Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR) Q4 2024 Results Conference Call February 27, 2024 10:00 AM ET

Company Participants

Adolfo Castro - Chief Executive Officer

Conference Call Participants

Juan Ponce - Bradesco BBI

Pablo Monsivais - Barclays

Anton Mortenkotter - GBM

Andressa Varotto - UBS

Isabela Salazar - GBM

Gabriel Himelfarb - Scotiabank

Jay Singh - Citibank

Operator

Good day, ladies and gentlemen, and welcome to ASUR’s Fourth Quarter 2023 Results Conference Call. My name is Doug, and I will be your operator. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, today's call is being recorded.

Now, I'd like to turn the call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead, sir.

Adolfo Castro

Thank you, Doug, and good morning, everyone. Before I begin discussing our results, let me remind you that certain statements made during this call may constitute forward-looking statements, which are based on current management expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially, including factors that may be beyond our company's control.

As usual, additional details about our quarterly results can be found in our press release, which was issued yesterday after market closed and is available on our website, Investor Relations sector. Following my presentation, I will be available for Q&A.

Before getting into a discussion of the quarterly results, let me start today's call with a recap of the recent developments. A significant milestone for the quarter was December 2023, approval of the 2024-2028 master development plan for our Mexican Airports.

This approval occurred under the government's new regulations and increase of the concession fee to 9% from the 5% of total gross revenues starting from January 3 of this year.

Some key highlights of the new MDP include. The efficiency factor used to annually adjust the maximum tariffs increase from 0.7% to 0.8% in the prior MDP. The methodology to calculate the discount rate is now based on weighted average cost of capital compared to cost of equity before. The new MDP 2024-2028 also calls for a total CapEx commitment of MXN 28.5 billion measure in December 2022 tariffs for the five year period.

Of these five year CapEx, 75% equivalent to MXN 21 billion or approximately $1.4 billion, will be invested at Cancun Airport, 70% of which will be allocated to expansion works. Key projects include the second phase of the expansion of the International Terminal 4, which includes additional four boarding gates that have been delayed due to the pandemic, a new road connecting the terminals to the major trains. We also plan to rebuild and expand Terminal 1 as well to expand airport roads.