Q1 2025 Grupo Aeroportuario del Sureste SAB de CV Earnings Call
Daryl: Good day, ladies and gentlemen, and welcome to ASUR's first quarter 2025 results conference call. My name is Daryl, and I'll be your operator. At this time, all participants are in a listen-only mode.
Good day, ladies and gentlemen, and welcome to our stores first quarter 2025 results Conference call. My name is Darrel and I'll be your operator at this time all participants are in a listen only mode. We will conduct a question and answer session towards the end of todays conference. If you would like to ask a question. Please press star.
Daryl: We will conduct a question and answer session toward the end of today's conference. If you would like to ask a question, please press star, then one. If you want to withdraw your question at any time, please press star, then two. If you're using a speakerphone, please lift a handset before making a selection. As a reminder, today's call is being recorded.
One if you want to withdraw your question at any time. Please press Star then two.
We were using a speaker phone please lift the handset before making a selection.
Speaker Change: A minor change call is being recorded now I'd like to turn this call over to Mr. Adolfo Castro Chief Executive Officer. Please go ahead Sir.
Adolfo Castro: Now, I'd like to turn this call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead. Thank you, Larry, and good morning, everyone.
Thank you Barry and good.
Good morning, everyone.
Adolfo Castro: Before I begin discussing our results, let me remind you that certain statements made during the call today may constitute forward-looking statements, which are based on current management expectations and beliefs, and are subject to several risk and uncertainties. that would cause active results to differ materially, including factors that may be beyond our company's control.
Before I begin discussing our so let me remind you that certain.
Speaker Change: Made during the call today may constitute forward looking statements, which are based on.
Speaker Change: With expectations beliefs.
Speaker Change: Subject to several risks and uncertainties.
Speaker Change: Of course actual results to differ materially.
Speaker Change: Factors that may be beyond our company's control.
Adolfo Castro: Additional details about our first quarter 2025 result can be found in our press release. which was issued yesterday after market close and is available on our website in the investor relations section. Following my presentation, I will be available for Q&A.
Speaker Change: And he says he thinks about our first quarter 2025. So can you talk in our press release, which was issued yesterday after market close.
Speaker Change: Pain level, our website Investor Relations section.
Speaker Change: Following my presentation I would be available for Q&A.
Adolfo Castro: As usual, all comparisons discussed on this call will be year-on-year, and figures are expressed in Mexican pesos unless specified otherwise. During the quarter, we welcome a total of 18.6 million passengers across our three countries of operation. largely flat compared to the same period last year. Continued growth in Puerto Rico and Colombia offset the softer performance in Mexico. Looking more closely at the traffic results by country, Puerto Rico was the best-performing market, maintaining a strong positive trend of nearly 11%. with international traffic expanding in the high teens and domestic traffic in the low double digits. While traffic remains resilient, we continue to expect normalization after benefiting from Frontier Airlines' expansion of operations last year.
Speaker Change: Absolutely Sean all comparison discuss on this call will be year on year and figures are expressed in Mexican pesos unless specified otherwise.
Speaker Change: During the quarter, we welcome I thought kind of 86 million passengers across our three countries of operations.
Speaker Change: Largely flat compared to the same period last year continue.
Speaker Change: Continued growth in Puerto Rico, Colombia, offset a softer performance in Mexico.
Speaker Change: Looking more closely at the truck installs by country.
Speaker Change: What's the best performing back to maintaining a strong positive trend up nearly 11% we.
Speaker Change: With international traffic expanding in the high teens in domestic traffic in the low double digits.
Speaker Change: What remain busy and we continue to expect about my decision after benefiting from frontier Airlines expansion of operations last year.
Adolfo Castro: Colombia was the next best performing market, as anticipated traffic in Colombia begun to normalize to more sustainable levels of 2023. rising just over 6% even growth in international traffic in the mid-teens and domestic traffic in the low single digits. In Mexico, traffic comparisons were impacted by Easter shift, which occurred in March 2024. In turn, traffic declined nearly 5% during the quarter, reflecting a high single-digit decline in international passengers, while the trend in domestic markets improved. declined just below 1%. Cancun, our largest airport, continued to fell the effects of Tulum air pollution. Overall, traffic in Mexico continues to experience year-on-year declines from almost all regions during the quarter.
Speaker Change: Columbia wants to Mexico.
And for me Mark hasn't dissipated.
Speaker Change: We haven't got enough not to normalize to more sustainable levels of 2023.
Speaker Change: She just over 6% growth in international traffic.
Speaker Change: And domestic traffic in the low single digits.
Speaker Change: In Mexico, our comparisons were impacted by Easter shift, which helped you were in March you're in 'twenty or in turn.
Speaker Change: Nearly 5% during the quarter.
Speaker Change: Reflecting a high single digit decline international passengers, what did trend domestic markets improved.
Speaker Change: The client just below 1% on our not just airports continue to Bellevue.
Speaker Change: Oh, good all traffic in Mexico continued to experience year on year declines from almost all regions during the quarter.
Adolfo Castro: specifically traffic from Europe decreased 0.8%. from the U.S. 10.5% and from South America by 2.8% while traffic from Canada remain unchanged. Domestic traffic remains affected by continued capacity limitation at Mexico City Airport since early 2024 with respect to be lifted in the second half of the year. together with the ongoing cut-and-wind-the-engine restriction. Additionally, Cancun has had for this experience a modest impact on the initial ramp-up of operations of the new tourism airport.
Speaker Change: Specifically traveling from Europe.
Speaker Change: 8%.
Speaker Change: From the U S.
Speaker Change: So.
Speaker Change: And from South America right.
Speaker Change: 8%.
Speaker Change: Web traffic from Canada that remain unchanged.
Speaker Change: Domestic traffic remained affected by continued.
Speaker Change: Indication that Mexico City Airport.
Speaker Change: 24, we've reached.
Speaker Change: To be late in the second half will be here.
Speaker Change: Together with the ongoing Whitney engine restriction.
Speaker Change: Pardon me.
Speaker Change: This experience modest feedback convenient sugar and blah blah blah.
Speaker Change: So when you do the math.
Adolfo Castro: For context, Tulum is projected to handle approximately 2.9 million passengers during this entire year, compared to the 1.2 million last year and over 30 million travelers that passed through Cancun in 2024, or 8 million in this quarter alone. Looking ahead, we anticipate traffic in Mexico will begin to stabilize next year, as the impact of traffic with the engine issue fades as Loon Airport completes its initial ramp-up phase. as I have mentioned in the past. Beyond that, we expect passenger volumes at both Cancun and Tulum to expand in line with the quota magnitude. Pacific 2E trains.
Speaker Change: For context.
Speaker Change: As projected.
Speaker Change: Roughly $2 9 million passengers during the entire year.
Speaker Change: Compared to the $1 2 million last year and over 30 million travelers that.
Speaker Change: And of course in 2024 or 8 million in this quarter alone.
Speaker Change: Yeah.
Speaker Change: Looking ahead, we anticipate trucks in Mexico would begin to stabilize next year.
Speaker Change: I think with the AG you should base airports compete to Nisha Rockwell space.
Speaker Change: Mainstream that.
Speaker Change: Young back do you expect passenger volumes Oh, well then.
Speaker Change: Go to expand languages.
Speaker Change: Growth dynamics.
Speaker Change: C P.
Speaker Change: Each.
Adolfo Castro: Currently, the global miraculous situation is fluid and unpredictable. However, pandemic disruptions, particularly related to the U.S. and the impact of travel to Mexico, have proven to be short-lived.
Speaker Change: Currently they go macro situations.
Speaker Change: Unpredictable Oliver.
Speaker Change: What options do you have to get it to the U S.
Speaker Change: Mexico has proven to be.
Speaker Change: To be sure.
Adolfo Castro: Now as we move to review our financial performance, recall that all reference to revenue and cost figures exclude construction. Total revenues were up 14% year-on-year to $8.2 billion. Supported by solid increases across all operations. Mexico represented 73% of total revenues, hosted a high single-total. a sensible digit up line increase. Aeronautical revenues were up 9% with aeronautical revenues rising 10% reflecting a strong commercial revenues per capita. Puerto Rico contributed 15% of the total revenues and continued to deliver steady growth in the high 20s. driven by both aeronautical and non-aeronautical vehicles. further supported by exchange rate benefits from Wikibest.
Speaker Change: No.
Our financial performance recall that all references to revenue and cost.
Speaker Change: Excuse me.
Speaker Change: Total revenues were up 14% year on year.
Speaker Change: Yes.
Speaker Change: I saw that increases across all operations.
Speaker Change: Mexico represented 73% of total revenues posted a high single.
Speaker Change: Did your topline increase.
Speaker Change: Domestic revenues were up 9% with everyone else can probably address 10%, reflecting a stroke.
Speaker Change: Passenger.
Speaker Change: All three will contribute.
Speaker Change: Total revenues and continued to deliver steady growth.
Speaker Change: Yes.
Speaker Change: Oh no.
Speaker Change: No.
Speaker Change: But at this.
Boards are supported by the exchange rate.
From a weaker peso.
Adolfo Castro: Colombia accounted for 12% of total revenues, boasting continuous solid top-line growth in the low 30s. The road was driven by both aeronautical and non-aeronautical revenues, which benefitted from a continued recovery in domestic and international traffic, and the opening of 26 new commercial spaces over the past 12 months, also benefitted from the weaker test. Adapting our strategy to expand commercial offerings, we opened 40 new commercial spaces over the last 12 months. This included 11 in Mexico, 3 in Puerto Rico, and 26 in Colombia. As a result, total commercial revenues grew in the high single digits, with Puerto Rico posting an early 23% increase, and Colombia delivering a strong year over it, with a growth of 38%.
Speaker Change: Colombia accounted for 12% of revenues.
Speaker Change: And it's sort of top line growth.
Speaker Change: Yes.
Speaker Change: What's driven by well I don't know.
Speaker Change: Because revenues, which benefited from a continued recovery in domestic and international traffic.
Speaker Change: We opened 26, new commercial spaces.
Speaker Change: The months also benefited from the weaker yes.
Speaker Change: Okay.
Speaker Change: G to expect Michelle offerings.
Speaker Change: 40, new commercial spaces to work with us.
Speaker Change: Hello months.
Speaker Change: 11, you'd Mexico pretty important equal 20 seats.
Speaker Change: So Michelle Mcgrath.
Speaker Change: High single digits.
Speaker Change: Okay.
Speaker Change: So anything per se piece.
Yeah.
Speaker Change: Strong yeah oaky.
Speaker Change: It goes well.
Speaker Change: 8%.
Adolfo Castro: In Mexico, commercial revenues show a low single digit increase, marking a positive shift from previous trends. Commercial revenues per passenger reached nearly 147 pesos in the quarter, reflecting a strong year-on-year in the high teens. The vast growth across all three regions supported this performance. in Puerto Rico and Colombia.
Speaker Change: In Mexico commercial revenues low single digit increase marking it constitutes cheap from previous trend.
Speaker Change: I'm wondering if I mean as with passenger reached nearly 147 vessels in deepwater.
Speaker Change: So strong year on year in the high teens.
Speaker Change: Yes.
Speaker Change: Robust growth across all three regions for the Super Bowl.
Speaker Change: In Puerto Rico and Colombia.
Adolfo Castro: I'm going to turn it over to the passengers. Commercial revenues increased in the high 20s, driven by a top-of-the-order exchange rate in Mexico and in Puerto Rico. and the contribution of new commercial openings in Colombia. Mexico also delivered solid growth in the low single-digit. reaching 169 pesos per passenger supported in part by currency effect.
Speaker Change: Once again I'm wondering if the passengers.
Speaker Change: But how much of revenues increasing the high twenty's.
Speaker Change: Bye bye.
Speaker Change: Exchange rates in Mexico.
Speaker Change: Great.
Speaker Change: And the contribution of new commercial openings in Colombia, Mexico also very solid growth in the low single digits.
Speaker Change: Reaching 169 business passengers.
Speaker Change: By currency effects.
Adolfo Castro: In terms of cost, total expenses were up 18% year-on-year. In Mexico, cost increased 10%, primarily reflecting decreases in concession fees made by the Mexican government. higher administrative fees and the impact of the 12% increase in minimum wage, effective January 1st of this year. In both, Puerto Rico and Colombia cost were up 30% with the increase in Puerto Rico and Colombia reflecting the depreciation of the Mexican peso against the U.S. dollar and the Colombian peso. has as a result consolidated GBTA goals 12% year-on-year. to 5.7 billion pesos in the quarter, while adjusted dividend margin, which excludes construction, stood at 70 percent compared with 71.4 percent a year ago.
Speaker Change: And so core expenses were 18% year on year in Mexico cost increased 10% primarily.
Speaker Change: It's just in concession fees mandate by the Mexican government.
Speaker Change: I mean, it's tricky piece.
Speaker Change: 12% increase in minimum wage.
Jerry: Thank you Jerry.
Speaker Change: Well this year.
Speaker Change: What particular, Colombia, close where all 30% with increase in Puerto Rico, Colombia.
Speaker Change: The depreciation of the Mexican peso against the U S dollar and Columbia.
Speaker Change: As a result consolidated EBITDA.
Speaker Change: What percent year on year.
Speaker Change: 257.
Passengers and good quarter.
Speaker Change: Adjusted EBITDA margin, which excludes construction stood at seven 2% compared with 71, 4% a year ago.
Adolfo Castro: The decrease was attributed to a slight margin decrease in each country due to higher operating costs. Notably, Puerto Rico and Colombia posted double-digit EVDA growth of 24% and 30% respectively. while Mexico saw an 8% increase in EVDA despite the lower passenger traffic.
Speaker Change: The decrease was a tripling.
Speaker Change: Like Martin decrease in each country.
Speaker Change: Operating costs go down.
Speaker Change: Colombia posted double digit.
Speaker Change: <unk> 24, and 30% respectively.
Speaker Change: Well, Mexico saw an 8% increase in EBITDA, despite the lower passenger truck.
Adolfo Castro: Our balance sheet remains strong with nearly 23 billion pesos in cash and cash equivalents. of 35% year-on-year, a net debt of NBDA ratio of negative 0.5 times. During the quarter, we invested 645 million pesos in capital expenditures, then deployed toward modernization and expansion efforts in our Mexican airports. The main projects during the quarter included the reconstruction and expansion of Terminal 1 at Cancun Airport, as well as the expansion of Terminal 2 in Oaxaca Airport. In Puerto Rico, runway pavement and rehabilitation was completed. and we're currently working on Taxiway Hotel. Recall that all construction activities are taking place outside the operational areas to ensure no disruption to airport operations.
Speaker Change: Our balance sheet remains strong with nearly 23 billion.
Speaker Change: Cash and cash equivalents.
Speaker Change: Oh 30 odd percent year on year, and then that.
Speaker Change: EBITDA breakthrough.
Speaker Change: Alright.
Speaker Change: Yes.
Speaker Change: During the quarter, we invested 645 million.
Speaker Change: Capital expenditures deployed towards.
Speaker Change: Station and expansion in our Mexican assets.
Speaker Change: Main projects during the quarter.
Speaker Change: The construction of expansion I mean, that's one.
Speaker Change: As well as expansion.
Speaker Change: Okay.
Speaker Change: In Puerto Rico from a weak patents and reputation once completed.
Speaker Change: And we're currently working on taxi wait.
Speaker Change: Okay.
Speaker Change: Recall that all construction activities are taking place outside the traditional English insured multi disruption to work with the patients.
Adolfo Castro: as mentioned during our prior hearing call. We continue to anticipate gradual increase in capex as we move forward with several strategic infrastructure projects this year. Among them, the most significant is the reconstruction and expansion of the man-wild cancun area. which is slated for completion in 2026. Terminal 4 cancun remains on track for completion by 2028. Additionally, once Terminal 1 is operational, we expect to implement key upgrades at Terminal 2 to ease existing capacity pressures, particularly in non-aeronautical areas. designed to streamline traffic flows, particularly from South America, unlocking additional commercial revenue potential.
Speaker Change: As mentioned.
Speaker Change: In prior earnings call.
Speaker Change: We couldn't have done this big increase.
Speaker Change: The increase in Capex as we move forward with several infrastructure.
Speaker Change: Construction project this year.
Speaker Change: Among the most.
Speaker Change: The most significant.
Speaker Change: And expansion coming out of Washington.
Speaker Change: She said slated for completion in 2026.
Speaker Change: Before I conclude remains on track for completion by 2028.
Speaker Change: Suddenly once they've got one separation or are we expecting for many people.
Speaker Change: Do we see existing capacity pressures, particularly no matter if you can maybe.
Speaker Change: B C H.
Speaker Change: Cool.
Speaker Change: Besides inbound traffic.
Speaker Change: Secondly, looking at additional promotions.
Adolfo Castro: As part of our ongoing commitment to delivering value to shareholders, in light of our solid financial performance, subject to approval at today's Annual General Meeting, the Board of Directors proposed a total cash dividend from accumulated return earnings and share The first branch includes ammunition, ordinary, and air-cast dividends of 50 pesos per share, tabled in May 2021. followed by two extraordinary net cash dividends of 15 each, payable in September and November 2025.
Speaker Change: As part of our ongoing commitment to delivering value to shareholders.
Speaker Change: In light of our solid financial performance.
Speaker Change: Google at today's annual General.
Speaker Change: Meeting the board of Directors' proposal.
Speaker Change: Didn't from accumulated.
Speaker Change: And ship it back to Jeff.
Speaker Change: Hey.
Speaker Change: The first tranche oops, I mean, you shouldn't do that.
Speaker Change: That's for sure.
Speaker Change: In May 2021.
Speaker Change: Followed by two extraordinary you get past the potential 15 each.
In September and November 2025.
Adolfo Castro: Before opening to a Q&A, note that last week we published our 2024 Sustainability Report, the 20th Report, and the Circular Week, and encourage you to read them, all of which can be found on our website. Let me take a brief moment to provide an update on our sustainability efforts. I am pleased to share that 2024 Market a Year of Meaningful Property. We took several key steps toward achieving our ESG goals, building on our long-term vision. We expanded our flagship social investment program to a third indigenous community in Yucatan. training in sustainable tourism, 59% more than the previous year.
Speaker Change: Before opening for Q&A.
Speaker Change: Note that last week, we published our 24, it's just and that's just the movies to people.
Speaker Change: The food court and that'll be good.
Speaker Change: Which you read them.
Speaker Change: All of which can be found on our website.
Speaker Change: Let me take a brief moment to provide an update on our sustainability here.
I'm pleased to share that in only 24.
Speaker Change: Market a year, meaning problems.
Speaker Change: We took several key there's still we're achieving our ESG goals building on our long term vision.
Speaker Change: We expanded our flagship social investment program throughout their indigenous community and you get that.
Speaker Change: Training sustainable tourism, 59% more than the previous year.
Adolfo Castro: On the climate front, following our 2023 commitment to the Science-Based Targets Initiative, we completed our first Scope 3 emissions inventory in Mexico. This milestone helps us better understand the broader impact of our value change as we move forward. to Net Zero Mission. Biodiversity preservations remain a top priority. In 2024, we begin building long-term alliances with global organizations to protect emblematic species and restore natural ecosystems in the southeast of Mexico.
Speaker Change: On the climb in front.
Speaker Change: Our 23 commitment to the science based targets and you should view, we completed our first the scope three emissions inventory mix.
Speaker Change: These mines and help us better understand the impact of our value change as we move forward.
Speaker Change: Net zero emissions.
Speaker Change: Participations remain pregnant.
Speaker Change: In 2024, and we've begun building long term alliances with global organizations protecting species and restore natural ecosystems and the Saudis Mexico.
Adolfo Castro: Lastly, from a governance perspective, we are proposing the appointment of a new female board at our upcoming Annual General Coordinators' Meeting. If approved, this will bring female representation on our board to 36%, while 57% of the board will be independent. including our first quarter 2025 performance. reflect the strength of our diversified portfolio, our excellent operational performance, disciplined execution and our continuous focus on efficiency. despite navigating industry challenges such as Pat and Whitney Engine. The capacity reductions at Mexico City Airport reported a 14% increase in net majority income to $3.5 billion. All else equal, we expect the solid remainder of 2025 as we continue investing in infrastructure, elevating the passenger experience, and delivering sustainable growth.
Speaker Change: Lastly from a governance perspective, we are proposing depomed.
Speaker Change: Boy I feel our upcoming analyst you go towards this meeting.
Speaker Change: These will bring pinata representation on our board.
Speaker Change: C G.
Speaker Change: 57%, but the board will be independent.
Speaker Change: In closing our first quarter 2025 almost.
Speaker Change: And our diversified book.
Speaker Change: Our sealy personal performance.
Speaker Change: Named execution.
Speaker Change: The sponsor nave patients.
Speaker Change: Navigating industry challenges, such as Pratt and Whitney engine.
Speaker Change: The capacity reductions that Mexico City Airport reported a 14% increase in net majority income.
Speaker Change: Three 5 billion.
Speaker Change: All else equal we expect the remainder of 2020 by as we continue investing in infrastructure innovating the passenger experience and delivering sustainable growth.
Adolfo Castro: At the same time, we are cognizant of the potential market challenge on a global basis that we are monitoring closely.
Speaker Change: Same time, where Congress.
Speaker Change: Potential market channels on a global basis that we're monitoring closely.
Adolfo Castro: That concludes my prepared remarks. Please open the floor for questions. Thank you again to the audience. It is star then one for questions. And again, please make sure your mute function is turned off or the handset is picked up before pressing the corresponding. One moment, please, while we poll for your.
Speaker Change: Barry.
Barry: Our remarks, please open the floor for questions.
Speaker Change: Thank you again to the audience. It is star then one for questions and again. Please make sure. Your mute function is turned off or the handset has picked up before pressing the corresponding catch it.
Barry: One moment, please while we poll for your questions.
Rodolfo Ramos: Our first questions come from the line of Rodolfo Ramos with Fordesco BBI. Please proceed with your question Good morning, Adolfo, thanks for taking my question. I have a couple, if I may. The first one is regarding the driver of your strong commercial revenue. I mean, you made some comments on this front, but if you can elaborate a little bit more on the performance that we saw during the quarter, perhaps your outlook. I mean, the Mexican peso depreciation certainly had a role, but the growth per pax was also stronger than in the first quarter of last year when the peso appreciated.
Speaker Change: Our first questions come from the line of Rodolfo Ramos with Bradesco <unk>. Please proceed with your questions.
Rodolfo Ramos: Good morning, Thanks for taking my question I have a couple if I if I may the first one is regarding the driver of your strong commercial revenue I mean, you made some comments on this front, but if you can elaborate a little bit more on the performance that we saw during the quarter, but how's your outlook I mean, the Mexican peso depreciation certainly.
Rodolfo Ramos: Had a role but the growth per Pax was also stronger than in the first quarter of last year when the peso appreciated. So so any additional color there would be would be helpful. And secondly, when you think about your capex or investment.
Adolfo Castro: So, any additional color there would be helpful.
Adolfo Castro: And secondly, when you think about your capex, your investment, your committed investments, especially in Cancun, and this year is expected to ramp up, and you mentioned that you don't expect to deliver these until 2026, these projects. I don't know if there's anything when you look at what you've already invested so far that could impact your operating expenses, your margins, as you open more areas or more expansions. Just want to get a sense of when we could start seeing your cost structure swelling up as a result of these investments, if at all.
Rodolfo Ramos: Youre committed investments, especially in Cancun I mean, this year is expected to ramp up you.
Rodolfo Ramos: And you've mentioned that you don't expect to deliver these until 2026. These projects I don't know.
Rodolfo Ramos: If theres anything when you look at you know what you've already invested so far.
Rodolfo Ramos: That could impact your your operating expenses your margins.
Rodolfo Ramos: As you open more and more areas are more expansions just wanted to get a sense of.
Rodolfo Ramos: When we could start seeing you know your cost structure.
Rodolfo Ramos: Swelling up as a result of these is these investments if at all thank you.
Adolfo Castro: Thank you. Hi Rodolfo, thank you for your questions. Well, in terms of commission revenue, of course, the most important is that in comparison of last year is related to Puerto Rico and Colombia, and those are also affected by the positive. Go back to the end of first quarter last year, the exchange rate with the dollar of the Mexican peso was 16.5. By the end of this year, we are talking about 20.4. So the test of the precision played an important role on the case of commercial business per passenger in Puerto Rico and also in the case of Colombia.
Rodolfo Ramos: Alright cool.
Thank you for your questions.
Rodolfo Ramos: Revenue of course, the most important thing.
Rodolfo Ramos: In comparison last year, and it's related to Puerto Rico, and Colombia and those are.
Rodolfo Ramos: Also.
Rodolfo Ramos: Affected by the the bullshit beef.
Rodolfo Ramos: And dollar there was the best.
Rodolfo Ramos: Go back to the end of first quarter.
Rodolfo Ramos: Last year.
Rodolfo Ramos: Exchange rates.
Rodolfo Ramos: With a doctor or the Mexican peso was 16 five.
Rodolfo Ramos: But the end of each year, we are talking about 24.
Rodolfo Ramos: So the peso depreciation.
Rodolfo Ramos: Ladies and important role.
Rodolfo Ramos: In the case of commercial business with passenger.
Rodolfo Ramos: In Puerto Rico, and non smoking because of Colombia.
Adolfo Castro: In the case of Mexico, I would say, yes, we had a very good quarter. That has to do with the passenger mix. some of the impact, both duty-free, presented to PESO donor, again. In terms of CAPEX, yes, we're working today, as I mentioned, in the remodeling and expansion of Terminal 1 that should be completed by the third quarter next year. And then you are right in the sense to say that the cost will change once this infrastructure is open. Of course, we will have new areas and we will have to maintain and clean and secure all of these new spaces.
Rodolfo Ramos: Okay. So basically I would say, yes, we had a very good quarter.
Rodolfo Ramos: That has to do with the passenger mix.
Rodolfo Ramos: No.
Rodolfo Ramos: Some of the impact.
Rodolfo Ramos: Would it be.
Rodolfo Ramos: Petrol dollar again.
Rodolfo Ramos: In terms of Capex.
Rodolfo Ramos: Yes, we are working today.
Rodolfo Ramos: Mention.
Rodolfo Ramos: The remodeling and expansion of things that'll one.
Rodolfo Ramos: That should be completed.
Rodolfo Ramos: The third quarter.
Rodolfo Ramos: Next year.
Rodolfo Ramos: And then you are right in the sense lets say that it will change once these inputs.
Rodolfo Ramos: Infrastructures.
Rodolfo Ramos: Well of course, we will have new areas.
Rodolfo Ramos: We'll have to let the teen and teen and secure.
Rodolfo Ramos: It'll be more space.
Adolfo Castro: In the case of Terminal 4, as I mentioned, we are expecting to conclude the project by the end of 2028. I don't know if this answers your question. Yes, thank you, Adolfo. You're welcome.
Rodolfo Ramos: Yes.
Rodolfo Ramos: As I mentioned, where it's.
To conclude the project by the end of 2028.
Rodolfo Ramos: I don't know if this answers your questions.
Speaker Change: Yes, Thank you Oliver.
Oliver: You're welcome.
Rodolfo Ramos: Okay.
Rodolfo Ramos: Okay.
Rodolfo Ramos: Okay.
Adolfo Castro: Thank you.
Jens Spiess: Our next questions come from the line of Jens Spiess with Morgan Stanley.
Speaker Change: Thank you. Our next question is come from the line of Jan Suites with Morgan Stanley. Please proceed with your questions.
Adolfo Castro: Please proceed with your Yes, hello, Adolfo. I have a question regarding your capital allocation and the dividend you will be paying. And in light of that, you probably saw that CCR is selling their airport assets in Brazil. Do you have interest in those, or can we read from your dividend that basically that's not part of your upcoming capital allocation?
Speaker Change: Yes, Hello Adolfo.
Rodolfo Ramos: I have.
Speaker Change: A question regarding the capital allocation and the dividend you will be paying.
Speaker Change: And in light of that is you probably saw that CCR is telling their airport assets in Brazil.
Speaker Change: Do you have interest in dose or can we read from your dividend that basically that's not part of your upcoming capital allocation. Thank you.
Adolfo Castro: Thank you, Jens. Good morning. Well, basically, if you see what we have proposed to the board and the board to the shareholders assembly, It's almost what we have in cash, the cash on cash equivalents for the quarter end up in $22 billion and the dividends for the whole year will be $24. Yes, we are seeing the project and the offering of CTI. We are analyzing this carefully. In the case of, this will come, or this will be funded by...
Speaker Change: Thank you James Good morning World basically you'll see what we have.
Speaker Change: Most important support to their shareholders.
Speaker Change: You said one was what we haven't catch all.
Speaker Change: The castle.
Speaker Change: For the quarter and then they can put it 2 billion funded loans.
Speaker Change: For the full year 'twenty.
Speaker Change: 24.
Speaker Change: Yes, we're seeing the projects on the.
Speaker Change: Yeah Yeah.
Speaker Change: Carefully.
Speaker Change: Indications for use.
Speaker Change: This will be funded by debt.
Adolfo Castro: Okay, perfect.
Okay perfect. Thank you and if I may just one one more question regarding any weakness that you're potentially seeing from like.
Adolfo Castro: Thank you. And if I may, just one one more question regarding any weakness that you're potentially seeing from like airlines Removing frequencies may be due to the ongoing like trade tensions and macro uncertainties. specifically the like weaker demand that some of the US airlines are seeing. Do you see any weakness coming from that or is it still too early to tell? I think it's too early to tell. I don't see any effect of these at the moment. Of course, when you see the traffic in Mexico, and when you see the traffic in Cancun particularly, You will see the effect of Tulum Airport, you know.
Speaker Change: Airlines, removing frequencies, maybe due to the ongoing trade tensions and macro uncertainty specifically the weaker demand that some of the U S. Airlines are seeing do you see any weakness coming from that or is it still too early to tell at this moment. Thank you.
Speaker Change: I think it's too early to tell I don't see any of these.
Speaker Change: So at the moment.
Speaker Change: Of course, when you win.
Speaker Change: Do you see more traffic in Mexico.
Speaker Change: Okay.
Speaker Change: Globally.
Speaker Change: You wouldn't see the little.
Speaker Change: No.
Adolfo Castro: Tulum Airport, as I was saying in my initial remarks, we're expecting these to reach 2.9 million passengers this year. roughly speaking, round numbers, if you subtract $150,000 every month for this quarter, that's $450,000. and 35% of these is international, not just domestic. So that is why you are seeing NQ numbers decreasing. That is the most important effect I'm seeing for the moment.
Speaker Change: As I was saying in my initial remarks, we are expecting these to reach two 9 million passengers this year.
Speaker Change: Speaking of Brown Mumbles, you've infused.
Speaker Change: 50000 every month this quarter.
Speaker Change: That will come to pass.
Speaker Change: 75% of these international won't just domestic.
Speaker Change: So that is why we're seeing numbers.
Speaker Change: Decrease.
Speaker Change: That is the most important the fact that you see for the moment.
Speaker Change: Okay.
Adolfo Castro: Thank you.
Speaker Change: Thank you our next questions come from the line of Gail <unk> Mendez with J P. Morgan. Please proceed with your questions.
Guilherme Mendes: Our next questions come from the line of Guilherme Mendes with J.P. Morgan. Please proceed with your question. Hey Adolfo, good morning. Thanks for taking my question. I have two follow-ups on traffic. The first one is regarding the Mexico City restrictions. You mentioned that you would expect some of the restrictions to be lifted in the second half of this year. Can you elaborate a little bit more on your expectations and how this should translate into traffic for Sur? And the second point is regarding Tulum. You mentioned 2.9 million passengers this year. Just wondering what was your expectations by the time of the MDP if this 2.9 is in line with what was incorporated on the MDP or slightly worse?
Speaker Change: Hey, Adolfo good morning, and thanks for taking my question I have two follow ups on traffic. The first one is regarding the Mexico City are restrictions you mentioned that you would expect.
Speaker Change: Some of the restrictions to be lifted in the second half of this year.
Speaker Change: Can you elaborate elaborated a little bit more your expectations and how they should translate into traffic, Florida food and.
Speaker Change: And the second point is regarding to loan you mentioned at $2 9 million passengers. This year just.
Speaker Change: Just wondering what was your expectations by the time of D. M. D. P. If these two nine using a lineup for you what was incorporated on the MLP or slightly worse. Thank you.
Adolfo Castro: Thank you.
Adolfo Castro: Hi, good morning. In the case of the Mexico City Airport, you'll remember that last year, the 8th of January, the precise... because we decided to impose a restriction in terms of capacity. The restriction was to have 43 operations per hour, coming from 52 operations per hour. This restriction, in my opinion, is too strong, considering that you have one runway and a half. One runway can sustain 50 ATMs per hour, so if we say one runway and a half, that should be 75. Today I'm 43, it's been three years. That's one piece of the puzzle. The other piece of the puzzle is, we show some...
Speaker Change: Hi, good morning.
Speaker Change: The Mexico City Airport.
Speaker Change: You'll remember that last year.
Speaker Change: January sorry.
Speaker Change: The government decided to impose a restriction in terms of capacity.
Speaker Change: The restriction was to have pretty ambitious Robert prone to workers as well.
Speaker Change: This restriction.
Speaker Change: In my opinion.
Speaker Change: Strong well considering you have one going away.
Speaker Change: One run rate.
Speaker Change: Sustained 50 Atms per hour.
Speaker Change: So we saved one of them.
Speaker Change: That should be 75.
Speaker Change: Today at 43 three gigawatt.
Speaker Change: One piece of the puzzle the other piece of the lease and show some.
Speaker Change: Hum.
Adolfo Castro: Elimination of restrictions in the case of Toluca Airport, and Toluca Airport to realize at the end of last year by 20% with us. Why is this so important? Because from the time we are in Mexico... It is originated 50% of the domestic traffic of the group. So it's extremely important that Mexico City, Toluca, and AIFA grow their traffic, you know. If we go back in time, I will invite you to compare what it was in 2019 when AIFA was not in place, you know, and Mexico City Airport traffic was 51 million, you know. If you see what the figures of last year were, you will see that After five years, almost six years, there is only a growth of one million.
Speaker Change: Elimination of the restriction in the case.
Speaker Change: Oh really.
Speaker Change: At the end of last year.
Speaker Change: 20%.
Speaker Change: Yeah.
Speaker Change: These are important because dunkin' family of Mexico.
Speaker Change: Yeah.
Speaker Change: <unk>, 50% of the domestic truck of the group.
Speaker Change: Sure.
Speaker Change: The C D.
Speaker Change: Uh huh.
Speaker Change: Growth in traffic.
Speaker Change: If we go back in time.
Speaker Change: I would invite you to compare what you'd walk from 2019.
Speaker Change: It was not in place now.
Speaker Change: In Mexico City Airport.
Speaker Change: You want me to.
Speaker Change: You'd have to see what they are.
Speaker Change: So last year, where you.
Speaker Change: You will see that.
Speaker Change: After five years, almost six years that he's only equal 1 million.
Speaker Change: Yeah.
Adolfo Castro: And this is extremely important for us, so I do believe that by the end of... the third quarter. The comment eliminates or changes this restriction to at least go back to the 52 ATMs per hour that we had at the end of 23. Also, keep in mind that next year we will have the World Cup in Mexico and it will be extremely important to have or to see the connectivity of Mexico City. In the case of Tulum, as I was saying, What we expect for this year is 2.9, in the case of the MDP it was almost the same, I was expecting probably 3 million for this year, so not too much difference.
Speaker Change: And this is extremely important for us.
Speaker Change: So I do believe that well.
Speaker Change: Well.
Speaker Change: The third quarter.
Speaker Change: They come and eliminates or.
Speaker Change: Changes these restriction so at least to go back to the 52 week, Yes Robert.
Robert: That we have.
Speaker Change: He and Tony pretty well.
Robert: Also keep in mind that next year.
Robert: We would have the word.
Robert: Work in Mexico.
Robert: It would be extremely important.
Robert: T O.
Robert: Okay.
Indicate so.
Robert: I'm, sorry, what I'm, saying.
Robert: What we expect all these years to 49.
Robert: Indicate so.
Robert: B B.
Robert: Almost the same level.
Robert: Good evening.
Robert: Yeah. So.
Robert: Not too much difference.
Adolfo Castro: the reality versus what I was expecting. Very clear. Thank you, Rodolfo. You're welcome. Thank you.
Robert: Yes.
Robert: Exactly.
Robert: Very clear thank God awful.
Robert: Youre welcome.
Speaker Change: Thank you. Our next question is come from the line of Pablo recall day with <unk>. Please proceed. Please proceed with your questions.
Pablo Recalde: Our next questions come from the line of Pablo Recalde with ATAL. Please proceed with your question. Hi, good morning, Alberto. Thanks for taking my question. I have a question on Mexico tariffs. Based on my understanding, you haven't raised tariffs this year. So, well, two questions.
Speaker Change: Hi, good morning.
Speaker Change: Thanks for taking my question about Mexico.
Speaker Change: Based on my understanding you haven't raised prices here. So two questions. The first one.
Adolfo Castro: The first one is, which percentage of your maximum tariff you are charging now? And the second, when do you expect to raise tariffs in Mexico? Okay, the maximum times or the maximum rate is measured once a year. No, you cannot say that you will be measuring that quad by quad. The plan here, the maritime compliance, that's the way that we call it, it was in 1998.
Speaker Change: Each person, but you are absolutely right.
Speaker Change: Charge, you know I'm not going to come to you.
Speaker Change: So based products to Mexico.
Speaker Change: Okay. The next symbol types or the maximum breakthroughs measure once a year.
Speaker Change: You cannot say that.
Speaker Change: It wouldn't be misreading that quite a big block.
Speaker Change: I'm here.
Speaker Change: <unk> got a compliance.
Speaker Change: That's the way that we put up.
Speaker Change: It was an IV.
Speaker Change: 99%.
Adolfo Castro: 99%. So, I would say today that the report that we presented yesterday, that we disclosed yesterday to the market just revenues that are in accordance with the maximum rate we have today. What we will be expecting for the end of the year, it's almost the same result that we got last year. So, it's not that today we are above the maximum rate. That's not the case on the first side. And on the other side, you cannot again measure these on a quarterly basis.
Speaker Change: I would say today that there'd be ports that we presented yesterday.
Speaker Change: We just closed yesterday to the market.
Speaker Change: Includes.
Speaker Change: Revenues that are in accordance with a maximum rate we have today.
Speaker Change: So.
Speaker Change: What we will be expecting by the end of the year. It's almost the same very strong up we've got.
Speaker Change: So it's not that today, we are off the Mexican breakdown.
Speaker Change: Not the case on their side and on the other side you cannot again measured on a quarterly basis.
Adolfo Castro: So, until then, good luck. for the ping-pong. Thank you.
Speaker Change: Yeah.
Speaker Change: Perfect.
Speaker Change: Yes.
Speaker Change: Thank you. Our next question is come from the line of and dress up Marotta with UBS. Please proceed with your questions.
Andresa Verado: Our next questions come from the line of Andresa Verado with UBS.
Adolfo Castro: Please proceed with your question. Hi, good morning, Adolfo. Thanks for taking my question. I just have one here on my side. What is the expectation of MDP CAPEX for this year from the first quarter figure versus our expectations? It seemed a bit low. So how do you see CAPEX deployment throughout the year?
Speaker Change: Okay.
Speaker Change: Hi, good morning handle food. Thanks for taking my question I just have one youre on my side.
Speaker Change: What is the expectation of I mean, you'd be capex for its like each year are from some of the first quarter figure.
Speaker Change: That is our expectation isn't that a.
Speaker Change: Hello, So how how do you see capex deployment.
Speaker Change: The date yet thank you.
Adolfo Castro: Thank you. You have the figures in the treasury list that we disclosed on December 13, 2023. Of course, those were percent of the investors as of December 22. So if you include the inflation factor up to the end of... PORTA RICO. It's a very small amount in the case of Colombia, that's what we expect for this year. Decisionally, you can compare this during the years and you always see that the first quarter is the lowest and the fourth is the highest.
Speaker Change: You're welcome.
Speaker Change: You're seeing the pressure in knees, we disclose publicly.
Speaker Change: Tony.
Speaker Change: Okay.
Speaker Change: So that's just.
Speaker Change: December 20.
Speaker Change: So if you include the inflation factor off towards the end of this.
Speaker Change: This year you do.
Speaker Change: And when we should number killed 7 billion.
Speaker Change: Mexico.
Speaker Change: I'd say 25 million $25 million for the case of Puerto Rico.
Speaker Change: Very small amount in the case of Colombia.
Speaker Change: What we expect.
Speaker Change: These here.
Speaker Change: So.
Speaker Change: So.
Speaker Change:
Speaker Change: This is dramatically you kind of a busy.
Speaker Change: Yes, and you will see that the first question the lowest and the fourth is the highest.
Speaker Change: Yeah.
Adolfo Castro: Thank you.
Speaker Change: Thank you our next questions come from the line of Anton Morton Cotter with GBM. Please proceed with your questions.
Ernst Mortenkotter: Our next questions come from the line of Anton Mortenkotter with GBM. Please proceed with your question. I mean, we understand that on Colombia, you were rolling out... Catch-Up in the commercial side. I was just wondering if the results of this quarter are a result of this and should we expect...
Speaker Change: Hi, Adolfo Thank you for a call and congrats on the results I just have one question.
Speaker Change: I mean, we understand that on Colombia, you were rolling out a strategy too.
To increase.
Speaker Change: The prices on some of your contracts or to do some catch up in the commercial side.
Speaker Change: I was just wondering if the results of this quarter.
Speaker Change: It was sold of this.
Speaker Change: And so we expect to see some more on that strong going forward.
Adolfo Castro: Hi, everybody. Good morning. Well, in the case of Colombia, again, I do believe We have done a very wonderful work in the increasing promotion of aeronautical passengers. My recommendation there would be to follow, since the end of 2017, the reports on Colombian pests, and then you will see the real effect of our work there, because it has been really nice. The strategy today is to continue with this as much as we can. Of course, some of the impact that we are seeing in the first quarter has to do with exchange rate, but also with additional spaces that we have opened, and the strategy of business as usual that we continue to operate there in Colombia.
Speaker Change: Hi, good morning.
Speaker Change: Colombia, and again, who can be.
Speaker Change: Well, we have done a very one of the board.
Speaker Change: The increase in commercial revenues per passenger.
Speaker Change: Yeah, Michael innovation, there would be two auto seems yeah Tony.
Speaker Change: At the.
Speaker Change: The end of 2017.
Speaker Change: Coach on Colombia.
And then if.
Speaker Change: You wouldn't see it.
Speaker Change: Oh yeah.
Speaker Change: Because it has to be really nice.
Speaker Change: The strategy is.
Speaker Change: To continue with this.
Speaker Change: As we can.
Speaker Change: Of course, some of the impact that you're seeing in the first quarter has to do with the exchange rate, but also with additional spaces that we have.
Speaker Change: And the strategy.
Speaker Change: Hum.
Speaker Change: Sure.
Speaker Change: Do you need to upgrade that in Colombia.
Speaker Change: Okay.
Adolfo Castro: Perfect.
Adolfo Castro: Thank you.
Speaker Change: Perfect. Thank you.
Adolfo Castro: Unilever.
Speaker Change: You're welcome.
Stephen Trent: Thank you. Our next questions come from the line of Stephen Trent with Citibank. Please proceed with your question.
Speaker Change: Thank you our next questions come from the line of Stephen Trent with Citibank. Please proceed with your questions.
Adolfo Castro: Good morning, Adolfo, and thanks very much for taking my questions. First is actually just a follow-up on Tulum and the traffic you're seeing around that. Do you have a sense for the extent to which, you know, some of the draw is coming from commercial traffic as opposed to charter and private traffic going to Tulum? Some of what we see today, that is related to chartered flights, chartered flights that have flying destinations. That's one piece of course. In the case of commercial activities You can see that American Airlines is flying there, and Juarez is flying there.
Speaker Change: Good morning Adolfo.
Speaker Change: Thanks, very much for taking my question.
Speaker Change: First is actually just yet.
Speaker Change: Follow up.
Speaker Change: On to loom and and the traffic you are seeing around that do you have a sense for the extent to which are you know some of the draw is coming from commercial traffic as opposed to charter and private tracking a charter and private traffic going to kill them instead of canceling.
Speaker Change: Yeah.
Speaker Change: Well of course.
Speaker Change: Some of what we see today that is related to charter flights on charter flights okay.
Speaker Change: Destination.
Speaker Change: Yeah pretty close to do well.
Speaker Change: Basically switching from Gregory Lewis should not flagged equally or maybe more.
Speaker Change: It's very close to do that.
Speaker Change: That's one piece of course is confirmed.
Speaker Change: Instead of activities.
Speaker Change: Either.
Speaker Change: She's blind.
Speaker Change: Yeah.
Adolfo Castro: The silencers were on death of both the men and their wives. flying there. Those are basically the commercial airlines. And we have one flight from Europe. Well, they have one flight from Europe at the end of last year. It was from France.
Speaker Change: Alright.
Speaker Change: Oh boy.
Speaker Change: For me.
Speaker Change: Yeah.
Speaker Change: So basically the commercial airlines and we have some.
Speaker Change: One from.
Speaker Change: From what they've had one platform.
Speaker Change: At the end of last year.
Speaker Change: From.
Adolfo Castro: Okay, that's very helpful. Appreciate it.
Speaker Change: Okay. That's very helpful. I appreciate it.
Adolfo Castro: And just a quick follow-up on the dividend. Of course, this year, it's a big one, and it looks like a substantial percentage of the company's retained earnings. How should we think about moving forward? How a SOAR might potentially source future dividends? Would it come from a different piece of shareholder's equity, or should we assume kind of steady state? And yes, the work in the case of what we have proposed to the Chalmers Assembly. is basically what is shown. of what we have done in the past in our financial performance. As I mentioned during the remarks on...
Speaker Change: Just a.
Speaker Change: Quick follow up on the dividend of course this year, it's a big one and it looks like.
Speaker Change: It looks like a substantial percentage of <unk>.
Speaker Change: The company has retained earnings.
Speaker Change: How should we think about.
Speaker Change: Moving forward.
Speaker Change: How else or Mike.
Speaker Change: Essentially source.
Speaker Change: Future dividends would it come from a different.
Speaker Change: Piece of shareholders' equity or or should we assume kind of steady state. Thank you.
Speaker Change: Hey, yes deep water in the kitchen.
Speaker Change: What we have proposed to the shareholders.
Speaker Change: Certainly.
Speaker Change: Yes, basically yes.
Speaker Change: Sure.
Speaker Change: What we have talked in the past.
Speaker Change: Our financial performance.
Speaker Change: As I mentioned during the day.
Speaker Change: The remarks.
Adolfo Castro: some of the questions before. We have 24 billion pesos in cash and cash equivalents at the end of the quarter. 22 billion, and the proposed income for the three countries is almost 24 billion, so we're just paying what we have achieved in terms of resource of the company. Going forward, we will have to see what the results are, and then we will propose something to share with the Center. Okay. Appreciate it. Thanks. You won't think. Thank you.
Speaker Change: Some of the questions before.
Speaker Change: We use we have plenty of vessels from cash and cash equivalents OPM book.
Speaker Change: Oh.
Speaker Change: One 2 billion.
Speaker Change: And the dividend proposal.
Speaker Change: Hum.
Speaker Change: Well no.
Speaker Change: Sure.
Speaker Change: What we have achieved Epsom salts.
Going forward, we will have to see what the results are.
Speaker Change: Come back we will propose some depletion.
Speaker Change: Yeah.
Speaker Change: Okay I appreciate it thanks Adolfo.
You're welcome.
Speaker Change: Yeah.
Fernanda Arequia: Our next questions come from the line of Fernanda Arequia with BTG. Please proceed with your question. Hey, good morning, Adolfo. Thank you for taking my question. So just two follow-ups here from our side.
Speaker Change: Thank you our next questions come from the line of Fernando Recchia with BTG. Please proceed with your questions.
Speaker Change: Hey, My money and also thank you for taking my question. So just two follow ups here from our side so.
Adolfo Castro: So just to explore a little bit further the traffic outlook for Puerto Rico and Colombia. I think you mentioned in your remarks that you expect a normalization, but maybe if you could provide us with a bit more color on what kind of is the first one, and the second on the commercial revenues in Mexico. As you mentioned, you're working on the remodeling of Terminal 2, which is expected to finish by the first half of next year. So maybe if you could give us any color on what kind of increase in commercial revenues per PEC should we anticipate because of this conclusion would be great.
Speaker Change: Just to explain a little bit further the traffic ultimate or but he Glenn Columbia I think you mentioned in your remarks that.
Speaker Change: Do you expect them or monetization, but maybe if you could.
Speaker Change: Provide us with a bit more color on what kind of traffic you're expecting for this year.
Speaker Change: And one part of her question tied to normalize is the first one and the second on the commercial revenues in Mexico as you mentioned what.
Speaker Change: We now turn I'll chew.
Speaker Change: So which is expected to finish by the first half of next year. So maybe if you could give us any color on what kind of increase in commercial rather than just the tax should we anticipate because of this conclusion would be great. Thank you.
Adolfo Castro: Thank you. After all, the traffic in Puerto Rico, as I mentioned in my initial remarks, is still very strong. and I was expecting these to normalize. No single digit, but it's still strong, because it is what it is. And we're happy to see that, you know.
Fernando Recchia: And Fernando.
Speaker Change: Perfect.
Speaker Change: I mentioned in my initial remarks.
Speaker Change: Cool.
Speaker Change: I was expecting these to normalize.
Speaker Change: Most single digits.
Speaker Change: This is still strong.
Speaker Change: Got it.
Speaker Change: We're happy to see that well the case of Colombia now you can see that.
Adolfo Castro: In the case of Colombia, now you can see that things are normalizing. You can see what the growth was for the month of March. and that's what we believe it should be for the rest of the year.
Speaker Change: Things are normalizing.
Speaker Change: And see what the growth was.
Speaker Change: It was supposed to do.
Speaker Change: What the March.
Speaker Change: And that's what we believe should be public rescue yeah well.
Adolfo Castro: Commission Revenues, we are just expanding and remodeling Terminal 1 to alleviate the capacity problems we have today in Terminal 2. And those capacity problems are basically... eliminating commercial opportunities that we have today. We know for sure that in the middle of the day, there's no chance for the passenger to have a meal because all the spaces are full. Once we open Terminal 1, we will work on Terminal 2 to improve the situation, and that, of course, will increase or have an impact on commercial revenue for passengers.
Speaker Change: <unk> revenues, we are spending more.
Speaker Change: Italy.
Speaker Change: Hum.
Speaker Change: It'd be alleviated capacity problems, we have today.
Speaker Change: Cool.
Speaker Change: And those problems are basically.
Speaker Change: And you mean, adding commercial opportunities that we have today for sure.
Speaker Change: What would they be more channels.
Speaker Change: The passenger to pass a meal because all the patients are.
Speaker Change: Once we have something that works.
Speaker Change: Hum.
Speaker Change: The tuition.
Speaker Change: Of course would increase or how it impacted the commercial revenue per passenger.
Adolfo Castro: It's not easy for me to say how much it will be, you know, we will have to wait and see once these spaces are fully operational and that should occur for the quarter next year. Okay, thank you. Thank you. As a reminder, if you would like to ask a question, please press star, then one on your telephone keypad.
Speaker Change: It's not easy for me to say how much it would be no we will have to wait and see.
Speaker Change: Once these spaces are.
Speaker Change: Fully operational is that true.
Speaker Change: Cool.
Speaker Change: Fourth quarter next year.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press Star then one on your telephone keypad.
Jorge Vargas: Our next questions come from the line of Jorge Vargas with GMB. Please proceed with your question.
Speaker Change: Our next questions come from the line of Jorge of Argos with G. M. B. Please proceed with your questions.
Adolfo Castro: Hi, good morning, Adolfo. Congratulations on the results and thank you for taking my question. Just a quick one from my side.
Jorge: Hi, good morning.
Speaker Change: So listen thank you for taking my question.
Speaker Change: Just a quick one from my side are there any updates from the adequate amount of investment or any other reproduction expansion.
Adolfo Castro: Are there any updates on the Aeropuerto de Bavaria investment or any other international expansion opportunities being considered? Thank you.
Speaker Change: Computer.
Speaker Change: Yeah.
Hi, Good morning, no no updates from volatile the situation was still the same.
Adolfo Castro: No updates on Barbaro. The situation is still the same. We are in the legal process. And that will continue for some time. Okay, thank you. You're welcome. Thank you.
Speaker Change: Yes.
Speaker Change: That would put you at home.
Speaker Change: For some time.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Youre welcome.
Speaker Change: Thank you. Our next question is come from the line of Gabriel Heidelberg with Scotiabank. Please proceed with your questions.
Gabriel Heidelberg: Our next questions come from the line of Gabriel Heidelberg with Scotiabank. Please proceed with your question. Hi Adolfo, thanks for the call. Just a quick question, based on your experience, in the cases of U.S. recession, how much do you think it might drop international traffic and visitors coming from the U.S. and Canada to Cancun? I know it's difficult to forecast, but based on your past experience?
Speaker Change: Yeah.
Speaker Change: Hi, Hello, Pablo Thanks for the call just a quick question.
Speaker Change: Just in your experience are indeed.
Speaker Change: In the cases of.
Speaker Change: U S recession, how much do you think it might drop in international traffic and visitors coming through the U S and Canada too.
Speaker Change: I know, it's difficult to forecast, but based on your past experience.
Speaker Change: Yeah.
Adolfo Castro: Hi, Gabriel. Well, let me tell you a story. If you see the presentation that we have on our web page, where we are presenting our traffic since 1990, that is the same chart that I used 25 years ago to make the IPO process of this company. And we decided to go back to 1990 because that was, at the moment, the last U.S. economic recession. to see what are the effects of the U.S. economic recession in the international refugee crisis. if you see the chart. The threshold chart grew from 2.6 million to 2.8 million, even with the U.S.
Speaker Change: Yes.
Speaker Change: Let me tell the story.
Speaker Change: If you've seen the presentation that we have in that Shaw webpage.
Speaker Change: Where we offer something our shopping scene right right.
Speaker Change: That is the same chart that use 25 years ago made the IPO.
Speaker Change:
Speaker Change: And we expect to go back to 1990, because that was at the moment the largest economic decision.
Speaker Change: Do you see what the effect was it kind of appreciation.
Speaker Change:
Speaker Change: Uh huh.
Speaker Change: If you see the charts international.
Speaker Change: Sure.
Speaker Change: One thing.
Speaker Change: EBIT with the U S.
Adolfo Castro: economic recession. Sure. In that sense, at the moment, we will receive you. for the U.S. economic recession. I don't know what will happen today and if the recession will be there or not. But on the other side, I have to say that what we are seeing today in the case of the United States... is a very strong decrease of tourism towards these countries. And if we can catch up some of these effects, it would be great for us. Let me say, the case of Canada is decreasing significantly for the summer, the same for the case of Europe and, let's say, North Asia and South America.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: In that sense at the moment when you see launch.
Speaker Change: But he was putting a good session I don't know what will happen today.
Speaker Change: The session will be held long.
Speaker Change: The other side I have to say that what we.
Speaker Change: We have seen.
Speaker Change: <unk>.
Speaker Change: The cadence of the United States.
Speaker Change: Really strong.
Speaker Change: Oh tuition.
Speaker Change: These.
Speaker Change: Okay.
Speaker Change: And if we can catch up some of these effects it would be great for us.
Speaker Change: Yeah.
Speaker Change: Some of that be seen significantly.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: Hum.
Speaker Change: Cable Asia.
Speaker Change: So again, we can.
Adolfo Castro: So, again, if we can catch some of these decreases, it would be excellent for us. You know why they are not willing to go there? And we will try to relocate our commercial... Okay, and have you seen any kind of ramp up from Canadian traffic, like you're moving from the U.S. to Canada, from traveling to the U.S. instead of traveling to Mexico?
Speaker Change: Catch some of these fees will be excellent.
Speaker Change: We're also doing.
Speaker Change: While there are no willing.
Speaker Change: Willing to go there.
Speaker Change: Yeah, we wouldn't try to relocate our commercial.
Speaker Change: Yeah.
Speaker Change: These two books.
Speaker Change: These on these market reports.
Speaker Change: Of course, all the marketing activities of these markets.
Speaker Change: Okay and have you seen any kind of ramp up from Canadian traffic like you're moving from the U S to Canada, but from traveling into the U S. Instead, turning to Mexico.
Adolfo Castro: Well, if you see what I said during the mission from Mars, the only region that was flat for the quarter or that was not negative for the quarter was Canada. Okay, thank you. You're welcome. Thank you.
Speaker Change: Well.
Speaker Change: See what I said during the initial remarks, the only region.
Speaker Change: For the quarter.
Speaker Change: What are what kind of.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Speaker Change: You're welcome.
Speaker Change: Thank you our next questions come from the line of yen sites with Morgan Stanley. Please proceed with your questions.
Jens Spiess: Our next questions come from the line of Jens Spies with Borg and Stanley. Please proceed with your question. Yes, thank you. Just one follow-up on Pablo's question. regarding the max tariff. I know that compliance is annual, so quarterly we shouldn't be worrying, but for the first quarter, I think you published that the unit tariff was 352, which I think is very close to the maximum tariff, if I'm not mistaken. So given all the FX volatility that might be ahead, and I know that more recently the PSS appreciated, so it plays in your favor, but not regardless, there's a lot of volatility.
Speaker Change: Yes. Thank you just one follow up on its own like Pablo's question regarding the Mexico, or if I know that compliance is annual so quarterly.
Speaker Change: We shouldn't be worrying, but for the first quarter I think you published that the skewing it a tariff with the 352, which I think is very close to the maximum tariff if I'm not mistaken so given like all the FX volatility there might be a hat and I know that the more recently the PSS appreciate it.
Speaker Change: Place in your favor, but not regardless.
Adolfo Castro: So do you think that there should be a bit more cushion just to factor that in, or do you feel comfortable with the current level? Let me try to explain the case of the maximum rates, and I'm going to just say numbers to be more clear on that subject. If we say that maximum rate is called... And we, during the quarter, obtained, let's say, 105. What we report is just 100 and the other 5 goes to the maximum value itself, so you will not see the 5 in the PMF.
Speaker Change: There's a lot of volatility. So do you think that there should be a bit more cushion I'm just to factor that in or do you feel comfortable with the current level. Thank you.
Speaker Change: Oh.
Speaker Change: Let me try to explain the case of the Maxim group.
And I'd just say.
Speaker Change: One was to be more.
So if we say the maximum brightness coke.
Speaker Change: And we during the quarter obtained let's say hundreds of them.
Speaker Change: Bob.
Speaker Change: What would be important is just wrong.
Speaker Change: Alright.
Speaker Change: The maximum value.
Speaker Change: So you won't see the by DMA.
Adolfo Castro: Cote d'Ivoire. If the maximum rate is 100 and the result is 98, what you are going to see in the P&L is 98. So, in terms of exchange rate, just to put this very clear, the end of last year, the end of last year... Sorry, the end, though. The first one last year, the exchange rate was at 16.5. The end of 24 was 20.78. The end of March was 20.43 and the current exchange rate is around 19.5. coming from 16.5 to 19.5 today. he was a lot of room to maneuver, so that is why I was saying that we expect for this year almost the same as in terms of maximum dive compliance of what we got last year.
Speaker Change: For the quarter.
Speaker Change: In.
Speaker Change: The maximum breakage.
Speaker Change: So 98, what you're going to see in the P&L.
Speaker Change: Yeah.
Speaker Change: Sure in terms of exchange rates just to put this very clear the end of last year the end of life.
Speaker Change: Yeah.
Speaker Change: It's probably the endo.
Speaker Change: The first quarter last year.
Speaker Change: The exchange rate was up 16 on spot.
Speaker Change: D&O 24 was $21 78.
Speaker Change: End of March was 2043, and the current exchange rate its around 19 five.
Speaker Change: Coming from $16 five to 19 five to date.
Speaker Change: Give us a lot of them.
Speaker Change: Yeah.
Speaker Change: So that is why I was saying that we expect for this year almost the same in terms of maximum backbones.
Speaker Change: Yeah.
Adolfo Castro: Okay, that's clear.
Speaker Change: Okay. That's clear thank you.
Adolfo Castro: Thank you, Adolfo. Thank you.
Speaker Change: You're welcome.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Daryl: As a reminder, if you would like to ask a question, please press star 1 on your telephone. Thank you. I'm showing no further questions at this time.
Speaker Change: Thank you I'm showing no further questions at this time that does conclude the question and answer portion of today's conference call I would like to turn the call back over to Mr. Castro for closing remarks.
Adolfo Castro: That does conclude the question and answer portion of today's conference call.
Adolfo Castro: I would like to turn the call back over to Mr. Castro for closing remarks. Thank you, Darren. And thank you all again for joining us today for the First Quarter 2025 Conference Call.
Castro: Thank you Darren and thank you all again for joining us today for the first quarter.
Daryl: We wish you a good day and goodbye. Now you may disconnect. Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time.
Speaker Change: Conference call. We wish you good day and Goodbye now you may disconnect.
Thank you that does conclude today's teleconference. We appreciate your participation you may disconnect your lines at this time.
Speaker Change: Enjoy the rest of your day.
Speaker Change: [music].
Speaker Change: Okay.