Business Context and Reporting Period
Company: Southeast Airport Group (Grupo Aeroportuario del Sureste, S.A.B. de C.V.)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Fourth Quarter and Full Year ended December 31, 2009
Business Overview: ASUR operates nine airports in southeast Mexico, including the major hub at Cancún. The company is subject to tariff regulation by the Mexican Ministry of Communications and Transportation.
Key Financial Metrics
Fourth Quarter 2009 (vs. 4Q08)
- Total Revenues: Ps. 753.4 million (Decline of 0.34%)
- EBITDA: Ps. 445.4 million (Increase of 3.32%)
- EBITDA Margin: 59.12% (Up from 57.03%)
- Operating Profit: Ps. 288.3 million (Increase of 3.06%)
- Operating Margin: 38.26% (Up from 37.00%)
- Net Income: Ps. 159.5 million (Decline of 23.44%)
- Earnings Per Share (EPS): Ps. 0.5317 (Decline of 23.44%)
- Passenger Traffic: 3.68 million total (Decline of 5.98% YoY)
Full Year 2009 (vs. FY08)
- Total Revenues: Ps. 3,131.2 million (Decline of 1.18%)
- EBITDA: Ps. 1,966.8 million (Decline of 0.93%)
- EBITDA Margin: 62.81% (Up from 62.65%)
- Operating Profit: Ps. 1,337.3 million (Decline of 3.35%)
- Operating Margin: 42.71% (Down from 43.67%)
- Net Income: Ps. 797.4 million (Decline of 24.02%)
- Earnings Per Share (EPS): Ps. 2.6580 (Decline of 24.02%)
- Passenger Traffic: 15.54 million total (Decline of 12.49% YoY)
Liquidity and Balance Sheet (as of Dec 31, 2009)
- Cash and Marketable Securities: Ps. 961.4 million (Decline of 44.54% from prior year)
- Total Bank Debt: Ps. 545.5 million
- Shareholder's Equity: Ps. 13,857.7 million (83.00% of total assets)
- Total Liabilities: Ps. 2,838.0 million (17.00% of total assets)
- Capital Expenditures (FY09): Ps. 617.7 million
Material Changes vs. Prior Period
Passenger Traffic Decline: Total traffic fell 5.98% in 4Q09 and 12.49% for the full year. The decline was driven by the global recession and the H1N1 influenza outbreak in Mexico, which caused severe drops in traffic from April to December 2009. International traffic at Cancún fell 8.42% in the quarter, while domestic traffic at several secondary airports (Cozumel, Oaxaca, Tapachula) declined by over 20%.
Revenue Composition: Despite traffic declines, commercial revenues per passenger increased 6.00% in 4Q09 to Ps. 61.34. Total commercial revenues rose 0.87% in the quarter, driven by significant growth in car rentals (+39.98%) and ground transportation (+8.07%), offsetting declines in duty-free stores (-8.11%) and advertising (-15.99%).
Cost Management: Operating costs decreased 2.33% in 4Q09, primarily due to a 10.67% drop in cost of services (lower energy and labor costs). However, administrative expenses rose 18.11% due to employee reassignments to corporate functions.
Net Income Impact: Net income dropped significantly (23.44% in 4Q09) despite stable EBITDA. This was largely due to a reversal of favorable exchange rate gains and interest income seen in 4Q08, replaced by an exchange rate loss of Ps. 10 million and higher tax provisions in the prior year.
Outlook, Risks, and Management Commentary
- Tariff Regulation: Regulated revenues accounted for 67.93% of total income in FY09. The Ministry of Communications and Transportation reviews compliance with maximum rates annually.
- Debt Hedging: In August 2009, ASUR hedged 100% of its interest rate exposure on a Ps. 750 million credit facility, fixing rates between 6.21% and 6.44% for three years.
- Liquidity Usage: The significant drop in cash balances (44.54%) was primarily due to a Ps. 1,884 million cash dividend paid in the second quarter of 2009.
- Forward-Looking Statements: The filing includes standard disclaimers that future results may differ due to risks including economic conditions, regulatory changes, and the potential for future health crises.
Investor Verification Checklist
- Verify the sustainability of commercial revenue growth per passenger as traffic volumes recover.
- Monitor the impact of the H1N1 outbreak on full-year 2010 traffic recovery, particularly in international markets.
- Review the company's dividend policy given the significant cash outflow in 2009 and current cash levels.
- Assess the impact of Mexican tax law (IETU) on future deferred tax assets and liabilities.
- Confirm the timeline for the next tariff review by the Mexican Ministry of Communications and Transportation.