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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 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.
Passenger Traffic - Colombia Passenger traffic rose 3% to close to 5 million, supported by a solid 11% increase in international traffic and a modest growth just under 1% in domestic volumes.
Passenger Traffic - Puerto Rico Total traffic was up 1%, reaching over 3 million passengers. Growth was driven by international passengers, which increased nearly 12% year-on-year, offsetting the 0.5% decrease in domestic traffic.
Passenger Traffic - Mexico Traffic declined 1% to nearly 10 million passengers for the quarter. The decrease reflects softer demand, domestic traffic, which was down nearly 2% and international which saw a slight contraction of 0.3%. Passenger volumes from the United States decreased just 0.2%, while South America contracted 7.2%. On the positive note, Canada and Europe increased 9.3% and 1.3%, respectively.
Total Revenues Increased in the mid-single digits, reaching over MXN 7 billion, driven by growth in Puerto Rico and Colombia. Mexico posted a slight low single-digit decline with aeronautical revenues practically flat and non-aeronautical revenues down in the mid-single digits. Revenue growth was limited by softer passenger volumes and the stronger peso.
Revenue - Puerto Rico Reported revenue growth in the high single digit driven by increases in 5% in aeronautical revenues and 10% in non-aeronautical revenues. This performance reflects positive passenger traffic trends and sustained demand across commercial activities.
Revenue - Colombia Delivered revenue growth in the high single digits, reflecting a mid-single digit increase in aeronautical revenues while non-aeronautical revenues were up in the high teens. This good performance was supported by passenger traffic growth and solid demand, partially offset by the strong Mexican peso.
Commercial Revenue Per Passenger Rose 1% to MXN 126. By region, Colombia led a 14% increase followed by Puerto Rico, up 10%, while Mexico posted a 4% decline, reaching MXN 144 per passenger.
Total Expenses Total expenses were up nearly 17% year-on-year. By region, Mexico posted a 4% increase, largely due to higher minimum wages and service costs. Puerto Rico reported expense increase of nearly 8%, reflecting inflationary pressures and higher operating activity. Colombia cost increased 76%, mainly driven by an adjustment in amortization method of the concession. Without this, the increase would have been 5.4%.
Consolidated EBITDA Declined just over 1% year-on-year to MXN 4.6 billion in the quarter. Puerto Rico and Colombia delivered EBITDA growth of nearly 5% and 10%, respectively, while EBITDA in Mexico declined close to 4%, mainly reflecting lower traffic and higher operating costs.
Adjusted EBITDA Margin Declined by 157 basis points to 66.7%. This reflects lower margin contribution from the Mexican and Puerto Rico operations, where the margin contracted 152 and 151 basis points, respectively. In contrast, Colombia reported an 81 basis points margin expansion.
Foreign Exchange Loss Depreciation of the Mexican peso against the U.S. dollar resulted in a foreign exchange loss of nearly MXN 1 billion compared to the reverse effect during the third quarter of last year.
Cash Position Closed the quarter with a solid cash position of MXN 16 billion, down 19% from December 31, 2024, primarily reflecting dividend payments made during the period.
Net Debt-to-EBITDA Ratio Remained at a healthy 0.2x.
Capital Expenditure Invested close to MXN 1.9 billion during the quarter, primarily directed to projects at Mexican airports, including the reconstruction and expansion of Terminal 1 at Cancun Airport, and the terminal expansion in other locations. In Puerto Rico, progress was made on the new pedestrian bridge for Terminal A, while in Colombia, investments were directed towards maintenance CapEx.
Acquisition of URW Airports: ASUR entered into a definitive agreement to acquire URW Airports for $295 million, marking a significant step in its international expansion strategy. URW manages commercial programs at major U.S. airports, including Los Angeles International Airport, Chicago O'Hare, and JFK International Airport, processing 14 million enplanements annually.
Passenger Traffic: ASUR served over 17 million passengers in Q3 2025. Traffic in Colombia rose 3%, Puerto Rico increased 1%, while Mexico declined 1% due to softer demand.
Revenue Growth by Region: Puerto Rico and Colombia showed high single-digit revenue growth, driven by increased aeronautical and non-aeronautical revenues. Mexico saw a slight decline in revenues due to weaker passenger volumes and a stronger peso.
Commercial Development: 45 new commercial spaces were added across airports in the last 12 months, including 31 in Colombia, 8 in Puerto Rico, and 6 in Mexico. This led to a low single-digit increase in commercial revenues.
Cost Management: Total expenses rose 17% year-on-year, with significant increases in Colombia due to an adjustment in the concession amortization method. Mexico and Puerto Rico experienced moderate cost increases due to inflation and higher wages.
Strategic Expansion: The acquisition of URW Airports strengthens ASUR's position in the U.S. market, particularly in high-growth, non-regulated commercial segments.
Acquisition of URW Airports: The acquisition is subject to customary regulatory approvals, which could pose delays or challenges. Additionally, financing the acquisition through JPMorgan Chase introduces financial risk, especially if market conditions change.
Passenger Traffic in Mexico: Passenger traffic in Mexico declined by 1%, with domestic traffic down nearly 2% and international traffic slightly contracting by 0.3%. This reflects softer demand and could impact revenue generation.
Revenue Growth Constraints: Revenue growth in Mexico was limited by softer passenger volumes and the stronger peso, which negatively affects U.S.-linked revenue streams.
Operating Costs: Total expenses increased nearly 17% year-on-year, with significant cost increases in Colombia (76%) due to an adjustment in the amortization method of the concession. Higher minimum wages and service costs in Mexico also contributed to increased expenses.
Profitability Challenges: Consolidated EBITDA declined by over 1%, with Mexico experiencing a close to 4% decline due to lower traffic and higher operating costs. The adjusted EBITDA margin also declined by 157 basis points to 66.7%.
Foreign Exchange Loss: The depreciation of the Mexican peso against the U.S. dollar resulted in a foreign exchange loss of nearly MXN 1 billion, negatively impacting the bottom line.
Concession Amortization Adjustment in Colombia: A MXN 333 million adjustment in the concession amortization method in Colombia negatively affected profitability.
Traffic Stabilization in Mexico: Traffic in Mexico is expected to gradually stabilize over the next year as aircraft availability improves.
Positive Momentum in Puerto Rico and Colombia: Continuous positive momentum is anticipated in Puerto Rico and Colombia, supported by healthy international demand and improving productivity.
Acquisition of URW Airports: The acquisition of URW Airports is expected to close during the second half of 2025, subject to regulatory approvals. This acquisition will provide a strategic foothold in major U.S. air travel markets and strengthen the company's position in the high-growth nonregulated commercial segment.
Dividend Payments: In September, an extraordinary dividend of MXN 15 per share was paid, funded from retained earnings. An additional dividend of MXN 15 per share is scheduled for 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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