Grupo Aeroportuario del Sureste(ASR) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a 50% increase in revenues to MXN5.8 billion, marking a record high for any given quarter, driven by strong performance in both aeronautical and non-aeronautical revenues [7][12] - Adjusted EBITDA reached MXN4.1 billion, up 64% from 2019 levels, reflecting solid performance across key metrics [10][12] - Net majority income increased by 42% to MXN2.5 billion, compared to MXN1.7 billion in Q3 2021 and MXN1.3 billion in Q3 2019 [12] Business Line Data and Key Metrics Changes - Commercial revenue rose by 45%, with increases of 57% in Mexico, 20% in Colombia, and nearly doubling in Puerto Rico [7] - Commercial revenues per passenger were nearly MXN117, above MXN99 reported in Q3 2019, indicating strong performance in commercial activities [7][8] Market Data and Key Metrics Changes - Total passenger traffic grew over 24% year-on-year, exceeding Q3 2019 levels by nearly 23%, reaching a record of 17 million passengers [4] - Traffic in Colombia saw a stronger recovery of 37%, with domestic travel expanding in the low 30s and international travel in the high 50s [4][5] - Traffic from Canada remained at slightly over 65% of pre-pandemic levels, but is expected to resume winter seasonal levels from November through April [5][14] Company Strategy and Development Direction - The company is focused on maintaining strong liquidity and a healthy debt profile, with cash and cash equivalents nearly MXN14 billion and a net debt to EBITDA ratio of 0.1 times [13] - Continued investment in capital expenditures (CapEx) is planned, with nearly MXN550 million invested in Q3, primarily in Mexico [12][13] - The company is optimistic about the recovery of domestic tourism and expects to see continued growth in passenger traffic [18][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing recovery of travel demand, supported by pent-up demand and new routes [4][14] - The impact of inflation on demand was acknowledged, but management believes that strong travel trends will continue [14] - The company anticipates that Canadian traffic will normalize during the winter season, which could help offset any potential declines in demand due to inflation [14] Other Important Information - The company completed the first phase of terminal four expansion at Cancun Airport and is progressing with other expansion projects [12][13] - The impact of Hurricane Fiona was noted, which resulted in increased costs and a temporary airport closure [11][40] Q&A Session Summary Question: Outlook for domestic traffic recovery - Management noted that while some airports may not recover to 2019 levels until next year, tourism traffic has been recovering well [18][19] Question: Changes in the Master Development Plan (MDP) - Management confirmed that they are working on the proposal for the MDP and will include the potential impact of Tulum airport operations starting in 2024 [20][21] Question: Long-term opportunities for commercial revenue in Colombia - Management highlighted the impact of the Colombian peso devaluation but noted strong initiatives in Colombia to increase commercial revenue [22] Question: Maximum tariff and inflation impact - Management indicated that they do not expect to reach the maximum compliance due to current inflation conditions but do not foresee an impact on the next MDP [25] Question: Cash flow generation and CapEx commitments - Management confirmed strong cash flow generation and indicated that CapEx in Puerto Rico could be higher than the current year [28] Question: Cost of servicing in Puerto Rico - Management acknowledged significant increases in costs due to energy prices and the impact of Hurricane Fiona [40] Question: Expectations on international traffic trends - Management remains positive about international traffic recovery, particularly from Canada, which is expected to return to pre-pandemic levels [37]