Business Context and Reporting Period
Company: Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR)
Reporting Period: First Quarter ended March 31, 2012 (1Q12)
Filing Date: April 24, 2012
ASUR is the first privatized airport group in Mexico, operating concessions for nine airports in southeast Mexico, including the major hub at Cancún. The company reported unaudited results prepared under International Financial Reporting Standards (IFRS), which were adopted effective January 1, 2012. All financial figures are expressed in nominal Mexican Pesos (Ps).
Key Financial Metrics
| Metric | 1Q12 | 1Q11 | YoY Change |
|---|---|---|---|
| Total Revenues | Ps. 1,285.98 million | Ps. 1,062.90 million | +20.99% |
| Operating Profit | Ps. 729.50 million | Ps. 582.56 million | +25.22% |
| EBITDA | Ps. 828.46 million | Ps. 676.73 million | +22.42% |
| Net Income | Ps. 537.97 million | Ps. 417.38 million | +28.89% |
| Earnings Per Share (EPS) | Ps. 1.7932 | Ps. 1.3913 | +28.89% |
| Earnings Per ADS (US$) | $1.3999 | $1.0861 | +28.89% |
| EBITDA Margin | 64.42% | 63.67% | +0.75 pp |
| Operating Margin | 56.73% | 54.81% | +1.92 pp |
| Commercial Revenue per Passenger | Ps. 74.63 | Ps. 65.09 | +14.66% |
Liquidity and Balance Sheet (as of March 31, 2012):
- Cash and Cash Equivalents: Ps. 2,069.24 million (up 35.27% from year-end 2011).
- Total Bank Debt: Ps. 604.0 million (including Ps. 0.9 million accrued interest).
- Shareholders' Equity: Ps. 16,014.30 million.
- Total Liabilities: Ps. 3,188.55 million (Deferred liabilities represent 62.94% of total liabilities).
Material Changes vs. Prior Period
Passenger Traffic: Total traffic increased 10.38% to 5.10 million passengers. Domestic traffic grew 19.79%, driven by increases across all airports, while international traffic rose 5.83%, primarily due to a 6.23% increase at Cancún.
Revenue Composition:
- Aeronautical Revenues: Increased 16.42% to Ps. 759.59 million, driven by higher passenger volumes.
- Non-Aeronautical Revenues: Increased 25.08% to Ps. 435.87 million. Commercial revenues specifically rose 26.48%, with significant growth in advertising (+32.49%), ground transportation (+31.54%), and duty-free stores (+31.30%).
- Construction Services: Revenues increased 46.12% to Ps. 90.52 million due to capital improvements. Note that an equal amount was recognized as "Construction Costs," resulting in no net impact on EBITDA from this line item.
Expenses: Total operating costs rose 15.85%. Key drivers included a 46.42% increase in construction costs (matching revenue recognition), a 22.38% increase in technical assistance fees (linked to EBITDA growth), and a 17.83% increase in concession fees paid to the Mexican government.
Financing Costs: Comprehensive financing costs increased to Ps. 15.13 million from a de minimis amount in 1Q11, primarily due to a Ps. 18.21 million foreign exchange loss.
Guidance, Outlook, and Risks
Capital Expenditures: ASUR invested Ps. 152.35 million in 1Q12 for airport modernization under master development plans.
Debt and Financing:
- ASUR has authorized credit lines of US$ 300 million and Ps. 1,500 million for Cancún Airport, subject to conditions precedent; these have not yet been utilized.
- Existing debt includes floating rate agreements based on TIIE plus a spread. The company maintains an interest rate hedge covering 17% of its exposure.
Regulatory Environment: Regulated revenues accounted for 66.79% of total income. The Mexican Ministry of Communications and Transportation sets maximum rates per traffic unit, reviewed annually.
Accounting Changes: The adoption of IFRS resulted in adjustments to shareholders' equity, primarily regarding labor liabilities, vacation reserves, and the elimination of inflation accounting for capital stock. Net income under IFRS was Ps. 537.97 million compared to Ps. 540.19 million under Mexican Financial Reporting Standards.
Risks: Forward-looking statements are subject to risks including foreign exchange fluctuations, regulatory changes, and general economic conditions. The filing notes that actual developments could differ significantly from expectations.
Investor Verification Checklist
- IFRS Impact: Verify the specific adjustments made to the balance sheet and income statement due to the transition from Mexican Financial Reporting Standards to IFRS, particularly regarding labor liabilities and deferred taxes.
- Construction Accounting: Confirm that the 46% increase in construction revenues is fully offset by construction costs, ensuring no artificial inflation of EBITDA.
- Debt Utilization: Monitor the status of the authorized US$ 300 million and Ps. 1,500 million credit lines for Cancún Airport to assess future leverage.
- Foreign Exchange Exposure: Review the sensitivity of earnings to peso fluctuations, given the Ps. 18.21 million FX loss in 1Q12.
- Regulatory Tariffs: Track the annual review of maximum rates by the Mexican Ministry of Communications and Transportation, as regulated revenues comprise two-thirds of total income.