Q2 2024 Grupo Aeroportuario del Pacífico SAB de CV Earnings Call

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 CAP's Investor Relations team. Please go ahead.

Unknown Executive: 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.

Unknown Executive: It is my pleasure to turn the conference over to Gab's Investor Relations team. Please go ahead.

Unknown Executive: Thank you and welcome to the group of Porto Aeroportuario del Pacifico second quarter 2024 conference call.

Maria Barona: Thank you and welcome to the Grupo Aeroportuario del Pacifico's second quarter 2024 conference call. Presenting from the company today are Mr. Raul De Vuelta, GAP's Chief Executive Officer, and Mr. Saul Villarreal, Chief Financial Officer. 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 performance, or financial results.

Unknown Executive: Presenting from the company today, we welcome Mr. Raul de Vuelta, Gab's Chief Executive Officer, and Mr. Saul Villarreal, Chief Financial Officer.

Unknown Executive: Please be advised that forward-looking statements may be made during this conference call. Please do not account for future economic circumstances, industry conditions, the company's performance, or financial results.

Unknown Executive: As such, statements made are based on several assumptions and factors that could change, causing actual results to materially differ from the current expectations.

Unknown Executive: For a complete note on forward-looking statements, please refer to the quarterly report.

Unknown Executive: At this point, I'd like to turn this over to Mr. Raul de Vuelta. Mr. Raul de Vuelta, for his opening remarks.

Maria Barona: As such, statements made are based on several assumptions and factors that could change, causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the quarterly report. At this point, I'd like to turn the call over to Mr. Revuelta for his opening remarks. Please begin, sir.

Raul de Vuelta: Please begin, sir. Thank you, Nalia, and thank you to our audience for joining us today. As always, we are pleased you will continue to support an interesting gap.

Raul Revuelta Musalem: Thank you, Maria, and thank you to our audience for joining us today. As always, we appreciate your continued support and interest in GAAP. I will briefly review operational and financial figures before taking your questions. During this quarter, the total number of passengers reached 15.3 million, which was a 3.9% decrease compared to 2020. The continued passenger traffic deceleration was due to the preventive inspection carriage by... on the A320neo and A321n

Raul de Vuelta: I will briefly review operational and financial figures before taking your questions. During this quarter, the total number of passengers reaches 15.3 million, which was a 3.9% decrease compared to 2023. The continuous passenger traffic disseleration was due to the preventive inspection carried out by the A320 Mio and A321 newer plane engines. This is a process that began in September of last year and is expected to continue for the remainder of this year into 2022. Despite this setback, we have continued to span our strengths or our network. During the second query, we added three international and two domestic worlds, bringing the total number of routes added to our network to 13, just during the first half of this year.

Raul Revuelta Musalem: This is a process that began in September of last year and is expected to continue for the remainder of this year and into 2025. Despite this setback, we have continued to expand the strength of our network. During the second quarter, we added three international and two domestic routes, bringing the total number of routes added to our network to 13, just during the first half of this year.

Raul de Vuelta: We anticipate adding around 11 international routes during the second half of this year, including the reference to the resume required to begin with, which you start on July 12th. You said first, allowing with our air development and strategies. As of your probably aware, last Friday morning on July 19th, air travel all over the world, experienced revulsion related to a Microsoft objects for customers of the 365 app. We include many major airlines. While gaps are perhaps non-internal system complications, as a result of the airline system, we have 274 delays and 23 cancellations in our Mexican network.

Raul Revuelta Musalem: We anticipate adding around 11 international routes during the second half of the year, including the recently resumed Tijuana to Beijing route, which will start on July 12th. Air Force, our language, our repair, development, and strategy. As you're probably aware, last Friday morning on July 19, air travel all over the world experienced an outage related to a Microsoft object for customers of the 365 app, which includes many major airlines.

Raul Revuelta Musalem: While gaps are perhaps non-internal system complications, as a result of the airline system outage, we experienced 254 delays and 23 cancellations in our Mexican network. Moving on to the financial performance, we experienced a revenue decrease for amnestic and non-amnestic services of 213 million pesos, or 3.3 percent lower compared to last year. Lower aeronautical revenues were attributed to the decline in passenger traffic and reached only 95% of the maximum tariff.

Raul de Vuelta: Moving on to the financial performance, we experience a convenient revenue decrease for an analytical neural analysis services of 213 million pesos, or 3.3 lower compared to last year. Lower analytical revenues were attributed to the decline of passenger traffic and reaches only 95% of the maximum target. However, there was almost 11% increasing commercial revenues, real mainly by the food and beverages, car rentals, and VIP alone. A little further detail of this commercial revenues, as you just mentioned, in terms of the current I'll increase, these were mainly driven by the new bidding process carried out in Guadalajara and Los Cabos.

Raul Revuelta Musalem: However, there was an almost 11% increase in commercial revenues driven mainly by food and beverage, car rental, and VIP lounges. Here is a little further detail on these commercial revenues I just mentioned. In terms of the car rental increase, this was mainly driven by the new bidding process carried out in Guadalajara, Los Angeles. Food and beverage stood out at the Guadalajara airport, mainly due to the opening of the new terrace, and the layout renovation carried out that resulted in a better brand mix.

Raul de Vuelta: Foot number of our students at the Guadalajara Airport mainly due to the opening of the new terrace and the layout renovation of Guadalajara that resulted in a better brand mix offer. Furthermore, the priority pass fees for the use of the VIP lounges increase, leading to a rise in the business line, specifically in the Guadalajara and Los Cabos servers, which experienced the best performance related to the VIP lounge revenues. On July 9, you open a second VIP lounge at the Guadalajara Airport. This will help us in the more adequately meeting in the high demand in this airport.

Raul Revuelta Musalem: Furthermore, the priority path fees for the use of the VIP lounges increased, leading to a rise in the business line, specifically among the Guadalajara and Los Cabos surfers, which experienced the best performance related to VIP lounge revenue, from July 9. Additionally, you opened a second VIP lounge at the Guadalajara Airport. This will help us in more adequate meeting the high demand for this airport. Additionally, the hotel at the Guadalajara Airport during this quarantine generates 18.6 million pesos with an occupancy rate of 51% as of June.

Raul de Vuelta: Additionally, the hotel or the Guadalajara Airport during this quarry generates 18.6 million pesos with an occupancy rate of 51% as of June. We are expecting to close the year a personality of 62% occupancy. New commercial opportunities and partnerships to do with the further commercial revenue in the growth are always top in demand for us and will continue to store in options. Regarding the acquisition of the cargo company GWTC, we expect to begin to consolidate the drain salt starting in the third quarter of 2024. In 2023, GWTC generates revenue above 1 billion pesos with an EBITDA margin of around 40% and without financial debt.

Raul Revuelta Musalem: We are expecting to close the year at approximately 62% occupancy. New commercial opportunities and partnerships to drive further commercial revenue growth are always top of the mind for us, and we continue exploring options. Regarding the acquisition of the cargo company GWTC, we expect to begin to consolidate the results starting in the third quarter of 2025. In 2023, GWTC will generate revenue above $1 billion, with an evident margin of around 40% and without financial debt.

Raul de Vuelta: On the other hand, the purchase price allocation will be done in the second half of the year. As for the cost of service, this increases by 179 million pesos or 17.3%, mainly due to the higher operational expenses such as employee cost, security, insurance, and maintenance. While this rising cost of the green challenge, they also indicate our continued education to upholding high service standards and operational service excellence. Despite the important street cost controls, we do anticipate higher expenses related to expansion and inflationary effects to continue. EBITDA decreased 378.7 million pesos, or 8.2%, as a result of the higher cost and slightly lower revenues.

Raul Revuelta Musalem: On the other hand, the purchase price allocation will be done in the second half of the year. As for the cost of service, this increases by 179 million pesos or 17.3%, mainly due to higher operational expenses such as employee costs, security, insurance, and maintenance.

Raul Revuelta Musalem: While these rising costs do bring challenges, they also indicate our continued dedication to upholding high service standards and operational service. Besides enforcing strict cost controls, we do anticipate higher expenses related to expansion and inflationary effects on consumers. Everybody, please.

Raul Revuelta Musalem: 378.7 million pesos, or 8.3%, as a result of the higher cost and slightly lower revenue. Looking ahead, we remain committed to delivering growth and delivering value to our stakeholders. Our focus will continue to be on enhancing operational efficiency while at the same time optimizing our services to meet the evolving needs of our customers. Moving on to the balance sheet, cash and cash equivalents are recruited by. 15.7% reaching 12.6 billion pesos. On the debt front, this figure reached 41.8 billion pesos.

Raul de Vuelta: Looking ahead, we remain committed to growing growth and delivering value to our stakeholders. Our focus will continue to be on enhancing operational efficiency while, at the same time, optimizing our services to meet the evolving needs of our customers. Moving on to the Valenship cash and cash equivalent, recruited by 15.7%, reaching 12.6 billion pesos. On the front, this figure reaches 41.8 billion pesos. We continue keeping healthy labor as levels reaching a net debt to EBITDA ratio of 1.7 times for the 12-month. Dervide, complying with all our debt covenants. Capix continued to follow the Commission Master Development Program, reaching a presently 3.1 billion pesos in the first half of the year.

Raul Revuelta Musalem: We continue keeping healthy labor levels, reaching a net debt to EBITDA ratio of 1.7 times for the 12-month, thereby complying with all our debt covenants. CAPEX continues to follow the Comedian Master Development Program, reaching approximately 3.1 billion pesos in the first half of the year. This position owes well to the compliance with the current and challenging MDP goals we have in place. I want to mention that yesterday, we opened the second runway at Guadalajara Airport, which was one of the key projects for this contingency.

Raul de Vuelta: This position owes well to the complies with the current and challenging MDP goals we have in place. I want to mention that just a way, we opened the second one way at the Walla Hieroport, which was one of the key projects for this continuum. This second wrong way will offer us the capacity to have between 50 to 70% of additional operations in the long term and give us more flexibility needed to continue developing wounds and connectivity throughout the region. This is another important step in meeting the growing needs of this airport, as I've mentioned before.

Raul Revuelta Musalem: This second runway will offer us the capacity to have between 50 to 70% of additional operations in the long term and give us more flexibility to continue developing routes and connectivity throughout the region. This is another important step in meeting the growing needs of this airport, as I mentioned before. Regarding distributions, yesterday, GAAP paid the first portion of the capital reduction for a total of 3.5 billion pesos, as per the resolution made at our extraordinary shareholders' meeting.

Raul de Vuelta: Regarding distributions, yesterday God paid the first portion of the capital reduction for a total of 3.5 billion pesos per the resolution made, and that were extraordinary shareholders' meeting. The second portion will be paid later in the year.

Raul Revuelta Musalem: The second portion will be paid later in the. Now, just an update on the Turks and Caicos Airport feeding process. As you know, we are committed to exploring new markets and revenue streams in an effort to further diversify our network. Therefore, as we announced before, we were pre-qualified to bid for the Turks and Caicos airports, and the airport mainly focused on international leisure traffic, which counted 1.4 million passengers in 2020. Most of the revenues come from the aeronautical side, but there is room for improvements in terms of non-aeronautical activity. At this point in the bidding process, we are analyzing capital investment needs. The criteria for the evaluation of the RFIRs will be 70% for the technical proposal and investment plan and 30% for financial evolution.

Raul de Vuelta: Now, just an update on the torsion kikos airport pitting process. As you know, we are committing to exploring new markets and revenue streams in an effort to further diversify our network. Therefore, as we announced before, we were pre-qualified to bid for the Torsion Kikos Airport, and an airport mainly focused on international leisure traffic, which has led 1.4 million passengers in 2023. Most of the revenues come from their logical side, but there is room for the improvements in terms of non-renowned telecommunications. At this point in process, we are analyzing capital investment needs. The criteria for the evaluation of the Europers will be 70% for technical proposal, an investment plan, and 30% financial evolution.

Raul Revuelta Musalem: Evaluation Basis and Proposal Revenueship. The tender submission deadline is October 23, 2024, and the process is expected to be concluded in December of this year. Before I finish, I want to provide revised guidance for 2025. Passenger traffic and aeronautical revenue remain as was originally stated at the beginning of the year, whereas no aeronautical revenues are updated with the performance of commercial activities and the continuation of GWT.

Raul de Vuelta: Evaluation based on proposal revenue share. The tender submission deadline is October 23, 2024, and the process is expected to be concluded in December of this year.

Raul de Vuelta: Before I finish, I want to provide revised guidance for 2024. passenger traffic and a run outical revenue remain as well as what's originally stated at the beginning of the year, whereas non-renactical revenues are updated with the performance of the commercial activities and the continuation of GWTC. On the other hand, David and David Amagin consider the aforementioned issue and the capitalization of the 40% percent of the concession fee to be paid over Mexican airports due to the recent changing law.

Operator: On the other hand, the EBITDA and EBITDA margin, considering the aforementioned issue and the capitalization of the purchase percent of the concession fee to be paid for Mexican airports due to the recent change in law. With that, I conclude my comments and ask the operator to open the call for your questions. At this time, if you would like to ask a question, please press star and 1 on your telephone keypad. You may withdraw your question by pressing the pound.

Raul de Vuelta: With that, I conclude my comment and ask the operator to open the call for new questions.

Unknown Executive: In a few minutes, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw your question by pressing the pound key. Once again, to ask a question, please press the star and one on your telephone keypad.

Operator: Once again, to ask a question, please press the start and 1 on your telephone keypad. I will take our first question from Guilherme Mendes on behalf of JP Morgan. Please go ahead; your line is open.

Unknown Executive: I will dig your first question from Guillermo Mendes with JP Morgan. Please go ahead.

Unknown Executive: Your line is open.

Guillermo Mendes: Good morning, Rose. Thanks for taking my question. First question is on the MDP negotiation. What is the latest there? So post elections. If there's any changes on when do we expect it for it to be announced? It's more towards the end of the year or could potentially be announced in the near future. Term, and if the assumption that you guys mentioned on the previous calls and on the investor day, it's still valid in terms of tariffs and capics.

Guilherme G. Mendes: Good morning, Raul, and Saul. Thanks for taking my question. My first question is on the MDP negotiation. What is the latest there?

Raul Revuelta Musalem: So, post-elections, if there's any changes on when you expect it to be announced? It's more toward the end of the year or could potentially be announced in the near... And if the assumptions that you guys mentioned on the previous calls and on investor day are still valid in terms of tariffs and capital. And just one follow-up on the commercial side, the upward revision on the guidance, is it only related to GWTC, or is there something else that has been surprising on the upside? Thank you. Hi Guilherme, this is Raul.

Guillermo Mendes: And just once follow up on the commercial side, the upward revision on the guidance, it's only related to the GWTC, or there's something else that has been surprising to the upside. Thank you.

Raul de Vuelta: Hi, Guillermo, this is Raul. In terms of the MVP negotiation, we are in the same timeline that we expect. We are trying to close the new MVP with this administration. So in that way, we expect to have the authorization of the MVP in September of this year.

Saul Villarreal Garcia: In terms of the MVP negotiations, we are in the, I would say, the same timeline that we expect. We are trying to close the new MVP with this administration. So in that way, we expect to have the authorization of the MAP MDP in September of this year. For the moment, we don't see, or we are not seeing at the moment, any kind of change on that. And we are aligned with the government in trying to get authorization in this administration. Hi Guilherme, this is Saul.

Raul de Vuelta: For the moment, we are, we don't see, or we are, at the moment, we are not seeing any kind of change on that. And we are aligned with the government to try to get the authorization in this administration.

Saul Villarreal Garcia: Regarding your questions about the new guidance, yes, it is only GWTC. As we mentioned last year, we had 1 billion pesos of revenues with a 40% EBITDA margin. And we are expecting to improve the EBITDA margin a little for this year. But at the end, it's already included in the guidance.

Saul Villarreal: Hi, Guillermo. This is Saul. The guy in the question is about the new guidance. Yes, it is only GWTC. As we mentioned last year, we have 1 billion pesos of revenues with a 40% of the margin. And we are expecting to improve a little the vitamin for this year. But at the end, it's already included in the guidance. Also, as we mentioned, the commercial performing and also the capitalization of the 4% of the construction fee for the Mexican airport. Of course, that was at 9 in the guidance relief in January this year. So those are only the three issues that were included in the new guidance.

Saul Villarreal Garcia: Also, as we mentioned, the commercial performance and also the capitalization of 4% of the consumption for the Mexican airports. That was at 9% in the guidance released in January this year. So those are only the three issues that were included in this new guidance.

Guillermo Mendes: Very clear. Thank you both.

Guilherme G. Mendes: Very clear, thank you both. Just one follow-up on the MDP, if the assumptions that you guys mentioned about the zero to mid single-digit increase in tariffs and roughly 110 capex per passenger, if that's still the base case, or there's something else, Guilherme, we are in the process of that. As you may know, during this process, we released our proposal to the authorities in June, and we are now reviewing with them additional investments. We are revising different... and assumptions, and that's the hard part of the process.

Guillermo Mendes: Just one follow-up on the MDP if the assumptions that you guys mentioned about the zero to meet single digit increase on tariffs and 110 roughly a cabx per passenger if that's to the base case or there's something different.

Raul de Vuelta: Guillermo, we are in the process of that. As you may know, during this, we released our proposal to the produce on June. We are now reviewing with them additional investments. We are revising different assumptions. And that's that, that the higher part of the of the process.

Raul Revuelta Musalem: So right now, we are in that. We cannot provide more information, as you may know, but probably it will be a little bit higher, the CAPEX, because we have additional requests from the authority that we have to analyze and define. So, but for now, we cannot release more detail, but it's close to what we have and what was released and announced in the AGARP data. Very clear. Thank you all. Our next question comes from Rodolfo Ramos with Bradesco BPI. Please go ahead.

Guillermo Mendes: So right now, we are in that we cannot write more information on as you may know, but probably will be a little bit higher. Here, the cabx, because we have additional requests from the 30 that we have to analyze and define. So, but for now, we cannot release more detail that is close to what we have and release and announce in the update.

Guillermo Mendes: Very clear. Thank you, Ho.

Rodolfo Ramos: Our next question comes from Rodolfo Ramos with Brothers Go BPI. Please go ahead.

Raul Revuelta Musalem: Thank you, everybody, thanks for taking my questions. A couple from my side. The first one is, you know, it doesn't seem that airports are a big priority for the upcoming administration, but I wanted to get your thoughts on the new team that was announced for the Ministry of Transportation, if you have any thoughts there or have any approaches with members of the new elected president's team. And secondly, I wanted to get your thoughts on the Mexico City bottlenecks and just, you know, just to see whether the bottlenecks that we're seeing there impact and, at the same time, how do you intend to benefit those to strengthen Guadalajara, like how much traffic can it encompass from its, you know, geographical area of influence from Mexico City and kind of bypass Mexico City's in terms of this bottleneck that it has seen Thank you, Rodolfo. This is Raul.

Rodolfo Ramos: Thank you, everybody. Thank you for taking my question. A couple from my side.

Rodolfo Ramos: The first one is, you know, it doesn't seem that airport is a big priority for the upcoming administration, but wanted to get your thoughts on the new team that was announced for the Ministry of Transportation. If you have any thoughts there or have any approaches with members of the newly elected president's team.

Rodolfo Ramos: And secondly, I wanted to get your thoughts on the Mexico City bottlenecks and just to see whether the bottlenecks that we're seeing there, how those impact and at the same time, how do you intend to benefit those to strengthen, like how much traffic can it encompass? From the geographical area of influence from Mexico City and kind of bypass Mexico City in terms of this bottleneck that I've seen because of the slot restrictions. Thank you.

Raul de Vuelta: Thank you, Rodolfo. This is Raul. I will say that in the first view, what we are seeing on the new government or in the new minister already announced is someone that comes from the construction. I will say a lot of an experience that has a world record man's career in terms of the development of infrastructure on the Mexico City in Mexico City. If for the moment we are focused on all the relationship with the today's administration because we are just in the middle of the negotiation of the MVP. As soon as we have the results on the negotiation of MVP, we will begin to have a closer time or meetings with the new administration.

Raul Revuelta Musalem: I will say that, at first glance, what we are seeing in the new government or in the new minister already announced is someone that comes from the construction, I would say, life, and it's clearly someone who has a well-recognized career in terms of the development of infrastructure in Mexico City. For the moment, we are focused on all the relationships with today's administration because we are just in the middle of the negotiation of the MVP.

Raul Revuelta Musalem: As soon as we have the results of the negotiation of the MDP, we will begin to have, I would say, a closer..., time or meetings with the new administration, but in general, first, I could tell you that today we are really focused on the MDP and, on the other hand, or one of the partners say, how important are going to be the efforts on the new administration? I will say that for the moment, the only infrastructure plans that we have already heard are more focused on trains and passenger trains rather than other things.

Raul de Vuelta: But in general, I could tell you that today we are really focused on the MVP.

Raul de Vuelta: In the other hand, or one of the partners say how important I'm going to be there for some on the new administration. I will say that for the moment the only infrastructure plans that we have already here are more focused on trains and passing your trains rather than other things. So I'm not really clear which is going to be the complete plan for the development of infrastructure on the country and specifically about airports. But in general terms, at least what we are hearing is more related to passing your friends rather than airports. In terms of what is happening in Mexico City and the possible bottleneck, first of all, today on the short term is difficult to analyze which could be the impact because there's a I will say a lack of enough seats related on the end of the 320.

Raul Revuelta Musalem: So I'm not really clear on what is going to be the complete plan for the development of infrastructure around the country and specifically for the airports. But in general terms, at least what we are hearing is more related to passenger trains rather than airports. In terms of what is happening in Mexico City and the possible bottleneck, first of all, today, in the short term, we've had... Difficult to analyze which impact there could be because there's a I will say a lack of enough seats related to the engines of the 320. So, it's not really clear which impact in the future.

Raul de Vuelta: So, it's not pretty clear which could be the impact in the future, but in general, that's what we have experienced in the last years: an increase on the strengths of what I had in terms of a hope. As you know, in the last, I would say, two years, we opened for the first time with the Red Rose to Canada, to Spain, to Colombia. So, in general terms, what we are seeing is that while Ahara is continuing to train their capabilities to be a more important hope. So, in that, what I'm thinking is in the coming years, depending for sure on how the economy of the central area of Mexico and the economy of a specific of Jalisco, Guanajapa or Vargas Calientes, in terms of the general performance of the area, combined with the decision of allocation of the fleet of some specific airlines as it could be in Guadalajara, we will continue to see the strength of the capabilities of hope on Guadalajara.

Raul Revuelta Musalem: But in general terms, what we have experienced in the last years is an increase in the strength of Guadalajara Airport in terms of a hub. As you know, in the last, I would say, two years, we opened for the first time routes, direct routes to Canada, to Spain, and Colombia.

Raul Revuelta Musalem: So, in general terms, what we are seeing is that Guadalajara is continuing to strengthen its capabilities to be a more important hub. So, in that, what I'm seeing is, in the coming years, depending for sure on how the economy of the central area of Mexico and the economy of the Pacific of Jalisco, Guanajapa, or Aguascalientes, in terms of the general performance of the area, combined with the decision of allocation of the fleet of some specific airlines, as it could be Volaris in Guadalajara, we will continue to see the strength Perfect; thank you very much at all.

Rodolfo Ramos: Perfect, thank you, Aron. Thank you, Aron.

Jens Steyes: Our next question comes from Jens Steyes with Morgan Stanley. Please go ahead.

Operator: [inaudible] Your next question comes from Jens Sties with Morgan Stanley. Please go ahead. Thank you all.

Jens Steyes: Yes, hello. Good afternoon. Thank you for taking the time for the questions.

Jens Sties: Thank you for taking the time for the questions. I just, um, very briefly, on the etiquette guidance you already alluded to, I think it's, I mean, it's, it's quite impressive the step change that it represents, which I think is closer to minus 5%. And your guidance is implying that in the second half of the year, you would have it grow at around 5% if I'm not mistaken, and the new acquisition.

Jens Steyes: I just very briefly on the either-get guidance you already alluded to. I think it's quite impressive for the step change that represents, first of all, the first cost growth, which I think it's closer to minus 5%, and your guidance is implying that in the second half of the year, you would have it grow at around 5% by not mistaken, and the new acquisition, I think would be around 2% of the consolidated EBDA.

Jens Sties: I think we'll get around 2% of consolidated EBITDA. So how do we get from the minus 5 current run rates to the plus 5 in the second half of the year? Sorry, James. Sorry to interrupt. The sound is not very good.

Unknown Executive: So how do we get from the minus 5 current run rates to the plus 5% in Guadalajara? Sorry, Jens. Sorry, Jens, the sound is not very good; it's cutting off. So I don't know if you can write down the questions in the webcast, please. No, it's not very good. It is not better.

Operator: It's cutting off. So I don't know if you can write down the questions in the webcast, please, because it sounds not very good.

Operator: Is it not better? Okay, I'll send it to you back. Okay. Our next question comes from Fernanda Recchia with BTG. Please go ahead. Hello, can you hear me?

Unknown Executive: Okay, I'll tell you the EBDA.

Fernanda Recchia: Our next question comes from Fernanda Rekia with BTG. Please go ahead. Hello, can you hear me?

Fernanda Recchia: Yeah, perfect. The first, thinking about commercial revenues, well, it's been impressive, the top-line growth that you're targeting for this year. Thinking regarding next year, could you comment if you think this growth is sustainable? How should we think about commercial revenues per passenger going forward? And second, on capital allocation, could you give us some color on if we should expect other airports to be under analysis? You already mentioned the one that you were selected as a preferred bidder, but I'm thinking about other airports and also if we could expect other deals like the GWTC that you just announced. Thank you. Thank you, Fernanda. This is Raul.

Fernanda Recchia: Yeah, perfect. Perfect.

Fernanda Recchia: Thank you for taking my question. Chu from our side. The first, thinking of the commercial revenue as well, it's been impressive the top line growth that you are targeting for this year. Thinking regarding next year, could you comment if you think this growth is sustainable? How should we think about the commercial revenues per passenger going forward? And second, on capital location, could you give us some color if we should expect other airports to be under analysis? You already mentioned about the one that you were selected as a preferred bidder, but thinking on other airports? And also if we could expect other deals like the GWTC that you just announced it, thank you.

Raul de Vuelta: Thank you, Fernanda.

Raul Revuelta Musalem: In terms of commercial revenue... We think that's going to be, in terms of the redshirt, sustainable in the long term. In the coming year, we will see the opening of some additional areas, and then 100% of the result in some of the areas that have just opened in the middle of this year, for example. So in general terms, we think that the double-digit growth trend on commercial revenues will be sustainable in the coming years and years forward, for sure, if related or highly related to the performance of traffic.

Raul de Vuelta: This is Raul. In terms of the commercial revenue, we think that going to be in terms of the richer, going to be sustainable in the long term. On coming year, we will see the opening of some additional areas and the 100% of the result in some of the areas that has just opened on the meat of the year, for example. So, in general terms, we think that the double-digit road trend on commercial revenues will be sustainable on coming year, 100 years forward. For sure, we let it, or highly related with the performance on traffic. So, one of the key factors to really understand how it could be on the long term, the growth on commercial revenue, is related with the bringing back on the fleet, all the fleet that is down for danger and problem.

Raul Revuelta Musalem: So one of the key factors to really understand how it could be in the long term, the growth in commercial revenue, is related to bringing back the fleet, all the fleet that is down for the engines problem. So as soon as we begin to see the coming back of the fleet, we think that the results on commercial readiness could be even better. In terms of other opportunities, as we... Just say we are just going really, really deep into the Turks and Caicos opportunity. But for sure, we are always reviewing all the different options of possible opportunities of investment in airports in the region.

Raul de Vuelta: So, as soon as we begin to see the coming back of the seats, we think that the results on commercial revenues could be even better.

Raul de Vuelta: In terms of other opportunities, as we just say, we are just going to really, really deepen in terms of the opportunity. But for sure, we are reviewing all the different options of a possible opportunity, self-investment in airports. In the region, we are all reviewing all the times any kind of opportunity there. For the moment, the only one that we have in terms of airports that be in our pipeline is the one we let it with torque and gas. In terms of other similar acquisitions, as could be GWTC, I would say that all the times our new business officer is looking for different opportunities, that could be in some way aligned with the kind of profit that Gap needs for the equity value.

Raul Revuelta Musalem: We are always reviewing any kind of opportunity there. For the moment, the only one that we have in terms of airports that is in our pipeline is the one related to Turks and Caicos. In terms of other similar acquisitions that could be GWTC, I would say that all the time our new business officer is looking for different opportunities that could be in some way aligned with the kind of profit that got, needs to be created in value, but it's, I would say, a continuous process that is happening in our business. So that is, in general terms. Thank you. Our next question comes from Jay Singh with Citi. Please go ahead. Thanks for taking my question. It's Jay dialing in for Stephen Trent.

Raul de Vuelta: But if I would say a continuous process that is happening in our business, that is in general terms. Thank you.

Jay Singh: I guess you already answered my question on the Turks and Caicos situation, but I also wanted to ask, do you have a strong preference for the dual-tilled regulatory structure, or would you also consider single-tilled or inflation-based models? Thank you. Thank you, Jay. In general terms, the model for Turks and Caicos, in terms of the regulatory model, it has only an inflationary review for the next 30 years,

Jay Singh: Our next question comes from Jay Singh with CD. Please go ahead. Thanks for taking my question.

Jay Singh: It's Jay Dallin and for Steven Trent. I guess you already answered my question on the terms and take a situation, but I also want to ask. Do you have a strong preference for the dual-till regulatory structure, or would you also consider single-till or inflation-based models? Thank you.

Raul de Vuelta: Thank you, Jay. In general terms and models for Doug Santagas in terms of our win-the-thirty model, it has all the infraction I review for the next 30 years.

Raul de Vuelta: Mainly, you have some commitments or topics that happen on the first moment of your original proposal.

Raul Revuelta Musalem: You have some commitments of CAPEX that happen at the first moment of your original proposal. And in the future, there will not be any more reviews of master plans or reviews of tariffs. All the tariffs will be only reviewed in terms of inflation in the future on that specific model.

Raul de Vuelta: On the future, there's not like reviews of master plans or review of tariff. All the tariff will be only reviewing terms of inflation on the future on that specific model.

Raul de Vuelta: Yes, and now we'll add only that the upside of the potential upside in the separates in the commercial revenue and also in the cost of operation that could have some efficiencies. Yeah, we just say having what I was saying, we are really comfortable about our knowledge in the Caribbean market just for the experience. So we think that we could be really competitive on this period process, just taking account all the experience that we already have in operation in the region.

Saul Villarreal Garcia: Yes, and I will add only that the upside or the potential upside in this airport is in commercial revenue and also in the cost of operation that could have some efficiency. We are really comfortable about our knowledge of the Caribbean market, just from the experience of the two airports in Jamaica. So we think that we could be really competitive in this bidding process, just taking into account all the experience that we already have operating in the region. Great color,

Jay Singh: Great color, thanks, guys.

Gabriel Himalor: Our next question comes from Gabriel Himalor with Scotia Bank. Please go ahead.

Operator: Thanks, guys. Our next question comes from Gabriel Himmler with Scotiabank. Please go ahead. Hi, thanks for the call. Just a quick follow-up question.

Gabriel Himalor: I think for the call, just a quick follow-up question, can you give us a bit of color about how the pattern with engines has been affecting the network and the traffic. I mean, a Polaris has to show a decrease in traffic and also what are your expectations on the new acquisitions on GWTC, what's the expected revenue pay up you're expecting to receive. Thank you. Thank you, Gabriel.

Gabriel Himmler: Can you give us a bit of color about how the Pratt & Whitney engines have been affecting the network and the traffic? I mean, Volaris has shown a decrease in traffic. And also, what are your expectations for the acquisitions on GWTC? What's the expected revenue payoff you're expecting to receive? Thank you. Thank you, Gabriel. As you know, the impact on the Indians began in September of last year. What we think this 2024, the worst part will be in the third quarter of the year when we're going to see the full impact of all the fleet that we rounded for the engines problem. After that, for the fourth quarter, we want to have a better comp. So, in some ways, we're going to begin to see some positive numbers related to two factors. One, a better, easier comp.

Raul de Vuelta: As you know, the impact on the Indian began on September of last year. What we think on this 2024 that the worst part will be on the third quarter of the year, when we're going to see the full impact of all the fleet that be grounded for danger's problem. After that, for the fourth quarter, we want to have a better comp. So, in some way, we're going to begin to see some positive numbers related with two factors. One, if your comps; the second, there's some specific additional planes arriving mainly for Polaris and arrivals that it's always helping for some capacity.

Raul Revuelta Musalem: But second, there are some specific additional planes arriving, mainly for Polaris and Iberobus, that are, in some ways, helping to add some capacity. We think that, gradually, all 2025, we're going to see a recovery, rather a recovery of the fleet from mainly the boat companies that are more affected, more likely to be vulnerable, so we think that at least all the 2025 will continue to be affected, and we will see a full comeback of total seats, most close to the half of the year in 2026.

Raul de Vuelta: We think that gradually, all 2025, we're going to see recovery, a rather recovery of the fleet from mainly the boat company that be more affect Polaris and arrivals. So with, we think that at least all the 2025 will continue affected and we will see a full comeback of total seats, most close to 20, to the, to the half of the year of 2026. But again, it depends on the time and delivery of the already a work of danger for profit and wisdom.

Raul Revuelta Musalem: But again, it depends on the times and delivery of the already work again, just for the present with me. But in general terms, we expect that for the first half of 2026, we will recover the full capacity in our, Is this from UWTC? Yes. Hi Gabriel. This is Saul.

Raul de Vuelta: But in general, theory terms, we expect that for the first half of the 2026, we will recover the full capacity in our...

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Saul Villarreal Garcia: Regarding UWTC, we have unexpected revenues above 2023, around 10%. Obviously, we are now taking control of this new asset, and we are reviewing the potential growth of this business. For now, our estimate is around 10% above 2023 in terms of revenues. Okay, thank you. Our next question comes from Andressa Varotto of UBS. Please go ahead. Hi, good morning. Thank you for taking my question. I have two quick ones here on our side.

Andressa Varotto: First one, traffic as well. Right now, we see that capacity is being restricted by the impact of PNW engineering inspections, but we are also increasingly seeing worldwide concerns about weaker demand. So, I don't know if you have any take on that. I know it's probably hard to tell right now, which could be the impact of demand, considering the capacity. Coal Strain.

Raul Revuelta Musalem: And my second question is regarding costs, since we've seen strong cost expectations in the quarter, so just wanted to know what we can expect in the coming quarters regarding costs. Thank you. In terms of traffic, Andressa, as you perfectly say, the capacity constraint related to broadband weakness is, I mean, clearly in the market, and you cannot, I will say... For more information, please visit www.sab.gov, but also, You know, for instance, Airbus announced that the deliveries in the coming years will not be lower than the original expectation of new deliveries.

Raul Revuelta Musalem: That will also bring some kind of pressure on the capacity of some of our major airlines, such as Volaris and Boeing. Because, as you remember, a couple of years ago, both airlines announced big deliveries with Airbus. I think that at least in the coming year, we will feel pressure about the capacity and the availability of additional things that will come to the market, mainly related to what is happening with, with, for sure, Pratt & Whitney, but also what could happen and the times of delivery in the future, mainly from, from, from Narrable South.

Raul Revuelta Musalem: In general terms, our expectation is going to be that the next year, in general terms, we will continue seeing some pressure in terms of capacity. But in some specific groups, there's still room for growing in terms of low factors, on the one hand.

Raul de Vuelta: But in some specific rules, still be a room for growing in terms of a low factors in one hand. And in other one hand is, we are seeing different airlines. New rules in our net. For instance, we have American Airlines, that's for the first time in a US carrier operating Juan Aeroport for the first time in history. And it's doing well with the early service to Phoenix, but also Alaska already announced the beginning of our route from La Paz to Los Angeles. I was a completely brand brand new route. We also have the announcement of a Mexico for different international routes from La Paz.

Raul Revuelta Musalem: And on the other hand, we are seeing different airlines flying new routes in our net. For instance, we have American Airlines that, for the first time, operates in Tijuana Airport for the first time in history, and it's doing well. We have daily service to Phoenix, but Alaska Airlines has already announced the beginning of a route from La Paz to Los Angeles, and it's, I would say, completely a brand-new route.

Raul Revuelta Musalem: We also have the announcement of AeroMexico for different international routes from our airport. So, what I'm seeing for the moment is that it's more clear that, at least on the international market, we will see some increases in capacity in the coming years, and the domestic market will be more pressured for all the capacity issues, at least in the coming year. But in general terms, I think that there is still some room for growth that comes from new opportunities of new routes and also some space on low factors that will bring us some growth.

Raul de Vuelta: So what I'm seeing for the moment is that it's more clear that at least an international market, we will see some increases on capacity on the coming years, that the domestic market will be more pressure for all the capacity issues on at least in the coming year. But in general terms, I think that still being is a some room to wrote that come from new opportunities of new rules and also some space on low factors that will bring us some role. And for sure, the easier comes in terms of year to year. But in general terms, is what I'm seeing on the capacity possible growth on coming years.

Raul Revuelta Musalem: And for sure, the easier it comes in terms of year to year, but in general terms, that's what I'm seeing on the capacity, possible growth in coming. Yes, hi, Andressa, this is Saul. There are a range of questions about the coastal side.

Raul de Vuelta: Yes, and this is a very new question about the coast side. As we explain already, we have some affectation in terms of labor law, not only in Mexico, but also in Jamaica. And we are having additional cause and pressure in terms of inflation. Besides that, once we have more spaces and more areas operating, we have in Guadalajara Apple with the different expansions. The coast will be increasing; the operation of the tail also implies a cause of operation. Just have in mind that the with a margin, the hotel is around a 35%. So it's different at the margin that we have.

Saul Villarreal Garcia: As we explained already, we have some affectation in terms of labor law, not only in Mexico but also in Jamaica, and we are having additional costs and pressure in terms of inflation. Besides that, once we have more spaces and more areas operating, as we have at Guadalajara Airport with the different expansions, the cost will be increasing. The operation of the hotel also implies a cost of operation.

Saul Villarreal Garcia: Just keep in mind that the margin in the hotel is around 35%. So it's different than the margin that we have. So it dilutes the margin we have. And we have additional costs for maintenance and additional costs in terms of electricity.

Raul de Vuelta: So it dilutes the margin we have. And we have a different cause in maintenance and additional cause in terms of the electricity. So the tariffs are increasing in Mexico and also are increasing significantly in Jamaica. So we have pressure for all the the sites in terms of the operation. It would be normalized. Let's say once we close the year, once we finalize the tariff negotiation. And obviously, once we see that the revenue related with this pension, that we have in the different different airports. So I think the point is it is an extraordinary quarter; it is not obviously the regular quarter that we just have.

Saul Villarreal Garcia: So the tariffs are increasing in Mexico and are also increasing significantly in Jamaica. So we have pressure on all the sites in terms of the operation. It will be normalized, let's say, once we cross the year, once we finalize the tariff negotiations, and obviously once we see the revenue related to these functions that we have in the different airports. So I think the point is it is an extraordinary quarter. It's not obviously the regular quarter that we just had, so it's extraordinary and will be recovered in the next year.

Raul de Vuelta: So it's an extraordinary and will be recovered in the next year.

Unknown Executive: Perfect, thank you very much.

Andres Aguirre: Your next question comes from Andres Aguirre with GBM.

Saul Villarreal Garcia: Perfect. Thank you very much. Your next question comes from Andres Aguirre with GBM. Please go ahead. Andres Aguirre, your line is open, please check your mute function.

Andres Aguirre: Please go ahead.

Andres Aguirre: Andres Aguirre, your line is open.

Unknown Executive: Please check your mute function. Thank you very much. Can you try to locate it if we can understand better?

Andres Aguirre: Thank you for taking this hearing. Thanks for taking the question. Can you clarify how GWPT will be consolidated in the financial segment? Will it be on the next slide on the information, Guilherme? [inaudible] Andres, this is Alejandra.

Alejandra Soto: I am so sorry, but your line is not really clear. Can you try to repeat it so we can understand better or write it on the webinar? Can you hear me now?

Unknown Executive: Can you do me now? A little better.

Andres Aguirre: A little better. I'm writing in the webcast. Thank you. OK. Thank you. We will move next with Pablo Monsivais from Barclays. Please go ahead.

Unknown Executive: I'm going to do the webcast. Thank you. Okay. Thank you.

Pablo Mendes: We'll move next with Pablo Mendes with Barclays. Please go ahead.

Pablo Mendes: Hi, Tim. Thanks for taking my question. Just kind of a follow-up to previous questions. What is your take on Volaris, updated guidance on capacity? Have you talked to them? And if so, have they provided you some insights on what could be the impact for the routes that Volaris is operating with you? Because it seems that they are a bit more positive for capacity for the second half of the year.

Pablo Monsivais: Hi Tim, thanks for taking my question. Just kind of a follow-up to previous questions, what is your take on Volaris' updated guidance on capacity? Have you talked to them?

Raul Revuelta Musalem: And if so, have they provided you with some insights on what could be the impact on the route that Volaris is operating with you? Because it seems that they are a bit more positive about capacity for the second half of the year. Thank you. Thank you, Pablo. This is Raul.

Raul de Vuelta: Thank you. Thank you, Pablo.

Raul Revuelta Musalem: Yeah, we are, I mean, on a daily basis, we communicate with both sides about their operations. For sure, in the long term, the coming year, we're still seeing that there will not be a full recovery of the sea, but one of the parts that we are seeing that is, in some ways, interesting to follow with Bolares, they have adapted some of their routes, they have, I would say, made a better use of their fleet, some additional hours of flying, their available seats, their ACMs are, I mean, in some So, in general terms, let me put it in this way. Volaris has made the correct moves, trying to support the most dense or bigger roots that have, in some way, the Better Possible Demand.

Raul de Vuelta: This is Raul. Yeah, we are in a daily basis communication with Volaris about their operations. For sure, in the long term, the coming year, we still see that there will not be the full recovery of the seats. But one of the parts that we are seeing that is in some way interesting to follow with Volaris, they have adapt some of their routes. They have, I would say, a better use of their fleet; some additional hours of flying. The available seats, the ACMs are, I mean, in some way, expecting to be for the last choir growing a little bit.

Raul de Vuelta: So, in general terms, let me put it in this way. Volaris has made the correct moves trying to support the most dense or bigger routes that have, in some way, the better possible demand. And in general terms, that gives us a little better position on the last choir of the years in terms of traffic.

Raul Revuelta Musalem: And in general terms, that gives us a little better position for the last quarter of the year in terms of... But, again, on the long term, I mean, as soon as the P&W engines issue... So it's not fully solved yet. We will continue seeing some lack of capacity and, for sure, a decrease in general terms of the capacity in our airports for at least the coming years. But, yeah, we are a little more positive for this second half of the year, talking about the Pacific of life.

Raul de Vuelta: But again, on the long term, I mean, as soon as the P&W engine issues. It's solved; it's not fully solved it. We will continue seeing some lack of capacity and for sure a decrease in general terms of the capacity in our airports for at least the coming year. But yeah, we are a little more positive for this second half of the year, talking about the specific of life.

Pablo Mendes: Perfect, thank you.

Operator: Perfect. Thank you. Our next question comes from Alan Macias with Bank of America. Please go ahead.

Alan Macias: Our next question comes from Alan Macias, with Bank of America.

Alan Macias: Please go ahead. Hi, good morning. Thank you for the call.

Alan Macias: Hi, good morning. Thank you for the call. Just at this point, can you provide a long-term, sustainable EBITDA margin target that you might be looking at? Thank you. Hi Alan, this is Saul. Well, this year will be complicated, as you know all the issues that we have ongoing, the discounts in passenger charges, the different issues related to costs, the decrease in passenger traffic, but for 2025, and once we have it, the new tariff will be close to 68%, 68 plus less 1%. It will be the normalized EBITDA margin.

Saul Villarreal: Just at this point, can you provide a long-term, sustainable, Evita margin target that you might be looking at? Thank you.

Saul Villarreal: Hi, Alan, this is all. Well, this year will be complicated, as you know, all the issues that we have ongoing that is counting in passenger charges, the different issues related with the cost, the decreasing passenger traffic. But fortunately, 25, and once we have the new tariff, we will be close to 68 percent. 68 plus less 1 percent. It will be the normalized Evita margin.

Saul Villarreal Garcia: Thank you. Thank you. Now I will turn the call over to management to take the webcast questions. Thank you, Nicky. And the first question is from Bernardo Malpica from Santander. And he's asking why aeronautical revenues fell 7.7% while traffic fell 4.1%. Why was the fall in aeronautical revenues worse than traffic? What is the mix?

Unknown Executive: And now I will turn the call over to management to take the webcast questions. Thank you, Niki.

Bernardo Manpica: And the first question we have is from Bernardo Manpica, from Santander. He's asking is, I don't know if the readiness failed, 7.7 percent, while traffic failed, 4.1 percent. Why was the fall in our knowledge for readiness worse than traffic?

Raul de Vuelta: What is the mix discount? The first part is related, for sure, with a mix of things. The first one is the fulfillment of the machine mentality that is related, in one hand, with discounts, mainly. Also, we have in general trends and 95 percent of fulfillment on the maximum type. And that is the biggest part of the estimation of the difference between driving the aeronautical revenues and passengers' road. Also, as you remember, Puerto Vallarta and Cabos, both airports have the biggest maximum tariff in our net, and both of these airports have few inquiries. So general terms is a mix between the composition of the maximum tariff in our portfolio and also the 95 percent on the fulfillment of the maximum tariff.

Raul Revuelta Musalem: Discount? The first part is related for sure to a mix of things. The first one is the achievement of the maximum target that is related, on the one hand, to, Also, we have, in general terms, a 95% fulfillment rate of the maximum tariff, and that is the biggest part of the explanation of the difference between aeronautical revenues and passengers' growth. Also, as you remember, Puerto Vallarta and Cabo both airports have the most, the biggest maximum tariff in our net, and both of these airports have a

Raul Revuelta Musalem: So, in general terms, it's a mix between the composition of the maximum tariff in our portfolio and also the 95% on the fulfillment of the maximum tariff. Thank you, Raul. Then we have another one from David Cruz from Grupo BAL. Regarding the purchase of Guadalajara WTC, how do you expect that this will change the estimate of results for 2024? Hi, David. This is Saul.

Saul Villarreal: Thank you, Raul.

Saul Villarreal: Then we have another one from David Cruz, from Grupo Vall, regarding the purchase of Guadalajara WTC. How do you expect that this will change the estimate of resource support 24?

Saul Villarreal: Hi David, this is Saul. Well, it is all very intimate, this expected revenue and a bidah for this new asset, and as we mentioned, will be consolidated and integrated to our figures starting on July 1st. So, it is already included in the guidance. And, as we mentioned, it will be consolidated and integrated to our figures starting on July 1st. So, it is already included in the guidance.

Saul Villarreal Garcia: Well, this expected revenue in EBITDA for this new asset, and as we mentioned, will be consolidated and integrated into our figures starting on July 1st. So, it is already included in the guidance. And as we mentioned, the total revenues will be around 10% above the revenues in 2023. Thank you, Saul. The third one is from Ali Nasser from Capitolo.

Saul Villarreal: As we mentioned, the total revenues will be around 10% above the revenues in 2023.

Saul Villarreal: Thank you, Saul.

Alina Serra: The third one is from Alina Serra, from Capitolo.

Saul Villarreal: We'll get paid concession fees and technical assistance fees over GWTC revenues. Thank you.

Raul Revuelta Musalem: Will GAAP pay concession fees and technical assistance fees on top of GWTC revenues? Thank you. I mean, in terms, GAAP will not pay an additional concession fee on technical assistance over the GWTC revenues. But it's important to remember that GWTC is a concession, so they already pay a concession fee for the authority. So GAAP will not pay an additional concessions fee. But in the cost of WTC, they are already paying a concession fee because it's a fiscal concession.

Saul Villarreal: I mean, in terms of gap, will not pay additional concession fee and technical assistance over the GWTC revenues. But it's important to remember that GWTC is a concession. So, they already pay a concession fee for the Authority. So, Gap will not pay additional concession fee. But in the cost of GWTC, they are already paying a concession fee because it's a fiscal concession.

Saul Villarreal: Thank you, Rowie.

Raul Revuelta Musalem: Thank you, Raul. Now we have the question from Jens Spies from Morgan Stanley. Thank you, Jens, for writing this.

Danz Pais: Now, we have the question from Danz Pais, from Morgan Stanley. Thank you, Danz, for writing this. My question was related to your new EBITDA growth guidance, which implies a roughly 5% year-over-year growth in the second half of 2024 versus minus 5% in the first half of 2024. The new acquisition adds around 2% of EBITDA growth, right? So, what other variables did you see improving in the second half versus the first half that we need to consider?

Saul Villarreal Garcia: It says, my question was related to your new EBITDA growth guidance, which implies roughly 5% year-over-year growth in the second half of 2024 versus minus 5% in the first half of 2024. The new acquisition adds around 2% to EBITDA growth, right? So what other variables did you see improving in the second half versus the first half that we need to consider?

Saul Villarreal: Hi Yens. This is Saul. Do you have any other major changes?

Saul Villarreal Garcia: Hi Jens, this is Saul. We don't have any other major changes. GWTC consolidation is important. It's a new asset, will be integrated. It wasn't included in the first half of the results of the company. So we don't have any other issues besides... The effect of the capitalization of the 4% was already included in the first half.

Saul Villarreal: GWTC consolidation is important. It's a new asset. It was included during the first half in the results of the company. So, we don't have any other issue besides the effect of the capitalization of the 4% was already included in the first half. And I would say that probably the effect on the increase in the commercial revenues that was included in the new revised guidance.

Saul Villarreal Garcia: And I would say that probably the effect on the increase in commercial revenues that was included in the new revised guide. Thank you, Saul. And then we have Ali Nasser from Capitola. The midpoint of your guidance implies a growth of 5% year over year on EBITDA in the second half of the year. How exactly will this be achieved given the decreasing tariff impacts year over year?

Saul Villarreal: Thank you, Saul.

Alina Serra: Then we have Alina Sir from Capital One. The mid-point of your guidance implies a growth of 5% year-over-year on EBITDA on the second half of the year. How exactly will this be a shift, given that it creates an entire impact year-over-year?

Saul Villarreal: Hi, Alina. This is basically because the consolidation of the new cargo company, GWTC, that will represent around 300 million pesos of EBITDA that will be integrated to the futures of the company. That's the main reason, obviously; the performance of the commercial is helping. But basically, the main reason of this increase.

Saul Villarreal Garcia: Hi Ali, this is basically because of the consolidation of the new cargo company, GWTC, that will represent around 300 million pesos of EBITDA that will be integrated into the fields of the company. That's the main reason; obviously, the performance of the commercial is helping, but basically, it's the main reason for this increase.

Saul Villarreal: Thank you, Saul.

Raul de Vuelta: And the last one, it is from Mauricio with Trago from AM Advisors. When do you expect to see the full benefit in revenues from the expansion in Guadalajara? Thank you, Mauricio. I mean, just just, we already just, just something some of the, of the, of the new commercial areas and other parts. So, let me put it in this way, on the agus of this 2024, will be 100% of the, of the new commercial state it would be operating. So, from that, we have the full year of operation of the new areas that happened in 2020, agus of 2025.

Saul Villarreal Garcia: Thank you, Saul. And the last one is from Mauricio Wittrago from AEM Advisors. When do you expect to see the full benefit in revenues from the expansion in Guadalajara? Thank you, Mauricio. I mean, just yesterday we already just opened some of the new commercial areas at Guadalajara Airport. So, let me put it in this way. On August of this 2024, 100% of the new commercial spaces will be operating. So from that, we'll have the full year of operation of the new areas that happened in 2020, August of 2025. I mean, the first full year of all the concept operations.

Raul de Vuelta: I mean, the first full year of all the concept operating.

Unknown Executive: Perfect. Thank you, Rowan. With this, we end from the webcast question, so I will turn the call to Nikki. Thank you.

Raul Revuelta Musalem: Perfect. Thank you, Raul. With this, we end our webcast questions, so I return the call to Niki. Thank you. We will show no further questions over the phone at this time. I will turn the call over to management for closing remarks. Thank you again, everyone, for joining us today at our Second Choir Results Conference. On God's behalf, we wish you a great day. Thank you. This concludes today's program. Thank you for your participation. You may disconnect at any time.

Unknown Executive: And we show no further questions over the phone at this time.

Unknown Executive: I will turn the call over to management for closing remarks. Thank you again, everyone, for joining us today at our second choir results conference.

Unknown Executive: On behalf of Guadalajara, we wish you a great date. Thank you.

Unknown Executive: Hey, Saul, it's going to be today's program. Thank you for your participation.

Unknown Executive: You may disconnect at any time.