Business Context and Reporting Period
Company: Grupo Aeroportuario del Sureste, S.A. de C.V. (ASUR)
Reporting Period: Fourth Quarter (4Q) and Twelve Months ended December 31, 2002.
Business Overview: ASUR is a Mexican airport operator holding concessions for nine airports in southeastern Mexico, including Cancun, Merida, and Cozumel. The company is listed on the NYSE (ASR) and the Mexican Bolsa (ASUR). Financial figures are presented in constant Mexican pesos (Ps.) as of December 31, 2002.
Key Financial Metrics
Fourth Quarter 2002 Performance
- Total Revenues: Ps. 282.5 million (up 12.85% YoY).
- EBITDA: Ps. 134.8 million (up 22.34% YoY); Margin improved to 47.72%.
- Operating Profit: Ps. 51.0 million (up 69.31% YoY); Margin improved to 18.07%.
- Net Income: Ps. 53.7 million (up 365.22% YoY).
- Earnings Per ADS (US$): $0.1715 (up 365.22% YoY).
- Passenger Traffic: Total traffic increased 11.08% YoY (International +18.84%, Domestic +3.01%).
Twelve Months 2002 Performance
- Total Revenues: Ps. 1,240.6 million (up 0.81% YoY).
- EBITDA: Ps. 690.3 million (down 3.99% YoY); Margin declined to 55.64%.
- Operating Profit: Ps. 355.2 million (down 10.93% YoY); Margin declined to 28.63%.
- Net Income: Ps. 220.3 million (down 17.55% YoY).
- Earnings Per ADS (US$): $0.7034 (down 17.55% YoY).
- Passenger Traffic: Total traffic decreased 2.17% YoY.
Liquidity and Balance Sheet (as of Dec 31, 2002)
- Cash and Cash Equivalents: Ps. 496.8 million (down 46.5% from prior year).
- Total Assets: Ps. 11,283.4 million.
- Shareholders' Equity: Represents 95.46% of total assets.
- Total Liabilities: Represents 4.54% of total assets; primarily deferred liabilities.
- CAPEX: Ps. 260.6 million invested in 2002 for airport modernization.
Material Changes vs. Prior Period
Revenue Drivers
Commercial revenues were the primary growth driver, increasing 39.05% in 4Q02 and 56.50% for the full year. This was fueled by new duty-free stores, food and beverage outlets, and retail spaces opened in late 2001 and early 2002. Conversely, aeronautical revenues declined 4.18% for the full year due to reduced international traffic following the September 11, 2001 events, though they rebounded 9.99% in the fourth quarter.
Cost Structure
Operating costs rose 5.11% in 4Q02 and 6.44% for the full year. Key factors included a 25.49% increase in energy costs due to government-mandated rate hikes, higher maintenance costs for new commercial areas, and increased technical assistance fees linked to EBITDA growth.
Tax and Accounting Adjustments
Net income volatility was significantly influenced by accounting changes approved by auditors:
- Asset Tax: The three-year tax exemption expired on Dec 31, 2001. Q4 tax payments were Ps. 42.3 million.
- Deferred Tax Adjustments: A credit of Ps. 44.82 million was recognized due to the statutory reduction in the corporate income tax rate from 35% to 32%.
- Valuation Allowances: A Ps. 28.15 million credit was recorded for deferred tax assets, while a Ps. 14.13 million charge was recognized for deferred employee profit sharing and tax assets at specific airports (Huatulco, Tapachula, Minatitlan) due to uncertainty regarding realizability.
Airport-Specific Performance
While Cancun saw strong growth (Total traffic +15.50% in 4Q02), Cozumel and Huatulco experienced declines. Cozumel traffic dropped 9.31% in 4Q02 due to the lingering impact of 9/11 on North American tourism and flight suspensions by Aeroferinco. Huatulco traffic declined 8.33% in 4Q02, largely due to the closure of the Club Med resort, though a new hotel (Las Brisas) opened in December 2002.
Guidance, Risks, and Contingencies
Outlook and Guidance
The filing does not provide specific numerical guidance for 2003. Management expects the new Las Brisas hotel in Huatulco to become fully operational in Q1 2003, potentially aiding traffic recovery.
Risks and Contingencies
- Airline Payment Disputes: Four major Mexican airlines (AeroMexico, Mexicana, Aerolitoral, Aeromar) suspended payments of airport-specific tariffs since June 2001. The unpaid amount totals Ps. 9.8 million. Additionally, airlines extended payment deadlines for passenger fees, resulting in Ps. 41.0 million in receivables at year-end.
- Regulatory Risk: The Mexican Ministry of Communications and Transport regulates maximum rates per traffic unit. Compliance is reviewed annually.
- Forward-Looking Statements: The company notes that future expectations are subject to risks and actual developments may differ significantly.
Investor Verification Checklist
- Tax Impact: Verify the sustainability of the Ps. 44.82 million tax credit and the long-term impact of the new asset tax regime post-exemption.
- Airline Receivables: Monitor the resolution of the Ps. 9.8 million tariff dispute and the collection of the Ps. 41.0 million in delayed passenger fees from major carriers.
- Cozumel Recovery: Assess whether Cozumel traffic trends are stabilizing given the heavy reliance on North American tourists.
- Cash Flow: Review the 46.5% year-over-year decline in cash and cash equivalents to ensure liquidity remains sufficient for ongoing CAPEX and operations.
- Huatulco Turnaround: Confirm the operational status and traffic contribution of the new Las Brisas hotel in Q1 2003.