Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) 26 Apr 222022 Q1 Earnings call transcript

00:03 Greetings. Welcome to the Grupo Aeroportuario del Centro Norte OMA First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. turn Relations over Officer, now Emmanuel your will Investor Camacho, you I the to conference host, XX:XX may begin.

Shimade. XXXX of today statements, Participating that certain you, OMA's our Perez Pliego. Duenas; discussion Thank Good made a and Ruffo everyone which XX:XX reminder Just welcome and first CFO, quarter forward-looking are during earnings may today call. statements constitute XX:XX conference CEO, a beliefs based differ risks for Ricardo number the morning, to current Duenas may the his Ricardo to expectations control. are are turn cause materially, to I'll over our XX:XX that of and uncertainties results and opening could on factors that be remarks. and beyond to call now subject management course actual including

Emmanuel. first, appreciate and XX:XX by me This Meeting, evolution Good us today. review We Annual XXXX But I business highlighting of we milestone our events. morning, Shareholders performance. joining let everyone. morning, quarter Last you will Friday, the and held begin our several first Thank our you, shareholders no and a the million first payment of dividend (ph) billion later a cash XX. XX:XX May than MXNX.X declaration shareholders one, two one among matters, of where of to The billion July than MXNX.X and the in other second XX later approved instalments. no MXNXXX

I place issuance carbon March by In XX, a XX% and completed passenger we to sustainability SLB pleased emission bond gas long-term to As in Americas decreasing part SLB target OMA's XXXX. billion airport worldwide. notes in our footprint that we second greenhouse operator our linked ambitious the addition, an the the XX:XX we MXNX December in sustainability first or to reduce XX, set by market am on framework, and the our have per announce of in Mexican successfully linked become

infrastructural projects traffic higher and of about translate will square in expectations the into positive passenger requirements. important level development, coming energy growth additional with meters coupled the an which from have in costs We years, operational

our our a best MXNX.X working remaining used corporate for MDP Proceeds So loans in to to to we from sustainable uses. operation short-term used more and be in fund XX:XX the create and billion are the investments will the SLB pay were airports.

to San a customer Juarez Finally, Lounges, to challenging Culiacan, in well in direct three experience as Acapulco, revenues. quarter, XXXX variant as we first Omicron airports four to to expect lounges during as main rise Premium quarter the and year our scenario us milestone eight operate operation improve passenger Currently, Zihuatanejo, generate cases. Turning Potosi a and the a open commercial will terminals recovery traffic the transitioned with significantly XXXX Luis OMA result allow which we we of a additional Reynosa, Mazatlan of Monterrey off as Ciudad We Chihuahua, the additional in and in results. . and positive of and start our Tampico XX:XX lounges

which the passenger back (ph), get However, of allowed on rapidly us vanished Omicron effect performance on track. to

quarter of first passenger the 'XX. the X.X million, traffic total XX% During quarter, reached above

on and Monterrey XX:XX to versus terms of in route. quarter, first compared Juarez, at stood quarter routes route Mexico of As the the Guadalajara total Ciudad first quarter experienced Chihuahua, growth volume greater the XX%. City During the XXXX traffic traffic City passenger its the XXXX, that were Mexico and Acapulco the on

results. quarter expectations business deliver from reaffirms routes, namely increased our to our positive performance results We're segment. the of and first which considered operational them better Business in to able XX:XX Turning of quarter. Travel All the activity

'XX versus and EBITDA of adjusted first of and translated expansion efficiency revenue increase quarter XX%. our operational XX% Our margin an a into of

levels versus Lounges. XXXX addition, in compared car 'XX. the long commercial contributed Juarez Parking higher On hotel with mainly and penetration restaurants contributed Monterrey, In revenues increased together space to XX% Diversification quarter Occupancy rate first we most the the increased XX% to growth XX%, the growth. rentals, in XX:XX commercial front, for end increased and of of observed Ciudad quarter. revenues Reynosa. most Carga space services also was revenues to OMA in retail our and VIP this XX.X% our at and terminals

from XX%. the maintenance the funds, and Monterrey storage X of Hilton revenues expenditure the XX:XX at and MDP OMA custody were revenues. strategic the occupancy On investments import Hotel Airport in XX% quarter versus rate the first increased rate the quarter Revenues first including of Terminal in Hotel MXNXXX investments quarter had During XX%, 'XX. total Collection increase of an capital handling, our XXXX, ground the Inn while on cargo the major Garden drove investments, NH million. occupancy was above Cargo

During the Monterrey by finished Finally, Master Ciudad Terminal XX the have building. installing the the airports end remodeling X, the work building, of of and the Terminal the platform to this reconfiguration on preliminary Plan be fully operational. Airport reconfiguration the we and Zihuatanejo expansion Airport panels of the will works solar of quarter, started modernization projects. and at terminal XX:XX year, and we the the of second building, expansion our projects and Juarez Expansion quarter Airport in for in of remodeling we continue and Monterrey remodeling Culiacan terminal major following

the generate I Ruffo detail to to more of energy financial over Pliego Perez quarters. remaining turn quarter. panels highlights call with now our Our will for over on our consumption expected for And the are XX:XX for the solar that, XX%

you, then, the to passenger revenues Aeronautical Turning open Thank revenues and highest briefly the for for XX:XX of Car retail increased Non-aeronautical XX:XX operations quarter and Parking good call financial Juarez Reynosa the quarter due and XX%, revenues XX:XX the questions. increased increase airports. rentals, XX% and your the increase restaurants first VIP restaurants, higher increase due to financial morning, and relative growth revenues increased XX%, to recognition with OMA traffic. the Diversification revenue increased XX% to by shared parking the a as lounges. and lounges. driven results. XX%. as of retail 'XX, XX% in to direct mainly operation, were first XX%, primarily Lounges commercial as will Premium revenues categories to revenues the OMA's due increased opening in VIP of in new XX% VIP revenues XX%, everyone. increasing and will projects. increased users number I respectively, XX:XX rentals, the Ricardo the and at an of well review from our we of results Monterrey,

as our quarter, cost MDP such a to to mainly total of quarter increased increased first and to relative the is Mexico lines X% XX% services of basic versus and new XX% investments. result result and result, business expense, the Contracted non-aeronautical the were effects the OMA G&A the and Lounges. of in and which XXXX, due aeronautical operation in of a payroll in XXXX, a of a airport overall MXNX.X of of first grew activity higher incorporation the services quarter VIP The of in growth Construction grew the revenues regulation the XX% in billion due labor as changes our As services XX:XX revenues airports. the expense 'XX.

Lounges. direct supplies While OMA EBITDA MXNX.X adjusted growth, costs XX%. and of reached OMA's the volume adjusted was materials as first operation reported and Premium billion, from we quarter also EBITDA reported the the

amounted in expense a as expense average to of higher MXNXXX loss result due the at from increase above quarter operating quarter exchange outstanding . was interest Cash an net XX:XX position. OMA, million, MXNXXX to Turning the MXNXXX cash financing the billion the at XX% an stood XQ MXNX.X generated recorded. that income of Our of mainly activities the end 'XX. Consolidated to in was and cash debt million our and million, of

MXNX.X the the dividend MXNX.X a XX:XX total recognized paid MXNX.X for Shimade, EBITDA At in the amounted in concludes X.X billion prepared and our in a our questions. This times. open the in transactions. MXNX.X debt loans of to billion March. March short-term billion to sustainability-linked adjusted the special and quarter, Mexican call net the quarter, billion of please issued stood at January. relevant During of also debt we remarks. ratio we market notes end We following We prepaid

XX:XX Gayol comes Instructions] first conducting question. Thank proceed your with time, this Our a question-and-answer you. Javier Please question be GBM. And we'll at from with session. [Operator

the XX:XX Hi. my Congratulations the to question. results have on taking I team. two you OMA for And thank questions.

The first a it's Are -- you the tariffs. guys one part is two question. regarding maximum

the when -- question tariffs And are of reading guys tariff? Have increases? you airports. to push back from to or are full tariffs First, projecting you into might you charging you bring routes more maximum my part have be first then airlines negotiate is, That the how with seen question. second the them? that lower will be having to in any them your Are the

Javier. you, XX:XX Thank

of reach tariff will we in the what year. next somewhere to first one, the we're first the reach For quarter -- maximum expecting

working with for As have currently very been working for airlines, out we're we the -- and with searching new routes. well opportunities them

XX:XX are much -- look have increasing ratio level you leverage at Mexican are lever leverage my of the could other the Did sheet of increase even question reasonable. Okay. airports you question with you international guys the the guys company leverage one comfortable early congratulations into balance International -- the so issuance leverage. and or time the Great. and OMA, higher is my compared of the could still Other recent -- concessionaries current And the of that. though company. regarding on to be But is, second it and is

XX:XX Thank Javier. you,

the to right, will and it other on You're proceeds. use level low depend it's airports compared of

that some So leverage. healthy if find increase were abroad corresponding expand probably level I will to opportunities we a would be -- of in then to there

XX:XX Thanks the and results. for congratulations answers All all on right. Great. the

you. Thank XX:XX

the Please XX:XX your proceed line Suisse. Our next question with Credit Zamacona from Alejandro question. of with comes

Ruffo Ricardo, questions our for XX:XX Thank side. you. call. Thank Two from Hi, Emmanuel. you and the

on The first control. the one cost

several seen same this quarters delivering leverage. have we So operating trend with

is the efficiencies we mostly was structural efficient assume it's OMA costs, of once if expect traffic I considering higher that that should or we become inflation has if terms seen have costs uptrend to these in fair fully So recovered, assuming recently. in the as wondering, more

XX:XX So hi, Alejandro. This is Ruffo.

in basically fulfill of last with the leverage. you quarter continue just [Technical year the claiming levels few that and and to do years same the operation the line the have cost the the company comparison even are has amounts the to larger in would over higher in would pre-pandemic on is size [indiscernible] from seeing through we that operational of services So even and that at in most XXXX, like XX% of to operating of but should quarter can a traffic to quarterly years. airports, first increasing quarter are but all levels now, concentrate previous third pay the set increases airports first traffic all item the we be expect roll we by working the some security terms up benefit be managed now in we the so the I constriction and Difficulty] are this yes, also that slightly of services year, traffic, see culture increase we think basis such been you keep we comparison quarter, we're to assume of saw right volume discipline in of the at of our continue our we What [Technical the were in our that cost at where of Difficulty] we we past seeing seeing Right the as

the efficient and point, more to definitely sustainable. have levels we on of current XX:XX we profitability today's add just believe And that are become think we

line XX:XX [Technical not am Okay. Thank my if or sure it's you. I Difficulty]

to hear, correctly? now it Difficulty] hear [Technical can you XX:XX

Yes, XX:XX Thank Ruffo. you,

So I'm sorry.

conclude in just trends -- mean question trends the some, that are looking in you up some also are the for So going -- I would forward. some right. expecting costs efficiencies the you costs but upward That's you're you to looking

increase compare in leverage of you comparison you XX:XX And because basis of in level security, will do of the year. cleaning second payroll -- than the will amount expect of a to rest capacity we additional quarter the by first such of from efficient. basically continue it's given to third of that XXXX see and definitely the terms subcontracted So our we're and quarter the expense operational yes, cost handle for in continue And we rather manage future the handling the but increases cost. increases XXXX, the see the probably to increases that to of significant as forward, we will very volume we operating traffic to see services of that of not expecting the are some we're going when but

jump you, XX:XX someone Okay. Thank let I in. Ruffo. else will to

your with of line the from Please question. JPMorgan. comes with question Guilherme next Our Mendes XX:XX processed

Hi, question. Ricardo, thanks for Emmanuel. XX:XX Ruffo, Good morning, taking and my

calls, pre-pandemic on is 'XX X% conference reaching mentioned question by and levels. first traffic reaching year around full third The related dropping about quarter to when X% last figures to the levels to you compared to the

the double the Just is guys capital is the check And terms of mentioned follow-up to a wanted in if terms question is second of base allocation, low. leverage in that's question still you pretty as still -- case? is

if allocation ones, even So in What thinking in could Barbados or what be allocation? growth future. of terms opportunities the outside increasing in terms about capital potential talk of the you can capital opportunities dividends Thanks.

optimistic in call. of than terms So previous more in XX:XX the we're traffic, slightly

the very, we're in now end are very close to XX million is, to April expecting passengers year. we of close the What the We XXXX are to be for levels. seeing April

the those in already we June, May of respect to June and to guys And and difficult to be to Ricardo could heard the of process, XXXX. So mentioned, pre-qualified XXXX. to surpassing restarted amounts proceeds, capital as process by May. the adjusted we right continue in with probably increasing it's from the addressing unless find we are IFC Barbados levels be get leverage comparable are And uses the of May allocation, of it with by that time, airports. this going sorry -- At we may international levels

depend looking they to forward, to are be on on any not with rules once this going our So it timeline. process increase the we'll continue at public, tend income. respect but announced will net we dividends, the increasing And the update XX:XX increasing can have time,

to generate in a we tax, can able to be tax sufficient So income [indiscernible] distribute net the dividends manner. efficient

clear. Okay. XX:XX Thanks. Super

Please question. XX:XX with the BBI. Our next proceed of line question comes Ramos Bradesco from your Rodolfo with

for question. my My you a Thank XX:XX follow-up expense question is one. the taking on

good do the would reported expenses going of or for go to quarter, us forward, that that base the the an first -- so that see a you rest just level for the how clarify So basis off of on to inflation in be year? the you

say, items, the volume in rest et for I XX:XX of on of such subcontracted of perhaps than the what case and most inflation for slightly the we are of year. the yes, because items insurance, fairly grow I as passenger cetera., could reflective the effect. the line rest of would greater But think line it's services expecting payroll,

routes bode a the you. that? Monterrey, do in you talk of you're that how a question traffic. two-parter how how seeing see forward? into how here Mexico City, your earlier you that your think about this Monterrey, do in going of network Thank does we I particularly second a mean, part Lucia mentioned on -- Santa system, short is XX:XX that term? just you this How type you are with And Thank seeing this Guadalajara. about passenger well Can feeding would little you. you route your should these or you in your dynamics in bit the about remarks, And opening see Monterrey remarks

Rodolfo. Thank XX:XX you,

route was compares, out variation to first look Monterrey, versus you I is only at if XX%. for Monterrey the -- That was think the Cancun, quarter that XX%. the which Mexico, the of point what's example, of quarter that 'XX to interesting

tourism. Now as route I is for that purely it's and travel, one the latter business first the mentioned, passenger, business a about

at, if for example, So example, VFR for increase a passenger which Same XX%. XX% we're (ph) business the compared to, was segment. is kind which the Guadalajara, look dynamism of thing, seeing is you more traffic, in Monterrey Zihuatanejo

point early earlier. too Santa that operated So know What six of right that they're finally seeing what And do Business Viva to Monterrey, is be. an XX:XX that now There's develop was say, a segment, mentioned to operating would we only impact the Lucia, the them we one routes. recovery it’s the to we're in hub. for potential it's opportunity Monterrey by a so as as

you. Thank XX:XX

your XX:XX question proceed Gabriel the with [Operator Please Our Himelfarb question. next from of Instructions] Scotiabank. comes with line

the call. for XX:XX Hi. Thanks

Just two quick follow-up questions.

to you trends call stage to (ph) you industrial Thanks. The travel corporate in are show? one, network you're you the Santa travel the business to And related second, did more open we airport. give seeing related the about plan travel or What routes because Lucia what the on do your boots specifically about to travel. business this start you probably do what and us conferences Lume choose -- business coming bit people and what for can think plan -- of office first color a and the as the future from you maybe to or office, coming -- year you back and started towards

moment, one, hear we Lucia Lume. it? for get first to, at the And have new you for no, to take did don't the routes didn't the one, Santa I'll I XX:XX plans second

XX:XX type opposed the industrial If type correctly, I to heard are for what trends regarding of the travel asking other as you're travel? of

Yes. XX:XX

we When a as and industrial yes, only the and type. the for for that mean our continue and traffic car rely we So it's executive factories not on banker But XX:XX airports. we high nearby the located about consultant business to of see, travel, talk plants do core steel are I market that type [indiscernible] lot us.

were see kind So, increase performing do yeah, airports. of traffic do routes that of business the quarters trend as in our you few to of continue to passengers the next mentioned the first that we and And drove we continue our most quarter, well in related expect the in that for routes. quarter

you. Okay. XX:XX Thank

line of your America. Macias Our Alan Bank with of next XX:XX from with comes question. question the proceed Please

you call. the for Hi. XX:XX Thank

you if City an or do Thank airports opportunities more on the measures to changing capture seen you cannot -- taking the this mix see are have handle. traffic just opportunity Mexico that tourism you. you traffic coming And What happen? hub. make your follow-up in question a in that traffic Monterrey Just to hub any

XX:XX Thank Alan. with ongoing It's airlines. conversation you, the We're process. the Sure. an having

move I through we we have also traffic Board the moment, the the at having U.S. to the Monterrey opportunity well. Mexico go of close think were all doesn't explore City half to as to that trying the airport the advantages to comes that it and that through want conversation the from the -- Monterrey having geographical

you. XX:XX Thank

Safety further can or you updates recover efforts into Aviation into the any provide one Mexico's Just question, one news. category insight any rating the Mexico any

about heard that. have You Thank you.

as we by same third again one you have what of that expecting we they're this think authorities the reach I the probably from level year. to have all the XX:XX quarter heard

XX:XX Thanks. Great.

XX:XX Our next with [indiscernible] GBM. your from of comes question. question proceed line the Please with

XX:XX for the and taking on the started be Thanks expecting you project, was Hi. you IRR congrats to the economics results. question color VIP would give us levels wondering of have my if to instance, operate. Could you know. you the have the that of on more Lounges, for some great it about I are

directly. operations the adjusted We XX:XX

have around expect We on through of a to that margin XX% business. line

to a than have. modernize project the we better be across We used product much have currently able to our our in to all Lounges to to parts provide airports and

IRR come to would back for that have one. to you probably As levels, for think we I

XX:XX I think that the previous contracts expired.

mean, reaching se our basically there target. I towards large So profitability but into levels per investment no being investing a in renewing, we're is made

the from to used the receive we to other Lounges, before have half. So to XX:XX used the operator have we used revenue XX% the third-party only -- of

a are the XXX% around the certain and XX%. but would margin of adding we costs are now, So having we operating revenues, be

EBITDA in an see increase overall, [indiscernible]. So would total you

XX:XX color on congrats That's the report. and great

XX:XX Thank you.

XX:XX Thank you.

the Alejandro next XX:XX question. of our question And Please your with with proceed Credit Suisse. line comes Zamacona from

guys. Hi, XX:XX

jump for in, Sorry again.

contracts? of business. guarantee the discounts current commercial the on status new [indiscernible] the question what's The additional one on the annual minimum Just

discounts. XX:XX year, we granting late So of XQ since last stop

not any we other relation So through are basically, granting of ‘XX the as when type of that tenants. third today, more to any occur in to we discounts province for a quarter support

Okay. XX:XX

XX% XX% revenue, variable XX:XX revenue as of of of parking [Multiple first from in from also was respect value, in point comparison excluding around versus parking variable. excluding was quarter with Speakers] revenue the Sorry, quarter XX% to the XXXX, much of derived was fixed rents, commercial how and derived first XX% was XXXX the our fixed is of rent out commercial and a the and fixed of

XX:XX Okay. Thank you, Ruffo.

And now of the the XX:XX call session. I'll for Ricardo Executive the to remarks. we turn have over Officer Duenas Chief question-and-answer closing Espriu, end reached

want and I always in participating are of you soon. hope We your Thank thank available a for and again to to questions to XX:XX have see good this all Ruffo, and you answer we day. call. you Emmanuel

disconnect This time. concludes your your XX:XX this Thank you today's may conference at participation. for you and lines