Good morning to everybody and welcome to our first half twenty twenty one results presentation. As full year results, we will have today also our Chairman and CEO, Mauricio Luthena and AENA's CFO, Jose Leo. The presentation will be started by our Chairman and then followed by Mr. Jose Leo. Now I give the floor to our Chairman, Mr.
Lutena.
Thank you, Emilio. Good morning, everybody. Slide 4 summarizes the evolution of activity and the most relevant economic and financial trends. So I will concentrate on this slide regarding and starting with passenger Traffic, passenger traffic, including Spain, it means that our 46 airports, including also Luton And finally, Brazil decreased to EUR 32,900,000, which implies 21% of traffic from the same period in 2019. If I Now try to separate the different airports in Spain.
The Airport networks in Spain, they had or they experimented 21% of traffic compared to 2019. In Luton, the traffic accounted for just 10% of traffic of 2019. And in Brazil, in the Northeast of Brazil, Our airport showed a strong recovery, which amounted to 71% of traffic in the same period of 2019. This means that total consolidated revenue decreased to EUR 862,900,000. And as usual, in the past months, it is important and I would like To underline this, it is important to keep in mind that in the application of For IFRS 16, revenue totaling EUR 255,600,000 of MAX has been recorded, given that AENA has a contractual right to receive this revenue.
So In other words, our total revenue includes and it is accounted as If we could be paid the total amount of MAX that was this amount of EUR 255,600,000 On the other hand, EBITDA for the period for the first half of the current year of the period came to minus €58,200,000 including minus €84,100,000 for the Northeast Airport Group affected by the impairment of €89,000,000 recorded in this Brazilian Airport Group and This, you know, that adds to the EUR 64,600,000 recorded in 2020 annual accounts. So in other words, if we exclude The effect of the net amount of the mentioned impairment, EBITDA would have amounted to EUR 30,900,000, I mean positive. Consolidated net result closed in minus EUR 346,400,000. And again, if we exclude the effect of the impairment mentioned, net losses for the period would have been minus €307,300,000 On the other hand, operating cash flow has ended the first half of the year with a cash burn of EUR 220,300,000. And finally, concerning our financial debt, Aynas Group's consolidated net financial debt has increased to EUR 7,600,000,000, including EUR 510,000,000 from Luton, EUR 46,000,000 from Murcia, from AIRM, that's what we call in short, Murcia and also EUR 12,000,000 from Brazil.
This net financial debt of EUR 7,600,000,000 compares to EUR 7,000,000,000 at the end of 2020. And again, this means that our ratio of net financial debt to EBITDA has increased in the within the consolidated group to 17.1 times. In this regard, it is important to highlight that the financial ratios included in the contracts with financial Covenants are linked to the EBITDA and the debt of AENA SME, not the consolidated group. In this sense, the net debt EBITDA ratio of AENA SME has closed to a little bit lower 14 times. Thank you.
Okay. Thank you. This is Jose Leo. I will Talk you through the main highlights of the half year results. To be honest, the key headlines have been already mentioned by the CEO, but I will try to expand a little bit more some of the details.
On Slide number 5, traffic, well, the CEO has already disclosed and showing the different component parts. It's clear that the first half of the year In terms of traffic, has been disappointing. It's not what we expected. We expected Initially, a progressive recovery, and that didn't happen. But On the other hand, it's positive to see that from May onwards, we have witnessed recovery.
And what we could call a healthy recovery given the circumstances, particularly in June, This seems to be the trend for the summer. So we would be, in principle, able to catch up and to make up for the disappointing 1st 5 months of the year. In any case, this is subject to any surprises or any new decisions made by the different governments around the pandemic, whether or not there are further restrictions, further concerns about the new variants and things like that. So in summary, we believe that I wouldn't speak about any guidance, but if you remember, we were mentioning a number of times that potentially 2021 would end up with something around 35% of the traffic of 2019. This is still achievable.
This is still more or less it would be feasible despite the fact that the 1st 5 months of the year were not showing the trend that we expected. I'm sure we will discuss that later on in the Q and A. In terms of revenues, Clearly, the decline overall decline in revenue is less than we would Expect by looking at traffic, the airport revenue or the airport charges are decreasing consistently with the traffic numbers. But this is not the case in terms of the commercial revenue. And this is due to what the Chairman and CEO already mentioned, the fact that we are Consistently and strictly applying the IFRS 16 rules, we are Obliged, I would say, to account for the minimum guarantee revenues that are contemplated in the commercial contracts.
So we have already accumulated between 2020 2021, the first 6 months of 2021, euros 875,000,000 in minimum guarantee rent. And we are conscious that these rents in a significant chunk of them won't be collected. They won't be collected to start with if and when any a tenant, any commercial operator, agrees to the proposal we made in January. At that very time, we would be waiving 50% to 60% of these revenues. They won't be collected either if we get any final court decisions over the coming months or years about the substance of the deal we are proposing and the substance of the positions taken by the operators.
So we are conscious of that. We have to be extremely clear on this. We are conscious of that, and we are making clear to investors and to the public in general that we are experiencing a divergence between the EBITDA and the cash collected. We will discuss that later, but I wanted to be very upfront on this as we have been already in previous results presentations. Then we submit or we filter These revenues through the IFRS 9 provisions in order to assess whether we need to provide for all or part of this based on the credit risks conditions or assessment.
Well, applying strictly IFRS 9, we have accounted for EUR 23,800,000 in additional provisions in connection with this amount of revenues and receivables we have in the balance sheet. And this is it. It may look too little, but this the strict application of IFRS 9, because any other consideration around Whether or not these MAX will be collected for other circumstances, such as court rulings or agreements offer or so on and so forth would fall under IFRS 16. And then we need to go back to the to square 1 and to see how IFRS 16 caters for the accounting of these revenues. Then moving on to Slide 6.
I just wanted to Highlight here a couple of things. We are investing at good pace. Clearly, the second Half of the year, we expect to invest more than in the first half of the year. This is a long standing tradition. We tend to do the same every year, but you know that we ultimately, we deliver.
So we have invested close to EUR 300,000,000 executed close to EUR 300,000,000 euros of our CapEx program so far in the year. I wouldn't stop on financing because there is no News there, negotiation on commercial contracts, just to update you that nothing has changed. The number of tenants that so far agreed to the Proposal made by IANA represent 67% of the total contracts, but only 13% of the volume of mag affected. So this is the trend. In terms of the judicial decisions, there are positives and negatives.
It's fair to say that we are more or less fifty-fifty in terms of number of decisions, but probably Clearly, there is a negative trend in terms of the volumes involved. Having said that, we always mention that these Judicial interventions so far are dealing with injunctions, are dealing with Precautionary measures are and they are not dealing yet with the substance of the dispute. In terms of Dora II, no other news than the news that you already are aware of, which is the CNMC report, where they are clearly indicating they want us to reduce the charges by 0.44 percent per year. I'm sure we will discuss that at the Q and A session. We are waiting for the DGIC to make a final ruling on that or final decision on that.
As you know, with the DGAC, we don't discuss things. We provide information. We provide input. They make their mind, and they will come up with something hopefully over the coming weeks or months. And then In terms of the next slide is my final slide before handing over you to Emilio.
The impairment test has been run again the 30th June. And no news on any of the clearly, the activities in Spain. And no news, no impairment needed for Luton Airport. But We have impaired we have accounted for an extra EUR 89,000,000 in impairment in for AENA Brasil for A and B. This is driven by as we have been Progressing in terms of assessing the future of the business, running the business plan and getting ready to start investing.
Things have changed there in terms of cost of raw materials, cost of construction materials, inflation. Being prudent, to be honest, we want to be prudent. We have assessed that there is We estimate the investment the CapEx needed there to be higher than originally expected to deliver the infrastructure we wanted to deliver. And that, together with a review in the discount rate, this is highly likely this is very highly technical. So that may go one way or the other.
We have recorded €89,000,000 euros of extra impairment on top of the €65,000,000 already recorded. As you know well, this is this has no impact on cash whatsoever. And this is it. I will hand you over to Emilio. Thank you.
Thank you, Jose. Moving to Slide number 9 on traffic data. Well, I'm not going through the slide as the traffic has already been mentioned and the detail was sent some days ago. But I think it's important to go to the table you have on your right hand side of the slide, highlighting how this performing the domestic traffic with just a 5% fall versus last year in comparison with the minus 56% of the international traffic that moved domestic traffic to be 55% of the total traffic during or in 2021 up to June. If we move to the next slide, number 10, just showing How the revenue by business line has performed?
I don't know if you call slightly in line with the traffic, minus 34% in terms of revenues, with the EBITDA moving to minus EUR 283,000,000 affected by the impairment testing in Brazil. Commercial activities just falling 13.6% also impacted by the minimum annual guarantee that have been already mentioned and also impact the EBITDA. And let's say that the best Pro form a would be the real estate services with a growth posted both in revenue and EBITDA. International Business line falls by 14% to €57,000,000 in revenue and minus 85 €1,000,000 on EBITDA. Sorry, because I was incorrect that the impairment of Brazil goes through the international line, okay, is included in those 85,000,000 losses at EBITDA level on international.
Sorry for that. If we move into the next slide, number 11. Let me emphasize a bit what we have already mentioned in past quarters, but I think it's very important because of what is moving What also Jose has mentioned in terms of the minimum annual guarantees accounted and the cash, okay? So first of all, AENA has recognized MAX of EUR 255,600,000 in the first half of year twenty twenty one, okay? These marks are recognized on a monthly basis and follow the curve of traffic.
So Let's say that the second half of the year would amount more minimum annual guarantees than the first half of the year according to the traffic evolution. Thirdly, that if an amendment is signed, the amount reduced according to that amendment has to be recorded using the straight line method until the end of the contract, let's say, a negative adjustment until the end of the contract. 4th, that let's say that using the same language, an example we used in full year 2020 results, The minimum annual guarantees registered since the 1st January of 2020 until the 30th June 2021, so in 18 months, amount to €875,000,000 of which €620,000,000 were accounted in 2020 $255,000,000 in 2021. And if our proposal had been accepted by all the operators, The amount pending would be EUR 285,000,000 throughout the whole period since January 2020. You have also a detail of all these figures on Page 13 of the management report.
And finally, moving to Slide 12, that will be the last commented. In terms of the commercial revenues, just highlight the average commercial revenue per passenger of EUR 14.5 as you can imagine is heavily affected by the low traffic figure. So it would not be a figure just to follow on in the future. And secondly, on the right hand side of the table, The first half twenty twenty one minimum annual guarantee already mentioned of EUR 255,600,000 that is shown in this table. And just as a comparison, in 2019, this figure was around EUR 17,000,000.
So indeed, it's a higher amount. But back in 2019, we already had these minimum annual guarantees pending from the commercial operators. I'm not going to go through the remaining part of the presentation, So we can move now to the Q and A session. Please, operator?
Thank you. We now begin the question and answer session. We are taking our first question from the line of Siobhan Lynch at Deutsche Bank.
Hi, good morning. Thank you very much If possible, I have 3. My first is on the MAG. Would you be able to update us On how far through the process, I guess, the court cases that consider the merit of the proposals are? Are they underway at this point?
Or do you have any time line on when they might start? And then I guess in the meantime, what has the dialogue been like between you and the respective retailers? Does the door still remain open for negotiation? And then my second question is, what insight can you give us And how easy or difficult it is to logistically manage the reopening of parts of the airport, as traffic Comes back. So I think recently you've opened some of your Madrid and Barcelona terminals again.
But given visibility on traffic is low, Is that something that you can ramp up with a few days' notice? Or does it take a number of weeks? And then finally, just on the recent Notable changes that we've seen in Europe for the winter season ahead. I think carriers have to deploy 50% of capacity. Do you think it makes much of a difference to the level of activity we could see in winter?
And I guess any thoughts you can share on the decision more generally? Thank
[SPEAKER JOSE
RAFAEL FERNANDEZ:] Thank you. This is Jose here. In terms of the MAX, I would say that all the major there are, to start with, 2 groups of tenants, those who accepted the offer. And we are working with them towards signing the contract amendments. This is a process that takes some weeks or but sooner or later, they will be signed and then the accounting rules that we [SPEAKER CARLOS ALBERTO
PEREZ DE SOLAY:] Cars will apply from that moment onwards.
With regard to the largest ones, the ones that rejected the offer, There are different situations, but generally speaking, all the major operators have already taken us to court. So the discussion there are no outstanding cases that are, let's say, material. The large scale operators are already involved in court cases with us. You know that most of them are taking us to court in terms of stopping or keeping us from executing guarantees or invoicing MAX and things like that. So in let's say, there are no major cases where we have we are already discussing the substance.
The discussion of the systems can take, I would say, months and potentially up to 1 year at
the let's
say, the very low end court level. If we go to the Audiencia Provincial, which is a different court level or we go to the let alone to the Trimunas Supremo Supreme Court, that would take years. I'm sure you would say, so this can take ages to get sorted. Yes, potentially. But we believe that this is not incompatible.
Discussions around this potential or this issue won't be incompatible with, if and when the traffic comes back, The business to get back on track and the operators, the very same operators potentially being involved in discussions about the future and things like that. We are not naive. We are not saying that they are going to waive or they are going to pull from the for their current requirements. But I think they will look at the future in a different way. And we want to I want to remind you of the 2 main principles that are driving our position here.
Principle number 1, we are making a generous or fair offer. We are offering to waive around EUR 800,000,000 in total in MAX. But we don't want to give up on the Very fabric of our contractual arrangements, which is the MAX, so far for us are critical. We don't know whether in 5 years' time the world is turning around and things are changing. But for us, we have a duty to protect that in the interest of our shareholders.
And we believe that there are no reasons to throw the, Let's say, the baby with bathwater, when you are just discussing the period of time that It's exceptional, it's terrible, but it's a period of time. This is principle number 1 for us. And principle number 2, I wouldn't say this is a principle. This is more a pragmatic approach. If we say yes to everything they are requesting today, What we get will be nothing, substantially nothing.
What is the point in getting nothing now? I mean, We simply carry on getting no cash collections from most of them. So there is no practical difference in terms of, let's say, giving up or not giving up. And we believe we don't we shouldn't give up for the sake of protecting the interest of our shareholders. I don't know if I'm answering your question.
In summary, this can take long at the level of the court. This can be very cumbersome from the accounting point of view. I recognize that. But Rest assured that we will be very transparent, and we will try to focus your eyes on the cash. And we believe this is not going to damage the long term relationships because the long term relationships will be driven by commercial interest, let's say, business.
And if the traffic comes back, many of these clouds will disappear for the future. If the traffic Never comes back. We will be discussing a completely different problem altogether, not only us, but the industry overall. 2nd question on reopening terminals. No, frankly, we are not experiencing any major Travel, in terms of reaction, we are reacting very, very quickly.
Actually, we have opened already all terminals. Every terminal across the network is open. Different thing is we have different we have spaces in terminal that are not already, let's say, in working conditions. But generally speaking, we are ready to accommodate Traffic growth. What we haven't seen yet, and this is this remains to be seen is uncharted territory is weather.
Significant very, very significant increases in traffic under the current operating conditions could be more difficult to handle than they used to be before, but time will tell. And the third frankly, I forgot the third point.
And it was also the slot numbers.
Yes, regarding the slots, I will take that one. Yes, I think it has been this week announced by the European Commission that they will maintain the 50% slot rule. And our view is the same that we had back in when the summer season rule was published and approved is that I think we believe it goes in parallel with the traffic recovery and gives more flexibility to the airlines to adapt their activity to that recovery and also to, let's say, for the airlines that have been more active to have slots for the following seasons.
Great. That's all very helpful. Thank you.
We are now taking our next Question from the line of Luis Prieto at Kepler.
Good afternoon. Luis Prieto here. I had a couple of questions, If I may. The first one, I would like to get a feel for the operating cost outlook over the next couple of quarters. Given, as you said, that you're effectively reopening the infrastructure to accommodate traffic reactivation, how should this impact the operating cost base of Q3 and Q4 versus what you've already reported in Q1 and Q2, am I right to assume on top of this that you Still expect operating cash flow to be breakeven in 2021.
And the second question regarding the Airport Cities real estate project that you recently launched. Am I right to assume that you will be providing its economic implications in the new strategic plan presentation letter this year? Is there any detail you could share now? Or should we wait? Thank you.
Okay. With regard to the OpEx, I have to say that The 2nd quarter results we are presenting today are proving that we I remain very focused on costs and that we are managing the operating costs, let's say, responsibly. Of course, there is an increase year on year, But that increase is around 26%, 27% For the Spanish network, I recognize that the consolidated numbers are different. But to be honest, the consolidated numbers are even better. So this is not bad at all.
What is true is that we won't be able to keep the level of costs choke that we applied in 2020. This is impossible. So without disclosing any numbers, this is our intention and our view, and we remain very confident that the cost increases on 2020 will be, let's say, manageable, clearly well below the 2019 operating cost figures. It's true that as we open new facilities, it becomes more difficult to, for instance, to do what we have done in quarter 2. In quarter 2, the cost increase is substantially lower than the passenger increase.
You would say, of course, I wouldn't expect otherwise. But what I mean, this is not easy as you move forward and you reach a higher level of traffic. But still, We remain confident without disclosing numbers that we are not going to move substantially away from the level of operating costs that you can see today in the business as long as we deliver the level of traffic that we discussed before in 2021. In summary, to cut a long story short, We remain very confident that at operating level, we will be in breakeven From the cash flow point of view, if the traffic ends up around 35% or a little bit more of the traffic in 2019. And I would say we are working hard to be cash flow positive at that level.
So this is the position today without getting you giving you any specific guidance. Different thing is the investment. Clearly, we are investing, and that will be burning cash. I forgot. Okay.
Airport cities. Well, we are really pleased that we have Finally, launch the process. We organized, as you know, that session with potential investors. Publicly, we disclosed the information we provided with Well, we responded to questions, and there is a huge amount of interest. As you know, the intention is to focus on Madrid now, and Barcelona probably is shortly after, but they focus on logistics.
This is promising, is the beginning, and we believe is doing the right thing and will change over time the somehow the look and feel of the surrounds of the airport. And that will be for the good of the airports and for the economy around the airport in general. Having said that, I mentioned a number of times, this is not going to be transformational in terms of the business Profile, this is not going to involve, I don't know, 10% of the EBITDA of the business coming from these activities. You know the real estate activities are long term. Developing this land bank will take years.
And also, importantly, we are not going to be the majority owners of any of the SPVs, we will be contributing the right of use of the land and we will be participating in the, let's say, dividends and the profits of those businesses. So this As you are not investing heavily and you are not taking a majority position, the our books will not be, let's say, changing dramatically. So very good business, Very good for the airport, very good for the future of the rest of the airport activities, the right thing to do, Value added, but don't expect the business to look different in 5 years because of this real estate business. I have to be absolutely upfront on that.
Excellent. Makes all sense. Thank you very much.
We are taking our next question from the line of Elodie Raul at JPMorgan.
Yes. Thanks for taking my questions. So first of all, on traffic, you did expect that we would come back with Questions on that. So you have said you've seen an improvement already in July versus the June level, which was at 34% of 2019 level. And you said that you think you'll guide that you can still make 35% of 2019 overall for the full year.
So first of all, what do we see what are you seeing in July so far? I mean, we are at the end of the month. Can you give us an idea? And what is your For the rest of the year to get to that 35% please. My second question is on tariffs and regulation.
So we know what the CNMC has proposed, we know what you have proposed, what you think the DVAT We'll propose in September. And can you give us some update on how the K factor will play out after the full proposal is finalized in September. And what is your expectation as well for the recovery of COVID-nineteen cost and how this will play out for 2022 tariffs between the compensation and the key factor. Thanks a lot.
Okay. Thank you. In terms of Traffic for the summer and beyond, we are not we don't want to disclose specific numbers, as you know, because but I see what I can tell you is that July is so far so good, maintaining the trend of June and which is Progressive recovery. This is what makes me or makes us feel that although looking at the numbers At half year, we are really lagging behind the original expectations, but we believe that this Entirely possible that we will end up in the levels of traffic for the year that we mentioned some months ago. That was not the guidance.
That was our impression of how things could develop. Of course, to get to that point, the summer should be a decent summer. And then, of course, the last quarter To be a decent last quarter, but the weight of the last quarter, as you know, tends to be smaller. So far, we are positive. We believe this is the this is seems to be a consistent trend, although, as you know, very biased towards Domestic traffic.
What we don't know is whether any of the variants or any of the fears around how these variants are spreading or any of the government decisions over the coming months could derail this view. This is what we don't know. I think nobody knows. But in the absence of this kind of changes, I think we are heading in the right direction. And more importantly, that will be the platform for a recovery in 2022, which is when everybody is expecting to get some more meaningful figures in place.
In terms of regulation, I'm afraid there is very little I cannot to what I said before. We are just waiting for the DDIC. We don't know that the DDIC will come up with. We are of course, we are very conscious of the key factor issue that I'm sure all of you understand. The key factor now is turning around, is going the other way and is impacting negatively to start with the 2022 figures.
This is an issue. We are in discussions. We have been in discussions. And as part of our submission, We provided with some rationale to make up for that. And I don't know, the VGAC will be In that, and they will make a decision.
And with regard to the COVID-nineteen costs, we have every confidence that we will recover Those costs, we are protected by the law in that regard. So we don't believe anybody can, let's say, get rid of this low commitment.
Sorry and when should we expect the COVID cost to be announced, so when we'll have
The COVID cost, you mean the Yes. Yes. I think it will be part All in one go.
Okay. And the K factor will be after that, right?
The key factor, if we need There are 2 different things here. One is the K factor application for 2022 2022 charges. Before For that, we will have the Dora II decision. The Dorado decision we'll have to take into account the Potential structural issues that I'm sure all of you know and understand, which is the key factor when applies, creates a sort of, let's say, cap or let's say, I don't know how to say, no? Capturing the or blocking.
So it's a sort of block for future increases. But this is under discussion, and this is we have provided the VGAC with our views, our solutions, and they will have to take that into account. Time will tell.
Okay. Thanks very much.
We're taking our next question from the line of Christian
Kou at UBS. Hi. Thank you very much for taking my questions. The first one, I believe you are doing some work In terms of the future retail strategy for the company, I appreciate you're in an early phase, but could you tell us a little bit what are The points under discussion, are you looking at retail space allocation? Are you looking at contract structure in the Future or which are the main areas of concern.
Secondly, we had the outcome of The retail tender in Norway, a couple of months ago and effectively we've seen one of the highest concession rates in Europe in New contracts. In that regard, can you tell us a little bit what you're seeing in the tenders that you're organizing in terms of specialty shops or food and beverage, what you're seeing in terms of concession rates versus the past in terms of appetite from bidders to comes to the tender process. And I guess the last one on the marks, just to frame a little bit better, The cash part of the mark, I think you disclosed also today that Based on the last 18 months, you are based on your proposal, you should collect around EUR 285,000,000 in cash related to the mags. So I guess what I'm trying to understand, can you frame a little bit the worst case scenario there is Maybe you don't collect any of those or maybe you collect a part of those. But just do I understand it well, just The range of outcomes in terms of marks, in terms of your cash collection, these are the main points or am I missing anything?
Thank you.
Okay. With regard to the retail strategy, I think this is the kind of question which is difficult to answer at this point in time because There are many moving parts. I think we have to be very clear. We are we have been living through a Massive storm, everybody, in our industry. So we are dealing with Deep, very difficult problems with no magic solutions.
It's not a black or white. It's not You did that is right. You did that is wrong. You are all the time dealing with trade offs. And when you make a decision, such as the one we made of putting an offer on the table and Saying this is it is fair.
Of course, you are there are negative consequences, and there are Achilles heels that are exposed. One of them is That will make extremely difficult to run discussions, meaningful discussions with your tenants at this stage. And at the same time, it's difficult to know what will be The picture of this retail business once we leave the pandemic behind? We don't know. Of course, we are exploring everything from digitalization, how different contract structures will work.
But this is all laboratory work at this stage, because you cannot engage meaningfully with any of the large operators when you are you have many moving parts, and they have many moving parts themselves. So any strategic decision With all the will in the world should wait, and we need information. To be quick, Sometimes it's good to be quick, sometimes it's just clumsy, it's the wrong thing to do. And you have to be patient and to see how things evolve. Of course, One of these decision making elements or trade offs is the impact on the different bids, on the different opportunities.
Today, now is not a good time to be in the market tendering out with your businesses. It would be if you can avoid it, you should avoid it. But at the same time, I believe that any tender being run at this stage would be misleading. Because if you take this as the picture of the industry for the rest of the I don't know, For the coming 20 years, you might be wrong. Who knows?
Let's wait and see. You shouldn't be too optimistic, but you shouldn't be too pessimistic. You have to be patient and realistic and manage every day situation because we are running through a very difficult time, more difficult in airports and airlines than in many other industries. So There is nothing wrong in committing mistakes. There is nothing wrong in running trade offs.
There is nothing wrong in waiting and seeing, nothing. I don't think being in a hurry is necessarily good. And then in terms of cash, well, what we are doing is, Christian, showing what would be the outcome in terms of cash if Everybody agrees to the deal. Of course, this is not the case. We know this is not the case now.
We know that the number of the operators already agreed to the deal, and we can calculate for you. And I don't have on Top of my mind, I don't have now on top of my mind, I don't have the number now. We will be collecting, I don't know, 40% of the MAX from these particular operators. For the bulk of the operators, we are in dispute. So the worst case scenario would be the judge is saying you have to collect nothing, nothing at all.
So that would be the worst case scenario. So we won't be collecting the EUR 250,000,000 at all. Or Even worse than that would be you have to dismantle your minimum guarantee rent structure, which I don't believe could be a good ruling, honestly. It's extremely unlikely. But that will be even worse.
But we don't see a reason why someone should give up on the contract that was signed just because you have a particular issue to deal with at the particular time. I hope that helps.
Understood. Yes, it does. Thank you very much.
We are now taking our next question from the line of Andrew Lobbenberg at HSBC.
Hi there. Can I ask, Ritu, starting with the Dura, I think the PMS And yet I think that I may well be wrong, but their projection is still based on your traffic forecast? Therefore, it's Can I ask about actual trading in the stores? Is there any sign that The Brexit situation in duty free trading actually has been genuine upside for trading since summer.
And then can I come back
to the blessed mag? You're working hard to help us try and understand the scale of revenue and risk and I'm grateful for that. But at the moment, we're within the time scale of when your offer is in place. But I think your offer is intended to And then correct in September, I think. So what happens on September?
I mean do we think that we're still in a legal process Will the concessionaires refuse to pay everything then? And then surely, if your offer for the period after September is 0 and they're not paying anything, Then the scale of risk starts increasing quite rapidly. So yes, what comes after September? Thanks.
Okay. Starting with the CNMC, the CNMC report literally said that They were they consider our traffic forecast conservative, and they were inviting, as you said, the DDAC to revisit that forecast. And they said nothing else. And then I think in a press conference or in a different session with investors, They mentioned something about their views. But frankly, we don't know what they are trying to achieve through that.
I suppose the DGAC is considering our forecast seriously, and they will come up with their views. And of course, this is part of what we are waiting for, the GAC views on everything, including traffic forecast. We believe that our traffic forecast was frankly very, very professionally pulled together I'm very technically pulled together, full of uncertainties, as you may expect these days. We would be Well, I think we haven't changed our mind so far. I think that the way the world is going, We don't have any more positive view today.
So we think it's a good submission. Nothing else. I don't know whether the DGAC will come up with something different, will come up with the same. And I'm intrigued about what the CNMC wanted to say or what they really meant. In terms of Trading conditions in the shops.
Clearly, it's difficult at this stage, Andrew, because on one side, we see the traffic Recovery taking place. There are more and more shops and restaurants open. But the and clearly, the volumes are improving. But Don't forget, our traffic recovery is very, very biased towards domestic. And this is we love our nationals, but they are not in terms of retail Revenues or indeed in terms of the hydro charges as attractive as the rest of the travelers.
So we have mixed feelings. Of course, things are improving. This is absolutely clear. But probably the profile of the passenger is not going to be particularly helpful. At this stage, I don't know, maybe through the summer, we see more Britons, more Germans, more French coming and things start to ramp up.
And in terms of the Max, I think maybe there is a misunderstanding here. In September, there is no nothing happens in September. We just offered the discounts from The 15th March 2020 to the 9th September 2021 because we used the reference of a royal decree of the Spanish government for reasons that we discussed previously. So this is it. In September, nothing happens.
We put forward the offer. I believe that none Of those who rejected the offer, we'll accept it, but I might be wrong. So they went to court, and we are in court discussions, and this can take months or years. Of course, we can't hurry up to give up to forget about the rights of or Let's say, the rights and entitlements we have in terms of the contractual obligations, we can do that. This is very easy.
You simply say, I give up all yours. We don't believe this is right. They are frankly targeting the structural features of the contract. This is what they are targeting. And then and honestly, We might be wrong, but we believe everything is down to traffic recovery.
If we were to be we would be today With levels of traffic of 80% of 2019, believe me, believe me, still the court cases could go ahead, but the future would be discussed already in a different way and with a different attitude. So traffic is the name of the game here in terms of the future. Different thing is the MAX over the period of time of the COVID, the intense COVID Consequences, this is different. This can take long. Hope that helps.
Yes.
Thanks, Nikky.
And we're taking our next question from the line of Johannes Braun at Stifel.
Yes. Thank you for taking my questions. I have 2. The first one is on Brazil. I think After the additional impairment of last quarter, the recoverable amount of the concession that you show in your H1 report It's now dropped to, I think, some euros 207,000,000 and I think that compares with the €5 €137,000,000 you paid for the concession a couple of years ago.
So question would be, what does that tell us regarding The risk of such investments in general and also is the shortfall in Brazil really only due to the cost inflation in the meantime and COVID-nineteen or would you say that in hindsight you might have been a bit too aggressive in bidding for the concession in the first place? And then secondly, on the M. A. C. Disputes.
I read in Spanish press that some shops now Used to open their shops to protest against the MAG. So maybe some comments on that and whether this is significant for you.
Okay. With regard to Brazil, you're right. The impact of the accumulated Impirming is material, is substantial. I believe that the COVID is the main driver of the situation we are facing today, I believe. I wouldn't say 100% of it is driven by the COVID.
But for instance, the traffic projections are affected by COVID. I would say the markets the raw material markets and the impact of that on some of the materials that are critical to develop this kind of infrastructure. You know guys better than me that for a number of reasons. COVID, probably one of them, not all, but our prices are going up. Of course, there is always risks when you deal with a foreign investment.
This is true. But We believe that the current circumstances, the situation we are going through is the main reason why we have based this that, of course, this is this has no impact in terms of cash, but has an impact in terms of how we look at the return on this investment. I think that, Honestly, we are one of these businesses where we are one of these companies where When assessing an investment abroad, we are extremely cautious, extremely prudent I'm extremely professional. Well, you might believe me or not. But rest assured, we didn't went to Brazil with an aggressive, let's say, at all costs kind of attitude.
With regard to the shops, yes, some of them are refusing. Once again, we are trying hard to enforce our rights. It's not that we are difficult. It's not that we want to be difficult. It's that In some cases, we believe the reason not to open the shops is not traffic.
Is, well, it's more convenient, it's more efficient and we are fine, it's fine. But we don't want to give up on our contractual rights. There is always time to say I give up, take it all, but we don't believe we should rush to do it.
Can you specify which operators do not open the shop
Goodness me. It's not operators. It's some operators, some specific shops. So if you ask me about that, I will need To go to the to take note. And frankly, I cannot tell you now.
We will need to check for you. We can try and see whether this is Confidential or not, and if there is no confidentiality issue, we can provide you with the information.
All right. That's fine. Thank you.
We're taking our Next question from the line of Dario Maione at BNP.
Hello, everyone. Thanks for taking my questions. 3 for me. First one, have you awarded any new food and beverage specialty shop contract in H1? And if so, how does the rent compare to what you would have achieved pre COVID 2nd question on margin, specifically EBITDA margins were almost 63% in 2019.
What EBITDA margin should we expect when traffic recovers 100 percent of 2019 levels. And last question is on the You will be aware that U. S. Launched last week a fit for 55 per quarter, which includes taxation on kerosene, A reduction on free ETS emission allowances for airlines. What is the inner Q on this proposal?
Thank you.
Well, the last question, I didn't quite understand it. Starting question number 1, I don't know. We will check it out for you. Someone is telling me none. So none is the answer.
In terms of the margin EBITDA margin, we always said that medium and long term, The 63%, 64% margin would not be tenable. We said that many, many, many times for reasons that we already explained, all of them good reasons, we believe this 63% margin won't be Tenable. So this is not going to be the kind of margin we'll see when this is all behind us. I don't know. I cannot provide you with a figure, first of all, because that would be probably irresponsible from my side.
Particularly now when all the changes that happened. Somehow, we are in need to see The well, the other side of the COVID to see what the picture is going to be and to work out a new strategic plan and to get the Dora to in place. So no one can tell you now what this margin would be. But definitely, it won't be the 63%. And definitely, we will be the most efficient airport operator in Europe.
We will remain in that position rest assured. And the third point was the what was the For
55 For 55 proposals, so the green deal for the EU.
The green deal with the EU?
That is to be 5455 proposal to tax Kurdistan and reduce
No, we have a charter. We have a broad and well published publicized Climate change commitment or planning against climate action plan, no? And This is in the public domain. I would invite you to probably get in touch with the IR team. They will show you the whole thing and every single commitment that we and you know it was already approved by the well, approved endorsed by the AGM.
So I would invite you to do that. I think we have 2 more gentlemen waiting. Let's try and make it end by quarter past, 20 past, if that's okay, Spanish time.
We're now taking our next question from the line of Jose Arroyas at Santander.
Good afternoon, gentlemen. I have one question.
My question is on the request for economic release,
You're right, we haven't disclosed any amount because what we requested was this Article 27 to be applied and to be assessed and for the regulator to tell us how. We suggested for We didn't disclose or indeed submitted any figure, but we clearly submitted the request for this to be considered and applied. We offered that to if that was fine for the regulator and to be, let's say, applied from Dora III onwards. But that's it. We are just waiting for the DGAC to get back to us on this issue as well.
Thank you. So we have a last gentleman. We
are taking our question from Niccolo Pessin, Mediobanca.
Yes, good afternoon all. A few follow-up questions. On this Recall the COVID impact, have you had any discussion with BGIC about the methodology that may be implemented for the calculation? 2nd question, can you give us an idea an indication of the yield concentration in the first half of twenty twenty one. And if you see the risk of the negative CapEx factor in 2023 tariffs.
And last question on the CNMC regulatory paper of the end of June. The CNMC objected the recovery of The extra security costs in dollar 1 arguing that we were not foreseeable, which is a different view from yours. So I'm trying to understand if these costs were really unforeseeable or not.
Thank you.
Okay. The first question is about case factor. Yes, case. In terms of the well, how to make up for this K factor gap, if you like, so to speak, is clearly that something we submitted The proposal, I'm not going to discuss it in detail here. And I understand that the EAC is considering In this proposal, and they would be considering other propose other views.
I don't know. I don't know. It's part of what we are expecting to be The final settlement or the final charges determination process, we don't know. We have to wait and see. But everybody is conscious of this issue, and that's there is no doubt about it.
The first half of twenty twenty one has delivered, so to speak, around EUR 60,000,000 in further concentration. So that means that the answer is yes for 2023. We expect the K factor to once again go the wrong way. And this is understandable. We are in a situation where aircraft are, let's say, end tier.
The load factors are smaller and also the passenger profile is different from the original well. So this is it. With regard to this recovery of security cost, these costs the security costs not only were enforceable or they couldn't be, Let's say expected, they are the result of decisions, governmental decisions and new security rules implemented. And the airport should implement then the airport should implement then yes or yes. So someone has to pay for that.
And this is part of what the low caters for that this kind of cost should be compensated later in the process. Okay. I think we are done.
Thank you.
Okay. Then thank you to everybody that has joined today in our results presentation. We'll meet again next October. Have a happy summer. Thank you very much.
Bye.