Grupo Aeroportuario del Centro Norte(OMAB) - 2019 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - OMA reported a 15.2% increase in adjusted EBITDA for Q4 2019, with an adjusted EBITDA margin of 73.2% [6][28] - For the full year, adjusted EBITDA margin reached 73.5%, with a 2.3% decrease in costs for airport services and G&A [7][8] - Cash flow from operations for the year was MXN 3.7 billion, reflecting strong operational performance [9][29] Business Line Data and Key Metrics Changes - Aeronautical revenues increased by 10% in Q4 2019, driven by a 7.6% growth in passenger traffic [22] - Non-aeronautical revenues grew by 9.8%, with commercial revenues contributing significantly, increasing by 10.2% [22][23] - Diversification revenues rose by 7%, primarily from OMA Cargo and the Industrial Park [12][26] Market Data and Key Metrics Changes - Passenger traffic reached 5.9 million in Q4 2019, up 7.6%, with significant contributions from VivaAerobus and Volaris [10] - Total available seats increased by 8%, with key routes showing a combined growth of 2% in Q4 2019 compared to the previous year [11] Company Strategy and Development Direction - OMA is investing MXN 4.2 billion in the Monterrey International Airport expansion project, expected to increase annual capacity from 11.6 million to 16.5 million passengers [15][18] - The company is negotiating its 2021-2025 master development program, with total investments projected between MXN 14 billion and MXN 15 billion [19][37] Management's Comments on Operating Environment and Future Outlook - Management noted that the Mexico City airport is at full capacity, which may drive airlines to seek alternatives, benefiting OMA's airports [40][41] - The company aims to maintain its adjusted EBITDA margin around 73.5% while continuing to identify cost-cutting initiatives [33] Other Important Information - OMA has achieved 40 consecutive quarters of growth in both aeronautical and non-aeronautical revenues [9] - The company implemented 24 commercial initiatives in Q4 2019, contributing to a commercial occupancy rate of 97.2% [12] Q&A Session Summary Question: Expected adjusted EBITDA margin for the year and long-term targets - Management aims to maintain the adjusted EBITDA margin at 73.5% and seeks to identify further efficiency improvements [33] Question: Overall investment expectations for the next master development program - Total investment is expected to be between MXN 14 billion and MXN 15 billion, with potential modifications based on airline feedback [37][38] Question: Impact of Mexico City airport capacity constraints on growth - Management acknowledged saturation at the Mexico City airport, suggesting growth will come from larger planes and increased traffic at OMA's airports [40][41] Question: Expectations regarding maximum tariff negotiations - Management indicated it is too early to provide specific tariff levels, as many variables are involved [46] Question: Impact of long weekends on traffic - Management believes the impact will be marginal as their airports are not heavily exposed to leisure traffic [51] Question: Situation with host airlines and payment measures - Management confirmed no issues with timely payments from airlines, with different payment terms in place [56]