Grupo Aeroportuario del Pacifico SAB de CV
BMV:GAPB
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Grupo Aeroportuario del Pacifico SAB de CV
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Good morning, and welcome to GAP's Second Quarter 2021 Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to GAP's Investor Relations team. Please go ahead.
Thank you, and welcome to the Grupo Aeroportuario del Pacífico's Second Quarter 2021 Conference Call. Presenting from the company today, we welcome Mr. Raul Revuelta, GAP's Chief Financial Officer (sic) Chief Executive Officer; and Mr. Saúl Villarreal, Chief Financial Officer.
Please be advised that forward-looking statements may be made during this conference call. These do not account for future economic circumstances, industry conditions, the company's performance or financial results. As such, statements made are based on several assumptions and factors that could change causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the quarterly report issued Wednesday. Because of the pandemic in 2020, comparing 2021 results versus 2020 results would reflect extraordinary growth that is not a clear indication of real growth. Thus, the company will be comparing second quarter 2021 results versus the second quarter 2019 instead. The company believes that this will provide a better understanding of the financial and operating performance trends for GAAP, and thus are more realistic indicators. Thank you. At this point, I would like to turn the call over to Mr. Revuelta for his opening remarks. Go ahead, sir.
Good morning, everyone. On behalf of GAP's team, we thank you for joining us today, and we hope that you are doing well and staying healthy.
At this point, it has been over a year since the beginning of the pandemic. There were unprecedented challenge for GAP and the industry because of this crisis. Challenges that were unsure how we will overcome. But we were able to successfully surpass them. Each and every employee stepped up and worked towards the overall benefits of the group and our customers and clients. We managed not only to take a direct hit, but we also learned many lessons along the way. The lessons that made us stronger and better prepared for the future. And while GAP passenger traffic continues to be impacted by the pandemic, we are encouraged by the positive travel and economic trends in the U.S., where the vaccine rollout is supporting the recovery of the economies. However, we are not losing sight of the continuous obstacles that remain ahead.
During the second quarter of 2021, GAP transported 11 million passengers throughout our 14 airports. This amount represents a decrease of only 2.7% versus the second quarter of 2019. This was an extraordinary recovery that was driven mainly by the consolidation of international traffic that includes [indiscernible] traffic as well as a boom of international travelers to Mexican leisure destinations, both of which have been paid off since the beginning of the pandemic in 2020. We also have seen a significant number of Mexican travelers to the U.S. to obtain their COVID vaccination. It is worth mentioning the outstanding recovery of the Tijuana Airport, which is despite the closure of CBX since last year has already surpassed pre-pandemic passengers traffic level. This assures us that we are on the right path in terms of the project we have for Delta in the coming years.
With regards to domestic passenger traffic, demand is focused on leisure travel destinations with the business market recovery lagging behind. Despite this lag, more recently, business travel demand showed signs of recovery, which we believe will be key to positive traffic recovery, specifically in Guadalajara Airport. On the other hand, the FAA recently announced the category downgrade for the Mexican aviation industry. This downward prohibits Mexican airlines to open any new route or add presence to the Europe destination for the time being. In 2010, Mexico also received a downgrade, which only lasted 4 months. What happened at that time was that the U.S. airlines took advantage of the unattended demand, opening new routes and added frequencies to various Mexican destinations.
As of today, all the international routes operating on Mexican carriers are fully operational. Thus, the impact of the downward at the moment has been no. Looking ahead, we are wanting to attract more international routes, and we are encouraged by the overall positive trend in our network as well as the lifting of travel restrictions in most countries. Specifically, we expect a recovery of the Canadian market for the winter season, potentially boosting traffic throughout the Montego Bay and Puerto Vallarta airports.
In the event of passengers traffic trends continue for the second half of 2021, we could expect to be closer to the 2019 levels more quickly than previously anticipated. Moving on to financial performance. Aeronautical revenue increased by 17.3%, driven by the increase in the maximum tariff approval for the 2020-2024 period. This was, however, offset by total passengers traffic decrease throughout GAP's network of only 9.6% in the second quarter of 2021. The continued discount program we offer our tenants has been successful. As such, commercial revenue decreased by only 3.8% versus 2019.
Most of this decrease was from the advertising and VIP lounge liners, business, offset by an increase in the duty-free, food and beverage and leasing of space operations. Regarding cost, we achieved 1.4% lower cost of services compared to the second quarter of 2019. Excluding Kingston, the cost of serving decreased by 9.7%. The decrease was mainly driven by a 27% decrease in maintenance and a decline of 42% in other expenses, which was comprised mainly of expected credit losses, professional services, travel expenses among other. This was offset by a 25% increase in personnel and security services mainly due to a higher number of staff contract as well as the recognition of labor provisions in accordance with the reforms to the Mexican labor law.
As a result of various airport marketing strategies aimed at growing passenger traffic, improving commercial revenues in addition to our cost contract policies, EBITDA was MXN 2.8 billion for the quarter, an increase of 15.2% compared to the second quarter 2019 with an EBITDA margin of 71%. We are still maintaining a strong balance sheet in the current situation.
Cash and cash equivalents reached a total MXN 15.5 billion as of June 30. During the second quarter of 2021, we issued MXN 4.5 billion in bond certificates. A portion of these proceeds was used to pay in advance bank loans asking them for corporate purpose comparing to the second quarter of 2020 for a total MXN 1 billion. The payment of the GAP16 bond certificate for MXN 1.5 billion and the remaining for investment in our Mexican airports committed for this year.
During this quarter, we also paid MXN 2 billion in our capital reduction approved at the shareholders' meeting held in April 2021. As a reminder, we restarted the share repurchase program in March 1 of this year. And as of today, we have repurchased 8.7 billion shares for total of MXN 1.9 billion. We will continue with the repurchase program during the following months.
Moving on to the CapEx. During the quarter, GAP executed capital expenditures of approximately MXN 874 million. The positions us well to comply with the challenging market development program that we have in place. The construction of the second runway at the Guadalajara airport continues underway as well as the construction of the new commercial complex at the Guadalajara airport, which will include a new hotel, corporate office and commercial spaces.
At this point, we expect that this complex will be ready in the year of 2023, adding new business line and additional commercial revenues. In Tijuana, we will continue the construction of the terminal passenger building which is at 16% completion and which we believe will be a great complement to the CBX and a game changer to the airport by attracting more clients from international markets.
The building will be within operations during 2022. We also continue with the expansion of Los Cabos International terminal building as well as the project can be signed for the second terminal building in Puerto Vallarta, which will be a green structure, integrating our sustainability goals. We recently published our 2020 sustainability report in our web page, and we will invite you to take a look and need to learn about the ESG strategy and the latest performance.
Before I conclude, I want to take a moment to thank everybody who has supported us during these difficult times. In addition to the hard work and dedication that our team has shown in executing our strategy plan to protect GAAP financial position and ensure the highest standard of health and safety for our passengers.
I also wish to thank our clients. The airlines and tenants and their trust and commitment have been instrumental for our recovery. Now I ask the operator to please open the floor for your questions.
[Operator Instructions] We'll take our first question from Pablo Monsivais with Barclays.
My first question is on the tariff. What percentage of [ low ] increase was reflected already in this quarter? And whether you expect to fully reflect the maximum tariff at some point this year? That's the first one.
And the second one is if you can share with us some revenues or any goals or objectives that you have for the commercial expansion that you have in Guadalajara.
Okay. Thank you, Pablo. This is Saul. Regarding the tariffs, we expect to fulfill the 100% of the tariff approved by the authorities. We haven't reached this level until the second quarter, but we will be able to reach this level at the end of the year. Therefore, we are very confident about the level of the tariff will be fully implemented at the end of the year. And regarding the revenues, I don't know, Raul, if you want to say?
I will take it. Thank you Pablo. Thank you for your question. In terms of the commercial revenue, in the case of Guadalajara Airport, we have 2 main projects happening right now. The first is related with the mixed-use building that incorporates a hotel, office spaces and commercial areas. And the second project is all the change of layouts into the terminal 1 of Guadalajara. We will have some additional spaces of food and beverage. Both projects, we expect that we'll be operating around the second quarter of 2023. With these growth projects, we expect to generate something really close to around MXN 200 million in a 12-month period, but it's around the additional rents that we are expecting for these specific projects.
We will take our next question from Javier Gayol with GBM.
I wanted to get a sense from you guys from the buyback program that you guys implemented. If you can share with us the trigger and the rationale behind it. As you mentioned in your remarks, you expect this to continue going forward. Is management expecting to reach the full allowed program of buybacks for the year or just understanding what is the rationale behind it, it will be very, very helpful.
And my second question is regarding the commercial revenue. And you mentioned that you've done some discounts to tenants and you've been doing some reshuffling in the airports in that regard. And I just wanted to get your view on how is GAP commercial portfolio today versus 2019? Do you think that the company's portfolio is better? Are you getting better tenants, better contracts? Just again, understanding the strategy on that part, that would be great.
Javier, this is Saul. Regarding your question about the buyback program, we will continue with the total amount approved by the joint shareholders' meeting. We expect to continue with this trend. We have been very active in the last weeks. And we will continue in that path. Obviously, it's something that is helping our share, it's something that is -- we see very productive for the company, and we are aligned with the instruction of the shareholders' meeting.
And Javier, on realty commercial revenues. All the programs of discounts to tenants is directly related with the comparison of the result of the month versus the same month in 2019. So I could tell you that, for instance, for July, we will have only 6 airports that will continue with discounts. We think that in the coming months or at least for the end of the year, we will have between 8 to 10 airports that could be almost with 0 discount.
But in general terms, I could say that the recovery on commercial revenue are doing pretty good. I think that in terms of passenger on the first 6 months of the year, we have -- versus 2019, we have a decrease of minus 23.4%. And in terms of Non-aeronautical revenue, we have 16.8%. So in general terms, I will say that we are perfectly passing the recovery of passengers to the commercial revenue. And we think that this trend will continue in coming months. And for sure, there is some additional commercial areas that will be in operations in the coming months, I will say that, for instance, in Tijuana, due to the opening of the new processor building, we are going to have some additional retail spaces. Also for the case of Los Cabos International Terminal, the T2, we are working really fast on changing all the layouts that will give us some additional spaces for retail and food and beverage. All this expansion and change of the layout of Cabos will be fully in place to the next summer on coming years but partially in this winter, we will now open part of this new retail area for Cabos Airport.
So at the end of the day, what we are seeing is that we will see an important growth on commercial revenue in the coming months, and we will continue seeing the same trend of passing all the increase of passengers to the commercial revenues.
And if I just have a follow-up on the buyback thing. Just to understand, the trigger for restoring the buyback program, is it price related to basically that you guys are seeing the company trading under value? Or is it more related to a return to shareholders sort of maybe compensate the previous 2020 distribution. Just understanding the strategy there. And also, if you could share with us what is the approved buyback program that you guys have from the shareholders' meeting?
Well, it's both. It's not only that the price is related with the undervalue of the price. We don't believe that we believe that giving support and continuing with the program is important for the price, but it's not the only target for us. We believe that it's also a return to the shareholders. That's the main target, the main point. We understand that difficult terms we pass through, and we understand that in 2020, we couldn't make any distribution. So it's in some way to give a return to the shareholders. So that strategy approved by the shareholders' meeting, and we will continue with that instruction.
Congratulations on the results.
We'll take our next question from Alejandro Zamacona with Credit Suisse.
Just a follow-up question on Javier's question regarding the commercial business. So I just want to try to understand how the contracts work.
So it's a monthly revision as far as I understand. And what's the threshold that triggers the end of the discount because when you mentioned that 6 airports are not -- in 6 airports, you are not granting any discounts, I guess, traffic must be above 2019 levels, but I just want to confirm with you guys.
Thank you, Alejandro. Yes, it will be -- I mean, all the program is related with the same month of past year 2019, and it goes also always 1 month behind, I would say, for instance, for July, we're going to close -- the number of passengers will be public in the coming days. But at the end of the day, what's going to happen is that, we will give additional -- or we will give discounts in terms of the result of the July month of 2021 versus July 1 of 2019.
In that way, always we are 1 month behind. But what we are expecting is that gradually more of our airports, we'll have fewer discounts. Obviously, we are talking only about, for instance, about June. June, it was clear that we have positive numbers versus 2019 in Tijuana, in Morelia, in Cabos, Vallarta.
So we think that this trend will continue. For July, it will be 6 airports and for the end of the year, we expect that's going to be at least from 9 to 10 airports with 0 discount. But the idea is that discount is completely aligned with the passengers recovery. So the airports that we could continue with some kind of discounts on the fixed part of the contract will be a really small discount at the end of the year and just in some of the airports that has not fully achieved the passenger that we used to have in 2019.
Okay. Got it. So traffic, I mean, in terms of the threshold, traffic must be above 2019 levels in order to stop granting those discounts, right?
Yes, that's correct. And the size of discount is related with the percentage that the airport to be behind their the result of 2019. So again, the example of June [Technical Difficulty]
Can you hear me? I'm sorry. Saul? Hello?
And we are experiencing technical difficulties. [Operator Instructions]
And you may continue.
Thank you. So sorry for this technical problem, but we are back. As I was saying, Alex, the discount will continue on the size of the -- or the part of the decrease of passengers that we not had fully recovery. So for instance, in June, if we have an airport, I would say, at 7% below the traffic of 2019 for the month of July, then we will obtain the same amount, the same 7% on discount. So gradually, all the airports will have really a more discount on the rents for the coming months.
So gradually, we will have this, I would say, the program will end gradually in the coming months.
And we will go ahead and take our next question from Francisco Suarez with Scotiabank.
Congrats on the great results and great execution. The question that I have is on Guadalajara. I have been there personally. A few questions for the last 3 months. The overall activity in Guadalajara is impressive, the mobility is on the rise. Clearly, more than happy to see that you are just 5% behind on international traffic in Guadalajara. I would like to hear from you your overall views on what is driving this sort of recovery, particularly to Guadalajara. And on that sense, I would like to understand if the -- of course, it has to do a lot with your overall incentive programs. But it seems that there's something else, something happening inherently in the demand side.
So anything that you can walk us on what explains the increase in overall mobility in the city, the level of business activity and this drive of international traffic as well. And lastly, also on Guadalajara, do you have already an operator for the plant in hotel and all the wings that you have under construction currently?
In the case of Guadalajara, I will tell you that the different routes come in different paths. I would say that are related with leisure that are mainly generating in Guadalajara to go into, for instance, Mexican beaches are doing pretty good, I would say. The route to Cancún, the route to Cabos or even Vallarta, all are working pretty nice. The second biggest market for 1 of the region's markets for Tijuana that is related with the BFR market. I would say that also are doing pretty good. I mean, the different routes of South California are doing good and also the routes to Tijuana. Even that the -- in Tijuana, the CBX is closed for Mexican citizens. So in that specific route, for instance, as soon as the border will -- ground border on Tijuana will open again, we expect an important boost in that specific group.
The 2 routes or the part of our net in Guadalajara that in some way are recovering at a slower pace is the 1 related with business traveling. As you remember, for instance, Guadalajara is -- has the biggest convention center in all Latin America, the expo, that expo also and [indiscernible] important part of an important demand of passengers related with business. We are suffering on the Mexico Guadalajara route and in the Guadalajara Monterrey route also with the [indiscernible] Guadalajara .
So mainly what we are seeing is slower recovery that we expect is related with the business market. For sure, we are optimistic that this market will recover gradually. But everybody are in some way, thinking the world is -- what's going to be the impact on the long term of all these home office, digital work, how could we affected on the long term for the business market. But I'm the one that still optimistic. I think that it will be gradual recovery. But in some months, we're going to see some better results on these routes. Additionally, I would say that this specific route of Guadalajara Mexico was the #1 and #2 operators in 2019 used to be Interjet and Aeromexico. In the case of Interjet, we have announced that we will have that offer right now. And for the case of Aeromexico, they also have in the middle of the Chapter 11, they have an important cut in the offer of seats in the last months and weeks.
We are seeing an interest and recovery of the offer from Aeromexico. As soon as they receive the 737 MAX, they are beginning to fly again on more frequency from the Mexico Guadalajara route. So in the time we think that we -- we're going to see a better recovery on that specific market of business.
Thank you so much for so much insight. But just a follow-up on this. The international traveler to Guadalajara is just is virtually in line with overall 2019 levels already.
I have this -- as you remember, all the BFR market in Guadalajara and mainly the Southern California market has been really, really, I would say, in some way, strong on the back of the BFR. But also, we have this Houston, Dallas and more business and more leisure from Mexico and to, for instance, different parts of the U.S. And in that side, we are also seeing that the Mexicans are more flying for internal issues on domestic markets rather than international.
I would say that partially in terms of the BFR, we are seeing also -- so -- sorry, in that way, I would say that we are seeing an important recovery, but if we review, for instance, the couple of years or the first half of international passengers of Guadalajara, we are still 25% below the numbers.
So part of this planes is Mexicans that are doing less leisure in international markets. Part of this mainly comes from Houston and Dallas for, I would say, business routes. And partially, we have a part of this planes is coming from some part of the South California travelers, mainly BFRs that are using -- BFRs U.S. citizens that are using more Tijuana to fly to Guadalajara rather than other international origins from Southern California, that are mainly the biggest -- the bigger trends on Guadalajara international market.
We will take our next question from Rodolfo Ramos with Bradesco BBI.
Just 2 on my side. The first 1 is on the traffic impact that you might have seen or, let's say, a slowdown in the recovery as a result of this third wave. I know that we will be seeing the numbers in a few days, but if there's anything you can comment there, would be greatly appreciated. And the second question is on the facility -- on the international passenger handling facility in Tijuana. I think you mentioned that you expected to operating -- start operations in 2022. If you can confirm that? And if there's any color that you can share on what's the addressable market relative to the current international traffic in Tijuana. I know it's a little bit difficult with a pandemic, but any color there would be helpful.
In terms of what we are seeing in the really short time, we are seeing a really nice recovery on the leisure market of Vallarta and Cabos. Also, we are seeing really -- the trend of positive numbers is still in place for Morelia and Tijuana. Also, we are beginning to see more positive numbers in, for instance, in Aguascalientes, in Mexicali.
In general terms, I will say that talking about our net, we have seen this lack of recovery on business routes, mainly our impact Guadalajara, Bajio and Hermosillo. So I would say in terms of what's going to happen in the really short term, about the facility in Tijuana, we think that we could begin operations at the really beginning of '22. I would say January is -- even if the pace of construction still at the same page that we are having today, it could even happen on December, but we are on that. And which market could be affected, I would say that the building has 2 main goals. The first -- on the first day, I will say that the comfort for the passengers and the velocity that they could be processed when they are crossing from U.S. to Mexico or from Mexico to the U.S. to be much, much better.
So I would say that on the first day, the impact will be in comfort, and that could attract additional passengers that we are, in some way, bringing from San Diego airport and Los Angeles airport to Tijuana. So that is the first pipe. And the second related with international markets that we will drive, again, the kind of goals that we are -- or the market that we will try to attract the different airlines. But Central America routes could be Guatemala, Salvador, San Jose and also Panama. That will be our first, I would say, our first step and the ones that we are trying to attract.
And in the medium term, I will say that mainly Asian routes. As you remember, Tijuana just before the pandemic, used to operate a direct flight from -- to Shanghai. Direct flight to Beijing in some moment. So we also expect that in the midterm, we will have some additional routes and some routes to Asia. But I will say that at least in the short term, our goal will be to attract Central American markets, BFRs markets, regions of Central America that the first and second generation of Central Americans that have U.S. citizens and lives in the Southern California.
[Operator Instructions] We will move next with Juan Matera with GBM.
I was wondering if you could give us some color on the dynamics around the Montego Bay and Kingston airports recovery.
Juan, thank you for your question. This is Saul. Well, we have seen an acceleration of the recovery for Montego and Kingston. We also expect that once the Canadian government release their restrictions, it could expedite the recovery. In any case, due to the level of vaccinations from U.S., we saw a strong month of June, and we are expecting to continue with that trend.
And we will move next with Guilherme Mendes with JPMorgan.
I have 2 questions. The first 1 is a clarification on the traffic recovery in Mexico. You mentioned that we're a little bit more optimistic than before in terms of how fast you could reach to '19 levels. I recall in some past calls, you mentioned about being fully back only by 2023 and also by 2034. So just wondering how do you see this recovery now shaping up, if you could see '19 levels on a consolidated basis already in 2022.
And the second question is related to margins. We saw a good improvement now in the second quarter. Just wonder if you could give us more color in terms of what could be like a normalized or like a stable level margins for the second half and for 2022 as well.
Thank you, Guilherme. In terms of the recovery of Mexico, as everyone remember, on our first view of traffic, we felt that the recovery of this crisis will be more aligned to 2024. The levels that we are seeing today and the additional fleets that are arriving to the market. And for instance, for domestic airlines, as [indiscernible] Buenos Aires are growing their fleet and also Aeromexico, we are more optimistic about the performance in coming months.
I would say that we think that will be fully recovery for 2023. But again, it will be, I would say, a mixed recovery. For instance, today, we have Tijuana or Morelia that today are fully recovering. So I would say that in the coming year 2022, we will see some more of our airports that will be complete recovery. And then for the 2023, we will see more airports that are showing some kind of lack of recovery related with the business travelers that will fully recover for 2023.
And Guilherme, regarding your question about the margins, we saw a very good EBITDA margin. excluding IFRIC 12 with 71% for the second quarter '21. However, at the end of the year, it will be normalized at the level that we had or below that we had in 2019. It is because we will start providing more resources to the airports for maintenance, for cleaning or security et cetera. So in some way, the recovery of traffic is providing some stressful in the level of service in our airports, then we will start releasing more cost expense for the second half of the year. Therefore, the EBITDA margin will be probably at slightly below the level of 2019.
At this time, we will take the webcast questions. I will now turn the call over to management.
Thank you, everyone. This is Alejandra Soto, IRO of the company. And we have some additional questions. The first 1 is from Silvia Vito. She's asking, is there any way to estimate how significant was the traffic to the U.S. that went for the mass vaccination program?
Silvia, tough question, but I will try to do my best to explain this. I would say that the offer of seats, for instance, to Houston, is in the same line that we used to have before the pandemic. We know that some of the business travelers are not flying today, but the demand in those routes mainly to Houston from Bajio, from Guadalajara, from Austin from all our airports is still the same offer.
And I will say that in the size of the demand are in the same level of demand. So I would assume that an important part of this I will say recovery of traffic will come from the vaccination process of Mexican flying mainly to Houston, San Antonio, Austin and some others to Los Angeles. But again, it's really an assumption and it's really difficult to give some kind of number. But I could say that the demand of those routes are important are in the same level that we used to have from 2019. And if that recovery is not -- or we will see that is not related with fully with business mandate that used to fly on those routes.
Thank you, Raul. Actually, we have another 1 from [indiscernible] from PMB. He's asking with the global acceptance of flexible working and working from home, do you think there are route changes in the business travel?
I will say, at least in the short term, there will be a change. I will have enough backup to say that it's going to be a complete structural change because 1 of the things that we are seeing all the days on the news, everybody or more companies that are thinking more on a hybrid method of working rather than only home office.
So I'm not pretty sure that this is going to be a trend that will in some way orchestrate structural change and more in the line that this is going to be a lot of recovery. But in the coming months, we will be trend of recovery of new routes. I mean, for instance, for a salesman, it's very difficult to think that they could close a sale through a virtual tool.
So I'm more aligned that the face-to-face business will be recovery and it's going to be a matter of time.
And we also have another one from [indiscernible]. He's asking if you can give some color of the U.S. made some border restrictions. And if you think that after land restrictions are lifted, people will fly less or travel more on road and rail/trucks?
I think that in case of the U.S. Mexico border restrictions, for the specific case of GAP, it will be a great news the moment that these restrictions for the land crossing will be lifted because at the end of the day, an important market that we have in Tijuana is Mexicans going for leisure and business to Southern California.
And today, they are not crossing. So for us, we will see a really important recovery and additional growth on Tijuana as soon as this happens. The rest of our net, I would say that there are -- for instance, the biggest international route in terms of the size for GAP is the Guadalajara Los Angeles. And we are talking about 2,500 kilometers from Guadalajara to Los Angeles. It is not like a natural, I would say, use of the car to go over there. So at least in that, we are not seeing any kind of impact. I would say, we don't see any kind of negative impact for the opening of the border. On the other hand, we are seeing a really great upside for Tijuana as soon as the border is open again for Mexico.
Thank you, Raul. I believe that we are done with the webcast questions.
Okay. Thank you, everyone, again, for joining us today in our second quarter results conference. We appreciate your interest in our company, and we look forward to providing all this on our business initiatives as they become available. In the meantime, the team remains available to answer any questions that you may have. On behalf of GAP, we wish you a great day. Thank you, everybody.
This does conclude today's conference. Thank you for your participation, and you may disconnect at any time.