Please standby, we are about to begin. Good day, and welcome to the OMA Fourth Quarter 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Emmanuel Camacho, Head of Investor Relations and Financial Planning. Please go ahead.

Thank you. Good morning. Welcome to OMA's fourth quarter 2017 earnings conference call. Joining me this morning is our Chief Accounting Officer, Jesús Villagómez. This morning, I will briefly review our operational performance and financial results. Then we will be pleased to answer your questions. OMA delivered record financial and operating results in the fourth quarter of 2017, and record results for the full-year. Adjusted EBITDA grew 14% in the quarter, and OMA recorded the highest quarterly adjusted EBITDA in our history, 67.5%, largely as a result of our cost controls and our initiative to increase aeronautical and non-aeronautical revenues. For the full-year, OMA generated the highest levels of revenue, EBITDA, and net income in our history, with double-digit growth in all these categories. The full-year adjusted EBITDA margin reached 66%, which is also a record. Our cash flow generation was strong, with 12-month cash flow from operations reaching Ps. 2.9 billion. This enabled us to fund our massive development program for the year, and strategic investments out of funds from operations and cash balances, pay our dividend, and still end the year with Ps. 2.2 billion in cash. Our performance is consistent. OMA has now delivered 32 consecutive quarters of growth in aeronautical and non-aeronautical revenues, and 26 quarters of adjusted EBITDA growth. Passenger traffic reached five million passengers in the fourth quarter, and was a record 19.7 million for the full-year. Eight airlines increased passenger volumes in the fourth quarter, with the main contributions to growth from VivaAerobús [ph], Calafia Airlines, and United. 19 new routes opened in the quarter, and six closed, while total available seats decreased 2.1%. Total passenger traffic increased 1.8%, slightly above the rate in the third quarter. Full-year traffic increased 4.8%. The principle drivers of traffic volumes were similar to those we outlined…

Please standby. This is the conference operator. Mr. Emmanuel Camacho's line has disconnected. The conference will resume momentarily. Thank you for your patience.

-- passenger charges. OMA provided some short-term incentives for route development in the quarter, which reduced the growth rate of domestic passenger charges by about 1.3 percentage points. Higher rates for international passenger charges were offset by the appreciation of the Peso during the fourth quarter, resulting in the decrease in that line item. Aeronautical revenue per passenger rose 2%. Non-aeronautical revenues rose 8% with commercial revenues making the largest contribution to growth. Commercial revenues increased 9%. The best performing areas were parking, restaurants, and car rental. Restaurants and car rental each increased more than 20% as a result of new leases and profit participations. Parking revenue growth reflects new capacity in the Monterrey and Chihuahua airports. Revenue from retail stores was affected by difference in the timing of the accounting provisions for recognition of revenue participations between 2016 and 2017. The underlying basis continues to grow [technical difficulty] rates. OMA terminated the advertising contract tender at the beginning of December because of [technical difficulty] performance. We are pursuing our claims against the provider. OMA is in the process of bidding out the advertising contract. And we expect to have a new provider in place by the start of the second quarter. Diversification activities grew 9%, mostly from growth in the OMA Carga freight logistic business, the hotels and an additional contribution from the industrial park. Complementary services grew 8%, mostly because of new leases for terminal space revenues and revenues from baggage screening. Non-aeronautical revenues per passenger grew 6%, and reached Ps. 78 per passenger. Because of our investment commitment under mass development programs in the current five year period, 2016–2020, the construction revenue line item more than doubled. This and non-cash item that is required by IFRIC 12, is equal to construction revenue, construction cost -- cost improvements…

Thank you. [Operator Instructions] We'll go first to Leandro Fontanesi with Bradesco.

Hi, thank you. So I have two questions. The first one, if you could just comment a little bit more on the termination of the [indiscernible] contract. If you could comment how much funds you're trying to recover that could company owes you. And the second point is if you could give us an update on the process for the new CFO, when you would expect to announce [technical difficulty]. Thank you very much.

Okay, thank you, Leandro. So OMA revoked the advertising contract with the provider in December, in a word, because of nonperformance. Right now we are pursing claims against that provider, and we expect to have a new advertising provider, as I mentioned, by the beginning of the second quarter. The billing process has remained stable, and the cancellation of the advertising providers involves nonperformance related issues, which have of course affected this line item. So it's more of a nonperformance related situation. And as to your second question, on the CFO, the Board of Directors have been looking for the new CFO. And we expect that this decision will be made soon, and we will inform the markets when this happens.

Okay, thank you.

Thank you.

[Operator Instructions] We'll go next to Ramon Obeso with Scotia Bank.

Hi, good morning, Emmanuel, and thank you for the call. Could you give us more color on the short-term incentives you mentioned for the aeronautical revenues?

Yes, of course. So every time we negotiate with airlines for the opening of new routes in the airports we plan an incentive program. And if they meet the expectations in terms of the route opening in the passenger side to our operations then we establish or we deliver those incentives. That's why in the fourth quarter we have this specific effect with -- that involved additional -- [indiscernible], but involved the planned incentives delivered to the airlines.

Okay, thank you.

You're welcome.

[Operator Instructions] We'll go next to Natalia Zamora with GBM.

Hi, and thank you for taking my question. We saw G&A fall almost 29% during the quarter, I was wondering if the expenses corresponding to your SAP were now ever, and the expenses of around Ps. 150 million could now be considered a normal level for your G&A in the future -- in future quarters. Thank you.

Yes, of course. So the effect was a one-off, as I mentioned. The SAP related cost was the final phase of this implementation. And going forward we should expect a more consistent performance related to the cost of this system and operation overall.

Okay, perfect. Thank you.

You're welcome.

And we'll go next to Alberto Valerio with Citibank.

Hi, thanks to taking my questions. I have two ones for you. The first one will be around the noise on Master. Do you have seen much negative impact on your industrial park? And the second one would be about the crude oil extract, have you seen the shale gas activity in your operations as well? And the last one, about the pick-up in [indiscernible], what about your own operations, do you have an impact on that? Thank you very much.

Okay. So regarding [indiscernible] it is still difficult to assess any potential impact on this matter. We couldn't provide at this point any effect related to the negotiations. We think it's early to determine what impact it could have, and what impact it is having now. If there is some activity related with performing with more cautiousness. It is important to mention that -- to remark again that we were able to sign two agreements in the [indiscernible] Park during the fourth quarter. So we have not seen any delay or any adverse effect on this matter. So I think it's still early to determine the potential effects. And if you could please repeat your second question, I didn't catch it quite well, sorry.

Sure, no problem. As the crude oil price has bounced, if you have seen some pick-up on shale gas activity in your regions? Thank you.

Well, no. As you may know, the energy reforms deed were aimed at enhancing the oil operations, including the shale gas, and it was an opportunity a few years ago. So the project stopped or ended those years. And we have not seen any bounce back in that sense specifically in the shale gas. And all of the performance of the passenger traffic in the airports is related to [technical difficulty] or more of an economic or other very specific effects.

Perfect. And just the last one about the [indiscernible], have seen some increasing in regions? Thank you.

Not now. We have seen -- well, last year, specifically, it was much calmer in the security levels and in these type of situations, in particular in our airports. So it has -- I would say that it has lowered as compared to pervious years.

Thank you very much.

You're welcome, Alberto.

And we'll go to Ricardo Alves with Morgan Stanley.

Hi gentlemen. Thanks for that. My question is more on the profitability outlook for this year. I mean we have several issues contributing favorably for you guys over the next couple of months or actually the rest of the year, relatively healthy traffic trend. As you mentioned in the call, much higher aeronautical fee or tariffs now with the general increase, some nonrecurring cash costs that you also mentioned should not repeat going forward. So my question is how your profitability, how your EBITDA margins could increase this year? I know you guys delivered a very respectable performance or profitability improvement in 2017, something like 200 bps if I'm not mistaken. So, where your margins could go with all these positive developments that we talked about? Where your profitability could go? Appreciate that.

Of course, thank you, Ricardo. So we're proud of the sustained improvement that we have made on the increase in EBITDA margins. The increases in margins reflect the operating leverage and our effective strict cost control policies. We believe of course there is room for additional EBITDA margin expansions as we continue to execute our business plan.

Thanks for that.

You're welcome.

Mr. Camacho, we have no further questions in the queue. At this time, I'd like to turn the conference back to you for any additional closing remarks.

Thank you. On behalf of OMA, I want to thank all of you again for your participation in this call. We're always available to answer your questions, and hope to you soon at our offices in Monterrey. Thank you, and have a good day.

And that does conclude today's conference. Thank you for your participation. And you may now disconnect.