Business context and reporting period
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (Central North Airport Group, OMA) filed its Form 20-F for the fiscal year ended December 31, 2022. The filing is an annual report, not a standalone fourth-quarter filing, and the financial statements are prepared under IFRS in Mexican pesos. OMA operates, maintains and develops 13 Mexican airports, supplemented by cargo logistics, hotel and industrial-park activities.
Passenger traffic recovered materially from the COVID-19 disruption. The airports handled 23.2 million terminal passengers in 2022, up 28.8% from 2021 and approximately 0.2% above 2019. Domestic passengers represented 88.3% of terminal traffic. Monterrey generated approximately 44.0% of total revenue and 41.4% of aeronautical and non-aeronautical revenue.
Key financial metrics
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Total revenue | Ps.11,934.8 million | Ps.8,720.0 million | +36.9% |
| Aeronautical revenue | Ps.7,055.5 million | Ps.5,277.7 million | +33.7% |
| Non-aeronautical revenue | Ps.2,229.8 million | Ps.1,653.4 million | +34.9% |
| Construction-service revenue | Ps.2,649.4 million | Ps.1,788.9 million | +48.1% |
| Operating income | Ps.6,064.5 million | Ps.4,110.4 million | +47.5% |
| Operating margin | 50.8% | 47.1% | +370 bps |
| Net income | Ps.3,917.3 million | Ps.2,863.6 million | +36.8% |
| Net margin | 32.8% | 32.8% | Stable |
| Operating cash flow | Ps.4,985.3 million | Ps.4,446.8 million | +12.1% |
| Cash and cash equivalents | Ps.3,336.4 million | Ps.5,987.2 million | -44.3% |
| Total debt | Ps.8,984.3 million | Ps.4,996.6 million | +79.8% |
| Capital expenditures | Ps.2,887.3 million | Ps.1,910.5 million | +51.1% |
Aeronautical revenue represented 59.1% of total revenue and 76.0% of aeronautical plus non-aeronautical revenue. Aeronautical revenue per workload unit increased 4.8% to Ps.287.2, while non-aeronautical revenue per terminal passenger increased 4.7% to Ps.96.0.
Interest expense, net, increased 97.0% to Ps.762.8 million, primarily because of additional debt issued during 2022. The effective tax rate was 26.0%, compared with the 30.0% statutory rate. Earnings were Ps.10.1017 per share and Ps.80.8135 per ADS.
Cash flow, debt and liquidity
- Operating cash flow was Ps.4,985.3 million. Investing cash outflow was Ps.2,754.8 million, principally for concession improvements.
- Financing cash outflow was Ps.4,875.8 million, including Ps.6,615.8 million of dividends and Ps.2,700.0 million of debt amortization, partly offset by Ps.4,000.0 million of debt issuance and Ps.1,200.0 million of short-term borrowings.
- At December 31, 2022, short-term debt was Ps.1,200.0 million, current long-term debt was Ps.1,500.0 million and non-current long-term debt was Ps.7,484.3 million.
- Approximately 70% of long-term debt was fixed-rate and 30% variable-rate. The filing reports no derivative financial instruments at year-end.
- Management stated that working capital was sufficient for present requirements and that operating cash flow, supplemented by debt when necessary, is expected to fund liquidity needs and investment commitments.
Material changes versus the prior comparable period
- Traffic recovery drove higher aeronautical charges, commercial activity, hotels and cargo logistics. OMA Carga revenue increased 28.2% to Ps.329.8 million; Terminal 2 NH Collection Hotel revenue increased 39.4% to Ps.236.0 million; and Hilton Garden Inn revenue increased 70.5% to Ps.89.5 million.
- Operating costs rose 27.3% to Ps.5,870.3 million. Cost of services increased 18.1%, wages and salaries increased 22.7%, utilities increased 14.9% and depreciation and amortization increased 13.1%.
- Major maintenance provision expense decreased 7.9% to Ps.472.1 million, while cash major-maintenance expenditures increased to Ps.398.0 million.
- Cash declined because dividends, capital spending and debt repayment exceeded cash generated and new financing. Total dividends paid in 2022 were Ps.6,615.8 million, compared with Ps.1,979.8 million in 2021.
- OMA completed the December 7, 2022 ownership transaction under which VINCI entities acquired SETA and Aerodrome, indirectly obtaining approximately 29.99% of OMA’s capital stock and special Series BB shareholder rights.
- Net foreign-exchange income of Ps.112.6 million in 2021 became a net loss of Ps.8.9 million in 2022, while the Mexican peso appreciated approximately 5.0% against the U.S. dollar during the year.
Guidance, outlook, risks and unusual items
The filing does not provide formal consolidated revenue, earnings or EBITDA guidance. It anticipates Ps.10,538.0 million of investments under the 2021–2025 Master Development Programs during 2023–2025, including Ps.4,597.1 million in 2023, Ps.3,142.4 million in 2024 and Ps.2,798.5 million in 2025. Major projects include the Monterrey terminal expansion, Culiacán terminal expansion and additional capacity at several regional and border airports.
- COVID-19 travel restrictions were largely eased, but renewed outbreaks, variants or travel restrictions could again reduce passenger volumes and liquidity.
- Passenger and cargo traffic is concentrated by geography, airport and airline. Monterrey is the largest airport, while VivaAerobus, Volaris and Grupo Aeroméxico represented 35.0%, 25.6% and 19.1%, respectively, of aeronautical revenue from airline customers in 2022.
- Mexico City airport congestion, flight-movement reductions and the development of Felipe Ángeles Airport could affect traffic patterns. A February 2023 decree also required most international and domestic cargo operators to relocate from Mexico City International Airport.
- Aeronautical charges are regulated by maximum-rate regimes, with a 0.70% annual efficiency reduction for 2021–2025. Exceeding maximum rates or failing to meet concession obligations could result in penalties or, in severe cases, concession revocation.
- OMA faces exposure to Mexican and U.S. economic conditions, inflation, interest rates, peso volatility, fuel prices, geopolitical events, crime, natural disasters, cybersecurity incidents, labor disputes and environmental regulation.
- Outstanding litigation includes land-ownership disputes at the Ciudad Juárez, Monterrey, Durango, Reynosa and Torreón airports, municipal property-tax claims and municipal-license challenges. Management has not recorded provisions for these matters where an unfavorable outcome was considered unlikely.
- The sustainability-linked debt includes a target to reduce Scope 1 and 2 emissions per passenger by 58% by 2025 versus 2018. Failure to meet the target may increase interest costs by 25 basis points on specified 2022 notes.
- Subsequent to year-end, OMA issued Ps.3,200.0 million of sustainability-linked notes, repaid Ps.1,200.0 million of short-term debt and repaid the Ps.1,500.0 million notes maturing in March 2023. It also declared a Ps.2,300.0 million dividend for payment in 2023.
The independent auditor issued an unqualified opinion on the consolidated financial statements and internal control over financial reporting. The critical audit matter concerned the recognition of concession improvements and major-maintenance expenditures and their compliance with the Master Development Programs.
Most important facts for an investor to verify
- Whether passenger traffic and aeronautical revenue growth remain durable after the post-COVID recovery period.
- The effect of higher debt, variable-rate exposure and 2023 debt refinancing on interest expense and free cash flow.
- Actual progress and remaining cost of the Ps.10.5 billion 2023–2025 Master Development Program commitments.
- Compliance with maximum-rate requirements, concession obligations and the 2025 sustainability performance targets.
- Traffic and revenue concentration at Monterrey and among VivaAerobus, Volaris and Aeroméxico.
- Outcomes and potential financial exposure from the pending land, property-tax and municipal-license proceedings.
- The effect of VINCI’s 29.99% ownership, Series BB veto rights, management appointment rights and the Ps.177.7 million 2022 technical-assistance fee.
- Whether future dividends and capital expenditures can be funded without materially reducing liquidity or increasing leverage.