Grupo Aeroportuario del Centro Norte(OMAB) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2024, total passenger traffic reached 6.5 million, a decrease of 2.4% compared to the same quarter last year [13] - Adjusted EBITDA was MXN2.2 billion with an adjusted margin of 73.3%, while total aeronautical and non-aeronautical revenues grew 1.1% to MXN2.9 billion [20][23] - Consolidated net income increased by 1.5% to MXN1.3 billion compared to Q2 2023 [40] Business Line Data and Key Metrics Changes - Aeronautical revenues decreased by 2.5%, primarily due to a 4.3% decline in domestic passenger traffic, partially offset by a 12.4% growth in international passenger traffic [36][90] - Non-aeronautical revenues increased by 13.8%, driven by VIP Lounges, Parking, and Restaurants [20][31] - Commercial revenues grew by 11.9%, with significant contributions from VIP Lounges and Parking [20][31] Market Data and Key Metrics Changes - International passenger traffic increased by 12% compared to Q2 2023, with Monterrey airport showing significant growth on routes to Atlanta, Las Vegas, Toronto, and Orlando [7][8] - The occupancy rate of commercial space stood at 95.3% at the end of the quarter [32] Company Strategy and Development Direction - The company is focusing on expanding its airport as a key logistics hub, with plans to increase cargo warehouse capacity by nearly 50% [16] - OMA is actively working on expanding and remodeling terminal buildings across several airports, reflecting a commitment to enhancing facilities and services [18] Management Comments on Operating Environment and Future Outlook - Management noted that the Pratt & Whitney engine recall affected traffic, particularly on routes like Monterrey to Cancun, but expects a quick recovery as the issue fades [5][30] - The company anticipates a low-single-digit decrease in traffic for the second half of the year due to the ongoing effects of the Pratt & Whitney issue [58] Other Important Information - The concession tax increased by 71% to MXN239.3 million due to a rate increase from 5% to 9% on revenues generated by airport concessions [21] - Cash generated from operating activities in Q2 amounted to MXN1 billion, with total debt at MXN10.9 billion and a net debt to adjusted EBITDA ratio of one times [93] Q&A Session Summary Question: Expectations for traffic in the second half of the year - Management expects a low-single-digit decrease in traffic due to the Pratt & Whitney issue [58] Question: Reason for traffic decline on the Monterrey-Cancun route - The decline was primarily due to reduced capacity by some carriers operating that route, which was significantly affected by the Pratt & Whitney issue [30] Question: Impact of international passengers on commercial revenues - The increase in commercial revenues is attributed to overall strategy rather than solely international passenger growth [78] Question: Compliance with maximum tariff - The company is close to 99.3% compliance with maximum tariff at this point [69] Question: Plans for international expansion - The company is always looking for international expansion opportunities but is not currently involved in any tender bidding processes [66]