Business Context and Reporting Period
Company: Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Second Quarter (2Q) and Six Months (6M) ended June 30, 2016.
Business Overview: ASUR is the first privatized airport group in Mexico, operating nine airports in southeast Mexico (including Cancún) and holding a 50% joint venture stake in Aerostar Airport Holdings, LLC, which operates the Luis Muñoz Marín International Airport in San Juan, Puerto Rico.
Key Financial Metrics (2Q16)
- Total Revenues: Ps. 2,243.79 million (up 5.82% YoY).
- EBITDA: Ps. 1,337.51 million (up 18.44% YoY).
- Operating Profit: Ps. 1,206.61 million (up 19.13% YoY).
- Net Income: Ps. 866.62 million (up 18.25% YoY).
- Earnings Per Share (EPS): Ps. 2.8887 (up 18.25% YoY).
- Earnings Per ADS (EPADS): US$ 1.5645 (up 18.25% YoY).
- EBITDA Margin: 59.61% (vs. 53.26% in 2Q15).
- Adjusted EBITDA Margin: 71.83% (excludes IFRIC 12 construction effects).
- Passenger Traffic: 6.934 million total passengers (up 5.38% YoY).
- Commercial Revenue per Passenger: Ps. 97.18 (up 18.86% YoY).
Material Changes vs. Prior Period
Revenue Composition
- Aeronautical Revenues: Increased 12.04% driven by a 5.38% rise in passenger traffic.
- Non-Aeronautical Revenues: Increased 24.17%, led by a 25.29% surge in commercial revenues (retail, F&B, car rentals).
- Construction Revenues: Declined 27.25% to Ps. 381.66 million due to lower capital expenditures and investments in concessioned assets. This decline offset some revenue growth but did not impact EBITDA due to matching construction costs.
Cost Structure
- Total Operating Costs: Declined 6.36% YoY, primarily due to the 27.25% drop in construction costs.
- Excluding Construction: Operating costs rose 12.45% to Ps. 655.52 million, driven by higher service costs (Terminal 3 expansion), technical assistance fees, and concession fees.
- Financing Costs: Net financing loss improved to Ps. 11.27 million from Ps. 16.60 million, despite higher interest expenses, due to reduced foreign exchange losses.
Joint Venture Performance
- Aerostar (San Juan): Equity income gain of Ps. 58.17 million (vs. Ps. 21.68 million in 2Q15). Passenger traffic at SJU increased 4.31%.
Outlook, Risks, and Unusual Items
Management Commentary and Events
- Dividends: Paid an ordinary cash dividend of Ps. 5.61 per share in June 2016, totaling Ps. 1,683.00 million.
- Contracts: Extended the 10-year contract with Dufry for duty-free operations at Cancún and Cozumel airports in July 2016.
- Capital Expenditures: 2Q16 CapEx was Ps. 240.37 million; 6M16 CapEx totaled Ps. 397.10 million.
Risks and Contingencies
- Regulatory Risk: Regulated revenues (approx. 63% of total income) are subject to maximum rate regulations set by the Mexican Ministry of Communications and Transportation.
- Currency Risk: The company holds significant debt in U.S. dollars (US$ 215 million for Cancún subsidiary). Depreciation of the Mexican peso resulted in foreign exchange losses, though the net liability position mitigated the impact compared to prior periods.
- Accounting Standards: Results are significantly impacted by IFRIC 12, which requires recognizing construction revenues and costs that cancel out in EBITDA but affect reported revenue and margin percentages.
Investor Verification Checklist
- Adjusted Margins: Verify the "Adjusted EBITDA Margin" (71.83%) as the primary performance metric, as reported margins are distorted by non-cash construction accounting (IFRIC 12).
- Debt Maturity: Confirm the US$ 215 million debt maturity schedule (2022) and interest rate structure (LIBOR + 1.85%) for the Cancún subsidiary.
- Traffic Variance: Note the divergence in traffic growth; while Cancún and Mérida grew significantly, Minatitlán and Villahermosa saw double-digit declines.
- Commercial Mix: Review the sustainability of the 25%+ growth in commercial revenues per passenger, which outpaced traffic growth.
- Currency Exposure: Monitor the impact of peso volatility on the translation of Aerostar's USD-denominated financial statements and debt service costs.