Business Context and Reporting Period
Company: Central North Airport Group (Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.), trading as OMA (NASDAQ: OMAB; BMV: OMA).
Reporting Period: Second Quarter 2018 (ended June 30, 2018).
Business Overview: OMA operates 13 international airports in nine states of central and northern Mexico, including major hubs in Monterrey and tourist destinations like Acapulco. The company also manages hotel services and freight logistics.
Key Financial Metrics
| Metric | Value / Change |
|---|---|
| Adjusted EBITDA | Increased 25.7% (Margin: 70.5%) |
| Net Income | Ps. 709 million (Increased 39.2%) |
| Earnings Per Share (EPS) | Ps. 1.79 (Increased 39.0%) |
| Earnings Per ADS | US$0.72 (Increased 26.2%) |
| Operating Income | Increased 31.4% (Margin: 52.2%) |
| Total Revenues | Increased 16.0% (Aeronautical +17.6%, Non-Aeronautical +11.3%) |
| Operating Costs & Expenses | Unchanged vs. prior year (Cost of services & G&A decreased 8.5%) |
| Net Debt to EBITDA | 0.70x (as of June 30, 2018) |
| Cash Balance | Ps. 1,624 million (as of June 30, 2018) |
| Operating Cash Flow (6 months) | Ps. 1,675 million (Increased 18.8%) |
Material Changes vs. Prior Period
- Revenue Growth: Driven by a 9.6% increase in total passenger traffic and tariff increases implemented in January 2018. Aeronautical revenue rose 17.6%, while non-aeronautical revenue grew 11.3%.
- Cost Efficiency: Cost of airport services and G&A expenses decreased 8.5% due to reduced payroll, contracted services, and minor maintenance. However, the airport concession tax rose 15.5% and the technical assistance fee rose 36.4%, keeping total operating expenses flat year-over-year.
- Passenger Traffic: Domestic traffic increased 10.6%, while international traffic grew 2.2%. Seat supply increased 11.3% year-over-year.
- Commercial Performance: Car rental revenue surged 55.0% and parking revenue grew 23.5%. Commercial space occupancy reached 98.5%.
Outlook, Commentary, and Risks
- Investments: Capital investments and major maintenance totaled Ps. 436 million in 2Q18, funded entirely by operating cash flow. Key projects included the completion of the new Acapulco terminal, construction in Reynosa, and expansions in Chihuahua, San Luis Potosi, and Tampico.
- Dividends: A cash dividend of Ps. 1,600 million was approved and paid in May 2018.
- Operational Updates: The new Acapulco terminal (capacity >1.3 million passengers/year) was inaugurated in May 2018. Hotel occupancy rates were impacted by maintenance at the NH Collection Terminal 2 Hotel, expected to conclude in 3Q18.
- Risks: The filing includes standard forward-looking statement disclaimers regarding risks such as regulatory changes, economic conditions, and operational uncertainties. The company notes it has no financial derivatives exposure.
Investor Verification Checklist
- Verify the sustainability of the 25.7% Adjusted EBITDA growth given the 15.5% increase in airport concession taxes.
- Confirm the timeline for the completion of maintenance at the NH Collection Terminal 2 Hotel and its impact on 3Q18 hotel revenue.
- Review the specific tariff adjustments implemented in January 2018 to understand the baseline for future aeronautical revenue.
- Assess the impact of the Ps. 1,600 million dividend payout on future liquidity and capital allocation plans.
- Monitor the execution of the Master Development Plan (MDP) projects, particularly the new terminals in Acapulco and Reynosa, for potential cost overruns.