Business Context and Reporting Period
Company: Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR)
Reporting Period: Third quarter and nine months ended September 30, 2012
Filing Date: October 23, 2012
Business Overview: ASUR is the first privatized airport group in Mexico, operating concessions for nine airports in southeast Mexico, including Cancún, Cozumel, and Mérida. The company adopted International Financial Reporting Standards (IFRS) effective January 1, 2012.
Key Financial Metrics
Third Quarter 2012 (3Q12)
- Total Revenues: Ps. 1,222.01 million (up 16.50% YoY)
- EBITDA: Ps. 691.80 million (up 17.81% YoY); Margin: 56.61%
- Operating Profit: Ps. 590.75 million (up 20.44% YoY); Margin: 48.34%
- Net Income: Ps. 409.07 million (up 12.55% YoY)
- Earnings Per Share (EPS): Ps. 1.3636
- Earnings Per ADS (US$): $1.0595
- Passenger Traffic: 4.77 million total (up 10.18% YoY)
- Commercial Revenue per Passenger: Ps. 67.81 (up 5.30% YoY)
Nine Months Ended September 30, 2012 (9M12)
- Total Revenues: Ps. 3,783.50 million (up 18.00% YoY)
- EBITDA: Ps. 2,260.28 million (up 19.85% YoY); Margin: 59.74%
- Operating Profit: Ps. 1,960.66 million (up 22.54% YoY); Margin: 51.82%
- Net Income: Ps. 1,410.27 million (up 20.86% YoY)
- Earnings Per Share (EPS): Ps. 4.7009
- Earnings Per ADS (US$): $3.6527
- Passenger Traffic: 14.61 million total (up 9.31% YoY)
Liquidity and Balance Sheet (as of Sept 30, 2012)
- Cash and Cash Equivalents: Ps. 1,941.59 million (up 26.93% from Dec 31, 2011)
- Total Bank Debt: Ps. 414.40 million (including Ps. 1.3 million accrued interest)
- Shareholders' Equity: Ps. 15,806.59 million
- Total Liabilities: Ps. 2,936.43 million
Material Changes vs. Prior Period
- Revenue Growth Drivers: Total revenue growth was driven by a 14.27% increase in aeronautical services (linked to traffic growth) and a 14.52% increase in non-aeronautical services. Construction services revenue surged 35.21% in 3Q12 due to capital investments in concessioned assets.
- Passenger Traffic: Domestic traffic grew 17.21% in 3Q12, significantly outpacing international traffic growth of 3.49%. Cancún airport saw a 28.72% increase in domestic passengers and a 3.32% increase in international passengers.
- Cost Structure: Operating costs rose 13.03% in 3Q12. Notable increases included construction costs (35.21%), technical assistance fees (17.76%), and concession fees (15.03%).
- Financing Results: Comprehensive financing results shifted from a Ps. 21.2 million gain in 3Q11 to a Ps. 6.69 million loss in 3Q12. This was primarily due to a Ps. 9.08 million foreign exchange loss resulting from the 6.74% appreciation of the Mexican peso against the U.S. dollar.
- IFRS Adoption: Financial figures for 2011 have been restated to reflect IFRS. The transition eliminated inflation accounting for capital stock and legal reserves and recognized new liabilities for vacation rights and severance.
Outlook, Risks, and Recent Events
Puerto Rico Expansion (LMM Airport)
ASUR, through a 50/50 joint venture with Highstar Capital IV named Aerostar, won the bid to operate the Luis Muñoz Marín (LMM) airport in San Juan, Puerto Rico. Key details include:
- Lease Agreement: Signed July 24, 2012, for a 40-year term.
- Upfront Payment: $615 million, to be funded by debt and equity.
- Investment Plan: Intended capital investment of over $1.4 billion during the lease term.
- Conditions Precedent: Closing is subject to FAA approval of the lease and issuance of a Part 139 operating certificate.
- Financing: Aerostar has secured commitments for up to $350 million in term loans and a $10 million revolving credit facility. ASUR has committed to lend up to $100 million.
Risks and Contingencies
- Regulatory Risk: ASUR's revenues are subject to maximum rates set by the Mexican Ministry of Communications and Transportation.
- Foreign Exchange: The company holds a net asset position in foreign currency, exposing it to losses when the peso appreciates against the dollar, as seen in 3Q12.
- Project Execution: The Puerto Rico project involves significant upfront costs and regulatory hurdles (FAA approval) that could delay or alter the investment timeline.
Investor Verification Checklist
- Verify the status of FAA approvals required for the closing of the Puerto Rico (LMM) airport lease.
- Monitor the Mexican peso exchange rate volatility and its impact on future financing costs and reported earnings.
- Review the breakdown of construction revenues vs. expenses to ensure capital expenditure plans align with cash flow projections.
- Confirm the sustainability of the 17%+ domestic passenger growth rate, particularly at key hubs like Cancún and Cozumel.
- Assess the impact of the IFRS transition on historical comparability of labor liabilities and deferred taxes.