Grupo Aeroportuario del Sureste(ASR) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Passenger traffic improved significantly, reaching nearly 14 million passengers in Q3 2021, only 1.4% below pre-pandemic levels of Q3 2019 [4] - Cash and cash equivalents increased to Ps.11 billion, more than doubling from December 2020 levels [7] - Revenues excluding construction rose 154% year-on-year to Ps.4.5 billion, achieving an 11% increase over pre-pandemic levels [9] - Consolidated EBITDA increased to Ps.2.2 billion, up from Ps.755 million in Q3 2020, reflecting an 18% increase compared to Q3 2019 [12] Business Line Data and Key Metrics Changes - Domestic traffic in Mexico was down only 9% compared to Q3 2019, improving from a 12% drop in the previous quarter [5] - Commercial revenues increased significantly across operations: over 210% in Mexico, 133% in Puerto Rico, and nearly 190% in Colombia [9] - Operating expenses, excluding construction costs, increased 31% year-on-year, but consolidated costs were down mid-single digits compared to Q3 2019 [10] Market Data and Key Metrics Changes - Domestic traffic in Colombia was only 4% below Q3 2019 levels, showing strong recovery [5] - Mexico accounted for 67% of total revenues excluding construction, while Puerto Rico and Colombia represented 22% and 11%, respectively [9] - The ongoing vaccination rollout in the U.S. is expected to contribute to the recovery of international traffic in Mexican operations [6] Company Strategy and Development Direction - The company aims to leverage its airport network to rebuild its passenger base in the long term, focusing on gradual recovery and managing cash and variable costs cautiously [14] - The company is committed to completing its capital expenditures of Ps.3.5 billion for the year in Mexico, with ongoing projects in Mérida and Cancun [13] - The company remains focused on improving commercial operations and exploring attractive investment opportunities post-pandemic [39] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the recovery of traffic, expecting to reach pre-pandemic levels by Q2 2022 [6][17] - The company is concerned about potential future COVID-19 waves but is preparing for a strong winter travel season [36] - Management noted that inflation and supply chain issues could impact planned investments, but they are committed to meeting their capital expenditure commitments [44] Other Important Information - The company refined its loan with BVA at Cancun Airport, extending its maturity by seven years [8] - Accounts receivables dropped 18% sequentially, mainly due to declines in Puerto Rico [8] Q&A Session Summary Question: Traffic recovery expectations for the second half of next year - Management expects normalized growth in each region if the pandemic situation stabilizes [17] Question: Details on the refinancing of debt with Santander - Refinancing was done over a three-year period, with no payments due next year [20] Question: Airport tariff increase implementation - Management confirmed that the 17% increase in tariffs is being implemented gradually [24] Question: Outlook for operating expenses normalization - Management anticipates operating expenses will return to 2019 levels once the situation normalizes, but inflation will be a factor [34] Question: Recovery of international traffic from Canada and Europe - Management noted that recovery is expected, with some airlines showing interest in increasing flights [36] Question: Impact of rising material costs on planned investments - Management acknowledged that rising construction costs could affect capital expenditures but remains committed to meeting obligations [44] Question: Commercial revenue expansion drivers - Management indicated that commercial revenues are still affected by passenger numbers, with some categories performing better than others [46]