these three next year.
Speaker Change #122: So if we compare that with the 8 million from <unk> 9 million from Veeva and probably another eight from an immediate.
Speaker Change #123: It doesn't mean too much.
Viva: As we have seen Viva ladies anatomy, he could have been adding some additional room.
Viva: Planes to their fleets.
Viva: This is all showing the capabilities and veeva mitigating that.
Viva: Okay.
Viva: Mitigating the effect of prep and we'd need.
Viva: And remember these revenue we'd need situation is a temporary situation. So we should see a strong recovery from these three next year.
Adolfo Rivas: Okay, thank you very much. Thank you.
Speaker Change #125: Okay. Thank you.
Speaker Change #127: Very much.
Speaker Change #126: New logo.
Speaker Change #126: Thank you. The next question comes from Isabella Salazar with GBM. Please go ahead.
Isabela Salazar: The next question comes from Isabela Salazar with GBM. Please go ahead. We don't have any updates; the legal process has been established. And that will take time, as I have said in my previous earning conference call. The project is put on hold for one year at least.
Speaker Change #128: And Oh I can do that.
Isabela Salazar Leipen: My question I was wondering if you could.
Davidson: Davidson uptake.
Isabela Salazar Leipen: Hum.
Speaker Change #135: We don't have any updates that legal process have been established and that will take time as I have said during my previous earning conference call.
Speaker Change #133: The project is political go for one year at least.
Isabela Salazar: Thank you.
Speaker Change #134: Thank you.
Speaker Change #134: Thank you.
Andres Agua: The next question comes from Andres Agua with GBM. Please go ahead. Hi, I have an important question. I was wondering if you could provide another review of expected traffic mix.
Andreas <unk>: The next question comes from Andreas <unk>.
With GBM. Please go ahead.
Isabela Salazar Leipen: Yeah.
Paul: Hi, Paul.
Isabela Salazar Leipen: Hum.
Isabela Salazar Leipen: If you could provide.
Paul: Expected profit mix I think youre melting domestic passengers for the remainder of the year. Thank you.
Adolfo Rivas: I think you're not going to be asking those for the remainder of the year. Thank you. Well, as I have mentioned, when the traffic, domestic traffic perennial years can be attracted by these two things. So, we should expect these to be negative in the whole thing; the majority of the cases were so.
Speaker Change #136: Well as I have mentioned.
Speaker Change #137: Traffic domestic traffic for many of you it's going to be affected by these two things, but with Mexico City.
Speaker Change #138: So we should expect these to be negative in the whole system not just in the case of concern.
Speaker Change #137: Yes.
Speaker Change #137: Yeah.
Speaker Change #137: Okay.
Speaker Change #139: Thank you.
Speaker Change #137: Thank you.
Anton Morton: The next question comes from Anton Morton quarter with GBM, please go ahead. Hi Adolfo, I'll come right from the resource and thank you for taking my question. I have two quick questions.
Speaker Change #140: The next question comes from Anton margin quarter with GBM. Please go ahead.
Speaker Change #137: Yeah.
Speaker Change #145: Hi, Adolfo congrats on the results and thank you for taking my question. Two quick questions. One is related on your cash balances was wondering if you could tell us how much of that is a stall right.
Anton Morton: One is related on your cash balance, which was one of the wrinkles. Tell us how much of that is a stole rise. And the second one is considering the cash flow generation that you have right now and with the capital commitments, even though they are really high for the next coming the next five years, seems like you will end up with a significant cash balance of around 20 billion pesos. I was just wondering what are your thoughts on the possible use of that cash.
Speaker Change #137: The second one as well.
Speaker Change #141: Considering the cash flow generation that you have right now and with the Capex commitments, even though they are really high for the next coming the next five years. It seems like you will end up with a significant cash balance of around 20 billion peso I was just wondering what are your thoughts on the possible use of that cash.
Adolfo Rivas: Hello, Anton. Well, basically, you can see the numbers: Puerto Rico's, US, Colombia, Colombia, pesos, and in the case of Mexico, some of these is US dollars. Roughly speaking, in Mexico, we should be around 400 or something million dollars in dollars and the rest in pesos. In terms of the cash flow generation, yes, of course, we have a lot of capital in front, very high numbers in the coming years, but as always, we will review these at the end of every year in terms of the tax situation, the cash balance, the capital commitments, and we will propose the dividends to both of the directors of the shape of the Los Angeles.
Speaker Change #142: Hello, anthem and well basically.
Speaker Change #149: You can see the.
Speaker Change #152: The numbers, Puerto Rico is U S. Colombia's government vessels in the case of Mexico.
Speaker Change #143: Some of these U S doors.
Speaker Change #150: Roughly speaking in Mexico, we should be alarmed program give them something million dollars.
In dollars and the rest of the vessels.
Speaker Change #144: In terms of the cash flow generation, Yes of course, we have a lot of capex in France really hanging numbers in the coming years.
Speaker Change #143: But.
Speaker Change #147: As always we will that you'd be at the end of every year in terms of the tax situation the cash balance the capex commitments and we will propose a dividend to the board of directors and the shareholders Assembly as I had mentioned.
Adolfo Rivas: I had mentioned you in May and June. We have paid 6.3 billion in dividends, no, and it was an ordinary dividend of 10.926 and an extraordinary dividend of 10, as it was done last year. Thank you.
Speaker Change #143: During may and in June we have paid the Zip code.
Speaker Change #143: One 3 billion in dividends now.
Speaker Change #146: It was another thing that I didn't.
Speaker Change #146: 92 seats and extraordinary dividend, but then that's it was unlucky.
Speaker Change #146: Okay.
Speaker Change #151: Uh huh.
Speaker Change #148: Thank you.
Speaker Change #148: Yes.
Speaker Change #148: Okay.
Speaker Change #148: [laughter].
Yeah.
Operator: Ladies and gentlemen, that concludes the question-and-answer portion for today's conference call.
Speaker Change #148: Ladies and gentlemen that concludes the question and answer Paul.
Speaker Change #153: For today's conference call.
Operator: I would like to turn it back over to Mr. Krashto for closing remarks. Thank you, Zico, and thank you all of you again for joining us today for this second quarter 2024 conference call.
<unk>: I would like to turn it back over to Mr. <unk>.
Speaker Change #155: Closing remarks.
Jay Singh: Sure. So you mentioned Colombia's and Puerto Rico's traffic strength and potential moderating in the coming quarters, but Jet Blue has been raising their capacity into Puerto Rico's market. So do you see that sticking around, or do you still see it normalizing?
Speaker Change #156: Thank you.
Adolfo Castro (CEO): The most important effect in Puerto Rico last year was the entrance of Frontier, and they are expanding and creating a base in Puerto Rico. Of course, when you reach the comparable year-over-year, then it will not be easier to reach the 18% growth we got last year. So that's why I'm saying that it should normalize once we reach the 12-month rollover with the entrance of Frontier.
Speaker Change #157: Thank you all of you again for joining us today for a decent second quarter 2024 conference call.
Operator: We wish you a good day and goodbye. Now you may disconnect. Thank you.
Speaker Change #157: We wish you a good day.
Speaker Change #157: And goodbye.
Speaker Change #157: Now you may disconnect.
Speaker Change #157: Thank you.
Ladies and gentlemen, that concludes our second quarter 2024 results conference call. We would like to thank you again for your participation. You may now disconnect. ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶
Jay Singh: All right, thanks. And for my second question, I want to ask how much CAPEX we can expect on a consolidated basis and what the split would look like between the MDP and the non-MDP.
Speaker Change #157: Ladies and.
Jay Singh: Again, I cannot hear you.
Speaker Change #158: Gentlemen that concludes our second quarter 2024 results conference call.
Jay Singh: Okay, how much CAPEX can we expect on a consolidated basis and what would the split look like between the MDP and the non-MDP? The end-to-peak for this year is around $3.8 billion.
Adolfo Castro (CEO): The NCP for this year is around $3.8 billion. That, of course, will have to be adjusted for the construction price index. And that's what we have to comply with. I have to say that at the beginning of the five-year period, once the projects have been approved, at the end of last year, we have to wait until we develop the projects, conduct the bidding process, and find the contractors. And then they can start building. So that's why you are seeing a very low number between brackets for the first half of the year, 800 and something million, comparable with the 3.8 billion that we have to spend in a year.
Pablo Monsivais: The next question is from the line of Pablo Monsivais with Barclays. Please go ahead.
Pablo Monsivais: Hi Adolfo. Good morning.
Pablo Monsivais: Thanks for taking my question. May I just ask if you can provide some color on your perspective on U.S. traffic to Cancun? We have seen some weakness, and U.S. carriers are saying that they are taking out capacity. But what are your thoughts on this, and especially how deep or how prolonged can this be?
Adolfo Castro (CEO): That's number one. And number two, I would like to have more detail on your commercial revenue plans for Colombia and Puerto Rico going forward. Thank you. Well, in the case of the traffic in Cancun, as you have seen in the first half of the...
Speaker Change #158: I would like to thank you again for your participation you may now disconnect.
Adolfo Castro (CEO): Well, in the case of the traffic in Cancun, as you have seen in the first half of the year, it has not been nice, basically, affected by the domestic situation of Totten-Whitney and the reduction of... The air traffic rules at Mexico City Airport from 62-43. I don't think that these two things will change so that those two things will continue affecting the traffic during the second half of the year. And also, a new negative effect is the reduction in traffic from the U.S., as I have mentioned in my initial remarks.
Adolfo Castro (CEO): As it was mentioned in the call, during 2018, at the end of 2018, because of the elections in the U.S., where there was someone saying every single day that Mexico was a bad place to be, probably we will be affected by this traffic from the U.S. So, not very high hopes for the traffic to Cancun over the year.
Andressa Varotto: Thank you. The next question is from Andressa Varotto with UBS. Please go ahead.
Alberto Valério: Hi, good morning. Actually, it's Alberto Valerio here from the UBS team.
Alberto Valério: Adolfo, I would like to know about the new airline in Mexico, Mexicana de Aviacion. What should we expect from them if you have talked to them about some new routes to your airport? And also, what should we expect from the industry of airlines in Mexico? If you see any additional capacity, we know that both Viva and Volaris are experiencing technical issues. But for next year, in 2026, what should we expect from the domestic industry?
Adolfo Castro (CEO): Thank you very much.
Alberto Valério: Well, in the case of Mexicana de Aviacion, what I... Subcurric, or what I have read in the news, and the numbers that have been provided by the Mexican government, is that they have transported around 100,000 passengers in the first five months of the year. So if we compare that with the $8 million from Volaris, $9 million from Viva, and probably another $8 million from Araméxico, it doesn't mean too much. As we have seen, VIVA, Olaris, and Air Mexico have been adding some additional planes to their fleet.
Alberto Valério: This is also in the case of Polaris and Ambiva partially mitigating the effect of Krafft & Whitney. And remember that this Pratt & Whitney situation is a temporary situation, so we should see a strong recovery from these three next year.
Speaker Change #158: Okay.
Alberto Valério: Okay, thank you very much.
Isabela Salazar: Thank you. The next question comes from Isabela Salazar with GBM. Please go ahead.
Speaker Change #158: Okay.
Adolfo Castro (CEO): We don't have any update, the legal process has been established, and that will take time. As I have said during my previous conference call, the project is put on hold for one year at least. Thank you.
Andress Aguirre: The next question comes from Andress Aguirre with GBM. Please go ahead.
Adolfo Castro (CEO): Well, as I have mentioned, when the traffic, domestic traffic for Romania over the years can be affected by these two things, particularly in Mexico City. So, we should expect these to be negative in the whole system, not just in the case of a social...
Ernst Anton Mortenkotter: Thank you. The next question comes from Anton Mortenkotter with GBM. Please go ahead.
Ernst Anton Mortenkotter: Hi Adolfo, and congrats on the results. I have two quick questions. One is related to your cash balance. I was wondering if you could tell us how much of that is polarized.
Ernst Anton Mortenkotter: And the second one is, considering the cash flow generation that you have right now and with the CAPEX commitments, even though they are really high for the next coming, the next five years, it seems like you will end up with a significant cash balance of around 20 billion pesos. I was just wondering, what are your thoughts on the possible use of that cash? Hello, Antonio.
Adolfo Castro (CEO): Well, basically, all you can see there... The numbers, Puerto Rico is U.S. dollars, Colombia is Colombian pesos, and in the case of Mexico, some of these are US dollars, and roughly speaking, in Mexico, we should be around 400 and something million dollars, in dollars and the rest in pesos, in terms of cash flow generation.
Adolfo Castro (CEO): Hello Antonio, Well, basically, all you can see here... The numbers, Puerto Rico is U.S., Colombia is Colombian pesos, and in the case of Mexico, some of these are in US dollars, and roughly speaking, in Mexico, we should be around 400 and something million dollars, of which in dollars and the rest in pesos. In terms of cash flow generation, yes, of course, we have a lot of capex in front of us, very high numbers in the coming years.
Adolfo Castro (CEO): But, as always, we will review them at the end of every year in terms of the tax situation, the cash balance, the CAPEX commitments, and we will propose the dividends to the board of directors and then to the shareholders assembly. As I had mentioned, during May and June, we paid $6.3 billion in dividends, right? And it was an ordinary dividend of $10.926, and an extraordinary dividend of $10, as it was done last year.
Operator: Ladies and gentlemen, that concludes the question and answer portion of today's conference call. I would like to turn it back over to Mr. Castro for...
Speaker Change #158: Okay.
Adolfo Castro (CEO): Thank you, Zico, and thank you all again for joining us today for this second quarter 2024 conference call. We wish you a good day, and goodbye. Now you may disconnect.
Operator: Ladies and gentlemen, that concludes ASUR's second quarter 2024 results conference call. We would like to thank you again for your participation. You may now disconnect.
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