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: Third Quarter (3Q) and Nine Months (9M) ended September 30, 2008.
Business Overview: ASUR is the first privatized airport group in Mexico, operating nine airports in the southeast region, including the major hub at Cancun. The company generates revenue from aeronautical services (landing fees, passenger taxes) and non-aeronautical services (retail, duty-free, parking, advertising).
Key Financial Metrics
Third Quarter 2008 (3Q08)
| Metric | 3Q08 (Ps. Millions) | 3Q07 (Ps. Millions) | % Change |
|---|---|---|---|
| Total Revenues | 734.3 | 698.4 | 5.14% |
| EBITDA | 439.3 | 430.2 | 2.11% |
| Operating Profit | 288.0 | 288.5 | (0.16%) |
| Net Income | 233.9 | 242.2 | (3.41%) |
| Earnings Per Share (Ps.) | 0.78 | 0.81 | (3.41%) |
| EBITDA Margin | 59.82% | 61.59% | -1.77 pts |
| Operating Margin | 39.22% | 41.30% | -2.08 pts |
Nine Months 2008 (9M08)
| Metric | 9M08 (Ps. Millions) | 9M07 (Ps. Millions) | % Change |
|---|---|---|---|
| Total Revenues | 2,412.7 | 2,123.7 | 13.61% |
| EBITDA | 1,554.1 | 1,328.8 | 16.96% |
| Operating Profit | 1,104.0 | 930.1 | 18.69% |
| Net Income | 841.1 | 713.2 | 17.94% |
| Earnings Per Share (Ps.) | 2.80 | 2.38 | 17.94% |
| EBITDA Margin | 64.41% | 62.57% | +1.84 pts |
| Operating Margin | 45.76% | 43.80% | +1.96 pts |
Liquidity and Balance Sheet (as of Sept 30, 2008)
- Cash and Marketable Securities: Ps. 1,776.78 million.
- Total Assets: Predominantly Airport Facility Usage Rights and Concessions (79.07%).
- Total Liabilities: Ps. 2,325.60 million (13.62% of total assets), with deferred liabilities comprising 82.31% of total liabilities.
- Shareholder's Equity: Ps. 14,746.67 million.
- Capital Expenditures (3Q08): Ps. 294.61 million.
Material Changes vs. Prior Period
Passenger Traffic
- 3Q08: Total traffic increased 6.90% year-over-year. International traffic rose 10.68% (driven by a 12.71% increase at Cancun), while domestic traffic rose 3.14%.
- 9M08: Total traffic increased 11.69% year-over-year.
- Notable Declines: International traffic at Huatulco (-53.09%) and Merida (-15.15%) declined significantly in 3Q08.
Revenue Drivers
- Aeronautical Revenues: Increased 7.05% in 3Q08, directly correlated with passenger volume growth.
- Non-Aeronautical Revenues: Increased 1.54% in 3Q08. Commercial revenues per passenger declined 5.28% to Ps. 48.64, despite total commercial revenue rising 1.05%.
- Commercial Mix: Duty-free (+31.42%), banking (+19.38%), and advertising (+14.54%) grew strongly. These were offset by declines in food and beverage (-32.92%) and teleservices (-6.48%).
Cost Structure
- Operating Costs: Increased 8.86% in 3Q08, outpacing revenue growth and compressing margins.
- Cost of Services: Rose 15.50%, driven by a 22.88% increase in energy costs, 49.46% in professional fees (related to master development plan negotiations), and 42.04% in maintenance costs (due to Terminal 3 operations at Cancun).
- Depreciation: Increased 6.75% due to fixed asset investments.
Guidance, Outlook, and Risks
Recent Developments
- Huatulco Land Acquisition: On October 17, 2008, ASUR purchased 130 hectares of land in Huatulco for Ps. 286.3 million. The company is required to construct at least 1,300 hotel rooms over four years to boost regional tourism and airport traffic.
- Terminal 3: Continued operations of Terminal 3 at Cancun (opened May 2007) are driving higher maintenance and energy costs.
Management Commentary and Risks
- Taxation: A one-time charge of Ps. 1.45 million was recorded in 3Q08 related to deferred tax provisions under the new Mexican flat-rate business tax (IETU).
- Regulatory Environment: Revenues are subject to regulation by the Mexican Ministry of Communications and Transportation, which sets maximum rates per traffic unit. Compliance is reviewed annually.
- Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ from expectations due to various risks, including economic conditions and regulatory changes.
Investor Verification Checklist
- Margin Compression: Verify the sustainability of the 3Q08 operating margin decline (39.22% vs 41.30%) given the 15.50% rise in cost of services.
- Commercial Revenue Per Passenger: Investigate the 5.28% drop in commercial revenue per passenger in 3Q08 despite strong growth in duty-free and banking sectors.
- Huatulco Project Viability: Assess the financial impact and timeline for the Ps. 286.3 million land purchase and the requirement to build 1,300 hotel rooms.
- Energy Cost Exposure: Monitor the 22.88% increase in energy costs and its potential impact on future quarters.
- Regulatory Tariffs: Confirm the status of the annual tariff review by the Mexican Ministry of Communications and Transportation.