Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) Q4 2024 Earnings Report, Transcript and Summary

Greetings, and welcome to the Grupo Aeroportuario del Centro Norte, OMA, Fourth Quarter 2024 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Emmanuel Camacho, Investor Relations Officer for the company. Thank you. You may now begin.

Thank you, Melissa. Good morning everyone. Welcome to OMA's fourth quarter 2024 earnings conference call. Joining us this morning are our 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. And now I'll turn the call over to Ricardo Dueñas for his opening remarks. Ricardo Dueñas: Thank you, Emmanuel. Hello everyone. We appreciate your presence on this call today. This morning, Ruffo and I will review our annual and quarterly operational performance, financial results and CapEx development. Finally, we will be happy to answer your questions. I will start by discussing our full year 2024 highlights and then I will move to our main fourth quarter results. 2024 started off with challenges, particularly due to aircraft capacity constraint stemming from Pratt & Whitney engine inspection program, which affected two of our largest airline partners, Viva and Volaris. Together, these airlines accounted for 71% of our total passenger traffic in our airports last year. In parallel, operational restrictions at the Mexico City International Airport posed another challenge for the industry, limiting airline operations at the country's main hub and reshaping connectivity strategies. These combined factors constrained airline capacity planning throughout the year, influencing both domestic and international traffic dynamics. Beyond these challenges, 2024 also brought interesting developments. The combination of operational restrictions at Mexico City Airport and limited aircraft availability in the market created opportunities for airlines to strengthen their international networks. We saw a clear shift in strategy with airlines increasing capacity and launchings new routes from OMA's airports to the U.S., reinforcing existing markets and exploring entirely new ones. As 2024 progressed, the negative impact from reduced seat capacity gradually diminished. Towards the end of the year, we reported a significant decrease in aircraft availability, which resulted in opening of new domestic and international routes and contributed to a strong passenger traffic performance. As a result, in the fourth quarter, total passenger traffic in our 13 airports grew by 4.6% with a 1.5% increase in domestic traffic and significant 26.4% growth in international passenger traffic. Looking at the full year, these dynamics reshaped our overall traffic performance. While domestic traffic declined by 3.5%, international traffic increased 15% as compared to 2023. Despite the limitations in the Mexico City Airport, demand on our most important routes, Monterrey to Mexico City metropolitan area, which adds the operations of AIFA and Toluca to those of Mexico City airport, grew by 8.18% in 2024. This was largely driven by a significant increase in traffic between Monterrey and AIFA, providing that demand for flights to Mexico City remains robust with airlines continuing to add capacity to these alternate airports. 2024 was also a year of strong performance across our various commercial and diversification lines business. Despite the passenger traffic decline during the year, we delivered outstanding results through strategic initiatives focused on maximizing revenues and optimizing operations. On the commercial front, we recorded meaningful growth across key revenue line items, mainly as a result of contract renegotiations, the opening of new outlets and introduction of new brands and operators. Restaurant revenues grew by 22%, VIP lounge revenues increased by 51% and parking revenues increased by 33 million pesos as compared to 2023. Altogether, this initiative resulted in a record high commercial revenues per passenger of 60 pesos in 2024, a 17% increase relative to 2023. Our OMA Cargo business continued to post a strong yearly result. We made key organizational changes to improve efficiency, enhance customer service and attract new customers. Thanks to these efforts, OMA Cargo grew by 22% in 2024. In hotel services, we work closely with our operating partners to refine pricing strategies and optimize occupancy levels, driving nearly 20% revenue growth in the hotel segment compared to 2023. And finally, our industrial park business delivered solid results. The strong industrial activity in the Monterrey region allowed us to continue with the construction and leasing of industrial warehouses. Last year we announced six new warehouses under development and by the end of 2024 five of them were already generating revenue. Combined with contractual rent growth and the impact of the Mexican peso depreciation against the U.S. dollar, our industrial service revenue grew by 61% for the full year. Regarding our financial performance, aeronautical and non-aeronautical revenues grew 2% and 17% respectively, versus 2023. As a result, our adjusted EBITDA for the year was Ps.9.1 billion and we recorded an adjusted EBITDA margin of 74.3%. On the capital expenditure front in 2024 we continue to invest in our long-term infrastructure development, particularly at our Monterrey Airport. During the year we inaugurated the East Public Area expansion of Terminal A, adding over 6,000 square meters of new facilities including additional check-in counters, commercial spaces and airport services. This expansion, combined with the previous developments at the airport has substantially increased passenger capacity, now reaching almost 14 million passengers per year. These efforts further reinforce Monterrey’s position as a leading hub in Northern Mexico and ensure its readiness for future growth. Looking ahead, we continue advancing with Phase 2 of the Monterrey airport expansion project. This next stage focuses on significantly expanding airside areas of Terminal A. Once completed, this project would optimize passenger flows, enhance commercial offers and services and further increase the airport’s capacity to almost 16 million passengers annually. The new areas are expected to become operational in early 2026. Finally, in September 2024, we completed the expansion and remodeling of the terminal building at Durango International Airport. This project allowed us to increase the air capacity to handle up to 760,000 passengers annually. This infrastructure investments reflect our commitment to enhancing the passenger experience and supporting the long-term development of our airports. I will now move on to our fourth quarter performance. In the fourth quarter, OMA's passenger traffic reached 7.1 million, an increase of 4.6% versus 4Q 2023. This increase was mainly attributable to an increase in seat capacity of 3.3% during the quarter. On the domestic front, passenger traffic grew by 1.5%. This increase was primarily driven by our Monterrey Airport, which saw expansion on routes to Querétaro, the metropolitan area of Mexico City, Ciudad Juarez, Hermosillo, Tulum and Guadalajara. Those routes collectively added more than 211,000 additional passengers during the quarter and were particularly offset by decreased capacity in routes from Monterrey to Cancun, Tijuana, Mérida, and Puebla. In contrast, international passenger traffic reached a historical quarterly record with a 26% growth to 1.1 million passengers as compared to fourth quarter of 2023. This growth was primarily driven by the Monterrey Airport, with a significant passenger traffic expansion on routes to Chicago, San Antonio, Los Angeles, Las Vegas, Orlando, Oakland, Miami, San Francisco, Austin and Denver. These routes accounted for approximately 74% of the total increase in international passenger traffic during the quarter. Additionally, during the quarter of 2024, we launched 16 new international routes from Monterrey, Mazatlán and Acapulco airports, further improving our international connectivity. We also anticipate the launch of more than 20 new domestic and international routes between February and July of this year, including 11 international routes. Moving on to the OMA's financial performance. The sum of aeronautical and non-aeronautical revenues reached a record high performance of Ps.3.3 billion in the quarter. Both revenue segments recorded growth in the quarter, with aeronautical revenue increasing 11% and non-aeronautical revenue rising 22%. The positive performance of our non-aeronautical revenue reflects the successful execution and consolidation of several commercial and diversification strategy initiatives throughout the year. Commercial revenues increased 19% compared to fourth quarter of 2023, primarily driven by restaurants, VIP lounges and retail revenues. Revenue for restaurants and retail grew 29% each versus fourth quarter of 2023, mainly due to the contribution of new commercial space and the replacement of several other outlets opened during the quarter – during previous quarters, sorry. In addition, VIP lounges grew by 59% as compared to the fourth quarter of 2023, mainly due to higher access rates and leases renewal of third-party lounges in Monterrey under improved terms as well as the opening of new lounge airport – new lounges in Durango Airport. Diversification revenues increased 28%. Industrial services was the main growth driver this quarter, rising 130.8% to Ps.47 million, primarily due to an increase in leased square meters compared to fourth quarter of 2023. Hotel services grew by 19%, mainly due to double-digit increase in average room rates per night on both hotels. OMA Carga increased 18% in the quarter, mainly due to higher revenues from ground cargo operations in Monterrey. Moving on to capital expenditure front. During the quarter, we invested Ps.951 million in MDP investments, major maintenance and strategic projects. Finally, I am proud to announce that all 13 OMA airports have obtained Level 3 Optimization Certification on the Airport Carbon Accreditation Program, strengthening our leadership in sustainable airport management. This milestone underscores our commitment to reducing carbon emissions and adopting innovative practices to minimize the environmental impact of our operations. We have not only optimized our own operations, but also collaborated closely with commercial partners and airlines to implement carbon management strategies across the entire airport value chain. This certification reflects our dedication to building a more sustainable future for the airport industry. I would now like to turn the call over to Ruffo Perez Pliego who will discuss our financial highlights for the quarter. Ruffo Pérez Pliego: Thank you, Ricardo, and good morning, everyone. I will briefly go over our financial results for the quarter before opening the call for questions. Aeronautical revenues increased 11.1% relative to the fourth quarter of 2023, driven primarily by the 26.4% growth in international passengers and higher revenue per passenger, as well as the 1.5% growth in our domestic passenger traffic during the quarter. Non-aero revenues increased 21.7%. Commercial revenues increased 19.1%, and the categories with higher growth were restaurants, VIP lounges, retail and car rentals. Notably, commercial revenue per passenger increased 13.9% to Ps.60.4 in the quarter, relative to the same quarter of last year. Diversification revenues increased 28%, mainly due to higher revenues from industrial services, hotels and OMA Carga. It is important to note that revenues from industrial services in 4Q 2024 include approximately Ps.6 million from invoicing of prior periods corresponding to our non-performing clients. Excluding these extraordinary revenue, industrial services grew 103% to Ps.42 million per quarter. Total aeronautical and non-aeronautical revenues grew 13.6%, reaching Ps.3.3 billion in the quarter, with construction revenues amounting to Ps.816 million in the fourth quarter. The cost of services and G&A expense increased by 14.9% compared to 4Q 2023 as the company has made efforts to contain its cost base despite inflationary pressures on external services and purchases. The other cost and expenses line item as well as the materials and supplies line item grew mainly as a result of increased operations in our VIP Lounges business as well as higher operations in our OMA Carga warehouses. In our Industrial Park costs during the quarter, we recognized a Ps.9.7 million of bad debt expense due to a non-performing tenant in the Monterrey Industrial Park. Additionally, due to the higher number of leased square meters, we recorded approximately Ps.2 million in higher lease brokerage fees in the quarter. As a result, our cost of Industrial Park Services was Ps.17.4 million in the quarter. Concession tax increased 97% to Ps.265 million as a result of the rate increase from 5% to 9% applied to the revenues generated by OMA’s airport concessions pursuant to Mexican tax duties law. Under the tariff regulation basis effective as of October 20, 2023, payments made to the government related to aeronautical revenues in excess of those included in the most recent tariff revision will be added to the reference value to be used in the next maximum tariff revision. Therefore, starting January 2026, these excess concession tax amounts will begin to be recovered through maximum tariffs. In the fourth quarter of 2024, the 4% surplus of the concession tax over aeronautical revenues amounted to Ps.101 million equivalent to 3.1% of the sum of OMA’s aeronautical and non-aeronautical revenues. This surplus is included in the Ps.265.2 million as concession – recorded as concession tax expense in the quarter. Major Maintenance Provision was Ps.39 million as compared to Ps.95 million in 4Q 2023 and the decrease is the result of updates in the timing of the execution of certain projects. OMA’s fourth quarter adjusted EBITDA reached Ps.2.4 billion and the adjusted EBITDA margin was 73.8%. Excluding the surplus concession tax and its impacts on OMA’s financial results, our adjusted EBITDA would have been Ps.2.5 billion with an adjusted margin of 76.7%. For the full year ended December 31, adjusted EBITDA would have been Ps.9.4 billion with a margin of 77.3%. Our financing expense amounted to Ps.332 million as compared to Ps.224 million in fourth quarter of 2023. The increase is mainly related to a Ps.103 million amount recorded in change of the present value of the Major Maintenance Provision as a result of the decrease in the rates used for the calculation of such provision. This is a non-cash effect. Consolidated net income was Ps.1.2 billion in the quarter, which decreased 5.9% relative to the fourth quarter of 2023. Turning to our cash position. Cash generated from operating activities in the quarter amounted to Ps.1.9 billion and at the end of the quarter cash balance stood at Ps.1.7 billion. This reflects the payment of the second installment of the ordinary dividend of Ps.2.1 billion as well as the drawdown of Ps.600 million in short-term loans. At December 31, the total debt including financial leases amounted to Ps.11.5 billion and we ended the quarter with a healthy net debt to adjusted EBITDA ratio of 1.1 times. This concludes our prepared remarks. Melissa, please open the call for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Rodolfo Ramos with Bradesco BBI. Please proceed with your question.

Good morning, Ricardo, Ruffo, Emmanuel. Thanks for taking my question. I have a couple if I may. Can you talk a little bit about your traffic outlook for this year? And related to this point, how far do you think you are in your efforts to develop Monterrey’s route network? So that would be my first question. And second, anything – I know this is early stage, but anything you can share as far as your MDP expectations. Do you see room to ramp up CapEx in Monterrey? Just to get a sense of what kind of tariff increase we might see. Thank you. Ruffo Pérez Pliego: Hi, Rodolfo. This is Ruffo. Regarding your first question, for this year, we're seeing a recovery in domestic capacity being deployed by the main carriers in our network. We have seen that increase started since November of last year and has continued through January of this year. For full year, we are expecting around a mid single digit growth year-over-year. And regarding the Monterrey network, we believe that there is plenty of opportunity to continue developing it. We're just positioning it as a connecting hub. A lot of the routes that Ricardo mentioned during his opening remarks were opened in the second half of last year and they have still to mature. So I believe that going forward Monterrey will continue to consolidate as a major connecting hub in northern Mexico. And Rodolfo, regarding the MDP, we're still working on the CapEx spend that we're going to put forward. What we can anticipate is that as we mentioned before, we're working on an optimized version of the CapEx. We're leveraging on our internal expertise, Vinci's expertise as well, so that we can put a CapEx plan that will not put unnecessary pressure on tariffs and will maximize the net present value of the company.

Thank you. Our next question comes from the line of Jens Spiess with Morgan Stanley. Please proceed with your question.

Yes, thanks for taking my question. So on the traffic outlook you just mentioned of mid single digits, I mean we're seeing clearly a lot of capacity being deployed to your network, which makes me think that maybe that assumption might be slightly conservative. But regardless, in terms of – and this might be a dumb question, but in terms of this being the year where you negotiate your MDP having very good traffic numbers. I know it's always good, but in light of the negotiations you will be having, does it – at any point might raise the bar too high or is it not even a concern and it doesn't really matter. Ricardo Dueñas: Hi, Jens. Ricardo here. The traffic projection is based on a long term view – a mid to long-term view. It's a bottom up analysis in which we're looking at many different things. Not only at the last data, we’re looking at the demand in the future, we’re looking at aircraft orders for airlines, we have independent traffic projections, the regulator has its own projections. So I don’t think it puts – it’s not necessarily bad – it’s bad news because we’re looking more at a mid to long-term view of this traffic projection.

Okay. Understood, understood. And if I may just add one question. I mean, congrats on the very impressive commercial revenues you had. So just trying to understand. Obviously, simply due to the like full year effect of the existing run rate, you will see probably a benefit this year versus last year. But beyond that, any additional upside we should be factoring in? Ruffo Pérez Pliego: I think for the following quarters we should expect a similar amount in terms of commercial income per passenger around the Ps.60 mark. We would expect a hike in that number once the Monterrey areas are opened. And we expect that to occur in early 2026. So 2026 will have a huge pickup because of the new areas to be inaugurated at the time.

Perfect. And any color on the magnitude of that step up in 2026? Ruffo Pérez Pliego: We are still quantifying it. And we’ll have more color towards the middle of the year. We’ll be tendering those spaces. So the tenders will be occurring towards middle of this year.

Fair enough. All right. Thank you.

Thank you. Our next question comes from the line of Guillherme Mendes with JPMorgan. Please proceed with your question.

Hi, Ricardo, Ruffo, Emmanuel, good morning. Thanks for taking my question. First one is a follow-up on the MDP. Any views on timing for the MDP announcement? Should we expecting something by November or December or maybe a little bit earlier? And second point on the costs and margin front. I guess Ruffo mentioned about the cost control during the quarter. And do you see any significant pressure going forward into 2025? And what kind of EBITDA margin can we expect going forward? Thank you. Ricardo Dueñas: Hi, Guillherme. In terms of the timing, we will be presenting officially the MDP plan by the end of June and we will take six months working with the ministry and we’re expecting this to go until the last weeks of December. That’s our expectation. Ruffo Pérez Pliego: And regarding our cost side, as we mentioned in the call, we had some extraordinary items, particularly in the industrial park. But with respect to other cost and expenses for this year, we would expect inflationary based increases as relative to last year.

Okay. That’s clear. Thanks. And just a follow up in terms of the EBITDA margins, fair to assume this mid-70s kind of level going forward, obviously without assuming any tariff increase post MDP. Ricardo Dueñas: Yes, that’s fair to assume, Guillherme.

Perfect. Thank you.

Thank you. Our next question comes from the line of Fernanda Recchia with BTG Pactual. Please proceed with your question.

Hey Ricardo, Ruffo, Emmanuel. Thank you for taking my question to hear from our side as well. The first, just a follow-up on traffic. If you could break down the mid-single-digit that they're expecting for 2025 between domestic and international looking since November, international has been surprising. So, I just wanted to understand how are you looking for the routes mix for this year? And second, I just wanted to hear, if there is any update regarding the intention to transform the Monterrey airport from military to commercial activity. And if so, do you expect to incorporate any impact of this into your MDP negotiation? Ricardo Dueñas: Okay. Hi, so I'll answer the second part. So the military airport, there's no official project. There's actually not no budget currently allocated to that project. So, I think the probability of having a competing airport next door, it's very low and it's lower than it has been in the past. Ruffo Pérez Pliego: And regarding the 2025 outlook, it's still unclear what the mix is going to be. We depend a lot on how the additional seat capacity that both Viva and Volaris will be deploying. For example, in the case of confirmed routes that we expect over the next few months, we have 20 new routes already confirmed. Nine of them are domestic and 11 routes are international. So I think that we'll still see a little bit more dynamism from the international side, but we'll see a recovery on the domestic front as compared to the previous year.

Okay, thank you.

Thank you. Our next question comes from the line of Pablo Ricalde with Itaú. Please proceed with your question.

Hi, good morning. Ricardo, Ruffo. Congrats on the results. I was wondering if you can provide more color on the interest expense line. We saw a huge increase in the quarter. Apparently, there was like this issue with the interest rate on the maintenance provision. But I don't know if we can talk a little bit further of this effect, and if we should expect something more going forward? Ruffo Pérez Pliego: Yes, we have, as major maintenance provision, which is a long-term forecast of the repavement [ph], primarily-related pavement works, repavement obligations through the life of the concession. And it's quite sensible to interest rate variations. So yes, we adjusted downwards our interest rate that we used to value the provision and that the non-cash effect during the quarter and we'll be still subject to those variations if rates either move up or down. In the report, we are now splitting up the breakdown of the interest expense, so you can see what the impact of that is in isolation. And I'll just highlight again that it's a non-cash variation.

Perfect. That was very clear.

Thank you. Our next question comes from the line of Pablo Monsivais with Barclays. Please proceed with your question. Pablo, your line is live.

Hi. Thanks for taking my question. Ricardo, you mentioned at the beginning of the call, Q&A session, that you are expecting for the MDP to be very CapEx optimal. Can you please share to us to what extent once the conversation with the government starts that variable moves up or down? Or to what extent this is based on, yes, of course, technical considerations, but also a little bit on the negotiation? Thank you. Ricardo Dueñas: Hi, Pablo. Thank you for your question. The CapEx plan that you put forward is based purely on technical decision. We're going to sit down with the government. We're going to look at the traffic projections that we both have, our third-party projections also have. We're going to look at the needs of the different stakeholders in the airport. And we're going to come up with a technical CapEx plan. That is the one we're putting forward. We already know in anticipation the needs. We are constantly in conversation with the regulator. And the tariffs will be a result of that technical analysis in our CapEx plan.

All right. Thank you. Ricardo Dueñas: Thank you.

Thank you. Our next question comes from the line of Andressa Varotto with UBS. Please proceed with your question.

Hi, good morning. Thank you for taking my question. I just have a follow-up here on traffic. You're seeing growth and more routes in the international side. Maybe it can be explained by airline deployment capacity in the international side in this moment of more restriction. But I wanted to explore more, like how do you see this going forward? Do you believe that this is indeed this opportunistic opportunity to allocate capacity there? Or do you see some improvement in demand drivers that can make this sustainable process and more routes to be added in the upcoming years? Thank you. Ruffo Pérez Pliego: Can you repeat your question, Andressa, please? We lost you a bit.

Yes, sorry. So this is about the international traffic. How do you see the capacity allocation on the international routes. If you are seeing this as a more opportunistic move from the airlines amid capacity restrictions or more sustainable demand-driven movement? Thank you. Ruffo Pérez Pliego: Yes. Thank you. So what we have seen in 2024 is these interests from domestic carriers towards international routes. We attribute that to the recovery of Category 1, or if you can remember, Mexican carriers were not allowed during that period to open new routes or services to the U.S. That was lifted towards the end of 2023. So during 2024, most of the new capacity that airlines were able to deploy was focused on the international market. We believe that the network primarily out of Monterrey to the U.S. destinations will continue to be strengthened. Around 88% of our international traffic comes from the U.S. so we still believe that most of the international roads will be generated in and out of the U.S. to our airports. And I think that that will continue to be a trend in the next few quarters.

Thank you very much.

Thank you. Our next question comes from the line of Edson Murguia with SummaCap. Please proceed with your question. Edson, your line is live. I'm sorry, we're experiencing some technical difficulty. Our next question comes from the line of Federico Galassi with TRG. Please proceed with your question.

Hi guys, thank you for taking my questions and congrats for the result. One question I'm thinking in your traffic guidance or your view for this year we see the last three months in Monterrey have been growing at 15%, 16%. When you mention this mid-single digit, what you are thinking for Monterrey? And the second one continue with Monterrey is, and you mentioned something but in the last presentation you are talking about the big expansion, space expansion in Monterrey. If you can give me more update of that? Thank you. Ricardo Dueñas: Hi Federico. So in terms of traffic guidance, yes, Monterrey will continue to be the driver of our growth. We do expect some airports to recover as domestic capacity comes back online towards the second half of the year. But in the foreseeable future Monterrey will be driving our results. Also worth noting that our traffic projection already incorporates some volatility that we're seeing in the macro environment. So we're being a bit cautious about that as well. And regarding the expansion in Monterrey, we are right now joining what we call the Wing A to the Terminal A, so sorry, Wing 1 to Terminal A and that should be completed by the first quarter of 2026, and that will allow us to increase at least a couple of million the yearly capacity of the airport and be able to sustain what we expect in the next couple of years.

And the commercial capacity is like 40%, 50% now when you finish at least this stage is right? Ricardo Dueñas: Yes, these areas are all air sites. So yes, they will be accompanied by a development of a passenger concentration area where we would expect most of the passengers to flow through once the areas are completed.

Awesome. Thank you, Ricardo.

Thank you. Our next question comes from the line of Alan Macías with Bank of America. Please proceed with your question. Alan Macías: Hi, good morning and thank you for the call. Just a follow-up question on the adjusted EBITDA margin for next year. I guess, if we assume that traffic is going to grow this year, is it a fair assumption to assume a margin expansion? Thank you. Ruffo Pérez Pliego: For next year you're talking about 2025 or 2026? Alan Macías: 2025. Ruffo Pérez Pliego: Okay. Yes. I think it's achievable to have a slight increase relative to 2024. Yes. Ricardo Dueñas: Marginal increase. Ruffo Pérez Pliego: Yes. Alan Macías: Thank you.

Thank you. Our next question comes from the line of Edson Murguia with SummaCap. Please proceed with your question.

Thank you. To apologies before, I have one question related to the Ps.600 million short term loan. My question is what is the strategy with this loan? I mean, it's due for May 25th and you already paid the prepaid Ps.120 million. So what would be the strategy? I know you mentioned that you can use that line for different it’s [indiscernible] over the strategy behind this. Ruffo Pérez Pliego: Edson, could you move closer to the microphone where you're hearing some noise in the background? We're unable to hear your complete question.

Yes. My question was related to the Ps.600 million loan term – the long term, short. So what is the strategy behind these Ps.600 million? Ruffo Pérez Pliego: Okay. Yes. So the short term loans that we had last year were just to strengthen our working capital position towards the end of last year and give some liquidity to the company in the first quarter of this year. We expect some CapEx execution and the idea would be to refinance it in the middle of this year with a long-term debt.

Okay, thank you.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Dueñas for any final comments. Ricardo Dueñas: We would like to thank everyone for participating in this call. Ruffo, Emmanuel and I are always available to answer your questions and we hope to see you soon. Thank you once again and have a great day.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.