Business Context and Reporting Period
Company: Central North Airport Group (Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., or OMA)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Third Quarter 2024 (ended September 30, 2024)
Release Date: October 24, 2024
Business Overview: OMA operates 13 international airports in central and northern Mexico, including major hubs in Monterrey and tourist destinations like Mazatlán and Acapulco. The company also manages hotel and industrial park services.
Key Financial Metrics
| Metric | 3Q24 Value | YoY Change |
|---|---|---|
| Passenger Traffic | 7.0 million | -5.3% |
| Total Revenues (Aeronautical + Non-aeronautical) | Ps. 3,229 million (implied) | +1.4% |
| Adjusted EBITDA | Ps. 2,435 million | N/A |
| Adjusted EBITDA Margin | 75.4% | N/A |
| Operating Income | Ps. 2,168 million | N/A |
| Operating Margin | 58.6% | N/A |
| Net Income | Ps. 1,385 million | -2.1% |
| Earnings Per Share (EPS) | Ps. 3.57 | N/A |
| Capital Investments (MDP + Strategic) | Ps. 581 million | N/A |
| Cash from Operations | Ps. 1,753 million | N/A |
| Cash and Equivalents (Sept 30, 2024) | Ps. 2,398 million | N/A |
Material Changes vs. Prior Period
- Traffic Dynamics: Total passenger traffic declined 5.3% due to a 7.4% drop in domestic traffic, partially offset by a 10.8% increase in international traffic. Seats offered decreased 8.1%.
- Notable Declines: Acapulco (-42.5%) due to Hurricane Otis impact in 3Q23; Culiacán (-20.7%); Ciudad Juárez (-9.1%).
- Notable Growth: Mazatlán (+16.6%); Durango (+1.6%).
- Revenue Mix: Aeronautical revenues fell 3.4%, while non-aeronautical revenues surged 18.9%. Commercial revenues grew 17.0%, driven by restaurants (+30.0%), VIP lounges (+64.4%), and parking (+10.5%). Diversification revenues (cargo, hotels, industrial) increased 26.7%.
- Cost Structure: The airport concession tax increased 73% to Ps. 262.3 million due to a statutory rate hike from 5% to 9%. Excluding the incremental tax effect, Adjusted EBITDA would have been Ps. 2,533 million (78.4% margin).
- Hotel Performance: NH Collection Terminal 2 occupancy rose to 88.4% with a 21.0% rate increase. Hilton Garden Inn occupancy reached 76.5% with a 25.5% rate increase.
Outlook, Risks, and Management Commentary
- Cybersecurity Incident: OMA reported a cybersecurity incident on October 18, 2024. Management states they are working with external advisors, have reinforced protocols, and are restoring services. As of the filing date, no material adverse impact on operations or financial position has been identified, though monitoring continues.
- Regulatory Recovery: Excess airport concession taxes paid (Ps. 101.3 million in 3Q24) will be recoverable through maximum tariff adjustments starting in January 2026.
- Investments: OMA inaugurated the expansion of the Durango International Airport terminal in September 2024, increasing capacity to 760,000 passengers annually.
- Derivatives: The company currently has no financial derivatives exposure.
- Forward-Looking Statements: Management cautions that future results may differ due to risks outlined in their Form 20-F, including economic conditions and regulatory changes.
Investor Verification Checklist
- Cybersecurity Impact: Verify if the October 2024 cybersecurity incident results in any future operational disruptions, data breach costs, or regulatory fines not yet quantified.
- Tax Rate Impact: Confirm the long-term effect of the 9% concession tax rate on future cash flows and the timeline for tariff recovery starting in 2026.
- Traffic Recovery: Monitor the trajectory of domestic passenger traffic, which declined 7.4%, to assess if the decline is structural or seasonal.
- Non-Aeronautical Growth: Validate the sustainability of the 18.9% growth in non-aeronautical revenues, particularly in VIP lounges and restaurants, as a hedge against traffic volatility.
- Cash Position: Review the Ps. 2,398 million cash balance against upcoming capital expenditure requirements for Master Development Plans (MDPs).