Q4 2024 Grupo Aeroportuario del Centro Norte SAB de CV Earnings Call
Listen only mode.
<unk> and answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
Speaker Change: I'd now like to turn the conference over to your host Emmanuel Camacho Investor Relations Officer for the company. Thank you you may begin.
David Please: Thank you Melissa good morning, everyone welcome to <unk> fourth quarter 2034 release conference call. Joining us. This morning are CEO, and California, and our CFO global basis, David Please.
David Please: 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 and are subject to a number of risks and uncertainties that could cause actual results to differ materially including factors that may be beyond our control.
Speaker Change: And now I'll turn the call over to <unk> for his opening remarks.
Speaker Change: Thank you Manuel Hello, everyone. We appreciate your presence on this call today. This morning, we will fall and I will be will review, our annual and quarterly operational performance financial results and Capex development. Finally, we will be happy to answer your questions.
Speaker Change: I will start by discussing our full year 2024 highlights and then I will move to our main full quarter results.
Speaker Change: 2024 started off with challenges, particularly due to aircraft capacity constrained stemming from patent Whitney engine inspection program, which affected two of our largest airline partners VRAM realize.
Speaker Change: Together these airlines accounted for 71% of our total passenger traffic in our airports last year.
Speaker Change: In parallel operational restrictions at the Mexico City International Airport post another challenge for the industry limiting airline operations at the country's main hub and reshaping connectivity strategies.
Speaker Change: These combined factors constrained airline capacity planning throughout the year influencing both domestic and international traffic dynamics.
Ruffo Castillo, Ricardo Duenas, Emmanuel Camacho
Speaker Change: Greetings and welcome to the Grupo Aeroportuario del Centro Norte OMA fourth quarter 2024 earnings call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker Change: Beyond this challenges 2024 also brought interesting developments the combination of operational restrictions on Mexico City Airport and limited aircraft availability in the market created opportunities for <unk> to strengthen their international networks, we saw a bigger shift in strategy with airlines, increasing capacity and launching new routes for a moment.
Speaker Change: <unk> to the U S reinforcing existing markets and explore an entirely new ones.
Speaker Change: 2024 progressed, the negative impact from reduced capacity gradually diminished.
Speaker Change: Towards the end of the year, we reported a significant decrease in aircraft availability, which resulted in opening of new domestic and international routes and contributed to our strong passenger traffic performance.
Speaker Change: As a result in the fourth quarter total passenger traffic in our 13 airports grew by four 6% with a one 5% increase in domestic traffic and significant 26 for growth in international passenger traffic.
Speaker Change: Thank you Benoit is hello, everyone. We appreciate your presence on this call today. This morning, who fall and I will be will review, our animal that BARDA Lee operational performance financial results and Capex development. Finally, we will be happy to answer your questions.
Speaker Change: Looking at the full year this dynamics reshaped our overall traffic performance.
Speaker Change: While domestic traffic declined by three 5% international traffic increased 15% as compared to 2023.
Speaker Change: I will start by discussing our full year 2024 highlights and then I will move to our main full quarter results.
Speaker Change: Despite the limitations in the Mexico City Airport demand on our most important routes Monterrey to Mexico City Metropolitan area, which as the operations of iPhone and Deluca to those of Mexico City Airport grew by eight 8% in 2024.
Speaker Change: 2024 started off with challenges, particularly due to aircraft capacity constrained stemming from patent Whitney engine inspection program, which affected two of our largest airline partners DRAM realize together.
Speaker Change: This was largely driven by a significant increase in traffic between Monterrey and iPhone.
Speaker Change: Together these airlines accounted for 71% of our total passenger traffic in our airports last year.
Speaker Change: Providing that demand for flights to Mexico City remains robust with airlines continuing to add capacity to this alternate airports.
Speaker Change: In parallel operational restrictions at the Mexico City International Airport post another challenge for the industry limiting airline operations at the country's main hub and reshaping connectivity strategies.
Speaker Change: 2024 was also a year of strong performance across our various commercial and diversification lines of business.
Speaker Change: These combined factors constrained airline capacity planning throughout the year influencing both domestic and international traffic dynamics.
Speaker Change: Despite the passenger traffic declined during the year, we delivered outstanding results through strategic initiatives focused on maximizing revenues and optimizing operations.
Speaker Change: Beyond these challenges 2024 also brought interesting developments the combination of operational restrictions on Mexico City Airport and limited aircraft availability in the market created opportunities for <unk> to strengthen their international networks, we saw a bigger shift in strategy with airlines, increasing capacity and launching new routes for a moment.
Speaker Change: On the commercial front, we reported meaningful growth across three key revenue line items, mainly as a result of contract renegotiations, the opening of new outlets and introduction of new brands and operators.
Speaker Change: Restaurant revenues grew by 22% VIP lounge revenues increased by 51% on parking revenues increased by 33 million pesos as compared to 2023 altogether. This initiatives resulted in a record high commercial revenues per passenger of 60 vessels in 2024.
Speaker Change: Sports to the U S reinforcing existing markets and explore an entirely new ones.
Speaker Change: As 2024 progressed, the negative impact from reduced seat capacity gradually diminished.
Speaker Change: Towards the end of the year, we'll record a significant decrease in aircraft availability, which resulted in opening of new domestic and international routes and contributed to our strong passenger traffic performance.
Speaker Change: 17% increase relative to 2023.
Speaker Change: Are all of our cargo business continued to post a strong yearly results.
Speaker Change: As a result in the fourth quarter total passenger traffic in our 13 airports grew by four 6% with a one 5% increase in domestic traffic and significant 26 for growth in international passenger traffic.
Speaker Change: We made key organizational changes to improve efficiency enhance customer service and attract new customers.
Speaker Change: Thanks to this efforts OMA cargo grew by 22% in 2024.
Speaker Change: Looking at the full year these dynamics reshaped our overall traffic performance.
Speaker Change: And hotel services, we work closely with our operating partners partners to refine our pricing strategies and optimize occupancy levels driving nearly 20% revenue growth in the hotel segment compared to 2023.
Speaker Change: While domestic traffic declined by three 5% international traffic increased 15% as compared to 2023.
Speaker Change: Despite the limitations in the Mexico City Airport demand on our most important routes Monterrey to Mexico City Metropolitan area, which at the operations of iPhone and Deluca to those of Mexico City Airport grew by eight 8% in 2024.
Speaker Change: And finally, our in the industrial Park business delivered solid results.
The strong industrial activity in the Monterrey region allowed us to continue with the construction and leasing of intent industrial warehouses.
Speaker Change: Last year, we announced six new warehouses underdevelopment and by the end of 2024 five of them were already generating revenue.
Speaker Change: This was largely driven by a significant increase in traffic between Monterrey and iPhone.
Speaker Change: Providing that demand for flights to Mexico City remains robust with airlines continuing to add capacity to this alternate airports.
Speaker Change: Combined with contractual rent growth and the impact of the Mexican peso depreciation against the U S. Dollar our industrial service revenue grew by 61% for the full year.
Speaker Change: 2024 was also a year of strong performance across our various commercial and diversification lines of business.
Speaker Change: Regarding our financial performance aeronautical and non aeronautical revenues grew 2% and 17% respectively versus 2023.
Speaker Change: Despite the passenger traffic declined during the year, we delivered outstanding results through strategic initiatives focused on maximizing revenues and optimizing operations.
Speaker Change: As a result, our adjusted EBITDA for the year was $9 1 billion pesos and we recorded an adjusted EBITDA margin of 74, 3%.
Speaker Change: On the commercial front, we reported meaningful growth across three key revenue line items, mainly as a result of contract renegotiations, the opening of new outlets and introduction of new brands and operators.
Speaker Change: On the capital expenditure front in 2024 continue to invest in our long term infrastructure development, particularly at our Monterrey Airport.
Speaker Change: Restaurant revenues grew by 22% VIP lounge revenues increased by 51% and parking revenues increased by 33 million pesos as compared to 2020 to be.
Speaker Change: During the year, we inaugurated the east public area expansion of terminal, a adding over 66000 square meters of new facilities, including additional checking counters commercial spaces and airport services.
Speaker Change: Altogether. This initiatives resulted in a record high commercial revenues per passenger of 60 vessels in 2024% to 17% increase relative to 2023.
Speaker Change: This expansion combined with the previous developments at the airport has substantially increased passenger capacity now, reaching almost 14 million passengers per year.
Speaker Change: Our all my cargo business continued to post a strong yearly results.
Speaker Change: This efforts further reinforced monterey its position as a leading hub in northern Mexico and ensure its readiness for future growth.
Speaker Change: We made key organizational changes to improve efficiency enhance customer service and attract new customers.
Speaker Change: Looking ahead, we continue advancing with phase II of the Monterrey Airport expansion project. This next stage focuses on significantly significantly expanding air side areas of terminal a.
Speaker Change: Thanks to these efforts all my cargo grew by 22% in 2024.
Speaker Change: And wholesale services, we work closely with our operating partners partners to refine our pricing strategies and optimize occupancy levels driving nearly 20% revenue growth in the hotel segment compared to 2023.
Speaker Change: Once and once completed this project would ultimately optimize passenger flows enhance commercial offers and services and further increase the airports capacity to almost 16 million passengers annually.
Speaker Change: And finally, our in the industrial Park business delivered solid results.
Speaker Change: The new areas are expected to become operational in early 2026.
Speaker Change: The strong industrial activity in the Monterrey region allowed us to continue with the construction and leasing of intent industrial warehouses.
Speaker Change: Finally in September 2024, we completed the expansion and remodeling of the terminal building at Durango International Airport.
Speaker Change: Last year, we announced six new warehouses underdevelopment and by the end of 2024 five of them were already generating revenue.
Speaker Change: This project allowed us to increase the air capacity capacity to handle up to 760000 passengers annually.
Speaker Change: Combined with contractual rent growth and the impact of the Mexican peso depreciation against the U S. Dollar our industrial service revenue grew by 61% for the full year.
Speaker Change: This infrastructure investments reflect our commitment to enhancing enhancing the passenger experience and supporting the long term development of our airports.
Speaker Change: I will now move on to our fourth quarter performance.
Speaker Change: Regarding our financial performance aeronautical and non aeronautical revenues grew 2% and 17% respectively versus 2023.
Speaker Change: In the fourth quarter almost passenger traffic reached $7 1 million, an increase of four 6% versus the fourth quarter of 2003.
Speaker Change: As a result, our adjusted EBITDA for the year was $9 1 billion pesos and we recorded an adjusted EBITDA margin of 74, 3%.
Speaker Change: This increase was mainly attributable to an increase in seat capacity of three 3% during the quarter.
Speaker Change: On the domestic front passenger traffic grew by one 5%. This increase was primarily driven by our Monterrey Airport, which saw expansion on routes to get at that all the metropolitan area of Mexico City. So that's.
Speaker Change: On the capital expenditure front in 2024 continue to invest in our long term infrastructure development, particularly at our Monterrey Airport.
Speaker Change: During the year, we inaugurated the east public area expansion of terminal, a adding over 66000 square meters of new facilities, including additional checking counters commercial spaces and airport services.
Speaker Change: Wireless and we'll see you or to loom unwell.
Speaker Change: Those routes collectively added more than 211000 additional passengers during the quarter and were particularly offset by decreased capacity and routes from Monterrey to conclude one that met either in Portland.
Speaker Change: This expansion combined with the previous developments at the airport has substantially increased passenger capacity now, reaching almost 14 million passengers per year.
Speaker Change: In contrast international passenger traffic reached historical quarterly record with a 26% growth to $1 1 million passengers as compared to the fourth quarter of 2003.
Speaker Change: This efforts further reinforced monterey its position as a leading hub in northern Mexico and ensure its readiness for future growth.
Speaker Change: This growth was primarily driven by the Monterrey Airport with a significant passenger traffic expansion on routes to Chicago, San Antonio Los Angeles, Las Vegas, Orlando, Oakland, Miami, San Francisco, Austin and Denver.
Speaker Change: Looking ahead, we continue advancing with phase II of the Monterrey Airport expansion project. This next stage focuses on significantly significantly expanding air side areas of terminal a.
Speaker Change: This routes accounted for approximately 74% of the total increase in international passenger traffic during the quarter.
Speaker Change: Once completed this project would ultimately optimize passenger flows enhance commercial offers and services and further increase the airports capacity to almost 16 million passengers annually.
Speaker Change: Additionally, during the quarter of 24, we launched 16, new international routes from Monterrey Master plan in Acapulco airports.
Speaker Change: And the new areas are expected to become operational in early 2026.
Speaker Change: Further improving our international connectivity.
Speaker Change: Finally in September 2024, we completed the expansion and remodeling of the terminal building at Durango International Airport.
Speaker Change: We also anticipate the launch of more than 20, new domestic and international routes between February and July of this year, including 11 international routes.
Speaker Change: This project allowed us to increase the air capacity capacity to handle up to 760000 passengers annually.
Speaker Change: Moving onto the almost financial performance.
Speaker Change: The sum of aeronautical and non aeronautical revenues reached a record high performance of three 3 billion pesos in the quarter.
Speaker Change: This infrastructure investments reflect our commitment to enhancing enhancing the passenger experience and supporting the long term development of our airports.
Speaker Change: Both revenue segments record growth in the quarter with aeronautical revenue, increasing 11% and non aeronautical revenue rising 22%.
Speaker Change: I will now move on to our fourth quarter performance.
Speaker Change: In the fourth quarter almost passenger traffic reached $7 1 million, an increase of four 6% versus the fourth quarter of 2003.
Speaker Change: The positive performance of our non aeronautical revenue reflects the successful execution and consolidation of several commercial and diversification strategy initiatives throughout the year.
Speaker Change: This increase was mainly attributable to an increase in seat capacity of three 3% during the quarter.
Speaker Change: Commercial revenues increased 19% compared to four quarter of 23%, primarily driven by restaurants, VIP lounges and retail revenues.
Speaker Change: On the domestic front passenger traffic grew by one 5%. This increase was primarily driven by our Monterrey Airport, which saw expansion on routes to get at that all the metropolitan area of Mexico City.
Speaker Change: Revenue for restaurants, and retail grew 29% each versus fourth quarter of 2003, mainly due to the contribution of new commercial space and the replacement of several other outlets opened during the quarter.
Speaker Change: <unk> two <unk>.
Speaker Change: Those routes collectively added more than 211000 additional passengers during the quarter and were particularly offset by decreased capacity and routes from Monterrey to conclude one that met either in Portland.
Speaker Change: During previous quarters sorry.
Speaker Change: In addition, VIP lounges grew by 59% as compared to the fourth quarter of 2003, mainly due to higher access rates and leases renewal of third party lounges in Monterrey under improved terms as well as the opening of new lounge airports, new largest and Durango airports.
Speaker Change: In contrast international passenger traffic reached a historical quarterly record with a 26% growth to $1 1 million passengers as compared to the fourth quarter of 2003.
Speaker Change: This growth was primarily driven by the Monterrey Airport with a significant passenger traffic expansion on routes to Chicago, San Antonio Los Angeles, Las Vegas, Orlando, Oakland, Miami, San Francisco, Austin and Denver.
Speaker Change: Diversification revenues increased 28% industrial services was the main growth driver.
Speaker Change: This quarter rising 138% to $47 million vessels, primarily due to an increase in leased square meters compared to fourth quarter of 'twenty three.
Speaker Change: This routes accounted for approximately 74% of the total increase in international passenger traffic during the quarter.
Speaker Change: Hotel services grew by 19%, mainly due to double digit increase in average room rates per night on both hotels.
Speaker Change: Additionally, during the quarter of 24, we launched 16, new international routes from Monterrey Master plan in Acapulco airports.
Speaker Change: Cargo increased 18% in the quarter, mainly due to higher revenues from ground cargo operations in Monterrey.
Speaker Change: Whether in improving our international connectivity.
Speaker Change: We also anticipate the launch of more than 20, new domestic and international routes between February and July of this year, including 11 international routes.
Speaker Change: Moving onto capital expenditure front during the quarter, we invested 951 million pesos in MVP investments major maintenance and strategic projects.
Speaker Change: Moving onto the almost financial performance.
Speaker Change: Finally, I am proud to announce that all 13 airports have obtained level III optima optimization certification on the airport carbon accreditation program strengthening our leadership in sustainable Airport management.
Speaker Change: The sum of aeronautical and non aeronautical revenues reached a record high performance of $3 3 billion peso in the quarter.
Speaker Change: Both revenue segments recorded growth in the quarter with aeronautical revenue, increasing 11% and non aeronautical revenue rising 22%.
Speaker Change: This milestone underscores our commitment to reducing carbon emissions and adopt them in novel innovative practices to minimize the environmental impact of our operations.
Speaker Change: The positive performance of our non aeronautical revenue reflects the successful execution and consolidation of several commercial and diversification strategy initiatives throughout the year.
Speaker Change: We have not only optimize our own operations, but also collaborated closely with commercial partners on airlines to implement carbon management strategies across the entire airport value chain.
Speaker Change: Commercial revenues increased 19% compared to fourth quarter of 2003, primarily driven by restaurants, VIP lounges and retail revenues.
Speaker Change: This certification reflect reflect our dedication to building a more sustainable future for the year for the industry.
Speaker Change: Revenue for restaurants, and retail grew 29% each versus fourth quarter of 'twenty three mainly due to the contribution of new commercial space and the replacement of several other outlets opened during the quarter.
Speaker Change: I would now like to turn the call over to <unk>, who will discuss our financial highlights for the quarter.
Speaker Change: Thank you Ricardo and good morning, everyone I will briefly go over our financial results for the quarter before opening the call for questions.
Speaker Change: During previous quarters, sorry in.
Speaker Change: In addition, VIP lounges grew by 59% as compared to the fourth quarter of 23%, mainly due to higher access rates and leases renewal of third party lounges in Monterrey under improved terms as well as the opening of new language airports, new largest and Durango airports.
Speaker Change: I don't know optical revenues increased 11, 1% relative to the fourth quarter of 2003, driven primarily by the 26, 4% growth in international passengers and higher revenue per procedure as well as the one 5% growth.
Speaker Change: Diversification revenues increased 28%.
Speaker Change: Our domestic passenger traffic during the quarter.
Speaker Change: Industrial services was the main growth driver.
Speaker Change: Lenovo revenues increased 21, 7%.
Speaker Change: This quarter rising 138.
Speaker Change: 8% to 47 million parcels, primarily due to an increase in leased square meters compared to fourth quarter of 2003.
Speaker Change: Commercial revenues increased four 1% and the categories with higher growth, where our restaurants the largest retailer <unk>.
Speaker Change: Notably commercial revenue per passenger increased 13, 9% to 64 vessels in the quarter relative to the same quarter of last year.
Speaker Change: Hotel services grew by 19%, mainly due to double digit increase in average room rates per night on both hotels.
Speaker Change: Diversification revenues increased 28%, mainly due to higher revenues from industrial services hotels and almost got it.
Speaker Change: Omar cargo increased 18% in the quarter, mainly due to higher revenues from ground cargo operations in Monterrey.
Speaker Change: Moving onto capital expenditure front during the quarter, we invested 951 million pesos in MVP investments major maintenance and strategic projects.
Speaker Change: It is important to note that revenues from industrial services and <unk> 24 includes approximately $6 million vessels from invoicing.
Speaker Change: <unk> corresponding to a nonperforming clients.
Speaker Change: Finally, I am proud to announce that all 13 airports have obtained level III optima optimization certification on the airport carbon accreditation program strengthening our leadership in sustainable Airport management.
Speaker Change: Excluding this.
Speaker Change: Australia revenue industrial services grew 103% to $42 million per quarter.
Speaker Change: Total I don't know article alone political revenues grew 13, 6%, reaching $3 3 billion vessels in the quarter.
Speaker Change: This milestone underscores our commitment to reducing carbon emissions and adopt them in novel innovative practices to minimize the environmental impact of our operations.
Speaker Change: We've got structural revenues amounting to 16 newbuild vessels in the fourth quarter.
Speaker Change: Okay.
Speaker Change: The cost of services and G&A expense increased by 14, 9% compared to for Q3 three as the company has made efforts to contain cost base. Despite inflationary pressures, so external services and purchase.
Speaker Change: We have not only optimize our own operations, but also collaborated closely with commercial partners on airlines to implement carbon management strategies across the entire airport value chain.
Speaker Change: The other cost and expenses line item as well as the materials materials and supplies line item grew mainly as a result of increased operational pseudo VIP launch business as well as cellular operations higher operations in our OMA cargo warehouses.
Speaker Change: This certification reflect reflect our dedication to building a more sustainable future for the airport industry.
Speaker Change: I would now like to turn the call over to <unk>, who will discuss our financial highlights for the quarter.
Speaker Change: Thank you Carlo and good morning, everyone I will briefly go over our financial results for the quarter before opening the call for questions.
Speaker Change: In our industrial park costs during the quarter, we recognized a $9 $7 million of bad debt expense.
Speaker Change: Due to a nonperforming tenant in the Monterrey industrial parks.
Speaker Change: I don't know if nickel revenues increased 11, 1% relative to the fourth quarter was 23, driven primarily by the 26, 4% growth in its initial passengers and higher revenue per procedure as well as the one 5% growth.
Speaker Change: Additionally, due to the higher number of leased square meters, we recorded approximately 2 million vessels and higher lease brokerage fees in the quarter.
Speaker Change: As a result, our cost of industrial Park services was $17 4 million vessels in the quarter.
Speaker Change: Our domestic passenger traffic during the quarter.
Speaker Change: Concession tax increased 97% to 265 million vessels as a result of the rate increase from 5% to 9% applied to the revenues generated by almost airport concessions for Suez to Mexican tax beauty slow.
Speaker Change: No narrow revenues increased 21, 7%.
Revenues increased 19, 1% in the categories with higher growth, where our restaurants spirit, the largest retail and car rentals.
Speaker Change: Notably commercial revenue per passenger increased 13, 9% to 64 vessels in the quarter relative to the same quarter of last year.
Speaker Change: Under the <unk> regulation basis affected us off of Dover 22023 payments.
Speaker Change: Payments made to the government to analytical revenues in excess of those included in the most recent tariff revision will be added to the referenced value to be used in the next maximum tariff revision.
Speaker Change: Diversification revenues increased 28%, mainly due to higher revenues from industrial services hotels and <unk>.
Speaker Change: Got it.
Speaker Change: It is important to note that revenues from industrial services in <unk> 24 includes approximately 6 million vessels from invoicing.
Speaker Change: Therefore, starting January 2026. This success concession tax amounts will begin to be recovered through maximum tariffs.
Speaker Change: Prior periods corresponding to a nonperforming clients.
Speaker Change: Excluding this.
In the fourth quarter of 2044, 4% surplus of the concession tax over ideological revenues amounted to a total of 1 million vessels equivalent to three 1% of the sum of almost identical labeling optical revenues.
Speaker Change: Australia revenue industrial services grew 103% to $42 million versus Brook luxury.
Speaker Change: Total I don't know article alone political revenues grew 13, 6%, reaching $3 3 billion vessels in the quarter.
Speaker Change: We've got structural revenues amounting to 800.
Speaker Change: This surplus is included in the $265 2 million vessels acquisition recorded as <unk> expense in departure.
Speaker Change: 16 million businesses in the fourth quarter.
Speaker Change: The cost of services and G&A expense increased by 14, 9% compared to for Q3 three as of.
Speaker Change: Major maintenance provision was 39 million vessels as compared to 95 vessels and for Q3, three and the decrease is the result of updating the timing of the execution of certain projects.
Speaker Change: Company has made efforts to contain cost base, despite inflationary pressures on external services and purchase.
Speaker Change: The other cost and expenses line item as well as the materials materials and supplies line item grew mainly as a result of increased operational VIP launch business as well as cable operations higher operations OMA cargo warehouses.
Almost fourth quarter adjusted EBITDA reached $2 4 billion vessels on the adjusted EBITDA margin was 73, 8%.
Speaker Change: Okay.
Speaker Change: Excluding the surplus concession tax and its impacts on almost financial results our adjusted.
Speaker Change: In our industrial park costs during the quarter, we recognized a $9 7 million peso bad debt expense due to a nonperforming tenant in the Monterrey Industrial Park.
Speaker Change: EBITDA was <unk> $2 5 billion vessels with an adjusted margin of 76, 7%.
For the full year ended December 31.
Speaker Change: Additionally, due to the higher number of leased square meters, we recorded approximately 2 million pesos higher lease brokerage fees in the quarter.
Speaker Change: Adjusted EBITDA would have been $9 4 billion of vessels with a margin of 77, 3%.
Speaker Change: Our financing expense amounted to $332 million vessels as compared to $224 million in the fourth quarter of 2003.
Speaker Change: As a result, our cost of industrial Park services was $17 4 million vessels in the quarter.
Speaker Change: Consistent tax increased 97% to 265 million vessels as a result of the rate increase from 5% to 9% applied to the revenues generated by almost airport concessions for Suez to Mexican tax beauty slow.
Speaker Change: The English is mainly related to a 103, new vessel amounts recorded in change of the present value of the major maintenance provision as a result of the decrease in the rates used for the calculation of such provision.
Speaker Change: Is a noncash effect.
Speaker Change: Under the <unk> regulation basis of 50 yourself October 22023 payments made it to the government to analytical revenues in excess of those included in the most recent tariff revision.
Speaker Change: Consolidated net income was $1 2 billion in the quarter, which decreased five 9% relative to the fourth quarter of 2023.
Speaker Change: Turning to our cash position cash generated from operating activities in the quarter amounted to $1 9 billion vessels and at the end of the larger cash balance stood at $1 7 billion of vessels. This reflects the payment of the second installment of the ordinary dividend of $2 1 billion vessels as well.
Speaker Change: We added to the referenced value to be used in the next maximum tariff review soon thereafter.
Speaker Change: Therefore, starting January 2026. This success consistent tax amounts will begin to be recovered through Mexico tariffs.
Speaker Change: In the fourth quarter of 2044, 4% surplus of the concession tax over ideological revenues amounted to a $1 million vessels equivalent to three 1% of the sum of almost identical on the label optical revenues.
Speaker Change: The drawdown of 600 million vessels and short term goals.
Speaker Change: At December 31, the total debt, including financial leases amounted to 11 type build vessels and we ended the quarter with net debt to adjusted EBITDA ratio of one one times.
Speaker Change: This surplus is included in the $265 2 million vessels acquisition recorded as <unk> expense in departure.
This concludes our prepared remarks, Melissa please open the call for questions.
Speaker Change: Major maintenance provision was 39 million vessels as compared to 95 million vessels and for Q3, three and the decrease is the result of updating the timing of the execution of certain projects.
Melissa: Thank you if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Melissa: You May press star two if you'd like to remove your question from the queue.
Speaker Change: Almost four <unk> adjusted EBITDA reached $2 4 billion vessels on the adjusted EBITDA margin was 73, 8%.
Melissa: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Speaker Change: Our first question comes from the line of Rudolph will Ramos with Bradesco BBA. Please proceed with your question.
Speaker Change: Excluding the surplus concession taxes it seems almost like this our results our adjusted.
Speaker Change: Good morning, Ricardo hormonal and thanks for taking my question.
Speaker Change: EBITDA, what's cost me $2 5 billion vessels with an adjusted margin of 76, 7%.
Speaker Change: I have a couple if I may can you can you talk a little bit about your traffic outlook for for this year.
Speaker Change: For the full year ended December 31, adjusted EBITDA would have been $9 4 billion vessels with emerging of 77, 3%.
Speaker Change: And related to this point.
Speaker Change: How far do you think you are in your efforts to development delays route network.
Speaker Change: Our financing expense amounted to $332 million vessels as compared to $224 million in the fourth quarter of 23.
Speaker Change: So that would be my first question and second.
Speaker Change: I know that it is early stages, but anything you can share as far as your MVP expectations do you do you see room to ramp up Capex in Monterrey.
Speaker Change: The English is mainly related to a 103, new vessel amounts reported in change of the present value of the major maintenance provision as a result of the decrease in the rates used for the calculation of such provision.
Speaker Change: Just to get a sense of what kind of tariff increase we might see thank you.
Bill: Hi, Bill this is go forward regarding.
Speaker Change: Is a noncash effect.
Speaker Change: Consolidated net income was $1 2 billion in the quarter, which decreased five 9% relative to the fourth quarter of 2023.
Speaker Change: Your first question.
Bill: For this year, we're seeing.
Bill: <unk>.
Recovery in domestic.
Bill: Capacity being deployed by by the main carriers in our network.
Speaker Change: Turning to our cash position cash generated from operating activities in the quarter amounted to $1 90 billion vessels and at the end of the quarter cash balances stood at $1 7 billion of vessels. This reserve is the payment of the second installment of the ordinary dividend of $2 1 billion vessels as well.
Bill: We have seen that increase has started since November of last year and has continued through January of this year.
Bill: For full year, we are expecting around a mid single digit growth year over year and regarding.
Speaker Change: The drawdown of 600 million vessels and short term goals.
Bill: The Monterrey network, we believe that there is plenty of opportunity to continue developing it.
Speaker Change: At December 31, the total debt, including financial leases amounted to $11 5 billion vessels and we ended the quarter with net debt to adjusted EBITDA ratio of one one times.
Bill: <unk> positioning is us.
Bill: Connecting hub.
Bill: A lot of their routes.
Bill: Got to listen to his opening remarks were opened in the second half of last year and they have still to mature so I believe that.
Speaker Change: This concludes our prepared remarks, Melissa please open the call for questions.
Bill: Going forward, we will continue to consolidate.
Melissa: Thank you if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Bill: The major conducting carving in northern Mexico.
And level four regarding the MVP, we are still working on the Capex plan that we're going to put forward. What we can anticipate is that as we've mentioned before we're working on an optimized version of the Capex.
Speaker Change: You May press star two if you'd like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Speaker Change: Our first question comes from the line of for thoughtful Ramos.
Bill: We're leveraging on our internal expertise vinci expertise as well.
Speaker Change: Jessica.
Speaker Change: Please proceed with your question.
Bill: So that we can put a capex plan that we will not put unnecessary pressure on tariffs and we'll maximize the net present value of the company.
Jessica: Good morning, Ricardo hormonal and thanks for taking my question.
Speaker Change: A couple if I may.
Speaker Change: Can you talk a little bit about your traffic outlook for for this year.
Speaker Change: Related to this point.
Speaker Change: How far do you think you are in your efforts to development delays route network.
Speaker Change: Thank you. Our next question comes from the line of yen speed with Morgan Stanley. Please proceed with your question.
Speaker Change: So that would be my first question and second anything.
Speaker Change: I know it is early stages, but anything you can share as far as your MVP expectations.
Yen Speed: Yes, thanks for taking my question.
Speaker Change: So.
Speaker Change: Do you see room to ramp up Capex in Monterrey.
Speaker Change: On the traffic outlook, you just mentioned of mid single digits. I mean, we're seeing clearly a lot of capacity being deployed to our network.
Speaker Change: Just to get a sense of what kind of tariff increase we might see thank you.
Speaker Change: Hi, This is go forward regarding.
Speaker Change: Which makes me think that maybe that assumption might be slightly conservative but regardless.
Speaker Change: Your first question.
Speaker Change: For this year.
Speaker Change: In terms of AV and this might be a dumb question, but in terms of this being the year, where you negotiate your MVP.
Speaker Change: Seeing a recovery in domestic.
Speaker Change: Our capacity being deployed by by the main carriers in our network.
Speaker Change: Having very good traffic numbers I know its always goods, but in light of the negotiations you will be having.
Speaker Change: We have seen that increase the started since November of last year and has continued through January of this year.
Speaker Change: Does it.
Speaker Change: At any point might raise the bar too high or is it not even a concern.
Speaker Change: For full year, we are expecting around a mid single digit growth year over year and.
Speaker Change: And it doesn't really matter.
Speaker Change: Regarding the Monterrey network, we believe that there is plenty of opportunity to continue developing it we're just positioning is us.
Speaker Change: Yeah.
Speaker Change: Hi, Jan sorry, Carlos here.
Speaker Change: The traffic projection is based on a long term view a mid to long term view.
Speaker Change: Connecting hub.
Speaker Change: A lot of their routes.
Speaker Change: It's a bottom up analysis in which we're looking at many different things not only at the last.
Speaker Change: With regard to the listeners is opening remarks were opened in the second half of last year and they have still to mature so I believe that.
Speaker Change: The last data, we're looking at the demand in the future. We're looking at the aircraft out orders for.
Speaker Change: Going forward, we will continue to consolidate.
Speaker Change: Major conducting carving in northern Mexico.
Speaker Change: Airlines, we have independent in the.
Speaker Change: And rollout for regarding the MVP, we are still working on the Capex plan that we're going to put forward. What we can anticipate is that as we've mentioned before we're working on an optimized version of the Capex will elaborate Jane on our internal expertise vinci expertise as well.
Speaker Change: And traffic projections. The regulator has his own projections. So I don't think it puts it in that it's not necessarily bad is bad news because we're looking more of a mid to long term view of this traffic projections.
Speaker Change: Okay understood.
Speaker Change: And if I may just add one question on AWN I mean, congrats on the very impressive commercial revenues you had so.
Speaker Change: So that we can put a capex plan that we will not put unnecessary pressure on tariffs and we'll maximize the net present value of the company.
Speaker Change: Just trying to understand.
Speaker Change: Obviously simply due to the full year effect of the existing run rate you will see probably a benefit this year versus last year, but beyond that any additional upside we should be factoring in.
Yen Speece: Thank you. Our next question comes from the line of yen Speece with Morgan Stanley. Please proceed with your question.
Speaker Change:
I think for for the.
Yen Speece: Yes, thanks for taking my question.
Speaker Change: The following quarters, we should expect.
Yen Speece: So.
Yen Speece: On the traffic outlook, you just mentioned of mid single digits. I mean, we're seeing clearly a lot of capacity being deployed to your network.
Speaker Change: A similar amount in terms of a promotional.
Speaker Change: Commercial income per passenger.
Speaker Change: Around the 60 vessels Mark.
Yen Speece: Which makes me think that maybe that assumption might be slightly conservative but regardless.
Speaker Change: We would expect.
Speaker Change: A hygiene that number once the Monterrey areas are opened we.
Yen Speece: In terms of off and this might be a dumb question, but in terms of this being the year, where you negotiate your MVP.
Speaker Change: We expect that to occur in early 2026, 2012 ships will have a huge pick up because of these new lenses to be.
Yen Speece: Having very good traffic numbers I know its always good but in light of the negotiations you will be having.
Speaker Change: <unk>.
Speaker Change: Perfect.
Speaker Change: Any color on the magnitude of that step up and try to ethics.
Yen Speece: Does it at any point might raise the bar too high or is it not even though concerning.
Speaker Change: We are still quantifying it.
Yen Speece: And it doesn't really matter.
Speaker Change: We will have a more clearer towards middle of the year will be tendering those basis.
Yen Speece: Yeah.
Yen Speece: Hi, Jan sorry, Carlos here.
Yen Speece: And the traffic projection is based on a long term view a mid to long term view.
Speaker Change: So the tenders, we were occurring towards middle of this year.
Yen Speece: It's a bottom up analysis in which we're looking at many different things not only at the last.
Speaker Change: Fair enough all right. Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you. Our next question comes from the line of Jeremy.
Yen Speece: The last data, we're looking at the demand in the future. We're looking at the aircraft that orders for.
Speaker Change: With Jpmorgan. Please proceed with your question.
Jeremy: Hi, Carlos Ruefully Manuel and good morning. Thanks for taking my question first one is a follow up on the MTBE.
Yen Speece: Airlines, we have independent.
Yen Speece: Independent traffic projections, the regulator has its own projections, so I don't think inputs.
Speaker Change: Any views on timing for him to Ken Osman should we expect something by in November or December or maybe a little bit earlier.
Yen Speece: Not necessarily bad.
Bad news, because we're looking more of a mid to long term view of this traffic projections.
Speaker Change: Second point on the costs and margin front, I guess fruitful mentioned about the cost control during the quarter.
Yen Speece: Okay understood.
Speaker Change: And do you see any pressure going forward into 2025, and what kind of EBITDA margin can we expect going forward. Thank you.
Speaker Change: And if I may just add one question on AWN I mean, congrats on the very impressive commercial revenues you had so.
Yen Speece: Just trying to understand.
Speaker Change: Okay and in terms of.
Yen Speece: Obviously simply due to the like a full year effect of the existing run rate you will see probably a benefit this year versus last year, but beyond that any additional upside we should be factoring in.
Speaker Change: By year end in terms of the timing.
Speaker Change: We will be presenting officially the MVP plan and by the end of June.
Speaker Change: And we will take six months.
Yen Speece:
Speaker Change: Working with the Ministry and we are expecting this to go until until the last weeks of December.
Yen Speece: I think for for the.
Yen Speece: The following quarters, we should expect.
Speaker Change: That's our expectation.
Yen Speece: A similar amount in terms of.
Speaker Change: And.
Speaker Change: Regarding.
Yen Speece: Commercial income per passenger.
Speaker Change: Our cost side as well.
Yen Speece: Around the 60 vessels Mark.
Speaker Change: Mentioned in the.
Speaker Change: Coal, we had some extraordinary items, particularly the initial park.
Yen Speece: We would expect.
Yen Speece: A high can that number once the Monterrey areas are opened.
Speaker Change: But with respect to other cost of expenses for this year, we would expect inflationary based increases.
Yen Speece: We expect that to occur in early 2026, 2012 ships will have a huge pickup because you want them to be.
Speaker Change: Relative to last year.
Speaker Change: Yeah.
At a time.
Speaker Change: Okay. That's clear thanks, and just a follow up in terms of the margins fair to assume this mid seventies kind of level going forward, obviously without assuming any tariff increase post <unk>.
Yen Speece: Perfect.
Yen Speece: And any color on the magnitude of that step up and try to fix.
Yen Speece: We're still.
Yen Speece: Quantifying it.
Speaker Change: Yeah, that's fair to assume human.
Yen Speece: We will have a more clearer towards middle of the year will be tendering those spaces.
Speaker Change: Perfect. Thank you.
Yen Speece: So the tenders, we were acutely and got towards middle of this year.
Speaker Change: Thank you. Our next question comes from the line of.
Fernando Recchia: Fernando Recchia with BTG Pactual. Please proceed with your question.
Yen Speece: Fair enough all right. Thank you.
Speaker Change: Sure.
Yen Speece: Yeah.
Speaker Change: Thank you. Our next question comes from the line of Jeremy.
Carlo: Hey, Carlo from Manuel Thank you for taking my question to you here from our side as well.
Jeremy Mendes: Mendes with Jpmorgan. Please proceed with your question.
Carlo: A quick follow up on the traffic if you could break down the mid single digit that theyre expecting for 2025 between domestic and international.
Jeremy Mendes: Hi, Carlos roofing Manuel and good morning, Thanks for taking my questions first one is a follow up on the MTBE.
Jeremy Mendes: Any views on timing for him to Ken Osman should we expect something by in November or December or maybe a little bit earlier and second point on the costs and margin front I guess real formation about the cost control during the quarter.
Carlo: Lukin since November international has been surprising so I just wanted to understand Hollywood King funding.
Carlo: Makes for an easier.
Carlo: And second I just want.
Jeremy Mendes: And do you see any pressure going forward into 2025, and what kind of EBITDA margin can we expect going forward. Thank you.
Thank you yeah. If there is any of the regarding that.
Transfer R&D Monterrey airport from military to commercial activity.
Jeremy Mendes: Okay and in terms of the high yield and in terms of the timing.
Carlo: And if so do you expect to incorporate any impact of this in trigger MTP negotiation.
Jeremy Mendes: We will be presenting at <unk>.
Jeremy Mendes: Actually the MVP plan and by the end of June.
Carlo: Okay.
Speaker Change: So I'll answer the second part.
Jeremy Mendes: And we will take six months working.
Speaker Change: So the military airport, there's no official project.
Jeremy Mendes: Working with the Ministry and we are expecting this to go until until the last weeks of December.
Speaker Change: There is actually not no budget currently allocated to that project. So I think the the probability of having a competing air for next door. It's it's.
Jeremy Mendes: That's our expectation.
Jeremy Mendes: And.
Jeremy Mendes: Regarding.
Jeremy Mendes: Our cost side as well.
Speaker Change: <unk> and its lower than than it has been in the past.
Jeremy Mendes: Mentioned in the.
Jeremy Mendes: Coal, we had some extraordinary items, particularly the initial park.
Speaker Change: And regarding the 25.
Speaker Change: Outlook.
Jeremy Mendes: But with respect to other cost of expenses for this year, we would expect inflationary based increases.
Speaker Change: It's still.
Speaker Change: Although clear what the mix is going to be we depend a lot on how the additional seat capacity that.
Jeremy Mendes: Relative to last year.
Jeremy Mendes: Yeah.
Speaker Change: Both of Eva.
Jeremy Mendes: Okay. That's clear thanks, and just a follow up in terms of the margin. It's fair to assume this mid seventies kind of level going forward, obviously without assuming any tariff increase post MTBE.
Speaker Change: It will be.
Speaker Change: Deploying.
Speaker Change: For example in the case of.
Speaker Change: Confirm drugs that we expect to over the next few months, we have 20, new routes already confirmed.
Gilman: Yeah, that's fair to assume Gilman.
Speaker Change: Nine of them are domestic on 11.
Jeremy Mendes: Perfect. Thank you.
Speaker Change: Roes are international so I think that we'll still see a little bit more dynamism.
Jeremy Mendes: Thank you. Our next question comes from the line.
Fernando Recchia: Fernando Recchia with BTG Pactual. Please proceed with your.
Speaker Change: From the international side, but we'll see a recovery on the domestic front as converged to politically this year.
Jeremy Mendes: Sure.
Speaker Change: Hey, Carlo.
Speaker Change: Thank you for taking my question to you here from our side as well.
Speaker Change: Okay. Thank you.
Speaker Change: Just a follow up on traffic.
Speaker Change: Could break down the mid single digit that you are expecting for 2025 between domestic and international Lukin. Since November International has been surprising so I just wanted to understand holiday <unk>.
Speaker Change: Thank you. Our next question comes from the line of Pavel.
Speaker Change: With that.
Speaker Change: Please proceed with your question.
Speaker Change: Hi, good morning, anecdotal for congrats on the results.
Speaker Change: It makes for an easier.
Speaker Change: I was wondering if you can provide more color on noninterest expense line and we saw a huge increase in the quarter.
Speaker Change: And second just Monday two years, if there is any of the research.
Speaker Change: Apparently there was like this issue with the interest rate on the maintenance provision.
Speaker Change: Grasp R&D Monterrey airport from military to commercial activity.
Speaker Change: If we can talk about.
Speaker Change: Further this effect and if we should expect something more going forward.
Speaker Change: And if so do you expect to incorporate any impact of this in trigger MTP and negotiation.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: We have as you know major maintenance provision released which is a long term.
Speaker Change: Okay.
Speaker Change: So I'll answer the second part.
Speaker Change: So the military airport, there's no official project.
Speaker Change: Forecast of the REIT basement.
Speaker Change: Primarily related payments are worse repayment obligations through.
Speaker Change: There is actually not no budget currently allocated to that project. So I think the the probability of having a competing airport next door.
Speaker Change: The life of the concession.
Speaker Change: And it's quite sensitive to interest rates variations. So so yes, we adjust it downward sewer.
Speaker Change: Very low and its lower than than it has been in the past.
Speaker Change: Interest rates that we used to value the provision that contain noncash effect during the quarter.
Speaker Change: And regarding the 25.
Speaker Change: Our outlook.
Speaker Change: It's still.
Speaker Change: Sure.
Speaker Change: Oh clear what the mix is going to be we depend a lot on how the additional seat capacity that.
Speaker Change: We will.
Speaker Change: They are still subject to those variations.
Speaker Change: <unk>.
Speaker Change: Or.
Speaker Change: Now in the report we're now splitting up the breakdown of the interest expense. So so you can see what the impact of that is in isolation.
Speaker Change: Both of you.
Speaker Change: We'll be.
Speaker Change: Deploying.
Speaker Change: For example in the case of.
Speaker Change: Confirmed routes that we expect to over the next few months, we have 20, new routes already confirmed.
Speaker Change: I'll just highlight.
Speaker Change: Highlights at the end of it it's a noncash variation.
Speaker Change: Nine of them are domestic on 11.
Speaker Change: Perfect that was very clear.
Speaker Change: Roes are international so I think that we'll still see a little bit more dynamism.
Speaker Change: Thank you. Our next question comes from the line of Pablo <unk> with Barclays. Please proceed with your question.
Speaker Change: From the international side, but we'll see a recovery on the domestic front as converged to politically this year.
Speaker Change: Although your line is live.
Speaker Change: Okay. Thank you.
Speaker Change: Hi.
Speaker Change: Thanks for taking my question, we got about you mentioned at the beginning of the call Q&A session that you are expecting for the MLP to be very.
Speaker Change: Thank you. Our next question comes from the line.
Speaker Change: Hello.
Speaker Change: Please proceed with your question.
Speaker Change: Hi, good morning, anecdotal for congrats on the results and I was wondering if you can provide more color on the interest expense line and we saw a huge increase in the quarter.
Speaker Change: Our capex up came up.
Speaker Change: Can you please share to to what extent was the conversation with the government starts that variable moves or down or to what extent. This is based on years of course technical considerations, but also a little bit on the negotiation. Thank you.
Speaker Change: Apparently there was like this issue with an interest rate on maintenance provision, but I don't know if we can talk a little bit further.
Speaker Change: And if we should expect something more going forward.
Pablo: Hi, Pablo Thank you. Thank you for your question.
Speaker Change: Yes.
Speaker Change: <unk>.
Pablo: The Capex plan that you put forward is based purely on technical this session, we're going to sit down with the government, we're going to look at the traffic projections that we both have our.
We have as you know major maintenance provision release, which is a long term.
Speaker Change: The forecast of the replacements.
As it relates to payments worse repayment obligations.
Pablo: Our third party projections also have.
Speaker Change: The life of the concession.
Pablo: To look at the needs of the different stakeholders in the airport and we're all got where we're going to come up with a with a technical Capex plan that is that one we're putting forward.
Speaker Change: And it's quite sensible to interest rates variations. So so yes, we adjusted downward sewer.
Speaker Change: Interest rates that we used to value the provision.
Pablo: You already know in anticipation the needs we are constantly in conversation with the regulator and the tariffs will be a result of that technical analysis in our Capex plan.
Speaker Change: The noncash effect during the quarter.
Speaker Change: We will.
Speaker Change: On the is still subject to those variations.
Pablo: Alright, thank you.
Speaker Change: Or or down.
Pablo: Thank you.
Speaker Change: The reports, we're now splitting up the breakdown of the interest expense. So you can see what the impact of that is in isolation.
Speaker Change: Our next question comes from the line of Andrew <unk>.
Speaker Change: With UBS. Please proceed with your question.
Speaker Change: Okay.
Speaker Change: I'll just highlight.
Speaker Change: Hi, Good morning, and thank you for taking my question I just have a follow up here on traffic.
Highlights at the end is it's a noncash.
Speaker Change: <unk>.
Speaker Change: <unk>.
Speaker Change: Well and MRO in the international side.
Speaker Change: Perfect that was very clear.
Speaker Change: This can be explained by airline flying rockhopper capacity in doing international high in this moment of my restriction.
Speaker Change: Thank you. Our next question comes from the line of Pablo months away with Barclays. Please proceed with your question.
Speaker Change: But I went in to catch for more like how do you see this going forward, but he said this is indeed.
Speaker Change: Although your line is live.
Speaker Change: Hi.
Speaker Change: Opportunistic opportunity to Ah trial, Okay capacity, there or do you see.
Speaker Change: Thanks for taking my question, we got about you mentioned at the beginning of the call Q&A session that you are expecting for the MLP to be very.
Speaker Change: Some improvement in demand drivers that can make this.
Speaker Change: Sustainable process and more relative to be added in the upcoming years. Thank you.
Speaker Change: Capex, so pretty modest.
Speaker Change: Can you please share to us to what extent was that conversation with the government starts that variable moves up or down or to what extent. This is based on years of course technical considerations, but also a little bit on.
Speaker Change: Okay.
Speaker Change: Can you repeat your question please.
Speaker Change: We lost you there.
Joe: I am sorry, Joe there's about.
Speaker Change: On the negotiation thank you.
Speaker Change: International traffic.
Pablo: Hi, Pablo Thank you. Thank you for your question.
Speaker Change: How do you see capacity allocation on the international Roe.
Speaker Change: The Capex plan that you put forward is based purely on technical this session, we're going to sit down with the government, we're going to look at the traffic projections that we both have.
Speaker Change: You are seeing.
Speaker Change: <unk> this is a more opportunistic.
Speaker Change: <unk> moved from the Airlines Amit capacity restrictions are sustained.
Speaker Change: Sustainable.
Speaker Change: Third party projections also have we're going to look at the needs of the different stakeholders in the airport and we're all we're going to come up with a with a technical Capex plan that is the one we're putting forward we already know in anticipation of the needs. We are constantly in conversation with the regulator and the tariffs will be our.
<unk> driven movement. Thank you.
Speaker Change: Right.
Speaker Change: Yes. Thank you.
Speaker Change: So what we have seen in <unk>.
Speaker Change: 2020 for Us is.
Speaker Change: Steve.
Speaker Change: Interest from domestic carriers to towards international routes.
Speaker Change: Result of that technical analysis in our Capex plan.
Speaker Change: We attributed that tool to the recovery of category, one or if you can remember a mess.
Speaker Change: Alright, thank you.
Speaker Change: Mexican carriers were not allowed during.
Speaker Change: Thank you.
Speaker Change: That period to open new routes or services to the to the U S.
Speaker Change: Our next question comes from the line of Andrew.
Speaker Change: That was lifted towards the end of 2023. So during 2020 for most of the new capacity that airlines, we're able to deploy it was focused on the on the international markets.
Speaker Change: With UBS. Please proceed with your question.
Andrew: Hi, Good morning, and thank you for taking my question.
Speaker Change: Follow up here on traffic.
Andrew: We are seeing wealth and.
Speaker Change: We believe that the network are primarily out of Monterrey to the U S.
Speaker Change: Tomorrow in Dayton.
Speaker Change: Cash outside.
Speaker Change: Destinations will continue tool to be strengthened.
Speaker Change: Maybe it can be explained by airline capacity.
Speaker Change: Capacity in doing international high in this moment of more restriction.
Speaker Change: Around 88% of our international traffic comes from the U S. Social we still believe that most of the international rose will be generated in and out of the U S to our airports.
Speaker Change: Well, then to catch up or more like how do you see this going forward, but he said this is indeed.
Speaker Change: Our first mistake opportunity too shallow K capacity, there or do you see.
Speaker Change: The.
Speaker Change: I think that that will continue to be a trend in the next.
Speaker Change: A few quarters.
Speaker Change: Yes.
Speaker Change: Some improvement in demand drivers that can make this.
Speaker Change: Thank you very much.
Speaker Change: Sustainable process and more relative to be added and that's coming.
Speaker Change: Thank you. Our next question comes from the line of Edson with Gilead with Macquarie. Please proceed with your question.
Speaker Change: Thank you.
Okay.
Speaker Change: Can you repeat your question please.
Speaker Change: And then your line is live.
Speaker Change: We lost you have it.
Speaker Change: Oh, yes, sorry, Joe just about.
Speaker Change: International traffic.
Speaker Change: I'm sorry variance in some technical difficulty. Our next question comes from the line of Federico Gallazzi with TRT. Please proceed with your question.
Speaker Change: How does he did capacity allocation on the international Roe.
You are saying.
Speaker Change: <unk> this is more opportunistic.
Speaker Change: <unk> moved from the airlines, Amit capacity restrictions or sustaining.
Federico Gallazzi: Hi, John Thank you.
Federico Gallazzi: My question's on Congress protocol.
Speaker Change: Sustainable.
Speaker Change: <unk> driven movement. Thank you.
Federico Gallazzi: One important thing getting bad.
Speaker Change: Right.
Federico Gallazzi: And the profit guidance.
Speaker Change: Yes. Thank you.
Speaker Change: So what we have seen in 2024.
Federico Gallazzi: DCF, which is the last three months in Montgomery tapping lower months.
Federico Gallazzi: When you mentioned mid single Nishu.
Speaker Change: <unk>.
Speaker Change: Steve.
Speaker Change: Interest from domestic carriers to towards international routes.
Federico Gallazzi: What do I think important Mumbai and the second one on consumables, but rates.
Federico Gallazzi: And you mentioned punching bag.
Speaker Change: We attributed that tool to the recovery of <unk> 41, or if you can remember Mitch.
Speaker Change: In the lesser convention, we are talking about.
Federico Gallazzi: We'll be the Spansion with banking function in Mumbai, if you can do.
Speaker Change: Mexican carriers were not allowed during.
Speaker Change: That period to open new routes or services to the U S.
Speaker Change: Perfect. Thank you.
Speaker Change: That was lifted towards the end of 2023. So during 2020 for most of the new capacity that airlines, we're able to deploy it was focused on the on the international markets.
Speaker Change: Hi, vertical so so in terms of traffic guidance.
Speaker Change: Yes, yes, multi res we will continue to be the.
Speaker Change: The driver of our growth.
Speaker Change: We believe that the network primarily out of Monterrey to the U S.
Speaker Change: We do expect some some airports tool to recover as domestic capacity those back on line towards the second half of the year, but.
Nations will continue tool to be.
Speaker Change: <unk>.
Speaker Change: Around 88% of our international traffic comes from the U S.
Speaker Change: In the in the foreseeable future Monterrey will be driving our results.
Speaker Change: We still believe that most of the international rose will be generated in and out of the U S.
Speaker Change: Also worth noting that our traffic projection already incorporate some some volatility that we're seeing in the macro environment. So we're being a bit cautious.
Speaker Change: Through our airports.
Speaker Change: I think that that will continue to be a trend in the next few quarters.
Speaker Change: Yes.
Speaker Change: About that.
Speaker Change: Thank you very much.
Speaker Change: As well.
Speaker Change: Regarding the expansion in in Monterrey.
Speaker Change: Thank you. Our next question comes from the line of Edson with Western Mckenna. Please proceed with your question.
Speaker Change: We are right now.
Speaker Change: Bob.
Speaker Change: Joining what we call the wink.
Speaker Change: A.
Speaker Change: To the terminal a socially wingo onshore terminal a.
Tim: And Tim Your line is live.
Speaker Change: And that should be.
Speaker Change: Completed by the first squadron 2026.
Tim: I'm sorry.
Speaker Change: And that will allow us to.
Speaker Change: <unk> seen some technical difficulty. Our next question comes from the line of Federico Gallazzi with TRT. Please proceed with your question.
Speaker Change: Increased at least a couple of million the yearly capacity of the airports.
Speaker Change: And be able to sustain what we expect in the next couple of years.
Federico Gallazzi: Hi, John Thank you for taking my questions on contract protocol.
Speaker Change: And the conventional capacity is slight positive to that.
Speaker Change: One important thing getting bad.
Thank you.
Federico Gallazzi: And the profit guidance.
Speaker Change: One to finish at least.
Federico Gallazzi: For this year you can see the last few months in a very public warmer months.
Speaker Change: Besides.
Speaker Change: Yes.
Speaker Change: These areas are all.
Federico Gallazzi: When you mentioned mid single issue.
Speaker Change: Oh sites with us social yes, they will be accompanied by a development of a passenger concentration area.
Federico Gallazzi: What do I think in Portland.
Federico Gallazzi: And the second one.
Federico Gallazzi: As you move east.
Federico Gallazzi: And you mentioned something that.
Federico Gallazzi: In Galactic <unk> Youre talking about.
Speaker Change: We would.
Speaker Change: We expect most of the passengers to flow through the <unk>.
Federico Gallazzi: We'll be the Spansion was facing function in one part of if you can give me more.
Speaker Change: Once the areas are going to do it.
Speaker Change: Thank you.
Speaker Change: And sometimes you're having fun.
Speaker Change: So.
Speaker Change: Thank you. Our next question comes from the line of Alan Macias with Bank of America. Please proceed with your question.
Speaker Change: In terms of traffic guidance.
Speaker Change: Yes, multi res and we will continue to be the.
Speaker Change: The driver of our growth.
Alan Macias: Hi, Good morning, and thank you for the call just a follow up question on the adjusted EBITA margin for next year I guess, if we assume that traffic is going to grow this year.
Speaker Change: We do expect some some airports to recover as domestic capacity those back on line towards the second half of the year.
Speaker Change: But.
Speaker Change: Is it a fair assumption to assume a margin expansion. Thank you.
Speaker Change: In the foreseeable future luxury will be driving.
Speaker Change: Our results.
Speaker Change: Also worth noting that our traffic projections already incorporate some some volatility that we're seeing in the macro environment.
Speaker Change: For next year Youre talking about 2025 for 2026.
Speaker Change: 25.
Speaker Change: Okay.
Speaker Change: We're being a bit cautious about that.
Speaker Change: Yes.
Speaker Change: As well.
Speaker Change: I think its achievable to have a slight increase.
Speaker Change: Regarding the expansion in in Monterrey.
Speaker Change: Inquiries relative to 2020.
Speaker Change: We are right now.
Speaker Change: 24.
<unk>.
Speaker Change: Yes.
Speaker Change: Joining what we call the.
Speaker Change: A marginal increase yes.
Speaker Change: <unk> eight.
Speaker Change: To the terminal a socially we won two terminal a.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from the line of Edson Murguia with semi cap. Please proceed with your question.
Speaker Change: And that should be.
Speaker Change: Completed by the first quarter of 2026.
Speaker Change: And that will allow us to.
Edson Murguia: I'm thinking about this before.
Speaker Change: Increased at least a couple of million the yearly capacity of the airports.
I have one question related to the 200 million short term loan.
Speaker Change: And be able to sustain what we expect in the next couple of years.
Edson Murguia: My question is.
Edson Murguia: What is your strategy with the liquid loan NIM.
Speaker Change: And the conventional capacity is slight positive feedback.
Edson Murguia: I mean, excuse me 25, and we'll be completing the prepaid 112.
Speaker Change: Thank you.
Speaker Change: When we finish at least two points.
Edson Murguia: And in pesos.
Speaker Change: Ed.
Speaker Change: Oh, yes.
Edson Murguia: So what.
Edson Murguia: What would be the strategy I know you mentioned that.
Speaker Change: These areas are all.
Edson Murguia: With that line.
Speaker Change: Oh sites with us so yes, they will be accompanied by a development of a passenger concentration area.
Edson Murguia: Yeah.
Edson Murguia: Over the strategy behind it.
Edson Murguia: It.
Speaker Change: We would.
Edson Murguia: Could you move closer to the microphone to or Youre seeing some noise in the background we're enabled.
Speaker Change: Expect most of the passengers to flow through the.
Edson Murguia: Unable to hear you.
Speaker Change: Once the areas are going to do it.
Edson Murguia: Question.
Kevin: That's helpful. Kevin.
Edson Murguia: Yes.
Edson Murguia: Question one.
Edson Murguia: Related to the Kremlin million alone lawn and garden.
Speaker Change: Thank you. Our next question comes from the line of Alan Macias with Bank of America. Please proceed with your question.
Edson Murguia: The long term short.
Alan Macias: Hi, Good morning, and thank you for the call just a follow up question on the adjusted EBITA margin for next year I guess, if we assume that traffic is going to grow this year.
Edson Murguia: So what was the strategy behind it it's kind of a minimum purchase.
Edson Murguia: Strategy, Okay, yes, so the short term loans that we had last year. We're just.
Alan Macias: Is it a fair assumption to assume a margin expansion. Thank you.
Edson Murguia: To strengthen our working capital position towards the end of last year and give some liquidity to the company in the first quarter of of this year.
Alan Macias: For next year Youre talking about 2025 for 2026.
Edson Murguia: We expect some some small capex execution.
Alan Macias: 35.
Alan Macias: Okay.
Edson Murguia: And the idea would be to.
Alan Macias: Yes.
Alan Macias: I think its achievable to have a slight.
Edson Murguia: Refinances.
Edson Murguia: In the middle of this year with a long term debt.
Alan Macias: Inquiries relative to 2020.
Alan Macias: 24.
Alan Macias: Yes.
Edson Murguia: Okay.
Alan Macias: A marginal increase yes.
Edson Murguia: Thank you.
Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back to Mr. Doyle for any final comments.
Alan Macias: Thank you.
Speaker Change: Thank you. Our next question comes from the line of Edson Mergui, yet with Soma capital. Please proceed with your question.
Speaker Change: We would like to thank everyone for participating in this call refer Manuel and I are always available to answer your questions and we hope to see you. Soon thank you once again and have a great day.
Speaker Change: Thank you I apologize before.
Edson Mergui: I have one question related to that.
Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.
Speaker Change: Military short and long.
Speaker Change: My question is.
Speaker Change: What is your strategy with the liquid loan NIM.
Speaker Change: Excuse me 25, and <unk> to preclude.
Speaker Change: Minimal impact tools.
Speaker Change: So what.
Speaker Change: What would be the strategy I know you mentioned that.
Speaker Change: With that line.
Speaker Change: <unk>.
Speaker Change: Carefully.
Speaker Change: Over the strategy behind it.
Speaker Change: Okay.
Speaker Change: Could you move closer to the microphone.
Speaker Change: There's some noise in the background.
Speaker Change: Labeled to hear you.
Speaker Change: Question.
Speaker Change: Yes.
Speaker Change: Question one.
Speaker Change: Related to the $200 million alone.
Speaker Change: Pardon.
Speaker Change: Hum.
Speaker Change: The long term short.
Speaker Change: So what we try to queue behind it.
Speaker Change: The vessels.
Speaker Change: Strategy Okay.
Speaker Change: In the short term loans that we had last year, we're just.
Speaker Change: To strengthen our working capital.
Speaker Change: <unk> towards the end of last year and give some liquidity to the company in the first quarter of <unk>.
Speaker Change: Of this year.
Speaker Change: We expect some capex execution.
Speaker Change:
Speaker Change: The idea would be to.
Speaker Change: Refinances.
Speaker Change: In the middle of this year with a long term debt.
Speaker Change: Okay.
<unk>.
Speaker Change: Thank you, ladies and gentlemen that concludes our question and answer session I will turn the floor back to Mr. Duenas for any final comments.
Speaker Change: We would like to thank everyone for participating in this call roofer Manuel and I are always available to answer your questions and we hope to see you. Soon thank you once again and have a great day.
Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.