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: Fourth Quarter and Full Year ended December 31, 2012
Release Date: February 25, 2013
Business Overview: ASUR is the first privatized airport group in Mexico, operating concessions for nine airports in southeast Mexico, including the high-traffic Cancún International Airport. Financial results are presented in Mexican Pesos (Ps.) under International Financial Reporting Standards (IFRS).
Key Financial Metrics
Fourth Quarter 2012 (4Q12)
- Total Revenues: Ps. 1,336.39 million (Decrease of 2.23% YoY)
- EBITDA: Ps. 671.18 million (Increase of 13.83% YoY)
- EBITDA Margin: 50.22% (Up from 43.14% in 4Q11)
- Operating Profit: Ps. 569.26 million (Increase of 15.52% YoY)
- Operating Margin: 42.60% (Up from 36.05% in 4Q11)
- Net Income: Ps. 665.06 million (Increase of 56.76% YoY)
- Earnings Per Share (EPS): Ps. 2.2169
- Earnings Per ADS (US$): $1.7098
- Passenger Traffic: 4.64 million total (Increase of 11.06% YoY)
Full Year 2012 (FY12)
- Total Revenues: Ps. 5,119.89 million (Increase of 11.95% YoY)
- EBITDA: Ps. 2,931.46 million (Increase of 18.42% YoY)
- EBITDA Margin: 57.26% (Up from 54.13% in FY11)
- Operating Profit: Ps. 2,529.92 million (Increase of 20.89% YoY)
- Net Income: Ps. 2,075.33 million (Increase of 30.43% YoY)
- Earnings Per Share (EPS): Ps. 6.9178
- Earnings Per ADS (US$): $5.3354
- Passenger Traffic: 19.25 million total (Increase of 9.73% YoY)
Liquidity and Balance Sheet (as of Dec 31, 2012)
- Cash and Cash Equivalents: Ps. 2,265.43 million (Increase of 38.25% YoY)
- Total Bank Debt: Ps. 314.9 million (including Ps. 1.3 million accrued interest)
- Shareholders' Equity: Ps. 16,471.00 million
- Total Liabilities: Ps. 2,638.24 million (72.39% deferred liabilities)
- Capital Expenditures (4Q12): Ps. 226.03 million
Material Changes vs. Prior Period
Revenue Composition: While total revenues declined slightly in 4Q12, the mix shifted significantly. Aeronautical revenues rose 12.13% and non-aeronautical (commercial) revenues rose 13.29%, driven by an 11.06% increase in passenger traffic. These gains were offset by a 36.78% decline in construction services revenues due to lower capital expenditures on concessioned assets.
Profitability Expansion: Operating margins expanded significantly in both the quarter and the full year. In 4Q12, the operating margin rose to 42.60% from 36.05%. This was driven by a 12.23% decline in total operating costs and expenses, primarily due to the reduction in construction costs, which outpaced the slight revenue decline.
Commercial Performance: Commercial revenues per passenger increased 1.41% to Ps. 73.41 in 4Q12. For the full year, commercial revenue per passenger grew 8.70% to Ps. 72.75. Growth was broad-based, with advertising up 39.51% and food & beverage up 21.37% in the quarter.
Passenger Traffic: Domestic traffic grew 12.15% in 4Q12, while international traffic grew 10.08%. Cancún Airport remained the primary driver, with total traffic up 14.21% in the quarter.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted the strong growth in passenger traffic and commercial revenues as key drivers of profitability. The company noted that the decline in construction revenues did not negatively impact EBITDA margins because construction costs decreased proportionately under IFRIC 12 accounting rules.
Regulatory Environment: ASUR's aeronautical revenues are regulated by the Mexican Ministry of Communications and Transportation, which sets maximum rates per traffic unit. Regulated revenues accounted for 57.88% of total income in FY12.
Debt and Financing: The company has authorized credit lines of US$300 million and Ps. 1,500 million for Cancún Airport, subject to conditions precedent, which have not yet been utilized. Existing debt includes floating rate loans based on TIIE plus a spread.
Accounting Transition: The company adopted IFRS on January 1, 2012. Significant adjustments included the elimination of inflation accounting for capital stock, recognition of vacation reserves, and changes to deferred tax calculations. Historical data has been restated to reflect IFRS.
Risks: Forward-looking statements are subject to risks including changes in Mexican tax law, regulatory tariff adjustments, and economic conditions affecting travel demand. The filing notes that actual developments could differ significantly from expectations.
Investor Verification Checklist
- Construction Revenue Volatility: Verify the impact of IFRIC 12 on reported revenues and expenses, as construction revenue and expense line items move in tandem and do not affect EBITDA directly.
- Regulatory Tariff Reviews: Monitor the annual review by the Mexican Ministry of Communications and Transportation, as regulated revenues constitute the majority of income.
- Debt Servicing: Confirm the status of the authorized US$300 million and Ps. 1,500 million credit lines and the terms of existing floating-rate debt (TIIE + spread).
- IFRS Adjustments: Review the specific IFRS adjustments to shareholders' equity and net income to ensure accurate comparison with prior periods under Mexican GAAP.
- Commercial Revenue Sustainability: Assess the sustainability of the high growth rates in advertising and food & beverage revenues relative to passenger traffic growth.