Aena SME SA
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Aena SME SA
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Good afternoon. This is the conference operator. Welcome, and thank you for joining the Aena Full Year 2022 Results Presentation. [Operator Instructions]
At this time, I would like to turn the conference over to Mr. Ignacio Castejón, Finance Director.
Please go ahead, sir.
Thank you very much. Good afternoon, everyone, and welcome to the Aena 2022 Results Presentation. This is Ignacio Castejón speaking, Finance Director at Aena. I'm here today with Maurici Lucena, Chairman and CEO; and Jose Leo, CFO. Maurici will go through the key highlights of 2022 and Jose will cover the business and financial performance of this year.
We will end up with a Q&A session as duly mentioned. Thank you very much for joining our call today.
Maurici, please, the floor is yours.
Thank you, Ignacio. Good afternoon, everybody. And again, welcome to our 2022 results presentation. I will host as Ignacio mentioned, the call along with Jose Leo and Ignacio Castejón, and at the end, we will be very pleased to answer all the questions you may have.
I will start with traffic. We are really seeing solid figures in the initial weeks of 2023. And what is more important, the capacity that airlines are scheduling for the summer season have -- has made us to review upwards our 2023 traffic guidance for the Spanish network. I would like to remind you that our previous guidance was 27%, excuse me, 87%, 97%, and we have revised upwards this guidance to 94%, 104%. So this is obviously good news.
And I think that this demonstrates the solid trends that our industry is experiencing so far.
Concerning 2022, Aena Group increased its profit, its EBITDA. And the main reason was that we experienced a very, very strong recovery of 81% of the traffic compared to 2019. Again, I'm referring to Aena as a group, the global group. In particular, the Spanish network experienced recovery of the traffic compared to 2019 of 88.5%. I would like to underline once more that this recovery was completely impossible to foresee at the beginning of 2022.
Let's again remind that at that moment, we were going through the Omicron wave. So the comeback of the traffic has been completely unforeseen, very strong, and we are very happy and proud that Aena could manage, could accommodate this very strong comeback of the traffic with, I would say, no operational problem. So this -- it's good news in absolute terms. But I want also to remind you that we were probably the sole exception in Europe in the sense that the Spanish airports were the only ones that did not have operational problems in the very challenging summer of 2022. Of course, this was not only because of the, let's say, high-quality management of Aena.
I'm referring to the managing of the traffic. It was also due to very specific Spanish loss in the labor market. But all in all, we are happy that we could manage this very strong comeback of the traffic because in the end, it was even stronger the recovery than in the rest of Europe.
And in particular, leaving aside Spain, in Luton the recovery was 73% of the traffic of 2019. And in Brazil, the recovery was even better, 100.1% of the traffic in 2019. An important matter of this presentation is the following one. Aena has changed the accounting policy applied to max reductions in the annual accounts. Consequently, rent reductions are registered in full at the time they occurred rather than the fearing them the impact of these macro reductions over the remaining life of the lease agreements.
Therefore, Aena has restated the 2021 annual accounts and also 2022 figures. Jose Leo will comment later on the accounting change and its impact on revenues, EBITDA and net profit.
But leaving aside the figures, I would like to underline that at least it seems to me that this is good news because, in my opinion, it makes our communication of the financial results to the market, let's say, cleaner and probably, we have finally left aside the confusion that arises from the difference of the evolution of our actual revenues and the accountability or the -- excuse me, the accounts and the 2021 and '22 figures. So I hope that this makes your life easier because with this accounting change, I think that the interpretation of our figures and the evolution of our activity is, as I said, cleaner than in the past.
Our total consolidated revenues amounted in 2022 to €4 billion. This, I would say, taking into account our starting point in 2022, I would say that this total consolidated revenue is dazzling and it's explained by the traffic growth and the outstanding performance of the commercial activity. For instance, 2022 commercial sales have exceeded 2019 and by 1%. So this means that there's -- we have experienced very, very strong increase in spending per passenger. This, along with the recovery of the traffic, have boosted the commercial activity in 2022 to pre-pandemic levels, let's say, before than we have expected.
But again, we are very happy with this novelty, of course. On the other hand and in the same line, specialty shops and food and beverage since November 2021, we have awarded more than 240 tenders, and MAGs have been really, really good. For example, MAGs in the mentioned 240 tenders are higher on average than in 2019, 22% in 2024 and 46% in 2025. Yesterday, the Board of Directors awarded the food and beverage activity at the Madrid-Barajas airport, and we are deeply satisfied. We have not also diversified the kind and of restaurants and the -- also the companies that are responsible for these restaurants, but also the financial results of these contracts have been very, very good.
Example 2023 MAGs in Madrid-Barajas airport, again, I'm referring to the food and beverage activity are on average 32% higher than in 2019.
We are also very excited with the Duty Free tender, you know that this tender is the world's largest Duty Free tender with more than 20,000 square meters. And we expect that this activity that will take place in the 60,000 square meters will generate sales of more than €18 billion during the 20 years length of the contracts.
We have so far succeeded attracting the best and the good of the industry. So we expect competition will be very fierce, and this will translate into -- we expect very good financial results when the tender is resolved.
Concerning the OpEx, the operating expenses in 2022 amounted to €1.14 billion. This means 19.7% higher in comparison to 2019. But, and this is very important, if we, for a moment, exclude the impact of the electricity, the increase would have been of 0.6%, which means €5.5 million, which I would say it's not bad at all, taking into account the inflation, the inflation pressures that have presided the economic activity, at least since the end of 2021.
In the midterm, you know that Aena is strongly committed on developing renewable energy services and we expect to soon we become -- we can become self-sufficient in this area.
If I now leap to EBITDA. Our EBITDA for the period stood at €2.1 billion. I'm again referring to 2022. This EBITDA includes GBP 91.3 million from Luton and BRL 366.5 million. And all in all, this is translated in a consolidated EBITDA margin that closed 2022 at 49.1%.
We are still a little bit far from where we want to be again in EBITDA margins around 55%, but we will reach again, that percentage of EBITDA margin. And in any case, it is clear that with the EBITDA margin of 2022, Aena clearly remains among the highest in the airport industry, which, again, I think that clearly demonstrates the solid figures and profitability of the company.
On the other hand, consolidated net profit, as you know, return, and this was good news again to the positive territory, and it stood at €901.5 million. Hence, we were very happy yesterday at the Board of Directors to propose to the Annual General Shareholders Meeting that will take place next April to distribute a gross dividend of €4.75 per share. This is the first time since the coronavirus showed up that the company will remunerate the shareholders, which you know is our traditional and very important policy since Aena went public.
And I will now start the final part of my presentation. Concerning Brazil, I have not very relevant news. You know that in Brazil, we won the concession to run 11 additional airports in Brazil. This is a very good news again. We will manage at the end of 2023 around 20% of air traffic in Brazil.
And the execution of the concession contract is expected to take place in the spring.
And finally, concerning ESG. ESG, as you know, is one of our top priorities, and I want to highlight 3 milestones. First, Aena joined to lose declaration, which makes clear our commitment to achieve 0 emissions by 2050. In the case of Aena, I can assure you that it will be before 2050 and probably before 2040, which is our formal commitment. Second, Aena has achieved the highest rating awarded by the Carbon Disclosure Project and Sustainalytics has recognized our company as the best company in the IBEX 35 for its environmental, social and governance performance.
And third and finally, Skytrax has distinguished Aena as the best airport group in the world for its excellence managing the pandemic.
This is all from my side so far. Thank you very much. I now will give the floor to our CFO to Jose Leo, and I will come back in the -- at the Q&A session. Thank you. And Jose, the floor is yours.
Thank you, Maurici. Okay. Can you please show the slide? Well, first of all, I'm going to spend some time taking you -- talking you through the change in accounting policy. You all are well aware of the fact that in October 2021, the DF7 determined that we couldn't carry on charging the standard rent that were included in the contract.
We needed to haircut them to reduce them significantly. At that time, there was a discussion with auditors and technical accountants as to whether or not we should take that to P&L in one go. The answer was no.
IFRS 16 applied, we have to defer the impact over a number of years. You know where we were disappointed by that because we were -- is somehow in trouble to try to explain the gaps between the underlying business, their commercial revenues on the other side, the cash flows. That struggle ended when the IFRS Interpretations Committee released so-called agenda decision at the end of September, I think, yes, the end of September -- no, October 2021 -- to be more precise 2022, sorry, I'm mixing October here. And the decision ended up in a very clear conclusion. This kind of, let's say, rent forgiveness processes or reduction should impact the P&L as the decision is made.
And this was very welcomed by us. I have to stress the fact that last year's accounts were prepared correctly on the grounds of the existing accounting policies at that time.
This year's accounts are also prepared correctly on the basis of a new development, a new interpretation by the, let's say, leading institution in Europe, taking care of the IFRS. The outcome is very clear. We retrospectively are accounting for these write-offs in 2021 and we are restating the 2021 accounts that are presented in the 2022 account set for comparison purposes. And the impact to cut a long story short is what you can see there. At EBITDA level, 2021 EBITDA has been corrected by €553 million.
And the net profit for 2021 is now after a restatement, €415 million less. Of course, that could complicate the comparisons. But my recommendation is to, let's say, forget about it and to move on and to focus on 2022 and beyond.
Clearly, now the business can be followed more intuitively because EBITDA and cash will go, let's say, will develop consistently. Of course, 2022 accounts are different from those that would have been produced under the former accounting policy. 2022 has never been formulated or prepared on the former accounting policy. So this is just a what if. And that what if is what you can see there.
EBITDA would have been €293 million less and net profit would have been €219.7 million less in what if situation. I hope you have managed to follow me and to understand that. But otherwise, I will be more than happy to come back to this.
Then. Okay. Looking at some of the indicators that were already discussed by the Chairman, I will only make some additional comments, if you like, because I think the Chairman has already went through them in good detail and very meaningfully. So first of all, the traffic recovery is being more substantial than we expected is coming earlier, it's faster, to the point that you can see now we are estimating 2023 to deliver 99% of the 2019 traffic. So let's say, for the sake of argument, 100%.
That means this is like bringing forward 1 year, 1 entire year. The expectations we had back in November when we submitted the -- when we presented the strategic plan. So let's say, by way of summary, the traffic is getting to that point 1 year earlier. But I have to be very clear as well, the range that we are providing is broad. And the reason for that is that there are still uncertainties.
Everybody living in this world knows that geopolitics and macro conditions are not yet clear. So that means that there is risks inherent to this estimate. But if we take that away, clearly, all the indications in the industry are very positive. For the same reason, the aircraft -- sorry, the airport revenues, the aeronautical revenues are growing, obviously, consistently with traffic. And I have to say the yield in 2022, I'm sure you have noticed on a per passenger basis is less than in 2021.
That's understandable. The charges went down. But on the other hand, there has been a positive development in the last quarter of 2022. We have seen the airport charges per passenger going up on a like-for-like basis because obviously, you have to remember that there has been a number of months in 2022 when we were charging an extra €0.80 per passenger to recover the COVID cost. But on a like-for-like basis, the fourth quarter of 2022 is delivering better airport revenue yield per passenger.
Commercial revenues, as the Chairman said are being a success. Hopefully, we knock on wood, that will remain, but we are very, very positive about this momentum. The underlying sales, the amount of money that passengers spend at the airports overall for the whole set of activities is going up, to say, is going up by 1%, but it's still going up on 2019. And that is really, really good. Of course, there are different activities that are performing differently, and we can discuss that later for reasons that are perfectly understandable.
But overall, the underlying activities at the airports are going north vis-a-vis 2019. And likewise, when you look at the information provided on Page 26 of this presentation, I'm not suggesting you to move to that yet. But it's clearly that -- it's clearly indicating that the trajectory of the revenues deliver through the ongoing day-to-day activity, what we call fixed and variable rents are -- is really positive.
They are about 2019 in overall, they are above 2019 on a per passenger basis. They are better than the rest of the 2022 figures on a per passenger basis at the end of the year. So even going -- improving as the year was, let's say, passing. And also, most -- the main categories are all of them delivering better revenues than the 2019 with a couple of exceptions. As I said before, I'm sure we can discuss it later if you wish.
This is the summary for me or the key messages coming out of this slide. So very good, very healthy underlying trends in the business. EBITDA at 49.1% margin is good news as well is somehow bringing forward expectations that we have for later on in the strategic plan horizon. That means that we are heading towards delivering the 55% that we estimated that the strategic plan could be feasible and achievable. Remember, the 62% that we used to achieve before the pandemic is not anymore in our reach at least for the coming 4 years or 3 years, different things later on.
But for the time being, I think 55% is a good target and still best in class. Should we move on to the next slide, please?
In terms of the operating costs, I'm not going to dwell on this anymore. I think there is a clear message here excluding electricity, we are flattish on 2019. And this is good news. It's good news because although it's clear that the current traffic level is not yet at the 2019 level, the business is up at full speed, full steam. All the facilities are open.
You have to deliver services as if you have the level of passengers you have in 2019, this is a very relevant element of fixed costs in our activity. The standards -- the quality standards, the requirements are much higher than they used to be. So all together means that being flat on -- in terms of operating cost is very good news. Going forward, we expect to make the most out of this. But mind you, the -- of course, there will be extra costs as we grow because the reality of the business is different.
Having said that, the -- let's say, the big goal here is the 55% gross margin, EBITDA margin that we are determined to achieve. And we are even more certain today than we were 3 months ago that we will achieve.
Then moving on to the next slide, and this will be the last one. I think the cash generation is also a very relevant indicator of how healthy the business performance is, we are delivering close to €1.9 billion of cash generated by the operations. If you take a look at this, obviously, cash is not affected by the change in accounting policy. So no need to adjust anything but clearly no, this is consistent with the close to €2.1 billion of EBITDA. And this is good news.
This is as I said before and the Chairman said before, this is making the follow-up of the business more intuitive. Well, there is only a difference of €200 million. That €200 million, if you go to the statement of cash flows, we'll see is the tax.
In 2022, in the last quarter of 2022, we are paying €177 million from memory, in taxes, in corporate tax. In Spain, the corporate tax is paid mainly upfront. So when you file your return in June, July next year, frankly, the cash adjustment used to be minor. So the bulk of the payment is made in the last quarter of the year before -- of the current year. So in -- so if you take that away, if you adjust this €177 million payment of the corporation tax made in the last quarter of 2022, you can see that the cash generated by the business before investment and debt repayment is €2.1 billion, exactly the same figure that we are generating as EBITDA.
And this is good news. And this is also an indication of our ability to convert EBITDA in cash.
So the cash conversion rate is close to 1. And then the debt-to-EBITDA ratio is now at 3x. You know that in the absence of attractive investments or we are not going to increase the gearing. We are not afraid of doing that for the right reasons. But otherwise, this will carry on going down up to 2% -- sorry, up to 2x EBITDA, once again, unless we find good opportunities and good return in investment to be made.
And this is it. Without further ado, I would ask the operator to open the Q&A session. Thank you.
[Operator Instructions] The first question is from Ivar Kelly of UBS.
Given you expect a faster traffic recovery in 2023, how should we think about OpEx this year relative to 2022? Specifically, what increase in FTEs do you expect? And what's the likely inflation third-party contracts and electricity costs? And secondly, rents collected per passenger were €4.93 in 2022. How do you expect that to evolve in '23?
And finally, excluding the provision reversal, EBITDA came in lower than expected. So how should we think about EBITDA in Brazil and Luton for 2023?
I didn't fully understand your second question, but we will come back to that. Well, in terms of the OpEx for 2023, as you know, we are not providing guidance on this must be absolutely clear from the beginning. What I can tell you is our trajectory is, let's say, our focus is to get what we believe will be a feasible EBITDA margin in this business. And we expect that to be 55% hope, well, we would be delighted if we can review that at any point in time. But for the time being, we believe this is the realistic target.
What we can see today is that at 49%, we are closer than we expected. And without providing any guidance on 2023, in the absence of any negative development from the point of view of the geopolitics, the war, the macroeconomic events, I would say the traffic expectations, the traffic estimate that you could see in the strategic plan would be brought forward by 1 year, so to speak. So that would accelerate, that will give momentum to this opportunity to get to 55%.
For 2023, of course, and we expect to improve this margin, I would expect to improve the revenues. That means that mathematically, in 2023, it is more likely than not that we won't be flat on OpEx vis-a-vis 2022. But on the other hand, we don't expect major increases or double-digit increases. Why? Because once we get to the 2019 level, we incorporate all the changes in the business reality, standards, quality standards, things like that.
We are nearly there. I know I'm very, very ambiguous, but I don't want to share with you any particular view on operating costs growth for 2023 or gross margin for 2023. So without providing you any figure, this is the trend. Traffic is brought forward for 1 year. The EBITDA margin now is at 49%.
So you should expect in 2023 to be better and are not going to be flat.
Setting aside the energy, which, frankly, by the way, is going the right way. So energy costs are now much less than we expected for the end of 2022 and the beginning of 2023. So this is it. With regard to the provisions, you said when taking out the impact of the accounting restatement or whatever we call it, the EBITDA is below expectations. I'm not sure I would say there are many of your colleagues that think otherwise.
And if you take a look at the fourth quarter -- the fourth quarter, if you take a look at it, EBITDA is better than it's proving to be better than in previous quarters, obviously, adjusting for the seasonality. Net profit is better than the fourth quarter. And the only 1 that let's say, at first slide, you could see the fourth quarter is -- you could think the fourth quarter is weaker in terms of cash flow generation. The answer is no. It is not.
Simply, we are paying €177 million of taxes. So from any angle you look at it, the fourth quarter is better than the previous one. And I have a number of papers produced by colleagues of yours this morning saying that we are slightly, but still better than expected. So I don't know how you get to this conclusion, honestly.
What was the second question, please?
In respect on Slide 29, where you set out the fixed and variable rents invoiced per passenger of €4.93. If you can give us any color on how you expect that to evolve in 2023, please?
Yes. We are -- in terms of higher revenue, if this is the question, frankly, I don't know. The -- without providing any further information, you know that the -- there are 2 elements to be considered or 3 elements. Element number 1 is the traffic, and you know what our view on traffic is now. Element number 2 is the airport charges approved by the CNMC.
And you know what they are. And number 3 is whether or not there will be some sort of dilution or concentration in the yield. And I think we are heading for more dilution. How much? I have no idea because that will be fully dependent on the traffic mix and the airports mix, so on and so forth.
So -- but with that in mind, you can get to your conclusion, frankly, without us telling you what is our view on a specific view on yield per passenger for add on revenues. Hopefully, I'm answering your question, but that's not fully sure.
The next question is from Stephanie D’Ath of RBC, Royal Bank of Canada.
The first 1 is a follow-up on OpEx. When you mentioned that electricity prices were going in the right direction and we're coming up slightly below expectation for 2023. Would it be fair to assume that the total cost of electricity will remain -- sorry, will come down year-on-year between 2022 and '23? And regarding staff costs, you mentioned in 1 of the slides that at the Spanish airport level you were basically flat versus 2019 in terms of OpEx. So does that mean that your savings that you are keeping from the pandemic more than offset the third-party contractors contract price increases because if I'm not mistaken, before the pandemic, you were highlighting that those would be increasing double digits.
So any color on energy and staff costs would be appreciated.
My second question is regarding commercial spend per passenger. Could you please give us a little bit more color on what is driving this very strong performance in terms of which passenger group is maybe spending more? And in your strategic plan, you forecasted a 12% increase between 2019 and 2026, which I guess doesn't really cover for inflation. So do you think that for the spend per pax you could reach the target earlier than foreseen as you are reaching the traffic pre-pandemic levels earlier than foreseen?
And then finally, my last question is on pre-speculation that you would consider selling down your stake in the latest Brazilian 11 airport block acquisition? Any comments on that would be appreciated.
This is Maurici Lucena. I will answer your last question concerning Brazil. At that moment, we are fully concentrated on the execution of the contract on the beginning of the new states in which we will take full control of the 11 airports. And our policy, I would say, is very simple. When we invest in an international airport, we want to manage it.
And in the case in the future, we would consider the participation of an investment fund or a financial partner. It will be, first of all, of course, keeping the control of the infrastructure in a site.
And secondly, I would say that we want to demonstrate through our -- through the quality of our management that we can fully deploy all the targets that we established when we consider the acquisition of the infrastructure. So in other words, so far, we are not analyzing any investment, any sale in the future when the -- let's say, when the 11 new or additional airports are demonstrated well run, we could eventually consider, but it's not on the table and it's not our plan at the present time. Thanks.
Stephanie. On the OpEx, clearly, the cost of electricity has come down over the last months. And this is good news. This is something you can notice in the quarter 4 set of results. And you would see that in the first months of 2023, should you be able to see it.
So this is a very interesting situation in which if that's -- if this is the case over the rest of the year, 2023, of course, would be delivering better outcomes that we expected. But we don't know, nobody knows.
So the next question is, should we hedge. And of course, we are looking at it, and we hedge something at the end of 2022 in December, actually, some 10%. Why so little? Because first of all, the market is not deep, it's not broad. Second, the curve is very steep.
You can be enjoying very good spot prices. But when you look at the curve beyond the point, you see that is getting steeper. So do you feel a little bit stupid hedging too much. And this is because the market is probably, well, not able to provide the right level of, let's say, hedge that many people would require. And on the other hand, because I've seen in this particular electricity war or gas war, I'm not an expert, I'm just guessing, expectations on market conditions are not, let's say, going together.
So we are in that process of finding ways of not speculating and hedging part of the bill, frankly, unlikely or impossible to think of hedging the majority or things like that over the coming months. But in the meantime, we are enjoying the good spot prices. But frankly, in some cases, are reaching levels of 60% or even less of the bill, we were paying at the, let's say, toughest part of the crisis.
With regard to commercial, yes, okay. I can give you some more color, some headlines, but if you want to follow up, of course, please be in touch with the IR team over the coming days or hours. I could say that the Duty Free activity, the activity run by Dufry currently is benefiting from a number of things. I'm starting with this because it's very significant. First of all, is the British passenger.
They are spending more. I suppose they are taking advantage of their new condition, and they are not anymore obviously, EU citizens. They can benefit from the, let's say, Duty Free shopping. But there is also a general increase in the average ticket volume or amount per passenger. And that means that there is an inclination to spend.
I don't know if this is sociological or it is, I don't know, whatever you call it, psychological, but it is already in the very, very patent.
When you look at other activities like food and beverage, definitely, there is a propensity to spend, to eat. So to speak, that is going north very significantly. And also, the average ticket price is going north. Of course, the flip side of that coin is specialty shops. They -- many of them -- well, not many.
And a good number of them still remain closed. At the end of the year, I think there were still around 12% of them closed. That means that the total spend on the specialty shops is going down. Luxury is not doing well in our business, it's not doing well here in Aena, I don't know, somewhere else. But publicity, obviously, advertising is, well, still lagging behind.
But for instance, the use of car parks is really, really growing very significantly. People are using our CapEx at levels that are not very far from 2019. Maybe this is driven by the high weight of the domestic market in this recovery, which is changing now. Now we have extremely good levels of international traffic.
The rent-a-car, amazing. Rent-a-car is a business where there was a shortage of cars. That meant that the average contract price went up dramatically, still people pay. They don't care. They keep paying.
And the revenues are going up on -- not only on a per user basis, but in absolute terms. So this is just descriptions. Obviously, you need some more detail, the IR team will be happy to help. But I hope that will give you the color you were asking me to provide.
The next question is from Elodie Rall of JPMorgan.
The first one, I'm sorry, but can I just follow up quickly on your guidance on OpEx? You said flattish '23 versus '22. And I know you gave us comments but basically, are you now assuming electricity costs to be slightly down, but staff costs and other costs to more than compensate that fall in electricity costs. Is that the base case that you're guiding for when you say flat cost, flat OpEx in '23 versus '22? That's my first question.
Second question, if we look at the recovery of COVID cost. I think you reported €156 million in 2022, of which €40 million to €50 million in Q4. So what should we expect going forward?
And lastly, if you could give us an update on Barcelona, given utilization or capacity utilization there seems to be around 96%, and you've had -- we know the extension plans are on hold. So what's the plan basically for Barcelona? What could be the impact if the investment is really delayed?
Hello, this is Maurici Lucena. I will answer the last question concerning the Barcelona Airport. All I can say is that our -- which strategy we have followed in the past, we proposed a specific model and specific project of expansion. This was rebuked by the Catalan government. We said from the beginning that for the project to be feasible.
We needed the green light of the Catalan government because this project due to the very specific features of the Barcelona Airport will -- would have environmental consequences. So we said that this green light, this regional green light was unnecessary condition. When we did not obtain this green light, it meant that the expansion of Barcelona was not included in DORA II. And I would say that the novelty in the last weeks and months has been that there has been a political agreement that comes from budget in Catalonia between the political party, which gives support to the Catalan government and the principal party in the position, the Socialist Party and this agreement, this political agreement, will materialize in, let's say, in an institutional and technical analysis in the coming months in which, I don't know, in which the Catalan government and the Spanish government will eventually decide which alternatives are evaluated in this technical and political analysis.
So the position of Aena is very clear. We will wait until this analysis starts. And when it starts, we will just follow the requests that are conveyed to Aena and I cannot say any more. It is true on the other hand, that the original agreement, political agreement states that the Barcelona Airport is -- how would I translate that into English. I mean the commitment is that it will gain aeronautical capacity.
This is all that the political agreement stated, and we'll see. We'll see what the future defines. And on another question, you mentioned, I would say that in the foreseeable future, in the short coming future capacity is not a problem in Barcelona. And I think this will remain true for at least a few years. Thanks.
And I will now give the floor back to Jose.
Well, on your first question, I didn't provide any guidance on OpEx. So please no call of guidance. What I said is -- first of all, we are not providing guidance on these sort of things for 2023. What we -- what I said is we are closing 2022 with the operating costs, excluding electricity costs being flat on 2019. We can see now that with the new guidance for 2023 on traffic, we are bringing forward, let's say, the recovery, let's say, 1 year, more or less.
So that means that I expect the margin to improve, obviously, on the current 49%, probably faster than we expected. And then I said, that doesn't mean I'm saying the operating cost for 2023 would be flat on 2022 and 2019, excluding electricity, always excluding electricity, where electricity plays a positive or negative impact, let's take it apart.
The rest of the operating cost would be more likely than not will be higher than in 2022. But our duty, our objective, our focus is to make sure that growth is moderate, is moderated by no means reaches the double digit. Because believe me, it's not easy. It's not -- I would say it's impossible to run airports these days on the same cost base that in 2019, if there is anyone in Europe, I don't know, Asia or I'm not familiar enough. If someone says that in Europe, they can run similar level of, let's say, activity in 2019 in a large or significant airport in Europe at the cost of 2019 well, I don't know, I would say that's not true.
So 2023, operating costs, more likely than not, they will go up. We are determined to make that growth, let's say, as limited as possible by no means reaching double digit. And more importantly, to be able to speed up the process to get to the 55% EBITDA margin that we believe is realistic is -- the realistic 1 in the current context of the, let's say, the business. If in 1 year or 2 years, we believe we can reach 60% or 62%, we will let you know, but it is unlikely.
And then finally, the recovery of the COVID costs. The COVID costs now are being dealt with in a different way. For 2023 -- for the 2023 charges, the CNMC allowed us to recover the 2022 to be more precise, the quarter 2, quarter 3 and quarter 4 of -- well, quarter 2 and quarter 3, COVID costs of 2022, only to the point that the final outcome of the airport charges for 2023 remain flat. That was the decision of the CNMC. That means that in 2023, the charges, the airport charges that, by the way, will start to apply on the first of March, so tomorrow.
These charges will allow us to recover only €40-something million, you don't remember the figure exactly, €45 million of COVID cost. The rest will only be recovered in 2024. That's the plan. And now as we speak, we are not incurring any more COVID costs. So this is part of the past, hopefully forever.
And what is true is that there is still some amount outstanding that will only be recovered in 2024 because the regulator decided not to allow any euro to be recovered if that means the charges would go up on the previous year. This is it. By the way, everything we postponed the recovery, we are entitled to recover the cost of capital on that amount, let's say, accordingly.
And if I can just confirm 1 thing on the MAGs impairment. We're no longer going to see any of these, right, with the restatement made. And so from now on, commercial activity match the cash flow P&L and cash flow matches, right?
Exactly. There is only 1 case which would contradict this, but it would be always immaterial. Let me put you an example. Imagine at the court a judge decided to, let's say, that 1 of our operators that, in our view, was not subject to the DF7, for instance, an advertising company, are entitled to the DF7. At that moment, we will need to account for a write-off because the decision will be taken at that time.
But this will be always exceptional situations and by no means you can think of a material amount, okay? But just to be absolutely precise. The rule now is you take the hit, you make the -- you take the losses, exactly at the time a long court decision or whatever says you are not entitled to recover that amount. But once again, the big deal was the DF7. This is part of the past, and you shouldn't expect any more material impact going forward.
The next question is from Nicolas Mora of Morgan Stanley.
Yes. Just 3 follow-ups, please, if I may. Just you -- on commercial and the retender of the Duty Free. You stated you expected some fierce competition. Can you maybe give us a little bit of color on how you -- are you seeing the tender is going?
We've got the 10 interested parties. I think from the press you're now expecting the technical and economic report by mid-May. What is there left for you to do to foster even more competition from here? That's question one.
Question two, just on cost and third-party services costs. What contracts you have to left to be renegotiated in '23? And what kind of inflation would you expect in there, especially with regards to the Spanish minimum wage? Is there a risk your wage bill will go up markedly in '23? I mean you've hinted to limited inflation year-on-year, but just a bit of color on the wage side.
And last point on CapEx. Your peer, ADP flagged [ low ] inflation in the CapEx bill from '24 onwards. Is this something you worried about as well at Aena specially in Spain?
Okay, Nicolas. With regard to the Duty Free tender, clearly, we have been working hard to make sure that the tender was shaped to attract competition. And we believe we have achieved the goal. There were a number of amendments introduced in the former way we tendered out these kind of contracts as, for instance, including a range of products that was not in the scope before such as luxury goods allowing flexibility in terms of -- well, more flexibility in terms of the designs, allowing -- extending the length of the contract, preventing any single leader to be able to take it all well, making sure that they involve the technology in their bidding. And so we can benefit and they can benefit out of what they are selling outside -- well, a number of things.
I'm not an expert, but 1 thing. So we have been attracting -- we have attracted a good number of operators. You can see them on Page 16, and for the first time, we have Asian and American players looking at the process. So we remain very confident that there will be a good outcome.
On the other hand, the precedent in terms of the rest of the activities are really, really brilliant. So this is it. We made sure that the ingredients were there to attract the competition. We believe the competitors are already showing up. So we are really positive and looking forward to see in their bids.
With regard to the cost of the third-party services, let me take a look. I think -- do we have the detail of what kind of -- well, Nicolas, probably the best way to go ahead with this, this is for us to provide you with this. Clearly, the -- our experience these days is as follows: anything we are tendering to third parties, the sort of aggressive bid that we had in the past are not anymore on the table. I mean, in terms of operating costs, we will come back to investments, our CapEx later. So you can say that in any single deal you are making to procure these kind of services, you are missing something for sure.
And of course, this is the result of the inflation pressures the minimum wages going up and also that the contracts are being shaped in a different way. We are asking them to take more risks after the COVID they realized that they have huge risks. So what they -- the suppliers are now saying, obviously, if I take more risks of downside, I have to price that risk. So how much that will impact on 2023 new contracts, specifically? I have no idea, no idea.
Hopefully, it will be double digit. This is what I said before. And we are very good at running these processes. We end up in every single case in electronic options. So what we are not seeing is people, let's say -- or the competition is appearing.
We still have competitors. But clearly, they are not bidding as aggressively as in the past. But honestly, I cannot tell you whether that will be 5%, 10%. But on the other hand, the number of contracts that we will be awarding in 2023 will represent a fraction of the total portfolio. So that will be somehow distributed over a number of years, not only year 1.
I know I'm not providing very detailed or very precise information because, frankly, it's what I can give you at this stage.
CapEx. Well, CapEx is an interesting case. CapEx, the Spanish government approved back in August, new ruling, I don't know if this is allow or not by which any institution, any public institution and Aena in that case is part of that, should be open to consider proposals from their contractors to increase or to review the prices up as a result of the pressure on their procurement and, let's say, chain. We have a number of applications already. They are subject to various strict rules and we believe that if this crystallizes in cost increases in some of the CapEx plans would be -- wouldn't be terribly material.
I'm not able to provide you a precise figure, but probably would be something like €100 million to €200 million. That would mean that the bar will be increased. But on the other hand, we will need to make room for that. So we may end up agreeing on postponing some other projects that are not strictly necessary. Other than that, we haven't seen anything any major any other major wave of, I don't know, people walking away or not bidding.
No, not at all. Still competitors, still people applying to make the works. And this is the only thing that we have to keep in mind that we may need to reduce some of the contracts slightly.
The next question is from Dario Maglione of BNP Paribas.
Four questions from me. One wage increase for 2023 for Aena Spanish staff. How much is the year-on-year increase that is agreed? And could that change during the year? Second question on yield concentration for 2022 to be recovered in the K factor.
What was the final amount for last year? Third question on underlying commercial revenue the passenger which was up 10% in Q4 compared to 2019 levels. What are you seeing in January and February, if you can share the data?
And the last question is at on the Duty Free tender. There are many leaders from around the board, and that's much better than the original bid almost 10 years ago. So you definitely have achieved higher level of competition for this tender. But I'd like to understand how we will select the winner? So let's say there is 1 bidder who offers a much higher rent than the current rent.
However, maybe this bidder has fewer credentials than incumbent Dufry. How will strike a balance in choosing who wins the concession?
Okay. Frankly, I didn't understand your second question. We will come back to it. In terms of the salary increases for 2023, salary increases in the business will be 2% fixed plus a potential 1% extra subject to a number of conditions. So you can take 3.5% for granted is -- we believe is fine.
It's not -- it's moderate is fairly balanced. So this is -- in terms of the Duty Free process, as I said before, we have been working hard to get -- to design the tender in a way that people are attracted. They are coming to bid. For close to 1 year, 10 months, our colleagues in the commercial business and the advisers they retain, have been traveling the world, meeting people, talking to people, trying to understand what they need.
And of course, together with their own knowledge they ended up by shaping the contract by shaping the tender in this way. The tender will be based in a combination of, let's say, the technical, the offer the bidders will be making and obviously, the economic element of it. But frankly, still is very much dominated by the weight, the relative weight of the economic offer is higher, to be perfectly honest. This is Aena's tradition. Some people like it.
Some people hate it, but this is Aena's view of life.
At the end of the day, it will be awarded to -- unless there are major differences in the quality of the offer they are making, it will be very much driven by the economic conditions. For the time being, we have been able to engage, as I said before, I don't know, 3, 4, 5x more people than we did in 2012 that I believe was the last time we tender this out. Please, if you can say again, second question, right? I didn't quite...
Yes, second question on yield concentration for 2022 on the aeronautical side, and if you can tell us what was the total amount for 2022 to be recovered in the future tariff?
Okay. Actually, in 2023 ended in dilution of €43.6 million, this is 2022. For 2023, well, who knows, but I would bet it will be dilution as well. As traffic is growing, load factors are going up and well, large airports are coming to help unlike 1 year ago, where it was all driven by touristic airports. That, for sure, will end up in more -- sorry, concentration for next year, dilution this year.
I got it totally wrong. But anyway. This year, dilution 43.6% -- €43.6 million. I got lost on this, as you can notice. €43.6 million of dilution.
Going forward, we are more likely to end up in a concentration case.
Okay. So you will recover the €43.6 million with higher tariffs in the future. And then for 2023?
Exactly, exactly. You are exactly right in 2024.
And maybe the last question was on the trends in underlying commercial revenue per passenger, which is pretty strong. I just wanted to know whether that is continuing in January and February?
In commercial, you mean?
Correct. Yes. Commercial.
Well, I will struggle to be committal on this. The trends are very positive, but I don't know. First and foremost, we are not providing guidance. But on the other hand, we have to keep an eye. I don't know for how long this per passenger basis growth trend will be.
Obviously, over the longer run, as you know, we have commitments in the strategic plan because we are going to develop different offerings, different ways of getting to the customer. So of course, there is a commitment, and there is a very, very good plan. But over the coming months, in terms of months, or the coming year? I'm not sure. I don't know whether this healthy trend of people spending more on a per passenger basis or higher tickets.
I don't know whether this is going to be sustainable over the coming year or so. Frankly, I have no idea.
I think we will -- I would ask you to make 1 question per person. We have 5 more people in queue -- and I would like to finish by, let's say, in 10 minutes, if that's okay. Obviously, we can follow up offline with the IR team.
The next question is from Marcin Wojtal of Bank of America.
Yes. So could you comment a little bit on your refinancing strategy? You've got a bit of that coming up in '24, '25. Are you going to use euro bonds or maybe bank financing or maybe you're just going simply to repay some of that debt? And if possible, can you also clarify why your cost of debt has increased so far very, very little?
It is still on average just around 1%, even though you have 20%, which is on the valuable rate.
Well, the refinancing strategy now is, honestly, for 2024, open-minded. We are working on it precisely as we speak. We will see what is best. Of course, I think Aena would be very well fit to be in the bond market. But not at any price and not if you don't need it.
You don't need that financing for too long. So open minded, but for sure, we are conscious that we will have to do something about the 2024 peak. We are extremely relaxed as you can imagine. This is mainly driven by the COVID related financing decisions. So it's fine.
In terms of the cost of debt, obviously, we have a massive chunk of that link in fixed or hedged or swapped. So -- and this is the reason why we are clearly able to keep the average cost so low. The team can give you some more color -- precise color, but this is the headline. Next one, please?
The next question is from Achal Kumar of HSBC.
I mean although most of the questions have been answered. Just a couple of things I wanted to understand. First of all, on the traffic guidance, you have guided to do 104%, up to 104%. But then you have mentioned that the base case is 99% of recovery. I mean, what makes you so cautious in terms of traffic guidance?
While I can see that there is quite a lot of optimism about the recovery. So where do you think -- where are you more cautious in terms of recovery? Secondly, in terms of issue so of course...
Can you just simplify and make a question? Because otherwise, I think [indiscernible] think you will be upset. Sorry, simply that we are running out of time, okay? If that's okay, you can follow up with the IR team. But it's simply that we need to go.
Sure, I can follow with IR. That's fine.
Please, apologies. In terms of your question, you can say that the range of the estimate is broad and you are right. You can think taking the midpoint is prudent, and you might be right. But Frankly, the current conditions around the world, around Europe are, let's say, making any sort of assessment difficult. When you sensitize this to the risks around, well, frankly, it's almost technically wrong to go to the -- technically, I mean, based on the work done by the people experts running these models that to go to the extreme north or south because there are significant uncertainties in Europe now that would make the traffic, the -- let's say, the air transport traffic let's say, potentially being affected is a very sensitive thing.
To put in simple terms, air traffic can be reacting very quickly and very significantly to any wrong geopolitical or macroeconomic evolution. You see now people spending nonstop, but what is things change. And this is driven by, let's say, statistical and econometric models. I just go and present it. And hopefully, it will be more than 99%, who knows.
But today, we are not so sure. And we have the final question already.
Yes, the final question is from José Arroyas from Santander.
I think this one is for Jose. Within your electricity bill in the Q4. Could you give us an indication of how much was the compensation for the gas plants? And how do you think this will perform in the first quarter at least?
Okay. You mean the gas cap. Well, I would need to check it, the team can help you with this. You are right, when you pay your electricity bill, you have 2 components. One is the market price, the other one is the gas cap mechanism.
But I don't have this information handy now. So I will send it over. We will send it over.
Thank you very much. I think we have finished and see you at the next occasion. Goodbye. Thank you.
Ladies and gentleman, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.