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: Third quarter and nine months ended September 30, 2013
Business Overview: ASUR operates nine airports in southeast Mexico (including Cancún) 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 (SJU). The company adopted International Financial Reporting Standards (IFRS) effective January 1, 2012.
Key Financial Metrics (3Q13)
- Total Revenues: Ps. 1,309.83 million (Increase of 7.19% YoY).
- EBITDA: Ps. 805.52 million (Increase of 16.44% YoY); Margin improved to 61.50% from 56.61%.
- Operating Profit: Ps. 699.95 million (Increase of 18.49% YoY); Margin improved to 53.44% from 48.34%.
- Net Income: Ps. 510.87 million (Increase of 24.89% YoY).
- Earnings Per Share (EPS): Ps. 1.7029 (US$ 1.2925 per ADS).
- Passenger Traffic: Total traffic increased 10.66% YoY to 5.28 million passengers (Domestic +9.41%, International +12.02%).
- Commercial Revenue per Passenger: Ps. 71.25 (Increase of 5.06% YoY).
- Liquidity: Cash and cash equivalents totaled Ps. 2,396.65 million as of September 30, 2013.
- Debt: Total bank debt was Ps. 2,847.33 million, including a US$ 215.00 million facility incurred in Q1 2013 to fund the SJU joint venture.
Material Changes vs. Prior Period
- Revenue Composition: Aeronautical revenues rose 8.81% and non-aeronautical (commercial) revenues rose 15.72%. These gains offset a 22.47% decline in construction services revenues due to lower capital expenditures on concessioned assets.
- Cost Structure: Total operating costs declined 3.39% YoY, driven by a 22.47% drop in construction costs and a 5.80% reduction in administrative expenses. Increases in technical assistance fees (16.34%) and concession fees (9.77%) partially offset these declines.
- Financing Results: Comprehensive financing results improved from a Ps. 6.69 million loss in 3Q12 to a Ps. 2.29 million gain in 3Q13, primarily due to reduced foreign exchange losses despite a 1.13% depreciation of the Mexican peso.
- Joint Venture Impact: ASUR recorded a Ps. 0.33 million net gain from its equity in Aerostar for 3Q13. However, for the nine-month period, the JV contributed a net loss of Ps. 94.92 million due to one-off privatization costs (Ps. 113.8 million) incurred during the bidding and setup phase for the SJU airport.
Outlook, Risks, and Management Commentary
- Regulatory Environment: ASUR's regulated revenues (approx. 64.52% of total income) are subject to maximum rates set by the Mexican Ministry of Communications and Transportation. The annual average tariff per workload unit for 9M13 was Ps. 155.67.
- Debt Covenants: The US$ 215.00 million credit facility requires a consolidated leverage ratio of 3.50:1.00 or less and an interest coverage ratio of 3.00:1.00 or less. Failure to comply would restrict dividend payments and could trigger immediate repayment. ASUR was in compliance as of the report date.
- Capital Expenditures: ASUR invested Ps. 130.25 million in 3Q13 and Ps. 323.52 million in 9M13 to modernize airports under master development plans.
- Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ from expectations due to risks identified in SEC filings.
Investor Verification Checklist
- Verify the sustainability of the 10.66% passenger traffic growth, particularly the 12.55% increase in international traffic at Cancún.
- Monitor the impact of the US$ 215.00 million debt on future interest expenses and foreign exchange exposure given the peso's volatility.
- Assess the timeline for the SJU joint venture to transition from one-off privatization costs to profitable operations.
- Confirm compliance with debt covenants (leverage and interest coverage ratios) in upcoming quarters.
- Review the regulatory review process for maximum tariff rates by the Mexican Ministry of Communications and Transportation.