Grupo Aeroportuario del Pacífico Q2 2024 Earnings Call Transcript

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Provided by Quartr
July 24, 2024

There are 13 speakers on the call.

Operator

Good morning, and welcome to Gap's Second Quarter 2024 Conference Call. It is now my pleasure to turn the conference over to Gap's Investor Relations team. Please go ahead.

Speaker 1

Thank you, and welcome to the Grupo La Porturio del Pacifico Second Quarter 2024 Conference Call. Presenting from the company today, we welcome Mr. Raul De Buelta, Gap's Chief Executive Officer and Mr. Saul Villareal, Chief Financial Officer. Please be advised that forward looking statements may be made during this conference call.

Speaker 1

These do not account for future economic circumstances, industry conditions, the company's performance or financial results. As such, statements made are based on several assumptions and factors that could change, causing actual results to materially differ from the current expectations. For a complete note on forward looking statements, please refer to the quarterly report. At this point, I'd like to turn the call over to Mr. Revolta for his opening remarks.

Speaker 1

Please begin, sir.

Speaker 2

Thank you, Maria, and thank you to our audience for joining us today. As always, we appreciate your continued support and interest in GAP. I will briefly review operational and financial figures before taking your questions. During this quarter, the total number of passengers reached 15,300,000, which was 3.9% decrease compared to 2023. The continued passengers traffic deceleration was due to the preventive inspection carried out by on the A320neo and A321neo airplane engines.

Speaker 2

This is a process that began in September of last year and is expected to continue for the remainder of this year into 2025. Despite this setback, we have continued to expand our strength of our network. During the second quarter, we added 3 international 2 domestic routes, bringing the total number of routes added to our network to 13 just during the first half of this year. We anticipate adding around 11 international routes during the second half of the year, including the recently resumed Tijuana to Beijing route, which will start on July 12. These efforts align with our repair development and strategies.

Speaker 2

As of you're probably aware, last Friday morning on July 19, air travel all over the world experienced disruption related to a Microsoft object for customer of the 365 app, which include many major airlines. While Gap's airport has non internal system complications, as a result of the airline system outage, we have 2 34 delays and 23 cancellations in our Mexican network. Moving on to the financial performance. We experienced a convenient revenue decrease for Aeronautica and Neuro Antifa services of ARS 213,000,000 or ARS 3.3 lower compared to last year. Lower aeronautical revenues were as a result of the decline on passenger traffic and reaching only 95% of the maximum tariff.

Speaker 2

However, there was an almost 11% increase in commercial revenues, driven mainly by the food and beverage, car rentals and VIP lounges. A little further detail of these commercial revenues, I just mentioned, in terms of the car rental increase, these were mainly driven by the new bidding process carried out in Guadalajara and Los Cabos. Putnam Bora stood out at the Guadalajara airport mainly due to the opening of the new terrace and the layout renovation carryout that result in a better brand mix offer. Furthermore, the priority pass fees for the use of the VIP lounges increases leading to a rise in the business line, specifically in the Guadalajara and Los Cabos Surplus, which experienced the best performance related to our VIP launch revenues. On July 9, we opened a second VIP launch at the Guadalajara airport.

Speaker 2

This will help us in the more adequately meeting in the high demand in this airport. Airport. Additionally, the hotel at the Guadalajara airport during this quarter generated ARS18,600,000 with an occupancy rate of 51% as of June. We are expecting to close this year approximately of 6 2% occupancy. New commercial opportunities and partnerships to drive the further commercial revenue growth are always top in demand for us and will continue exploring options.

Speaker 2

Regarding the acquisition of the cargo company, GWTC, we expect to begin to consolidate the results starting in the Q3 of 2024. In 2023, GWTC generated revenue above ARS 1,000,000,000 with an EBITDA margin of around 40% and without financial debt. On the other hand, the purchase price allocation will be done in the second half of the year. As for the cost of service, this increases by ARS179 1,000,000 or 17.3%, mainly due to the higher operational expenses such as employee costs, security, insurance and maintenance. While these rising costs do bring challenge, they also indicate our continued dedication to upholding high services standards and operational excellence.

Speaker 2

Despite enforcing strict cost controls, we do anticipate higher expenses related to expansion and inflationary effects to continue. EBITDA decreased ARS 378,700,000 or 8.3% as a result of the higher cost and slightly lower revenues. Looking ahead, we remain committed to drilling growth and delivering value to our stakeholders. Our focus will continue to be on enhancing operational efficiency while at the same time optimizing our services to meet the evolving needs of our customers. Moving on to the balance sheet.

Speaker 2

Cash and cash equivalents decreased by 15.7%, reaching ARS 12,600,000,000. On the debt front, this figure reached ARS 41,800,000,000. We continue keeping healthy leverage levels, reaching a net debt to EBITDA ratio of 1.7x for the trailing 12 months, thereby complying with all our debt covenants. CapEx continued to follow the committed master development program, reaching approximately ARS 3,100,000,000 in the first half of the year. This position us well to comply with the current and challenging MDP goals we have in place.

Speaker 2

I want to mention that yesterday, we opened the 2nd runway at the Guadalajara airport, which was one of the key projects for this Ingenio. This 2nd runway will offer us the capacity to have between 50% to 70% of additional operation in the long term and give us more flexibility to continue developing routes and connectivity throughout the region. This is another important step in meeting the growing needs of this airport, as I mentioned before. Regarding distributions, yesterday, GAAP paid the first portion of the capital reduction for a total of ARS 3,500,000,000 per the resolution made at our extraordinary shareholders meeting. The 2nd portion will be paid later in this year.

Speaker 2

Now just an update on the Turks and Caicos airport bidding process. As you know, we are committing to exploring new markets and revenue streams in an effort to further diversify our network. Therefore, as we announced before, we were prequalified to bid for the Turks and Caicos airports and then and airport mainly focused on international leisure traffic, which handled 1,400,000 passengers in 2023. Most of the revenues come from the aeronautical side, but there is room for the improvements in terms of non aeronautical activity. At this point in the bidding process, we are analyzing capital investment needs.

Speaker 2

The criteria for the valuation of the offers will be 70% for technical proposal and investment plan and 30% financial evolution, evaluation based on proposal revenue share. The tender submission deadline is October 23, 2024, and the process is expected to be concluded in December of this year. Before I finish, I want to provide revised guidance for 2024. Passenger traffic and aeronautical revenue remain as originally stated at the beginning of the year, whereas, aeronautical revenues are updated with the performance of the commercial activities and the consolidation of GWTC. On the other hand, the EBITDA and EBITDA margin, considering the aforementioned issue and the capitalization of the 40% of the concession fee to be paid over Mexican airports due to the recent change in law.

Speaker 2

With that, I conclude my comments and ask the operator to open the call for

Operator

I will take our first question from Guillermo Mendez with JPMorgan. Please go ahead. Your line is open.

Speaker 3

Good morning, Raul, Saut. Thanks for taking my question. First question is on the MDP negotiation. What is the latest there? So post elections, if there's any changes on when do we expect it for it to be announced?

Speaker 3

It's more towards the end of the year or could potentially be announced in the near term? If the assumptions that you guys mentioned on the previous calls and on the Investor Day, it's still valid in terms of tariffs and CapEx? And just one follow-up on the commercial side, the upward revision on the guidance, it's only related to the GWTC or something else that has been surprising to the upside? Thank you.

Speaker 2

Hi Guilherme, this is Raul. In terms of the MDP negotiation, we are in the I would say in the same timeline that we expect. We are trying to close the new MDP with this administration. So in that way, we expect to have the authorization of the MASP MDP in September of this year. For the moment, we are we don't see or we are at the moment, we are not seeing any kind of change on that.

Speaker 2

And we are aligned to with the government to try and to get authorization in this administration.

Speaker 4

Yes. Hi, Guilherme, this is Raul. Regarding your questions about the new guidance, yes, it is only GWTC. As we mentioned last year, we had ARS1 1,000,000,000 of revenues with a 40% of EBITDA margin And we are expecting to improve a little the EBITDA margin for this year. But at the end, it's already included in the guidance.

Speaker 4

Also, as we mentioned, the commercial performing and also the capitalization of the 4% of the concession fee for the Mexican Airports that was at 9 in the guidance release in January this year. So those are only the 3 issues that were included in this new guidance.

Speaker 3

Very clear. Thank you both. Just one follow-up on the MDP, if the assumptions that you guys mentioned about the 0 to mid single digit increase on tariffs and $110,000,000 roughly CapEx per passenger, if that's to the base case or there's something different?

Speaker 4

Guilherme, we are in the process of that. As you may know, during this, we released our proposal to the authorities on June. We are now reviewing with them additional investments. We are revising different assumptions. And that's the hard part of the process.

Speaker 4

So right now, we are in that. We cannot provide more information, as you may know, but probably it will be a little bit higher, the CapEx, because we have additional requests from the authorities that we have to analyze and define. So for now, we cannot release more detail, but it's close to what we have and released and announced in the update.

Speaker 3

Very clear. Thank you, Hope.

Operator

Our next question comes from Rodolfo Ramos with Bradesco BBI. Please go ahead.

Speaker 5

Thank you, everybody. Thanks for taking my question. A couple from my side. The first one is, it doesn't seem that airports is a big priority for the upcoming administration, but wanted to get your thoughts on the new team that was announced for the Ministry of Transportation. If you have any thoughts there or have any approaches with members of the new elected President's team?

Speaker 5

And secondly, I wanted to get your thoughts on the Mexico City bottlenecks and just to see whether the bottlenecks that we're seeing there, how do those impact? And at the same time, how do you intend to benefit those to strengthen as Guadalajara? Like how much traffic can it encompass from the its geographical area of influence from Mexico City and kind of bypass Mexico City in terms of this bottleneck that it has seen because of the slot restrictions?

Speaker 2

Thank you, Rodol, for this. This is Raul. I will say that in the first view, what we are seeing on the new government or in the new minister already announced is someone that comes from the construction, I will say, alive and is clearly that has a well recognized career in terms of the development of infrastructure on the Mexico City. For the moment, we are focused on all the relationship with today's administration because we are just in the middle of the negotiation of the MDP. As soon as we have the results on the negotiation of the MDP, we will begin to have, I would say, a closer time or meetings with the new administration.

Speaker 2

But in general terms, I could tell you that today, we are really focused on the MDP. And in the other hand, one of the parts that say how important I'm going to be the efforts on the new administration, I will say that for the moment, the only infrastructure plans that we have already here are more focused on trains and passenger trains rather than other things. So I'm not pretty clear which is going to be the, I would say, the complete plan for the development of infrastructure around the country and specifically about the airport spot. In general terms, at least what we are hearing is more related to passenger trends rather than airports. In terms of what has happened in Mexico City and the possible bottleneck, first of all, today, on the short term, it's difficult to analyze which could be the impact because there's a, I will say, a lack of enough seats related for the on the engines of the 320.

Speaker 2

So it's not pretty clear which could be the impact in the future. But in general terms, what we have experienced on the last years is an increase on the strength of Guadalajara Airport in terms of a hop. As you know, in the last, I would say, 2 years, we opened for the first time routes, direct routes to Canada, to Spain, to Colombia. So in general terms, what we are seeing is that while what I'm seeing is in the coming years, depending for sure in how the economy of the Central Area of Mexico and the economy of specific of Jalisco, 1.5 hours of Aguascalientes. In terms of the general performance of the area, combined with the decision of allocation of the fleet of some specific airlines as it could be Volaris in Guadalajara, we will continue to see the strength of the capabilities of COP on wider higher output.

Operator

Our next question comes from James Stice with Morgan Stanley. Please go ahead.

Speaker 6

Yes. Congrats on the results and thank you for taking the time for the questions. I just very briefly on the EBITDA guidance you already alluded to. I think I mean, it's quite impressive the step change it would represent versus the first half growth, which I think is closer to minus 5% and your guidance is implying that in the second half of the year, EBITDA would grow at around 5%, if I'm not mistaken. And the new acquisition, I think will be about 2% of consolidated EBITDA.

Speaker 6

So how do we get from the minus 5 current run rate to the plus 5 in the second half of the

Speaker 4

year? Sorry, Jens. Sorry to interrupt. The sound is not very good. It's cutting off.

Speaker 4

So I don't know if you can write down the questions in the webcast, please.

Speaker 2

Because it sounds not

Speaker 6

It is not better. Okay, I'll send it to your back.

Operator

Our next question comes from Fernanda Ricchiha with BTG. Please go ahead.

Speaker 7

Hello. Can you hear me?

Speaker 2

Yes, perfect.

Speaker 7

Perfect. Thank you for taking my question. 2 from our side. The first, thinking on the commercial revenue as well, it's been impressive, the top line growth that you're targeting for this year. Thinking regarding next year, could you comment if you think this growth is sustainable?

Speaker 7

How should we think about the commercial revenues per passenger going forward? And second, on capital allocation, could you give us some color if we should expect other airports should be under analysis. You already mentioned about the one that you were selected as a preferred bidder, but thinking on other airports? And also if we could expect other deals like the GWTC that you just announced? Thank you.

Speaker 2

Thank you, Fernando. This is Raul. In terms of the commercial revenue, we think that's going to be terms of the retro, going to be sustainable in the long term. On coming year, we will see the opening of some additional areas or and then the 100% of the result in some of the areas that has just opened on the mid of this year, for example. So in general terms, we think that the double digit growth trend on commercial revenues will be sustainable on coming years and years forward.

Speaker 2

For sure, it's related or highly related with the performance of traffic. So one of the key factors to really understand how it could be on the long term the growth on commercial revenue is related with the bringing back on the fleet of the all the fleet that is down for the engines problem. So as soon as we begin to see the coming back of the fleet, we think that the results on commercial revenues could be even better. In terms of other opportunities, as we just say, we are just going really, really deep in the Turks and Caicos opportunity. But for sure, we are reviewing always all the different options of possibility opportunities of investment in airports.

Speaker 2

In the region, we are all reviewing all the times any kind of opportunity there. For the moment, the only one that we have in terms of airports that be in our pipeline is the one related with Tulsa and Caicos. In terms of other similar acquisitions as could be GWTC, I would say that all the times our new business officer is looking for different opportunities that could be in some way aligned with the kind of profit that Gap needs for being accretive in value. But it's, I would say, a continuous process that is happening in the in our business. So that is in general terms.

Operator

Thank you. Our next question comes from Jay Singh with Citi. Please go ahead.

Speaker 8

Thanks for taking my question. It's Jay Dowling in for Stephen Trent. I guess you already answered my question on the Turks and Caicos situation, but I also want to ask, do you have a strong preference for the dual tilt regulatory structure or would you also consider single tilt or inflation based models? Thank you. [SPEAKER

Speaker 2

JOSE RAFAEL FERNANDEZ:] Thank you, Jake. In general, thermostat model for stock and takeoffs in terms of the regulatory model, It has all the infractionary review for the next 30 years, mainly. You have some commitments of CapEx that happens on the first moment of your original proposal. And on the future, there's not like reviews of master plans or review of tariffs. All the tires will be only review in terms of inflation on the future on that specific model.

Speaker 4

Yes. And I will add only that the upside or the potential upside in this effort is in the commercial revenue and also in the cost of operation that could have some efficiencies.

Speaker 2

Yes. We I'll just say adding what Calum is saying, we are really comfortable about our knowledge in the Caribbean market just for the experience of the 200% Jamaica. So we think that we could be really competitive on this bidding process, just taking account all the experience that we already have operating in the region.

Operator

Our next question comes from Gabriel Heimler with Scotiabank. Please go ahead.

Speaker 9

Hi. Thanks for the call. Just a quick follow-up question. Can you give us a bit of color about how the Pratt and Whitney engines have been affecting the network and the traffic. I mean, Volaris has show a decrease in traffic.

Speaker 9

And also, what are your expectations on the new acquisitions on GWTC? What's the expected revenue pay up you're expecting to receive? Thank you.

Speaker 2

Thank you, Gabriel. As you know, the impact of the on the engines began on September of last year. What we think on this 2024 that the worst part will be on the Q3 of the year when we're going to see the full impact of all the fleet that is grounded for the engines problem. After that, for the Q4, we would have a better comps. So in some way, we're going to begin to see some positive numbers related with 2 factors.

Speaker 2

1, a better easier comps. But second, there are some specific additional planes arriving mainly for Polares and Iberobus that in some ways helping for some to add some capacity. We think that gradually, all 2025, we're going to see recovery a gradual recovery of the fleet from mainly the boat companies that be more affect, Volaris and Viberables. So we think that at least all the 2025 will continue to affect it, and we will see a full comeback of total seats, most close to 20 to the half of the year on 2026. But again, it depends on the times and delivery of the already working engines for prep and weakness.

Speaker 2

But in general, in terms, we expect that for the first half of twenty twenty six, we will recover the full capacity in our airports.

Speaker 9

Okay. Thank you.

Speaker 2

In terms of UWC?

Speaker 4

Yes. Hi, Gabriel. This is our regarding GWTC, we have been an expected revenues above of 2023, around 10%. Obviously, we are now taking control of this new asset and we are reviewing the potential growth of this business. For now, our estimate is around 10% above of 2023 percent in terms of revenues.

Speaker 9

Okay. Thank you.

Operator

Our next question comes from Andressa Barroto with UBS. Please go ahead.

Speaker 10

Hi, good morning. Thank you for taking my question. I have 2 quick ones here on our side. First one, traffic as well. Right now, we see that capacity is being restricted by the impact of PNW engineering inspections, but we are also increasingly seeing worldwide concerns about a weaker demand.

Speaker 10

So I would like to know if you have like any take on that. I know probably harder to tell right now is which could be the impact of demand considering the capacity constraint? And my second question is regarding costs. Since you've seen strong cost expansion in the quarter. So just wanted to

Speaker 7

know what

Speaker 10

can we expect in the coming quarters regarding costs? Thank you.

Speaker 2

In terms of the traffic and rest of as you perfectly say, I mean, the capacity constraint related with the broadband weakness is, I mean, clearing the market. And it's not, I would say, full transparency or full knowledge about which going to be specific the time for the recovery of everything is like, I would say, a moving target of what we consider. But also, as you know, for instance, Airbus announced that the deliveries in the coming years will not be lower than the original expectation of new deliveries. That will also bring some kind of pressure to the capacity of some of our major airlines as Volans and Deliverables because as you remember, a couple of years ago, both airlines announced big delivery with Airbus. So I think that at least the coming year, we will still pressure about the capacity and the availability of additional fleet that will come to the market, mainly related with what is happening with, for sure, Pratt and Whitney, but also what could happen and the times of deliveries in the future mainly from NEROUBLUE.

Speaker 2

So in general terms, our expectation generally that the continually see some pressure in terms of capacity. But in some specific rules, there still be room for growing in terms of load factors in one hand. And in other one hand is we are seeing different airlines trying the new routes in our net. For instance, we have American Airlines that, for the first time, a U. S.

Speaker 2

Carrier operates in Tijuana Airport for the 1st airline history, and it's doing well. We have the early service to Phoenix, But also Alaska already announced the beginning of our route from La Paz to Los Angeles. That is, I would say, completely a brand new route. We also have the announcement of Aeromexico for different international routes from our airport. So what I'm seeing for the moment is that it's more clear that at least on international market, we will see some increases on capacity on the coming years that the domestic market will be more pressure for all the capacity issues on at least in the coming year.

Speaker 2

But in general terms, I think there's still been some room to growth that come from new opportunities of new routes and also some stakes on load factors that will bring us some rolling. And for sure, the easier comes in terms year to year. But in general terms is what I'm seeing on the capacity possible growth on coming years.

Speaker 4

Yes. Hi, Andres, this is Saul. Regarding your questions about the cost side, as we explained already, we have some expectation in terms of labor law, not only in Mexico, but also in Jamaica. And we are having additional cost and pressure in terms of inflation. Besides that, once we have more spaces and more areas operating, we have in Guadalajara airport with the different expansions.

Speaker 4

The cost will be increasing the operation of the tail, also implies a cost of operation. Just have in mind that the EBITDA margin in the hotel is around 35%. So it's different at the margin that we have. So it dilutes the margin we have and we have additional costs in maintenance and additional costs in terms of the electricity. So the tariffs are increasing in Mexico and also are increasing significantly in Jamaica.

Speaker 4

So we have pressure for all the sites in terms of the operation. It will be normalized, let's say, once we close the year, once we finalize the tariff negotiation. And obviously, once we see that the revenue related with the expansions that we have in the different airports. So I think the point is it is an extraordinary quarter. It's not obviously the regular quarter that we just have.

Speaker 4

So it's extraordinary and will be recovering in the next year.

Speaker 10

Perfect. Thank you very much.

Operator

Your next question comes from Andres Aguirre with GBM. Please go ahead.

Speaker 6

Hi, can you hear me? Thanks for taking the question. Can you clarify how GVAT will be consolidated in your financial statement?

Speaker 11

Andres, this is Alejandra. I am so sorry, but your line is not really clear. Can you try to repeat it if we can understand better or guide it in the

Speaker 6

I'm writing in the webcast. Thank you.

Speaker 11

Okay. Thank you, Andre.

Operator

We will move next with Pablo Montivas with Barclays. Please go ahead.

Speaker 12

Hi, Tim. Thanks for taking my question. Just kind of a follow-up to previous questions. What is your take on Volaris updated guidance on capacity? Have you talked to them?

Speaker 12

And if so, have they provided to you some insights on what could be the impact for the routes that Volaris is operating with you because it seems that they are a bit more positive for capacity for the second half of the year? Thank you.

Speaker 2

Thank you, Pablo. This is Raul. Yes, we are, I mean, in a daily basis, we have communication with Volaris about their operations. For sure, in the long term, in the coming year, we're still seeing that there will not be the full recovery of the feet. But one of the parts that we are seeing that is in some way interesting to follow with Volaris, They had adapt some of their routes.

Speaker 2

They have, I would say, a better use of their fleet, some additional hours of flying. The available seats, the ACMs are, I mean, in some way expecting to be for the last quarter growing a little bit. So in general terms, let me put it in this way. Volaris has made the correct moves trying to support the most dense or bigger routes that have, in some way, the better possible demand. And in general terms, that give us a little better position on the last quarter of the year in terms of traffic.

Speaker 2

But again, on the long term, I mean, as soon as the P and W engines issue is solved, it's not fully solved, we will continue seeing some lack of capacity and for sure a decrease in general terms of the capacity in our airports for at least the coming year. But yes, we are a little more positive for this second half of the year talking about specific of

Speaker 12

Perfect. Thank you.

Operator

Our next question comes from Alan Macias with Bank of America. Please go ahead.

Speaker 2

Hi, good morning, Tim. Thank you for the call. Just at this point, can you provide a long term sustainable EBITDA margin target that you might be looking at? Thank you.

Speaker 4

Hi, Alan. This is Ulf. Well, DJ will be complicated. As you know, all the issues that we have ongoing, the discounts in passenger charges, the different issues related with the cost, the decrease in passenger traffic. But for 2025, once we have the new tariff, we will be close to 68%, 68% close less 1% will be the normalized EBITDA margin.

Speaker 2

Thank you.

Operator

Thank you. And now I will turn the call over to management to take the webcast questions.

Speaker 10

Thank you, Nicky.

Speaker 11

And the first question we have is from Bernardo Malpica from Santander. And he's asking if Aeronautical revenues fell 7.7 percent while traffic fell 4.1%. Why was the fall in Aeronautical revenues worse than traffic? What is the mix, discount?

Speaker 2

The first part is related for sure with it's a mix of things. The first one is the fulfillment of the maximum target that is related in one hand with discounts mainly. Also, we have in general trends 95% of fulfillment on the maximum tires and that is the biggest part of the donation of the of difference between revenue aeronautical revenues and passengers growth. Also, as you remember, Puerto Vallarta and Caboz both airport has the most the biggest maximum tariff in our net and both of these airports has zero increase. So in general terms, it's a mix between the composition of the maximum tariff in our portfolio and also the 95% on the fulfillment of the maximum tariff.

Speaker 11

Thank you, Rob. Then we have another one from David Cruz from Grupo Val. Regarding the purchase of Guadalajara WTC, how do you expect that this will change the estimate of results for 2024?

Speaker 4

Hi, David. This is Saul. Well, it is already included this expected revenue in EBITDA for this new asset, as we mentioned, will be consolidated and integrated to our figures starting on July 1. So it is already included in the guidance. And as we mentioned, the total revenues will be around 10% above of the revenues in 2023.

Speaker 11

Thank you, Sal. The third one is from Alina Ser from Capitolo. Will GAAP pay concession fees and technical assistance fees over GWTC revenues?

Speaker 2

Thank you. I mean in terms GAAP will not pay additional concession fee and technical assistance over the GWTC revenues. But it's important to remember that GWTC is a concession, so they already pay a concession fee for the authority. So GAAP will not pay additional concession fee. But in the cost of W2C, they are already paying a concession fee because it's a fiscal concession.

Speaker 11

Thank you, Raul. Now we have the question from Dennis Stice from Morgan Stanley. Thank you, James, for writing this. It says, my question was related to your new EBITDA growth guidance, which implies roughly 5% year over year growth in the second half of twenty twenty four versus minus 5% in the first half of 2024. The new acquisition adds around 2% of EBITDA growth, right?

Speaker 11

So what other variables do you see improving in second half versus first half that we need to consider?

Speaker 4

Hi, Jens. This is Saul. We don't have any other major changes. GWTC consolidation is important. It's a new asset.

Speaker 4

We'll be integrated. It wasn't included during the first half in the results of the company. So we don't have any other issue besides the effect of the capitalization of the 4% was already included in the first half. And I would say that probably the effect on the increase in the commercial revenues that was included in the new revised guidance.

Speaker 11

Thank you, Saul. Then we have Alina Sur from Capitola. The midpoint of your guidance implies a growth of 5% year over year on EBITDA on the second half of the year. How exactly will this be a shift given the decreasing tariff impacts year over year?

Speaker 4

Hi, Ali. This is basically because the consolidation of the new cargo company, GWTC, that will represent around ARS 300 1,000,000 of EBITDA that will be integrated into the fields of the company. That's the main reason. Obviously, the performance of the commercial is helping, but basically is the main reason of this increase.

Speaker 11

Thank you, Saul. And the last one, it is from Mauricio Withlago from AM Advisors. When do you expect to see the full benefit in revenues from the expansion in Guadalajara?

Speaker 2

Thank you, Mauricio. I mean, just we already just opened some of the new commercial areas on Guadalajara airport. So let me put it in this way. On August of this 2024, we'll be 100% of the new commercial space that would be operating. So from that, we'll have the full year of operation of the new areas that are going to happen in 2020 August of 2025.

Speaker 2

I mean, the 1st full year of all the concept operating.

Speaker 11

Perfect. Thank you, Raul. With this, we end from the webcast questions. So I return the call to Nikki.

Operator

Thank you. We show no further questions over the phone at this time. I will turn the call over to management for closing remarks.

Speaker 2

Thank you again, everyone, for joining us today at our 2nd quarter results conference. On GAAP's behalf, we wish you a great day. Thank you.

Operator

This does conclude today's program. Thank you for your participation. You may disconnect

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Grupo Aeroportuario del Pacífico Q2 2024
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