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ASUR 4Q18 Passenger Traffic Increased 7.5% YoY in Mexico, 30.4% in Puerto Rico and 27.8% in Colombia

MEXICO CITY, Feb. 25, 2019 /PRNewswire/ -- Grupo Aeroportuario del Sureste, S.A.B. de C.V.  (NYSE: ASR; BMV: ASUR) (ASUR), a leading international airport group with operations in Mexico, the U.S., and Colombia, today announced results for the three-and twelve-month periods ended December 31, 2018.

4Q18 Highlights1

  • Passenger traffic in Mexico rose 7.5% YoY, reflecting increases of 12.3% and 3.0% in domestic and international traffic, respectively. Cancun Airport was the main traffic driver.
  • Traffic in Puerto Rico (Aerostar) rose 30.4% YoY, driven by increases of 29.9% in domestic traffic and 34.9% in international traffic. The recovery in total passenger traffic reflects the impact of Hurricane Maria, which hit the island on September 21, 2017.
  • Traffic in Colombia (Airplan) increased 27.8% YoY, reflecting growth of 30.7% in domestic traffic and 12.6% in international traffic.
  • Consolidated commercial revenues per passenger reached Ps.95.6.
  • Consolidated EBITDA rose 26.9% YoY, reaching Ps.2,459.8 million.
  • Cash position at year-end was Ps.4,584.5 million. Net Debt to LTM EBITDA stood at 1.1x, reflecting the consolidation of Puerto Rico (Aerostar) and Colombia (Airplan).

4Q18 Earnings Call

Date & Time:

Tuesday, February 26, 2019 at 10:00 AM US ET; 9:00 AM CT

Dial-in: 1-800-239-9838 (US & Canada); 1-323-794-2551 (International & Mexico). Access Code: 7821007.

Replay: Tuesday, February 26, 2018 at 1:00 PM US ET, ending at 11:59 PM US ET on March 5, 2019. Dial-in number: 1-844-512-2921 (US & Canada) 1-412-317-6671 (International & Mexico); Access Code 7821007.

 

Table 1:  Financial & Operational Highlights 1




Fourth Quarter

% Var


2017

2018

Financial Highlights




Total Revenue

3,947,669

3,924,232

(0.6)

Mexico

2,813,545

2,636,719

(6.3)

San Juan

652,066

858,436

31.6

Colombia

482,058

429,077

(11.0)

Commercial Revenues per PAX

95.4

95.6

0.2

Mexico

103.7

111.6

7.6

San Juan

130.0

122.2

(6.0)

Colombia

35.3

35.2

(0.1)

EBITDA

1,937,770

2,459,804

26.9

Net Income

3,113,847

1,547,748

(50.3)

Majority Net Income

2,262,511

1,458,592

(35.5)

Earnings per Share (in pesos)

7.5417

4.8620

(35.5)

Earnings per ADS (in US$)

3.8378

2.4741

(35.5)

Capex

766,160

266,516

(65.2)

Cash & Cash Equivalents

4,677,454

4,584,507

(2.0)

Net Debt

12,966,576

9,915,874

(23.5)

Net Debt/ LTM EBITDA

1.7

1.1

(40.7)

Operational Highlights




Passenger Traffic




Mexico

7,522,050

8,088,897

7.5

San Juan

1,542,093

2,011,106

30.4

Colombia

2,321,077

2,966,105

27.8

1 Unless otherwise stated, all financial figures discussed in this announcement are unaudited, prepared in accordance with International Financial Reporting Standards (IFRS), including application of IFRS 9 and 15 that came into force in 2018, and represent comparisons between the three- and twelve-month periods ended December 31, 2018, and the equivalent three- and twelve-month periods ended December 31, 2017.  On May 26, 2017, ASUR increased its share ownership in Aerostar to 60% from its prior 50% ownership. Accordingly, starting June 1, 2017, ASUR began to fully consolidate Aerostar results on a line by line basis, while until then, results were accounted for by the equity method. Furthermore, starting October 19, 2017, ASUR began to consolidate results of Airplan in Colombia. All figures in this report are expressed in Mexican pesos, unless otherwise noted. Tables state figures in thousands of pesos, unless otherwise noted. Passenger figures for Mexico and Colombia exclude transit and general aviation passengers, unless otherwise noted. Commercial revenues include revenues from non-permanent ground transportation and parking lots. All U.S. dollar figures are calculated at the exchange rate of US$1.00 = Mexican Ps. 19.6512 (source: Diario Oficial de la Federacion de Mexico) while Colombian peso figures are calculated at the exchange rate of COL$165.2900 = Ps. 1.00 Mexican pesos (source:Investing). Definitions for EBITDA, Adjusted EBITDA Margin, Majority Net Income can be found on page 17 of this report. 

Passenger Traffic

ASUR's total passenger traffic in 4Q18 rose 14.8% YoY to 13.1 million passengers, reflecting increases of 7.5% in traffic in Mexico, 30.4% in Puerto Rico, and 27.8% in Colombia. 

Passenger traffic growth of 7.5% in Mexico reflects increases of 12.3% and 3.0% in domestic and international traffic, respectively. Cancun was the main driver behind traffic growth, with increases of 14.4% and 3.4% in domestic and international traffic, respectively.  The majority of ASUR's other Mexican airports also contributed to higher traffic.

Traffic in Puerto Rico increased 30.4% YoY, recovering following the impact of Hurricane Maria, which hit the island in September 2017. Domestic traffic increased 29.9% YoY while international traffic rose 34.9%.

Colombia reported a 27.8% YoY increase in total traffic driven by growth of 30.7% and 12.6% in domestic and international traffic, respectively.

Tables with detailed passenger traffic information for each airport can be found on page 19 of this report.

Table 2: Passenger Traffic Summary







Fourth Quarter

% Chg.


Fiscal Year

% Chg.


2017

2018


2017

2018

Total Mexico

7,522,050

8,088,897

7.5


31,052,569

33,247,315

7.1

- Cancun

5,605,403

6,012,727

7.3


23,601,509

25,202,016

6.8

- 8 Other Airports

1,916,647

2,076,170

8.3


7,451,060

8,045,299

8.0

Domestic Traffic

3,668,922

4,118,536

12.3


14,310,728

15,843,617

10.7

- Cancun

1,968,462

2,251,623

14.4


7,808,368

8,777,510

12.4

- 8 Other Airports

1,700,460

1,866,913

9.8


6,502,360

7,066,107

8.7

International traffic

3,853,128

3,970,361

3.0


16,741,841

17,403,698

4.0

- Cancun

3,636,941

3,761,104

3.4


15,793,141

16,424,506

4.0

- 8 Others Airports

216,187

209,257

(3.2)


948,700

979,192

3.2

Total San Juan, Puerto Rico1

1,542,093

2,011,106

30.4


8,407,404

8,373,679

(0.4)

Domestic Traffic

1,383,363

1,797,007

29.9


7,389,095

7,469,211

1.1

International traffic

158,730

214,099

34.9


1,018,309

904,468

(11.2)

Total Colombia2

2,321,077

2,966,105

27.8


10,051,129

10,647,523

5.9

Domestic Traffic

1,946,733

2,544,552

30.7


8,660,472

9,061,166

4.6

International traffic

374,344

421,553

12.6


1,390,657

1,586,357

14.1

Total traffic

11,385,220

13,066,108

14.8


49,511,102

52,268,517

5.6

Domestic Traffic

6,999,018

8,460,095

20.9


30,360,295

32,373,994

6.6

International traffic

4,386,202

4,606,013

5.0


19,150,807

19,894,523

3.9


Note: Passenger figures for Mexico and Colombia exclude transit and general aviation passengers, while Puerto Rico includes transit passengers and general aviation.


1 On May 26, 2017, ASUR increased its ownership stake in Aerostar, operator of Luis Muñoz Marín (LMM) Airport in Puerto Rico from 50% to 60%. ASUR began fully consolidating line by line Aerostar's operations starting June 1, 2017. For comparison purposes, this table includes traffic figures for LMM Airport for 4Q18 and 4Q17.


2 On October 19, 2017, ASUR began to consolidate Airplan's operations (Colombia). For comparison purposes, this table includes traffic figures for Airplan for 4Q17 and 4Q18.

Review of Consolidated Results

In May 2017, ASUR increased its share ownership in Aerostar, operator of LMM Airport in Puerto Rico, to 60% from its prior 50% ownership. Accordingly, until May 31, 2017, ASUR's ownership in Aerostar was accounted for by the equity method, while starting June 1, 2017, ASUR began to fully consolidate Aerostar results on a line by line basis. In addition, on October 19, 2017, ASUR acquired a 92.42% ownership stake in Airplan, which operates six airports in Colombia, and starting on that date, ASUR began to fully consolidate Airplan's operations on a line by line basis. On May 25, 2018, ASUR acquired a 7.58% ownership stake in Airplan, bringing its total share ownership in Airplan to 100.0%.

 

Table 3: Summary of Consolidated Results


Fourth Quarter

% Chg.


Fiscal Year

% Chg.


2017

2018


2017

2018

Total Revenues

3,947,669

3,924,232

(0.6)


12,589,818

15,410,241

22.4

Aeronautical Services

1,896,499

2,227,777

17.5


6,484,219

8,942,910

37.9

Non-Aeronautical Services

1,151,103

1,371,265

19.1


4,261,383

5,531,557

29.8

Total Revenues Excluding Construction Revenues

3,047,602

3,599,042

18.1


10,745,602

14,474,467

34.7

Construction Revenues 1

900,067

325,190

(63.9)


1,844,216

935,774

(49.3)

Total Operating Costs & Expenses

7,372,116

1,931,169

(75.6)


11,112,985

7,765,909

(31.3)

Other Income


134,637

n/a



134,637

n/a

Operating Profit

(3,424,447)

2,127,700

(162.1)


1,476,833

7,778,969

426.7

Operating Margin

(86.7%)

54.22%

14097 bps


11.7%

50.5%

3875 bps

Adjusted Operating Margin 2

(112.4%)

59.12%

17148 bps


13.7%

53.7%

4000 bps

EBITDA

1,937,770

2,459,804

26.9


7,413,527

9,553,635

28.9

EBITDA Margin

49.09%

62.68%

1360 bps


58.9%

62.0%

311 bps

Adjusted EBITDA Margin 3

63.58%

68.35%

476 bps


69.0%

66.0%

(299 bps)

Net Income

3,113,847

1,547,748

(50.3)


6,750,165

5,119,806

(24.2)

Majority Net Income

2,262,511

1,458,592

(35.5)


5,834,484

4,987,601

(14.5)

Earnings per Share

7.5417

4.8620

(35.5)


19.4483

16.6253

(14.5)

Earnings per ADS in US$

3.8378

2.4741

(35.5)


9.8967

16.6253

68.0









Total Commercial Revenues per Passenger 4

95.4

95.6

0.2


102.8

96.9

(5.7)

Commercial Revenues

1,053,171

1,259,118

19.6


3,877,529

5,099,979

31.5

Commercial Revenues from Direct Operations per Passenger 5

17.6

16.5

(6.7)


18.6

17.7

(4.6)

Commercial Revenues Excl. Direct Operations per Passenger

77.8

79.2

1.7


84.2

79.2

(6.0)


1 Construction revenues for Airplan in 4Q18 and 4Q17 include the actual construction revenues which is equal to the construction cost of Ps.82.6 million and Ps.241.6 million respectively, and an estimate to the downside of income derived from the valuation of the intangible to present value (construction income) of Ps.102.7 million and Ps.54.3 million, respectively, according to IFRIC 12.


2 Adjusted Operating Margin excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets in Mexico, and is equal to operating profit divided by total revenues excluding construction services revenues.


3 Adjusted EBITDA Margin excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets in Mexico, and is calculated by dividing EBITDA by total revenues excluding construction services revenues.


4 Passenger figures include transit and general aviation passengers for Mexico, Puerto Rico, and Colombia.


5 Represents ASUR's operations in convenience stores.

Consolidated Revenues

Consolidated Revenues for 4Q18 declined 0.6% YoY, or Ps.23.4 million to Ps.3,924.2million, mainly driven by a 63.9%, or Ps.574.9 million, decline in revenues from construction services. This was mainly due to a decrease in construction revenues in Colombia, as well as lower construction revenues in Mexico and Puerto Rico as a result of lower capital expenditures and other investments in concessioned assets during the period.

This more than offset the following increases:

  • 17.5% in revenues from aeronautical services to Ps.2,227.8 million. Mexico contributed with Ps.1,482.4 million in revenues from aeronautical services in 4Q18, while Puerto Rico and Colombia contributed with Ps.403.1 million and Ps.342.3 million, respectively; and
  • 19.1% in revenues from non-aeronautical services to Ps.1,371.3 million, principally reflecting the 19.6% increase in commercial revenues. Mexico contributed with Ps.1,016.1 million in revenues from non-aeronautical services, while Puerto Rico and Colombia contributed with Ps.248.2 million and Ps.106.9 million, respectively.

Excluding revenues from construction services, which are deducted as costs under IFRS accounting standards, total revenues would have increased 18.1% YoY to Ps.3,599.0 million. Total revenues excluding revenues from construction services in Puerto Rico and Colombia in 4Q18 represented 18.1% and 12.5%, respectively, of ASUR's consolidated revenues excluding revenues from construction services.

Commercial Revenues in 4Q18 increased 19.6% YoY to Ps.1,259.1 million, mainly reflecting the 14.8% increase in total passenger traffic. Commercial revenues in Mexico rose 15.6% to Ps.906.5 million, mainly driven by increases in Duty Free, Food and Beverages, Retail, and Car Rentals, among others, principally reflecting the opening of Terminal 4 at Cancun Airport during 4Q17. Likewise, Puerto Rico reported an YoY increase of 22.6% to Ps.245.7 million in commercial revenues, and Colombia an increase of 56.7% to Ps.106.9 million.  

Commercial Revenues per Passenger were relatively stable at Ps.95.6 in 4Q18. Mexico contributed with commercial revenues per passenger of Ps.111.6 in 4Q18, Puerto Rico with Ps.122.2, and Colombia with Ps.35.2. During the period, commercial revenues per passenger increased 7.6% in Mexico and declined 6.0% in Puerto Rico and 0.3% in Colombia.  

Consolidated Operating Costs and Expenses

Consolidated Operating Costs and Expenses, including construction costs, for 4Q18 declined by 73.8% YoY, or Ps.5,440.9 million, to Ps.1,931.2 million. Excluding an impairment in fixed-assets in Puerto Rico in 4Q17 of Ps.4,719.1 million (equivalent to US$240.0 million) as a result of Hurricane Maria, costs and expenses declined by 27.2% or Ps.721.9 million. Excluding construction costs, operating costs and expenses declined by 11.5% or Ps.195.4 million.

In Puerto Rico, operating costs and expenses excluding construction costs declined 44.4%, or Ps.313.1 million, mainly as a result of: i) a Ps.198.7 million (US$10.4 million) loss in fixed assets reflecting the damages arising from Hurricane Maria, ii) a Ps.98.9 million reduction in the maintenance provision as per IFRIC12 in 4Q18, and iii) the recognition of Ps.98.8 million in amortization of the intangible asset resulting from the valuation of the investment in Aerostar in 4Q17, compared to Ps.44.8 million in 4Q18.

Mexico reported an 11.0%, or Ps.82.7 million, increase in operating costs and expenses excluding construction costs, principally as a result of increases in maintenance, energy, and security expenses. Higher cost of sales from the opening of stores directly operated by ASUR in Terminal 4 of Cancun Airport and professional fees in connection with diverse projects also contributed to the increase in costs.

Colombia reported an increase of 73.2%, or Ps.175.5 million, operating costs and expenses excluding construction costs composed of: i) Ps.159.3 million in cost of services, resulting from a Ps.199.7 million increase in the maintenance provision for the future replacement of fixed assets as of December 31, 2018 as per IFRIC12, partially offset by a Ps.45 million decline in the provision for uncollectible accounts, ii)  Ps.0.8 million in technical assistance costs, iii) concession costs of Ps.24.2 million, partially offset be a decline of Ps.149.2 million in amortization of the concession (includes Ps.28.6 million from the recognition of the intangible asset resulting from the valuation of Airplan under IFRS 3 and Ps.122.2 million in initial amortization of complementary works, offset by the decline in the accumulated amortization for committed works).

Cost of Services rose by 9.0%, or Ps.72.1 million. In Mexico, cost of services increased 3.9% YoY, or Ps.14.9 million, reflecting higher maintenance expenses from the opening of Terminal 4 in Cancun airport, along with higher cost of sales from convenience stores directly operated by ASUR. Increased energy, security, and maintenance expenses also contributed to the increase in cost of services. Cost of snull