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: Fourth Quarter (4Q) and Full Year (FY) ended December 31, 2011.
Business Overview: ASUR is the first privatized airport group in Mexico, operating concessions for nine airports in southeast Mexico, including the major hub at Cancún. Financial results are presented in Mexican Pesos (Ps.) under Mexican Financial Reporting Standards (MFRS).
Key Financial Metrics
Fourth Quarter 2011 (4Q11)
- Total Revenues: Ps. 1,366.82 million (up 14.58% YoY).
- EBITDA: Ps. 590.54 million (up 26.47% YoY); Margin improved to 43.21%.
- Operating Profit: Ps. 493.71 million (up 32.12% YoY); Margin improved to 36.12%.
- Net Income: Ps. 422.27 million (up 51.81% YoY).
- Earnings Per Share (EPS): Ps. 1.4076 (up 51.81% YoY).
- Passenger Traffic: Total traffic increased 11.66% YoY (Domestic +17.18%, International +7.15%).
- Commercial Revenue per Passenger: Ps. 72.38 (up 13.37% YoY).
Full Year 2011 (FY11)
- Total Revenues: Ps. 4,573.31 million (up 7.98% YoY).
- EBITDA: Ps. 2,477.24 million (up 17.77% YoY); Margin improved to 54.17%.
- Operating Profit: Ps. 2,094.50 million (up 21.47% YoY); Margin improved to 45.80%.
- Net Income: Ps. 1,592.36 million (up 24.88% YoY).
- Earnings Per Share (EPS): Ps. 5.3079 (up 24.88% YoY).
- Passenger Traffic: Total traffic increased 4.93% YoY.
Liquidity and Balance Sheet (as of Dec 31, 2011)
- Cash and Cash Equivalents: Ps. 1,529.67 million (up 6.01% from prior year).
- Total Bank Debt: Ps. 696.6 million (including Ps. 0.9 million accrued interest).
- Shareholders' Equity: Ps. 15,487.81 million (82.36% of total assets).
- Total Liabilities: Ps. 3,315.54 million (17.64% of total assets).
- Capital Expenditures (4Q11): Ps. 452.64 million.
Material Changes vs. Prior Period
- Revenue Growth Drivers: 4Q11 revenue growth was driven by a 19.80% increase in aeronautical revenues (linked to traffic growth) and a 23.06% increase in non-aeronautical revenues. Commercial revenues rose 26.26% due to improved contractual terms and higher traffic.
- Cost Management: Total operating costs increased only 6.58% in 4Q11, significantly lower than revenue growth, driving margin expansion. This was aided by the absence of the one-time provision for doubtful accounts related to Grupo Mexicana de Aviación's bankruptcy that impacted 4Q10.
- Construction Accounting: Under I-MFRS 17, construction revenues and expenses are recognized equally (Ps. 409.43 million in 4Q11), resulting in no net impact on EBITDA despite the revenue line increase.
- Tax Impact: Income taxes declined 7.72% in 4Q11 due to fiscal losses at Cancún Airport and changes in deferred tax provisions, contributing to the sharp rise in Net Income.
Outlook, Risks, and Contingencies
Regulatory and Tax Contingency
Significant Risk: In February 2012, the Mexican Ministry of Finance issued an assessment of Ps. 865.3 million against ASUR's Cancún subsidiary. The Ministry disputed the 15% annual amortization rate used for tax purposes in 2006-2007, asserting it should have been 2.0%.
- Company Position: ASUR believes the Ministry's position is erroneous and plans to file an appeal.
- Financial Impact: If the appeal fails, ASUR estimates potential fines, penalties, and adverse consequences totaling Ps. 334.2 million, which could materially affect results and the balance sheet.
Forward-Looking Statements
The filing contains forward-looking statements regarding future expectations. Actual results may differ due to risks including regulatory changes, economic conditions, and the outcome of the tax dispute mentioned above.
Investor Verification Checklist
- Tax Dispute Status: Verify the progress of the appeal regarding the Ps. 865.3 million assessment and the potential Ps. 334.2 million liability.
- Traffic Sustainability: Confirm if the 11.66% Q4 traffic growth is sustainable or seasonal, particularly the divergence between domestic (+17.18%) and international (+7.15%) growth.
- Commercial Revenue Quality: Review the sustainability of the 26.26% commercial revenue growth, specifically the impact of new retail openings and contractual terms.
- Debt Servicing: Monitor quarterly principal payments on the Ps. 350 million and Ps. 570 million credit agreements and the impact of floating interest rates (TIIE).
- Regulatory Tariffs: Track the annual review of maximum rates by the Ministry of Communications and Transportation, which impacts 55.48% of total income.