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

Greetings and welcome to the Grupo Aeroportuario del Centro Norte OMA fourth quarter 2024 earnings 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 the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Emmanuel Camacho, Investor Relations Officer for the company. Thank you. You may begin.

Thank you, Melissa, and good morning, everyone. Welcome to OMA Sports Quarter 2024, Greenleaf Conference Call. Joining us this morning are our CEO, Ricardo Reyes, and our CFO, Rubo Perez-Piedro. Please be reminded that certain statements made through 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 now I'll start the call over to the Catalonia's for his opening remarks.

Thank you, Emmanuel. Hello, everyone. We appreciate your presence on this call today. This morning, Rufo and I will review our annual and quarterly operational performance, financial results, and CapEx development. Finally, we will be happy to answer your questions. I will start by discussing our four-year 2024 highlights, and then I will move to our main four-quarter results. 2024 started off with challenges, particularly due to aircraft capacity constraints stemming from Pratt & Whitney engine inspection program, which affected two of our largest airline partners, Viva and Volaris. Together, these airlines accounted for 71% of our total passenger traffic in our airports last year. In parallel, operational restrictions at the Mexico City International Airport posed another challenge for the industry, limiting airline operations at the country's main hub and reshaping connectivity strategies. These combined factors constrain airline capacity planning throughout the year, influencing both domestic and international traffic dynamics. Beyond these challenges, 2024 also brought interesting developments. The combination of operational restrictions at Mexico City Airport and limited aircraft availability in the market created opportunities for airlines to strengthen their international networks. We saw a clear shift in strategy with airlines increasing capacity and launching new routes from Omaha's airports to the U.S., reinforcing existing markets and exploring entirely new ones. As 2024 progressed, the negative impact from reduced seat capacity gradually diminished. Towards the end of the year, we reported a significant decrease in aircraft availability, which resulted in opening of new domestic and international routes and contributed to a strong passenger traffic performance. As a result, in the fourth quarter, total passenger traffic in our 13 airports grew by 4.6%, with a 1.5% increase in domestic traffic and significant 26.4% growth in international passenger traffic. Looking at the full year, this dynamic reshaped our overall traffic performance. While domestic traffic declined by 3.5%, international traffic increased 15% as compared to 2023. Despite the limitations in the Mexico City airport, demand on our most important routes, Monterrey to Mexico City metropolitan area, which adds the operations of IFA and Toluca to those of Mexico City airport, grew by 8.18%. in 2024. This was largely driven by a significant increase in traffic between Monterrey and IFA, providing that demand for flights to Mexico City remains robust, with airlines continuing to add capacity to these alternate airports. 2024 was also a year of strong performance across our various commercial and diversification lines of business. Despite the passenger traffic they're applying during the year, we delivered outstanding results through strategic initiatives focused on maximizing revenues and optimizing operations. On the commercial front, we recorded meaningful growth across key revenue line items, mainly as a result of contract renegotiations, the opening of new outlets, and introduction of new brands and operators. Restaurant revenues grew by 22%. VIP lounge revenues increased by 51%. And parking revenues increased by 33 million pesos as compared to 2023. Altogether, this initiative resulted in a record high commercial revenues per passenger of 60 pesos in 2024, a 17% increase relative to 2023. Our Alma cargo business continued to boast a strong yearly result. We made key organizational changes to improve efficiency, enhance customer service, and attract new customers. Thanks to these efforts, OMA Cargo grew by 22% in 2024. In hotel services, we work closely with our operating partners to refine pricing strategies and optimize occupancy levels, driving nearly 20% revenue growth in the hotel segment compared to 2023. And finally, our industrial part business delivered solid results. The strong industrial activity in the Monterey region allowed us to continue with the construction and leasing of industrial warehouses. Last year, we announced six new warehouses under development, and by the end of 2024, five of them were already generating revenue. Combined with contractual rent growth and the impact of the Mexican peso depreciation against the U.S. dollar, Our industrial service revenue grew by 61% for the full year. Regarding our financial performance, aeronautical and non-aeronautical revenues grew 2% and 17% respectively versus 2023. As a result, our adjusted EBITDA for the year was 9.1 billion pesos, and we recorded an adjusted EBITDA margin of 74.3%. On the capital expenditure front, in 2024, continue to invest in our long-term infrastructure development, particularly at our Monterey Airport. During the year, we inaugurated the East Public Area expansion of Terminal A, adding over 6,000 square meters of new facilities, including additional check-in counters, commercial spaces, and airport services. This expansion, combined with the previous developments at the airport, has substantially increased passenger capacity, now reaching almost 14 million passengers per year. These efforts further reinforce Monterey's position as a leading hub in northern Mexico and ensure its readiness for future growth. Looking ahead, we continue advancing with Phase 2 of the Monterey Airport Expansion Project. This next stage focuses on significantly expanding airside areas of Terminal A. Once completed, this project would optimize passenger flows, enhance commercial offers and services, and further increase the airport's capacity to almost 16 million passengers annually. The new areas are expected to become operational in early 2026. Finally, In September 2024, we completed the expansion and remodeling of the terminal building at Durango International Airport. This project allowed us to increase the air capacity to handle up to 750,000 passengers annually. This infrastructure investments reflect our commitment to enhancing the passenger experience and supporting the long-term development of our airports. I will now move on to our fourth quarter performance. In the fourth quarter, almost passenger traffic reached 7.1 million, an increase of 4.6% versus the fourth quarter of 23. This increase was mainly attributable to an increase in seat capacity of 3.3% during the quarter. On the domestic front, passenger traffic grew by 1.5%. This increase was primarily driven by our Monterey Airport, which saw expansion on routes to Querétaro, the metropolitan area of Mexico City, Ciudad Juárez, Hermosillo, Tulum, and Guadalajara. Those routes collectively added more than 211,000 additional passengers during the quarter and were particularly offset by decreased capacity on routes from Monterey to Cancún, Tijuana, Mérida, and Puebla. In contrast, International passenger traffic reached a historical quarterly record with a 26% growth to 1.1 million passengers as compared to the fourth quarter of 23. This growth was primarily driven by the Monterey Airport with a significant passenger traffic expansion on routes to Chicago, San Antonio, Los Angeles, Las Vegas, Orlando, Oakland, Miami, San Francisco, Austin, and Denver. These routes accounted for approximately 74% of the total increase in international passenger traffic during the quarter. Additionally, during the quarter of 24, we launched 16 new international routes from Monterey, Mazatlan, and Acapulco airports, further improving our international connectivity. We also anticipate the launch of more than 20 new domestic and international routes between February and July of this year, including 11 international routes. Moving on to the OMAS financial performance. The sum of aeronautical and non-aeronautical revenues reach a record high performance of 3.3 billion pesos in the quarter. Both revenue segments record growth in the quarter, with aeronautical revenue increasing 11% and non-aeronautical revenue rising 22%. The positive performance of our non-aeronautical revenue reflects the successful execution and consolidation of several commercial and diversification strategy initiatives throughout the year. Commercial revenues increased 19% compared to 4.25%, primarily driven by restaurants, VIP lounges, and retail revenues. Revenue for restaurants and retail grew 29% each. versus fourth quarter of 23, mainly due to the contribution of new commercial space and the replacement of several other outlets opened during the quarter. During previous quarters, sorry. In addition, VIP lounges grew by 59% as compared to the fourth quarter of 23, mainly due to higher access rates and leases renewal of third-party lounges in Monterey under improved terms, as well as the opening of new lounges in Durango Airport. Diversification revenues increased 28%. Industrial services was the main growth driver this quarter, rising 130.8% to 47 million pesos, primarily due to an increase in least squared meters compared to fourth quarter of 23. Hotel services grew by 19%, mainly due to double-digit increase in average room rates per night on both hotels. OMA cargo increased 18% in the quarter, mainly due to higher revenues from ground cargo operations in Monterey. Moving on to capital expenditure front, during the quarter, we invested 951 million pesos in MDP investments, major maintenance, and strategic projects. Finally, I am proud to announce that all 13 OMA airports have obtained level three optimization certification on the airport carbon accreditation program, strengthening our leadership in sustainable airport management. This milestone underscores our commitment to reducing carbon emissions and adopting innovative practices to minimize the environmental impact of our operations. We have not only optimized our own operations, but also collaborated closely with commercial partners and airlines to implement carbon management strategies across the entire airport value chain. This certification reflects our dedication to building a more sustainable future for the airport industry. I would now like to turn the call over to Rufo Perez-Flier, who will discuss our financial highlights for the quarter.