Grupo Aeroportuario del Sureste, S. A. B. de C. V.

Good day, ladies and gentlemen, and welcome to ASUR's first quarter 2026 results conference call. My name is Sachi, and I'll be your operator. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward the end of today's teleconference. If you would like to ask a question, please press star 1. If you want to withdraw your question at any time, please press star 2. If you are using a speakerphone, please lift the handset before making a selection. As a reminder, today's call is being recorded. Now, Mr. David Barlow, Corporate Governance, Strategic Planning Manager and IRO at ASUR. Please go ahead, sir.

Thank you, Sachi, and thank you, everyone, for joining us today to discuss ASUR's results for the first quarter 2026. With me on today's call is Adolfo Castro, Chief Executive Officer. Additional details about our results can be found in our first release, which was issued yesterday after market calls. and is available on our website. As usual, all comparisons discussed on this call will be year-on-year, and all figures are expected in Mexican pesos unless specified otherwise. As a reminder, certain statements made during the call today may constitute forward-looking statements which are based on current management expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially. including factors that may be beyond our company's control. Please refer to the forward-looking statements disclosure included in this earnings presentation for additional information. With that, I will now turn the call to Adolfo. Please go ahead, Adolfo.

Thank you, David, and good morning, everyone. Before I begin, I would like to note that David Barlow has assumed a responsibility for investor relations. that David has been with Azure for more than 20 years and knows the company and operations very well. He attends our Board of Directors meeting and committee sessions. Now, let me start by bringing the quarter. We started the first quarter We were operating in an environment where the traffic trends on our Mexican market were stabilizing after a period of normalization. Puerto Rico entering a more mature phase following strong post-pandemic growth, and Colombia in a growth with momentum. Recall that the first quarter of Mexico is the seasonal peak at the strongest. then, we were negatively affected by the security-related events beginning on February 22nd, and after that, by the TSA-related disruptions in the U.S. airports, which also impacted Puerto Rico. This effect contributed to increased volatility in traffic trends, particularly toward the end of the quarter. On the positive side, we've made progress on two key priorities. The first one, integration of ASUS U.S. airports. This makes the first full work of consolidation of our U.S. commercial platform. The business contributed to non-aerobic and revenues while profitability reflects the early land park operations. We expect travel improvement as the platform scales, supported by the new commercial openings in Terminal 8 and the upcoming opening of the Terminal 1 this year, both at GEA which will further expand the commercial base. Second, continued execution of our regional expansion strategy. We remain focused on completing the Motiva transaction which is now pending remaining regulatory approvals and is expected to close in the second quarter this year. diversification, expanding our presence in new markets, and further balancing our portfolio. Our strategy remains consistent, diversifying our revenue base, including a greater focus on non-regulated revenue, selecting expanding into markets with attractive long-term demand, and deploying capital in a disciplined and value-attractive manner. Let me now review Azur's operational performance for the quarter. Total passenger traffic increased 1.9% year-to-year, reaching nearly 90 million passengers, driven by strong traffic in Colombia, stabilization in Mexico, and short-term softness in Puerto Rico. Colombia remains our fastest-growing market with traffic off. Mexico remained broadly stable, with international traffic showing modest growth, while domestic traffic remained slightly below prior year's levels. Trafficking then declined 2% during the quarter, while the other ATEM was in Mexico, grew by 5%. Positive trends in January and February were offset by weaker March. Beginning on February 22nd, traffic was affected by the security-related events in Mexico, which impacted traffic to and from the United States through mid-March. Later that month, traffic was affected by a TSA-related screening disruptions in the U.S. airports. We believe these factors were temporary and do not reflect a change in the underlying demand. As we move through the year, we expect to see difficult operating conditions, including higher fuel prices and recent capacity reductions. Passage volumes from the United States, our largest international source market, decreased 4.6%, while South America contracted 1.4%. On the positive note, Canada and Europe increased by 11% and 11.4% respectively. In Puerto Rico, traffic trends driven primarily by domestic demand and the effects of DSA when international traffic continued to grow. Turning now to financial performance. As a reminder, all figures that exclude construction revenue and cost and comparison are year-on-year, otherwise otherwise noted. Total revenues increased to 0.2% year-on-year firmly driven by an early mindset increasing non-aeronautical revenues, supported by the first full consolidation of the U.S. airports, which added approximately 138 million pesos in non-aeronautical revenue during the quarter. In turn, aeronautical revenues declined low single digits, mainly reflecting the FX conversion impacts in Puerto Rico and Colombia, together with the lower traffic in Puerto Rico. Commercial revenues increased nearly 7%, primarily reflecting the new commercial operations in the U.S. and the able single-digit organic road in Colombia. Performance in Mexico and Puerto Rico remained soft within the quarter, reflecting a combination of FX headwinds, even the strength of the Mexican peso against the U.S. dollar, combined with low traffic in Puerto Rico. We continue to execute of a revenue base, with a growing contribution from non-regulated and donor-denominated sources. The integration of the U.S. commercial platform is an important step in that direction, and while still in its early stages, it already represents an attractive addition to our portfolio. Over the past year, we also continue to actively expand our commercial footprint across the network. On a per-passage basis, commercial revenue increased mid-season digits to 153.6 pesos, benefited from a full quarter of operations from the U.S. commercial operations. Despite the impact of depreciation of the Mexican and Colombian pesos against the U.S. dollar and a mixed traffic environment, by geography, Puerto Rico delivered the highest levels with the passenger, despite the 5% decline in 3.5% tax conversion and the slight reduction in traffic levels. Mexico's 0.4% decline mainly reflected the impact on the Tesla precision of the US dollar, denominated commercial roads. Lastly, Colombia posted a mid-season decline despite the strong traffic flow, reflecting effects and mixed effects Turning to operation costs, total expenses increased 25% year-on-year, mainly driven by the integration of U.S. commercial operations, higher depreciation, and amortization in Colombia, professional fees related to the U.S. acquisition, together with the ongoing inflationary pressures. Excluding these effects, underlying operating costs was moderate. By region, Mexico recorded a 6% increase in expenses. If clearing production would be associated with a U.S. commercial acquisition, expenses would have grown just 0.9%, mainly reflecting modest increases in labor and service-related costs. In Puerto Rico, expenses declined nearly 7%, benefiting from depreciation on the Mexican peso against the U.S. dollar. Expenses in Colombia increased 33%, largely driven by the higher depreciation and amortization change in amortization methodology. Recall this change reflects the expected evolution of the consortium, including the phase-out of regulated revenues starting in 2007 and the remaining life of the asset through 2032. Excluding depreciation and amortization, expenses in Colombia will have increased by just 2.6%. In the U.S., we recorded lease-related adjustments, account reconciliation items, provisions for uncollectible accounts, and prior year employees bonus. Moving on to profitability, consolidated EBITDA decreased nearly 6% to $5.4 billion in the quarter. EBITDA was lower across regions, down mid-single digits in Mexico and Colombia, high single digits in Puerto Rico, while our U.S. commercial operation costing a negative UDA of 50 million pesos in the quarter. The adjusted UDA margin declined nearly 600 basis points to 64.1% the other year, mainly reflecting the ramp-up of the U.S. increased interest expenses following the recent financings, and a lower interest income. Importantly, the reported profitability of Arcturus USA for this quarter is not yet indicative of the underlying earnings capacity of the business and costs associated to sell out the business. As disclosed in our 20-hour report on a performance base, billion in revenues and $711 million in net income in the fiscal year 2025. In addition, the launch of the new Terminal 1 at GMA Airport, expected to come online during the third quarter this year, will further support commercial revenue growth as it ramps up, further enhancing the performance of this business. Moving into the balance sheet, we close the quarter with cash Our partnership continues to prove significant flexibility to firm growth while maintaining conservative leverage. Capital expenditures total $544 million, primarily focused on Mexico, where our investments under the Mass Development Program continue to advance, including the construction of terminal 1 in Cuy, on track to open on the third quarter this year, which will enhance capacity, improve passenger flow, and optimize commercial working hard for the full year as per our mass development plan, total 7.9 billion pesos. In Puerto Rico, we remain focused on operational improvements and while capital deployment in Colombia . At the end of March, airplane sign an agreement authorizing immediate interventions at Jose Maria Cordoba Airport. To address unexpected events, with an estimated investment of approximately 165 billion Colombian pesos, the project covers a series of capacity expansions, a service-level improvement works, including domestic and international checking facilities, a reporting baggage handling system, security checkpoints, remote boarding areas, In summary, ASTRO is becoming a more diversified platform with increasing exposure to U.S. denominated revenues. A clear visibility on key road drivers, including the ramp-up of U.S. commercial operations and expected closing of motivator sections. While in the near-term, traffic trends remain mixed across regions, County underlying the land for air travel and we may focus on execution. Cost discipline and long-term value creation. The final comment is that a social service meeting will take place at 10 a.m. Mexico City time today with the proposed dividend payment of 10 pesos per share to be paid at the end of May. Now, I will open the floor for questions. Sashi, please open the floor.