Grupo Aeroportuario del Centro Norte(OMAB) - 2023 Q4 - Earnings Call Transcript

Financial Performance and Key Metrics Changes - OMA achieved record-breaking results in passenger traffic, revenues, adjusted EBITDA, and consolidated net income for the full year 2023, with adjusted EBITDA margin at 78.4% [4][10] - Aeronautical revenues grew by 27% and non-aeronautical revenues increased by 18% compared to 2022, leading to an adjusted EBITDA of MXN9.1 billion, a 28% increase [10] - Consolidated net income reached MXN5 billion, also reflecting a 28% increase from the previous year [10] - In Q4 2023, adjusted EBITDA grew 16% to MXN2.3 billion, with an adjusted EBITDA margin of 77.7% [13][21] Business Line Data and Key Metrics Changes - Aeronautical revenues in Q4 increased by 13% to MXN2.2 billion, driven by a 5.2% rise in passenger traffic [14][43] - Non-aeronautical revenues rose by 15%, with OMA Carga being a significant contributor due to increased tonnage handled [15] - Restaurant revenues surged by 38%, parking revenues increased by 10.4%, and VIP lounges saw a 25.6% rise, attributed to new openings and higher passenger traffic [19][43] Market Data and Key Metrics Changes - Monterrey airport was the primary contributor to passenger traffic growth, increasing by almost 22% in 2023, with significant traffic to the metropolitan area of Mexico City [9] - Total passenger traffic for the year reached a record 26.8 million, representing a 15% growth compared to 2022 [34] - In Q4, passenger traffic reached 6.8 million, a 5.2% increase year-over-year, with Monterrey contributing 96% of the total growth [38] Company Strategy and Development Direction - The company is focused on delivering shareholder value while committing to sustainability and operational excellence [12] - Significant investments were made in expanding capacity and diversifying activities, including the opening of new lounges and the construction of industrial warehouses [11] - The company is preparing for the MDP negotiation, aiming for optimized capital expenditures and efficiencies [51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from the Pratt & Whitney engine recall affecting two major airlines but sees opportunities in nearshoring and increased commercial revenue per passenger [37] - The company expects flat traffic performance for 2024 due to the impact of the engine recall [28] - Acapulco airport is recovering slowly, currently operating at 50% of pre-pandemic levels, with international flights expected to resume in mid-2024 [95] Other Important Information - OMA achieved airport carbon accreditation level 2 certification across all 13 airports, reflecting its commitment to sustainability [17] - Total debt at the end of the quarter was MXN10.7 billion, with a net debt to adjusted EBITDA ratio of 0.9 times [46] Q&A Session Summary Question: Expectations from MDP negotiation with new tariff regulation - Management is still working on the MDP and expects to present it at the end of next year, focusing on optimized capital expenditures [51] Question: Traffic performance outlook for 2024 - Management anticipates flat traffic due to the Pratt & Whitney recall affecting low-cost carriers [28] Question: Impact of new tariffs and discounts - Discounts were implemented in November and December, with inflationary increases applied in January [52][74] Question: Labor costs outlook - Current labor cost levels reflect fourth-quarter figures, with wage adjustments expected for 2024 [78] Question: New commercial initiatives - Management is exploring new commercial projects and renegotiating outlet contracts for better terms [60][98]