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Operator
Good morning. My name is Nathan, and I will be your conference operator today. At this time, I would like to welcome everyone to the ASUR fourth quarter earnings conference call.
[OPERATOR INSTRUCTIONS]
At this time, I will turn over the all to Mr. Adolfo Castro, CFO. Mr. Castro, you may begin.
Adolfo Castro - CFO
Thank you, Nathan. Good morning, everybody. This is Adolfo Castro, Chief Financial Officer of ASUR. Welcome to the discussion of our results for the fourth quarter 2006. Allow me to remind you that certain statements made during the course of our discussion today may constitute forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially, including risks that may be beyond our company's control. For an explanation of these risks, please refer to ASUR's filings with the Securities and Exchange Commission and the Mexican Stock Exchange.
As expected, by the end of December, Cancun and the Riviera Maya regions reached full recovery in terms of number of hotel rooms that were there in the region before the Hurricane Wilma. On December, we restarted partial operations at Terminal 1, adding capacity for an additional 1.5 million passengers. With this addition, I am pleased to report that Cancun Airport now has enough capacity to support our winter season that has started December 15 of last year, which is comparable to the capacity prior to Hurricane Wilma.
The construction process for Terminal 3 is progressing very well. And we continue to expect that it will begin operations during the second quarter of this year. With this new terminal, we will increase the terminal capacity at Cancun Airport by 53%. Work for the second runway is also moving along. And we remain on schedule for 2008.
Let me now discuss the results for the quarter. The numbers are in yesterday's press release, so as usual, I will not go too much in detail. As expected, we reported strong passenger traffic numbers with a total passenger traffic for the quarter up by 57% year-over-year. This improvement was largely driven by the pickup in international passenger traffic, which was up 105%.
Domestic traffic also increased following the trend we saw through the year, up 22% this quarter. Passenger traffic for the fourth quarter at Cancun and Cozumel Airports was up by 105%, compared with the increase of 2.1% in the third quarter, and declines of 6.9% in the second quarter, and 24.6% in the first quarter of 2006. Traffic also benefited from the growth of 30.49% at Veracruz Airport reflecting new routes operating by local carriers.
This quarter, passenger traffic was again impacted by the ongoing public demonstrations in Oaxaca, which forced to cancel 133 flights and resulted in a 35.95% drop in passenger traffic at that airport. During the quarter, protestors continued to threaten to close the airport and block regional highways. The U.S. Department has issued several advisories regarding travel to Oaxaca. As we have mentioned before, at this moment, we are unable to predict whether or how the conflict will be resolved, or how the ongoing demonstrations may affect our operations.
Total passenger traffic rose year-over-year by 26.1%, 113% and 111% for the months of October, November and December, respectively, for passengers to and from the United States. International passenger traffic accounted for 55.2% of the total traffic of the quarter, above the 42.4% for the fourth quarter 2005, but below the 53.3% posted in the third quarter 2005 before the Hurricane Wilma. Passenger traffic between Mexico, Canada and the United States represents 83.7% of the total traffic, slightly below the 83.9% for the fourth quarter 2005.
Total revenues also show a strong growth this quarter, up 66.37%, mainly due to the 98.56% increase in commercial revenues with improvement across all business lines. As a result, commercial revenues per passenger for the quarter rose 27.54% year-over-year to MXN46.31 per passenger. Commercial revenues per passenger were also above the MXN45.93 reported in the third quarter 2005, before the hurricane. It is important to mention that a portion of this resulted from one-time income as we have mentioned in the report.
Finally, EBTIDA margin for the quarter rose to 58.86% from 41.11% in the year ago quarter, driven by strong increase in revenue, which more than offset a 13.92% increase in cost of services. The increase was mostly due to the expected additional cost associated to the implementation of the new baggage screening procedures and higher insurance premiums and, of course, higher concession fees and technical assistance fees.
Keep in mind that, as I have mentioned in the past, expenses on absolute terms will continue to rise as a result of the opening of Cancun's Airport Terminal 3 and due to the maintenance expense resulting from the security equipment installed in 2005. As a percentage of revenues, however, cost of services for the quarter declined to 63% from 93% in the year ago quarter, given the strong growth in revenue.
I also want to note, that in December, the Mexican authorities approved a change in the methodology used to calculate asset tax, which resulted in a tax rate reduction to 1.25% from 1.8%, now applicable to the average tax value of virtually all the company's assets, without deducting the average tax value of certain liabilities. Going forward, we expect a positive impact from this change in the methodology.
Net income rose by almost 20 times to MXN131 million during the quarter. During the quarter, we have made investments of MXN372.9 million and investments for the full year totaled MXN1,089 million.
Now, let me open the floor for questions. Operator, please go ahead.
Operator
[OPERATOR INSTRUCTIONS]
We'll take our first question from Marcelo Telles, Credit Suisse.
Marcelo Telles - Analyst
Hi. Good morning, Adolfo.
Adolfo Castro - CFO
Hi. Good morning, Marcelo.
Marcelo Telles - Analyst
Adolfo, I have two questions. The first question is regarding the asset tax reduction. Do you think you could give us a little bit more color in terms of what sort of reduction we could expect in terms of effective tax rate going forward. And if we are going to have any positive impact in the income statement arising from, you know, maybe a reduction in deferred tax liabilities associated with this reduction on the asset tax?
And my second question is it would be great if you could just give us an update on, you know, the status of the airport in the Mayan Riviera.
Adolfo Castro - CFO
Okay. In the case of the asset tax, as you have seen, the Mexican authorities reduced the tax rates and changed the methodology. You know that we have to calculate these company by company. And some of the companies, some of the smaller airports, have some debt in the balance sheet. Because of this, I would say that we can see a positive effect of the total calculation. The amount that I have calculated -- and of course, this is not a legal commitment, and we cannot estimate this accurately -- but we can say that the reduction in the payment to the Mexican authorities could be around MXN4 million.
How much of this is going to be reflected in the P&L is something that I don't have in the top of my head for the moment. You can do your own calculations. You know that a piece of this has to go to the P&L. We are reporting every quarter how much of what we pay goes to the P&L.
In the case of the second airport to the Riviera Maya region, as you know we have requested a concession to the [SET]. Today we have to receive -- well, not today. We are in the process to receive an opinion from the Antitrust Commission. What I can say to you is that we have receiving some news about that the SET wants to make a bidding process on these airports. If you remember, at the end of the year 2005, the federal government was saying exactly the same -- that they wanted to make a bidding process on these. I really don't know how this will end up. For the moment, this is all what I can say.
Marcelo Telles - Analyst
Thank you, Adolfo. If you allow me just one follow-up question regarding the asset tax, does this reduction in asset tax make us feel more inclined to take on addition -- or take on debt, or maybe get some leverage in the balance sheet? Is this a possibility? Or is this something that is still far away?
Adolfo Castro - CFO
Marcelo, of course this will have an impact if we take some debt. But of course, we are not taking debt, or we will take debt not because of this. The asset tax is not the real reason why we do not have debt in the balance sheet.
Marcelo Telles - Analyst
Okay. Thank you, Adolfo.
Operator
Our next question comes from Vanessa Quiroga, Credit Suisse.
Vanessa Quiroga - Analyst
Hi, Adolfo. How are you?
Adolfo Castro - CFO
Hi, Vanessa.
Vanessa Quiroga - Analyst
My question is regarding commercial revenues.
Adolfo Castro - CFO
Yes?
Vanessa Quiroga - Analyst
Could you please break down the one-time income that you received during the fourth quarter?
Adolfo Castro - CFO
Well, I cannot give you the exact amount, because we have a confidentiality agreement with the concessionaire. What I can say to you, that this was related to the agreement that we have signed with them in the case of food and beverage for Terminal 3. And in case of the duty-free products, this was related to a very old claim about taxes. But I cannot disclose the amounts to you.
Vanessa Quiroga - Analyst
Or an idea of how much it would have grown if it wasn't for this one-time income?
Adolfo Castro - CFO
I don't have the calculation.
Vanessa Quiroga - Analyst
Okay. Thanks.
Operator
Our next question comes from Esteban Polidura, Merrill Lynch.
Esteban Polidura - Analyst
Thank you. Good morning, Adolfo, and first of all, congratulations for the report. Quick question -- have you been able to substitute Banamex for another tenant? And if not, when can we expect -- or when do you expect to do that?
Adolfo Castro - CFO
We have not replaced -- we have not found someone to replace Banamex. We're working on that. I do not have a certain date for that process. I hope that we are able to find someone during the first half of 2007.
Esteban Polidura - Analyst
Perfect, thank you.
Operator
[OPERATOR INSTRUCTIONS]
Our next question comes from Nick Sebrell, Morgan Stanley.
Nick Sebrell - Analyst
Good morning, Adolfo. A couple of questions.
Adolfo Castro - CFO
Hi, Nick.
Nick Sebrell - Analyst
First, cost of services -- they were a bit lower than we expected -- significantly lower than last quarter. I was wondering, is this something we can expect for first and second quarter again, a similar performance, at least before the new terminal opens at Cancun? This is the first question.
Second question is looking at the tariff per workload unit seemed to increase fairly significantly between third quarter and fourth quarter about MXN102 last quarter, MXN109 in the fourth. What's behind that?
Adolfo Castro - CFO
So, your first question was about commercial revenues?
Nick Sebrell - Analyst
Oh, I'm sorry, no. Cost of services were, I guess if you totaled them, about 158.5. And last quarter they were, what, 179 I think. And I was just surprised to see that decrease. I thought the baggage handling and other costs were going to be recurring. And obviously, they weren't. Or at least some portion of that was not recurring.
Adolfo Castro - CFO
Well, what I can say to you that cost of services have decreased basically due to result of maintenance decreases. Every single quarter has its own seasonality. I cannot compare what we do in the first quarter with what we do in the fourth quarter. It will be better for you if you can compare quarters with quarters. The activities during the quarters are not exactly the same. Let me just give you one example. If it is raining, you will not spend, in many things that you will do once it's not raining.
Nick Sebrell - Analyst
Right.
Adolfo Castro - CFO
Okay? So, it has something to do with seasonality.
Nick Sebrell - Analyst
No, I understand. But normally, there is an increase from third quarter to fourth quarter, if you look on previous years. And that didn't happen this year. So --?
Adolfo Castro - CFO
Basically because of maintenance.
Nick Sebrell - Analyst
Okay. No, that's clear. And then the second question is the tariff per workload unit?
Adolfo Castro - CFO
Yes. Well, you know that the type, the workload unit has to be reviewed with one-year calculation. Normally what we do is we make our own adjustments during the fourth quarter. And in some cases, as you can see in the filings, we have some distance. But what you are saying is that during the fourth quarter, the implicit rate -- let me put it in that way -- has increased compared with the third quarter. That's what you are saying.
Nick Sebrell - Analyst
Yes.
Adolfo Castro - CFO
Basically, it was the result of the adjustment that we have made in some of the airports --
Nick Sebrell - Analyst
Okay.
Adolfo Castro - CFO
-- in order to be as close as possible to the maximum rate.
Nick Sebrell - Analyst
Right. And so, if we look at that adjusted rate, then that should be similar going forward on an inflation-adjusted basis. Right? Or in real terms, it should be similar.
Adolfo Castro - CFO
Yes. You have the maximum rates in the filings in the 20-F report every maximum rate for every single airport.
Nick Sebrell - Analyst
No. True, true. Okay, thank you.
Adolfo Castro - CFO
What we have to do is to decrease that by 0.75% in real terms, because that's the efficiency factor. And then you will have to estimate how much are we going to be as close to these numbers.
Nick Sebrell - Analyst
Right, understood.
Adolfo Castro - CFO
This year, we were at almost 99% for the weighted average for all the airports in the maximum rates.
Nick Sebrell - Analyst
Perfect, thanks.
Operator
[OPERATOR INSTRUCTIONS] We'll go next to Gonzalo Fernandez, Santander.
Gonzalo Fernandez - Analyst
Hi, Adolfo. Good morning. Just two quick questions -- one is if in February you have a feeling of any impact from the ID requirement from tourists from the U.S. requiring a passport. I don't know if you -- this has done any impact on your airports. And the second is we were aware that there were some local carrier interested in building their operations in Cancun. Is there any advances in that?
Adolfo Castro - CFO
Okay, Gonzalo. I couldn't hear your question very well. But let me try to say your first question was about the change that the U.S. government has made on passports. What I think -- hello?
Gonzalo Fernandez - Analyst
Yes, yes, hello. First question is if the requirement of carrying passport instead of another kind of ID -- passenger requirement.
Adolfo Castro - CFO
Okay. Your line is very noisy. But let me try to answer your question. The U.S. government changed migration policy. Now they are requesting everybody goes with a passport when they are going outside the country. This was not normal in the case of Cancun. In the case of Cancun, I can say to you that probably 50% of the people that arrived there from the United States were without a passport.
We were concerned about this change in the measure from the United States. And personally, I spoke with some of the tour operators since October last year to see what would be the impact of this. What I can say to you is that they were, more or less, right expecting no major change or no major impact on this new measure from the United States. For the moment, what I can say to you is that we have not seen a major impact on this.
In the case of the local carriers, yes, you are right. Someone is telling that they want to make a home base in Cancun. Personally, I don't believe too much on this, because Cancun is not a transit city for Mexico. You know that Cancun is at the end of the country from the southeast. If they are willing to make their home base to try to move some people from Cancun to the southeast region of the country, that means a regional local carrier, it's something that I would believe -- but not to try to connect someone inside the country outside the southeast region. No, I don't believe in that.
Gonzalo Fernandez - Analyst
Okay. Thank you.
Operator
Our next question comes from [Thomas Fojeaux], UBS.
Thomas Fojeaux - Analyst
Good morning, Adolfo. Thank you for the call. Two quick questions -- the first one is, in terms of the asset tax, this reduction I includes now calculating on net assets rather than -- sorry, on gross assets rather than net assets. If there were to be a change in the law or an appeal to the law, would this reduction be further if it were still to calculate just on net assets?
And the second question is what expectations do you have for new hotel room additions in Cancun over the next year, if any?
Adolfo Castro - CFO
Okay. Thomas, in the case of your first question, I was not able to understand what you were asking.
Thomas Fojeaux - Analyst
Sorry. Do you have an impact from having, sort of, intercompany loans or other kinds of liabilities that, under the new asset tax calculation, including all of these gross assets, increases the taxable base? And do you have any expectations to appeal this law or for the law to change, so that you're back to calculating asset tax on net assets? And if so, what would be the impact?
Adolfo Castro - CFO
Okay. Yes, you are absolutely right. And I was trying to explain that at the beginning. Yes, some of the smaller airports have some debts. And this is basically debts among the companies. Of course, this has an impact on the new regulation, because we are losing the possibility of deducting these amounts. That's why I have said that the impact that we expect -- right now it's MXN40 million, which is not exactly the same proportion that the tax rate base decreases.
If I'm going to appeal or not, normally we do not disclose our appeals. This is probably an internal policy or an internal way to do the things. What I can say to you is that we can appeal, yes. And we will be recovering this. But the general change in the methodology is, today, a positive for us. And we will be paying less to the Mexican tax authorities.
Thomas Fojeaux - Analyst
Thank you.
Adolfo Castro - CFO
The case of the new hotel rooms in the Riviera Maya region and Cancun, I do not have an exact amount of the hotel rooms that are under construction today. What I can say to you is that, in accordance with the studies that we have received from external consultants -- because today we are preparing our new master development plan, we can estimate more or less between 6% to 7% growth rate in terms of hotel rooms.
Operator
[OPERATOR INSTRUCTIONS] We'll go next to Alexander Green, Citigroup.
Alexander Green - Analyst
Hi. Good morning, Adolfo.
Adolfo Castro - CFO
Hi, Alexander.
Alexander Green - Analyst
Adolfo, just a quick follow-up on that taxation -- can you tell us how many of the airports are still paying the asset tax?
Adolfo Castro - CFO
All of them.
Alexander Green - Analyst
All of them?
Adolfo Castro - CFO
Yes.
Alexander Green - Analyst
All right. And then any guidance for 2007 on growth in margins?
Adolfo Castro - CFO
Well normally, you know that I don't like to talk about margins, because margins in this company are the result of two independent variables. But what I can say to you, and this is round figures, rough estimations without legal commitment, what I expect is that the additional passenger traffic that we can expect for this year, compared with last year, will not be reflected in the margin, because of the increase in expenses or costs related to the opening of Terminal 3.
Alexander Green - Analyst
All right. Thank you.
Operator
Our next question comes from Alejandro Marcos, Banorte.
Alejandro Marcos - Analyst
Yes. Hi, Adolfo. Just two quick questions -- for the end of the year, do you know where Cancun and Riviera Maya at full capacity in terms of hotel rooms?
Adolfo Castro - CFO
If we talk about just the Riviera Maya, that will be very close to 30,000.
Alejandro Marcos - Analyst
And do you expect that, with the 6% and 7% of growth in terms of hotel rooms for the next year, you could also grow in that terms for Cancun and Cozumel airports in terms of passenger traffic?
Adolfo Castro - CFO
Well, you know that Cozumel is completely independent from the Riviera Maya region and from the Cancun region. In the case of Cancun, it will be a very nice number for us. But of course, I cannot say that this is a complete direct proportion. And what we really don't know is when this new or additional 6% will be added in terms of the year. But you have seen the past. You have historical numbers. And you can say that there is a very close correlation to one between passenger traffic and hotel rooms. So, make your own numbers.
Alejandro Marcos - Analyst
Okay. Thank you.
Adolfo Castro - CFO
Thank you.
Operator
[OPERATOR INSTRUCTIONS] We'll go next to [Mauricio Santos], [GBN].
Mauricio Santos - Analyst
Hi, Adolfo. How are you? Congratulations on your report.
Adolfo Castro - CFO
Thank you.
Mauricio Santos - Analyst
Well, the thing is that I was going to ask you about how much passenger traffic growth you 're expecting during 2007. But you already told me that it's closely related to the hotel room growth, right?
Adolfo Castro - CFO
It could be very close to that.
Mauricio Santos - Analyst
Okay. Thank you very much.
Adolfo Castro - CFO
Thank you.
Operator
[OPERATOR INSTRUCTIONS] We'll take a follow-up question from Nick Sebrell, Morgan Stanley.
Nick Sebrell - Analyst
Adolfo, I just wanted to check to make sure I got the number right. You said MXN40 million rough estimate of the impact of the tax reduction?
Adolfo Castro - CFO
Yes. And Nick, what I'm saying is MXN40 million less in the payment. That doesn't mean that this will imply a MXN40 million reduction in the P&L.
Nick Sebrell - Analyst
No, that's completely clear. Thank you.
Adolfo Castro - CFO
Okay. Thank you.
Operator
[OPERATOR INSTRUCTIONS]
Mr. Castro, that was our last question. I'll turn the program back over to management for any concluding remarks.
Adolfo Castro - CFO
Okay. Once again thank you, all of you. What I can say to you as a final remark, two important issues, is -- one is the Riviera Maya airport try to be in touch with the news from the SET. And let's try to see if they're going to make a bidding process or not. And the final one is related to Terminal 3. As I said before, we're expecting now to open this during the second quarter of this year.
I hope that next conference call I will have better news on dates and final inauguration date. Thank you, all of you.
Operator
That concludes this morning's conference call. Thank you for calling. You may disconnect