Business Context and Reporting Period
Company: Central North Airport Group (Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., "OMA")
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Third Quarter 2022 (ended September 30, 2022)
Date of Filing: October 28, 2022
Business Overview: OMA operates 13 international airports in nine states of central and northern Mexico, including major hubs in Monterrey and tourist destinations like Mazatlán. The company also provides hotel, cargo, and industrial park services.
Key Financial Metrics
| Metric | 3Q22 Value | 3Q21 Value | YoY Change |
|---|---|---|---|
| Passenger Traffic | 6.3 million | 5.1 million (implied) | +22.8% |
| Adjusted EBITDA | Ps. 1,907 million | Ps. 1,473 million | +29.5% |
| Adjusted EBITDA Margin | 76.5% | 75.2% | +130 bps |
| Operating Income | Ps. 1,717 million | N/A | N/A |
| Operating Margin | 54.6% | N/A | N/A |
| Net Income | Ps. 1,101 million | N/A | +35.7% |
| Earnings Per Share (EPS) | Ps. 2.84 | N/A | N/A |
| Cash from Operations | Ps. 1,628 million | N/A | N/A |
| Cash and Equivalents (End of Period) | Ps. 2,073 million | N/A | N/A |
| Capital Investments (MDP + Strategic) | Ps. 839 million | N/A | N/A |
Note: All monetary values are in Mexican Pesos (Ps.) unless otherwise noted. EPS is based on controlling interest; Earnings per ADS was US$1.13.
Material Changes vs. Prior Period
- Traffic Recovery: Total passenger traffic increased 22.8% year-over-year (YoY) and is now 2.0% above 2019 pre-pandemic levels. Domestic traffic grew 25.6% YoY, while international traffic grew 4.1% YoY.
- Revenue Growth: Aeronautical revenues rose 27.0% due to higher traffic and tariff increases. Non-aeronautical revenues increased 27.8%, driven by a 33.8% jump in commercial revenues (parking +58.1%, VIP lounges +57.4%).
- Cost Structure: Total operating costs and expenses increased 20.0%, primarily due to higher payroll, contracted services, and materials. Financing expenses surged to Ps. 219 million from Ps. 42 million in 3Q21 due to higher interest rates, increased indebtedness, and exchange losses.
- Profitability: Despite higher costs, Adjusted EBITDA margin expanded to 76.5% from 75.2% in 3Q21, reflecting strong operational leverage.
Outlook, Risks, and Unusual Items
- Subsequent Event (Ownership Change): On July 31, 2022, affiliates of Fintech Advisory Inc. entered into an agreement to sell 29.9% of OMA's capital stock to a subsidiary of VINCI Airports SAS. The transaction is subject to regulatory approvals.
- Investment Activity: Capital investments totaled Ps. 839 million, including Ps. 653 million for improvements to concessioned assets under Master Development Plans (MDPs).
- Dividends: The company paid the second installment of dividends totaling Ps. 495 million during the quarter.
- Risks: The filing includes standard forward-looking statement disclaimers regarding risks such as regulatory changes, economic conditions, and competition, which could cause actual results to differ from projections.
Key Facts for Investor Verification
- Ownership Transition: Verify the status of the 29.9% stake sale to VINCI Airports and any associated regulatory approvals or conditions.
- Debt and Interest Rates: Confirm the impact of rising interest rates on future financing costs, given the significant increase in financing expenses in 3Q22.
- Traffic Sustainability: Monitor whether passenger traffic growth can sustain levels above 2019 benchmarks, particularly in international segments which grew more slowly than domestic.
- Construction Accounting: Note that construction revenues and costs are recognized at cost (no profit) under IFRIC 12, which inflates total revenue figures without impacting operating income or EBITDA.