Business context and reporting period
Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR; Southeast Airport Group) filed this Form 20-F for the fiscal year ended December 31, 2022. This is an annual filing, not a standalone fourth-quarter report. ASUR operates nine airports in southeastern Mexico, six in Colombia, and Luis Muñoz Marín International Airport in Puerto Rico. Financial statements are prepared under IFRS, in Mexican pesos (Ps.).
Key financial and operating metrics
| Metric | 2022 | Change vs. 2021 |
|---|---|---|
| Revenue | Ps.25,313.9 million | +34.8% |
| Aeronautical revenue | Ps.14,072.5 million | +49.6% |
| Non-aeronautical revenue | Ps.8,548.7 million | +37.2% |
| Construction-services revenue | Ps.2,692.7 million | -14.4% |
| Operating profit | Ps.14,698.1 million | +69.8% |
| Operating margin | 58.1% | 46.1% in 2021 |
| Net income | Ps.10,645.9 million | +66.4% |
| Net margin | 42.8% | 34.1% in 2021 |
| Net comprehensive financing loss | Ps.613.4 million | Ps.531.6 million loss in 2021 |
| Cash from operating activities | Ps.13,518.4 million | Ps.10,347.0 million in 2021 |
| Cash used in investing activities | Ps.2,547.0 million | Ps.3,427.6 million in 2021 |
| Cash used in financing activities | Ps.6,130.4 million | Ps.3,378.2 million in 2021 |
| Cash and cash equivalents at year-end | Ps.13,175.0 million | Ps.8,770.1 million in 2021 |
| Restricted cash at year-end | Ps.1,420.7 million | Ps.123.1 million in 2021 |
| Consolidated debt at year-end | Ps.15,204.8 million | Ps.13,779.5 million in 2021 |
Reported passenger traffic was approximately 66.3 million, up 34.4% from 2021. Traffic increased 35.6% in Mexico, 56.8% in Colombia and 6.5% in Puerto Rico. Cancun generated Ps.14,280.8 million of revenue, including construction services, or 56.4% of consolidated revenue; it accounted for 76.8% of Mexican passenger traffic.
Material changes versus the prior comparable period
- Recovery in traffic drove strong growth in aeronautical and commercial revenue. Passenger charges were 76.9% of aeronautical revenue and 42.8% of consolidated revenue.
- Construction revenue and related expense declined as investment activity at concessioned airports eased. These services are generally recognized at matching revenue and cost, so their decline affects reported revenue more than operating profit.
- Operating expenses rose 8.2%, slower than revenue. Technical-assistance fees increased 64.4% to Ps.643.9 million, and government concession fees increased 50.2% to Ps.1,424.1 million, largely reflecting higher activity and revenue.
- Net financing loss widened as foreign-exchange results shifted from a Ps.108.6 million gain in 2021 to a Ps.208.2 million loss in 2022, and interest expense increased. Higher interest income partly offset the change.
- Aerostar issued U.S.$200 million of 4.92% senior secured notes due 2035; it also renegotiated existing U.S.$50 million 6.75% notes. ASUR prepaid Ps.650 million of Cancun’s Santander loan.
- ASUR paid ordinary and extraordinary dividends totaling Ps.4,509 million, or Ps.15.03 per share, in June 2022.
Outlook, commentary, risks and unusual items
- Outlook: The filing gives no numerical earnings or revenue guidance. Management says it expects to fund investment and working-capital needs primarily from operating cash flow and available borrowing, and believes working capital is sufficient for current needs. Mexico’s current master development plans run through 2023; the filing does not state the final outcome of the next regulatory rate-setting process.
- Regulation and concentration: Mexican airport revenues are subject to per-airport maximum rates; 2022 regulated revenue was 96.6% of the amount ASUR was entitled to earn under those rates. Cancun and US-linked travel are important concentrations. Mexico remained FAA Category 2 at the filing date; a planned 2023 audit and potential regulatory reforms could affect routes, competition or traffic.
- Competition and airline exposure: Tulum’s planned airport and the Mayan Train could affect Cancun traffic. Viva Air ceased operations in February 2023 and Ultra Airlines in March 2023; ASUR disclosed amounts owed by them of Ps.12.5 million and Ps.9.2 million, respectively, as of March 31, 2023, not included in its doubtful-account allowance.
- Debt and rates: Floating-rate debt and higher interest rates could increase debt service. Aerostar’s debt is secured by its assets; the Mexican loans include leverage and interest-coverage covenants that can restrict dividends if breached.
- Unusual income and support: 2022 other income of Ps.346.2 million included court-related recoveries of Ps.300.4 million for aviation-fuel charges at LMM Airport and Ps.45.8 million related to rental-car agreements. Aerostar also received US federal pandemic grants; these reimbursements reduced related costs and are not recurring operating revenue.
- Legal and environmental matters: The Mexican employee profit-sharing tax appeal remains unresolved, with an estimated additional exposure of Ps.116.0 million if unsuccessful. Cancun’s appeal of a Ps.73 million COFECE fine remains pending. GDS-related recovery of land at Mérida Airport and Puerto Rico contamination investigation and remediation are also disclosed. Management says it does not expect the identified legal claims, individually or in aggregate, to materially affect consolidated results.
- Other risks: Exposure includes economic and currency volatility in Mexico and Colombia, hurricanes and other natural disasters, geopolitical or public-health shocks, cybersecurity or operational outages, concession compliance and termination, and the possibility that sustainability targets are not met. Hurricane Fiona temporarily suspended LMM Airport air travel in September 2022, but did not cause significant airport damage.
- Controls: Management and the independent auditor concluded that internal control over financial reporting was effective as of December 31, 2022. The auditor issued an unqualified opinion on the IFRS financial statements; compliance with Mexico’s regulated maximum rates was identified as a critical audit matter.
Important facts for investors to verify
- Reconcile the cash-flow narrative: the MD&A text cites operating cash flow of Ps.13,458.7 million, while the audited cash-flow statement reports Ps.13,518.4 million.
- Confirm debt maturity, currency, floating-rate exposure, security and covenant headroom, including Aerostar’s secured notes and Mexican bank loans.
- Track Mexican maximum-rate compliance and the outcome of the next master development plans and rate-setting cycle; the current plans expire December 31, 2023.
- Assess Cancun’s revenue concentration and the potential traffic effects of Tulum airport, the Mayan Train, FAA Category 2 status and airline financial distress.
- Monitor collection of the Viva Air and Ultra Airlines balances, the tax and COFECE appeals, the Mérida property dispute, and Puerto Rico environmental remediation.
- Check the sustainability and traffic updates against reported outcomes; the filing’s first-quarter 2023 passenger-growth references are inconsistent, citing both 19.2% and 9.2%.