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01/10 21:33
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Passenger Traffic 17.7 million passengers served across all airports, remaining largely flat year-on-year. Puerto Rico saw a 3% growth, Colombia a 1% increase, and Mexico a nearly 2% decline. Declines in Mexico were attributed to the ramp-up of the new Tulum airport and broader market dynamics.
Total Revenues Increased 5% year-on-year to MXN 7.4 billion. Growth was driven by operations in Puerto Rico and Colombia, while Mexico posted a low single-digit increase of 0.7%.
Commercial Revenue Per Passenger Reached nearly MXN 140, representing mid-single-digit year-on-year growth. Colombia led with a 22% increase, followed by Puerto Rico with a 12% gain, and Mexico with a 3% rise.
Total Expenses Increased nearly 10% year-on-year, driven by a 12% increase in minimum wage in Mexico and cost increases in Puerto Rico and Colombia due to currency depreciation.
Consolidated EBITDA Rose slightly by 2% year-on-year to MXN 5 million. Puerto Rico and Colombia posted double-digit EBITDA growth of 20% and 15%, respectively, while Mexico saw a 1.6% decrease due to passenger traffic decline, strong peso, and higher costs.
Adjusted EBITDA Margin Stood at nearly 68%, compared to 69% in the same quarter last year. The slight contraction was due to a 170 basis points decline in Mexico, while Puerto Rico improved by 120 basis points.
Foreign Exchange Loss MXN 1,200 million loss due to the appreciation of the Mexican peso against the U.S. dollar, compared to a gain of MXN 942 million in the same quarter last year.
Cash Position Nearly MXN 20 billion in cash and cash equivalents, up 32% year-on-year.
Net Debt-to-EBITDA Ratio Increased slightly to 0.1x, reflecting the drawdown of a loan facility in Mexico for MXN 9.5 billion.
Capital Expenditures Totaled MXN 1.4 billion, primarily directed towards modernization and expansion projects at Mexican airports, including Terminal 1 at Cancun Airport.
Opening of new commercial spaces: 47 new commercial spaces opened over the last 12 months: 35 in Colombia, 7 in Mexico, and 5 in Puerto Rico.
Passenger traffic: 17.7 million passengers served in Q2 2025. Puerto Rico saw a 3% growth, Colombia a 1% increase, while Mexico experienced a 2% decline.
Regional performance: Puerto Rico and Colombia showed strong growth in passenger traffic and revenues, while Mexico faced declines in international travel.
Revenue growth: Total revenues increased 5% year-on-year to MXN 7.4 billion, with significant contributions from Puerto Rico and Colombia.
Cost management: Total expenses increased nearly 10% year-on-year, driven by higher minimum wages and currency depreciation effects.
Infrastructure investments: Capital expenditures of MXN 1.4 billion focused on modernization and expansion projects, including Cancun Airport Terminal 1 reconstruction.
Governance changes: Appointment of Mrs. Isabel Prieto to the Board of Directors, increasing female representation to 36%.
Passenger Traffic Decline in Mexico: Passenger traffic in Mexico declined by nearly 2%, with international travel decreasing by 4.5%. This was partly due to the ramp-up of the new Tulum airport, which diverted passengers from Cancun, and broader market dynamics reflecting cautious demand.
Broader Market Dynamics: Softness in international travel demand was observed across several markets, including declines in passenger volumes from Europe, the U.S., South America, and Canada. This reflects a more cautious demand environment.
Cost Increases: Total expenses increased nearly 10% year-on-year, driven by a 12% increase in minimum wage in Mexico and cost increases in Puerto Rico and Colombia due to currency depreciation.
Foreign Exchange Loss: The company experienced a foreign exchange loss of MXN 1,200 million due to the appreciation of the Mexican peso against the U.S. dollar, negatively impacting the bottom line.
EBITDA Margin Contraction in Mexico: Mexico's adjusted EBITDA margin declined by 170 basis points, attributed to lower passenger traffic, a strong peso, and higher costs.
Potential U.S. Department of Transportation Restrictions: Although the company expects minimal impact from potential U.S. Department of Transportation restrictions on Mexican carriers, this remains a regulatory risk.
Traffic in Mexico: Expected to gradually stabilize over the course of next year as the effects of the engine-related aircraft plumbings appear to have bottomed out and Tulum airport reaches more normalized level of operations.
Impact of U.S. Department of Transportation restrictions on Mexican carriers: ASUR does not expect a material impact on operations from these measures as exposure to the affected airlines is minimal.
Long-term growth potential for Cancun and Tulum: Both regions are expected to grow, driven by specific demand dynamics of their respective catchment areas.
Capital expenditures: Investments directed towards modernization and expansion projects at Mexican airports, including reconstruction and expansion of Terminal 1 at Cancun Airport and terminal expansion in Puerto Rico.
Cash Dividend in May: MXN 50 per share, funded from accumulated retained earnings.
Extraordinary Dividends: Two extraordinary dividends of MXN 15 per share each to be paid in September and November.
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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