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01/11 05:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects strong financial performance with an 11% increase in passenger traffic and a 17% rise in aeronautical revenues. Despite some uncertainties in the Q&A, such as reduced airline capacity, the overall sentiment is positive due to strong growth metrics, high EBITDA margins, and a stable dividend policy. The market cap of over 3 billion suggests moderate volatility, leading to a positive stock price movement prediction of 2% to 8% over the next two weeks.
Passenger Traffic OMA's passenger traffic totaled 7.2 million, an 11% increase year-over-year. Domestic passenger traffic grew by 10%, driven by Monterrey Airport, while international passenger traffic increased by 19%, also led by Monterrey Airport.
Aeronautical Revenues Aeronautical revenues increased 17% year-over-year, driven by higher aeronautical yields and increased domestic and international passenger traffic.
Commercial Revenues Commercial revenues grew 20% year-over-year, with commercial revenue per passenger increasing by 8% to MXN 62. Growth was mainly driven by restaurants, parking, VIP lounges, and retail.
Adjusted EBITDA Adjusted EBITDA increased 19% year-over-year to MXN 2.6 billion, with an adjusted EBITDA margin of 74.6%.
Capital Expenditures Total investments, including MDP investments, major maintenance, and strategic investments, amounted to MXN 965 million in the quarter.
Construction Revenues Construction revenues increased 64.7% year-over-year to MXN 916 million, driven by increased MDP investments.
Diversification Revenues Diversification activities increased 11% year-over-year, with industrial services contributing most to this growth. Industrial services grew over 100% due to an increase in leased square meters in the industrial park.
Hotel Services Revenue Revenue from hotel services increased 4% year-over-year to MXN 112 million, driven by higher average run rates, partially offset by lower occupancy rates.
Consolidated Net Income Consolidated net income was MXN 1.3 billion, a 3.8% increase year-over-year.
Cash Position Cash generated from operating activities was MXN 1.8 billion, while investing activities used MXN 575 million. Financing activities resulted in a net cash outflow of MXN 138 million, leaving a cash position of MXN 3.4 billion at the end of the quarter.
New leadership appointments: Raful Zacarias appointed as Chief Operating Officer, succeeding Enrique Navarro. Pierre Grosmaire appointed as Chief Commercial Officer, succeeding Alvaro Leite.
Passenger traffic growth: Total passenger traffic increased by 11% year-over-year to 7.2 million. Domestic traffic grew by 10%, while international traffic grew by 19%.
Airline performance: VivaAerobus accounted for 51% of total traffic with a 14% increase in passenger numbers. Volaris accounted for 24% of total traffic with a 31% increase in passenger numbers.
Revenue growth: Aeronautical revenues increased by 17%, and commercial revenues grew by 20%. Diversification revenues increased by 11%, driven by industrial services and hotel services.
Infrastructure investments: Investments totaled MXN 965 million, including MDP investments, major maintenance, and strategic investments. Key projects include expansion of Terminal A at Monterrey Airport and technology upgrades.
Master Development Program (MDP): Proposed MDP submitted to Mexico's Federal Civil Aviation Agency with a focus on efficiency and passenger experience. Approximately 49% of investments allocated to Monterrey Airport.
Leadership Transition: The retirement of the Chief Operating Officer and the transition to a new Chief Commercial Officer could pose risks related to continuity and strategic execution during the leadership change.
Master Development Program (MDP) Negotiations: The ongoing negotiations with Mexico's Federal Civil Aviation Agency (AFAC) for the 2026-2030 MDP, including tariff model discussions, could face delays or unfavorable outcomes, impacting financial and operational planning.
Debt and Financial Commitments: The issuance of MXN 2.75 billion in long-term notes and the repayment of MXN 600 million in short-term loans increase financial obligations, which could strain cash flow if revenue growth does not meet expectations.
Operational Costs: Increased costs for security, cleaning services, and payroll could pressure profit margins if not offset by revenue growth.
Passenger Traffic Dependency: The company's reliance on specific routes and airlines, such as VivaAerobus and Volaris, for passenger traffic growth could pose risks if these partners face operational or financial challenges.
Regulatory and Compliance Risks: The approval process for the MDP and adherence to regulatory requirements could introduce uncertainties and potential delays in project execution.
Master Development Program (MDP) 2026-2030: The company submitted its proposed MDP to Mexico's Federal Civil Aviation Agency (AFAC) with a total committed investment similar in real peso terms to the previous MDP (2021-2025). Technical visits to 13 airports will occur from August to September, with tariff model negotiations expected between October and November. Final approval and disclosure of the new maximum tariff are anticipated in early December. Approximately 49% of the investment will be allocated to Monterrey Airport, focusing on Terminal A expansion, platform expansions, fast taxiways, and technology upgrades. Other significant investments will be made in Culiacan, Ciudad Juarez, and Mazatlan airports. The company anticipates a low single-digit increase in the maximum tariff in real terms.
Capital Expenditures: Proceeds from a recent MXN 2.75 billion long-term note issuance will be used to repay MXN 600 million in short-term loans and fund committed investments and general corporate purposes.
Ordinary Dividend: The first installment of the ordinary dividend of EUR 2.25 billion was paid during the quarter.
Despite positive financial performance, including increased passenger traffic and revenues, concerns about regulatory uncertainty, inflationary pressures, and rising costs balance out the positive sentiment. The lack of clear guidance on international expansion and the potential impact of the ongoing MDP negotiations further contribute to a neutral outlook. The market cap indicates moderate sensitivity to these mixed signals, suggesting a neutral stock price movement.
The earnings call reflects strong financial performance with an 11% increase in passenger traffic and a 17% rise in aeronautical revenues. Despite some uncertainties in the Q&A, such as reduced airline capacity, the overall sentiment is positive due to strong growth metrics, high EBITDA margins, and a stable dividend policy. The market cap of over 3 billion suggests moderate volatility, leading to a positive stock price movement prediction of 2% to 8% over the next two weeks.
The earnings call reveals mixed results: strong financial performance with revenue growth and a declared cash dividend, but also challenges like regulatory issues, supply chain problems, and increased expenses. The Q&A section highlights cautious management regarding demand and capacity, with no new partnerships or strategic moves that might boost sentiment. The market cap suggests a moderate reaction, leading to a neutral prediction.
The earnings call reveals several negative factors: increased concession taxes, rising operational costs, and a decline in passenger traffic and aeronautical revenue. The Q&A section highlights a lack of clear guidance, particularly concerning future traffic and CapEx plans. Although non-aeronautical revenue growth and a slight net income increase are positives, they are overshadowed by broader financial and operational challenges. Given the market cap, these factors are likely to result in a stock price decline of -2% to -8% over the next two weeks.
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