Business Context and Reporting Period
Company: Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR)
Reporting Period: First Quarter ended March 31, 2013 (1Q13)
Filing Date: April 22, 2013
Operations: ASUR operates nine airports in southeast Mexico (including Cancún) and holds a 50% stake in Aerostar Airport Holdings, LLC, which began operating the Luis Muñoz Marín International Airport in San Juan, Puerto Rico (SJU) on February 27, 2013.
Key Financial Metrics
| Metric | 1Q13 (Ps. Millions) | 1Q12 (Ps. Millions) | Change (%) |
|---|---|---|---|
| Total Revenues | 1,374.51 | 1,285.98 | 6.88 |
| Operating Profit | 814.17 | 729.50 | 11.61 |
| EBITDA | 917.32 | 828.46 | 10.73 |
| Net Income | 486.61 | 537.97 | (9.55) |
| EBITDA Margin | 66.74% | 64.42% | +2.32 pts |
| Operating Margin | 59.23% | 56.73% | +2.50 pts |
| Cash & Equivalents | 2,660.94 | 2,265.43 | 17.46 |
| Total Bank Debt | 2,886.10 | N/A | N/A |
Note: Figures in millions of Mexican Pesos (Ps.) unless otherwise noted. Net Income declined despite revenue growth due to one-time costs associated with the Puerto Rico joint venture.
Material Changes vs. Prior Period
- Passenger Traffic: Total traffic increased 8.53% to 5.54 million passengers. Domestic traffic rose 10.33%, while international traffic grew 7.54%, driven primarily by Cancún.
- Revenue Mix: Aeronautical revenues grew 7.22% and non-aeronautical (commercial) revenues grew 7.75%. Construction services revenues declined slightly by 0.10% due to lower capital expenditures.
- Cost Structure: Total operating costs rose only 0.69%, driven by higher concession fees (8.66%) and technical assistance fees (10.78%), partially offset by a 4.24% decrease in service costs due to reimbursements related to the SJU project.
- Financing Results: Comprehensive financing results swung from a Ps.15.13 million loss in 1Q12 to a Ps.46.19 million gain in 1Q13, largely due to a Ps.31.40 million foreign exchange gain from the appreciation of the Mexican peso against the U.S. dollar.
- Joint Venture Impact: ASUR recorded a Ps.122.05 million loss from its equity investment in Aerostar (SJU), primarily due to Ps.113.8 million in one-off costs related to the privatization bidding process and initial operations.
Guidance, Outlook, and Risks
- Debt Covenants: ASUR incurred US$215.0 million in new debt to fund its Aerostar contribution. The 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 dividends and trigger immediate repayment.
- Regulatory Environment: Regulated revenues (approx. 67% of total income) are subject to maximum rates set by the Mexican Ministry of Communications and Transportation, reviewed annually.
- Forward-Looking Statements: The filing contains forward-looking statements regarding the transition of SJU operations and future traffic growth, which are subject to risks including economic conditions and regulatory changes.
- Accounting Standards: The company reports under IFRS. Significant adjustments were made regarding employee benefits, deferred taxes, and the elimination of inflation accounting compared to previous Mexican standards.
Investor Verification Checklist
- Net Income Volatility: Verify the sustainability of net income given the Ps.122 million one-time loss from the Aerostar joint venture in 1Q13.
- Debt Servicing: Confirm compliance with the new US$215 million loan covenants (leverage and interest coverage ratios) in subsequent quarters.
- Commercial Revenue Per Passenger: Monitor the slight decline (0.54%) in commercial revenue per passenger despite overall traffic growth.
- Foreign Exchange Exposure: Assess the impact of peso appreciation on future earnings, as the 1Q13 gain was driven by a net liability position in U.S. dollars.
- SJU Operational Ramp-up: Track the operational performance of the San Juan airport post-transition to determine if the initial losses were truly one-time or indicative of ongoing challenges.