Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR) Q1 2025 Earnings Call Transcript

Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR) Q1 2025 Earnings Call Transcript April 23, 2025

Operator: Good day, ladies and gentlemen, and welcome to ASUR’s First Quarter 2025 Results Conference Call. My name is Daryl and I’ll be your operator. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session toward the end of today’s conference. [Operator Instructions] As a reminder, today’s call is being recorded. Now, I’d like to turn this call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead, sir.

Adolfo Castro: Thank you, Daryl and good morning everyone. Before I begin discussing our results, let me remind you that certain statements made during the call today may constitute forward-looking statements, which are based on current management’s 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. Additional details about our first quarter 2025 results can be found in our press release, which was issued yesterday after market close and is available on our website in the Investor Relations’ section. Following my presentation, I will be available for Q&A. As usual, all comparisons discussed on this call will be year-on-year and figures are expressed in Mexican pesos unless specified otherwise.

During the quarter, we welcomed a total of 18.6 million passengers across our three countries of operations, largely flat compared to the same period last year, continued growth in Puerto Rico and Colombia, offset a softer performance in Mexico. Looking more closely at the traffic results by country, Puerto Rico was the best-performing market, maintaining a strong positive trend, up nearly 11%, with international traffic expanding in the high teens and domestic traffic in the low double-digits. While traffic remained resilient, we continue to expect normalization after benefiting from Frontier Airlines’ expansion of operations last year. Colombia was the next best-performing market. As anticipated, traffic in Colombia began to normalize to more sustainable levels 2023, rising just over 6% driven growth in international traffic in the mid-teens and domestic traffic in the low single-digits.

In Mexico, traffic comparisons were impacted by Easter shift, which occurred in March during 2024. In turn, traffic declined nearly 5% during the quarter, reflecting a high single-digit decline in international passengers, while the trend in domestic markets improved, declined just below 1%. Cancun, our largest airport continued to build the effects of Tulum Airport. Overall, traffic in Mexico continued to experience year-on-year declines from almost all regions during the quarter. Specifically, traffic from Europe decreased 0.8%, from the U.S. 10.5% and from South America by 2.8%, while traffic from Canada remain unchanged. Domestic traffic remained affected by continued capacity limitation at Mexico City Airport since early 2024, which we expect to be lifted in the second half of the year.

Together with the ongoing Pratt & Whitney engine restriction, additionally, Cancun Airport experienced a modest impact from the initial ramp-up of operations of the new Tulum Airport. For context, Tulum is projected to handle approximately 2.9 million passengers during this entire year compared to the 1.2 million last year and over 30 million travelers that passed through Cancun in 2024 or 8 million in this quarter alone. Looking ahead, we anticipate traffic in Mexico will begin to stabilize next year as the impact of Pratt & Whitney engine issue fades as Tulum Airport completes its initial ramp-up phase. As I have mentioned in the past, beyond that, we expect passenger volumes at both Cancun and Tulum to expand in line with the growth dynamics specific to each region.

Q&A Session

Currently, the global macro situation is fluid and unpredictable. However, as this disruptions, particularly related to the U.S. and the impact of travel to Mexico have proven not to be — have proven to be short lived. Now, as we move to review our financial performance, recall that all reference to revenue and cost figures exclude construction. Total revenues were up 14% year-on-year to MXN8.2 billion, supported by solid increases across all operations. Mexico represented 73% of total revenues, posted a high single-digit top line increase. Aeronautical revenues were up 9% with aeronautical revenues rising 10% reflecting a strong commercial revenues per passenger. Puerto Rico contributed 15% of the total revenues and continued to deliver steady growth in the high 20s, driven by both aeronautical and non-aeronautical revenues, further supported by exchange rate benefits from weaker peso.

Colombia accounted for 12% of total revenues, posting continued solid top line growth in low 30s. Growth was driven by both aeronautical and non-aeronautical revenues, which benefited from a continued recovery in domestic and international traffic and the opening of 26 new commercial spaces over the past 12 months, also benefited from the weaker peso. Advancing our strategy to expand commercial offerings, we opened 40 new commercial spaces over the last 12 months. This included 11 in Mexico, three in Puerto Rico, and 26 in Colombia. As a result, total commercial revenues grew in the high single-digits with Puerto Rico posting an early 23% increase and Colombia delivering a strong year with a growth of 38%. In Mexico, commercial revenues show a low single-digit increase, marking a positive shift from previous trend.

Commercial revenues per passenger reached nearly MXN147 in the quarter, reflecting a strong year-on-year in the high teens, robust growth across all three regions supported this performance. In Puerto Rico and Colombia, commercial revenue per passengers — commercial revenues increased in the high 20s, driven by a favorable exchange rate in Mexico and in Puerto Rico and the contribution of new commercial openings in Colombia. Mexico also delivered solid growth in the low single-digits, reaching MXN169 per passenger supported in part by currency effects. In terms of costs, total expenses were up 18% year-on-year. In Mexico, cost increased 10%, primarily reflecting decreases in concession fees mandated by the Mexican government, higher administrative fees, and the impact of the 12% increase in minimum wages effective January 1st of this year.

In both Puerto Rico and Colombia costs were up 30%, with increase in Puerto Rico, Colombia, reflecting the depreciation of the Mexican peso against the U.S. dollar and the Colombian peso. As a result, consolidated EBITDA rose 12% year-on-year to MXN5.7 billion in the quarter. While adjusted EBITDA margin, which excludes construction stood at 70% compared with 71.4% a year ago. The decrease was attributable to the slight margin decrease in each country due to higher operating costs. Notably Puerto Rico and Colombia posted double-digit EBITDA growth of 24% and 30%, respectively, while Mexico saw an 8% increase in EBITDA despite the lower passenger traffic. Our balance sheet remains strong with nearly MXN23 billion in cash and cash equivalents, up 35% year-on-year and net debt of EBITDA ratio of negative 0.5 times.

During the quarter, we invested MXN645 million in capital expenditures, mainly deployed towards modernization and expansion efforts in our Mexican airports. Main projects during the quarter included the construction and expansion of Terminal 1 in Cancun Airport as well as the expansion of Terminal in Oaxaca Airport. In Puerto Rico, runway pavements and rehabilitation was completed and we’re currently working on taxiway hotel. Recall that all construction activities are taking place outside the operational areas to ensure no disruption to airport operations. As mentioned during our prior earnings call, we continue to anticipate gradual increase in CapEx as we move forward with several strategic infrastructure projects this year. Amongst the most significant is construction and expansion of Terminal 1 in Cancun Airport, which is slated for completion in 2026.

Terminal 4 in Cancun remains on track for completion by 2028. Additionally, once Terminal 1 is operational, we expect to implement key upgrades at Terminal 2 to ease existing capacity pressures, particularly in non-aeronautical areas. This is also designed to streamline traffic flows, particularly from South America, unlocking additional promotional revenue potential. As part of our ongoing commitment to delivering value to shareholders, in light of our solid financial performance, subject to approval at today’s Annual General Meeting, the Board of Directors proposed a total cash dividend from accumulated retained earnings and share buyback reserves to be paid in three tranches. The first tranche includes an initial ordinary net cash dividend of MXN50 per share payable in May 2025, followed by two extraordinary net cash dividends of MXN15 each payable in September and November 2025.

Before opening for Q&A, note that last week, we published our 2024 sustainability report, the 20-F report and the Circular Unica and encourage you to read them, all of which can be found on our website. Let me take a brief moment to provide an update on our sustainability efforts. I am pleased to share that 2024 marked a year of meaningful progress. We took several key steps toward achieving our ESG goals building on our long-term vision. We expanded our flagship social investment program to a third indigenous community in Yucatan, training in sustainable tourism, 59% more than the previous year. On the climate front, following our 2023 commitment to the science-based targets initiative, we completed our first Scope 3 emissions inventory in Mexico.

This milestone help us better understand the broader impact of our value change as we move forward to net zero emissions. Biodiversity preservations remain a top priority. In 2024, we began building long-term alliances with global organizations to protect emblematic species and restore natural ecosystems in the southeast of Mexico. Lastly, from a governance perspective, we are proposing the appointment of a new female Board at our upcoming Annual Shareholders meeting. If approved, this will bring female representation on our Board to 36%, while 57% of the Board will be in the independent. In closing, our first quarter 2025 performance reflects the strength of our diversified portfolio, our resilient operational performance, disciplined execution, and our continuous focus on efficiency.

Despite navigating industry challenges such as Pratt & Whitney engine, the capacity reductions at Mexico City Airport we reported a 14% increase in net majority income to MXN3.5 billion. All else equal, we expect a solid remainder of 2025 as we continue investing in infrastructure, elevating the passenger experience and delivering sustainable growth. At the same time, we are cognizant of the potential macro challenge on a global basis that we are monitoring closing. That concludes my prepared remarks. Please open the floor for questions.

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

Rodolfo Ramos: Good morning Adolfo. Thanks for taking my questions. I have a couple, if I may. The first one is regarding the driver of your strong commercial revenue. I mean you made some comments on this front. But if you can elaborate a little bit more on the performance that we saw during the quarter. Perhaps your outlook? I mean, the Mexican peso depreciation certainly had a role, but the growth per pax was also stronger than in the first quarter of last year when the peso appreciated. So, any additional color there would be helpful. And secondly, when you think about your CapEx, your investment — your committed investments, especially in Cancun, in this year, it’s expected to ramp up. And you mentioned that you don’t expect to deliver these until 2026 these projects.

I don’t know if there’s anything when you look at what you’ve already invested so far that could impact your operating expenses, your margins as you open more areas or more expansions. Just want to get a sense of when we could start seeing your cost structure swelling up as a result of these investments, if at all? Thank you.

Adolfo Castro: Hi Rodolfo. Thank you for your questions. Well, in terms of commercial revenue, of course, the most important effect in comparison of last year is related to Puerto Rico and Colombia and those are also affected by the positive dollar versus the peso. If we go back to the end of first quarter last year, the exchange rate with the dollar of the Mexican peso was MXN16.5. By the end of this year, we are talking about MXN20.4. So, the peso depreciation will play an important role on the case of commercial revenues per passenger in Puerto Rico and also in the case of Colombia. In the case of Mexico, I would say, yes, we had a very good quarter that has to do with the passenger mix and some of the impact for duty-free related to peso dollar again.

In terms of CapEx, yes, we are working today, as I mentioned, in the remodeling and expansion of Terminal 1 that should be completed by the third quarter next year. And then you are right in the sense to say that the cost will change once this infrastructure is open. And of course, we will have new areas that we will have to maintain and clean and secure all of these new spaces. In the case of Terminal 4, as I mentioned, we are expecting to conclude the project by the end of 2028. I don’t know if this answers your questions.

Rodolfo Ramos: Yes. Thank you, Adolfo.

Adolfo Castro: You’re welcome.

Operator: Thank you. Our next questions come from the line of Jens Spiess with Morgan Stanley. Please proceed with your questions.

Jens Spiess: Yes, hello Adolfo. I have question regarding capital allocation and the dividend you will be paying. And in light of that, if you probably saw that CCR is selling their airport assets in Brazil. Do you have interest in those? Or can we read from your dividend that basically that’s not part of your upcoming capital allocation? Thank you.

Adolfo Castro: Thank you, Jens. Good morning. Well, basically, if you see what we propose to Board and the Board to the shareholders assembly, it’s almost what we have in cash. The cash and cash equivalents for the quarter MXN22 billion and the dividend for the whole year will be MXN24 billion. Yes, we are seeing the project and the offering of CCR. We’re analyzing this carefully. In the case of this will come — or if this will be funded by debt.

Jens Spiess: Okay, perfect. thank you. And if I may, just one more question regarding any weakness that you’re potentially seeing from like airlines removing frequencies maybe due to the ongoing like trade tensions and macro uncertainty specifically like weaker demand that some of the U.S. airlines are seeing. Do you see any weakness coming from that? Or is it still too early to tell at this moment? Thank you.

Adolfo Castro: I think it’s too early to tell. I don’t see any effect of this at the moment. Of course, when you — when you see the traffic in Mexico and when you see the traffic in Cancun particularly, you will see the effect of Tulum Airport. Tulum Airport as I was saying in my initial remarks, we’re expecting this to reach 2.9 million passengers this year. Roughly speaking, round numbers, if you track 150,000 every month for this quarter, that’s 450,000. And 75% of this is international, not just domestic. So, that is why you are seeing Cancun numbers decreasing. That is the most important effect I’m seeing for the moment.

Operator: Thank you. Our next questions come from the line of Guilherme Mendes with JPMorgan. Please proceed with your questions.

Guilherme Mendes: Hey Adolfo, good morning. Thanks for taking my questions. I have two follow-ups on traffic. The first one is regarding the Mexico City restrictions. You mentioned that you do expect some of the restrictions to be lifted in the second half of this year. Can you elaborate a little bit more your expectations and how this should translate into traffic for ASUR? And the second point is regarding Tulum. You mentioned 2.9 million passengers this year. Just wondering what was your expectations by the time of the MDP, if this 2.9 million is in line with what was incorporated on the MDP or slightly worse? Thank you.

Adolfo Castro: Hi, good morning. Well, in the case of the Mexico City Airport, we do remember that last year, the 8th of January to be precise, the government decided to impose a restriction in terms of capacity, the restriction was to have 43 operations per hour coming from 52 operations per hour. This restriction in my opinion, is too strong, considering that you have one runway and a half. One runway can sustain 50 ATMs per hour, so if we say one runway and a half, that should be 75. Today at 43 it’s really low. That’s one piece of the puzzle. The other piece of the puzzle is we saw some elimination of restriction in the case of Toluca Airport and Toluca airport really nice at the end of last year by 20% with us. Why it is so important because from the Valley of Mexico, it is originated 50% of the domestic traffic of the group.

So, it’s extremely important that Mexico City Toluca have grown their traffic. If we come back in time, I would invite you to compare what it was in 2019 when the IFA was not in place and Mexico City Airport traffic was 51 million. If you see what the figures of last year were, you will see that after five years, almost six years there is only a growth of 1 million. And this is extremely important for us. So, I do believe that by the end of the third quarter the government eliminates or changes this restriction to at least to go back to the 52 ATMs per hour that we have at the end of 2023. Also keep in mind that next year, we will have the football World Cup in Mexico, and it will be extremely important to have the connectivity of Mexico City.

In the case of Tulum, as I was saying, what we expect for this year is 2.9 million. In the case of MDP it was almost the same. I was expecting probably 3 million for this year. So, not too much difference of the reality versus what I was expecting.

Guilherme Mendes: Very clear. Thank you, Adolfo.

Adolfo Castro: You’re welcome.

Operator: Thank you. Our next questions come from the line of Pablo Ricalde with Itaú. Please proceed with your questions.

Pablo Ricalde: Hi, good morning Adolfo. Thanks for taking my questions. I have a question on Mexico tariffs. Based on my understanding, you haven’t raised price this year. So — well, two questions. The first one is which percentage of your maximum tariff you are charging now? And the second when do you expect to raise tariffs in Mexico?

Adolfo Castro: The Mexico tariffs or the Mexico rate is measured once a year. You cannot say that you will be measuring that quarter by quarter. Last year, the maximum tariff compliance that’s the way that we call it, it was 99%. So, I would say today that the report that we presented yesterday, that we disclosed yesterday to the market includes just revenues that are in accordance with the maximum rate we have today. So, what we will be expecting for the end of the year, it’s almost the same results that we got last year. It’s not that today, we are above the maximum right now. That’s not the case on the per side. And on the other side, you cannot again measure these on a quarterly basis. It’s just once a year.

Pablo Ricalde: Perfect. Thank you.

Adolfo Castro: You’re welcome.

Operator: Thank you. Our next questions come from the line of Andressa Varotto with UBS. Please proceed with your questions.

Andressa Varotto: Hi, good morning Adolfo. Thanks for taking my question. I just have one here on my side. What is the expectation of MDP CapEx for this year from the first quarter figure versus our expectations, it seemed a bit low? So, how do you see CapEx deployment throughout the year? Thank you.

Adolfo Castro: You’re welcome. You have the figures in the press release that we disclosed on December 13th, 2023. Of course, those were presented in pesos as of December 2022. So, if you include the inflation factor up to the end of this year, you will reach a number close to $7 billion in the case of Mexico. I would say, $25 million in the case of Puerto Rico and a very small amount in the case of Colombia. That is what we expect for this year. In terms of the seasonality, you can compare this during the years and you always we see that the first quarter is the lowest and the fourth is the highest.

Operator: Thank you. Our next questions come from the line of Anton Mortenkotter with GBM. Please proceed with your questions.

Anton Mortenkotter: Hi, Adolfo. Thank you for calling. Congrats on the results. I just have one question. I mean, we understand that on Colombia, you were rolling out a strategy to increase the prices on some of your contracts or to do some catch-up in the commercial side. I was just wondering if the results of this quarter are a result of this. And should we expect to see some more of that trend going forward?

Adolfo Castro: Hi Anton, good morning. Well, in the case of Colombia, again, I do believe we have done a very wonderful work in the increase in commercial revenues per passenger. The recommendation there will be to follow since the end of — since the end of 2017, the reports on Colombia pesos. And then you will see the real effect of our work there. It has been really nice. The strategy today is to continue with this as we can. Of course, some of the impact that we are seeing in the first quarter has to do with exchange rate, but also with additional spaces that we have opened and the strategy of business as usual that we continue to operate there in Colombia.

Anton Mortenkotter: Perfect. Thank you.

Adolfo Castro: You’re welcome.

Operator: Thank you. Our next question come from the line of Stephen Trent with Citibank. Please proceed with your questions.

Stephen Trent: Good morning Adolfo and thanks very much for taking my questions. First is actually just a follow-up on Tulum and the traffic you’re seeing around that. Do you have a sense for the extent to which some of the draw is coming from commercial traffic as opposed to charter and private traffic going to Tulum instead of Cancun?

Adolfo Castro: Well, of course, some of what we see today there is related to charter flights, charter flights that have final destination very close to Tulum. They are basically switching from Cancun to Tulum. They should not fly to Cancun any more if the final destination is very close to Tulum. That’s one piece of course. In the case of commercial activities, you can see that American Airlines is flying there and [indiscernible] is flying there and [Technical Difficulty] Those are basically the commercial airlines and we have some flights — one flight from Europe. Well, they have one flight from Europe at the end of last year and it was from France.

Stephen Trent: Okay, that’s very helpful. Appreciate it. And just a quick follow-up on the dividend. Of course, this year, it’s a big one, and it looks like a substantial percentage of the company’s retained earnings. How should we think about moving forward, how ASUR might potentially source future dividends? Would it come from a different piece of shareholders’ equity? Or should we assume kind of steady state? Thank you.

Adolfo Castro: Yes. Well, in the case of what we have proposed to the shareholders assembly is basically the result of what we have done in the past in our financial performance. As I mentioned during the remarks on some of the questions before, we have MXN24 billion in cash and cash equivalents at the end of the quarter — MXN22 billion. And the proposed dividend is in three tranches is almost MXN24 billion. So, we’re just paying what we have achieved in terms of results of the company. Going forward, we will have to see what the results are, and then we will propose something to shareholders also.

Stephen Trent: Okay, appreciate it. Thanks Adolfo.

Adolfo Castro: You’re welcome.

Operator: Thank you. Our next questions come from the line of Fernanda Recchia with BTG. Please proceed with your questions.

Fernanda Recchia: Hey, good morning Adolfo. Thank you for taking my questions. So, just two follow-ups here from our side. So, just to explore a little bit further the traffic outlook for Puerto Rico and Colombia. I think you mentioned in your remarks that you expect the normalization, but maybe if you could provide us with a bit more color on what kind of traffic you’re expecting for this year? And when Puerto Rico should start to normalize is the first one. And the second, on the commercial revenues in Mexico, as you mentioned, you’re working on the remodeling of Terminal 2. So, — which is expected to finish by the first half of next year. So, maybe if you could give us any color on what kind of increase in commercial revenues per PAX should we anticipate because of this conclusion would be great. Thank you.

Adolfo Castro: Hi Fernanda, well the traffic in Puerto Rico, as I mentioned in my initial remarks is still very strong growth. And I was expecting this to normalize in the low single-digits but this is still strong on Puerto Rico’s part. And we are happy to see that. In the case of Colombia, now you can see that things are normalizing. You can see what the growth was for the month of March, and that’s what we believe it should be for the rest of the year. Commercial revenues, we are just expanding and remodeling Terminal 1 to alleviate the capacity problems we have today in the Terminal 2. And those capacity problems are basically eliminating commercial opportunities that we have today. We know for sure in the middle of the day, there is no chance with the passenger to have a meal because all the spaces are full.

Once we opened Terminal 1, we will work on Terminal 2 to improve the situation and that of course will increase or have an impact on commercial revenue per passenger. It’s not easy for me to say how much it will be. We will have to wait and see once these spaces are fully operational, and that should occur third quarter next year.

Fernanda Recchia: Okay. Thank you.

Operator: Thank you. [Operator Instructions] Our next questions come from the line of Jorge [indiscernible] with GMB. Please proceed with your questions.

Unidentified Analyst: Hi, good morning Adolfo. Congrats on the results and thank you for taking the question. Just a quick one from my side. Are there any updates on the Aeropuerto de Bavaro investment or any other international expansion opportunities being considered? thank you.

Adolfo Castro: Hi, good morning. No updates on Bavaro. The situation is still the same. We are in the legal process, and that will continue for some time.

Unidentified Analyst: Thank you.

Adolfo Castro: You’re welcome.

Operator: Thank you. Our next questions come from the line of Gabriel Himelfarb with Scotiabank. Please proceed with your questions.

Gabriel Himelfarb: Hi, Adolfo. Thanks for the call. Just a question. Based on your experience, — in the cases of a U.S. recession, how much do you think it might drop international traffic and visitors coming from the U.S. and Canada to Cancun? I know it’s difficult to forecast, but based on your past experience.

Adolfo Castro: Hi Gabriel. Well, let me tell you a story. If you see the presentation that we have in ASUR web page where we are presenting our traffic since 1990. That is the same chart that I used 25 years ago to make the IPO process of this company. As we’ve said to go back to 1990 because that was at the moment the last U.S. economic recession to see what was the effect of the U.S. economic recession in the international passenger traffic. If you see the charts, international traffic grew from 2.6 million to 2.8 million, even with the U.S. economic recession. So, in that sense, at the moment, we were resilient for the U.S. economic recession. I don’t know what will happen today and if the recession will be there or not. But on the other side, I have to say that what we are seeing today in the case of the United States is a very strong decrease of tourism towards this country.

And if we can catch up some of these effects, it would be great for us, let me say, the case of Canada is decreasing significantly for the summer, let’s say for the case of Europe and let’s say, Asia and South America. So, again, if we can catch some of these decrease will be excellent for us. You know why they are not willing to go there. And we will try to relocate our commercial activities to focus on this market or reinforce the commercial or the marketing activities on this market.

Gabriel Himelfarb: Okay. And have you seen any kind of ramp-up from Canadian traffic, like they’re moving from the U.S. to Canada — from traveling into the U.S. instead traveling to Mexico?

Adolfo Castro: Well, if you see what I said during the initial remarks, the only region that was flat for the quarter or that was not negative for the quarter was Canada.

Gabriel Himelfarb: Okay. Thank you.

Adolfo Castro: You’re welcome.

Operator: Thank you. Our next questions come from the line of Jens Spiess with Morgan Stanley. Please proceed with your questions.

Jens Spiess: Yes. Thank you. Just one follow-up on — also like on Pablo’s question regarding the MAX tariff. I know that compliance is annual. So quarterly we shouldn’t be worrying. But for the first quarter, I think you published that the unit tariff was 352, which I think is very close to the maximum tariff, if I’m not mistaken. So, given like all the FX volatility that might be ahead. And I know that more recently, the peso has appreciated, so it plays in your favor, but not regardless, there’s a lot of volatility. So, do you think that there should be a bit more cushion just to factor that in? Or do you feel comfortable with the current level? Thank you.

Adolfo Castro: Let me try and explain the case of the maximum rate. And I’m going to just say numbers to be more clear on that. If we say that maximum rate is contract, and we, during the quarter, obtained, let’s say, 105. What we report is just 100 and the other five goes to the maximum tariff itself. So, you will not see the five in the P&L for the quarter. If the maximum rate is 100 and the result is 98, what you are going to see in the P&L is 98. So, in terms of exchange rate, just to put this very clear, the end of last year, the end of last — sorry, at the end of the first quarter last year, the exchange rate was at MXN16.5. The end of 2024 it was MXN20.78. The end of March was MXN20.43 and the current exchange rate is around MXN19.5. Coming from MXN16.5 to MXN19.5 today give us a lot of room to maneuver. So, that is why I was saying that we expect for this year, almost the same as in terms of maximum compliance of what we got last year.

Jens Spiess: Okay, that’s clear. Thank you, Adolfo.

Adolfo Castro: You’re welcome.

Operator: Thank you. [Operator Instructions] I’m showing no further questions at this time. That does conclude the question-and-answer portion of today’s conference call. I would like to turn the call back over to Mr. Castro for closing remarks.

Adolfo Castro: Thank you, Daryl and thank you all again for joining us today for the first quarter 2025 conference call. We wish you a good day and good bye. Now, you may disconnect.

Operator: Thank you. That does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.