Grupo Aeroportuario del Sureste(ASR) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues increased by 14% year-on-year to just over MXN 7 billion in Q1 2024, with Mexico and Colombia showing mid-teen growth while Puerto Rico experienced low single-digit growth [7][8] - Consolidated EVA rose by 13% year-on-year to MXN 5.1 billion, with EBITDA growth across all regions, particularly in Mexico with a 15% increase [11] - Cash and cash equivalents reached nearly MXN 17 billion, up 21% from the same quarter last year, while total debt declined by 4% [11] Business Line Data and Key Metrics Changes - Mexico, accounting for 76% of total revenues, saw a 16% increase in revenues driven by mid-20s growth in aeronautical services [8] - Puerto Rico, which represented 14% of total revenues, posted nearly 2% revenue growth, with a 10% increase in non-aeronautical revenues offset by a 5% decline in aeronautical revenues [8] - Colombia, contributing 10% to revenues, experienced a mid-teen increase in revenues, benefiting from international traffic growth [9] Market Data and Key Metrics Changes - Passenger traffic reached a record high of 18.6 million, up 4% year-on-year, with Puerto Rico showing the strongest growth at nearly 12% [5] - Domestic traffic in Mexico was impacted by a reduction in air traffic movements at Mexico City Airport, which accounted for 45% of domestic tourist traffic in 2023 [6] - Colombia's traffic showed signs of recovery with a 9% growth in March, following a year-over-year decline of only 2% in Q1 2024 [7] Company Strategy and Development Direction - The company is focused on enhancing passenger experience and expanding commercial offerings, with plans to invest in capacity and infrastructure [13] - A significant CapEx program of MXN 29 billion over the next five years is aimed at supporting growth while balancing cash returns to shareholders [30] - The company is committed to sustainability, with ongoing projects related to water security and energy efficiency [55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from Pratt & Whitney engine issues and capacity reductions at Mexico City Airport, which are expected to impact domestic traffic [13] - The outlook for international traffic remains positive, particularly from the U.S. and Canada, although domestic traffic may see a slight decrease [23] - Management expressed confidence in the recovery of traffic in Colombia and normalization in Puerto Rico, anticipating continued growth throughout the year [36] Other Important Information - The company proposed an ordinary cash dividend of MXN 10 and an extraordinary cash dividend of MXN 10, payable in May and June respectively [12] - The company published its 2023 sustainability report, emphasizing its commitment to environmental initiatives [12] Q&A Session Summary Question: Cost control initiatives in Mexico - Management highlighted a 50% reduction in strategic TANF fees offsetting increased concession fees, with administrative costs rising due to a 20% minimum wage increase [15] Question: Update on Punta Cana situation - No updates were provided regarding the Dominican Republic's government situation, with ongoing legal procedures in place [15] Question: Impact of Mexico City Airport capacity restrictions - Management noted a 70% decrease in capacity at Mexico City Airport, resulting in a loss of nearly a million passengers compared to last year [18] Question: CapEx program disruptions - Management does not foresee disruptions to commercial revenues during the CapEx rollout, as major expansions will occur outside operational areas [20] Question: MDP tariff adjustments - Management confirmed that no adjustments were made in Q1 2024, with increases expected to take effect from April [23] Question: Traffic outlook for Puerto Rico and Colombia - Management expects normalization in traffic for both regions, with Colombia showing signs of recovery and Puerto Rico's growth expected to stabilize [36] Question: New investments outside Mexico - Currently, there are no new investment projects outside Mexico [51]