Grupo Aeroportuario Del Pacifico, S.A. B. de C.V.

Good morning, and welcome to GAP's second quarter 2024 conference call. All lines have been placed on mute to prevent any background noise. After the presentation, we will open the floor for questions, and at that time, instructions will be given if you would like to ask a question. It is now a pleasure to turn the conference over to GAP's investor relations team. Please go ahead.

Thank you, and welcome to the Grupo Reportuario del Pacifico second quarter 2024 conference call. Presenting from the company today, we welcome Mr. Raul de Vuelta, GAP's Chief Executive Officer, and Mr. Saúl Villarreal, Chief Financial Officer. Please be advised that forward-looking statements may be made during this conference call. These do not account for future economic circumstances, industry conditions, the company's performance, or financial results. As such... Statements made are based on several assumptions and factors that could change, causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the quarterly report. At this point, I'd like to turn the call over to Mr. Revuelta for his opening remarks. Please begin, sir.

Thank you, Maria, and thank you to our audience for joining us today. As always, we appreciate your continued support and interest in GAP. I will briefly review operational and financial figures before taking your questions. During this quarter, the total number of passengers reached 15.3 million, which was 3.9% decrease compared to 2023. The continued passenger traffic deceleration was due to the preventive inspection carried out by on the A320neo and A321neo airplane engines. This is a process that began in September of last year and is expected to continue for the remainder of this year into 2025. Despite this setback, we have continued to expand our strength of our network. During the second quarter, we added three international and two domestic routes, bringing the total number of routes added to our network to 13, just during the first half of this year. We anticipate adding around 11 international routes during the second half of this year, including the rest of the resume Tijuana to Virginia route, which restarts on July 12th. These efforts align with our air development and strategies. As you're probably aware, last Friday morning on July 19th, air travel all over the world experienced an eruption related to a Microsoft object for the customer of the 365 app, which includes many major airlines. While GAPS airport has non-internal system complications, as a result of the airline system outage, we have 274 delays and 23 cancellations in our Mexican network. Moving on to the financial performance, we experienced a convenient revenue decrease for aeronautical and non-aeronautical services of 213 million pesos, or 3.3 lower compared to last year. Lower aeronautical revenues were attributed to the decline of passenger traffic and reaching only 95% of the maximum traffic. However, there was an almost 11% increase in commercial revenues driven mainly by the food and beverage, car rentals, and VIP lounges. A little further detail of these commercial revenues I just mentioned, in terms of the car rental increase, these were mainly driven by the new bidding process carried out in Guadalajara and Los Campos. Futambara stood out at the Guadalajara airport mainly due to the opening of the new terrace and the layout renovation carried out that resulted in a better brand mix offer. Furthermore, the priority pass fees for the use of the VIP lounges increases leading to a rise in the business line, specifically in the Guadalajara and Los Cabos airports, which experience the best performance related to a VIP lounge revenue. On July 9th, we opened a second VIP lounge at the Guadalajara airport. This will help us in the more adequate meeting in the high demand in this airport. Additionally, the hotel at the Guadalajara airport during this quarantine generates 18.6 million pesos with an occupancy rate of 51% as of June. We are expecting to close this year a percentage of 62% occupancy. New commercial opportunities and partnerships to reap the further commercial revenue growth are always top in the mind for us and we continue exploring options. Regarding the acquisition of the cargo company GWTC, we expect to begin to consolidate the results starting in the third quarter of 2024. In 2023, GWTC generated revenue above one billion pesos with an evident margin of around 40% and without financial debt. On the other hand, the purchase plus allocation will be done in the second half of the year. As for the cost of service, this increases by 179 million pesos, or 17.3%, mainly due to the higher operational expenses, such as employee costs, security, insurance, and maintenance. While these rising costs do bring challenge, They also indicate our continued dedication to upholding high services standards and operational excellence. Besides enforcing strict cost controls, we do anticipate higher expenses related to expansion and inflationary effects to continue. Evidence decreased 378.7 million pesos or 8.3% as a result of the higher cost and slightly lower revenue. Looking ahead, we remain committed to delivering growth and delivery value to our stakeholders. Our focus will continue to be on enhancing operational efficiency while at the same time optimizing our services to meet the evolving needs of our customers. Moving onto the balance sheet, cash and cash equivalents decreased by 15.7% reaching 12.6 billion pesos. On the debt front, this figure reached 41.8 billion pesos. We continue keeping healthy labor levels, reaching a net debt-to-ebitda ratio of 1.7 times for the 12 months, thereby complying with all our debt covenants. CAPEX continued to follow the community master development program, reaching approximately 3.1 billion pesos in the first half of the year. This position also well to the compliance with the current and challenging MDP goals we have in place. I want to mention that yesterday, we opened the second runway at the Guadalajara airport, which was one of the key projects for this ingenium. This second runway will offer us the capacity to have between 50 to 70% of additional operation in the long term and give us more flexibility to continue developing routes and connectivity throughout the region. This is another important step in meeting the growing needs of this airport, as I mentioned before. Regarding distributions, yesterday GAAP paid the first portion of the capital reduction for a total of 3.5 billion pesos per the resolution made at our extraordinary shareholders meeting. The second portion will be paid later in the year. Now, just an update on the Turks and Caicos airport bidding process. As you know, we are committed to exploring new markets and revenue streams in an effort to further diversify our network. Therefore, as we announced before, we were pre-qualified to bid for the Turks and Caicos airport, an airport mainly focused on international leisure traffic which handled 1.4 million passengers in 2023. Most of the revenues come from the aeronautical side, but there is room for improvements in terms of non-aeronautical activity. At this point in the bidding process, we are analyzing capital investment needs. The criteria for devaluation of the authors will be 70% for technical proposal and investment plan and 30% financial evolution. evaluation based on proposed revenue share. The tender submission deadline is October 23, 2024, and the process is expected to be concluded in December of this year. Before I finish, I want to provide revised guidance for 2024. Passenger traffic and aeronautical revenue remain as was originally stated at the beginning of the year. whereas non-aeronautical revenues are updated with the performance of the commercial activities and the continuation of GWTC. On the other hand, the EBITDA and EBITDA margin consider the aforementioned issue and the capitalization of the 40% of the concession fee to be paid over Mexican airports due to the recent change in law. With that, I conclude my comments and ask the operator to open the call for new questions.

And at this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw your question by pressing the pound key. Once again, to ask a question, please press the star and one on your telephone keypad. I will take our first question from Guillermo Mendez with JP Morgan. Please go ahead. Your line is open.

Good morning, Raul, Saúl. Thanks for taking my question. First question is on the MDP negotiation. What is the latest there? So post-elections, if there's any changes on when do we expect it for it to be announced, it's more toward the end of the year or could potentially be announced in the near term. And if the assumptions that you guys mentioned on the previous calls and on the investor day, it's still valid in terms of tariffs and CAPEX. And just one follow-up on the commercial side, the upward revision on the guidance, it's only related to the GWTC or is there something else that has been surprising to the upside?

Thank you. Hi Guilherme, this is Raul.

In terms of the MDP negotiation, we are in the, I would say, in the same timeline that we expect. We are trying to close the new MDP this administration so in that way we expect to have the authorization of the MDP in September of this year for the moment we don't see at the moment we are not seeing any kind of change on that and we are aligned with the government to try to get authorization in this administration yes Hi, Guilherme, this is Saul. Regarding your questions about the new guidance, yes, it is only GWTC. As we mentioned last year, we have one billion pesos of revenues with a 40% of the margin, and we're expecting to improve a little the EBITDA margin for this year, but at the end it's already included in the guidance. Also, as we mentioned, commercial performing and also the capitalization of the 4% of the concession fee for the Mexican airports. That was at nine in the guidance release in January this year. Those are only the three issues that were included in the new guidance.

Very clear. Thank you both. Just one follow-up on the MDP. If the assumptions that you guys mentioned about the zero to meet single-digit increase on tariffs and 110 roughly capex per passenger, if that's still the base case or there's something different?

Guilherme, we are in the process of that. As you may know, during this, we released our proposal to the authorities on June. We are now reviewing with them additional investments. We are revising different assumptions. And that's the hard part of the process. So right now we are in that. We cannot provide more more information, as you may know, but probably it will be a little bit higher, the CAPEX, because we have additional requests from the authority that we have to analyze and define. So, for now, we cannot release more detail, but it's close to what we have released and announced in the update.

Very clear. Thank you, Hope.

Our next question comes from Rodolfo Ramos with Bradesco PPI. Please go ahead.

Thank you, everybody. Thanks for taking my question. A couple from my side. The first one is, you know, it doesn't seem that airports is a big priority for the upcoming administration, but I wanted to get your thoughts on the new team that was announced for the Ministry of Transportation. If you have any thoughts there or have any, you know, approaches with members of the new elected president's team. And secondly, I wanted to get your thoughts on the Mexico City bottlenecks and just to see whether the bottlenecks that we're seeing there, how do those impact? And at the same time, how do you intend to benefit those to strengthen Guadalajara? how much traffic can it encompass from its geographical area of influence from Mexico City and kind of bypass Mexico City in terms of this bottleneck that I have seen because of the slot restrictions. Thank you.

Thank you, Roland, for this. This is Raul. I would say that in the first view, what we are seeing on the new government or in the new minister already announced, is someone that comes from the construction, I would say, life, and is clearly that has a well-recognized career in terms of the development of infrastructure in Mexico City. For the moment, we are focused on all the relationship with today's administration, because we are just in the middle of the negotiation of the MDP. As soon as we have the results on the negotiation of MDP, we will begin to have, I would say, a closer time or meetings with the new administration. But in general terms, I could tell you that today we are really focused on the MDP and In the other hand, or one of the partners say, how important are going to be the efforts on the new administration? I would say that for the moment, the only infrastructure plans that we have already here are more focused on trains and passenger trains rather than other things. So I'm not pretty clear which is going to be the focus. I would say the complete plan for the development of infrastructure around the country and specifically about the airports. But in general terms, at least what we are hearing is more related to passenger trains rather than airports. In terms of what is happening in Mexico City and the possible bottleneck, first of all, today, on the short term, difficult to analyze which could be the impact because there's, I would say, a lack of enough seats related on the engines of the 320. So it's not really clear which could be the impact in the future. But in general terms, what we have experienced in the last years is an increase on the strength of Guadalajara Airport in terms of a hub. As you know, in the last I would say two years, we opened for the first time direct routes to Canada, to Spain, to Colombia. So in general terms, what we are seeing is that while Ajara is continuing to strengthen their capabilities to be a more important hub. So in that, What I'm thinking is in the coming years, depending for sure on how the economy of the central area of Mexico and the economy of the specific of Jalisco, Guanajuato, Aguascalientes, in terms of the general performance of the area, combined with the decision of allocation of the fleet of some specific airlines, as it could be Volaris in Guadalajara, We will continue to see the strength of the capabilities of HOP on Guadalajara Airport.

Perfect.

Thank you very much.

Our next question comes from Jens Steiss with Morgan Stanley. Please go ahead.

Yes, hello. Congrats on the results and thank you for taking the time for the questions. I just very briefly on the EBITDA guidance you already alluded to. I think it's quite impressive the step change it represents versus the first half growth, which I think is closer to minus 5%. And your guidance is implying that in the second half of the year, EBITDA would grow at around 5%, if I'm not mistaken. And the new acquisition... I think we've got around 2% of consolidated EBITDA. So how do we get from the minus 5% current run rate to the plus 5% in the second half of the year?

Sorry, Jim. Sorry, Jens. Sorry to interrupt. The sound is not very good. It's cutting off. So I don't know if you can write down the question list. But in the webcast, please. Because it sounds not .

Yeah. Perfect. It is not better? Okay. I'll send it to you, but all right.

Okay. .

Our next question comes from Fernanda Regia with BTG. Please go ahead.

Hello. Can you hear me?

Yeah, perfect.

Okay. Thank you for taking my question. Two from our side. The first, thinking on the commercial revenues, while it's been impressive, the top line growth that you're targeting for this year, thinking regarding next year, could you comment if you think this growth is sustainable? How should we think about the commercial revenues per passenger going forward? And second, on capital allocation, could you give us some color if we should expect other airports should be under analysis. You already mentioned about the one that you were selected as a preferred bidder, but thinking of other airports, and also if we could expect other deals like the GWTC that you just announced. Thank you.

Thank you, Fernanda. This is Raul. In terms of the commercial revenue, We think that's gonna be, in terms of the ratio, gonna be sustainable in the long term. Oncoming year, we will see the opening of some additional areas, and then the 100% of the result in some of the areas that has just opened on the mid of this year, for example. So in general terms, we think that the double-digit growth trend on commercial revenues will be sustainable on coming years and years forward, for sure is related or highly related with the performance on traffic. So one of the key factors to really understand how to see on the long term the growth on commercial revenue is related with bringing back all the fleet that is down for the engines problem. So as soon as we begin to see the coming back of the seats, we think that the results on commercial rail use could be even better. In terms of other opportunities, as we just say we are just going really, really deep in the Turks and Caicos opportunity. But for sure, we are reviewing always all the different options of possibly opportunities of investment in airports. in the region, we are all viewing all the times any kind of opportunity there. For the moment, the only one that we have in terms of airports that be in our pipeline is the one related with Turks and Caicos. In terms of other similar acquisitions as could be GWTC, I would say that all the times our new business officer is looking for different opportunities, that could be in some way aligned with the kind of profit that gap needs for being created in value. But it's, I would say, a continuous process that is happening in our business. So that is in general terms.

Thank you. Our next question comes from Jay Singh with Citi. Please go ahead.

Thanks for taking my question. It's Jay dialing in for Stephen Trent.

I guess you already answered my question on the Turks and Caicos situation, but I also wanted to ask, do you have a strong preference for the dual-till regulatory structure, or would you also consider single-till or inflation-based models?

Thank you. Thank you, Jay.

In general terms, the model for stocks and K-cups, in terms of regulatory model, it has all the inflationary review for the next 30 years, mainly. You have some commitments of capex that happens on the first moment of your original proposal. And on the future, there's not like reviews of market plans or review of ties. All the ties will be only review in terms of inflation on the future on that specific model. Yes, and I will add only that the upside or the potential upside in this airport is in the commercial revenue and also in the cost of operations. that could have some efficiencies. Yeah, we just say, having what I was saying, we are really comfortable about our knowledge in the Caribbean market, just for the experience of the two airports in Jamaica. So we think that we could be really competitive on this bidding process, just taking account all the the experience that we already have operating in the region.

Very cool. Thanks, guys.

Our next question comes from Gabriel Himelar with Scotiabank. Please go ahead.

I think for the call, just a quick follow-up question. Can you give us a bit of color about how the Pratt & Whitney engines have been affecting the network and the traffic? I mean, Volaris has shown a decrease in traffic. And also, what are your expectations on the acquisitions on GWTC? What's the expected revenue payout you're expecting to receive?

Thank you. Thank you, Gabriel.

As you know, the impact on the engines began on September of last year. What we think on this 2024 that the worst part will be on the third quarter of the year when we're going to see the full impact of all the fleet that is rounded for the engines program. After that, for the fourth quarter, we want to have a better comps. So in some way, we're going to begin to see some positive numbers related with two factors. One, a better, easier comps. But second, there's some specific additional planes arriving, mainly for Polaris and Iberobus, that in some ways helping for some, to add some capacity. We think that gradually all 2025, we're gonna see a recovery, a rather recovery of the fleet from mainly the boat companies that be more affect, Volaris and Vivarabus. So we think that at least all the 2025 will continue affected and we will see a full comeback of total seats most close to the half of the year on 2026. But again, it depends on the times and delivery of the already worked engines for Pratt & Whitney. But in general theory terms, we expect that for the first half of the 2026, we will recover the full capacity in our airports. Okay, thank you. In terms of GWTC... Yes. Hi Gabriel. This is Raul. Regarding GWTC, we are having unexpected revenues above of 2023, around 10%. We are now taking control of this new asset, and we are reviewing the potential growth of this business. For now, our estimate is around 10% above of 2023 in terms of revenues.

Okay, thank you.

Our next question comes from Andresa Baroto with UBS. Please go ahead.

Hi. Good morning. Thank you for taking my question. I have two quick ones here on our side. First one, traffic as well. Right now we see that capacity is being restricted by the impacts of P&W engineering inspections. But we are also increasingly seeing worldwide concerns about a weaker demand. So I don't know if you have any take on that. I know it's probably harder to tell right now, which could be the impact of demand considering the capacity constraints And my second question is regarding costs. Since we've seen strong cost expansion in the quarter, so just wanted to know what can we expect in the coming quarters regarding costs? Thank you.

In terms of the traffic address, as you perfectly say, I mean, the capacity constraint related with the product witnesses I mean, clearly in the market. And it's not, I would say full transparency or full knowledge about which gonna be a specific the time for the recovery of everything is like, I would say a moving target of what we could see there. But also, as you know, for instance, announced that the delivery in the coming years lower than the original expectation of new deliveries, that will also bring some kind of pressure to the capacity of some of our major airlines as Volais and Ibaribus, because as you remember, a couple of years ago, both airlines announced big deliveries with Ibaribus. So, I think that at least the coming year, we will feel pressure about the capacity and availability of additional fields that can come to the market, mainly related with what is happening with, for sure, Pratt & Whitney, but also what could happen and the times of delivers in the future, mainly from Narebu. So in general terms, our expectation, generally that the next year, in general terms, we will, continually seeing some pressure in terms of capacity, but in some specific rules, there's still room for growing in terms of low factors in one hand, and in other hand is we are seeing different airlines trying new rules in our net. For instance, we have American Airlines that for the first time, carrier operates in Tijuana airport for the first time in the history. And it's doing well. We are the only service to Phoenix, but also Alaska already announced the beginning of our route from La Paz to Los Angeles. That is, I would say completely a brand new route. We also have the announcement of I know Mexico for different international routes from our airport. So what I'm seeing for the moment is that it's more clear that at least some international market, we will see some increases on capacity on the coming years, that the domestic market will be more pressure for all the capacity issues at least in the coming year. But in general terms, I think there's still been is some room to growth that comes from new opportunities of new routes and also some space on low factors that will bring us some rolling. And for sure, the easier comes in terms year to year. But in general terms is what I'm seeing on the capacity, possible growth on coming years. Yes. This is Saul. Your questions about the cost side, as we explained already, we have some affectation in terms of labor law, not only in Mexico, but also in Jamaica. And we are having additional cost and pressure in terms of inflation. Besides that, once we have more spaces and more areas operating, that we have in Guadalajara airport with the different expansions, the cost will be increasing. The operation of the tail also implies a cost of operation. Just have in mind that the margin in the hotel is around 35%. So it's different at the margin that we have. So it dilutes the margin we have. And we have additional costs in maintenance and additional costs in terms of the electricity. So the tariffs are increasing in Mexico and also are increasing significantly in Jamaica. So we have pressure for all the sites in terms of the operation. It will be normalized, let's say, once we cross the year, once we finalize the tariff negotiation And obviously once we see that the revenue related with these functions that we have in the different airports. So I think the point is, it is an extraordinary quarter. It's not obviously the regular quarter that we just had. So it's an extraordinary and will be recovered in the next year.

Perfect. Thank you very much.

Your next question comes from Andres Aguirre with GPM.

Please go ahead. Andres Aguirre, your line is open.

Please check your mute function.

Hi, can you hear me? Okay. Thanks for taking the question. Can you clarify how GWTG will be consolidated in the financial statement? Will it be left side on the financial value or another category?

Andres, this is Alejandra. I am so sorry, but your line is not really clear. Can you try to repeat it if we can understand better? Yes. Or write it in the word count?

Sorry, right there. Can you hear me now?

A little better.

Sure. I'll write it in the webcast. Thank you.

OK. Thank you, Andre.

We'll move next with Pablo Montivais with Barclays. Please go ahead.

Hi, Tim. Thanks for taking my question. Just kind of a follow up to previous questions. What is your take on Volaris' updated guidance on capacity? Have you talked to them? And if so, have they provided to you some insights on what could be the impact for the route that Volaris is operating with you? Because it seems that they are a bit more positive for capacity for the second half of the year.

Thank you.

Thank you, Pablo. This is Raul. Yeah, we are, I mean, in a daily basis with communication with BOLARIS about their operations. For sure in the long term, the coming year, we're still seeing that there will not be the full recovery of the feet. But one of the parts that we are seeing that is in some way interesting to follow with BOLARIS, they have adapted some of their routes. have, I would say, a better use of their fleet, some additional hours of flying. The available seats, the ACMs are, I mean, in some ways expecting to be for the last while growing a little bit. So in general terms, let me put it in this way. Volaris has made the correct moves trying to support the most dense or bigger routes that have, in some way, the better possible demand. And in general terms, that gives us a little better position on the last quarter of the years in terms of traffic. But again, on the long term, I mean, as soon as the P&W engines issue is solved, it's not fully solved, we will continue seeing some lack of capacity and for sure a decrease in general terms of the capacity in our airports for at least the coming year. But yeah, we are a little more positive for this second half of the year, talking about the specific of life.

Perfect, thank you.

Our next question comes from Alan Macias with Bank of America. Please go ahead.

Hi. Good morning, and thank you for the call. Just at this point, can you provide a long-term sustainable EBITDA margin target that you might be looking at?

Thank you. Hi, Alan. This is Saul.

Well, this year will be complicated. As you know, all the issues that we have ongoing, the discounts in passenger charges, the different issues related with the cost, the decrease in passenger traffic. But for 2025, once we have the new tariff, we will be close to 68%. 60 plus less 1% would be the normalized EBITDA margin.

Thank you.

Thank you. And now I will turn the call over to management to take the webcast questions.

Thank you, Nikki. And the first question we have is from Bernardo Malpica from Santander. And he's asking if aeronautical revenues fell 7.7% while traffic fell 4.1%, why was the fall in aeronautical revenues worse than traffic? What is the mix? Discounts?

The first part is related for sure with it's a mix of things. The first one is the fulfillment of the maximum target that is related in one hand with the with discounts mainly, also we have in general terms and 95% of fulfillment on the maximum time. And that is the biggest part of the explanation of the difference between agronautical revenues and passengers growth. Also, as you remember, Puerto Vallarta and Cabos both have the most, the biggest maximum tariff in our net and both of these airports has zero increase. So in general terms, it's a mix between the composition of the maximum tariff in our portfolio and also the 95% on the fulfillment of the maximum tariff.

Thank you, Raul. Then we have another one from David Cruz from Grupo Val. Regarding the purchase of Guadalajara WTC, how do you expect that this will change the estimate of results for 2024?

Hi, David. This is Saul. Well, it is already included, this expected revenue and EBITDA for this new asset. And as we mentioned, will be consolidated and integrated to our figures starting on July 1st. So it is already included in the guidance. And as we mentioned, the total revenues will be around 10% above of the revenues in 2023.

Thank you, Saul. The third one is from Alina Sir from Capitolo. Will GAP pay concession fees and technical assistance fees over GWTC revenues?

Thank you. I mean, in terms, GAAP will not pay additional concession fee on technical assistance over the GWTC revenues. But it's important to remember that GWTC is a concession. So they already pay a concession fee for the authority. Okay. So GAAP will not pay additional concessions fee, but in the cost of WTC, they are already paying a concession fee because it's a fiscal concession.

Thank you, Raul. Now we have the question from Jens from Morgan Stanley. Thank you, Jens, for writing this. It says, my question was related to your new EBITDA growth guidance, which implies roughly 5% year-over-year growth in the second half of 2024 versus minus 5% in the first half of 2024. The new acquisition adds around 2% of EBITDA growth, right? So what other variables do you see improving in second half versus first half that we need to consider?

Hi, Jens. This is Saul. We don't have any other major changes. GWTC consolidation is important. It's a new asset. It will be integrated. It wasn't included in the first half in the results of the company. So we don't have any other issue besides the effect of the capitalization of the 4%. was already included in the first half. And I would say that probably the effect on the increase in the commercial revenues that was included in the new revised guidance.

Thank you, Saul. Then we have Ali Nasser from Capitola. The midpoint of your guidance implies a growth of 5% year-over-year on a visa on the second half of the year. How exactly will this be achieved given the decreasing tariffs in tax year over year?

This is basically because the consolidation of the new cargo company, GWTC, that will represent around 300 million pesos of EBITDA that will be integrated into the fears of the company. That's the main reason. Obviously, the performance of the commercial is helping, but basically, it's the main reason of this increase.

Thank you, Saul. And the last one, it is from Mauricio Wittrago from AM Advisors. When do you expect to see the full benefit in revenues from the expansion in Guadalajara?

Thank you, Mauricio. I mean, yesterday we already just opened some of the new... commercial areas on Guadalajara Airport. So let me put it in this way. On August of this 2024, will be 100% of the new commercial spaces will be operating. So from that, we'll have the full year of operation of the new areas that happened in 2020, August of 2025. I mean, the first full year of all the concepts operating.

Perfect. Thank you, Rowan. With this, we end from the webcast questions, so I will turn the call to Nikki.

Thank you. And we show no further questions over the phone at this time. I will turn the call over to management for closing remarks.

Thank you again, everyone, for joining us today at our second quiet results conference. On GAP's behalf, we wish you a great day. Thank you.

This also concludes today's program. Thank you for your participation. You may disconnect at any time.