Business Context and Reporting Period
Company: Southeast Airport Group (Grupo Aeroportuario del Sureste, S.A.B. de C.V.)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: First Quarter ended March 31, 2016
Business Overview: ASUR operates nine airports in southeast Mexico (including Cancún) and holds a 50% joint venture stake in Aerostar, which operates the Luis Muñoz Marín International Airport in San Juan, Puerto Rico.
Key Financial Metrics
| Metric | 1Q16 (Ps. Millions) | 1Q15 (Ps. Millions) | YoY Change |
|---|---|---|---|
| Total Revenues | 2,077.35 | 1,796.60 | +15.63% |
| EBITDA | 1,414.59 | 1,143.22 | +23.74% |
| Operating Profit | 1,286.19 | 1,027.50 | +25.18% |
| Net Income | 928.33 | 744.26 | +24.73% |
| Earnings Per Share (Ps.) | 3.09 | 2.48 | +24.73% |
| Earnings Per ADS (US$) | 1.80 | 1.44 | +24.73% |
| Cash and Equivalents | 2,945.61 | 2,084.16 | +41.33% |
| Total Bank Debt | 3,696.92 | N/A | N/A |
Margins:
- EBITDA Margin: 68.10% (vs. 63.63% in 1Q15)
- Adjusted EBITDA Margin (excl. IFRIC12): 73.14% (vs. 71.31% in 1Q15)
- Operating Margin: 61.91% (vs. 57.19% in 1Q15)
Material Changes vs. Prior Period
- Passenger Traffic: Total traffic increased 8.93% to 7.19 million passengers. Domestic traffic grew 13.04%, while international traffic grew 6.53%. Cancún airport drove international growth with a 6.92% increase.
- Revenue Composition:
- Aeronautical Revenues: Up 15.42% due to traffic growth.
- Non-Aeronautical Revenues: Up 28.88%, driven by a 31.00% increase in commercial revenues (retail, duty-free, car rentals).
- Construction Revenues: Declined 25.90% due to lower capital expenditures on concessioned assets.
- Costs: Total operating costs rose 2.87%. Increases were seen in cost of services (10.78%), technical assistance fees (23.79%), and concession fees (19.54%). These were partially offset by a 25.90% drop in construction costs.
- Financing: Interest expenses increased 56.02% due to higher interest rates. Foreign exchange losses decreased to Ps.23.35 million from Ps.35.18 million in 1Q15.
Outlook, Risks, and Commentary
- Management Commentary: Strong performance was attributed to robust passenger traffic growth and improved commercial revenue per passenger (up 20.29% to Ps.99.35). The company highlighted successful expansion of retail and F&B offerings.
- Capital Expenditures: Investments of Ps.156.73 million were made in 1Q16 for airport modernization.
- Regulatory Environment: Regulated revenues accounted for 69.22% of total income. Tariffs are set by the Mexican Ministry of Communications and Transportation.
- Risks and Contingencies:
- Currency Risk: The company holds significant debt in U.S. dollars (US$215 million for Cancún subsidiary), exposing it to peso depreciation.
- Forward-Looking Statements: Future expectations are subject to risks identified in SEC filings; actual results may differ.
Investor Verification Checklist
- Verify the sustainability of the 31% growth in commercial revenues per passenger.
- Monitor the impact of U.S. dollar-denominated debt on interest expenses given peso volatility.
- Confirm the timeline and cost of the Terminal 3 expansion at Cancún, which contributed to higher service costs.
- Review the specific regulatory tariff adjustments for the upcoming year by the Mexican Ministry of Communications.
- Assess the performance of the Aerostar joint venture in San Juan, which contributed Ps.49.85 million to net income.