Greetings, and welcome to the OMA Third Quarter Conference 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. It is now my pleasure to introduce Emmanuel Camacho, Investor Relations. Thank you. You may begin. Thank you, Doug. Hello, everyone, and welcome to OMA's Third Quarter 2023 Earnings Conference Call. Participating today are CEO Ricardo Dueñas and CFO Ruffo Pérez Pliego. Please be reminded that certain statements made during 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. With that, I'll turn the call over to Ricardo Dueñas for his opening remarks. Thank you, Emmanuel. Good morning, everyone. We appreciate your presence on this call today. I will begin by discussing the impact that Hurricane Otis had in our Acapulco airport, and then we'll comment on recent developments in the regulatory landscape of our airport concessions. Afterward, we will move on to our quarterly results. On the night of October 25, Hurricane Otis struck Acapulco, Acapulco City with Category 5 intensity. The hurricane caused some damage to the terminal building of the Acapulco airport. However, the airport remains operational and is currently focused on humanitarian operations. We are working closely with local and federal authorities to fully restore the regular operations of the airport, which we expect to be relatively soon. In 2022, Acapulco contributed with 3.6% of our total passenger traffic and 3.4% of OMA's total aeronautical and non-aeronautical revenues. Regarding recent regulatory changes, on October 4, 2023, the Civil Aviation Agency, an autonomous body under Ministry of Communications and Transportation, notified us about immediate modification established in Annex 7 of the Tariff Regulation Bases of our airport concessions. Over the two weeks that followed, we conducted a thorough review of these new guidelines and engaged in close and constructive communication with the ministry and the AFAC to clarify certain points. During these interactions, the Mexican government was open to dialogue, leading to agreements finally reflected in the modified basis that we received on October 19, and subsequently made public to the market. We don't expect significant impact from this. Another matter that I would like to mention concerns the concession tax. On October 25, the Senate approved the new 2025 Federal Duties Law. This law includes provisions to increase the concession tax from 5% to 9% based on airport revenues, effective January 24. It is worth mentioning that under new tariff regulation, the increase in the concession tax affecting the 2024 and 2025 period, will be recognized in the next tariff negotiation of 2026-2030 period through the Reference Value. It is also essential to understand that the concession tax is part of the calculation variables for determining maximum tariff. This new basis did not change this relative to the original basis. After all these events, we anticipate that OMA will uphold its commitment to adaptability, resilience, and the sustained and successful track record of its financial and operational results. Turning to our main third quarter of this year results. OMA continued to deliver solid financial and operating results during the third quarter. Adjusted EBITDA grew 33% in the quarter to MXN 2.5 billion, and Adjusted EBITDA margin reached 79.4%, largely as a result of the increase in both aeronautical and non-aeronautical revenues on our successful cost control strategy. In the third quarter, OMA's passenger traffic reached a record number of 7.4 million, an increase of 19% versus the third quarter of last year. Outstanding results were guided by the performance in Monterrey, which accounted for 62% of OMA's total passenger growth as compared to the third quarter of last year. The main destinations that drove traffic growth were to Toluca, Querétaro, Cancún, Santa Lucía, and Mexico City, most of them considered business routes. On aggregate, these five routes added 255,000 additional passengers in the quarter, an increase of 17% versus the third quarter of last year. Primarily, as a result of the strong passenger traffic performance, our aeronautical revenue grew by 31% in the quarter to MXN 2.5 billion. On the commercial front, revenues increased 24% compared to third quarter of last year, driven by restaurants, parking, car rentals, and VIP lounges. Occupancy rate for commercial space stood at 94.7% at the end of the quarter. Diversification revenues increased 8%. Our hotel services contributed most to this growth. In the second quarter of this year, occupancy rate at our Terminal 2 NH was 86.3%, while the Hilton Garden Inn Hotel had an occupancy rate of 73.3%. On the capital expenditures front, total investment in the quarter, including MDP, MDP investments, major maintenance, and strategic investments, were MXN 964 million. During the quarter, some of the most relevant projects we are working on are the expansion and remodeling of the Monterrey Airport Terminal A building, as well as Ciudad Juárez, Torreón, Culiacán, and Durango terminal buildings, reconfiguration of the Mazatlán terminal building, major rehabilitation and reconfiguration of platforms and taxiways in several airports, and construction of four industrial warehouses. I would now, I would now like to turn the call over to Ruffo Pérez Pliego, who will discuss our financial highlights of the quarter. Thank you, Ricardo, and good morning, everyone. I will briefly review our financial results for the quarter, and then we will open the call for your questions. Turning to OMA's third quarter financial results. Aeronautical revenues increased 31% relative to the third quarter of 2022, driven primarily by the 18.6% increase in passenger traffic and higher revenue per passenger. Non-aero revenues increased 17.6%. Commercial revenues increased 23.6%. The categories with the largest growth were restaurants, parking, car rentals, and VIP lounges. Restaurants and car rentals rose 40% and 28%, respectively, mainly due to higher revenue sharing and the impact of the opening of new spaces and improved contractual conditions on renewals. Parking increased 16.4% as a result of an increase in passengers and higher penetration rates in Ciudad Juárez, Chihuahua, Culiacán, Monterrey, and Reynosa airports. VIP lounges increased 31.5% as a result of the increase in passenger traffic and the opening of the Reynosa lounge in August 2023, as well as the Tampico lounge in May 2023, and Ciudad Juárez in November 2022. Diversification activities increased 8.3%, as strong hotel revenue growth was partially offset by a decline in OMA Carga, which was affected by a decline in revenues related to our ground import cargo. Total aeronautical and non-aeronautical revenues grew 27.9% to MXN 3.2 billion in the quarter. Construction revenues amounted to MXN 719 million in the third quarter, an increase of 10% as a result of higher MDP investment execution. The cost of airport services and G&A expense increased 2.8% relative to the third quarter of last year, mainly due to an increase in minor maintenance, contract service, and basic services costs as a result of higher activity in our airports and inflationary effects. Scheduled maintenance provision was MXN 95 million, compared to MXN 51 million in 2Q 2022. OMA's third quarter Adjusted EBITDA was MXN 2.5 billion, and the Adjusted EBITDA margin was 79.4%. Our financing expense was MXN 272 million, mainly due to a higher interest expense as a result of additional debt issuance and the higher cost of debt. Consolidated net income was MXN 1.3 billion in the quarter, an increase of 28% versus 3Q 2022. Turning to our cash position. Cash generated from operating activities in the third quarter amounted to MXN 1.3 billion, and cash at the end of the quarter stood at MXN 2 billion. On September 20th, we made the payment for the second installment of the ordinary dividends, amounting to MXN 500 million, in accordance with the resolutions of our shareholder meetings in April. At the end of the quarter, total debt amounted to MXN 10.7 billion, and we ended the quarter with a healthy net debt to Adjusted EBITDA ratio of 1.0x. This concludes our prepared remarks. Now, please open the call for your questions. Thank you. Ladies and gentlemen, at this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, you may press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Pablo Monsivais with Barclays. Please, please proceed with your question. Hi, good morning, Ricardo, Ruffo, and Emmanuel. Thanks for taking my question. I have two questions. The first one, if you have done a quick calculation of what would be your discount rate under these new rules, and how does it compares to the previous discount rate on the previous rules? And the second question is about what the media has been published on the 10% decrease of the TUA. Can you please confirm whether this increase in the TUA is in any way related to the new tariff methodology? Thank you. Hi, Pablo, this is Ruffo. I will answer your first question. The components for the calculation of the discount rate used in the maximum tariff are now clearly stated and less subjective to interpretation. But as you know, before, the discount rate was based on the yield of Mexican government bonds, plus a premium that was to be defined by the ministry. And now the new rate is established clearly the variables to be used to determine the discount rate. Based on our calculations, we do not assess a significant impact on the discount rate as a result of the changes that were made in the new tariff basis. Regarding your second part, Pablo, the discounts are totally unrelated from the new basis. Related to the aforementioned new regulatory guidance, there are other agreements we have made with regulatory bodies. These agreements entail a general 10% extraordinary discount in real terms for passenger charges on TUA, starting November and December of 2023, applicable to 10 of our airports. After application of discount, this discount in 2023, we expect to apply annual inflation adjustments on TUA. Other aeronautical tariffs, in addition to a TUA, are not subject to the discounts. It is also important to mention that as a result of the discount package previously mentioned, and unrelated to the changes in the annex, we will have an MDP CapEx deferral for 24 months. This MDP CapEx deferral amounts to MXN 1.2 billion in the aggregate, and as a percentage of the original CapEx commitment, represents about 25% in 2024, and 13% in 2025. These deferments do not compromise the operations, quality, and safety standards of our airports. Thank you very much, Ricardo. Welcome. Our next question comes from the line of Guilherme Mendes with JP Morgan. Please proceed with your question. Good morning, Ricardo, Ruffo, Emmanuel. Thanks for taking my question. I have two as well. The first one is on margins. And congrats on the very strong margins reported during the third quarter. The question is: How should we think about margins going forward, especially thinking in terms of the increase in the concession fees, and if that will be fully compensated on the aeronautical part of the business? And the second question is regarding the impacts brought by the hurricane. If you can provide a little bit more color in terms of what should be the actual impact, thinking on fourth quarter numbers, and potentially early 2024 numbers as well, maybe in terms of traffic or in terms of revenues impact. Thank you. Sure. Thank you. For the hurricane, it's too early to assess the amount of the impact. What we can say is that the runway, the platform, the taxiways are in perfect state. The terminal has suffered some damages, however, it is operational. It's important to remind you that Acapulco represents only 3.4% of the total revenues of the company. We still have intermittent communication with Acapulco, and we will know the impact of the damages in the next coming days. And regarding to margins, we expect the next year some around 4% impact as a result of the concession tax increase. However, this concession tax increase, the amount of, for 2024 and 2025, will be recognized as Reference Value for the next MDP negotiation in 2026. Thanks. Just one quick follow-up on the margins. In addition to the concession fees, do you expect any potential inflationary pressures that should alone drop your margins from the current 75-76 levels? So in addition to concession fees, is there any other impact that should bring margins down? I mean, we're still finalizing our budgets for next year. We'll have to obviously we're incorporating the increase in the concession tax, which will trim close to 4% response of margin. And with respect to other inflationary pressures, I think that they could be compensated with inflationary increases in our tariffs. Okay, thank you. Our next question comes from the line of Rodolfo Ramos, with Bradesco BBI. Please proceed with your question. Thank you, Ricardo, Ruffo, Emmanuel, for taking my question. Just a clarification on the previous one before I go into a couple of questions that I have. So the hit you're expecting on the concession fee, you're expecting it to be reflected now in the upcoming MDP, but will it be a kind of a backward-looking adjustment, or is it just going forward, you'll be able to compensate that to the tariff? So just that quick follow-up first. No, just for the next two years, that amount will be recognized in the Reference Value for the next negotiation. And going forward, that will be reflected as a non-tax expense, as it has been in the past. Okay, so it is backward-looking. Okay, thank you. And just, another follow-up, on, on the regulatory side. I mean, perhaps it's difficult to, to, to say, precisely, but just wanted to get a sense of, of how do you see, you know, these regulatory changes, and particularly on the, on the cap of excess surplus, you know, this 3% cap? I'm not sure if you're able to quantify or just give us an idea of how much revenues or income this has generated over the last maybe 20 years, you know, you have the concession. So yeah, that, that'll be my first one. Any color there would be, would be helpful. I think the new rates, what they're trying to establish, is to have a more precise traffic vector when we negotiate tariffs with them. So starting in the negotiation of 2031, what will happen, there will be a look back for the previous five-year period. So in our case, it would be the 2026 to 2030 period. And according to that, to the revenues from that five-year plan, everything that was collected in excess of 3% will be recognized, will be carried forward for the Reference Value for the next negotiation. In the past, just to give you some, in the past four MDP negotiations, two of them we have been above with the negotiated traffic, two times we have been below the negotiated traffic. So there's not necessarily certainty that we will always be above the negotiated traffic. And I think that this annex tries to give more clarity and more transparency as to the traffic vector that we will negotiate on our tariff revisions. Perfect. Very clear. Just more on the business, and it's just your second question. You know, I don't know if you can share your traffic growth expectation for next year, I mean, how, you know, how much are you factoring in for an impact from the Pratt & Whitney, you know, engine recall? Acapulco, of course, is still early, but just wanted to get a sense of how you're seeing it, things going into 2024. I think for the rest of the year, Pablo, I think it's already incorporated the Pratt & Whitney issue. We've been working closely with airlines, also with the manufacturers. There's still not much clarity as to what will be the impact on the maintenance schedule of next year. So we're waiting to hear and what will be the impact there. Thank you. Thank you. Our next question comes from the line of Alberto Valerio with UBS. Please proceed with your question. Hi, Ricardo, Ruffo, Emmanuel. Hope everybody who works at in Acapulco Airport is fine, safe. My question is related to the regulatory framework. It's hard to us to understand that we have a very few changes on the regulatory framework, and put this together as the government speech of decreasing tariffs by 10%-15%. If you have a similar CapEx, similar discount rates, and tariffs decreasing by 10%-15%, can we assume that it will be harder from now on to get maximum tariffs? It will be running close to 90% or it's something else? Thank you. So, yes, as you mentioned, there are little modifications to the tariffs. I think the main changes that it gives clarity and takes away some opacity relative to the previous phases. With respect to reaching maximum tariffs, I think it's gonna be in the case of our existing MDP cycle, which, as you know, ends in 2025, we probably are going to be around 97% for this year and perhaps a similar percentage the following years. For the next tariff review, I mean, based on the traffic vector, I mean, obviously, our goal would be to reach the 100 level in the following annual tariff review. I see. Thank you very much. Our next question comes from the line of Bruno Amorim with Goldman Sachs. Please proceed with your question. Thank you for taking my questions. Actually, I have two. The first one is a clarification on the reduction of TUA. I understood that you mentioned that you're gonna lower TUA in 10 airports, and that would be offset by CapEx postponement. You know, is it fair to say that from an NPV perspective, you're looking to recover 100% of the reduction in TUA through this postponement in CapEx, so that the value of the company will not be impaired? Also, in that same topic, if you lower the TUA, which I guess, you know, accounts for the majority of the revenues, and if you expect no changes to your tariffs in the MDP as a result of the ongoing discussions, does it mean that you are gonna, going forward, run below the maximum tariff? So that's the first question. And the second question is, actually, you know, I'd like to have your help to better understand the big picture around the new set of rules for the MDP. You know, we are talking about higher concession fee, which, as you have argued, you know, argues for higher tariffs, all else are equal. But at the same time, it seems that the agenda of the government is to lower tariffs, not to increase tariffs. So we're talking about higher concession fee, lower tariffs, you know, the expiry date of the contracts has not changed, and it would be good to have some confirmation from your side if you are now discussing to extend the concession. On the CapEx as well, the feedback from your peers is that the CapEx plan for the MDP will likely not change as a result of the new regulation. So if you have the same expiry date, same CapEx, more concession fee, and you have, you know, lower tariffs in the next MDP, you know, how come the returns on the regulated part of the business will not be lower? You know, what are we missing here? Thank you very much. Just to clarify, there's no extension of the concession has been discussed during this conversation. It's too early to say what will happen on the next negotiation. We're still two years away. Obviously, the concession tax will get factored into the reference value. There will be many variables that will be moving from now to the 2026 negotiation, and this concession factor will be just one of them, as many variables are moving. For the next year, maximum tariff compliance, we're looking to... It's still difficult to assess what will be the percentage compliance, given that these two discounts could have some impact on traffic as well. Ruffo, do you want to add something? Well, and as in preparation for the next MDP cycle, obviously, we'll have to look into how to be more efficient and how to make our investments and to extract the most value out of the infrastructure that currently in place, to maximize its utilization before increasing the size of the terminals or investing in additional infrastructure. So that's something we'll be working closely in the next couple of years as well. Thank you. And if I may, just, one follow-up question on the potential impact from the grounding of aircraft as a result, as a result of the issue with the engines from Pratt & Whitney. Even though you mentioned you are not ready to provide a forecast for traffic next year, you know, are we talking about negative traffic variation, or can traffic still grow next year? You know, directionally, you know, what do you think, you know, can happen given the extent of the exposure of the two main low-cost carriers in the country? You know, any guideline you could provide at this point in time? It's as you said, it's difficult to assess right now what will be the impact with the problem with the engine issue. But what I can tell you is we are expecting a small growth in the aero side of the business for next year. Thank you. Our next question comes from the line of Juan Macedo with GBM. Please proceed with your question. Hi, thanks for taking my question, and congrats on the results. My question is regarding the change in the MDP's rate of return calculation from focus on equity returns to WACC kind of calculation. Do you expect to change your capital structure given this change? Are you evaluating this, or are you comfortable with the current structure? We're still evaluating. We believe in the case of OMA, the impact of changing from return on equity to the WACC, it will be relatively small, given that our amount of leverage at the moment is currently low, is currently low. So I believe we would expect to remain most in line with what you have seen in the last couple of years. All right, that's clear. Thank you. Our next question comes from the line of Jay Singh with Citi. Please proceed with your question. Hello, thanks for answering my question. My first one is, would OMA ever consider investing in airports outside of Mexico? We're always open to, to, to understanding, to, to looking at opportunities. We don't have, at the moment, any concrete transaction in the pipeline, but we're always open into, for opportunities outside. Okay. As a follow-up, besides the concession fee hike, until the end of 2025, do you guys see any other regulatory changes coming in? We don't expect, it's hard to say, but we, we don't expect any more changes from our conversations with the government, both from the Treasury and the Communications and Transportation. They have mentioned that this has been the, the end of this modifications in the regulatory process. All right. Thank you much. Our next question comes from the line of Edson Murguía with Summa Capital. Please proceed with your question. Hi, good afternoon. Thank you for taking my question. I have only one related to cost of services. This quarter increased 22%. So could you give us a little more color that will happen specifically? Thank you. So, most of the increase is related to maintenance and some utilities expense. As we have increased areas and expanded the airport, the terminals in the last year or so, and with the increase of volume of passengers, we have seen a greater growth in maintenance. Sometimes there is some timing issues, but I mean, the accumulated expense for the nine months is reflective of the full, I mean, if you annualize, it would be reflective of the full year cost of maintenance. Okay, that's okay. Thank you so much. Our next question comes from the line of Gabriel Himelfarb with Scotiabank. Please proceed with your question... Gabriel, your line is live. Sorry, can you hear me now? Yes. Hi, thanks for the call. Just a quick follow-up question. Considering that the 10% decrease on TUA, the increase on the concession fee, and the change in the methodology for the discount, will be somehow offset or considered for the next MDP. Also, the concession fee, is my understanding, it also considers the non-regulated portion of the business. How will this portion or this impact will be offset, you know, by tariffs? Thank you. Also, if you can clarify again the CapEx movement for the next two years, that will be resulting from these amendments, from these regulatory changes? Thanks. Sure. So in next review, certainly the increase in the concession tax and the rate of 9% will be incorporated into the calculation. Now, the discount of the 10% TUA is something that only affects this period, so it will not be part of the variables to be used in the negotiation of the next tariff maximum tariff in 2026. Now, with respect to the CapEx referral, in the aggregate, it's one point two billion pesos. So, yeah, as September 2023 purchasing power, and that. That's around 800 and 90 million for 2024. It's- and the remainder, around MXN 400 million for 2025, which represents roughly 25% of the regional CapEx commitment in 2024, and 13% in 2025. Okay. Thank you. And in the case of the concession fee, it does affect the commercial or the non-regulated portion of the business, and how can... Will you be able to offset it? Only through increasing tariffs, and for the next MDP, is there any other leeway you can negotiate there? This hasn't changed from the previous basis. The formula for operational cost to determine the maximum tariff is just incorporates expenses related to the regulated side of the business. So yes, commercial revenues would be subject to the increase in the TUA, in the concession tax, and we will have to see how to adjust our rates to recover some of this increase. As it has always been the case. Yeah. Okay, thank you very much. Our next question comes from the line of Fernanda Recchia, with BTG Pactual. Please proceed with your question. Hello, thank you for taking my question. Just a follow-up to understand a little bit further the TUA discount. This 10% extraordinary discount, it was given just to avoid you to surpass the maximum amount of the rate, or it was to make the airfares more competitive? Just because you mentioned that you expect to reach 97% of maximum rate this year. So in the end, you are just lowering- Sorry, could you repeat the first part? Could you repeat the first part, Fernanda? There was bad communication. Could you repeat it, please? Yeah. No, sure. I just wanted to understand the rationale of the government to apply this 10% of extraordinary discount. Was it just because if you don't apply, you will probably surpass the maximum rate? Or it is a measure to incentivize to lower air tariffs? This is the first one, and then I make my second one. I think hard to speak on their behalf, but I think that the rationale is trying to incentivize. All right. Now, because you mentioned that you're expecting to reach 97% of maximum rate, so in the end, it's just a 3% discount in, on your regulated revenues, right? Is it correct to make this assessment? Yes, it will be slightly above 97%. The reason is this, for this year, it will only be two months, and that 97% accounts for the whole year. Right. And second, still on this topic, we know that this is a yearly discount. Could you give us a sense of how much discount did you apply last year, just for a reference, for us to see if this 10% is in line with historical average? We sometimes enter into agreements for new route openings and other strategies with airlines. But we haven't had general discounts such as these for many years. Okay, thank you. Our next question comes from the line of Alan Macias, with Bank of America. Please proceed with your question. Hi, hi, good morning, and thank you for the call. I just have, I guess, two questions and one clarification. The two represents what percentage of aeronautical revenue? And the second question would be on the expected higher CapEx for the Acapulco airport, and would that be incorporated into the new master development program or before? Thank you. On the second part, we've been in very close coordination with the government for Acapulco. We still don't know the size of the damage. We know that the core part for operating the airport is okay. Obviously, the terminal has suffered some damages. On our last conversation with the government, they are very open to work closely on how we can offset the impact from the hurricane in our CapEx. And for the TUA, it represents 89% of our aeronautical revenues. Just one more question on the engine recall impact. Any impact you have seen as of October, during October? Thank you. Yeah, we have seen the scheduled seats in databases such as OAG have been trending down over the last month or so. So yeah, we do believe that what is reflected right now in the system is already incorporating what's known of the recall of Pratt & Whitney engines, at least for the winter season. We know that the airlines are taking a lot of measures to try to offset this impact. We know they are trying to extend leases, trying to extend the life of some of their other aircraft. So in the next two months, we will have more clarity what will be the real impact next year. Thank you. Our next question is a follow-up question from the line of Bruno Marino with Goldman Sachs. Please proceed with your question. Yes, I just wanted to clarify one specific point. You know, what leverage or what debt specifically will be considered for the calculation of the cost of capital? Is it the debt at the moment of the MDP discussion, is it a five-year average? And also, you know, to the extent that you might have corporate debt or, you know, in the event that you invest abroad and you have debt attached to it, you know, will they look just at the debt at the asset level in Mexico, or will they look at OMA as a whole? Thank you very much. I think in the basis that we published, there are some debts to capital ratios that are averages that includes other airports groups as well. It's only debt relates to assets in Mexico, and it excludes debt that is not funding operations in Mexico. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Thank you all for participating today. Ruffo, Emmanuel, and I are always available to answer your questions, and we hope to see you soon. Thank you, and have a good day. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.