Good day, ladies and gentlemen, welcome to ASUR's second quarter 2023 results conference call. My name is Kevin. I will be your operator. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of today's conference. If you would like to ask a question, please press star followed by one. If you want to withdraw your question at any time, please press star followed by two. If you are using a speakerphone, please lift the handset before making a selection. As a reminder, today's call is being recorded. I would like to turn this call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead, sir. Thank you, Kevin. Good morning, everyone. Before I begin discussing our results, let me remind you that certain statements made during this call 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. As usual, additional details about our quarterly results can be found in our press release, which was issued yesterday after market close and is available on our website in the Investor Relations section. Following my presentation, I will be available for a Q&A. Before getting into a discussion of the quarter results, let me start today's call with recent developments in terms of capital allocation. Through a US subsidiary, we have recently entered into a joint business investment agreement with Grupo Abrisa and CVC ONE. One, to develop and build a private international airport in Bávaro, Dominican Republic. This entailed an initial investment by AZUR of $17.8 million that was paid in June, funded by internally generated funds. Once the construction of this airport is finalized, we expect to maintain a 25% ownership stake in the venture, representing a total estimated investment for AZUR of $66 million. The remaining $48.2 million to be invested by AZUR will be applied to the construction of the airport. The Abrisa Group is a well-respected and diversified business group based in the Dominican Republic, with a leading market position in construction, real estate development, health, and education. Since its foundation, the Abrisa Group has been committed to helping people acquire basic goods and services such as housing, healthcare, and education. The Abrisa Group were the founders of Aerodom in 2002, which operated successful airports in the Dominican Republic, among them, Las Américas Airport in Santo Domingo, that was sold to Advent International in 2008. Today, Punta Cana is the second most important tourism market in Latin America after Cancun and presents a very attractive growth opportunity. To put this in perspective, lodging capacity in Punta Cana is around 47,000 hotel rooms and is expected to double by 2040. This compares with 120,000 hotel rooms in the Cancun region. In terms of passenger traffic, Punta Cana receives approximately 8 million passengers annually, with traffic expected to expand to 13 million by 2040. With capacity to serve 8 million passengers annually, Bávaro International Airport will provide modern and efficient facilities, offering a superior experience to both passengers and airlines, while acting as a catalyst for local business. The airport will be conveniently located approximately 12 kilometers from the current tourist hotel area and 32 kilometers from Punta Cana International Airport. The airport will be situated right between Bávaro Beach and the fast-growing new tourist area to the north of Bávaro, around Playa Macao and Uvero Alto. This area is currently experiencing an increase in hotel development to absorb the same growth in tourists expected to continue over the next three decades in this region. The JV already owns the plot of land to develop the new airport, which was approved by the government. At the moment, it is in its initial phase of project planning and development, with the construction expected to start once this phase is finalized and authorized by the government. We expect Bávaro International Airport to begin operations approximately three years from now. Second, at the annual general meeting held on 26 April, shareholders approved the distribution of an ordinary cash dividend of MXN 9.93 per share and an extraordinary cash dividend of MXN 10 per share, to be paid in November. Now, moving on to Azul's operating and financial performance for the quarter. Before starting, note that all comparisons are year-on-year, unless otherwise noted. As anticipated in our prior call, we saw a slowdown in total passenger traffic growth this quarter of nearly 4%. This was a record high for a second quarter at 17.3 million travelers. Recall that in the first quarter 2023, traffic benefited from easy comps from Omicron during the first months of 2022, while this quarter we are experiencing the negative effects of the suspension of two Colombian airlines earlier in the year, which is impacting our operations in that region. On a consolidated basis, the share of domestic traffic over total traffic remains stable year-over-year at 63% of total traffic during the second quarter. Moving next to a review by country, starting with Mexico, we posted 9% growth in passenger traffic. This is moderating from the double-digit levels experienced in the first quarter due to the easy comps because of Omicron in 2022. Domestic travel was up in the high teens, 17%, with traffic at TERRA back to pre-pandemic levels. International traffic was up in the low single digits, mainly driven by Canada, which recovered pre-pandemic levels during the first quarter. Puerto Rico and the US posted growth of 15%, with domestic traffic up 12% and international traffic up 43%. Total passenger traffic in Colombia contracted nearly 18%, with declines of 20% and 4% in domestic and international passengers, respectively. As mentioned in our prior call, this reflects the suspension of operations of Viva Air and Ultra Air in the first quarter, which represented 17.4% and 1.9% of 2022 passenger traffic in Colombia, respectively. The increase in value-added taxes from 5% to 19% at the beginning of the year also impacted traffic trends. Turning to the P&L, recall all references to revenues and costs exclude construction revenues and construction costs. Also note that Puerto Rico and Colombia figures reflect the strong Mexican peso, which appreciated 15% and 18% versus the US dollar and the Colombian peso since the end of the second quarter last year through the end of the second quarter this year, respectively. Now, starting with the top line, revenues increased 5% to MXN 6 billion in the quarter, mainly driven by growth in our aeronautical and non-aeronautical revenues in Mexico, while Puerto Rico and Colombia posted declines of nearly 1% and 16%, respectively. Overall, Mexico represented 74% of total revenues, while Puerto Rico and Colombia accounted for 16% and 10%, respectively. Note that in local currency, revenues were up nearly 13% and 6% in Puerto Rico and Colombia, respectively. Commercial revenues were up 6%, doubling passenger traffic growth, driven by increases of 8% in Mexico, 6% in Puerto Rico, more than offsetting the 15% decline in Colombia. On a per passenger basis, commercial revenues increased to MXN 122, up from nearly MXN 120 in the year ago quarter. By region, figures range from MXN 142 in Mexico to MXN 146 in Puerto Rico and MXN 41 in Colombia. In local currency, Puerto Rico and Colombia posted increases in commercial revenues per passenger of 5.1% and 31.3%, respectively. These proposals reflect our sustained focus on expanding our commercial offerings to further enhance the travel experience of our passengers across our airports network. In this respect, during the last 12 months, we opened 20 new commercial spaces in Mexico, 4 in Puerto Rico, and 44 in Colombia. Turning to cost, total comparable operating expenses were up 8% compared to 5% revenue growth in the quarter. Note that comparable costs exclude the effect of MXN 252 million expense recovery this quarter, resulting from the application of the CRRSAA Act in Puerto Rico, compared to the benefit of MXN 175 million in the same quarter last year. In Mexico, expenses rose 16%, above the 10% revenue growth. While we maintain tight control on expenses, the increase was primarily driven by the high cost of services, reflecting the effect of a 20% increase in the minimum wage at the beginning of the year. In turn, strong capital investments last year drove higher amortization expenses. In Puerto Rico, costs declined 15%, benefiting from a higher expense recovery under the CRRSAA Act this quarter compared to 2Q22. Excluding this recovery in both periods, expenses would have increased 11%, as higher professional fees and maintenance more than offset savings in personnel and energy costs. Costs in Colombia declined 8%, as provisions for bad debt in connection with the suspension of two local airlines were more than compensated by declines across most of the line items. Consolidated EBITDA for the quarter was up 3%, reaching MXN 4.2 billion, mainly driven by higher profitability in Mexico, up 9% to MXN 3.3 billion. In turn, consolidated adjusted EBITDA margin declined 140 basis points to 69%, reflecting contractions of 100 basis points in Mexico to 74.3%, 430 basis points in Puerto Rico to 54.5%, and 530 basis points in Colombia to 52.6%. To be clear, we delivered another good quarter in Mexico, affected by the strong peso and the effects of the two Colombian airlines that stopped operations during the quarter. Moving to our financial position, we maintain a robust balance sheet with cash and cash equivalents over MXN 14 billion and a healthy debt profile after paying the ordinary dividend at the end of May, which amounted to a total of nearly MXN 3 billion. Accounts receivable increased 7%, driven by half passenger traffic in Mexico and Puerto Rico, together with combined receivables of MXN 23 from the two local airlines that were suspended earlier in the year. Capital expenditures in the quarter totaled MXN 153 million. Of these, 50% was allocated to Mexico, 46% to Puerto Rico, and the remaining to Colombia. We are seeing healthy passenger traffic trends, we have a solid financial position, and we are investing for the future growth. This ends my presentation. Kevin, please open the call for questions. Certainly. We're now beginning conducting your question and answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. If you'd like to be removed from the queue, please press star two. As a reminder, please pick up your handset before pressing star one. Our first question today is coming from Rodolfo Ramos, from Bradesco BBI. Your line is now live. Thank you, Adolfo. Good morning. Thanks for taking my question. I have a couple. The first one is on the Bávaro Airport. Can you please repeat, the level of passenger that you're targeting over the long run, and when you expect to conclude, and also, if there is anything you can share on the economics, the amount of income that you expect to attain once it's stabilized? That'd be my first question. Okay. What I have said is that we are working in a project that will have an 8 to 8 million passengers capacity day 1 in the infrastructure of the airport. In terms of economics, it's too early to tell. We are 3 years away from that moment. Thank you. The second question I had was on your MDP. I mean, we have seen this administration, you know, be more confrontational with concession-based businesses. You know, we've seen headlines about some industry players pushing back against the current level of tariffs. I mean, this is not just for you, but it for the industry broadly. Can you talk about your expectations on your MDP? Anything that you've seen recently, and whether you've seen any changes on whether it's the process or methodology, anything versus your previous negotiations? Thank you, Adolfo. So far, we have not seen anything in comparison with the previous negotiations. As of today, we have the process, or we have together with the authorities, conducted a process to visit all the airports and review each one of the projects we have proposed. During the second half of the year, we will go to the economics in terms of the passenger traffic, the discount rate, and finally, the final calculation. So far, I can say to you that I don't see any change in comparison of how it has been in the past. Thank you. As a reminder, that star 1 be placed in the question queue. We ask you please ask 1 question, 1 follow-up, then return to the queue. Our next question is coming from Guilherme Mendes from J.P. Morgan. Your line is now live. Hi, Adolfo. Good morning. Thanks for taking my question. My first question is a follow-up to the previous one on the Dominican Republic airport. I understand the 8 million passengers a year, but just thinking of the ramp-up of this operation, so by the time it's concluded three years from now, how fast will you reach this 8 million? How is the competition? I mean, it's only 30 kilometers from the Punta Cana International Airport, so how should we think about the competition in the region? The second one is regarding Colombia. I mean, how do you see the outlook in terms of traffic performing post the embroglio with the two airlines that went bust? I mean, how fast would we expect the recovery in traffic in the region? Thank you. You're welcome. In the case of Bávaro today, the Punta Cana Airport is moving at approximately 8 million passengers. We are constructing, or we will be constructing, an infrastructure with a capacity of 8 million. Normally, I would say, technically speaking, you construct the infrastructure day one with a target of, let's say, between five to seven years. In the case of Colombia, what I can say to you is that I don't see how the other two airlines, Avianca and LATAM, will be able to recuperate in a fast way what we have lost from Ultra Air and Viva Colombia. My expectation is that we will be affected for the rest of the year. Okay. Thank you. You're welcome. Thank you. Next question today is coming from Javier Gayol from GBM. Your line is now live. Hi, Adolfo. Thanks for taking my question. I have a follow-up on the Bávaro airport. If you could just help us understand the regulatory framework of that venture, is there any, at this time in your joint venture, are there any options that you have to maybe buy 100%, or is it anything like that structure into the concept of the joint venture that we should be aware of? Thank you. For the moment, that's what we have. We have been invited to this project. We will be working together with them for the design and the future operation of this airport. As I have said to my initial remarks, what we are expecting to have is 35% of this airport. Of course, in the future, it can grow, we do not have any option at the moment to increase our participation in that. Thank you. On the regulation of the airport, is it similar to what we should expect, like Mexico, like Colombia, like Puerto Rico? What sort of scheme are you guys looking at over there? It's not equal to Mexico nor to Colombia. The government has a say on the passenger fees and some other fees. I would say in general terms, it's a dual-till system, and of course, being a private airport is not exactly the same as what we have in Mexico, so the regulation is not so, I would say, strict in that sense. But it's a dual-till system where the government has something to say in some specific tariffs. Okay. That's fair. Thank you. You're welcome. Thank you. Next question today is coming from Anton Mortenkotter from GBM. Your line is now live. Hi, Adolfo. Thanks for taking my question from us on your results. Just two quick ones. One is, I mean, besides the Tuesday effect on your peso-denominated revenues, have you seen any impact of maybe less consumption at some of your airports or something like that? No, I have not seen anything like that. Of course, as I have said in to my initial remarks, if you consider the peso appreciation from the US dollar and the Colombian peso of 15% and 18% during the last year, of course, that has an implication, an important implication, in the results I am presenting today, when we transform all of these to peso. That's what I said to my initial remarks, that the commercial revenues, the passenger in local currency have increased significantly. If we see what has happened in the case of Colombia, it was an increase of 31%. When you translate this into Mexican pesos, apparently this appears, you know? Yes. Thank you. That's pretty clear. The other one is related to the service cost. We saw an increase quarter-over-quarter. Should we expect these levels to be maintained or if you could provide some color there? Well, the important effect that we saw in the case of Mexico was at the beginning of the year, due to the minimum wage increase by 20%. That affects basically services like cleaning and security. Also, some increase in costs of personnel by salary increases, of course, not with this size. Yes, we will be affected from now on, in terms of the growth you are seeing during the 2Q. Okay, just another quick one. I also saw some really high cash taxes during the quarter, quite different from previous quarters. You could tell us a little bit about why? Well, that has to do with the level of revenues in the case of Mexico now. Probably, when you see the consolidation effect, the results are not so well in the other two airports, but they are in the case of Mexico, and that's why you saw an increase in taxes. Perfect. Thank you. Thanks, Adolfo. You're welcome. Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is coming from Jay Singh from Citi. Your line is now live. Thank you. This is Jay Singh from Stephen Trent team. My first question is, your Mexico CapEx was very low. Is this due to it being the final year of the Master Development Plan or something else? No, it's the last year of the MDP. The expected amount for the year is around MXN 600 million. Thank you. As a follow-up, is ASUR considering any expansion opportunities abroad, maybe airport acquisitions in Central America or the Caribbean? Thank you. Well, the only thing that we have today is what I just mentioned in the case of Aerodom. Thank you. Our next question is coming from Alan Macias from Bank of America. Your line is now live. Hi. Hi. Good morning, everyone. Thank you for the call. Just if you could give us a little color on international traffic to Cancun, how U.S. traffic from visitors from the U.S. has been acting up? Has it been decreasing? What do you see behind this? Of course, the Canadian traffic has recovered quite well, but are you seeing any effect in U.S. visitors besides a strong peso? Thank you. Alan, hi, good morning. I don't see any decrease in the U.S. traffic. I would say, it's a small increase if we compare the second quarter with the previous year. In the case of international traffic during the quarter, as I had mentioned during my initial remarks, most of the growth came from Canada, some growth from the U.S., and a slight growth from Europe, a decrease in Latin America. Thank you. Just, can you give us the level or the average of Mexican flying from Cancun to the US? Is that a significant amount of traffic, or has that been growing? Well, if you are trying to ask about Category 1, the traffic between U.S. and Cancun mostly is traveling with a U.S. carrier. If we go back in time, May 2021, when Mexico lost its Category 1, and it was in Category 2, we issued a 6-K saying that 0.5% of our traffic to and from our airports in Mexico to the U.S. are traveling with a domestic carrier. 99.5% is traveling with a U.S. carrier. Thank you. You're welcome. Thank you. As a reminder, that's star one to be placed into question queue. One moment, please, while we poll for further questions. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments. Thank you, Kevin, and thank you, all of you, again for participating in the second quarter results conference call. On behalf of Azul, we wish you a good day and goodbye. Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.