Business Context and Reporting Period
Company: Southeast Airport Group (Grupo Aeroportuario del Sureste, S.A.B. de C.V.)
Filing Type: Form 6-K (Foreign Private Issuer)
Reporting Period: Fourth Quarter and Full Year ended December 31, 2018
Release Date: February 26, 2019
Operations: ASUR operates 16 airports across Mexico, Puerto Rico (Aerostar), and Colombia (Airplan). The company fully consolidated Aerostar results starting June 1, 2017, and Airplan results starting October 19, 2017.
Key Financial Metrics (4Q18 vs 4Q17)
| Metric | 4Q 2017 (Ps. Millions) | 4Q 2018 (Ps. Millions) | YoY Change |
|---|---|---|---|
| Total Revenue | 3,947.7 | 3,924.2 | (0.6)% |
| EBITDA | 1,937.8 | 2,459.8 | 26.9% |
| Net Income | 3,113.8 | 1,547.7 | (50.3)% |
| Majority Net Income | 2,262.5 | 1,458.6 | (35.5)% |
| Cash & Equivalents | 4,677.5 | 4,584.5 | (2.0)% |
| Net Debt | 12,966.6 | 9,915.9 | (23.5)% |
| Net Debt / LTM EBITDA | 1.7x | 1.1x | (40.7)% |
Note: All figures in Mexican Pesos (Ps.) unless otherwise noted. Figures are in thousands in source tables, converted to millions for summary.
Material Changes vs. Prior Period
- Revenue Composition: Total revenue remained flat (-0.6%) due to a 63.9% decline in construction revenues (Ps.574.9 million decrease), which was offset by growth in aeronautical services (+17.5%) and non-aeronautical services (+19.1%). Excluding construction revenues, total revenue increased 18.1%.
- Profitability: EBITDA grew 26.9% to Ps.2,459.8 million, driven by traffic growth and operational leverage. However, Net Income dropped 50.3% primarily because 4Q17 included a Ps.2,310.1 million one-time valuation gain from the Aerostar investment (IFRS 3) that did not recur in 4Q18.
- Operational Traffic: Total passenger traffic rose 14.8% to 13.1 million.
- Mexico: +7.5% (Cancun was the main driver).
- Puerto Rico: +30.4% (Recovery from Hurricane Maria).
- Colombia: +27.8%.
- Costs: Operating costs declined 73.8% YoY, largely due to a Ps.4,719.1 million impairment of fixed assets in Puerto Rico in 4Q17 related to Hurricane Maria. Excluding this impairment and construction costs, operating costs declined 11.5%.
- Debt Reduction: Total debt decreased to Ps.14,500.4 million from Ps.17,644.0 million, as the company paid down US$145.0 million in debt and Ps.3,230.4 million in Colombian peso debt during 2018.
Guidance, Outlook, and Risks
- Management Commentary: Management highlighted the successful recovery in Puerto Rico traffic and strong commercial revenue growth in Mexico (driven by Terminal 4 at Cancun). The company emphasized improved liquidity and a reduced leverage ratio (Net Debt/EBITDA of 1.1x).
- Recent Events: Mr. Jorge Hernandez de Leon was appointed acting CEO of Aerostar effective February 13, 2019.
- Accounting Adjustments: The filing notes amendments to the Cash Flow Statement regarding bank loans and interest paid in 4Q18 and FY18. While totals remain unchanged, specific line items were corrected (e.g., Interest paid in 4Q18 corrected to Ps.307.4 million from Ps.1,679.9 million).
- Risks: Forward-looking statements are subject to risks including regulatory changes in tariff structures (Mexico, Puerto Rico, Colombia), currency fluctuations (MXN, USD, COP), and potential impacts from natural disasters (as seen with Hurricane Maria).
Investor Verification Checklist
- One-Time Gains: Verify the impact of the Ps.2,310.1 million valuation gain in 4Q17 on Net Income comparisons; 4Q18 results are more reflective of recurring operations.
- Construction Revenue Volatility: Monitor the "Construction Revenues" line item, which fluctuates significantly based on capital expenditure timing and IFRIC 12 accounting rules, distorting total revenue growth.
- Debt Profile: Confirm the currency mix of debt (50.6% USD, 31.9% MXN, 17.9% COP) and exposure to interest rate changes, particularly for Colombian loans tied to DTF rates.
- Amended Cash Flow: Review the corrected Cash Flow Statement figures for bank loans and interest payments to ensure accurate liquidity analysis.
- Commercial Revenue Per Passenger: Track the divergence in commercial revenue per passenger across regions (Mexico +7.6%, Puerto Rico -6.0%, Colombia -0.1%) to assess non-aeronautical monetization efficiency.