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: Second Quarter and First Half ended June 30, 2009
Date of Filing: July 27, 2009
Business Overview: ASUR operates nine airports in southeast Mexico, including the major hub at Cancún. The company is the first privatized airport group in Mexico.
Key Financial Metrics
Second Quarter 2009 (2Q09)
| Metric | 2Q09 Value | 2Q08 Value | YoY Change |
|---|---|---|---|
| Total Revenues | Ps. 678.4 million | Ps. 808.5 million | (16.10%) |
| EBITDA | Ps. 400.9 million | Ps. 531.9 million | (24.62%) |
| Operating Profit | Ps. 243.3 million | Ps. 382.1 million | (36.33%) |
| Net Income | Ps. 125.4 million | Ps. 255.2 million | (50.84%) |
| Earnings Per Share (EPS) | Ps. 0.4181 | Ps. 0.8505 | (50.84%) |
| EBITDA Margin | 59.10% | 65.78% | -6.68 pts |
| Operating Margin | 35.86% | 47.26% | -11.40 pts |
First Half 2009 (1H09)
| Metric | 1H09 Value | 1H08 Value | YoY Change |
|---|---|---|---|
| Total Revenues | Ps. 1,663.1 million | Ps. 1,678.4 million | (0.91%) |
| EBITDA | Ps. 1,086.7 million | Ps. 1,114.8 million | (2.53%) |
| Operating Profit | Ps. 770.7 million | Ps. 816.0 million | (5.55%) |
| Net Income | Ps. 467.2 million | Ps. 607.2 million | (23.07%) |
| Earnings Per Share (EPS) | Ps. 1.5572 | Ps. 2.0241 | (23.07%) |
Liquidity and Balance Sheet (as of June 30, 2009)
- Cash and Marketable Securities: Ps. 973.32 million
- Total Assets: Predominantly Airport Facility Usage Rights and Concessions (79.40%)
- Shareholder's Equity: Ps. 13,538.16 million (83.16% of total assets)
- Total Liabilities: Ps. 2,741.06 million (16.84% of total assets)
- Debt Facilities: In May 2009, the Cancún subsidiary executed three term credit facilities totaling Ps. 750 million (Ps. 250 million each from IXE Banco, Banco Santander, and BBVA Bancomer). As of July 27, 2009, Ps. 600 million had been disbursed.
Material Changes vs. Prior Period
- Passenger Traffic Decline: Total passenger traffic dropped 26.76% in 2Q09 and 14.53% in 1H09. International traffic fell 30.62% in 2Q09, while domestic traffic fell 21.63%.
- H1N1 Impact: The World Health Organization's April 28, 2009 announcement of the H1N1 Influenza outbreak in Mexico caused severe traffic drops: 2.1% in April, 50.7% in May, and 28.4% in June.
- Revenue Composition: While aeronautical revenues declined 17.71% in 2Q09 due to traffic loss, commercial revenues per passenger increased 20.29% to Ps. 59.29. For the full first half, commercial revenues rose 7.68% year-over-year, offsetting some aeronautical declines.
- Cost Structure: Total operating costs increased 2.04% in 2Q09, driven by an 8.86% rise in cost of services (partially due to a reversal of a deferred provision from 2Q08) and a 5.25% increase in depreciation. Concession fees to the government declined 15.95% due to lower revenue bases.
Outlook, Risks, and Management Commentary
- Capital Expenditures: ASUR invested Ps. 56.35 million in 2Q09 and Ps. 97.05 million in 1H09 for airport modernization under master development plans.
- Debt Covenants: New credit facilities require maintaining a liquidity ratio of at least 1.25:1, interest coverage of 5.00:1, and EBITDA-to-debt of 2.00:1. Failure to comply could restrict dividend payments.
- Interest Rate Hedging: Management entered into interest rate swap agreements effective 3Q09 to fix the TIIE rate between 6.21% and 6.37% on the new credit facilities.
- Taxation: The company recognized Ps. 8.9 million in asset taxes in 2Q09 which it does not expect to recover. Provisional tax payments under the IETU regime totaled Ps. 23.0 million.
- Forward-Looking Statements: Management notes that future results depend on traffic recovery and are subject to risks including regulatory changes and economic conditions.
Investor Verification Checklist
- Traffic Recovery Trajectory: Verify the extent of H1N1 impact on Q3 and Q4 2009 travel demand, particularly for international arrivals at Cancún.
- Commercial Revenue Resilience: Confirm if the increase in commercial revenue per passenger (Ps. 59.29) is sustainable as traffic volumes normalize.
- Debt Covenant Compliance: Monitor quarterly liquidity and interest coverage ratios to ensure compliance with the new Ps. 750 million credit facility covenants.
- Regulatory Tariff Adjustments: Review upcoming reviews by the Mexican Ministry of Communications and Transportation regarding maximum rate compliance and potential tariff adjustments.
- Cost Reversal Impact: Assess the one-time nature of the Ps. 34.0 million deferred provision reversal in 2Q08 to accurately normalize cost comparisons for future periods.