ASR

Business Context and Reporting Period

Company: Grupo Aeroportuario del Sureste, S.A. de C.V. (ASUR)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Second Quarter (2Q) and First Half (1H) ended June 30, 2005
Business Overview: ASUR is the first privatized airport group in Mexico, operating nine airports in the southeast region, including the major Cancun International Airport. The company generates revenue from aeronautical services (landing fees, passenger taxes) and non-aeronautical services (duty-free, retail, food and beverage, parking).

Key Financial Metrics

Financial figures are presented in thousands of constant Mexican pesos (Ps.) unless otherwise noted. Exchange rate used: US$1 = Ps.10.7752.

Second Quarter 2005 (2Q05) vs. 2Q04

First Half 2005 (1H05) vs. 1H04

Liquidity and Balance Sheet (as of June 30, 2005)

• Cash and Cash Equivalents: Ps.1,303.55 million (up 45.99% from June 2004).
• Total Assets: Ps.13,357.71 million.
• Total Liabilities: Ps.824.44 million (6.18% of total assets).
• Shareholders' Equity: Ps.12,533.26 million (93.82% of total assets).
• Capital Expenditures (1H05): Ps.237.94 million.

Material Changes vs. Prior Period

• Revenue Growth: Total revenues increased 11.44% in 2Q05, driven by a 24.91% surge in non-aeronautical revenues and a 6.84% increase in aeronautical revenues. Commercial revenues per passenger rose 18.02% to Ps.34.25.
• Traffic Trends: Total passenger traffic grew 6.67% year-over-year in 2Q05. International traffic increased 11.5%, while domestic traffic declined 1.23% (primarily due to a shift in the Holy Week vacation period from April 2004 to March 2005).
• Cost Structure: Operating costs rose 10.75% in 2Q05. Notable increases included costs of services (16.34%) due to the direct operation of restaurants and convenience stores previously managed by concessionaires, and higher payroll costs.
• Profitability: Net income grew 19.83% in 2Q05 and 38.49% for the first half of 2005, outpacing revenue growth due to operating leverage and cost controls.

Outlook, Risks, and Contingencies

• Direct Operations Strategy: ASUR continues to transition from concession-based models to direct operations for retail and food services (e.g., taking over restaurants and convenience stores at Cancun and Merida), which has increased both revenue and operating costs.
• Legal Contingency: ASUR won an arbitration against duty-free concessionaire Dufry México S.A. de C.V., securing a ruling for US$3.7 million in owed rent and the return of a duty-free store. As of the filing date, Dufry had not complied, and ASUR initiated legal proceedings estimated to take six months.
• Weather Impact: Hurricane Emily (July 2005) caused minimal damage to Cancun, Cozumel, and Merida airports. Operations were temporarily suspended for safety, resulting in flight cancellations, but management reported no major structural damage.
• Regulatory Environment: Revenues are subject to maximum rates regulated by the Mexican Ministry of Communications and Transportation. Regulated revenues accounted for approximately 76.92% of total income in 1H05.

Investor Verification Checklist

• Arbitration Recovery: Verify the status of the US$3.7 million collection from Dufry México and the timeline for legal enforcement.
• Direct Operation Margins: Monitor the long-term margin impact of shifting from concession fees to direct retail/food operations, which currently show higher costs but higher revenue capture.
• Domestic Traffic Seasonality: Assess the impact of calendar shifts (Holy Week) on domestic traffic comparisons and future quarterly guidance.
• Capital Allocation: Review the Ps.237.94 million in 1H05 Capex to ensure alignment with modernization plans and future revenue growth.
• Regulatory Compliance: Confirm continued compliance with Ministry of Communications and Transportation tariff caps, which limit 77% of revenue streams.