Business Context and Reporting Period
Company: Central North Airport Group (Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., or OMA)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Third Quarter 2019 (ended September 30, 2019)
Filing Date: October 23, 2019
Business Overview: OMA operates 13 international airports in nine states of central and northern Mexico, including major hubs in Monterrey, Acapulco, and Mazatlán. The company also provides hotel, cargo, and industrial park services.
Key Financial Metrics
| Metric | Value (3Q19) | Currency |
|---|---|---|
| Passenger Traffic | 6.1 million | Units |
| Operating Income | 1,286 million | Pesos (Ps.) |
| Operating Margin | 59.7% | % |
| Adjusted EBITDA | Increased 14.5% | % Change |
| Adjusted EBITDA Margin | 74.1% | % |
| Net Income | 858 million | Pesos (Ps.) |
| Earnings Per Share (EPS) | 2.18 | Pesos (Ps.) |
| Earnings Per ADS | 0.89 | US Dollars (US$) |
| Cash and Cash Equivalents (as of Sept 30, 2019) | 3,121 million | Pesos (Ps.) |
| Capital Investments (3Q19) | 357 million | Pesos (Ps.) |
Revenue Breakdown: Aeronautical revenues increased 10.0%; Non-aeronautical revenues increased 11.2% (Ps. 75.7 per passenger). Commercial revenues rose 12.3%, driven by parking, restaurants, VIP lounges, and car rentals.
Material Changes vs. Prior Period
- Traffic Growth: Total passenger traffic grew 6.9% year-over-year. Domestic traffic increased 6.4%, while international traffic rose 11.2%.
- Profitability: Operating income rose 17.9% to Ps. 1,286 million. Net income increased 18.2% to Ps. 858 million.
- Cost Management: Total operating costs and expenses decreased 0.8%. Excluding construction costs, expenses decreased 1.9%, aided by lower professional fees, utilities, and the adoption of IFRS 16 (Leases).
- Cash Flow (9 Months 2019): Operating cash flow increased 0.4% to Ps. 2,763 million. Financing activities resulted in a net outflow of Ps. 2,105 million, primarily due to dividends (Ps. 1,599 million) and share repurchases (Ps. 210 million).
- Freight: OMA Carga revenues grew 12.1%, despite a 11.1% decrease in handled freight volume, attributed to higher commercial value cargo.
Outlook, Commentary, and Risks
- Capital Projects: OMA inaugurated expansions at San Luis Potosí (Ps. 400 million investment) and Chihuahua (Ps. 318 million investment) airports during the quarter, significantly increasing passenger capacity.
- Commercial Initiatives: Implemented 21 commercial initiatives with a terminal space occupancy rate of 98.7%.
- Debt and Derivatives: As of the report date, OMA has no financial derivatives exposure. The filing does not provide specific total debt figures, only financing cash flows.
- Risks: The filing includes standard forward-looking statement disclaimers, noting that actual results may differ due to risks discussed in the most recent Form 20-F, including factors beyond OMA's control.
Investor Verification Checklist
- Verify the impact of the new IFRS 16 lease standard on future rent expense and balance sheet liabilities.
- Confirm the sustainability of the 11.2% international traffic growth, particularly on the Houston route from Monterrey.
- Review the full Form 20-F for detailed debt maturity schedules and total leverage ratios, as this 6-K focuses on cash flows rather than total debt balances.
- Assess the return on investment for the Ps. 718 million spent on San Luis Potosí and Chihuahua terminal expansions.
- Monitor the effective tax rate (31.4% in 3Q19) for potential changes in future periods.