Grupo Aeromexico SAB de CV (AERO) 2013 Q4 法說會逐字稿

Good morning and welcome to the Grupo Aeromexico Fourth Quarter 2013 Earnings Results Conference Call.

Before proceeding, I would like to mention that certain comments made during the conference call may constitute forward-looking statements regarding future events or the future financial performance of the Company.

These statements are based on the current beliefs and expectations of management and the Company regarding future events or future financial performance.

Forward-looking statements are based on management's current assumptions and on information currently available, and do not (technical difficulty) the timing of certain events and actual results may differ materially from those projected by forward-looking statements due to a number of factors, including, but not limited to, those inherent for the industry, as well as commercial, economic and other risks and uncertainties.

At this time, all participants are in listen-only mode. I would now like to turn the conference over to your host for today, Luz Montemayor, Aeromexico Investor Relations Officer. Please go ahead.

Thank you. Good morning, and thank you for joining us. Today, Andres Conesa, Grupo Aeromexico CEO, and Ricardo Sanchez Baker, our CFO, will review key highlights of our fourth quarter 2013 results. Also joining us today is Carlos Doormann, Senior VP of Financial Analysis.

Now, I would like to turn the call to Andres. Andres, please go ahead. Thank you.

Thank you, Luz. And I'd like to welcome everyone to our fourth quarter conference call.

I am pleased to inform you that we continue to strengthen Aeromexico's operational and financial performance. Our fourth quarter numbers show that we've continued to achieve high standards, lowering costs per ASK, while increasing recurring net income, all within the context of a sluggish Mexican economy.

As you may recall, earlier last year -- early in 2013 -- we observed that the Mexican economy was showing signs of weakness resulting in lower aggregate demand. The most recent available economic indicators suggest that the Mexican economy decelerated last year and expanded only 1.3% in real terms. This is the lowest growth rate in the last four years.

We reacted quickly and proactively early last year to immediately adjust our overall capacity and to redirect some of our seats from the domestic market to international destinations. Both moves proved to be successful.

As we have mentioned before, the slowdown of the economy, together with a significant expansion of the capacity of further operators in our domestic market prompted us to implement a new revenue management strategy aimed at optimizing revenue per ASK, and passenger revenue per ASK, favoring load factors and maintaining competitive yields.

This strategy proved to be successful as Aeromexico's fourth quarter load factors increased to 78.6%. This is 270 basis points higher than in the same period of 2012, while our the Mexican international market share during the fourth quarter of last year, both experienced significant improvements.

In particular, Aeromexico's total market share in the last quarter of 2013 was 27.6%. This is 2.9 percentage points higher than the first nine months of 2013.

Fourth quarter revenues reached MXN10.7 billion, 8.7% higher than the last quarter of 2012. This, driven mainly by some international passenger revenue, baggage fees and other ancillary revenues.

Moving to the cost side, it's important to note that this is the fourth consecutive quarter in which we were able to achieve lower costs per ASK.

In this particular quarter, costs for ASK declined 5% when measured against the same period of 2012. As a result, our operating margin expanded from 3.7% to 5.9% of revenues during the same period.

Looking ahead to this year, we will continue to pursue our differentiated pricing and revenue management strategy that recognizes important value-added of our products. As I have mentioned, we are more optimistic about Mexico's 2014 growth prospects and about the positive impact of the social reforms, which will promote better economic conditions in the medium term.

In fact, January operating results have already been robust, with an 18.8% increase in passenger traffic and a load factor that grew 5.3 percentage points to reach 80.1% during the first month of 2014.

Let me share with you some of our key strategies for 2014. First, cost control remains an important, and probably the most important, pillar in our strategy. This year, we will continue to implement new and creative cost control measures in an effort to strengthen our airline's objectives in this area.

Our fleet renewal and the unique flexibility of our fleet plan is an important competitive advantage that enables us to improve efficiency through staggered fleet contracts. We will also continue streamlining operation and administrative processes this year. And last, but not least, moving forward, the roll-in of new and more productive labor contracts.

Our 2014 goal is to continue to improve margins while reducing costs per ASK to more than offset for lowered total revenue per ASK.

Turning to our net worth, we will continue strengthening our position in Mexico City Airport, our main hub. What we will do is we will change from six to 10 connecting banks by the end of this year. This will increase connectivity to 35 additional cities. And approximately 85% of the flights in Mexico City will be able to connect with another flight.

We will continue to leverage our unique flexibility to adapt to the changing economic environment, using every opportunity to replace smaller aircraft with larger ones in order to maximize utilization of our [slow] portfolio in Mexico City Airport and take advantage of our premium time slot.

Next March we will be launching our new [Aerofuente] shuttle product to continue strengthening our position in the three largest domestic business markets in Mexico. This is Mexico City-Monterrey, Mexico City- Guadalajara, and Monterrey-Guadalajara.

Our Aerofuente shuttle will provide hourly flights with enhanced schedules that are particularly convenient for our business passengers, with a consistent two-class product, improved onboard amenities, dedicated gates and ticket counters.

We expect to have an average of 16 daily weekday flights between Mexico City to Monterrey and between Mexico City and Guadalajara, and seven daily flights between Guadalajara and Monterrey.

In international markets, we will continue to strengthen our position and provide our passengers with an improved product offering. By May of this year, we expect to have five 787s covering daily frequencies to Paris and New York, four flights per week to [Narita], and three weekly frequencies to London and Madrid.

Strengthening our long haul fleet also provides us flexibility to enhance our South American nations network. We will be adding one additional weekly frequency to Shanghai and one to Santiago de Chile, while we will only be adding one new destination in our long haul portfolio. And this is to Rio de Janeiro in Brazil by the end of June.

Therefore, as we continue to grow on the international side, Aeromexico's US dollar denominated revenues will also improve, naturally [changing] our non-peso exposure to better position our Company's balance sheet.

We will continue offering our Aeromexico [Contiva] product, using a select number of (inaudible) to maintain and satisfy our presence at the Guadalajara and Tijuana airports, together with some cities in the state of California in the US.

As I have mentioned, a key priority for this year is to continue to strengthen our business products and improve the overall passenger experience.

On the long haul side, we have received positive feedback from our customers to their 787 experience. On our narrow bodies, we plan to incorporate additional 737-800 aircraft with individual entertainment features. And we will improve our regional route product offering by phasing out nine ERJ-145s and replacing them with Embraer 190s and Embraer 170s.

We also recently announced our partnership with GoGo. GoGo is the leader of in-flight connectivity and wireless in-flight digital entertainment. And Aeromexico will become the first carrier in both Mexico and in Latin America to offer passengers in-flight internet and wireless entertainment service in selected aircrafts. This is expected to start by the end of this year, subject to regulatory approval.

Finally, turning to the operating service side, our on-time performance recovery program continues to improve. In particular, on-time departures within 15 minutes last year increased 8 percentage points when measured against 2012, averaging 88% during 2013 half the year.

Looking ahead to 2014, an improved economic environment combined with clearly defined strategies and initiatives by the (inaudible) employees will enable us to continue delivering strong results while we maintain Aeromexico's leadership position.

Thank you very much. And I will now turn the call over to Ricardo who will provide you with more color on our financial results. Please, Ricardo, go ahead.

Thank you, Andres. And thank you all for joining us on today's call. Let me begin by discussing some of this quarter's financial highlights.

As Andres mentioned, we achieved revenues of MXN10.7 billion in the fourth quarter of 2013, an 8.7% year-on-year increase. This increase was mainly due to higher international flight revenues, as well as higher cargo, excess baggage and other incidental revenue, which were partially offset by a decrease in charter revenue.

It is important to mention that this is the first quarter in 2014 where we have had a year-on-year increase in cargo revenues. We believe that the extra cargo capacity of the 787s, combined with an improving Mexican economy, will have a positive impact on Aeromexico's cargo revenue moving forward.

We continue to execute our revenue management strategy, which is focused on optimizing total revenue per ASK through a combination of higher load factors and more competitive yield. In line with this strategy, average yield decreased by 8.3% year-on-year in the fourth quarter of 2013, while load factor increased by 2.7 percentage points, achieving a load factor of 78.6%. Total quarterly revenues per ASK decreased 2.8% year-over-year.

On the expenditure side, our cost reduction strategy remained on track, which helped improve our cost structure throughout the Company.

In the fourth quarter, our total cost per ASK in pesos decreased 5.1% year-on-year, while our cost per ASK excluding fuel decreased by 5% year-on-year. This represents the fourth consecutive quarter of decreased unit growth year-on-year.

More importantly, we continued to have a strong pipeline of initiatives related to efficiency and cost reduction that should help us to keep the positive momentum on unit costs going forward. These initiatives include operating positive revisions, fleet and labor efficiencies.

Moving on to our bottom line. Fourth quarter operating profits before non-operating revenues and expenses reached MXN634 million, a 71.8% year-on-year, with a 5.9% margin, which is 2.2 percentage points greater than the same period of last year.

Our PLM subsidiary paid Grupo Aeromexico MXN495.6 million in capital stock reimbursements during the year, to reach a total payment of MXN674.8 million in capital stock reimbursements for the full year 2013.

Fourth quarter adjusted EBITDAR reached just short of MXN2.1 billion, a 24.5 increase compared to the same period of 2012. We believe adjusted EBITDAR metric provides more detail and color on Grupo Aeromexico's capacity to generate cash due to the fact that it captures recurrent dividends or capital stock reimbursements from subsidiary accounts on the equity metric.

During the fourth quarter of 2013, after publication of the recent tax reform, several adjustments in deferred taxes were made as a result of the review of different taxable concepts associated with Aeromexico's taxable income. This adjustment generated a one-time payroll impact of MXN94 million in deferred tax adjustments during the fourth quarter of 2013.

Fourth quarter net income, then, reached MXN385 million. And it is important to note for comparison purposes that in the fourth quarter of 2012, we had a net non-recurring benefit of MXN601 million that resulted from the sale of an additional 20% stake of [PLN].

Also during the quarter, we successfully (inaudible) a MXN% 1.5 billion denominated bond through the Mexican stock exchange in a program called Certificado (Inaudible).

This transaction is part of our up to MXN5 billion program that is backed by credit card cash flows derived from ticket sales property offices and travel agencies in Mexico. The proceeds from this issuance, while used to strengthen the Company's liquidity position and to replace debt with less favorable taxes.

We continue to evaluate opportunities in the capital market going forward in line with our strategy to continue creating a percentage of owned fleet and obtaining better financing rates.

Looking to the year ahead, as Andres mentioned, we will continue to improve fleet efficiency by taking advantage of our lease portfolio flexibility.

Our (inaudible) fleet plan for 2014 takes into consideration the following adjustments. On the one hand, we expect to deliver 14 aircraft. This includes nine Embraer 145s, four 737-700s and one 767-200. On the other hand, we expect to incorporate 20 aircraft for our fleet. Two 787-8, six 737-800, and (inaudible) Embraer 191-70 aircrafts.

We, therefore, expect to end this year 2014 with 123 aircrafts, six more aircrafts than the 117 aircrafts that we had at the end of 2013. The combination of the fleet will allow us to a better cost efficiency and a better product at the same time.

This fleet line implies an 8% to 10% growth in seats, with an estimated 12% to 14% increase in international seats and a 6% to 8% increase in domestic segment seats.

If we look in terms of ASK, we expect a growth rate of between 15% to 18% of ASK in 2014, with a growth rate between 19% and 22% for the international segment and a growth rate of between 9% and 12% for the domestic market.

A significant part of this growth will be the growth of occasional current (inaudible) in line with our strategy of consolidating existing markets.

Specifically, as Andres mentioned, we expect to phase out the Embraer 145 from our Mexico City operation by the end of this year, a strategy that will allow us to strengthen our position in the Mexico City market.

It is important, therefore, that, like most of our domestic competitors, Aeromexico has significant opportunities to continue to grow out the Mexico City Airport. We currently operate 84% of our flights form this airport with our (inaudible) fleet and 737-700, which provides us with significant growth flexibility for the next years.

As we continue this (inaudible) strategy, our seat count in Mexico City should increase, further strengthening our position in the most important premium markets.

With this, I would like to conclude my remarks. Thank you once again for joining us on today's call. And we would now like to answer any questions that you may have. Thank you.

(Operator instructions). And your first question will come from Michael Linenberg with Deutsche Bank.

Yes. Good morning, everyone. A couple of questions here. I want to go back -- Andres, you talked about increasing the banks at Mexico City -- the connecting banks from six to 10. And, given that it's slot constrained, how much of that is actually utilizing new slots? Or is it just sort of rescheduling the operation and just defining the peaks and valleys better? Is that what's going on there?

Yes. It's just the rescheduling. There are no additional slots. Mexico City Airport is fully constrained. So we are just redefining our network to improve connectivity.

Okay. Great. And then, as a follow-up to that, what percent of passengers today connect over Mexico City? So if I look at your Mexico City flights, what percent is the connections for you today? And going from -- two things I see here.

Going from six to 10 banks a day, combined with the fact that you're now up-gauging -- which my sense is that those smaller airplanes, it's hard to connect to them because they only have 50 seats. So by going additional banks and up-gauging, where will that percentage move -- that connecting percentage?

Today we are in the high 20s, which is low by international standards. We want to move in the short term to the mid-30s. And what we will do, following what Ricardo mentioned, our idea is to stop operating those smaller aircraft for Mexico City by the end of this year.

So we will have -- the smallest aircraft that we will have in Mexico City Airport by the fourth quarter of this year will be a 170 or a 190. And the rest of them will be about that size. That will help us in this strategy.

And we will use 145s in other cities like Hermosillo, like Monterrey, like Guadalajara -- outside Mexico City.

Okay. And then just -- I apologize because it's so interesting as you go through some of these structural changes. The going from the high 20s to the mid-30s, how much of that is international versus domestic? So of that high 20s, is roughly half domestic connecting to international? Or is mostly domestic-domestic?

And then I realize that there's some international to international that you can take advantage of as you broaden your root network. How shall we think about those different connecting flows?

Mostly it's international to domestic. And also what we mentioned is our idea is to grow internationally ASK between 19% and 22%, while domestic ASK will grow between 6% and 8%. So most of it will be between international and domestic.

But as you mentioned rightly, we also have a better opportunity to connect international to international.

What we are doing, for example, when we started Quito in December and now Rio de Janeiro in June, we will be able to capture some of that traffic also that goes particularly to the west coast of the US. And improve the position of Mexico City as a connecting hub between Latin America and the US.

Okay. And then just one last one. I apologize. And then I'll hand it over to others.

I saw that you took delivery -- the new airplanes in the fourth quarter included a 767. And when I think about 767s, I view them as older airplanes. Was that just merely replacing an older 767-200 with maybe a newer 767-300 ER?

What we did is we found this opportunity to operate a 767-300 that was in very good condition that has a [LOTA] which is higher than the one that we have. We are able to accommodate close to 220 passengers in that 767. And we are using mainly that aircraft as a [cache] -- as a replacement, as an insurance to the 787 fleet.

So far, we haven't really been able to need it. I mean, really the LOTA and reliability of the 787 has been very positive. Again, even though we are flying that plane most hours than any other 787 operators, we haven't (inaudible) use that.

But we believe that as we transition to that plane that we were able to provide a better service to our customers when we have these type of actions versus in a scenario where we don't. So that was the main rationale behind it.

And our idea is to get rid of all the 767s by the second half of 2015. And that hasn't changed. We got this plane on a short list contract of two years.

Great. Very good. Thank you.

Thank you.

And next we'll hear from Eduardo Couto with Morgan Stanley -- Smith Barney.

Hi. Good morning, guys. And congratulations on the results. I have two questions, if I may.

The first one is on the cost side, your CASK ex-fuel -- your cost ex-fuel. They declined, I think, around 6% year-on-year, which is quite impressive. I want to hear thoughts on how do you see this cost CASK fuel progressing? Do you think it can go down more, or stay stable, or go up less than inflation? So, in other words, do you think the CASK ex-fuel will grow less inflation, which may help margins going forward? How do you see that?

Thank you Eduardo. We have, certainly, a very good quarter in terms of cost performance. But we see that many of these initiatives are just starting to be reflected in the numbers. We think we have a strong pipeline of initiatives that we help us to maintain our costs going down, in nominal terms.

These initiatives include a revision of processes internally as a utilization of a new [ERPT] (inaudible) and the creation of shared service incentive for all the back office functions of the Group.

For example, integration between our Mexico and our Mexico Connect operational integration that continues. We are revising some maintenance processes as well. So that's one line of action.

(Inaudible) the other important -- two lines of actions, of course, are related to the labor side with the application of the new labor contracts that we have been able to negotiate with the different labor groups. And as we continue to grow, we will have a worker that has these more efficient contracts.

And the third line, of course, the fleet process -- [mobile paging] -- that allows us to decrease unit costs and, at the same time, improve the (inaudible).

So we expect that this trend of cost reduction for ASK will continue. No? (Inaudible) to achieve this growth in ASK that we are (inaudible), certainly we expect that these cost reductions will allow us to have better cost performance. And in this sense, more than compensate a potential decrease in revenue for ASK, as Andres has mentioned.

And just on the labor side, as you mentioned, do you know what percentage of your crew members, or your employees, are already on the new terms -- on these better term contracts? And what percentage are in the less favorable contract? Do you have that percentage?

Yes, Eduardo. This is Andres. From the (inaudible) workers, basically, we were able to restructure the contracts. And we have, basically -- even the workers we hired at that time, have a better -- are more productive economic conditions.

Now, moving to the pilot, today, the pilots in Aeromexico are around 20% under new conditions. And the other are under the previous contract. And in the flight attendants, we just started for the fourth quarter of last year. So there we only have around 100 flight attendants under the new conditions versus a total headcount of around 1,500.

Okay. And just a second question on your cash side. Now you improved your cash position on the fourth quarter and you issued a bond. But your cash is still around 10% of revenues. So just want to hear if the idea is to continue to grow the cash position or not? So how do you see your cash progressing going forward?

Yes, Eduardo. We (technical difficulty) around 10%. As you mentioned, we improved the cash position. Last year, we did a significant investment in aircrafts, including we received three [737-8s] and we did a substantial payment of (inaudible) fees for our aircraft that we will be receiving.

In 2014, the aircraft that we will be receiving will be under operating leases. So in that sense, the cash flow outlays on the investment program for aircraft will be lower this year. And we expect to increase our cash position.

Certainly, we want to increase this ratio to a higher number. But we believe that -- and we will be monitoring also financial markets if we are able to do another operation in the Seguras program that we have. We will be monitoring that.

So, certainly, yes. We think that this year we should see a (inaudible) of our cash position compared to our revenues.

Do you know more or less what is the PDP for this year?

For this year, the PDP payments will be around MXN50 million, compared to more than MXN100 million that we had the last couple of years.

Okay. Thank you, guys. And congrats again.

Thank you.

Thank you.

From Itau, we hear from Renato Salomone.

Hi, guys. Good morning. Thanks for taking my questions.

Following up on Eduardo's question on CASK ex fuel, when we look at maintenance expenses for ASK, we saw significant improvement in 2013, particularly in the second half of the year. And I'd like to have some color on the [Catetero] -- if, indeed, it was opened as expected in January? And what impact we should expect that the (inaudible) throughout 2014 coming from Catetero, but from other initiatives as well? Thank you.

Hi, Renato. Just let me comment on the Catetero facility before turning the microphone to Ricardo about the cost per ASK.

In Catetero, yes, according -- we were able to start the operation of a new facility as we expected in the first day of this year. Today, we have five lines working. And we expect to have an additional two by the summer of this year. And this is the first phase of this project.

It's really working, again, very, very good, as expected. It's the largest facility, probably in the whole region. And already we are working on both Delta planes and Aeromexico planes.

And our idea, again, is to consolidate all of our heavy maintenance of the narrow bodies in Catetero. And just keep the line maintenance of the [50] in the different stations. And continue to outsource the [C-check] on the wide body fleet outside Mexico, while we have -- again in this project going forward, it's likely that we could have also facilities to do heavy checks on our wide bodies going forward in the Catetero facility.

Let me turn it over to Ricardo. He has some comments on (inaudible) that you mentioned.

Thank you, Renato. We have what I would call maintenance (inaudible). As you know, what we record in the maintenance item is basically line maintenance. And major maintenance is reflected more on amortization and depreciation. And the way we record that is we create a (inaudible) that is amortized until the next major maintenance service is performed.

So what explains the variation in maintenance is just only the lower cost in measurement in line maintenance that includes some agreements that we have formalized during the year with some of our providers. And also the [calendar note] that we have for line maintenance compared to last year where we have several wide bodies at the same time during the fourth quarter. This is now more spread.

Going forward, we are incorporating a newer aircraft into our fleet. And we are taking out some of the oldest aircraft, like the Embraer-145s, which are certainly one of the most maintenance-demanding in our fleet right now.

We think that maintenance costs should remain stable. On the one side, we have an aircraft aging. We have more maintenance coming from some of the engines. But on the other side, we have these benefits of bringing in newer aircraft, which will compensate us. So we think maintenance costs will remain stable going forward.

Thank you. And if I may ask another question -- did you see an acceleration of sales to government-related passengers in the fourth quarter as government spending picked up? And if yes, has this trend been sustained in early 2014?

Yes. We discussed that in previous conference calls. That was one of the factors that affected our numbers last year. And not only ours. It was a factor contributing to the development of Mexico's economic activity during 2013. And, yes, we see more activity starting by the end of last year, and steadily picking up during 2014.

So we expect things to stabilize where they were before the change of administration by the second quarter of this year. So that, up front, seems positive going forward.

Thank you very much.

Thank you.

(Operator instructions). From Bank of America, we'll hear from (Inaudible).

Good morning. A question on just competitive supply. It just seems like the largest (inaudible) talking about adding a lot of domestic capacity. How much do you see overall capacity growing in the domestic and the US/Mexico market in 2014?

Hi, Glen. Yes, as you mentioned, last year was particularly high in the sense of additional capacity by every player in the industry. We expect in 2014 that the expansion will be lower than in 2013. Our numbers show total additional aircraft last year for all the Mexico-base operators probably increased between 25 and 30 aircraft. And maybe this year will be between 15 and 20 aircraft for all the industry. This is more or less what we are expecting.

But one important thing is that we have a clearly distinct position in Mexico City. So, as I mentioned before, there are no additional slots for either player. So what we are doing is we are redirecting our larger planes in Mexico City and using the smaller ones outside. Whereas, our competitors, if they provide additional aircraft, they need to try those in connecting pairs of cities, not touching Mexico City because of the lack of slots.

So that makes it harder to make an investment sustainable than when you have what we have in the most important airport in the country.

We see lots of opportunity to add additional seats in the transporter market, as you mentioned. In particular, our Contigo products that are tailored to not only between, again, Guadalajara and Tijuana, but also between Guadalajara and California -- many cities like Fresno, Sacramento, San Francisco, [Ontario], have been showing very positive developments since we started that product in October.

But since everybody else -- your competitors now also need more US dollars, are we seeing the transporter capacity now pick up as well?

Yes. What we see -- at least from one of these competitors -- we see additional supply. But in the margin, at least during 2013, most of the industry, most of the additional seats that were brought by the industry, were directed to the domestic market.

I haven't seen (inaudible) new announcements of new markets between Mexico and the US of our competitors. But, again, we are ready. We believe that we have very high quality products. For example, with [four] frequencies that we have between Mexico City and New York and L.A. and Miami and Chicago in each of those markets. We are, we believe, in a very good position to compete head-to-head against these players and international players.

And (inaudible), obviously, which you know is very important, is that we have the most solid and the best run airline in the US, which is Delta. So this relationship has proven to be very positive for us. And I believe also for them.

And could you talk about distribution and what you're doing to bring your distribution costs down?

One important thing -- thank you for asking that question because it gives us an opportunity to mention, to comment on that -- that we didn't mention that in our initial comments -- is that we are -- one important program we have is our plan today we see we have around 15 offices around Mexico where we still distribute tickets -- you know, owned by Aeromexico.

We're getting rid of all the oldest offices this year. This will help us to significantly reduce our distribution costs because costs in these offices is around 8%, whereas the total cost that we are aiming is around 3.5%. So that is one part of the strategy.

And the other one we've been successful in increasing our direct points of sale, particularly online sales. And still we have lots of room to improve because online sales represent 11%, 12% of total sales.

So we believe we can do significantly better on that front and continue achieving savings on this distribution of tickets.

Thank you very much.

Thank you.

And from GBM, we have Bernardo Velez.

Hi. Good morning. Thanks for taking my call. I was wondering, in the line of intangible assets, you spent roughly MXN540 million. Could you elaborate on that?

Yes, Bernardo. These intangible assets reflect to software acquisitions. As we mentioned, during 2013, we implemented the new [ERP] software, so most of it is associated to that acquisition of intangible assets.

Perfect. Thank you. And just another question. What comments would you have regarding the rumors about the possible spin-off or IPO of PLM?

Yes, Bernardo. We are working. We're very happy of the way we are working with IMIA -- with our Canadian partners. We believe that we have still many things to work on to strengthen the Company. And this is nothing that we are contemplating in the short term and medium term.

And, in fact -- (Inaudible) can give his support to mention -- we have a very valuable asset. And, as Ricardo explained, we believe that the adjusted EBITDAR numbers are very reflection -- which includes, for example, dividends paid by CLM to us, better reflect our condition. And we believe that this is not reflected in our price development in the stock market in the [bolsa] that our performance is not taking into account the big contribution of CLM to the airline.

Okay. Got it. Thank you.

Thank you.

And at this time, there are no other questions.

Well, thank you very much for joining the call. Let me just pass the microphone to Luz. And thank you very much for attending this call. And looking forward to seeing you in the next Q call.

Thank you. And any additional questions, please feel free to call us.

And with that, ladies and gentlemen, that does conclude today's presentation. We do thank everyone for your participation.