Q3 2024 Grupo Aeroportuario del Centro Norte SAB de CV Earnings Call
No.
[music].
Speaker Change: Greetings and welcome to the Grupo airports, sorry, Oh del Centro Norte, OMA third quarter 2024 earnings conference call.
Time, all participants are in listen only mode.
Speaker Change: A question and answer session will follow the formal presentation.
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Speaker Change: As a reminder, this conference is being recorded.
Speaker Change: At this time it is now my pleasure to introduce Emmanuel Camacho Investor Relations Officer. Thank you you may now begin.
Emmanuel Camacho: Thank you Robin and good morning, everyone and welcome to third quarter 2034. During these conference calls.
Speaker Change: Good morning, nice to be able to California, the CFO the poker game.
Please be reminded that certain statements made during the course of our discussion today may constitute forward looking statements, which are based on current management expectations and beliefs.
Just a number of risks and uncertainties that could cause actual results to differ materially including factors that may be beyond our control.
Speaker Change: I'll now turn local language that they gotta windows for yourself in these remarks.
Speaker Change: Thank you Mike.
Speaker Change: Hello, everyone. We appreciate your presence on this call today first I will highlight our operational performance financial results and Capex development. Finally, we will be pleased to answer some questions.
Speaker Change: During the third quarter Oh, my passenger traffic reached 7 million a decrease of five 3% versus the third quarter of last year does it was mainly related to the Pratt and Whitney engine recall, which continues to have an impact on the fleet of the Mexican low cost carriers.
Speaker Change: And the domestic Brian passenger traffic declined by seven 4%, excluding a call before where the destination continues to recover from the impact of Hurricane Altice in October 'twenty through 'twenty three passenger traffic decreased by five 8%.
Speaker Change: The most impacted airports, excluding a cool pool, where once a week like honestly why flattish, which together accounted for 80% of the total domestic capacity declined during the quarter.
Speaker Change: Despite this reduction higher occupancy factors have partially mitigated the impact on average there's three airports are 2.7% versus two Boeing seven percentage point increase in load factors, indicating that underlying domestic and demand remained strong despite seat capacity being constrained by the ongoing engine revision in contrast.
Speaker Change: Passenger traffic reached a historical quarter record level of <unk> 9 million passengers and 11% increase as compared to the third quarter of last year. This role west primarily driven by the Monterrey Airport, we saw significant growth on rasp, Orlando Las Vegas, Miami Atlanta Chicago.
Speaker Change: There's five routes accounted for approximately 60% of the total increase in international passenger traffic during the quarter.
Speaker Change: Finally during the quarter, we launched four new international routes all based at Monterrey Airport further enhancing our international connectivity.
Speaker Change: We're also expecting them to start up operations for more than 10, new routes from Audrey to various destinations in both Mexico and the U S set to be launched by the end of this year and early 'twenty five.
Speaker Change: Moving on to all of our financial performance.
Speaker Change: And the sum of aeronautical and non aeronautical revenues achieved a record performance of $3 2 billion pesos, mainly guided by the positive performance of our non Aero revenues.
Speaker Change: Despite a five 3% decline in total passengers non aeronautical revenues increased by 19% as a result of our successful execution and the constellation of sterile strategic commercial and diversification projects throughout the year.
Speaker Change: Commercial revenues grew 17% compared to the third quarter of last year, primarily driven by restaurants, VIP lounges and parking revenues along with several other categories.
Speaker Change: Commercial revenue per passenger rose by 24%, reaching 51 passenger spend per passenger in the third quarter.
Speaker Change: Rather than us from restaurants retail and car rental group driven by the contribution of greenhouses spaces opened during the previous quarters.
Speaker Change: VIP lounges, where all of that is attributable to higher tax rates and leases renewal of third parties.
Speaker Change: Diversification revenues increased 27%, while my cargo contributed most of this growth with an increase of 32% mainly due to higher revenues from ground and air cargo operations in Monterrey.
Hotel services grew by 25%, mainly due to a double digit increase in average room rates per night on both hotels as well as higher occupancy rates.
Speaker Change: Moving on to the capital expenditure front during the quarter, we invested 581 million passengers and MTP investments major maintenance and strategic projects.
Speaker Change: In September 24th we not curated the expansion and remodeling project of the terminal building at two language International Airport the.
Speaker Change: The project involves the construction over 800 square meters and the renovation of 3000 square meters within this investment Durango airports will have the capacity to handle up to 760000 passengers out.
Speaker Change: I would now like to turn the call over to Google pay scale, who will discuss our financial highlights for the quarter.
Speaker Change: Thank you Ricardo and good morning to everyone I will briefly review our financial results and then we will open the call for your questions.
Speaker Change: I don't know that they'll revenues decreased three 4% relative to the third quarter of last year, driven primarily by the lower passenger traffic with a seven 4% decrease in domestic passenger traffic, partially offset by a 10, 8% growth in international passengers.
Speaker Change: No Nigel revenues increased 18, 9% commercial revenues increased 17% and the categories with the highest growth where restaurants, VIP lounges parking and retail.
Speaker Change: Diversification activities increased 26, 7%, mainly due to strong performances of Oh My God.
Speaker Change: Wholesale services.
Speaker Change: Total I don't know what anyone else can revenues were one 4%, reaching $3 2 billion of vessels in the quarter.
Speaker Change: The cost of services and G&A expense increased six 1% compared to the third quarter of last year as the company has made efforts to contain its cost base. Despite inflationary pressures on external services and purchases.
Speaker Change: Consistent tax increased 73% to $262 3 million vessels as a result of the rate increased from five 9% applied to revenues generated by almost airport concessions, which went through the Mexican federal you're just low.
Speaker Change: There's a tariff regulation basis effective as of October 22, Hudson Phase III payments made to the government related to Ireland obstacle readiness in excess of those included in the most recent study provision will be added to the referenced values to be use the next Mexican tariff revision therefore, starting January 2000.
Speaker Change: 26, we successfully positioned tests and mountain states will begin to be recovered through the Mexico tariff.
Speaker Change: In the third quarter of 2024, 4% surplus of concession tax where I don't know if it'll revenues amounted to 100, and the 1 million pesos equivalent to three 1% of the sum of AUM S. I Dunno Zika and neurological readiness. This surplus is included in the 262 million vessels.
Speaker Change: <unk> recorded thus consistent tax expense for the quarter.
Speaker Change: Major maintenance provision was 75 from the old vessels as compared to 95 million last year.
Speaker Change: Almost third quarter adjusted EBITDA reached $2 4 billion vessels and the adjusted EBITDA margin was 75, 4%.
Speaker Change: Excluding the surplus of concession tax and its impacts on unless I Miss our results.
Speaker Change: The third quarter of 2024, adjusted EBITDA would have been $2 6 billion pesos with a margin of 78, 4%.
Speaker Change: Oh, we're financing expense amounted to 272 million vessels practically unchanged royalties till the third quarter of last year.
Speaker Change: Consolidated net income was $1 4 billion vessels in the quarter, which decreased two 1% that's compared to the third quarter of 2023.
Speaker Change: Turning to our cash position.
Speaker Change: We generated from operating activities in the third quarter amounted to 1.8 million vessels and cash at the end of the quarter stood at 2.4 billion versus.
Speaker Change: As of September three total debt amounted to 10.9 billion pesos and we ended the quarter with a healthy net debt to adjusted EBITDA ratio of zero point 95 times.
Speaker Change: This concludes our prepared remarks rough please open the call for questions.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: We'll now be conducting a question and answer session.
Speaker Change: I'd like to ask a question. Please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue.
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Speaker Change: One moment. Please we poll for questions. Thank you.
Speaker Change: Thank you. Our first question comes from the line of Rodolfo Ramos with Bradesco BBA. Please proceed with your questions.
Rodolfo Ramos: Good morning, I forgot about Oklahoma in right and thanks for taking my question and congrats on the results a couple if I may can you give us a sense on.
Speaker Change: Whether we stand regarding the.
Speaker Change: The the grounded aircraft coming back into the market I don't know if you have already seen these coming through and how do you see them.
Speaker Change: Leading to.
Speaker Change: To better.
Speaker Change: Supply there.
Speaker Change: Second if I may related to your your ended P.
Speaker Change: We saw yet this morning.
Speaker Change: Citing concerns over airport fees and limited visibility into the process. So can you just remind us how airlines get involved in that.
Speaker Change: Process.
Speaker Change: And if there's any detail that you can share regarding your MTBE negotiation I know it's early.
Speaker Change: But specifically if you see any large capex projects that you envision in Monterrey that can lead to a similar set up as we saw with that with us and so so those those would be my two questions. Thank you everyone.
Speaker Change: Hi.
Speaker Change: This is so.
Speaker Change: Yes, we were.
Speaker Change: We're based on seats published under the systems, where we're seeing an increase in.
<unk> capacity is searching in November and December are mainly in the Monterrey Airport.
Speaker Change: There are several new routes.
Speaker Change: Firmed up by by both a well that is and I don't mean Hugo.
Speaker Change: We shall see what the impact is but yes, we are expecting a stronger first quarter based on the capacity.
Speaker Change: <unk> babies are those primarily.
Speaker Change: And I know the MVP side.
Speaker Change: Ralph will where we're still working it's a bit early to have a some numbers what I can tell you is that we are working very closely with the team. We're also working very closely with Vg are to come up with a very optimized capex that we will not sacrifice the quality or security.
Speaker Change: And it's able to cope with the projections of traffic, but it will be at and optimized.
Speaker Change: Capex going forward.
Speaker Change: During this process.
Speaker Change: Do you have to consult with all the different stakeholders.
Speaker Change: Not only airlines, but every authorities as well and everyone that has an assay within the airports. We're consolidating all those comments and we will have more visibility into where we are during the first quarter of next year.
Speaker Change: Great. Thank you.
Speaker Change: Our next question is from the line of Fernando Recchia with B T. H P. T. G. Please proceed with your questions.
Speaker Change: Hello, he kind of a room for mono al. Thank you for taking my question two.
Speaker Change: To your question on our side as well so the first quarter.
Speaker Change: Can you provide any update regarding the new airport in Monterrey are if you could provide any color if.
Speaker Change: The Gulf of mine has decided that this airport will be a change it for commercial aviation and I'll see if you have any color. If there's a decade, how will be the capacity all of these airports would be very helpful.
Speaker Change: And Chuck on a kind of related with the previous one but maybe.
Speaker Change: Maybe if you could provide us an outlook for traffic for next year.
Speaker Change: I mean, you already mentioned about the aircraft grounding, but any color you could get and it gave us regarding trying to think for.
Speaker Change: They came to five would be very helpful. Thank you.
Speaker Change: Sure regarding that didn't work out of the North area. As you know the only thing that happened was that that it changed that now the military's operating.
Speaker Change: The moment that the ministry of communication and transportation Havent mentioned anything about the intention of building a new airport there even if they did theres a lot of infrastructure that would have to be considered before that would happen, but at this point that project is not something that that we see happening in the short run.
Speaker Change: And with respect to your second question.
Speaker Change: All of that.
Speaker Change: For this year, we're expecting a somewhat better performance than what do we have a year to date. So so.
Speaker Change: Below the 3% Mark that's our target for the year next year, we're expecting an increase.
Speaker Change: The low to mid single digits.
Speaker Change: Yes.
Speaker Change: Okay. Thank you so much.
Speaker Change: Our next question is from the line of chance of space with Morgan Stanley. Please proceed with your question.
Speaker Change: Hello, Yes, I have two questions one relates to the next and the Pes cycle. If you could give any guidance of.
Speaker Change: Like the the Capex levels, you are foreseeing I know, it's very early and difficult to anticipate but just like brought like Capex per capita.
Speaker Change:
Speaker Change: In the next cycle versus versus this cycle and also if there any particular assets beyond Monterey that you see them like attractiveness to to invest at the moment and the second question is relating also to traffic I mean, you already mentioned.
The fourth quarter's scheduling data.
Speaker Change: And for the full year of next year, but we're seeing quite strong numbers for the reschedule. It scheduled flights in the first quarter of next year. So that that number you just mentioned seems actually but low or you're not seeing the same.
Speaker Change: Yeah.
Speaker Change: Sure Oh, the first part of the MVP as we mentioned Sterling early to have some numbers, we're still working internally as we.
Speaker Change: Mentioned, we're working on an optimized capex that we will not sacrifice, obviously quality safety and and it's able to cope with the projections of traffic, but will be a very optimized capex and we're working very closely with vinci to have the best in kind of the technology and optimized capex in terms of new assets.
Speaker Change: We don't have any concrete thing at the moment, but we're always looking for opportunities to expand our footprint outside of Mexico and in terms of traffic.
Yes.
Speaker Change: What we're seeing.
Speaker Change: So.
Large increases in the seat capacity I think we are conservative in the load factors that those new routes will be generating.
Speaker Change: So we based on first quarter performance, we would have to adjust or validates our our forecasts, but yes right. Now we are not assuming the same load factors that we're seeing right now applies to the new capacity.
Speaker Change: And also we.
Speaker Change: We think we think we already reached the bottom of the van Whitney incident, but theres still a lot of uncertainty.
Speaker Change: The pace of recovery at least from our side.
Speaker Change: Alright fair enough okay. Thank you.
Speaker Change: Yeah.
Speaker Change: Our next questions come from the line of Jason with Citi. Please proceed with your questions.
Speaker Change: Thanks for taking my question most of my other ones were already answered, but the one I have is how do you think the pace of near shoring bleeding through continued.
Speaker Change: Thank you.
Good evening.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Yes. Thank you for your question Jay.
Speaker Change: Yes, our expectation is that near shoring will continue we expect that not only dreams business power business traffic, but also in the cargo operations that we've seen that activity happening in Europe and land cargo as well as our industrial parks. So yes, we're expecting that activity to continue as reflected in our numbers.
Speaker Change: Okay. Thank.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: The next question is from the line of Federico Gallazzi with TRT see with your questions.
Speaker Change: Hi, guys. Good morning, Congrats for fundamental science.
Speaker Change: I have two questions. The first one and then no no I don't know.
Syed.
Speaker Change: First one is.
Speaker Change: Sure.
Speaker Change: That ends up for it.
Speaker Change: Our growth continues to be.
Speaker Change: That's a net 18 looks like that.
Speaker Change: The question is this is sustainable because in some lines you have there.
Speaker Change: Uh huh.
Speaker Change: The high revenues in your history. So the first one is how do you see Bob Bt's more related risk.
Yeah.
Speaker Change: On the change in particular in the month of your airports.
Speaker Change: That's a different question on the second one you announce it.
For international.
Speaker Change: New routes.
Speaker Change: Do you see how how do you see this one.
Speaker Change: In the next months, if you want in particular for the international.
Speaker Change: International New lines in Europe.
Speaker Change:
I didn't go so well, yes on the on the no Nigel size season saw Bunchy acquisition. This has been a.
Speaker Change: A big focus of the company.
Speaker Change: Different categories kind of performed real well.
Speaker Change: Just summarizing the case of our food and beverage for example.
We did a number of tenders all over they produce.
Speaker Change: Workers.
Speaker Change: The leases on those tenders that starts to get reflected on the opening of new outlets related to those tenders are open we're seeing a pickup in income per passenger as well as in total revenues.
Speaker Change: Alright.
Speaker Change: The passenger decline.
Speaker Change: In the case of parking, it's mostly related to tariff adjustments.
Speaker Change: In the case of a VIP lounges, it's a combination of new VIP lounges were opened in 2023 and now we're seeing the full year, Oh watch or effect of all of those ones. For example, and we will continue to see a positive trend that we just finished.
Speaker Change: Let's see what the and therefore.
VIP, so sort of in the next quarter. For example that would also start contributing as well and also a improved lease terms with third party VIP operators and in the.
Speaker Change: Access rates that we have in the Omaha lounges are the three minutes ourselves.
In the case of our international routes, Yes, we see a clear trend by the airlines.
Speaker Change: Airlines to focus on international capacity.
Speaker Change: Even with the new.
Speaker Change: Our capacity in the new planes coming online.
Speaker Change: We continue to expect a strong.
The performance of the international passengers above those of the domestic market. So we expect that trend to continue.
Speaker Change: It's part of the strategy of positioning our Monterey as a connectivity hub.
Speaker Change: So we're working with airlines to continue that trend.
Speaker Change: And one question. So it looks like it will continue but one question I mean, you'll have two new no new lung.
It took you answer this is moura lately.
Speaker Change: Yeah.
Speaker Change: The lack of capacity also true that Mexico Airport is something that we're looking forward to expand but obviously it looks like this is mark yeah shutting team.
Speaker Change: We shall get approach.
Speaker Change: And again, if this is more related to the lack of capacity off of Mexico airports. So that makes me Goldberg.
Speaker Change: Yeah.
Speaker Change: I would say.
Domestic capacity has been the one that has been moving away from Mexico City airports.
Towards to Luca on the Santa Lucia I, five airports with international slots being preserved primarily that's our overview there.
Speaker Change: So I think that it's mostly related to catchment area of demand in the Monterey area itself.
Speaker Change: Okay.
Speaker Change:
Speaker Change: No no sorry in diversified revenues.
Speaker Change: Do you have any time in the last two quarters Oh My God. This is more related to new contracts. These motor space, that's probably more of them in your airport and the second one is there's another champ in industrial services do you have more industrial products are you adding capacity.
Yeah.
Speaker Change: So the footprint of the English Dropbox has not changed but what has changed is that we built a number of our warehouses in 2023 and 2024.
Speaker Change: <unk> that are now generating rents are.
Speaker Change: Virtual last year or so so that's that's one of the reasons and there was also an FX rates effect.
Speaker Change: 99% of the rents in the industrial park are denominated in U S. Dollar. So so that's also.
And then the fee that we're currently in construction of two warehouses.
Speaker Change: Once those warehouses are.
Speaker Change: Of finished.
Speaker Change: The the park would be 98%.
Speaker Change: The available land for development would be about 98%.
Speaker Change: Hum occupied.
Speaker Change: So we are in the process of seeing how to expand.
Speaker Change: Within the months of rate, a very niche or airport perimeter the industrial park.
Speaker Change: So we continue to see strong performance there as well.
Speaker Change: And.
Speaker Change: Oh, my God of children and in terms of cargo and in terms of cargo. It's a mix of everything you said, we have worked throughout this year.
Speaker Change: Proving most of the processes that we have in land and air cargo. So its a combination of having more efficient processes are increasing.
Speaker Change: The business that we're bringing from the existing clients as well as landing new accounts. As an example is new fashion that we landed during the during this last quarter.
Speaker Change: Okay got it. Thank you so much and again congrats for the results in particular in the commercial bank.
Speaker Change: Okay. Thank you.
Speaker Change: Our next questions are from the line of Isabela Salazar with GBM. Please proceed with your questions.
Speaker Change: Hello.
Speaker Change: Thank you to taking my question. This one is along the lines of the question previously asked.
Speaker Change: He can be commercial.
Speaker Change: Yes.
Speaker Change: I was wondering if you're expecting to continue to see double digit growth.
Speaker Change: And <unk> revenues.
Speaker Change: And also as.
The higher conventional Diane you.
Speaker Change: Passenger it has something to do with having more international passenger.
Speaker Change: And my last question. Thank you.
King.
Speaker Change: Hi, Isabella so in terms of.
Speaker Change: The level of the level of our commercial revenue per passenger I I'd say I think at least for the next few quarters. It would stabilize around the current levels of 60 vessels.
Speaker Change: So the growth rates would not necessarily be a sky oh, so they were in <unk> compared to the previous quarter.
Speaker Change: But yes in absolute terms on a per box basis, we do expect these decided to be.
Speaker Change: Sustainable.
Speaker Change: Yes, it does.
Speaker Change: So somebody if at all and maybe how your purchasing power or we didn't miss suspense of international passengers.
Speaker Change: But in the case of the main categories that we saw increases the chart parking a food and beverage.
Speaker Change: We are.
Speaker Change: Not necessarily related to specific international passenger so I think it's.
Speaker Change: The improvement in the overall.
Income per passenger in general as opposed to just the international.
Contributions.
Speaker Change: Yeah.
Speaker Change: Perfect. Thank you.
Speaker Change: Our next question's from the line of Intesa for auto from UBS. Please proceed with your questions.
Hi.
Thank you my question. Thanks.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Wow.
Speaker Change: Thank you.
Speaker Change: Alright.
Speaker Change: Good luck.
Speaker Change: And then I thought your line is we're not we cannot hear you very well.
Speaker Change: There's a lot of noise in there.
Speaker Change: Can you hear me better.
Speaker Change: Or would you really like.
Speaker Change: Yes, yes that was like yes.
Speaker Change: Yes.
Yeah.
Speaker Change: Okay. So my question is about the two items.
Speaker Change: Sharon.
Speaker Change: You guys can play and watch it for next year.
Speaker Change: Sure.
Speaker Change: For next year I was asked was part of the agreement with the government within the October negotiation of last year was to have an inflationary adjustment as of the first day of January and at the moment, we are operating at a 999% comp.
Science with the maximum tariff.
Thank you.
Speaker Change: Second question.
Speaker Change: And I feel excellent yeah.
Speaker Change: So yes, you nearshoring or are you at <unk>.
Speaker Change: He has.
Thank you.
Speaker Change: Oh.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Uh huh.
Speaker Change:
Speaker Change: I mean, I'd say I think I think that the.
Speaker Change: And then I saw the near shoring activity, we expect that to happen, regardless of who wins that the U S election, we're seeing an increased activity in business I have traffic, we're seeing an increase in activity also in the industrial parks anomalies worked for everybody in terms of pricing as well and the same thing is happening.
Speaker Change: Cargo in land and air cargo and we expect this to continue regardless of who wins the U S election.
Speaker Change: Okay.
Speaker Change: Our next question is from the line of Alan Macias with Bank of America. Please proceed with your questions.
Alan Macias: Hi, Good morning. Thank you for the call just two questions. So first one any indication that the capacity in the Mexico City Airport will be increased.
Speaker Change: In the near term.
Speaker Change: Have you seen any signals there.
Speaker Change: And I guess the second question regarding.
Speaker Change: If you can share what your forecast for international traffic to be the share or the weight of it.
Five five years down the line. Thank you.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: In terms of the capacity in Mexico City as you know.
Speaker Change: No that does.
Speaker Change: All of our operations per hour was reduced from 452% to 42 to 40 D operations per hour. There. There has been there have been rumors running around of returning to that previous number increasing them back to the low $50 52 operated per minute. However, there is no official.
Speaker Change: No official announcement, yet however, there are some rumors.
Speaker Change: That's all we know.
Speaker Change: In that fund.
Speaker Change: In terms of the share of international traffic. We currently are operating at a 13% of our traffic is international.
We have seen throughout the year is as a result of the patent would niche situation and the shortage of aircrafts in the market. Most of the airlines have been shifting capacity out of the domestic into the international market looking for yield and Thats why we have seen a very important increase in <unk>.
Speaker Change: International traffic as it Brian Whitney.
Speaker Change: Situation starts to stabilize we should expect that domestic traffic to improve broadly international traffic to return it to the previous a growing.
Speaker Change: Growing trend.
Speaker Change: Yes.
Speaker Change: Back to you on that.
Speaker Change: So what we're expecting more or less five years down the road I don't have the number on top of my head right now.
Speaker Change: Yes.
Speaker Change: Thank you.
Our next question is from the line of Jeremy Mendez with J P. Morgan. Please proceed with your question.
Speaker Change: Hey, he cut the roof with Monroe. Thanks for taking my question and congrats on the results. One quick question on the EBITDA margin. If this meet 70% a level that you guys have been operating something sustainable in the longer term.
Speaker Change: And on top of the discussions on the commercial front end and the possibility of increasing our revenues per passenger going forward.
Is this something that could materially change your EBITDA margin levels going forward. Thank you.
Speaker Change: So yes, we believe that these uh huh.
It is seven is our adjusted EBITDA.
Speaker Change: Our ratio should be.
Speaker Change: Sustainable.
Speaker Change: <unk>.
I mean, we don't expect major variations from from portable, but it's.
Speaker Change: Currently right now.
Speaker Change: Perfect. Thank you.
Speaker Change: Thank you.
Speaker Change: Anil question is from the line of Pablo to call date with email. Please proceed with your questions.
Pablo: Hey, good morning, all my team I have two questions. The first one is on that on the labor costs and I believe you renegotiated the labor contract. This October so I don't know if you can share the output of those negotiations or how should we expect the labor line for 2025.
Speaker Change: My first question.
Speaker Change: The other one it's a follow up on a very quick question on the aeronautical revenues and not.
Speaker Change: Our revenue story, we saw these future increasing the lines like food and beverage is duty free and I believe most of those improvements I relate it to being she'd been part of a holdback bought how much is left on both lines to be able to negotiate it.
Speaker Change: Well, let me tackle the first one the labor the.
Speaker Change: Conversation what the Union are still ongoing so we're waiting to see results in the next in the next month or so so there is.
Speaker Change: We're still that's still work in progress no answer there yet.
Speaker Change: With respect to the duty free.
It's mostly related to <unk>.
Speaker Change: Recommendation of the flights that we are.
Our are doing at the Monterrey airports.
Speaker Change: We're now trying to direct most of the international capacity through one of our terminals. Instead of two terminals are so its a little out of Samuel <unk> is supposed to be a stimulant C N terminal a.
Speaker Change: So that has improved the exposure of passengers through the existing.
Speaker Change: Existing duty free stores that we have sold so that's an operational change that we did in previous quarters, I think still being a very good results, but yeah.
Speaker Change: Your question is how much is there left going forward, yes, as a result of it it's a mix of basically coming in.
Speaker Change: Trying to bring best practices from their experience and capitalizing on the experience to allow their their network 70 airports. We havent moved a lot of the processes. We have renegotiated a lot of the contracts will still working we think there are some potential going forward, where we're penciling in projections around.
Speaker Change: Similar.
Speaker Change: Non aero revenues per passenger going forward of 60 62 fastest per passenger.
Speaker Change: Perfect. Thanks.
Speaker Change: Congrats on the results.
Speaker Change: Okay.
Speaker Change: Thanks, Paul.
Speaker Change: Thank you.
At this time, if reach end of our question and answer session and I'd like to turn the floor back to Ricardo Duenas for closing remarks.
Speaker Change: We would like to thank everyone for participating in this call SKU from Manuel and I are always available to answer your questions and we hope to see you. Soon thank you once again have a great day.
Speaker Change: Thank you. This concludes today's teleconference. We thank you for your participation you may now disconnect your lines at this time.