Grupo Aeroportuario del Sureste (ASUR) — FY2020 Form 20-F
Reporting period: Fiscal year ended December 31, 2020; this is an annual report, not a Q4-only filing. ASUR operates nine airports in southeast Mexico, six in Colombia and Luis Muñoz Marín International Airport in Puerto Rico. Financial statements are prepared under IFRS and presented in Mexican pesos (Ps.); amounts below are in Ps. millions unless stated otherwise.
Financial and operating performance
| Metric | FY2020 | FY2019 | Change |
|---|---|---|---|
| Total revenue | 12,624.7 | 16,821.6 | (24.9%) |
| Aeronautical revenue | 5,412.4 | 9,597.0 | (43.6%) |
| Non-aeronautical revenue | 3,555.2 | 5,988.5 | (40.6%) |
| Construction-services revenue | 3,657.1 | 1,236.2 | +195.8% |
| Operating profit | 3,276.2 | 8,481.3 | (61.4%) |
| Net income | 2,126.5 | 5,683.6 | (62.6%) |
| Net income attributable to controlling interest | 1,972.3 | 5,465.8 | Down |
| Operating margin | 26.0% | 50.4% | Down 24.4 points |
| Net margin | 16.8% | 33.8% | Down 17.0 points |
| Operating cash flow | 2,937.1 | 8,501.7 | (65.5%) |
| Cash and cash equivalents, year-end | 5,192.6 | 6,192.7 | (1,000.1) |
| Consolidated debt | 13,900.3 | 13,712.9 | +187.5 |
Passenger traffic fell 54.0% to 25.6 million; air traffic movements declined to 205.6 thousand from 335.5 thousand. Capital spending on concession assets and equipment was Ps.3,412.5 million. Cash used in investing activities was Ps.2,876.0 million; cash used in financing activities was Ps.1,142.3 million. Current assets were Ps.7,716.0 million and current liabilities Ps.2,767.1 million. Total liabilities were Ps.18,718.0 million and equity Ps.41,693.2 million.
Construction-services revenue is recognized as airport improvement work progresses and is generally matched by construction expense. Accordingly, the sharp increase in this revenue did not offset the underlying collapse in passenger-related activity: revenue excluding construction services fell about 42.5% year over year. Basic and diluted EPS was Ps.6.57, versus Ps.18.22 in 2019. No dividend was paid in 2020; Ps.3,000 million was paid in 2019.
Material changes and management commentary
- COVID-19 sharply reduced demand from March 2020. Mexico and Puerto Rico airports remained open, while Colombia suspended commercial passenger flights for much of the year and gradually restarted service. The company temporarily closed Cancún Terminals 2 and 3.
- Traffic declined across all three regions: Mexico 51.6%, Colombia 65.0%, and Puerto Rico 48.7%. Aeronautical and non-aeronautical revenues fell accordingly. Management said most operating costs are fixed, limiting the benefit of cost reductions.
- Operating expenses rose 11.3% to Ps.9,507.4 million, principally because construction costs increased with the investment program. Cost of services declined 22.4%, including the effect of Ps.367.8 million of CARES Act grant reimbursements recognized against expenses.
- The net comprehensive financing loss narrowed to Ps.418.9 million from Ps.819.6 million, reflecting lower interest expense and a net foreign-exchange gain. Income tax expense fell to Ps.729.2 million from Ps.1,978.1 million.
- Year-end cash was supplemented by available, undrawn facilities: a Ps.1,500 million Mexican credit line and a USD20 million Aerostar line. Aerostar also drew USD10 million on an existing revolving facility in 2020.
Outlook, risks, contingencies and unusual items
- Outlook remains uncertain: Management expected COVID-19 to continue severely affecting its markets in 2021 and said the timing and impact of recovery, including vaccination effects and possible renewed restrictions, could not be predicted. Total passenger traffic declined 6.3% in Q1 2021 versus Q1 2020.
- Concentration: Cancún generated 50.1% of 2020 consolidated revenue, including construction services, and represented 74.2% of ASUR’s Mexican passenger traffic. The business remains exposed to tourism demand and U.S. travel conditions.
- Airline and collection risk: Interjet ceased flying in December 2020; the filing says its receivable was fully impaired and separately reports Ps.74.8 million owed. Aeroméxico’s deferred passenger-charge balance was Ps.76.1 million at year-end and was subsequently paid in full. Airline bankruptcies and payment extensions remain risks.
- Debt covenant waiver: Airplan did not meet debt-coverage requirements in 2020. Lenders waived the relevant covenant through the first quarter of 2022; management stated this did not create liquidity or going-concern issues. ASUR reported compliance with its Mexican loan covenants.
- Investment and tariff update: Regulators deferred Ps.2,292.4 million of 2020 Mexican committed investments to 2021. On April 7, 2021, after year-end, an extraordinary review raised Mexican maximum rates and reduced committed investments for 2021–2023. Revised commitments were Ps.3,064.1 million for 2021, Ps.1,793.8 million for 2022 and Ps.457.5 million for 2023.
- Contingencies: ASUR is appealing a Ps.73 million COFECE fine concerning Cancún parking/access practices; payment was not required pending appeal. A separate appeal concerning employee profit-sharing could require an additional Ps.116.0 million if unsuccessful. Labor claims totaled approximately Ps.20 million, for which no provision was recorded; management said adverse outcomes were not expected to be significant.
- Other unusual items: The 2020 CARES Act grant awarded to Aerostar was USD33.4 million; Ps.367.8 million of reimbursements were recognized during the year. A further USD10.6 million of federal assistance was confirmed in February 2021 but had not yet been received. FONATUR agreed to repurchase Huatulco land for Ps.286.3 million; an initial Ps.50 million was received in February 2021, with the balance due before July 1, 2021.
- Impairment and audit: ASUR recorded no impairment of goodwill, concessions or other intangible assets after testing them in 2020 using probability-weighted recovery scenarios. The auditor issued an unqualified IFRS opinion and found internal control over financial reporting effective. Critical audit matters included Mexican maximum-rate compliance and impairment estimates.
Most important facts for investors to verify
- Passenger-traffic recovery by country and airport, particularly Cancún, and the effect of restrictions and airline capacity in 2021.
- Underlying revenue and profitability excluding construction services, which materially increased but was matched by construction expense.
- Cash generation, debt maturities, available credit lines and ongoing Airplan covenant compliance after the waiver period.
- Collection and impairment of airline and commercial-client receivables, including Interjet and amounts covered by payment extensions or promissory notes.
- Implementation of revised Mexican tariffs and investment commitments, plus the outcomes of the COFECE and tax/profit-sharing appeals.
- Receipt of the remaining FONATUR land-repurchase payment and the CARES/CRRSAA grant reimbursement, and whether any further support or dividends are declared.