Business Context and Reporting Period
Company: Southeast Airport Group (Grupo Aeroportuario del Sureste, S.A.B. de C.V.)
Filing Type: Form 6-K (Current Report)
Reporting Period: Second Quarter ended June 30, 2018
Date of Filing: July 23, 2018
Operations: ASUR operates 16 airports across Mexico, Puerto Rico (via Aerostar), and Colombia (via Airplan). The period reflects full consolidation of Aerostar (since June 2017) and Airplan (since October 2017).
Key Financial Metrics
| Metric | 2Q 2018 | 2Q 2017 | YoY Change |
|---|---|---|---|
| Total Revenue (MXN millions) | 3,887.4 | 2,935.3 | +32.4% |
| EBITDA (MXN millions) | 2,359.8 | 1,787.9 | +32.0% |
| Net Income (MXN millions) | 1,098.4 | 1,152.1 | -4.7% |
| Majority Net Income (MXN millions) | 1,086.3 | 1,132.6 | -4.1% |
| Earnings Per Share (MXN) | 3.62 | 3.78 | -4.1% |
| Cash & Equivalents (MXN millions) | 3,688.9 | 2,829.8 | +30.4% |
| Net Debt (MXN millions) | 12,907.5 | 8,064.5 | +60.1% |
| Net Debt / LTM EBITDA | 1.04x | 1.71x | -39.3% |
| Commercial Rev per Passenger (MXN) | 99.7 | 102.3 | -2.5% |
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenue rose 32.4% YoY, driven by a 49.9% increase in aeronautical services and a 42.0% increase in non-aeronautical services. This growth is largely attributable to the full-year consolidation of Aerostar (Puerto Rico) and Airplan (Colombia) compared to partial or equity-method reporting in 2Q17.
- Profitability: While EBITDA increased 32.0%, Net Income declined 4.7% and Majority Net Income fell 4.1%. This divergence is due to higher interest expenses (up 326.3% YoY) and increased depreciation/amortization (up 200.3%) resulting from the consolidation of new assets and debt.
- Operational Traffic: Total passenger traffic increased 1.0% YoY to 13.1 million.
- Mexico: Traffic rose 4.8% YoY, led by Cancun Airport.
- Puerto Rico: Traffic declined 5.9% YoY due to the lingering effects of Hurricane Maria.
- Colombia: Traffic decreased 4.0% YoY, with a 6.5% drop in domestic traffic offsetting an 11.8% rise in international traffic.
- Dividends: The company paid an ordinary cash dividend of Ps. 6.78 per share, totaling Ps. 1,848 million.
Guidance, Outlook, and Risks
- Regulatory Approval: ASUR received approval for Master Development Programs for its Mexican concessions covering 2019–2033, including maximum tariffs for 2019–2023.
- Acquisition Completion: On May 25, 2018, ASUR acquired the remaining 7.58% stake in Airplan (Colombia), bringing total ownership to 100%.
- Capital Expenditures: Capex for 2Q18 was Ps. 407.2 million, focused on modernizing Mexican airports (including Cancun Terminal 4), Puerto Rico, and Colombia.
- Risks and Contingencies:
- Hurricane Maria: Continued impact on Puerto Rico traffic and operations.
- Debt Levels: Net debt increased significantly due to consolidation, though leverage ratios improved (Net Debt/EBITDA 1.04x).
- Accounting Standards: Significant impact from IFRS 3 (Business Combinations) and IFRIC 12 (Service Concessions) on depreciation, amortization, and construction revenue recognition.
Investor Verification Checklist
- Consolidation Impact: Verify the extent to which revenue and debt growth is driven by the inclusion of Aerostar and Airplan versus organic growth.
- Net Income vs. EBITDA: Analyze the widening gap between EBITDA growth (+32%) and Net Income decline (-4.7%) caused by interest and amortization expenses.
- Puerto Rico Recovery: Monitor passenger traffic trends in San Juan to assess the timeline for recovery from Hurricane Maria.
- Debt Structure: Review the currency composition of debt (54.2% USD, 27.0% MXN, 18.8% COP) and exposure to exchange rate fluctuations.
- Commercial Revenue Per Passenger: Investigate the 2.5% decline in consolidated commercial revenue per passenger despite traffic growth in Mexico.