Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) 27 Jul 222022 Q2 Earnings call transcript

Greetings, and welcome to the Grupo Aeroportuario del Centro Norte OMA Second Quarter 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Emmanuel Camacho, Investor Relations Officer. Thank you, Emmanuel.

begin. may You

reminded may and cause Ricardo forward-looking based Quarter Paul CEO, everyone. be to discussion Please call Welcome Duenas; including the made risks Thank and of of to a which on current course Earnings good number are Conference I Second our be materially Pliego. Perez control. XXXX management our over CFO, may opening differ expectations are that certain beyond and actual Call. OMA's could will statements and during constitute beliefs you, factors today Ruffo morning, the to that statements, Participating Ricardo that and for are subject turn remarks. results uncertainties now his to today

appreciate I This Thank joining you you, Emmanuel. will our performance. operational us morning, Good quarter second We everyone. review today. morning,

I an delivered will EBITDA XXXX aeronautical explain all, we and adjusted that of quarter outstanding how now all-time EBITDA performance am revenues, highs pleased these inform of XX.X%. the achieved I on which our reached second revenues, with to OMA results. briefly First non-aeronautical margin, during adjusted

the passenger traffic reached XX% versus $X.X During the second quarter, of 'XX. an increase quarter million, total of

second XX%. to quarter total compared stood XXXX, at the As traffic passenger of

Our of performance activity with and performance from segment. sound a the our passenger traffic an and consistent better remains expectations increased business business travel

on XXXX Ciudad one Monterrey passenger in and volume growth and were Durango most Mexico terms Guadalajara traffic quarter, second City the the to that the quarter route route. Chihuahua During of contributed the City Juárez, versus Mexico routes; its and

routes. considered them of All business mainly

aeronautical grew the to quarter in as year, as revenue the quarter an strong 'XX the of tariff As XX% a result performance traffic of billion. aeronautical well increase this our earlier MXNX.X versus second in passenger

second the those travel result Monterrey to front, airports. compared in XXXX, XX% increased increased higher penetration versus commercial business the in higher of of and as mainly to a due revenue Marketing quarter 'XX. levels revenues XX% On Chihuahua

space terminal In addition, the with also XX% our in at Lounges. rentals to restaurants, quarter. for the of Occupancy growth contributed retail most was and car together commercial VIP rate end

terms X the strategy to In of and Premium during on commercial directly Lounges new construction the up operate Juárez, Lounges we OMA Zihuatanejo following quarter, Durango, started Reynosa, in and of VIP Ciudad Airports. Tampico, our development

In addition, Luis and Monterrey, being airports Lounges OMA our in Acapulco, San Mazatlán remodeled. Potosí are

Lounges project conclude 'XX. expect We revenues airports. in a After first of Diversification our in performance by operate this hotel outstanding XX% will OMA of increased OMA services to Carga and conclusion, an in quarter the total our of segments. we XX XX led

second the an rate Inn at XX%, During in quarter These XX% rates while rate the Garden quarter. of has performance of which of second quarter the reaffirms NH the XXXX, XX% XXXX, our was our Hotel strong occupancy respectively, XX%. Hilton occupancy the compared of to X during Terminal and Collection Hotel hotels

of of record and record translated phases non-aeronautical high means quarter adjusted lobby which into we expected an which is our and increase of air and with driven XX% its we and spaces. has handling, the X a in out XX% be delivering second entrance, to MXNX.X carried storage versus custody a finished increased ground cost of import a restaurant, been by by improving Hotel, 'XX a our performance discipline hit at XX.X%. started cargo. our aforementioned we As major along projects hotel of The guest XXX rooms, all-time the and results quarter, NH revenues Terminal through from all continued remodeling during reconditioned Collection second in revenue and to of versus the margin The as billion EBITDA, mid-XXXX. such OMA revenues Carga in as mainly hotel it quarter among aeronautical uninterrupted highs areas the the public strong 'XX, and renewed the of ensure other operations order project experience

quarter, major in A expenditure square On June, investment MDP meter for whole area including capital began Monterrey the additional In represents investments, area total A XX% new public maintenance of section and were front, contemplated project. in operation. a Terminal the about of Terminal XX,XXX the This MXNXXX strategic million. the the investments

of During Ciudad expansion the turn that, terminal Mazatlán the A, more of our the the terminal projects. and of the Perez reconfiguration call at modernization the highlights Juárez building. will for of building; financial quarter, over and all the building; The terminal now remodeling the remodeling to Monterrey Airport Airport we Ruffo on for continued building; to the quarter. and I the Terminal with platforms major work of on expansion expansion and Pliego Monterrey terminal remodeling And reconfiguration Zihuatanejo details Culiacán

Ricardo, for then briefly and questions. you, good everyone. I will and the our call your Thank review results, open morning, will we financial

operations an the revenues attributable Lounges. due reflecting Carga rentals non-aeronautical G&A opening as Minor result quarter the XX% due increase of cost on and as and the increase as recognition increase higher traffic services that, of The parking, sector. investments. to as increased of XXXX, 'XX. increased car quarter passenger cost rental increased second Construction the Turning quarter division's in quarter of to an and Lounges. the to a MXNXXX Car VIP Monterrey aeronautical increased analogical relative with revenues of second producer respectively, driven retail, increased increased XX% increases the MDP the was airports, the parking 'XX of due our MXNX.X expense million retail provision from increased hotel implemented OMA revenues restaurants, Lounges. grew compared in results the the the Total from higher and to airport the Chihuahua OMA works primarily XX% performance. in versus reached supplies the OMA's revenues due and a XX% services direct of of mainly category we in the mainly maintenance commercial second as billion to direct to is Premium well of basic second and in VIP Restaurants, and in XX% in in new XX% to inflationary effect increase grew quarter highest XX% of and result penetration car of lines, XX% implemented increased mainly Non-aeronautical revenues payroll of the results. the half and Mexico Premium the OMA and Lounges maintenance the Of in increased grew new revenues major second Lounges. operation first expense, regulations MXNXXX in increased an index revenues of XQ that XX% for mainly of the to XX% relative the were 'XX. as year. the business XX%, commercial activity labor XX%. changes to XXXX, sharing XX%, incorporation in revenue effects the tariffs the quarter which users and and due expected number The and financial growth XX%, of overall were the OMA increased spaces. The increase well costs price and by of materials in to of maintenance of activities the Aeronautical Diversification operations and in the future million the construction strong recorded airports. of

margin XX.X%. was was quarter adjusted billion EBITDA EBITDA the and adjusted second MXNX.X Our

quarter financing higher second issuance XX% expense of on implied of maintenance additional a an was was and of million, increase net income noncash provision. due Our interest the the to versus the mainly as interest expense major result MXNXXX million, Consolidated debt MXNXXX XXXX.

to MXNX.X to Turning cash the activities position. our second end and quarter billion, MXNX.X cash at generated of quarter from at the billion. operating Cash in stood amounted the

approved XXXX billion meeting. shareholders' During the the paid the we installment the of in MXNX.X quarter, billion first MXNX.X dividend

amounted our The call -- for paid the to EBITDA debt to our the Operator, X second open was of end stood MXNXXX the prepared questions. concludes installment X.Xx. final ago. total the At our MXNX.X billion, and please at adjusted This days debt remarks. and net quarter, ratio total million of debt

Instructions]. [Operator

Alejandro question first Suisse. Our Crédit from is with Zamacona

the Ricardo aeronautical Thank tariffs. and you. question first is Emmanuel. My on Thanks,

your that in terms years. to I X So XX% was that in negotiated implement week recall throughout strategy the last real increase

revenue at any increase lower will significant you why the So I'm what intention. wondering on quarter was than when we seen this haven't we it even do, look to

any would color on be topic appreciated? that So

the is This international Ruffo. the quarter of the different Sure. versus run year. airports, We passengers. same reported contribution last effect This from per is primarily X.X% rates our pax a as aeronautical among lower increased revenue the well as in mix of

than passenger second domestic compared we XX% to for XQ have average quarter know, ones. international from were 'XX. as you experienced higher in also, of as charges the growth example, of airports that passengers lower are for our XX% OMA. And So in than And international XXXX,

had that to last grew XX% versus grew And of compared the of the also in lower a XX.X% amount quarter of So last Ciudad and in average. quarter are than for year, grew who example, passengers around the as total tour Monterrey airports smaller tour And Chihuahua year. we have Juárez XX.X% this our that's passengers quarter, same XX%. XX%, tour paying are a paying same of passengers these

around results to year impact in because that these did the average increase just the mix I've a quarter-over-quarter. increase. around mentioned, of see issuance But explained, earlier that fee effect that is all XX%. you X% of this is reflected the a impact combined our reduction the So that We of the I

So inflation, part have is than mix much is we that -- been higher the producer anticipated? hasn't index part and price

if hotel as strong know higher then But small this my quarter And including rates. it. Got and for Okay. occupancy second a mentioned, the we it's on services. the may, saw I business a company. for recovery Ricardo I question,

or of segment? is second (inaudible) of wondering the leisure? the my just positive we to topic kind could if potential were expect I'm BFR hotels recovery what business that exposed a these are to And traffic return on question to So

What of You expect a was positive said on the can last sorry? what, hotel? we the question part

of in we retail segment. if recovery strong Yes, hotel to recovery positive see services and the potential could business the this the some

Retail, okay. Yes.

think, a be readthrough. So yes, could I it

business the Honors dedicated -- mostly thing. hotels the Airport, same part mostly segment. in it's is there's Aeroméxico. to it's our passenger have are There's Hilton of which is the hotels, Mexico in a In Our which a customers passengers one Hilton, Monterrey, we are of City is personnel, so and X, program lot big business Terminal X flight in

So the we're in or We're sign in is been of seeing look seen the also have months, at a And our much touristic has in our BFR the positive not that business is growth we segment we routes. travel in one that only couple routes If than yes, business seeing larger last that also hotels. returning. the routes.

Bradesco from with next Ramos BBI. Our is Rodolfo question

the result Alejandro's on A on gentlemen. Congrats follow-up question.

you far level? If us where first from stand in be you you reaching would do of How that your can my maximum question. execution? are terms tell tariff That

We thank you, are -- Rodolfo.

year excluding X to price producer we're above been So index that tariff anticipating close been to percentage being is the price has larger, around much consumer compliance. this royal, the which XX% rates, maximum index, real grow appropriate the The it points index. with is has reason around

to And in terms of can also, you Okay. on to BFR color seemed travel that a bit little give compare what a leisure more routes the if most me if and months, you time traffic business I it expect we as this the to It destinations. us discovered, may on you have other the that bit sluggish little line? recent side seen in we the

be think and see next about Mexico, any And you talk to to year-end And wanted can how (inaudible) it's see the just Do you seasonality thinking Guadalajara more pronounced Monterrey, Monterrey or likely you if year? So about recovery? do . specifically there? more you're about towards

very of strong in I recovery a May. was June, mentioned, kind So and as April we think both you that experienced sluggish.

effect We in even the does that though the little and it room result cancellation bookings. COVID meetings to critical and doesn't to bit conferences. parts have of used of -- the that's business first travel fifth wave in impact to context And it people, have which of

for especially, some last pickup business in wave seeing recedes, the routes we and in critical So we of a routes, being we're expect put capacity into as additional example, those -- work, Mexico serve. business the will that this

monitor weeks We wave that We on going already gaining issue already to detected is plane prices in cases we this peaked also already up. the basis. of also in prices the last coming the we slightly picked trend And a a down. airline where couple week starting ago, weekly there going see We're and was of up of oil future. tickets capacity or

So also impact. that some had

mean, Mexico relocated follow-up, cities Okay. connect How if do And say, Do or do perhaps to Felipe network? you see we Angeles smaller new I their one reconfiguration within last to an airport of cities, your if network or, impact see see the being Toluca? were I routes impacting let's there? the you may. you that see --

we airport, be that Mexico in seen impact. have what opportunities City you'll go Mexico haven't to very taken any that as that fraction, small But been the to Actually, Santa airport, from we more the a that X.X%. all airports. going in which have saturation is the negative opportunity other believe have traffic the midterm like to a have we Well, moving as we City less for Lucia issue with into which to doesn't that's only been out operations airports routes it's Monterrey see we the to go see through think are than

pass Mexico looking will strategy us. Airport. at airlines City to for a in opportunity an buy the believe I So a that's And start

question next from with is Trent Stephen Our Citi.

two quickly very me. from Just

could color with slowed accounts And you time. turnover some wondering Looks what paying on and airlines are with that if happened guys like any the First, on conversations give airlines I you if was receivables down. receivable? having

curious, Just my that's first and question.

in our in with increase line revenues. receivable has been account So growing

We of breach in And have is now, airline balance. of their healthy no receivable returns. as a

So portfolio. have currant a we accounts receivable

any just if I that. you a thought slowly, OMA but I very come interest the projects? are turned interest in the Or any And like at know market? Barbados focusing Okay. on little wondering any is Appreciate And guys at you been auction RFP more refresh receivables was purely they that? look memory foreign helpful. my can least. I Airport airport well, taking in the domestic point, as some over bit there's may that

opportunities abroad. Thank for you, looking Stephen. We're constantly

can yes, to it we Yes, opportunities you Barbados. comparative are increte. But been don't for looking the where we're on advantage. mentioned, anything hold. placed has a always So have participating we But far, we have in as

Okay. That's helpful. there.. leave I'll it

with next Barclays. Our question comes Pablo from Monsivais

per it revenues quick non-aeronautical passenger. we're increased and per a right has there of revenue per it on one XXXX, a incorporate passenger. course, significantly. level high if Do What can passenger? I commercial yet mostly higher think of non-aero perhaps XXXX revenue MXNXXX know because light would you was you the have be a ratio in more passenger. But lower have to It into normalized should don't I shed that should forward? reaching around passenger going passenger you And a of XXs, useful. per now, we getting some be and or

Sure.

at separate been I the revenues deliver Carga, the think growth our the other as revenues ratio in this recovery quarter business. by you expect has to be had the and we this driven and similar a continues to year reach would a split wholesale pax a of for leave expect like in should the are ratios of that per Carga above the if very for also to obviously, results, what But hotels, obviously year. very we the XXXX per we significant passenger. out we seeing commercial this to growth And diversification to year-on-year year which the And of solid activities close continuous commercial occupancy now. activity, expect end we in in good OMA the towards per passenger remainder MXNXX level

if know relative should I gradual recovery (inaudible) previous have a over quarters. this that don't But So outlook? your to the more shopping helps

comes question GBM. next from Our with [indiscernible]

I heard about correctly execution. Just want to make sure tariff maximum your

level, You're that XX% the year anticipating correct? of to this close at maximum is

XX%. around XX%, No,

Our Gabriel with is from next Himelfarb question Scotiabank.

impact last contracts? the color give had cost us increase. quick Could year bit how labor little Just the SG&A of reform on why that cost a -- question since a did about direct you affected a

Sure.

I think related to increase. primarily headcount it's

additional people are that new part around previously we have companies XX approximately hired people were OMA Lounge We that people division. that And the in -- are have the company. of XXX now third-party through

XXX you roughly the around year. So of were have that same employees in last not quarter

in the increase explains basically, that So payroll.

bit terminal? your in a us these give There you Have to terminals? constrained you been on color. can of have lack own been capacity a What lot seen has of just And labor. Okay. European of done due

we being right to we same more need around adjustments that the experiencing of No. mean, We are not type the of problems major that I world. happening in -- But to the past size years. become but are payable airports have other efficient, (inaudible) couple did of operations have. we over sense we of a the level

big also were countries than in anticipated. than Europe, Mexico it's And large difficult big seeing hired because as as not did only we they other you it's of The Europe, problem more in we the it has during we crisis labor layoffs in been them and in example. for were in That's layoffs, a what shortage airports, airlines. and not expected,

has have a been demand. there in get airports. layoffs didn't mitch So Mexico, large layoffs in definitely amount problem in and that big That shorter not a the with supply and in labor international were they match airports. didn't We --

is next Mendes Our Guilherme from with JPMorgan. question

here. Two questions

from the in The previous first think a of one terms costs follow-up question in and is of margins. terms

the see Just CapEx. to do saw that sustainable as margins question And you if this quarter, guys wondering related going the XX% second is forward? we

pressure lot costs We initiatives of a are to pressure are -- on measures only of what on but terms kind on as well. the seeing not forward? main in there Are inflation, CapEx CapEx mitigate of going this

around we of For be rest have will we the of And cost, the doing terms been economies. XX% manageable. a first in for lot the part, think year, of XX%

the are in efficiencies seeing haven't we're prices a lot that of in by that inflation. We found CapEx increase deployment offsetting

Perfect. it. Got

for average it Just year? the second the MXNXX to the the million or year is clear, of for this make half

The average for the year.

in have bargaining mind in that we agreement XQ. Bear review collective our Yes.

the to not expect year. of So -- for any adjustments have do the tariff remaining and we

in lower you'll few had quarters next a see margin the in slightly quarter. that's why the second that we So

[Operator Instructions].

next [indiscernible]. Our comes question from

looking Just the only the XX%, the a one and following I'm costs in my trying in it it's and understand of is... of follow-up increase this quarters? the will be question. expenses. the on just second to operating dynamics of macroeconomical in total because or That And range environment, like ahead, is first same quarter inflation

We Sorry, enough question. the be please? Could of repeat, let to first hear part there. you you kind me didn't hold the

Yes.

expenses. sure. total operating cost and For a It's on follow-up that

This quarter, exactly. the increase was XX.X% XX%,

we range the for in have quarter now So same be the will different the or of question from is company? it second because quarters, it's factors the data you the right only the in ahead looking following was that macroeconomical historical for because the

number the referring after of are you the construction position. the is you and major XX.X% So costs depreciation include and (inaudible)

are costs. those So costs all noncash

So the the some effect hotel case would cost towards XX% And more we services. increase, including a cash expect adjustments of cost in final our we year. the around focus on which was of the quarter

be mentioned, costs also in I relative today. have through that we contract negotiated there of I wouldn't those bargaining other quarter will As the inflationary we is But a to levels that using having expect on significant that of renewals impact year. happened cash the some current some as of contracts increase and the services are

is Okay. on traffic. international And second the question regarding

a about the on saw color it course, we FFA related it would it's decrease, Category was can more wondering X? give quarter, to This is be general Mexico little X But likely decreased, an helpful. if airports this related you us bit If of I or to increase. if

Sure.

traffic international a to So to of tourism travel. We vaccinated. went in part primarily this not Texas year -- in attribute to the hike 'XX, get vaccine on there. Monterrey did to see was the from That we that second quarter

Antonio, same this to routes the year. in last Houston, declines quarter main of our Monterrey, So San experience

because of And -- openings our related So XXXX, have -- quarter the recent we in route there from new to second of and see X. Terminal the in see most to in fact, we what the don't months. happened openings been it that international U.S. carriers airports route

time. the X negative not So at this Category from experiencing we are a impact

the Congrats on results. Okay.

is question from Macias next Our with of Bank Alan America.

policy dividend what next year? on share question can and could for your one we if -- expect what Just you

billion paid we think MXNX.X around -- year. this We

amount going forward. think try to will I the we keep same

There further any to to closing Duenas, like are I'd turn this time. over questions no call at back CEO, for Ricardo comments. the

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

today's concludes Thank conference. you. This

participation. your You your this you time. may lines Thank disconnect for at