Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) 31 Oct 222022 Q3 Earnings call transcript

Greetings, welcome to OMA’s Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Emmanuel Camacho, Investor Relations Officer. Thank you.

You may begin.

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

Thank you will performance. you This and Emmanuel. review Good us we quarter appreciate third morning business everyone. morning our our joining We the of evolution today.

structure. like comment update I an begin, would we Before to my on shareholding important on all

by of the an airport and have OMA's a term OMA. confirmation shares subsidiary of VINCI’s VINCI direct combining airports airports our During that together entered expertise XX.XX% OMA’s B We're and OMA largest additional and were of investment advisory shareholder. with of delivered had VINCI FinTech the be the endorsement past private BB long will and strategy represents performance quarter certain a extraordinary in of of to with excited by value assets. a of of we share world's agreement Series This VINCI potential the acquisition into in transaction informed FinTech make leading airports for welcoming the purchase we affiliates create operator, global network the and prospects.

increased beginning of operational In versus traffic first of X.X and X.X% an versus for the of XXXX XXXX. passenger our expected traffic passenger this quarter million, which pandemic. XXXX. I and third increase quarter to reached December same quarter international transaction in respectively, three of levels not ahead X% passenger performance. Domestic will OMA’s quarter by of X.X%, the quarter is on review We will third now Total the closing XXXX. comment occur traffic further the since surpassed the

was business the performance City traffic route Monterrey XXXX. quarter level in passenger our the to guided the strong our improvement on is at continued third already which same segment relevant by most route, Our of of was main routes. Mexico The travel

other such Monterrey Juárez to City Guadalajara, XX%, Additionally, quarter and XXXX, levels to with important important routes XX% respectively. an versus of business as growth increase Ciudad of Mexico delivered third and

increasing of versus or grew As of a result traffic XXXX aeronautical quarter the quarter revenue of performance the the MXNX.X in third aero billion. to strong quarter, the in XXXX first passenger and tariffs XX%

occupancy versus beverage food XX%. additional car increased lounges. revenues XX% in meters XXXX third and parking segments XX% On occupied restaurants, VIP compared by was quarter of square Monterrey airports. Commercial the Diversification rate XX% our and in an mainly by our the of commercial front, XXXX. terminals for for an the end the commercial quarter of retail end the at quarter increased for XXXX the guided and commercial and demand by revenues space driven of retail spaces second Strong at closed rentals, to Tampico

Our by hotel and storage Collection the strong this mainly third hotel driven as X quarter Terminal revenues XX%. Hilton an Garden handling, from import was and our XX% contributed custody results airport third of rate the hotel XXXX, and Inn growth. of XXXX, rate revenues at of Carga to occupancy the OMA quarter NH most XX% of services cargo. while Carga occupancy In ground had and of increased another set had OMA versus

and square decided facilities of additional meters, area increase our entails quarter approximately to XX% Airport. As XXXX. ground to of an the first is a be result operating the performance strong operation of of fully cargo of operational project The expected by continued during Carga’s Monterrey XXXX we and OMA expansion an capacity increase quarter,

the expenditures and in strategic major the investments investments MDP maintenance quarter was investments, including front, total capital On MXNXXX million.

for the buildings. building, projects; Juárez re-modeling of major and work rehabilitation for Zihuatanejo I call Terminal airport. taxiways quarter, of Mazatlán platform platform Perez Pliego to financial turn as in the with several the more and Monterrey building the well and airport we on Ciudad the airports at on expansion Culiacán our A And over that, now building, Ruffo and of Monterrey Reconfiguration of the During highlights following quarter. continue major reconfiguration terminal Modernization detail to will terminal the terminal

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

business financial MXNX.X result revenues aero quarter XX% airports. provision OMA in relative Construction salaries of passenger and Culiacán, XXXX, and by grew last due to payroll our premium the MDP higher of mainly XXXX. quarter Aeronautical a direct opening and increased revenues in as relative costs implemented direct billion increased in to Monterrey penetration XX% sharing an provisions in in of as growth Non highest the XX% lounges. Aeronautical services including increase quarter XX% first of and increased due of the from versus to profit of of sharing. headcount, and and increased respectively, car a result higher investments. statutory third quarter The the airports restaurants, traffic Contracted new quarter commercial the XX% operation of a to recorded premium of our an XX% and Chihuahua, supplies the of materials reached of airports of overall Car dynamism increased increased were G&A lounges increased Diversification adjusted revenues XX% rentals, MXNXX to expense and expense Total XQ and to number OMA’s XX% those OMA and we to the space. revenues Major grew an driven was XX%, in restaurants increase XX% as increase of the services increased as increase parking premium XXXX. year. tariffs quarter increase and airport VIP in revenues this to higher million adjusted third the XX% the was cost and quarter the activities were the XX.X%. mainly a and XX% margin Turning Car non-aeronautical higher EBITDA results. OMA in as due XXXX, to higher users XX%. well non-Aeronautical retails, third retail performances. EBITDA revenues lounges. a increased lounges. Carga car MXNXXX the increased Almost third and revenues to operation, compared the hotel with strong due million year billion recognition maintenance categories and activity VIP Commercial parking, result primarily due MXNX.X reflecting relative grew as in in rentals, third as revenue

cost financing maintenance a Our and implied provision. increase as result XX% debt expense higher interest billion, MXNX.X MXNXXX expense of additional income XXXX. third was million, due of was debt the well relative to of the non-cash as issuance, mainly Consolidated the as net an of higher major quarter on interest to

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

of that EBITDA please the the the billion MXNX.X to prepared stood shareholders dividend adjusted the During This total approved and second for to times. the in our was installment paid MXNX.X X.X the amounted quarter, remarks. million quarter, annual meeting. of debt we net concludes billion XXXX end Operator, debt the our call ratio MXNXXX At open at questions.

Please first from Zamacona proceed Our Suisse. with Crédit Alejandro Instructions] you.[Operator is question Thank

Quick Emmanuel. and Ricardo tariffs. question you Thank on the

So we increase. seen slight during XXXX have a

far So for [Indiscernible] aeronautical revenue working.

you XXXX increase be will said XX% you able beyond amid a as in a that increase to maximum the implement will negotiation. MDP So the inflation last tariff

implemented XX% our Certainly, increase boards. expect in this year, this get do to this we the Alejandro year Hi, We our throughout approximately of recovery. Ruffo. maximum to not is beginning salaries

same the In fact, we around year XX%. last should level of be around

targeting we of year, the next year inflation next the take and consideration have the situation increases as level to of well still expected overall are into for the be yet industry. define will what For as will increases, we

second my in I question, margins. of the if Okay, may, And thank terms you. then

Just a you term? high sustainable achievable for believe margins long do question this is regarding how XXs

is Thank term. long the XX% We you, close in Alejandro. something margin Yes. in medium think the to term XX% sustainable

you. Thank Good.

is Please proceed. Our Juan next Bradesco. from Ponce with question

saw levels. In amid September pandemic these the I everyone. actually you main on and most a morning, showing moving slowdown? much. have be next going the potential and Thank of the drivers view, sustained a are were question the We your forward recent in you do what you traffic Monterrey. year Good drivers your above And report needle? X% will think in north very

our have favorite yes, you. think we Thank things us recovering. so has they're we helped traffic been business in that sustainable. Yes, Two

BFR and landing a it traffic traffic. As was that was leisure

the So has we're that effects than of much at for we sector. in them some example, had by starting the see than to used already near some XXXX. in effect higher can have see were to that our traffic traffic, shoring in as positive Juárez, looking more in airports, that you Also,

thanks. great, Okay,

Philip Our next with from is proceed. Citi. question [ph] Nielsen Please

morning, afternoon. or good everyone, Hi,

you And the the have hubs are we'd your that? seeing seeing I my intentions questions. that any Mexico, new hear thoughts your How getting Monterrey or airports. on side. you're Like what have So in outside or, is impacts update on from I'd two for on business, questions Benito thanks And And Juárez, to to Mexico that. on less Mexico question are Is or like projects? inside airports from are City know, travel you projects good like if new into reshuffle taking etcetera. bad? even an second my what expanding the

the we know government traffic Mexico process. this opportunity still United clear the of we We When start is strategically trying an is trend of Mexico our is too will new That City. airport decentralize see located private the to traffic about terms very to in across which has it's to lot the take situation. bypass In of for Monterrey OMA. from airport advantage been early like believe the effect, States groups a What in that City.

to to quarter, new the we opened During routes Toluca. Lucia Santa airport

going shift happen, it's it's but So it's going not might we think be a a to might -- effect. be to immediate be

to in the plan. while are the we we're executing new projects, As MDP two year plan, of

to Monterrey for always as terminals. abroad, And Our looking and Culiacán major main Juárez, are Ciudad opportunities expansion works at potential expand. we're

table, was was the opportunities. any to it don't that we're in our were know, in transaction always far, process, but So have understanding was listen you it Barbados privatization We cancelled. we to participating, the recently open as is concrete it

may, And great. tariffs. one up. I if Okay, I the on One follow follow up have just

you're off you've you that due seen you see a reason You for increases not? this for said have year? tariff to last expecting to year. increases probably large any that next rolling Do too Or

what of that effect that We're still what that that year? early next the too will should seeing be an the It's internally inflation in And are expectations working process. be. also in budgeting we're

Okay, Thank much. great. you you. Thank very

Our Please next question GBM. proceed. is Macedo from Juan with

and results. you expect increments decrease? payroll. Hi, give detail in to thanks outsourcing the regarding And on the related it increase My do call question us is for law? that year's Could some last the you more soon? Was

yes. Yes, fact. Hi, to that due partially was it

this quarters. couple of new think certain it We of has have in at VIP I that time, upcoming openings lounges stabilized. do the

So it will think increase But slightly. it stabilized. to has terms fed amount, that that in of down continue I

great. Okay,

I what storage you expansion the this color terminal. from expect could us the expansion? give if question, ask to What, Monterrey on Second you do some impact in

in mentioned as in have one Ricardo are increasing warehouse, of our we [Indiscernible]. we warehouses the Monterrey the Well, that

to continues Carga OMA next the already the digit We above the and well do know, see few maintaining you levels. double in trend it's post XXXX growth, As years.

we expense. market. in So this we anticipating to mean, see will capture us allow are I underlying so that that that demand expansion additional

continue should expect in Carga we for foreseeable the digit to So double OMA future. growth

and Thank congrats for you the the Great. answers on results.

you. Thank

is Scotiabank. Himelfarb Please next proceed. from Our Gabriel question with

the good morning thanks everyone. for to Hi, And call.

the MDP. Thank materials payroll MDP be increasing. the Do to planet or level you. inflation my Just expect increasing. about modified increasing, as labor cost are construction is a you quick Maybe question could –

terms. commitment period XXXX the XXXX the in is five in So as of regulation, real to year the per investments from

this Association when pesos XXXX in total remember, billion. billion to year, cumulative results, MXNXX commitment from the the to may we XXXX to you expressed roughly a December inflation MDP announced XXXX. With As we of MDP committed has MXNXX September a December increased of

with power in the real is as pesos that So of purchasing expressed terms today. amount

a bit. To just add little up, and add

inflation in So MDP annually case and always aspects is that above because some that value it's adjusted projects. by in and, opportunities level, see certain inflation there's to higher or of protected, you inflation those some engineer are

Okay, thank you very much.

from is question Please proceed. next Our [Indiscernible].

taking for questions. two of Thank my have morning. good you I Hi, them.

quarter this routes of new the two to and international the related of is company's one first The launch. [Ph] carriers new EDA

Mexico the So you or U.S? for routes will other opening my of be more between question. the That XXXX, first parts expecting are end of

second The related one costs. construction to is

quarter This costs increased construction to X%.

wondering related only this another cost. I wondering, about the to Thank So is operational your of was you. it's MDP listing or because

in So on second question, the see the equals the your revenues. you P&L construction costs the that construction construction

a the last have net in they higher relative execution investments of year. income and MDP this is reflect or they So to operating zero that effect what of

okay Okay, makes sense.

that [Indiscernible] not Canadian Mazatlán, went front, market as that respect with And the international last usually been. of [Ph] we season recovery it such Guadalajara capacity announced of Puerto markets the that already we strong as and the in some was year have to which new has to frequencies to starting start expecting have as routes are additional carriers some in December on

from a tomorrow, So November, quarter starting and expecting to Angeles strong markets Detroit additional we airports Mazatlán these that's quarter, so winter see to the bode Canada flights starting for such a basically for are and all well in as should, well our on frequencies last to charter should Los capacity this season OMA. in and increase we further as

thank much. you Okay, so

Valerio from next UBS. Alberto proceed. is with Please Our question

questions. Duenas, moment. about a the level where I'd a of you Ruffo we now the Hi, first We time for cycle my and at saw thank to demand taking for [Indiscernible] the like board are the as ask

great? sorry. question repeat, your can can you repeat I'm line the is Alberto, not

at is demand this we question no, the Okay, where My the are no of moment. cycle problem. about

going the traffic you in are recovering of you Mexico in and the is in domestic the that, we aircraft actually routes leader categories safety question. Mexico, from if see Mexico the one and as or OMA to some And Mexico at U.S. you second we category infact it this pandemic of relates the if my are may to see for my traffic if cycle top cycle, one pre the in the just had is So the to levels away quarter.

the take me Let second part.

that next January there could in over very somewhere That the during we the FAA was to return the say the the They the was that a -- going There release to weekend. to the So the meeting impact very existing was frequencies. increase we Mexico there to a the two from opportunity have was is and are. to send category And going to they in is going important, expectation, is that States good increase which have to apparently, regarding or an year. personnel officials public review these went in that public category category we FAA one, to around group somewhere process now first routes that United have an be in to don't it's news Mexico this from information of a carriers, that right those States. to United meet quarter that new ones to weekend, Mexican where

we that of some in terms demand demand. the next overall would deceleration outlook for mean, economic few months, I the U.S. expect in affect So

a However, of as business effect recovered as Ricardo that strong, we mentioned near of recovery other the well been markets, like or have type routes see as BFR, the they lagging sure faster. have strong the

some So next will the it and we quarters. positive we'll that even continue see to growth over think out

so Thanks much.

you. Thank

Thank you.

Ricardo session. question-and-answer end I closing the turn over would reached the of our have for to conference back We to like comments.

to Thank day. for have and your participation and hope Ruffo we a are you you questions and good your always to soon. Thank see all you I today. available answer

Thank conclude does you. This today's conference.

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