Grupo Aeroportuario del Sureste(ASR) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total passenger traffic growth slowed to nearly 4%, reaching a record high of 17.3 million travelers in Q2 2023 [8] - Revenues increased by 5% to MXN6 billion, driven by growth in aeronautical and non-aeronautical revenues in Mexico [11] - Consolidated EBITDA rose by 3% to MXN4.2 billion, with a decline in adjusted EBITDA margin by 140 basis points to 69% [14] Business Line Data and Key Metrics Changes - In Mexico, passenger traffic grew by 9%, with domestic travel up 17% and international traffic in low single digits [9] - Puerto Rico saw the fastest growth in passenger traffic at 15%, with domestic traffic up 12% and international traffic up 44% [10] - Colombia experienced a contraction of nearly 18% in total passenger traffic, with domestic and international passengers declining by 20% and 4%, respectively [10] Market Data and Key Metrics Changes - Mexico accounted for 74% of total revenues, while Puerto Rico and Colombia represented 16% and 10%, respectively [11] - The strong Mexican peso appreciated by 15% against the U.S. dollar and 18% against the Colombian peso, impacting revenue figures [10] Company Strategy and Development Direction - The company entered a joint business investment agreement to develop a private international airport in Bavaro, Dominican Republic, with an initial investment of $17.8 million [3] - The Bavaro International Airport is expected to serve 8 million passengers annually and is projected to begin operations in approximately three years [6][7] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in passenger traffic growth due to the suspension of two Colombian airlines and the impact of a strong peso [8][14] - The company maintains a robust balance sheet with cash and cash equivalents over MXN14 billion, indicating a solid financial position [15] Other Important Information - Shareholders approved an ordinary cash dividend of MXN9.93 per share and an extraordinary cash dividend of MXN10 per share to be paid in November [7] - The company opened 20 new commercial spaces in Mexico, four in Puerto Rico, and 44 in Colombia over the last 12 months [12] Q&A Session Summary Question: What is the target passenger capacity for the Bavaro airport and expected income? - The project aims for an 8 million passenger capacity, but it is too early to determine the expected income as operations are three years away from commencement [17][18] Question: What are the expectations regarding the Master Development Plan (MDP) and any changes in negotiations? - No significant changes have been observed in the MDP negotiations compared to previous years, with ongoing reviews of airport projects [19][20] Question: How will the ramp-up of operations at the Dominican Republic airport occur, and what is the competition like? - The ramp-up to 8 million passengers is expected to take between five to seven years, with competition from Punta Cana International Airport [22][23] Question: What is the outlook for traffic recovery in Colombia post airline suspensions? - Recovery in Colombia is not expected to be fast, with ongoing impacts from the suspension of two airlines [22][23] Question: What is the regulatory framework for the Bavaro airport joint venture? - The regulatory framework is a dual-till system, with the government having a say in specific tariffs, differing from regulations in Mexico and Colombia [25][28] Question: Have there been any impacts on consumption at the airports due to currency fluctuations? - No significant impacts on consumption have been observed, although the strong peso has affected revenue translations [30][31] Question: What is the expected capital expenditure for the final year of the MDP? - The expected capital expenditure for the final year of the MDP is around MXN600 million [37] Question: How has international traffic from the U.S. to Cancun been performing? - There has been a small increase in U.S. traffic compared to the previous year, with most growth coming from Canada [39]