Business Context and Reporting Period
Company: Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Fourth Quarter (4Q) and Full Year (FY) ended December 31, 2016.
Business Overview: ASUR operates nine airports in southeast Mexico (including Cancún, Mérida, and Cozumel) and holds a 50% joint venture stake in Aerostar Airport Holdings, LLC, which operates the Luis Muñoz Marín International Airport in San Juan, Puerto Rico.
Key Financial Metrics
Fourth Quarter 2016 (4Q16)
- Total Revenues: Ps.3,076.59 million (up 5.90% YoY).
- EBITDA: Ps.1,340.00 million (up 18.99% YoY); Margin 43.55%.
- Adjusted EBITDA Margin: 70.04% (excludes IFRIC 12 construction effects).
- Operating Profit: Ps.1,204.37 million (up 19.61% YoY); Margin 39.15%.
- Net Income: Ps.917.51 million (up 25.54% YoY).
- Earnings Per Share (EPS): Ps.3.0584.
- Earnings Per ADS (EPADS): US$1.4832.
- Passenger Traffic: 7.08 million (up 11.91% YoY).
- Commercial Revenue per Passenger: Ps.96.38 (up 8.66% YoY).
Full Year 2016 (FY16)
- Total Revenues: Ps.9,753.49 million (up 8.44% YoY).
- EBITDA: Ps.5,462.26 million (up 20.26% YoY); Margin 56.00%.
- Adjusted EBITDA Margin: 71.53%.
- Operating Profit: Ps.4,932.60 million (up 21.11% YoY); Margin 50.57%.
- Net Income: Ps.3,629.26 million (up 24.56% YoY).
- Earnings Per Share (EPS): Ps.12.0975.
- Earnings Per ADS (EPADS): US$5.8671.
- Passenger Traffic: 28.41 million (up 8.67% YoY).
Liquidity and Balance Sheet (as of Dec 31, 2016)
- Cash and Cash Equivalents: Ps.3,497.63 million (up 67.82% YoY).
- Total Bank Debt: Ps.4,460.78 million (includes Ps.27.61 million accrued interest).
- Stockholders' Equity: Ps.22,753.95 million (77.88% of total assets).
- Total Liabilities: Ps.6,462.14 million (22.12% of total assets).
- Capital Expenditures (FY16): Ps.1,814.48 million.
Material Changes vs. Prior Period
- Revenue Composition: Aeronautical revenues increased 19.10% (4Q) and 15.56% (FY) driven by traffic growth. Non-aeronautical (commercial) revenues rose 21.66% (4Q) and 24.58% (FY). Conversely, construction services revenues declined 11.35% (4Q) and 17.97% (FY) due to lower capital investments.
- Cost Structure: Total operating costs declined 1.37% (4Q) and 2.05% (FY) primarily due to reduced construction costs. However, excluding construction, operating costs rose 21.00% (4Q) and 15.50% (FY) due to higher service costs, concession fees, and technical assistance fees.
- Foreign Exchange: ASUR reported a foreign exchange loss of Ps.23.87 million in 4Q16 and Ps.103.85 million in FY16 due to the depreciation of the Mexican peso against the U.S. dollar. This was partially offset by translation gains in stockholders' equity from the Aerostar joint venture.
- Joint Venture Performance: Equity income from Aerostar (San Juan) turned positive in 4Q16 (Ps.7.09 million gain) compared to a loss in 4Q15. FY16 equity income was Ps.144.25 million.
Guidance, Outlook, and Risks
- Regulatory Environment: Regulated revenues account for approximately 62.37% of total income (excluding construction). The Mexican Ministry of Communications and Transportation sets maximum rates per traffic unit, which are reviewed annually.
- Capital Projects: ASUR continues to invest in modernization, including the Terminal 3 expansion at Cancún, which contributed to higher service costs.
- Debt Obligations: The Cancún subsidiary holds US$215.0 million in bank loans maturing in 2022, denominated in U.S. dollars at LIBOR + 1.85%.
- Forward-Looking Statements: The filing contains forward-looking statements regarding future expectations, which are subject to risks and assumptions. Actual results may differ significantly.
- Unusual Items: The filing highlights the impact of IFRIC 12 accounting standards on construction revenues and costs, which inflate revenue figures without impacting EBITDA. Management provides "Adjusted" metrics to exclude these effects for better comparability.
Investor Verification Checklist
- Verify the sustainability of the 11.91% passenger traffic growth, particularly the divergence between domestic (14.79% growth) and international (9.29% growth) segments.
- Confirm the impact of the Mexican peso's depreciation on future debt service costs, given the US$215 million USD-denominated debt.
- Review the "Adjusted EBITDA Margin" (70.04% in 4Q16) versus the reported EBITDA Margin (43.55%) to understand the true operating leverage excluding IFRIC 12 construction accounting.
- Monitor the performance of the Aerostar joint venture in San Juan, which saw a slight traffic decline (-0.98%) in 4Q16 despite overall group growth.
- Assess the trajectory of concession fees paid to the Mexican government, which increased 20.42% in 4Q16 due to higher regulated revenues.