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

Ladies and gentlemen, this is the conference operator. Thank you for standing by. The call will begin in a few moments. Again, this is the conference operator. Thank you for standing by. The call will begin in a few moments. you Good morning and welcome to GAP's third quarter 2025 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 my pleasure to turn the call over to GAP's Investor Relations team. Please go ahead.

Thank you, and welcome to GAP's Third Quarter 2025 Conference Call. Prior to introducing GAAP's management team, I'd like to take a few moments to mention the forward-looking statements as described in the financial disclosure statements. Please be advised that any comments made today may not account for future economic circumstances, industry conditions, the company's future performance, or financial results. As such, any information discussed is based on several assumptions and factors that could change causing actual events to materially differ from current expectations. For the complete note on forward-looking statements, please refer to the quarterly report. Thank you for your attention. Our speakers today from GAAP are Mr. Raul Travuelta, Chief Executive Officer, and Mr. Saul Villarreal, Chief Financial Officer. At this time, I'll turn the call over to Mr. Travuelta for his opening remarks.

Thank you, Maria. Good morning, everyone, and thank you for joining us today. I am pleased to share with you the operational and financial highlights for the third quarter of 2025. Overall, and despite the passenger traffic slowdown in this quarter, this was another solid quarter for GAAP, marked by continued revenue growth and profitability, as well as important progress in terms of the company's investment program and financial strategy. Let me start with the passenger traffic. During the quarter, international passenger traffic declined. mainly due to the immigration-related challenge and a more restrictive perception under the current U.S. administration, which has affected the behavior of VFR and leisure passengers. In addition, the ongoing Bratton-Whitney engine issues continue to limit Volaris and VivaVerbo's seat capacity recovery, as carriers have indicated the expect to fully recover their fleet by 2027. Despite this challenge, Total passengers traffic across GAAP's 14 airports increased by 2.5% compared to the same period of 2024, reaching a total of 15.8 million passengers in the quarter. This growth was supported by new routes and additional frequencies, which helped offset the decline in international travel and reflect the sustained recovery in domestic demand. Looking ahead, Our strategy remains focused on connectivity and diversifying our network. During the four quarters, annual international routes to Canada will be launched, three from Guadalajara, three from Puerto Vallarta, and two from Montego Bay, which will enhance passenger traffic and support demand during the high winter seasons. Furthermore, for the first time in the history of Los Cabos, it will be connected directly to Panama. expanding our network into Central America and thereby extracting in GAAP position as a regional hub. Turning to total revenues, this increased by 17.4% versus third quarter 24, driven by the solid performance of both the aeronautical and non-aeronautical business. Aeronautical revenue grew by 18.3%, reflecting the new maximum tariff The original plan was to implement the increase approved in two phases, 15% in March of 2025 and the remainder during 2026. However, after reviewing traffic performance and load factor strength during this year, we moved forward with a second adjustment on an average of 7.5% starting September 1st. In aeronautical revenues, increased by 15.6 percent, both by the strong performance in both Mexico and Jamaica. Revenue from business operated directly by GAP rose by 30.1 percent, increased mainly due to the consolidation of the cargo and bundling warehouse business, which contributed 559 million pesos. Revenue from third-party operators increased by 4.7 percent, and include the opening of new commercial spaces and the renegotiation of contracts under better market conditions. It is worth noting that the strongest performing business lines were Food and Beverage, Retail, Duty Free, Grant Transportation, and Timeshares. Beyond the quarterly results, new aeronautical revenues continue to drive diversification and resilience in our business model. The expansion of commercial areas and the integration of the new services such as cargo operation, strengthens GAMP's long-term revenue base. Looking ahead, we expect to continue optimizing our commercial offering and leveraging passenger flow growth to enhance value creation across all the airports. Moving on to the cost, the cost of services increased by 14.1% compared to the same period last year. This increase reflects the impact of operation of jet bridges and airport buses. A task that was previously managed by third parties but must now be operated directly by GAP due to the change in regulations. Without this cost, cost of services would have increased by around 4.8%. Despite this increase, our focus on street cost discipline remains a priority. Our goal is to maximize operational efficiency and long-term sustainability. while ensuring that service quality and safety standards across our airports remain among the highest in the region. Turning now to profitability, EBITDA grew by 12.8%, reaching 5.1 billion pesos, with an EBITDA margin of 64.3%, excluding IFRIC troughs. Margin was lower than in 2024, reflecting mainly the impact of the change in concession fee for our Mexican airports from 5% to 9%, which was payable finance 2024, but reflected in our P&L in 2025. Regarding our financial position, we remain in strong liquidity position with 11.7 billion in cash and cash equivalents as on September 3rd. In the third quarter of 25, we paid the second and final dividend installment of 8.42 pesos per outstanding share which was approved at the Annual General Ordinary Shareholders Meeting. During the inquiry, we successfully issued two new bond certifications under our long-term program for a total amount of 8.5 billion pesos. The proceeds are used to finance approximately 7 billion pesos in capital investment and to repay 1.5 billion pesos bank loans with Santander. We also refinanced our US dollar 40 million credit line with Banamex, extending its maturity to 2030. Active management of our capital structure strength, the balance sheet, and provides us with the flexibility required to execute our long-term investment commitments and potential inorganic growth. In terms of CAPEX, during the first nine months of the year, we invest approximately 10 billion pesos. Most of these investments were related to the early stage of major infrastructure projects under the Master Development Program, including terminal expansions, area site improvement, among others. Looking ahead, we remain cautiously optimistic. Macroeconomic uncertainty and exchange rate volatility may create a short-term challenge. However, it is important to highlight that GAPS continues to benefit from a resilient domestic market, a diversified portfolio of airports, and a disciplined financial management. Furthermore, our strong financial position and continual growth in both aeronautical and non-aeronautical revenues allows GAPS to maintain its leadership position in the region and thus continue generating long-term value for our shareholders. Before closing, I would like to provide an update on our strategic expansion opportunities. The process related to Turks and Caicos tender remains ongoing. We submitted our bid last year, and while evolution continues, no resolution has been announced yet. We are still analyzing the potential acquisition of Motiva Airports, including the information available in Data Room, reviewing transaction details, and developing our financial model. As always, the market will be duly informed of any development and we will be, as always, continue to focus on value creation. Thank you again for your time, operator. Please open the line for questions.