Business Context and Reporting Period
Company: Grupo Aeroportuario del Sureste, S.A. de C.V. (ASUR)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Second Quarter and Six Months ended June 30, 2003
Business Overview: ASUR is the first privatized airport group in Mexico, operating concessions for nine airports in the southeast region, including the major hub at Cancun. Financial figures are presented in constant Mexican pesos (Ps.) as of June 30, 2003.
Key Financial Metrics
Second Quarter 2003 (2Q03)
- Total Revenues: Ps. 357.9 million (up 13.31% YoY).
- Operating Profit: Ps. 121.5 million (up 33.40% YoY).
- EBITDA: Ps. 209.5 million (up 18.95% YoY).
- Net Income: Ps. 72.5 million (up 19.82% YoY).
- Earnings Per Share (EPS): Ps. 0.2417 (US$0.2316 per ADS).
- EBITDA Margin: 58.55% (up from 55.78% in 2Q02).
- Operating Margin: 33.96% (up from 28.84% in 2Q02).
Six-Month Period 2003 (1H03)
- Total Revenues: Ps. 722.7 million (up 12.53% YoY).
- Operating Profit: Ps. 267.6 million (up 29.21% YoY).
- EBITDA: Ps. 443.6 million (up 17.60% YoY).
- Net Income: Ps. 160.1 million (up 38.87% YoY).
- Earnings Per Share (EPS): Ps. 0.5338 (US$0.5114 per ADS).
- EBITDA Margin: 61.38% (up from 58.73% in 1H02).
Liquidity and Balance Sheet (as of June 30, 2003)
- Cash and Marketable Securities: Ps. 585.2 million.
- Total Assets: Ps. 11.37 billion (84.92% comprised of Airport Facility Usage Rights and Concessions).
- Shareholders' Equity: 95.10% of total assets.
- Total Liabilities: 4.90% of total assets (76.57% of liabilities are deferred).
- Dividends Paid: Ps. 150.0 million paid on May 27, 2003.
Material Changes vs. Prior Period
Traffic and Revenue Drivers
- Passenger Traffic: Total traffic increased 10.19% in 2Q03. Domestic traffic rose 16.37% (partially due to Holy Week shifting from March to April), while international traffic grew 6.09%, driven by new routes at Cancun (Phoenix, Houston) and increased capacity.
- Aeronautical Revenues: Increased 11.50% in 2Q03, directly correlated with passenger volume growth.
- Commercial Revenues: Surged 29.51% in 2Q03 (34.30% for 1H03). Commercial revenue per passenger rose 17.80% to Ps. 16.66. Key drivers included:
- Banking/Currency exchange revenue up 92.93% (American Express fully operational).
- Advertising revenue up 70.16%.
- Retail revenue up 65.92% due to new convenience stores.
- Food and beverage revenue up 30.85%.
Cost Structure
- Operating Costs: Increased only 5.17% in 2Q03 despite revenue growth, demonstrating operating leverage.
- Energy Costs: Rose 40.53% due to rate increases, impacting the "Cost of Services" line.
- Concession Fees: Increased 13.33% as they are tied to revenue performance.
- Taxation: Net income benefited from a reduction in the corporate tax rate from 35% to 32% and adjustments to asset tax provisions.
Outlook, Risks, and Contingencies
Legal and Regulatory Risks
- Airline Disputes: Five major Mexican airlines (Aeromexico, Mexicana, Aerolitoral, Aeromar, Aerovias Caribe) are challenging a 2001 rate adjustment approved by the Ministry of Communications.
- Unpaid Amounts: As of June 30, 2003, Ps. 12.1 million remains unpaid regarding the rate adjustment dispute.
- Overdue Payments: Airlines requested an extension of payment terms from 60 to 115 days. Consequently, Ps. 65.8 million was overdue as of June 30, 2003, calculated on the original 60-day schedule.
- Tariff Regulation: The Ministry regulates maximum rates per traffic unit. Compliance is reviewed annually.
Unusual Items
- Extraordinary Expense: Ps. 12.64 million recorded in 2Q03 related to the termination of lease agreements for the remodeling of the satellite building at Cancun airport.
- Asset Tax: Ps. 41.1 million paid in 2Q03; Ps. 24.3 million expensed, with Ps. 16.8 million recorded as an asset for future income tax recovery.
Investor Verification Checklist
- Collection Risk: Verify the status of the Ps. 65.8 million in overdue payments from the five major airlines and the likelihood of recovery given the ongoing legal dispute over rate adjustments.
- Cost Inflation: Monitor the impact of the 40.53% increase in energy costs on future margins, as this is a significant variable expense.
- Regulatory Environment: Assess the risk of future tariff adjustments or regulatory changes by the Mexican Ministry of Communications and Transportation.
- Capital Expenditure: Review the Ps. 41.7 million invested in Q1 2003 and the broader modernization plan to ensure alignment with traffic growth projections.
- Seasonality: Confirm the extent to which the 16.37% domestic traffic growth was driven by the one-time shift of Holy Week to April 2003 versus structural demand growth.