Business Context and Reporting Period
Company: Central North Airport Group (OMA)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Fourth Quarter 2023 (4Q23) and Full Year 2023
Date of Filing: February 22, 2024
OMA operates 13 international airports in central and northern Mexico, including major hubs in Monterrey and tourist destinations like Acapulco and Mazatlán. The company also manages hotel and industrial park services.
Key Financial Metrics
Fourth Quarter 2023 Performance
- Passenger Traffic: 6.8 million (up 5.2% vs. 4Q22).
- Operating Income: Ps.1,989 million (Operating Margin: 53.6%).
- Adjusted EBITDA: Ps.2,256 million (up 16.4% vs. 4Q22; Margin: 77.7%).
- Net Income: Ps.1,255 million (up 10.5% vs. 4Q22).
- Earnings Per Share (EPS): Ps.3.24 (US$1.53 per ADS).
- Cash Flow: Operating cash flow generated Ps.1,701 million; Net cash increase of Ps.363 million.
- Cash Balance: Ps.2,576 million as of December 31, 2023.
- Capital Investments: Ps.1,006 million (including Ps.805 million in concessioned asset improvements).
Full Year 2023 Performance
- Passenger Traffic: 26.8 million (up 15.6% vs. 2022).
- Adjusted EBITDA: Ps.9,057 million (up 27.8% vs. 2022).
- Capital Investments: Ps.3,611 million.
- Dividends: Ps.9.61 per share distributed.
- Leverage: Net Debt/Adjusted EBITDA ratio of 0.9x as of December 31, 2023.
Material Changes vs. Prior Period
- Revenue Growth: Aeronautical revenues increased 13.4% and non-aeronautical revenues increased 13.9% in 4Q23. Commercial revenues rose 14.3%, driven by restaurants (+38.4%), VIP lounges (+25.6%), and parking (+10.4%).
- Cost Efficiency: Total operating costs and expenses decreased 10.3% despite revenue growth, contributing to margin expansion.
- Freight Logistics: OMA Carga revenues increased 19.4% with tonnage up 30.5% due to higher storage and custody services.
- Hotel Operations: NH Collection Terminal 2 occupancy rose to 92.4% (from 81.5%), while Hilton Garden Inn occupancy fell to 68.0% (from 75.1%) but saw a 23.1% increase in average room rate.
- Financing Costs: Financing expenses increased to Ps.224 million (from Ps.205 million) due to higher indebtedness levels and financing costs.
Outlook, Risks, and Unusual Items
Management Commentary and Outlook
Management highlighted strong traffic recovery and commercial diversification. The company achieved Level 2 accreditation under the Airport Carbon Accreditation program for all 13 airports. An earnings conference call was held on February 23, 2024.
Risks and Contingencies
- Hurricane OTIS Impact: Acapulco Airport was closed to commercial operations from October 25 to November 13, 2023, due to Hurricane OTIS. Acapulco represented 3.3% of total passenger traffic and 3.2% of combined revenues in 2023.
- Regulatory Changes: On October 19, 2023, OMA received new tariff regulation bases from the Federal Civil Aviation Agency (AFAC), effective immediately.
- Forward-Looking Statements: The filing includes standard disclaimers regarding risks that could cause actual results to differ from projections, referencing the "Risk Factors" section of the most recent Form 20-F.
Investor Verification Checklist
- Verify the sustainability of the 16.4% Adjusted EBITDA growth given the 10.3% reduction in operating costs.
- Confirm the long-term impact of Hurricane OTIS on Acapulco's traffic recovery and revenue contribution.
- Review the implications of the new AFAC tariff regulation bases received in October 2023 on future pricing power.
- Monitor the Net Debt/Adjusted EBITDA leverage ratio of 0.9x and the trend in financing expenses.
- Assess the performance of new VIP Lounge operations in Tampico, Durango, and Reynosa as a driver of commercial revenue.