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: First Quarter ended March 31, 2009
Business Overview: ASUR is the first privatized airport group in Mexico, operating nine airports in the southeast region, including the major hub at Cancún. The company generates revenue through aeronautical services (regulated tariffs) and non-aeronautical commercial services (duty-free, retail, parking, etc.).
Key Financial Metrics
| Metric | 1Q09 | 1Q08 | Change |
|---|---|---|---|
| Total Revenues | Ps. 984.7 million | Ps. 869.9 million | +13.20% |
| EBITDA | Ps. 685.8 million | Ps. 583.0 million | +17.63% |
| Operating Profit | Ps. 527.4 million | Ps. 433.8 million | +21.57% |
| Net Income | Ps. 341.7 million | Ps. 352.1 million | -2.94% |
| Earnings Per Share (Ps.) | 1.1391 | 1.1736 | -2.94% |
| Earnings Per ADS (US$) | 0.8049 | 0.8293 | -2.94% |
| EBITDA Margin | 69.64% | 67.02% | +2.62 pts |
| Operating Margin | 53.56% | 49.87% | +3.69 pts |
| Commercial Revenue per Passenger | Ps. 60.62 | Ps. 45.94 | +31.95% |
Liquidity and Balance Sheet (as of March 31, 2009):
- Cash and Marketable Securities: Ps. 1,945.75 million
- Total Assets: Predominantly Airport Facility Usage Rights and Concessions (77.29%)
- Shareholder's Equity: Ps. 15,296.72 million (87.25% of total assets)
- Total Liabilities: Ps. 2,234.48 million (12.75% of total assets), with 85.90% classified as deferred liabilities.
Material Changes vs. Prior Period
Passenger Traffic: Total traffic declined 3.30% year-over-year to 4.86 million passengers.
- Domestic: Declined 13.90%, driven by significant drops at Mérida (-24.05%), Villahermosa (-21.96%), and Cozumel (-27.85%).
- International: Increased 3.04%, primarily due to a 4.54% rise at Cancún.
Revenue Drivers:
- Aeronautical Revenues: Rose 8.50% despite lower traffic, due to rate increases.
- Non-Aeronautical Revenues: Rose 23.36%, driven by a 26.73% increase in commercial revenues.
- Currency Impact: Commercial revenue growth was significantly aided by a 32.9% depreciation of the Mexican peso against the U.S. dollar, as many concession contracts are dollar-denominated.
Cost Structure: Total operating costs increased 4.87%.
- Cost of services rose 4.13% (personnel +9.75%, maintenance +9.41%).
- Depreciation and amortization increased 6.18% due to new investments.
- Technical assistance fees to ITA increased 17.64% due to higher EBITDA.
Net Income Decline: Despite strong operating profit growth, net income fell 2.94% due to tax provisions, including Ps. 75.6 million in provisional IETU tax payments and Ps. 9.5 million in unrecoverable asset taxes.
Outlook, Risks, and Management Commentary
Regulatory Environment:
- ASUR received approval for Master Development Programs (2009-2023) and maximum tariffs for 2009-2013 from the Mexican Ministry of Communications and Transportation.
- Maximum rates are subject to an annual efficiency factor reduction of 0.70% in real terms.
- Mayan Riviera Airport: The Ministry has committed to adjusting ASUR's investment obligations and maximum rates within three months of granting the concession for the new Mayan Riviera Airport to account for potential traffic cannibalization at Cancún.
Capital Expenditures:
- Invested Ps. 70.28 million in 1Q09 for airport modernization.
- Committed investments for 2009-2013 are outlined in the Master Development Plans, with significant allocations for Cancún and Veracruz.
Risks and Contingencies:
- Forward-looking statements regarding future traffic and investment are subject to risks and assumptions that may not materialize.
- Regulatory changes in tax law (IETU) continue to impact net income calculations.
- Dependence on the Mexican peso exchange rate for commercial revenue recognition.
Investor Verification Checklist
- Currency Sensitivity: Verify the extent to which future commercial revenue growth relies on peso depreciation versus organic volume growth.
- Domestic Traffic Recovery: Monitor the significant decline in domestic traffic at key hubs (Mérida, Villahermosa) and its potential impact on long-term aeronautical revenue.
- Mayan Riviera Impact: Track the timeline for the new Mayan Riviera Airport concession and the subsequent regulatory adjustments to ASUR's tariffs and investment obligations.
- Tax Provisions: Review the sustainability of net income margins given the provisional tax payments and asset tax provisions recognized in 1Q09.
- Capital Allocation: Confirm adherence to the approved Master Development Plans and the timing of committed investments, particularly at Cancún.