Grupo Aeroportuario del Centro Norte S.A.B. de C.V.

Greetings and welcome to Grupo Aeroportuario del Centro Norte AMA fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Emmanuel Camacho, Investor Relations Officer. Thank you. You may begin.

Thank you, Doug, and hello, everyone. Welcome to OMA's fourth quarter 2023 earnings conference call. We're delighted to have you join us today as we discuss our company's performance and financial results for the past quarter. Participating today are CEO Ricardo Duenas and CFO Rufo Perez-Piego. Please be reminded that certain statements made during the course of our discussion today may constitute forward-looking statements, which are based on current management expectations and beliefs, and are subject to a number of risks and uncertainties that could cause actual results to differ materially, including factors that may be beyond our control. And with that, I'll turn the call over to Ricardo Buenas for his opening remarks.

Thank you, Emmanuel. Good morning, everyone. We appreciate your presence on this call today. This morning, Rufo and I will review our annual operational and financial results, and then we will be pleased to answer your questions. I will start by discussing our full year 2023 highlights, and then I will move on to our main fourth quarter results. OMA achieved another exceptional financial and operational performance, setting new records for the full year 2023. We achieved record breaking results in passenger traffic revenues adjusted EBITDA with an impressive adjusted EBITDA margin of 78.4% and then consolidated net income. Our full year performance was propelled by a robust increase in both aeronautical and non-aeronautical revenues underpinned by our successful cost control strategy. During 2023, the airport that contributed most to the growth of passenger traffic was Monterey, which grew by almost 22% during the year. The performance of passenger traffic from Monterey to the metropolitan area of Mexico City, including Mexico City, IFA, and Toluca airports is notable. During the year, traffic in the market represented 15% of our total passenger traffic and grew collectively by almost 600,000 passengers, an increase of 18% as compared to 2022. It is also important to highlight the positive performance on routes from Monterey to Queretaro, Cancun, Guadalajara, Houston, and Tijuana, which collectively add almost 700,000 passengers in the year and grew by 19%. As a result of our performance, 12-month passenger traffic stood at a new record level of 26.8 million passengers, which represents a 15% growth as compared to 2022. Regarding our financial performance, aeronautical and non-aeronautical revenues reached again record levels in 2023, growing 27% at 18%, respectively, versus 2022. As a result, our adjusted EBITDA for the year was 9.1 billion pesos, an increase of 28%. And we set a new record of our adjusted EBITDA margin at 78.4%. Consolidated net income for the year reached a record of 5 billion pesos and increased by 28% compared to 2022. In reviewing the significant events of the past year, it is clear that we face both challenges and opportunities. We have remained consistent in our commitment to transparency, sustainability, and operational excellence, reflecting our dedication to generating long-term shareholder value. Throughout 2023, we achieved notable milestones, including the opening in June of Wing 1 in the Monterey Airport as part of the major expansion project to enhance our capacity to serve passengers and accommodate growth in the airport. We also made significant investments in improving and expanding our diversification activities, such as the completion of the remodeling of the NH Terminal 2 Hotel at Mexico City Airport, and the construction of six industrial warehouses at our industrial park in Monterey, of which we have completed two. In addition, we opened three new OMA premium lounges facilities at Tampico, Reynosa, and Durango airports. Furthermore, in 2023, we effectively managed regulatory adjustments as shown by our proactive approach and respond to changes in our basis for tariff regulation. Despite challenges such as Hurricane Otis that impacted Acapulco Airport, we demonstrated agility and determination, ensuring minimal disruption to our operations. As we move forward, we remain focused on delivering value to our shareholders while maintaining our commitment to sustainability and operational excellence. We are aware of the challenges posed by the capacity reductions in aircraft due to the Pratt & Whitney engine recall program affecting two of the most relevant Mexican airlines. However, opportunities persist, particularly in terms of nearshoring in northern Mexico and the potential for increased commercial revenue per passenger. I will now move on to our fourth quarter performance. OMA delivered another strong financial operational performance in the quarter of 2023, in the fourth quarter of 2023. Adjusted EBITDA grew 16% in the quarter to 2.3 billion pesos, and adjusted EBITDA margin reached 77.7%, largely as a result of the increase in both aeronautical and non-aeronautical revenues, as well as our continuous cost efficiencies. In the fourth quarter, OMAS passenger traffic reached 6.8 million, an increase of 5.2% versus the fourth quarter of 22. It is worth noting that excluding Acapulco, passenger growth in the quarter was 7.1%. Outstanding results in the quarter were guided by the performance in Monterey, which contributed with 96% of all mass total passenger growth as compared to the fourth quarter of 22. The routes from Monterey that experienced the highest growth in terms of passenger volume were to Queretaro, Guanajuato, Tijuana, Mexicali, Tapachula, Toluca, and Cancun. which collectively accounted to 47% of the traffic growth during the quarter and grew by 20%. Primarily as a result of the strong passenger traffic performance, our aeronautical revenues grew by 13% in the quarter to 2.2 billion pesos. Commercial revenues increased 14% as compared to the fourth quarter of 22, driven by restaurants, parking, and VIP lounges. The restaurant light items benefit from the opening of new food and beverage shops across our airports, as we have sought to optimize and increase the revenues from leased commercial space, as well as from participation of sales. Additionally, as part of our strategy to directly operate and renovate our existing OMA preview lounge facilities, we have also increased the number of lounges available at our airports. In the fourth quarter of 23, revenues benefit from three openings that occur during the year. Today, we operate 12 lounges in 10 of our airports. Occupancy rate for commercial space stood at 95% at the end of the quarter. On the diversification front, revenues increased 15%. Omicron contributed most to this growth, mainly as a result of an increase in the number of tonnage handled particularly for service related to storage and custody in both ground and air import cargo. In the fourth quarter of 23, occupancy rate at our Terminal 2 NH was 92%, while the Hilton Garden Inn Hotel had an occupancy rate of 68%. Regarding the industrial park in Monterey, we have initiated the construction of two new warehouses for 6,000 and 9,000 square meters respectively. These warehouses are projected to begin generating revenues in the second half of 24. With the addition of these warehouses, the leased area will expand to approximately 131,000 square meters, representing 95% of the total leasable capacity of the industrial park. On the capital expenditure front, total investments in the quarter, including MPP investments, major maintenance, strategic investments were 1 billion pesos. During the quarter, some of the most relevant projects we're working on are the expansion and remodeling of the Monterey Airport Terminal A building, as well as the Ciudad Juarez, Torreón, Culiacán, and Durango terminal buildings. Reconfiguration of the Mazatlan terminal buildings. Major rehabilitation and reconfiguration of platforms and taxiways in several airports. And construction of four industrial warehouses. Finally, I'm delighted to share that we have achieved airport carbon accreditation level 2 certification in our 13 airports. This achievement signifies not only our commitment to reducing our carbon footprint, but also aligning with global sustainability goals and maintaining a role as leader in the aviation industry efforts to combat climate change. I would now like to turn the call over to Rufo Perez-Pelé, who will discuss our financial highlights for the quarter.