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01/10 21:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presented strong financial performance with a 19% increase in total revenues and a 23% rise in EBITDA, indicating robust operational health. Despite competitive pressures and some uncertainties in international traffic, the company remains optimistic about capacity improvements in Mexico City. The Q&A section highlighted management's confidence in overcoming current challenges, such as the Pratt & Whitney issue, and the potential for increased shareholder returns. The lack of specific shareholder return plans slightly tempers the outlook, but overall, the positive financials and optimistic guidance suggest a positive stock reaction.
Total Revenues MXN 7.4 billion, up 19% year-on-year, driven by strong performance across all regions, particularly a 30% increase in Colombia's revenue.
Net Majority Income MXN 13.6 billion, up 33% year-on-year, supported by resilient operational performance and a foreign exchange gain of MXN 2 billion.
Consolidated EBITDA Over MXN 5 billion, up 23% year-on-year, with EBITDA margin improving 200 basis points to 69.7%.
Total Expenses Increased 13% year-on-year, with costs in Mexico up 12% due to increased concession fees and minimum wages.
Capital Expenditure MXN 2.5 billion for the quarter, accounting for half of the full year total of MXN 4.4 billion, focused on key infrastructure projects.
Commercial Revenue per Passenger MXN 130, up in the high single digits year-on-year, with growth across all markets.
Passenger Traffic Growth in Colombia: Colombia remained our strongest performance market with passenger traffic increasing in the mid-teens year-on-year, supported by the favorable comps following the suspension of 2 local carriers in early 2023.
Passenger Traffic Growth in Puerto Rico: Puerto Rico maintained its positive trend with total traffic up nearly 10%, supported by a strong growth in international traffic, up 29%, while domestic traffic was up 7%.
Commercial Offerings Expansion: As part of the strategy to expand commercial offerings, we opened 45 new commercial spaces over the last 12 months. This included 12 locations in Mexico, 5 in Puerto Rico and 28 in Colombia.
Revenue Growth: Total revenues for the quarter increased 19% year-on-year to MXN 7.4 billion, reflecting a strong performance across all 3 regions.
EBITDA Growth: Consolidated EBITDA was up 23% year-on-year to over MXN 5 billion in the quarter, while the adjusted EBITDA margin improved 200 basis points to 69.7%.
Capital Expenditure: Capital expenditure accelerated, reaching MXN 2.5 billion and accounting for half of the full year of total MXN 4.4 billion in 2024.
Infrastructure Investments: We expect investments to gradually ramp up CapEx through this year as we advance in the key infrastructure projects, including the construction and expansion of Terminal 1 at Cancun Airport with estimated completion in 2026.
Passenger Traffic Risks: Passenger traffic was flat year-over-year, with a decline of 0.3% in Q4 2024. Weaker traffic in Mexico, down 8%, is a concern, particularly due to ongoing Pratt & Whitney engine restrictions and air traffic capacity constraints at Mexico City Airport.
Supply Chain Challenges: The initial ramp-up phase of the new Tulum Airport is impacting Cancun Airport, which is expected to lose 1.7 million passengers this year. This could affect overall traffic and revenue.
Regulatory Issues: An 80% increase in concession fees mandated by the Mexican government and a 20% increase in minimum wages are driving up costs, which could impact profitability.
Economic Factors: The depreciation of the Mexican peso against the U.S. dollar has led to increased costs in Puerto Rico and has created foreign exchange gains, which may not be sustainable.
Competitive Pressures: International traffic from key markets such as Europe, Canada, and the U.S. has seen declines, indicating potential competitive pressures affecting revenue generation.
Passenger Traffic Growth: Expect traffic trends to normalize in the first quarter towards sustainable levels of 2023.
Commercial Offerings Expansion: Opened 45 new commercial spaces over the last 12 months, including 12 in Mexico, 5 in Puerto Rico, and 28 in Colombia.
Capital Expenditure: Capital expenditure accelerated to MXN 2.5 billion in Q4 2024, with total for the year at MXN 4.4 billion.
Infrastructure Projects: Key projects include the construction and expansion of Terminal 1 at Cancun Airport, expected completion in 2026, and Terminal 4 by 2028.
Operational Improvements: Terminal 2 improvements expected post-completion of Terminal 1 to alleviate bottlenecks.
Revenue Growth: Total revenues for Q4 increased 19% year-on-year to MXN 7.4 billion.
EBITDA Margin: Adjusted EBITDA margin improved 200 basis points to 69.7%.
Net Majority Income: Net majority income for the year rose 33% year-on-year to MXN 13.6 billion.
Debt to EBITDA Ratio: Debt to last 12 months adjusted EBITDA remains at negative 0.3x.
Future Traffic Expectations: Expect normalization of passenger traffic at Cancun and Tulum airports by 2026.
Shareholder Return Plan: The company has a robust balance sheet with cash and cash equivalents over $1 billion, indicating potential for future shareholder returns. However, no specific share buyback program or dividend program was mentioned during the call.
The earnings call reveals mixed signals: strong revenue growth in Colombia and positive cash position are offset by increased expenses, declining EBITDA, and weak traffic in Mexico. Q&A highlights uncertainties, such as the lack of clarity on the URW acquisition and traffic challenges. The strategic rationale for the acquisition is positive, but the lack of specific financial guidance and weak domestic traffic in Mexico balance out the optimism. Overall, the sentiment is neutral given the mixed performance and uncertainties, leading to a likely neutral stock price movement.
The earnings call and Q&A session reveal a mix of positive and negative factors. Traffic growth in Puerto Rico is strong, but normalization in Colombia and capacity issues in Mexico City present challenges. The uncertainty about lifting restrictions and the impact of FX on revenues are concerns. The company's cautious approach to dividend payments and new debt for tax expenses add to the mixed outlook. Overall, these elements balance each other out, leading to a neutral sentiment.
The earnings call presents a mixed picture: strong financial performance, improved EBITDA margin, and a share buyback program are positives. However, competitive pressures, regulatory issues, and traffic declines in key regions like Mexico and the U.S. pose challenges. The Q&A reveals some uncertainties, particularly around CapEx impacts and commercial revenue expectations. Despite optimistic guidance and shareholder returns, the lack of clarity and operational challenges balance the positives, leading to a neutral stock price prediction.
The earnings call presented strong financial performance with a 19% increase in total revenues and a 23% rise in EBITDA, indicating robust operational health. Despite competitive pressures and some uncertainties in international traffic, the company remains optimistic about capacity improvements in Mexico City. The Q&A section highlighted management's confidence in overcoming current challenges, such as the Pratt & Whitney issue, and the potential for increased shareholder returns. The lack of specific shareholder return plans slightly tempers the outlook, but overall, the positive financials and optimistic guidance suggest a positive stock reaction.
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