Aena Sme (Madrid:AENA) Q1 2026 Earnings Call

0:00 Everyone, and thank you for joining us today for the Aena Q1 twenty twenty six results presentation. My name is Sammy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. I'll now hand over to your host, Carlos, Head of IR, to begin. Please go ahead, Carlos. Good afternoon, everyone, and welcome to our Q1 twenty twenty six results presentation. This is Carlos Gallego speaking, Head of IR. It's a pleasure to be with you today. Our CFO, Inatio Castellon, will host the call together with me. We are going to cover some of the main topics explained in the results presentation that is already available in the CNMC website, and we'll finish with a Q and A session. As usual, to ensure that we remain on schedule, we kindly ask you to limit yourself to one question per participant.

0:57 Without further ado, give the floor to Napier Castellan. Thank you. Thank you very much, Carlos. Hello, everyone. Good afternoon, and thank you for joining us today with our Q1 twenty twenty six results presentation. I will start commenting some highlights. And afterwards, I will leave the floor to Carlos. We'll have a Q and A session at the end of the call. Let me start on Slide four with some comments on traffic trends. As you can see, traffic increased for the group 3.8% year on year, up to 81,300,000 passengers. If we look at the Spanish network, the annual increase was 3.2% and we reached almost 65,600,000 passengers, slightly ahead of our forecast for this quarter.

1:47 Please note that the traffic performance for this quarter has been positively affected by the timing of the Easter break. Last year, the Easter break took place in April and this year has been has happened between March and April. And we have also experienced some positive shift from rail to air transport, I would say, took place on extraordinary basis. If we look at the short term from a traffic standpoint, what I can say with you at this moment in time is that April so far is performing well. Let's have a look at the financial performance. Twenty twenty six Q1 total revenues for the group accounted for EUR 1,479,900,000.

2:39 That's an increase of €154,300,000 EBITDA reached €661,000,000 increasing by €17,400,000 And if we look at net profit, profit after taxes, that was circa three hundred and thirty million euros, an increase of 9.3%, circa an increase of €30,000,000. The growth in revenues was driven by traffic performance, traffic evolution, the increase in the idle charges from March 1, the improvement in commercial activity and the performance of our international assets. Please let me highlight that when we look at the performance on the international assets, even the increasing on the construction services, now looking at the Slide six, they explain they mostly explained that increase. The construction services amounted to EUR84.3 million in the first quarter of twenty twenty six compared with only EUR8 million in the first quarter of twenty twenty five.

3:47 Basically, this reflects the progress that we are having in the Congonhas portfolio with the progress in that specific airport in all the construction activities. If we exclude these IFRIC 12 construction revenues, the underlying consolidated revenue growth for the group was 6% in this quarter. Let's have a look at the performance by business lines. Aerial revenues, they grow by 5.2%, commercial revenues 5.5%, revenues from real estate, a very positive and high increase with a 16.8 and international revenues increased by 57.7%, largely driven as I was explaining earlier by the construction revenues recognized on the IFRIC 12.

4:32 If we exclude this effect, the revenue growth, sorry, our international revenues would have been 8%. Let's have a look in more detail to Ireland Commercial. Ireland, just a couple of comments. As you know, as you I'm sure have seen in the papers we have said with the market dilution in this quarter has been EUR 28,700,000. That's much higher than the dilution that we have last year. And the main reason is the increase in tariff. Last year, tariff was flat for the first quarter. And in this specific year, the tariff has been flat for the first two months, has increased in the third month and we are taking into account the final tariff for the whole year in order to calculate dilution. That's the rationale for the main rationale behind the EUR28 million of dilution that are not part of the revenues at this moment in time, in this quarter, but will be revenues for the group in a couple of years through dilution factors to the K factor.

5:32 If we look at the commercial revenues, there's a few comments. Sales keep going keep increasing circa 5% in the first quarter of twenty twenty six and also very important growth in all our activities that we manage in house. I'm referring to VIP services and parking. VIP services keep delivering growth rates higher than 30% and parking revenues also performed very strongly. When we look at retail activities, I would like to share with you that we have an excellent results in the awards of the contracts in F and B specialty shops. As you can see in the information provided to the market, for example, in F and B, MAX increased by 30% when comparing MAX for 2026.

6:18 And if we look at the specialty shops, MAX increased by 45% when we compare the MAX in 2026 to 2025. So very good results from all the contracts award for retailing activities in this quarter. Let me finish on commercial business with another topic. We have managed to reach agreement with a number of tenants in relation to all the losses that the company had in the through COVID because traffic losses. This is as a result of these agreements, the company will have a cash inflow in the next months and also an income that you will be seeing in the next quarter when we're using the results for the first half of the year.

7:08 The income that we come to that you will be able to see in that at that moment in time, will be circa EUR30 million as part of our commercial income mainly. Let's have a look at cost. So I would move into Slide seven. I've seen a number of notes on costs and operating costs this morning from many of your notes. Basically, let me share some information and we can exchange this later on the Q and A. With respect to information, operating expenses, so that includes supplies, staff costs and other operating expenses for the group. If you look and compare it year to year, the increase is 17.8%, total of €850,000,000.

7:55 Please note that that increase is taking into account IFRIC 12. So if we remove from that item, the IFRIC 12 impact, the increasing cost in OpEx would be circa 7% for the whole group, for the consolidated group. We have been for a number of years and especially in the last two calls that we have had with all of you, we have been anticipating that we are seeing a trend with respect to our OpEx in which that trend is provoking that the OpEx figures of the company go north. We have also tried to be very transparent about the reasons of that of that change, of that increase.

8:42 That is mainly explained by more FTEs, higher traffic, regulation, quality levels, inflation. So happy to provide more insight later, and I'm sure Carlos will will spend some time explaining the other operating expenses later on. But that's what we are seeing. So when we look at the Spanish network, the total OpEx figure has increased by 7.9%, reaching €644,300,000 with an increase in staff cost of 12.4% that are and also a significant increase in other operating expenses. Let's have a look at EBITDA. So I'm referring to Slide eight. Reported EBITDA for the first quarter of twenty twenty six amounted to EUR 6 and 61,100,000.

9:29 That's a growth of 2.7% year on year and the reported EBITDA margin for the quarter was 44.7%. These figures on EBITDA growth margin and number are impacted when we compare those figures with the previous with the figures of the previous year or the quarter or first quarter of the previous year. And the main impacts are basically explained by the Luton situation in relation to the fire that the parking and the reconstruction of that parking after the fire and the insurance compensation, but also IFRIC 12 impacting on the margin. So if we remove the impact, the extraordinary revenues that we had in the first quarter of twenty twenty five related to the fire compensation for the reconstruction of the parking, the increase in EBITDA of the group would have been higher than 5%, 5.1%, amounting to an increase of EUR32.1 million.

10:28 If we remove from the margin calculations, these compensation, but also the IFRIC 12, the margin of the group would start this quarter at 2026 at 47.4% compared with a margin also in 2025 of 47.7%. So a decrease, but a very slight decrease. I would say a flattening of EBITDA margins once we remove all these extraordinary items. Let's have a look at the net profit that is also in that slide. Net profit amounted to €329,000,000 in the first quarter of twenty twenty six. That's an increase of 9.3% year on year. That's a very strong growth that is explained by, of course, the business growth that we have been explaining earlier, but also by the lower depreciation and amortization this quarter compared to the quarter of twenty twenty five, because of the adjustments in the useful lives that we explained last year, but also because of the lower net financial expenses that were reduced by CHF 20,000,000 when we compare quarter to quarter, basically explained by the compensation of all the cash that we have in Brazil that we have in order to be able to pay for the CapEx in the following months and the applicable exchange rates for this quarter.

11:59 Let me finish with some comments on EBITDA. With respect to EBITDA moving to slide nine by business segments. The EBITDA growth in the real estate activities has amounted to 60 sorry, Sorry. The the the just give me a minute because I cannot see properly. Yeah. 31%. Sorry. That was right. The EBITDA for the real estate business increased by 32%, mainly explained by the increase in revenues that I was discussing earlier 16%, but also by the cost control in that specific business segment. And with respect to international activities, you will see in this Slide nine, a decline of 3.5%, but is also explained by all those extraordinary effects mainly related to the reconstruction of the parking facility and the insurance compensation related to that reconstruction.

12:58 If we were removing that impact, EBITDA for international activity would be going up by circa 16% in this quarter, confirming the very strong underlying performance of all our assets in Brazil and The UK, as Carlos will explain further. Let me finish with some further notes. Hopefully, in the next weeks of this quarter, we will achieve the financial close of the acquisition of a stake in the new holding company that will be owning 100% of Leeds at Batford Airport and also Newcastle Airport, as we anticipated before year end. And with respect to the announced transaction related to Rio De Janeiro, Galea International Airport a few weeks ago, the initial steps in order to achieve financial close of that transaction are happening as we were expecting.

13:56 On regulatory and corporate matters, as you know, the company made their proposal for DORA last February, thus progressing according to our plans. And the AGM that took place in mid April approved all the resolutions proposed to our shareholders. And therefore, the distribution of the dividend approved that AGM took place this week on Monday, in which €1.0.09 per share was paid all our shareholders and incredible dividend for all our shareholders. And that was all from me. I will let Carlos to go into further detail in a number of topics for today's presentation. Thank you very much, Carlos. Thank you.

14:49 Thank you, Matthew. Let me walk you through some additional details with respect to traffic as summarized on Slide 12. On traffic, Matthew already covered traffic performance at the group level and in Spain. So I'll give a quick overview of the traffic data for our international assets as disclosed in the press release published on April 13. Routon Air 400 GBP 3,700,000, that's an increase of 2.9% compared to Q1 twenty twenty five. In our Brazilian assets, ANB managed circa 4,700,000 passengers, plus 11.5% year on year. And BAOB recorded 7,200,000 passengers, 5.0% higher than the same period of 2025. Within the Spanish network, domestic traffic declined by 1.4 year on year, while international traffic increased by 5.5%.

15:39 This reflects a combination of supply and demand factors impacting the domestic market. On Slide 13, traffic by regions. Europe, excluding Spain, grew by 4.9%, Latin by 8.3%, North America by 9.5%, Africa by 14.9% and Asia by 36.8%, while The Middle East, minus 13.4% and Spain, the aforementioned minus 1.4%, were the only regions where traffic declined. By countries, traffic with The United Kingdom increased by 4.9%, Germany declined by 1.2% and Italy increased by 5.3%. At airport level, Alicante recorded passenger growth of 6.6%, Malaga grew by 6.3%, Madrid increased by 4.3% and Barcelona increased by 4.1%.

16:33 By airline, Ryanair reduced passenger volumes by 3.4% year on year with a market share of 19.6% of total traffic. Bueling increased passenger volumes by 4.3% with a market share of 16%. And finally, Iberia increased passenger volumes by 0.9%, representing a market share of 8.2%. Let's analyze in more detail the commercial performance. So let's move to Slides fourteen and fifteen. Total sales increased by 4.9%, higher than the traffic growth. And on a per passenger basis, the growth has been 1.7%. Revenue from fixed and variable rents invoiced in the period increased by 8.3% compared to Q1 twenty twenty five.

17:21 Excluding the multiyear straight line and other adjustments, commercial and real estate revenue grew by 7.9 to about EUR $488,000,000, and the revenue on a per passenger basis grew by 3.0%, reaching EUR 7.6 per passenger. As Ignacio mentioned earlier, total revenues from real estate services increased by 16.7% year on year. This growth was mainly driven by two components. On the one hand, cargo business revenues increased by 16.4%, reflecting continuous strength in air cargo activity. And on the other hand, revenues from real estate operations increased by 32.1%, driven by higher income from listed assets and surface rights linked to logistic and commercial developments. I think it's worth analyzing the information along commercial business line to comment on specific details.

18:13 On Slide 15, I would like to start by stating that the sales of our tenants in our core retail activities, duty free, specialty shops and food and beverage grew in line or above traffic. In the case of duty free, growth was 8%, in the case of specialty shops, 3% and in the case of F and B, 7%. Total revenue duty free decreased 0.7% compared to Q1 twenty twenty five, reaching EUR 131,000,000. But if we analyze duty free revenue excluding straight lining and other adjustments and consider business revenue as the sum of both the variable revenue invoiced in the period and the MAX, revenue has grown by 2.8, which is virtually in line with traffic growth. In addition, in the first quarter of twenty twenty five, the Canary Island plot was the only one that exceeded the minimum annual guarantee rents.

19:03 Total revenue in Food and Beverage grew year on year by 3.5 to EUR 86,000,000, and specialty subs grew by 9.3%, reaching more than EUR 32,000,000. The performance in both business lines can be explained by the new brands and tenants, the improvement of the commercial mix and additional commercial service. Revenue from mobility services, including car parks and car rentals, has grown by 6.2% to nearly EUR 110,000,000. Car park revenue grew well above domestic traffic, 9.1% to EUR 52,000,000, while domestic traffic decreased by 1.4%. The main drivers behind the revenue growth are the optimization of the available parking spaces and the pricing policy, which is pushing the average ticket by 5.8%.

19:50 Car rental sales grew by 1% and total revenue by 3.7% to EUR 58,000,000. This growth is primarily due to a strong performance at major airports and 1.2% increase in contracts, partially offset by the strong competition among the car rental providers. Finally, as Ignacio mentioned earlier, by IP services, revenues continued to grow during the quarter, plus 31.5% year on year in Q1 twenty twenty six to EUR 55,000,000, with an income per passenger of €0.84 plus 27% compared to Q1 twenty twenty five. Within this business line, VIP Lunches is the main one, representing circa 88% of the revenue. Its revenue grew by 25% because of the higher number of users, plus 15%, and higher average price, 9%.

20:44 Sorry, Slide 16 shows a high detail of the main items of the other operating expenses for the network in Spain, both in million euros and in a per passenger basis. Other operating expenses in the Spanish network rose to 7.1%, reaching €442,000,000 This increase was driven by the increase in maintenance, 20% security, plus 8.5% VRM, plus 23.5% professional services, plus 17.3% and VIP lunches plus 35%, partially offset by electricity, minus 7.7% and taxes, minus 2.2%. Although OpEx growth was higher than traffic growth, Aena clearly retains the leadership in the OpEx per passenger metric.

21:32 On Slide 17, net cash generated by operating activities amounted to circa EUR $9.00 9,000,000 in the first quarter of twenty twenty six, representing an increase of 10.7% year on year. Because of this cash generation and overall financial management, net financial debt to EBITDA improved from 1.46x at year end 2025 to 1.32x at the end of the first quarter of twenty twenty six, reflecting a continuous strengthening of the balance sheet. CapEx paid in the first quarter amounted to circa EUR 300,000,000. Most of these investments focus on safety and security and improving the airport facilities. Fixed rate debt stood at 83% of our total debt compared to 82% in 2025.

22:20 And the average cost of our debt increased to 2.51% compared to 2.34% in 2025. I will end off commenting of international assets, starting with Luton on Slide 18. In local currency, revenue at London Luton Airport rose 8.3% to EUR 84,200,000 sorry, GBP million. EBITDA reached EUR 32,100,000, minus 15.4, and the EBITDA margin was 38.2%, 48.8% in the first quarter of twenty twenty five. The contribution of the group's EBITDA amounted to EUR 37,000,000. Excluding all the items recorded in the first quarter of twenty twenty five resulting from the Carpark fire, insurance compensation for the reconstruction, lots, profits and expenses arising from the Car Park fire, EBITDA for the first quarter of twenty twenty five will be GBP 27,000,000, and the year on year change will reflect an increase of 18.9% and plus GBP 5,100,000.

23:24 The EBITDA margin would be 35.7% in the first quarter on twenty twenty five. Let's move to the Brazilian assets, Slides nineteen and twenty. I would like to highlight the traffic growth, plus 11.5% in ANB and 5.0% in VOB, and the very limited CapEx in ANB and the mandatory CapEx we have already started to deploy in VOAB. As you know, EBITDA margins are affected by the accounting standard IFRIC 12. Excluding this impact, the EBITDA margin on ANV stands at 65.7, 65.0% in Q1 twenty twenty five and in VOAB at 65.0%, 63.3% in Q1 twenty twenty five.

24:10 The contribution of the Brazilian assets to the group EBITDA amounted to EUR 50,000,000. That will be the end of my presentation. Sme, if that's okay for you, we are ready to move to the Q and A session. I can see that there are many of you who would like to clear up some doubts about this presentation and to give everyone a chance to speak and to keep within the time limit of this presentation. I will be grateful if you could limit your comments to a single question. As always, the Investor Relations team is available to answer any further questions you may have. Thank you. Thanks very much. Our first question comes from Luis Brito from Kepler Cheuvreux. Luis, your line is open. Please go ahead.

25:03 Good afternoon. Thanks for taking our questions. I'm going to limit myself to one, and it's not going to be in the obvious OpEx front. It's going be more traffic oriented. So what I would like to come back to is the AGM statement by the Chairman that you would be reassessing traffic performance in due course. I exactly know what reassessing means, but what forces and tensions are you seeing in short term traffic performance at the moment? Thank you. Thank you very much, Luis, for your question. This is Nazzi speaking. And I think what the the the chairman referred at that moment in time at the AGM, I think is the the the comment that all all of us are making to ourselves when the number for a traffic forecast, for a traffic guidance of this year was internally elaborated and built the information, the inputs that Aena had were completely different to the information that we have in front of us at this moment in time.

26:17 And we are seeing positive and negative trends the traffic performance. And the trends are so different to the ones that were used at that moment in time. That's why we as a company, we were want we wanted to be transparent about the situation. I think confirming a number or putting a number at this moment in time when we are seeing news every single minute changing the situation, not only of the geopolitics, but also in particular, the one impacting our industry is something that all of us are watching. And that could impact short term, medium term and long term from many different fronts. So all that is what we would like to convey to to all of you.

27:10 I think I've seen the some notes, Luis, this morning. Aena is confirming. Aena is not confirming the 1.3%. What we are not confirming or we are not changing. What we are saying is that all the information that was put together in order to estimate the 1.3 is being materially impacted, and it's reasonable to expect that the traffic projects forecast for this year will change. But we are seeing, Luis, things that are impacting positively and negatively. And the ones that are impacting negatively could be things that could materially impact the whole industry. And we are talking about jet fuel. We seeing news about flights being canceled, airlines confirming flight tickets going up. So we are seeing many a trend of negative news that is huge in that regard.

28:05 It's too early to put a number given the uncertainty is, in my opinion, at the highest levels that I have seen in my career. And what we are trying to gain is some more visibility before putting a number in front of all of you. That's what we are risk being totally transparent. Yeah. Absolutely clear, as always. Thank you. Our next question comes from Tobias Froome from Bernstein. Your line is open. Please go ahead. Hello. Thank you for taking my question. I will ask a question on OpEx, and I was wondering if you can help us square the O that stands for OpEx. I appreciate that excluding IFRIC 12 OpEx only grew by 8% year over year.

28:54 But I would like to focus on maintenance and security because those are the two cost elements that you had elaborated on in your Dora three proposal as well. When I take the 20% growth in Q1 year over year for maintenance and then I sort of add this up, sort of apply that same growth rate over the next couple of quarters, I get to $311,000,000 in 2026 and you had stated maintenance cost of 300,000,000 in 2027. I'm just this is just an example. I don't want to sort of pinpoint necessarily just on that. But does that mean OpEx growth for the rest of the year will be slower than in Q1? Is that something you can sort of elaborate on a little bit?

29:44 Thank you. Thank you very much for your question. I think with respect to the general trend on OpEx, and we can discuss some of the items or the items that you have asked on maintenance or security or PRM. I think that the general trend that you will see in OpEx for this year is the one that we have been explaining to the market for a while, that are comparable to increases that you have seen this quarter, the last quarter of twenty twenty five, the third quarter of twenty twenty five. Because the largest items on the other operating expenses of this company, I'm referring to maintenance, security or PRM, are being are being impacted in many in many fronts. And we are renewing some of our contracts. I mean, those contracts because of a scope getting larger because of regulation, because of more activities, because of assets that the warranties are terminated and therefore we have to pay for the maintenance of those assets, because of many reasons. Those all those costs are going up. You were referring to maintenance that I think in this quarter, the figure is 20%.

31:08 I'm not expecting a 20% through the whole year of growth, but it's not going to be materially different to the maintenance increases, to the increases that you have seen in the maintenance items in the previous year, this quarter perhaps is a bit higher than other quarters. And therefore, you should expect a potential reduction, but it's not going to be a reduction that changed the trend that we have been explaining to everyone in in our courts in our courts. You have referred to security. Security, there is not a new contract. The contract was signed, I would say, couple of years ago, year and a half a year and a half ago. And what you are seeing is an increase in the cost of security related to CPIs, more activity that is part of the contract that we have for security.

32:08 And that's and that's a result of that that number. Don't expect material change with respect to the performance of that item compared to the one that are that you are seeing in this quarter. There could be slight reduction, because in this quarter, you will remember that in the middle of twenty twenty five, we increased the cost in security in order to have more security guards in our terminals. And that's an impact that took place around the second half of this year of 2025. So those cost increases that are impacting the comparison with the in the first half, because we have those, but we didn't have those costs in the first half of twenty twenty five.

32:56 But through the year, given that we start incurring those increases in 2025, in June, July 2025, you will get some normalization, but it's a very small part of the cost item of security. Thank you. Okay, great. Maybe just a very, very quick follow-up. So the numbers that you have in your DORA three proposal, those are still valid and then this quarter has not changed anything regarding your assumptions? Of course, those numbers are pretty valid. What I would like to highlight is that all of us are seeing the consequences of the inflation that everyone is anticipating related to the increases in the fuel. And inflation is going to be another important topic in OpEx for the next months because it will depend on how all the cost increases in oil will be translated or passed through to the economy. And that's something that we didn't have at the moment in time that we put together the numbers for DORA. Thank you. Bye.

33:57 Perfect. Thank you. Our next question comes from Graham Hunt from Jefferies. Your line is open, Graham. Please go ahead. Yes. Thanks very much. Maybe I'll stick on OpEx and just ask the sort of similar question on staff costs, specifically within Spain, that growing 12.5% in Q1. What's going into that number? And is that something we should be carrying through for the rest of the year? Or is that some one off impact in there? Then we think beyond, is that giving you capacity that means that out the year is a little bit slower? Just wondering what's driving such a high increase in staff costs for this quarter. Thanks.

34:51 Thank you. Thank you very much. I'm happy to try to address your question. If I am not wrong, the increase in staff cost for this quarter has been 12.5%. That's around EUR 17,600,000. If we if we look at the breakdown behind that, that increase would have increases in in social security cost. That's around 4,000,000 increases in headcount. We have been adding people and if you compare the headcount numbers of this quarter with the quarters of '25, there is an increase of around 400 people.

35:39 That's between EUR 3,000,000 and EUR 4,000,000 of increase. We have some impacts coming because of the collective bargain, new collective agreement that Aena signed last year adjustment in relation to the variable remuneration changes coming from the collective agreement, there's a couple of million euros salary review for 2026, that is 2%, that's public. So there are a number of reasons there that I could say are going to happen through through the year, and are going to be a recurrent based on the breakdown and explanations that I can I have just shared? I have said I have just shared with you. I wouldn't be surprised, Ran, if if the cost of staff cost, they've increased to the year is double digit.

36:32 And it's not far from the one that you have seen this this quarter. So that's what I can share with you at this morning time. Very clear. Thank you very much. Thank you. Our next question comes from Christian Nederclu from UBS. Your line is open. Please go ahead. Thank you very much. It's a two part question, if I may, and it's all related to kerosene. I guess the first part is in the context of potential kerosene shortages, could you describe a little bit more about your supply chain in kerosene and tell us a bit more about that? And also in relation with the higher kerosene prices, we had a French regulator a few weeks ago published a large document acknowledging that the current disruption will be considered in their traffic forecast, in their WACC assumptions, in their inflation assumptions for the next regulatory period in France.

37:36 So my question here is, do you believe the CNMC and the DGAC will also consider these changes when thinking about DORA three? And how will the mechanism work? Would you be expected to update your proposal, your DORA three proposal? Or what is the loss what does the loss say in this situation? Thank you. Thank you. You completely breached the rule of two questions of one question per speaker, but no problem at all. I think with respect to your first question, the straightforward answer is that as far as we understand, and there is a group that Aena is part of that is monitoring the supply chain with respect to kerosene jet fuel for the following weeks.

38:35 Supply has been confirmed in Spain. So that's that's the information that I can I can share with you at this at this moment in time? Of course, everything is going to depend on the length of the of the war and the length of the situation in the Strait Of Hormuz. So let's see how things evolve. But the information that that I can say is is the one that I that I was summarizing for the following weeks, given all the information that we are receiving. Supplies is confirmed at in in in Spain. With respect to your second question, Christian, don't know. The honest answer is I I don't know what the French regulator stated or proposed about all this. What what I certainly know is that this is confirming the situation, the level of risk of the industry, the level of risk of any traffic forecast, the level of risk now, financial risks that are that are airport operators have just looking at the rates.

39:42 So this is this is confirming that a crisis happened, that a traffic is impacted, that returns are impacted. And hopefully, given that is all this is known by everyone, given that is in the public domain and we all of us are seeing decisions taken by airlines to land planes or how all the situation is impacting market rates that all that is taken into account by the regulators because it's information that no one can neglect. But with respect to how it's going to be treated, how it's going to be taken into consideration, I cannot answer you that in a specific manner your question, Christian.

40:28 As you know, we made our proposal in mid Feb, and hopefully, we should hear back before summer. That's what that's what love in order to mitigate as much as possible the length of time in which we are exposed to that decision. Thank you, Christian. Thank you very much. Our next question comes from Andrew Lobbenberg from Barclays. Your line is open. Please go ahead. Hi there. Can I just go to a different place of the P and L? And you mentioned a bit in your elaboration about the change in the financial lines. Can you just explain it a bit more slowly and whether we should expect the improved financial result to continue through the year or not? Thanks.

41:19 There, that's one, isn't it? Thank you, Andrew. I was expecting your question a little. I know. Well, you can tell us about that as well if you want to make it too. I mean, it seems you seem flexible. Okay. Happy happy to take it later. I think there is a significant part that is that is explained because of exchange rate movements. The real has has has helped a lot with the has has helped a bit, sorry, with the the appreciation. But I wouldn't expect that this this impact is is a structural one through the whole year because of the two following reasons. The cash position in Brazil will get reduced through the natural CapEx cycle of investment in Congonhas.

42:14 So that's CASAS used for that purpose. And two, there was a loss, a financial loss in the first quarter of last year related to the exchange rate that perhaps doesn't happen in the next quarters. So expect a reduction in positive impact. Okay. And on Luton, we are working hard in order to make progress for the potential agreement on the expansion on the airport and our role there. Our next question comes from Dario Maglian from BNP Paribas.

43:01 Just one question for me on the CMEC. So one of the parameters that they look at is the OpEx allowance for the euros per ATU of a passenger, let's say. Any discussion on this point with the CMEC for this sense on how to account for OpEx inflation, how this allowance could move? Dario, I couldn't follow your question completely. But if I understood you well, the answer is that there have not been a real discussion, and we haven't received feedback from the CNMC yet on on our proposal.

43:56 So I I cannot I cannot help you with the other one, unfortunately. Okay. Do you do you maybe have any view on the OpEx allowance, how they could move in DORA three? And how likely is that there in the CMHC and the regulator will allow for some increase compared to DORA two? Well, what I can share with you, Dario, is that the proposal that we have put on the table in mid Feb reflects our views on the OpEx expected performance of the company for the following years. So talking about allowance or reactions to that figures would be just speculation from my side at this moment in time. So let's let's let's be hopeful that all the information, highly detailed information provided by the company in order to explain the CapEx performance that we forecast is taken into account, and we can operate on those basis. Thank you. Okay.

45:08 Understood. Thanks, Marshall. Our next question comes from Marcin Vorstad from Bank of America. Your line is open. Please go ahead. Yes. Thank you. Good afternoon. So just one question. I believe it was reported recently in Spanish press that you are working on a business plan presentation that could happen towards the end of the year. Could you perhaps comment on that very briefly? Is that indeed the intention? And when could that business plan presentation actually happen? Thank you. Thank you very much for the question, Martin. Yes, you know that we have a current strategic plan that ends in 2026 that we we updated eighteen months ago.

46:03 Well, twenty four months ago. Therefore, the current strategic plan needs to be reassessed and needs to be replaced by by a new one. So the the company is looking at the at the next at the next five year period in order to put together or do we think makes sense in our businesses, in our international strategy, from many different perspectives. So given the situation that the current one is going to end, what I can say with you that we are working, of course, in order to be ready for the next five year period. And the company has always shared with the market once that exercise has finished our views for that new strategic period. And that that would be our intention.

46:59 I cannot confirm, Marcin, to you when, how, but I think based based on experience, please assume that that will be our approach. And that once we have more information and we are getting close to the end of the year, we are likely to be ready in a position for that move. Thank you. Thank you. Our next question comes from Jose Araos from Santander. Your line is open. Please go ahead. Thank you. I think you answered my question indirectly earlier, but I wanted to make sure I understood correctly. Is it reasonable to expect that the DORA three will be completed by July this year instead of by September?

47:45 And if this is the right interpretation, when should we expect the report, the non binding report from the CNMC? Jose Manuel, thank you for the question. I would love to have a straightforward answer to your question. What I can share with you is that we have worked hard in order to share our proposal with the regulator in mid Feb. We are aware that CNMC and the civil aviation authority are working are also working very hard. And what we believe is that the sooner we have a resolution, the better in order to reduce uncertainty from many from many perspectives.

48:40 And that's and that's what we are doing and has always been our intention in this in this process. And what I can confirm to you is that the regulators are working are also working very, very hard based on all the interactions that we have with them. So that's we would love to have that resolution before before summer. But it's given the all the stakeholders that are involved is something that I cannot confirm to you. But everyone is working in that direction. Thank you. We currently have no further time for any questions, I'm afraid. So I'd like to hand back to Carlos for some closing remarks. Thank you, Sme Sme. As there are no further questions, we would like to conclude today's call. The Investor Relations team remains at your disposal for any additional information or clarification you may require.

49:34 Thank you very much to all of you, and have a great afternoon. Thank you. This concludes today's call. We thank everyone for joining. You may now disconnect your lines.