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: Second Quarter (2Q) and First Half (1H) ended June 30, 2015
Business Overview: ASUR operates nine airports in southeast Mexico (including Cancún) and holds a 50% joint venture stake in Aerostar Airport Holdings, operator of San Juan, Puerto Rico's airport.
Key Financial Metrics (2Q15 vs. 2Q14)
| Metric | 2Q15 (Ps. Millions) | 2Q14 (Ps. Millions) | % Change |
|---|---|---|---|
| Total Revenues | 2,120.43 | 1,340.63 | 58.17% |
| EBITDA | 1,129.26 | 873.78 | 29.24% |
| Operating Profit | 1,012.85 | 761.06 | 33.08% |
| Net Income | 732.90 | 554.75 | 32.11% |
| Earnings Per Share (Ps.) | 2.4430 | 1.8492 | 32.11% |
| Earnings Per ADS (US$) | 1.5575 | 1.1789 | 32.11% |
Operational Metrics:
- Total Passenger Traffic: 6.58 million (Up 14.27% YoY)
- Commercial Revenue per Passenger: Ps. 81.75 (Up 11.94% YoY)
- EBITDA Margin: 53.26% (Down from 65.18% in 2Q14)
- Operating Margin: 47.77% (Down from 56.77% in 2Q14)
Material Changes vs. Prior Period
Revenue Drivers: The 58.17% revenue increase was driven by a 14.27% rise in passenger traffic and a 1,058.67% surge in construction services revenue. Construction revenue increased due to higher capital expenditures recognized under IFRIC 12; however, this is offset by equal construction costs, resulting in no net impact on EBITDA but diluting the EBITDA margin.
Expense Increases: Total operating costs rose 91.10% YoY. Key drivers included:
- Construction costs: +1,058.67%
- Concession fees to the Mexican government: +21.08%
- Technical assistance fees: +29.24%
Foreign Exchange Impact: A Ps. 30.5 million foreign exchange loss occurred in 2Q15 due to a 2.04% depreciation of the Mexican peso against the U.S. dollar, contrasting with a gain in 2Q14.
Outlook, Risks, and Liquidity
Liquidity and Debt:
- Cash and cash equivalents as of June 30, 2015: Ps. 3,172.23 million (Up 11.10% from year-end 2014).
- Total bank debt: Ps. 3,390.76 million.
- Shareholders' equity: Ps. 18,804.19 million (77.09% of total assets).
Debt Restructuring: On July 17, 2015, ASUR amended its US$215.0 million bank loan facility for Cancún Airport. The maturity was extended from 2018 to 2022, with semi-annual amortization beginning in 2018. Additionally, lenders committed to an extra US$85.0 million in loans available for drawdown until September 2015.
Capital Expenditures: ASUR invested Ps. 389.49 million in 2Q15 and Ps. 543.13 million in 1H15 for airport modernization.
Risks: The filing notes standard forward-looking statement risks, including the impact of peso depreciation on foreign currency liabilities and the regulatory environment governing tariff rates.
Investor Verification Checklist
- Construction Revenue Impact: Verify the non-cash nature of the 1,058% construction revenue increase and its dilutive effect on EBITDA margins.
- Currency Exposure: Assess the impact of continued peso depreciation on the US$-denominated debt service and foreign exchange losses.
- Debt Maturity Profile: Confirm the terms of the July 2015 loan amendment extending maturity to 2022 and the availability of the additional US$85 million credit line.
- Passenger Growth Sustainability: Evaluate the 14.27% YoY traffic growth, particularly the 15.30% increase at Cancún, against historical trends.
- Regulatory Tariffs: Monitor the Mexican Ministry of Communications and Transportation's setting of maximum rates, which accounted for 62.05% of total income in 1H15.