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 2019 (January 1, 2019 – March 31, 2019).
Business Overview: OMA operates 13 international airports in nine states of central and northern Mexico, serving major metropolitan areas, tourist destinations, and border cities. The company also manages hotel services and industrial parks.
Key Financial Metrics
| Metric | Value (1Q19) | Currency |
|---|---|---|
| Passenger Traffic | 5.1 million | Units |
| Aeronautical Revenues | Increased 9.9% | % Change |
| Non-Aeronautical Revenues | Increased 13.3% | % Change |
| Non-Aeronautical Revenue per Passenger | Ps. 83.3 | MXN |
| Operating Income | Increased 19.4% | % Change |
| Operating Margin | 58.1% | % |
| Adjusted EBITDA | Increased 18.4% | % Change |
| Adjusted EBITDA Margin | 72.6% | % |
| Net Income | Ps. 760 million | MXN |
| Earnings Per Share (EPS) | Ps. 1.92 | MXN |
| Earnings Per ADS | US$ 0.79 | USD |
| Cash Flow from Operating Activities | Ps. 1,097 million | MXN |
| Cash and Cash Equivalents (End of Period) | Ps. 3,821 million | MXN |
| Capital Investments (MDP + Strategic) | Ps. 241 million | MXN |
| Major Maintenance Provision | Ps. 42 million | MXN |
| Outstanding Maintenance Provision Balance | Ps. 953 million | MXN |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues were driven by a 9.9% increase in aeronautical revenues and a 13.3% increase in non-aeronautical revenues. Commercial revenues specifically grew 20.1%, led by a 53.5% surge in advertising revenue due to a new contract and a 19.0% increase in parking revenue.
- Cost Efficiency: Total operating costs and expenses decreased 17.5% year-over-year. Excluding construction costs, operating expenses decreased 2.1%. This reduction was primarily due to lower professional fees, payroll expenses, and the adoption of IFRS 16 (Leases), which reduced rent and hotel service costs.
- Profitability: Net income rose 24.7% to Ps. 760 million. The effective tax rate was 29.8%. The technical assistance fee decreased 11.7% due to a rate reduction from 4% to 3% of consolidated EBITDA effective January 2019.
- Operational Volume: Passenger traffic grew 4.3% to 5.1 million. Domestic traffic increased 5.0%, while international traffic grew 0.8%. Available seats offered increased 5.3%.
- Cash Flow: Operating cash flow increased 42.3% to Ps. 1,097 million. Net cash increased by Ps. 887 million during the quarter.
Guidance, Outlook, and Risks
- Dividend Proposal: The Board of Directors proposed a cash dividend of Ps. 1,600 million for approval at the Annual Ordinary General Shareholders' Meeting scheduled for April 29, 2019.
- Investment Pipeline: Construction began on a new warehouse (4,851 m2) and an expansion (4,080 m2) at the OMA VYNMSA Aero Industrial Park, scheduled for completion in 2Q19.
- Forward-Looking Statements: The filing contains forward-looking statements regarding future events and expectations. Management cautions that actual results may differ materially due to risks and uncertainties, including those detailed in the most recent Form 20-F under "Risk Factors."
- Derivatives: As of the report date, OMA has no financial derivatives exposure.
Key Facts for Investor Verification
- Verify the impact of the new advertising contract (started 4Q18) on sustained revenue growth in subsequent quarters.
- Confirm the execution of the proposed Ps. 1,600 million cash dividend at the April 29, 2019 shareholder meeting.
- Monitor the completion of the OMA VYNMSA Aero Industrial Park warehouse projects in 2Q19 and their contribution to diversification revenues.
- Assess the sustainability of the 17.5% decrease in total operating costs, particularly regarding the one-time effects of IFRS 16 adoption and the technical assistance fee rate reduction.
- Review the 0.8% growth in international passenger traffic to understand if this trend aligns with broader regional tourism recovery.