Business Context and Reporting Period
Company: Central North Airport Group (Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.), trading as OMA (NASDAQ: OMAB; BMV: OMA).
Reporting Period: Third Quarter 2021 (ended September 30, 2021).
Business Overview: OMA operates 13 international airports in nine states of central and northern Mexico, including major hubs in Monterrey and tourist destinations like Mazatlán. The company also provides commercial services, hotel operations (NH Collection and Hilton Garden Inn), and freight logistics (OMA Carga).
Key Financial Metrics
| Metric | 3Q21 Value | Currency |
|---|---|---|
| Passenger Traffic | 5.1 million | Units |
| Adjusted EBITDA | 1,473 million | MXN |
| Adjusted EBITDA Margin | 75.2% | % |
| Operating Income | 1,187 million | MXN |
| Operating Margin | 49.9% | % |
| Net Income | 812 million | MXN |
| Earnings Per Share (EPS) | 2.08 | MXN |
| Earnings Per ADS | 0.81 | USD |
| Cash Flow from Operations | 1,379 million | MXN |
| Cash and Cash Equivalents (End of Period) | 4,684 million | MXN |
| Capital Investments & Major Maintenance | 524 million | MXN |
Material Changes vs. Prior Periods
- Passenger Traffic: Increased 121% compared to 3Q20 but remains 16.9% below 3Q19 levels. International traffic surged 329% year-over-year, while domestic traffic rose 106%.
- Profitability: Adjusted EBITDA rose significantly to Ps.1,473 million from Ps.432 million in 3Q20, exceeding 3Q19 levels by 1.6%. Adjusted EBITDA margin expanded to 75.2% from 52.3% in 3Q20.
- Revenue Growth: Aeronautical revenues increased 153% and non-aeronautical revenues increased 98.1% compared to 3Q20. Commercial revenues specifically jumped 125%, driven by parking (+140%) and retail/rentals.
- Costs: Total operating costs and expenses increased 24.2%, primarily due to higher contracted services and basic services linked to traffic growth. A one-time payroll expense of Ps.8 million was recorded due to labor regulation changes.
- Net Income: Consolidated net income increased by Ps.742 million compared to the prior year quarter.
Outlook, Risks, and Management Commentary
- Recovery Trends: Management notes a positive recovery trend in passenger traffic, with international traffic reaching 99.6% of 3Q19 levels, driven largely by flights to the United States.
- Route Expansion: As of September 30, 2021, 136 origin-destination routes were in operation, including 7 new routes established since the pandemic began.
- Investments: Capital investments totaled Ps.524 million, including Ps.417 million for improvements to concessioned assets under Master Development Plans (MDPs).
- Liquidity and Debt: Financing activities resulted in a cash outflow of Ps.579 million, primarily due to share repurchases of Ps.475 million. The company reported no financial derivatives exposure.
- Risks: The filing includes standard forward-looking statement disclaimers regarding risks such as epidemiological conditions (COVID-19), regulatory changes, and economic factors that could cause actual results to differ from projections.
Key Facts for Investor Verification
- Share Repurchases: Verify the impact of the Ps.475 million share buyback on outstanding share count and future EPS calculations.
- Construction Accounting: Note that construction revenues and costs are recognized under IFRIC 12 with no profit impact; verify how this affects total revenue margins versus cash flow.
- International Recovery: Confirm the sustainability of the 329% year-over-year growth in international traffic, which is heavily reliant on US routes.
- One-Time Expenses: Assess the recurrence of the Ps.8 million payroll expense related to Mexican labor regulation changes.
- Currency Impact: Monitor the effect of the Mexican peso's depreciation against the USD on the reported cash balance and USD-denominated earnings per ADS.