Business Context and Reporting Period
Company: Central North Airport Group (Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.), trading as OMA (NASDAQ: OMAB; BMV: OMA).
Reporting Period: First Quarter 2021 (ended March 31, 2021).
Context: OMA operates 13 international airports in central and northern Mexico. The quarter was characterized by ongoing COVID-19 travel restrictions, though passenger traffic showed signs of recovery in March compared to February. The company also executed significant debt refinancing and infrastructure projects during the period.
Key Financial Metrics
| Metric | Value (1Q21) |
|---|---|
| Operating Income | Ps.612 million |
| Operating Margin | 41.3% |
| Adjusted EBITDA | Ps.808 million |
| Adjusted EBITDA Margin | 67.9% |
| Net Income | Ps.416 million |
| Earnings Per Share (EPS) | Ps.1.06 |
| Earnings Per ADS | US$0.41 |
| Cash Flow from Operations | Ps.736 million |
| Cash and Cash Equivalents (End of Period) | Ps.3,159 million |
| Capital Investments (MDP + Strategic) | Ps.360 million |
Material Changes vs. Prior Period
- Passenger Traffic: Total traffic decreased 37.8% year-over-year to 3.0 million passengers. Domestic traffic fell 35.4%, while international traffic dropped 52.4% due to travel restrictions.
- Revenue:
- Aeronautical revenues decreased 31.6%.
- Non-aeronautical revenues decreased 27.8%.
- Commercial revenues (parking, retail, restaurants) declined significantly, ranging from -30.6% to -45.5%.
- Diversification revenues decreased 15.8%, driven by lower hotel occupancy but partially offset by growth in cargo (OMA Carga +29.9%) and industrial services (+40.2%).
- Costs: Total operating costs and expenses increased 7.2% year-over-year, primarily due to higher major maintenance provisions. However, excluding construction costs, operating expenses decreased 8.5% due to headcount reductions and lower security/cleaning costs.
- Debt Activity: OMA issued Ps.3,500 million in long-term notes (including a Ps.1,000 million Green Bond) and used proceeds to prepay Ps.3,000 million in existing notes.
Outlook, Risks, and Management Commentary
- Operational Recovery: Passenger traffic decreased only 3.0% in March compared to the same period in 2020, representing a 53.4% increase from February 2021, indicating a recovery path.
- Dividend Declaration: The Annual General Shareholders' Meeting approved a cash dividend of up to Ps.2,000 million, with the Board delegated to determine the exact amount and payment date.
- Infrastructure: Inaugurated the new terminal at Reynosa airport (capacity increased to 900,000 passengers/year) with an investment of Ps.335 million.
- Risks and Contingencies:
- COVID-19: Ongoing restrictions, including Canada's suspension of flights to Mexico and U.S. testing requirements, continue to impact international traffic.
- Forward-Looking Statements: Management cautions that actual results may differ due to unpredictable risks, including epidemiological developments and regulatory changes.
- Green Bond: OMA became the first airport operator in Mexico and the only one in Latin America to issue a Green Bond, funding renewable energy and efficiency projects.
Investor Verification Checklist
- Verify the exact dividend amount and payment date once determined by the Board of Directors.
- Monitor the trajectory of international passenger traffic recovery given ongoing cross-border restrictions (U.S. and Canada).
- Review the utilization of Green Bond proceeds for eligible renewable energy projects.
- Assess the impact of the new Reynosa terminal on future revenue growth in the border region.
- Confirm the sustainability of the 67.9% Adjusted EBITDA margin as commercial revenues (retail, parking) remain depressed relative to pre-pandemic levels.