UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

  

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER 

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER 

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of October 2019

 

GRUPO AEROPORTUARIO DEL SURESTE, S.A.B. de C.V. 

(SOUTHEAST AIRPORT GROUP)

 

 

 

(Translation of Registrant’s Name Into English)

  

México

 

(Jurisdiction of incorporation or organization)

  

Bosque de Alisos No. 47A– 4th Floor 

Bosques de las Lomas 

05120 México, D.F.

 

 

 

(Address of principal executive offices)

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

 

  Form 20-F ☒ Form 40-F ☐

 

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

 

  Yes ☐ No ☒

 

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_.)

 

 

 

 

 

 

 

 

 

ASUR 3Q19 Passenger Traffic Increased 0.4% YoY

in Mexico, 5.7% in Puerto Rico and 14.0% in Colombia

 

Mexico City, October 23, 2019 - 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 nine-month periods ended September 30, 2019.

 

3Q19 Highlights1

 

Passenger traffic in Mexico rose 0.4% YoY, with domestic traffic up 2.9% offsetting a 2.5% decline in international traffic.

 

Traffic in Puerto Rico (Aerostar) increased 5.7% YoY, supported by a 7.2% increase in domestic traffic which more than offset a 5.1% decline in international traffic.

 

Traffic in Colombia (Airplan) rose 14.0% YoY, driven by growth of 12.8% in domestic traffic and 21.0% in international traffic.

 

Consolidated commercial revenues per passenger reached Ps.99.2.

 

Consolidated EBITDA increased 8.7% YoY, reaching Ps.2,475.6 million.

 

Cash position at year-end was Ps.6,196.8 million. Net Debt to LTM EBITDA stood at 0.8x.

 

3Q19 Earnings Call

 

Date & Time: Thursday, October 24, 2019 at 10:00 AM US ET; 9:00 AM CT

 

Dial-in: 1-800-289-0438 (US & Canada); 1-323-794-2423 (International y Mexico); Code: 3374927.

 

Replay: Thursday, October 24 at 1:00 PM US ET, ending at 11:59 PM US ET on Thursday, October 31, 2019. Dial-in number: 1-844-512-2921 Dial-in number: 1-844-512-2921 (US & Canada) 1-412-317-6671 (International & Mexico); Access Code 3374927.

 

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 nine-month periods ended September 30, 2019, and the equivalent three- and nine-month periods ended September 30, 2018. 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.19.7345 (source: Diario Oficial de la Federacion de Mexico) while Colombian peso figures are calculated at the exchange rate of COP$176.32 = Mexican Ps.1.00 (source: Investing). Definitions for EBITDA, Adjusted EBITDA Margin, Majority Net Income can be found on page 16 of this report.

 

Table 1:  Financial & Operational Highlights 1    
  Third Quarter % Var
  2018 2019
Financial Highlights      
Total Revenue 3,682,047 4,106,266 11.5
Mexico 2,585,641 2,745,561 6.2
San Juan 692,466 808,251 16.7
Colombia 403,940 552,454 36.8
Commercial Revenues per PAX 92.5 99.2 7.3
Mexico 108.1 114.3 5.7
San Juan 108.0 124.2 14.9
Colombia 35.0 42.2 20.6
EBITDA 2,278,320 2,475,603 8.7
Net Income 1,006,574 1,340,432 33.2
Majority Net Income 988,054 1,314,628 33.1
Earnings per Share (in pesos) 3.2935 4.3821 33.1
Earnings per ADS (in US$) 1.6689 2.2205 33.1
Capex 363,379 445,755 22.7
Cash & Cash Equivalents 4,569,129 6,196,806 35.6
Net Debt 11,006,740 7,777,721 (29.3)
Net Debt / LTM EBITDA 1.2 0.8 (38.3)
Operational Highlights      
Passenger Traffic      
Mexico 8,303,559 8,333,227 0.4
San Juan 2,226,595 2,354,372 5.7
Colombia 2,800,730 3,192,585 14.0


 

ASUR 3Q19 Page 1 of 24    
 

 

Passenger Traffic

 

ASUR’s 3Q19 total passenger traffic increased 4.1% YoY reaching 13.9 million passengers driven by increases of 0.4% in Mexico, 5.7% in Puerto Rico, and 14.0% in Colombia.

 

Passenger traffic growth of 0.4% YoY in Mexico was mainly driven by a 2.9% increase in domestic traffic which more than offset the 2.5% decline in international traffic. Merida and Oaxaca airports were the main drivers behind domestic traffic growth, with increases of 14.7% and 25.2%, respectively. Oaxaca, in turn, achieved a 59.6% increase in international traffic, while Cancun reported declines of 0.4% and 2.2% in domestic and international traffic, respectively.

 

Traffic in Puerto Rico increased 5.7% YoY, recovering following the impact of Hurricane Maria, which hit the island in September 2017. Domestic traffic increased 7.2% YoY while international traffic declined 5.1%.

 

Colombia reported a 14.0% YoY increase in total traffic driven by growth of 12.8% and 21.0% in domestic and international traffic, respectively. Rionegro Airport in Medellin was the main driver of traffic growth, reporting increases of 15.5% and 21.0% 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              
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Total Mexico 8,303,559 8,333,227 0.4   25,158,418 25,783,861 2.5
- Cancun 6,251,306 6,160,215 (1.5)   19,189,289 19,374,608 1.0
- 8 Other Airports 2,052,253 2,173,012 5.9   5,969,129 6,409,253 7.4
Domestic Traffic 4,342,594 4,469,498 2.9   11,725,081 12,367,374 5.5
- Cancun 2,493,382 2,484,484 (0.4)   6,525,887 6,703,534 2.7
- 8 Other Airports 1,849,212 1,985,014 7.3   5,199,194 5,663,840 8.9
International Traffic 3,960,965 3,863,729 (2.5)   13,433,337 13,416,487 (0.1)
- Cancun 3,757,924 3,675,731 (2.2)   12,663,402 12,671,074 0.1
- 8 Others Airports 203,041 187,998 (7.4)   769,935 745,413 (3.2)
Total San Juan, Puerto Rico 2,226,595 2,354,372 5.7   6,362,573 7,072,180 11.2
Domestic Traffic 1,957,414 2,098,971 7.2   5,672,204 6,315,138 11.3
International Traffic 269,181 255,401 (5.1)   690,369 757,042 9.7
Total Colombia 2,800,730 3,192,585 14.0   7,681,418 8,807,551 14.7
Domestic Traffic 2,393,455 2,699,836 12.8   6,516,614 7,457,666 14.4
International Traffic 407,275 492,749 21.0   1,164,804 1,349,885 15.9
Total Traffic 13,330,884 13,880,184 4.1   39,202,409 41,663,592 6.3
Domestic Traffic 8,693,463 9,268,305 6.6   23,913,899 26,140,178 9.3
International Traffic 4,637,421 4,611,879 (0.6)   15,288,510 15,523,414 1.5
Note: Passenger figures for Mexico and Colombia exclude transit and general aviation passengers, while Puerto Rico includes transit and general aviation passengers.

 

ASUR 3Q19 Page 2 of 24    
 

 

Review of Consolidated Results

 

 

Table 3: Summary of Consolidated Results

               
    Third Quarter % Chg.   Nine-Months % Chg.  
    2018 2019   2018 2019  
  Total Revenues 3,682,047 4,106,266 11.5   11,486,011 12,276,995 6.9  
  Aeronautical Services 2,251,115 2,380,645 5.8   6,715,133 7,181,875 7.0  
  Non-Aeronautical Services 1,340,615 1,488,391 11.0   4,160,293 4,577,310 10.0  
  Total Revenues Excluding Construction Revenues 3,591,730 3,869,036 7.7   10,875,426 11,759,185 8.1  
  Construction Revenues 1 90,317 237,230 162.7   610,585 517,810 (15.2)  
  Total Operating Costs & Expenses 2,025,512 2,079,656 2.7   5,834,738 5,989,758 2.7  
  Other Income           204,074 n/a  
  Operating Profit 1,656,535 2,026,610 22.3   5,651,273 6,491,311 14.9  
  Operating Margin 45.0% 49.35% 436 bps   49.2% 52.9% 367 bps  
  Adjusted Operating Margin 2 46.1% 52.38% 626 bps   52.0% 55.2% 324 bps  
  EBITDA 2,278,320 2,475,603 8.7   7,093,833 7,883,561 11.1  
  EBITDA Margin 61.88% 60.29% (159 bps)   61.8% 64.2% 245 bps  
  Adjusted EBITDA Margin 3 63.43% 63.99% 55 bps   65.2% 67.0% 181 bps  
  Net Income 1,006,574 1,340,432 33.2   3,572,062 4,383,088 22.7  
  Majority Net Income 988,054 1,314,628 33.1   3,529,012 4,209,817 19.3  
  Earnings per Share 3.2935 4.3821 33.1   11.7634 14.0327 19.3  
  Earnings per ADS in US$ 1.6689 2.2205 33.1   5.9608 7.1108 19.3  
                   
  Total Commercial Revenues per Passenger 4 92.5 99.2 7.3   97.3 101.2 4.0  
  Commercial Revenues 1,241,918 1,385,129 11.5   3,840,862 4,242,814 10.5  
  Commercial Revenues from Direct Operations per Passenger 5 17.4 17.9 3.0   18.1 18.8 3.9  
  Commercial Revenues Excl. Direct Operations per Passenger 75.1 81.3 8.2   79.2 82.4 4.0  
 
  1 Construction revenues for Airplan in 3Q18 include the actual construction revenues which is equal to the construction cost of Ps.63.1 million, and an estimate to the downside of income derived from the valuation of the intangible to present value (construction income) of Ps.80.9 million, according to IFRIC 12. Construction revenues for Airplan in 3Q19 were equal to the construction cost of Ps.46.9 million.
   
  2 Adjusted operating margin excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets in Mexico, Puerto Rico and Colombia, and is equal to operating income divided by total revenues minus revenues from construction services.
   
  3 Adjusted EBITDA Margin excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets in Mexico, Puerto Rico and Colombia, and is calculated by dividing EBITDA by total revenues less construction services revenues.
   
  4 Passenger figures include transit and general aviation passengers Mexico, Puerto Rico and Colombia.
   
  5 Represents ASUR´s operations in convenience stores.
                   

Consolidated Revenues

 

Consolidated Revenues for 3Q19 rose 11.5% YoY, or Ps.424.2 million to Ps.4,106.3 million, mainly driven by increases of:

 

● 5.8% in revenues from aeronautical services to Ps.2,380.6 million. Mexico contributed with Ps.1,552.1 million, while Puerto Rico and Colombia contributed with Ps.460.8 million and Ps.367.8 million, respectively;

 

● 11.0% in revenues from non-aeronautical services to Ps.1,488.4 million, mainly due to the 11.5% increase in commercial revenues. Mexico contributed with Ps.1,056.2 million in revenues from non-aeronautical services, while Puerto Rico and Colombia contributed with Ps.294.4 million and Ps.137.8 million, respectively; and

 

● 162.7%, or Ps.146.9 million in revenues from construction services. This was mainly due to capital expenditures in Cancun and Merida airports in line with Mexico’s Master Development Plan, as well as new construction works in Puerto Rico. Construction revenues in Colombia increased reflecting the recognition of a Ps.81.0 million concesion valuation loss in 3Q18. Excluding the impact from the concession valuation loss in Colombia, consolidated construction revenues would have increased YoY by 38.5%, or Ps.65.9 million.

 

Excluding revenues from construction services, which are deducted as costs under IFRS accounting standards, total revenues would have increased 7.7% YoY to Ps.3,869.0 million. Mexico contributed with 67.4% of total revenues excluding revenues from construction services, while Puerto Rico and Colombia represented 19.5% and 13.1%, respectively.

 

ASUR 3Q19 Page 3 of 24    
 

 

Commercial Revenues in 3Q19 increased 11.5% YoY to Ps.1,385.1 million, mainly reflecting the 4.1% increase in total passenger traffic. Commercial revenues in Mexico rose 6.1% to Ps.955.8 million, mainly driven by the opening of new commercial spaces, including duty free, retail, food and beverages, and car rentals, among others. Likewise, commercial revenues increased YoY by 21.5% to Ps.292.4 million in Puerto Rico, and 36.4% to Ps.137.0 million in Colombia.

 

Commercial Revenues per Passenger increased 7.3% YoY to Ps.99.2 in 3Q19. Mexico contributed with commercial revenues per passenger of Ps.114.3 in 3Q19, Puerto Rico with Ps.124.2, and Colombia with Ps.42.2. Commercial revenues per passenger increased 5.7% in Mexico, 14.9% in Puerto Rico and 20.6% in Colombia.

 

Consolidated Operating Costs and Expenses

 

Consolidated Operating Costs and Expenses, including construction costs, for 3Q19 increased 2.7% YoY, or Ps.54.1 million, to Ps.2,079.7 million. Excluding construction costs, operating costs and expenses declined 0.6%, or Ps.11.8 million, year-on-year, reflecting the following variations:

 

● A 3.1%, or Ps.28.5 million, increase in Mexico reflecting higher administrative costs, increases in legal, technical assistance and concession fees. This was partially offset by declines in maintenance and energy costs;

 

● A 12.4%, or Ps.61.3 million, increase in Puerto Rico mainly mainly as a result of an increase of Ps.12.4 million in payroll expenses along with higher professional fees. Furthermore, concession fees increased 13.4% as a result of higher aeronautical revenues while depreciation and amortization expenses rose 13.6% reflecting higher capex investments; and

 

● A 23.0%, or Ps.101.9 million, decline in Colombia composed reflecting a Ps.116.2 million, or 52.3%, decline in depreciation and amortization principally reflecting a change in amortization methodology, which starting January 2019 is on a straight-line basis instead of the percentage of completion method which implied variations in the accumulated amortization rate of the concession. This was partially offset by the 20.3%, or Ps.16.2 million, increase in concession fees as a result of the increase in aeronautical revenues that was mainly driven by a 13.1% increase in passenger traffic.

 

Cost of Services rose by 4.6%, or Ps.43.1 million. In Mexico, cost of services increased 1.7% YoY, or Ps.8.1 million, mainly reflecting higher legal professional fees and administrative expenses, partially offset by a decline in maintenance and energy costs. By contrast, cost of services in Colombia declined 1.3%, or Ps.1.9 million, principally reflecting higher professional legal fees in 3Q18, partially ofset by an increase in the maintenance provision for the future replacement of fixed assets as per IFRIC 12. Cost of services in Puerto Rico increased 11.8%, or Ps.36.9 million, principally reflecting higher payroll costs along with an increase in professional fees.

 

Construction Costs increased by 38.5% YoY, or Ps.65.9 million. This was mainly driven by increases of 48.6%, or Ps.44.9 million, in Mexico and 234.4%, or Ps.37.2 million, in Puerto Rico, partially offset by a 25.7%, or Ps.16.2 million, decline in Colombia.

 

G&A Expenses, which reflect administrative expenses in Mexico, increased 14.0% YoY mainly reflecting higher salaries and professional fees.

 

Consolidated Technical Assistance increased 5.1% YoY, mainly reflecting EBITDA growth in Mexico, excluding extraordinary items, a factor in the calculation of the fee.

 

Concession Fees increased 11.2% YoY, principally reflecting higher fees paid to the Mexican government, mainly due to an increase in regulated revenues in Mexico, a factor in the calculation of the fee. Concession fees for 3Q19 also reflect increases in Puerto Rico and Colombia.

 

Depreciation and Amortization declined 17.1%, or Ps.92.9 million, principally due to a Ps.116.3 million, or 52.3%, decline in Colombia, resulting mainly from the change in the amortization methodology, which as of January 1, 2019 is on a straight line rather than a percentage of completion basis. By contrast, depreciation and amortization in Mexico increased 1.8%, or Ps.3.0 million, while Puerto Rico reported an increase of 13.6%, or Ps.20.4 million, mainly from the recognition starting March 2018 of the amortization of the intangible asset resulting from the valuation of the investment in Aerostar under IFRS 3.

 

ASUR 3Q19 Page 4 of 24    
 

 

Consolidated Operating Profit and EBITDA

 

Consolidated Operating Profit in 3Q19 ammounted to Ps.2,026.6 million with Operating Margin of 49.4%. This was principally due to increases of 5.8%, or Ps.129.5 million, in aeronautical revenues, and 11.0%, or Ps.147.8 million, in non-aeronautical revenues. Mexico reported an operating profit of 1,665.4 million, Puerto Rico of Ps.197.3 million, and Colombia Ps.163.9 million.

 

Adjusted Operating Margin, which excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets in Mexico, Colombia, and Puerto Rico, and is calculated as operating profit divided by total revenues less construction services revenues, was 52.4% in 3Q19 compared with 46.1% in 3Q19.

 

EBITDA increased 8.7%, or Ps.197.3 million, to Ps.2,475.6 million in 3Q19. EBITDA increased 5.1%, or Ps.89.6 million in Mexico, 11.6%, or Ps.38.2 million in Puerto Rico, and 34.6%, or Ps.69.5 million in Colombia. 3Q19 EBITDA Margin was 60.3% compared to 61.9% in 3Q18.

 

Adjusted EBITDA Margin, which excludes the effect of IFRIC 12 with respect to the construction of or improvements to concessioned assets in Mexico, Puerto Rico, and Colombia was 64.0% in 3Q19 compared to 63.4% in 3Q18.

 

Consolidated Comprehensive Financing Gain (Loss)

 

Table 4: Consolidated Comprehensive Financing Gain (Loss)            
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Interest Income         58,148         73,708 26.8         209,010       272,744 30.5
Interest Expense    (298,931)    (279,890) 6.4      (914,861)    (838,025) 8.4
Foreign Exchange Gain (Loss), Net      (39,492)         70,388 n/a           33,095         60,580 83.0
Total (280,275) (135,794) 51.5   (672,756) (504,701) 25.0

 

In 3Q19, ASUR reported a Ps.135.8 million Consolidated Comprehensive Financing Loss, compared to a Ps.280.3 million loss in 3Q18.

 

Interest expense declined by Ps.19.0 million during the period, or 6.4%, mainly reflecting a Ps.12.9 million decline in interest payments in Mexico as the Company paid down loans in June and November 2018, together with a Ps.10.0 million decline in interest payments in Colombia, reflecting a loan payments in 2H18. Interest income increased Ps.15.6 million, or 26.8%, reflecting a higher cash balance in the quarter.

 

In 3Q19, ASUR reported a foreign exchange gain of Ps.70.4 million, resulting from the 1.14% quarterly average depreciation of the Mexican peso against the U.S. dollar together with a lower U.S. dollar foreign currency net asset position. This compares to a Ps.39.5 million foreign exchange loss in 3Q18 resulting from the 3.8% quarterly average Mexican peso appreciation during that period on a higher foreign currency net asset position.

 

Income Taxes

 

Income Taxes for 3Q19 increased by Ps.180.7 million year-over-year, principally due to the combination of following factors:

 

● A Ps.95.5 million YoY increase in deferred income taxes, mainly reflecting a deferred income tax gain in Colombia in 3Q18 resulting from the reduction in the value of the concession as per IFRIC 12 and a decrease in the tax benefit in Mexico resulting from a change in the tax amortization rate on the concessioned assets starting in the second quarter of 2018. The decrease in the inflation rate from 1.16% in 3Q18 to 0.7% in 3Q19 also contributed to higher deferred income. This was partially offset by a reduction in the tax rate used for the calculation of deferred income taxes in Colombia from 33% to 30% starting on January 2019, resulting from the fiscal reform enacted on December 23, 2018.

 

● An Ps.85.4 million increase in income taxes, reflecting mainly a higher taxable income base for Cancun, Veracruz and Villahermosa airports in Mexico. Higher YoY income taxes also reflect a tax gain in Colombia in 2018 resulting from a change in tax legislation according to Decree 2235 published on December 27,

 

ASUR 3Q19 Page 5 of 24    
 

 

  2017, along with a decline in deferred taxes in connection with the decline in the value of the concession in line with IFRIC12.

 

Majority Net Income

 

Majority Net Income for 3Q19 increased by 33.1% or Ps.326.6 million, to Ps.1,314.6 million from Ps.988.0 million in 3Q18. Earnings per common share for the quarter were Ps.4.3821 and earnings per ADS (EPADS) were US$2.2205 (one ADS represents ten series B common shares). This compares with earnings per share of Ps.3.2935 and earnings per ADS of US$1.6689 for the same period last year.

 

Net Income

 

Net Income for 3Q19 increased by 33.2%, or Ps.333.9 million, to Ps.1,340.4 million from Ps.1,006.6 million in 3Q19.

 

Consolidated Financial Position

 

On September 30, 2019, airport concessions represented 85.5% of the Company’s total assets, with current assets representing 13.5% and other assets representing 1.0%. As of September 30, 2019, ASUR had cash and cash equivalents of Ps.6,196.8 million, a 35.2% increase from Ps.4,584.5 million at December 31, 2018. Mexico contributed with Ps.1,260.6 million in cash and cash equivalents in 3Q19, Puerto Rico with Ps.146.9 mmillion and Colombia with Ps.204.8 million.

 

As of September 30, 2019, the valuation of ASUR’s investment in Aerostar in accordance with IFRS 3 "Business Combinations" resulted in the following effects on the balance sheet: i) the recognition of a net intangible asset of Ps.6,013.5 million, ii) goodwill of Ps.887.2 (net of an impairment of Ps.4,719.1 million), iii) deferred taxes of Ps.601.4 million, and iv) a minority interest of Ps.5,366.2 million within stockholders' equity.

 

Furthermore, the valuation of ASUR’s investment in Airplan resulted in the following effects on the balance sheet as of September 30, 2019: i) the recognition of a net intangible asset of Ps.1,337.0 million, ii) goodwill of Ps.1,504.9, iii) deferred taxes of Ps.212.0 million, and iv) Ps.630.4 million from the recognition of bank loans at fair value.

 

On May 25, 2018, ASUR acquired an additional 7.6% of the share ownership of Airplan, bringing its ownership stake in the company to 100%. This transaction resulted in the recognition of shareholders’ equity of approximately Ps.213.5 million (Ps.37.7 million by majority interest and Ps.175.8 by minority interest).

 

Stockholders’ equity at the close of 3Q19 was Ps.37,974.0 million and total liabilities were Ps.18,998.1 million, representing 66.7% and 33.3% of total assets, respectively. Deferred liabilities represented 16.3% of ASUR’s total liabilities.

 

Total Debt at quarter-end decreased to Ps.13,974.5 million fom Ps.14,500.4 million on December 31, 2018. On September 30, 2019, 28.5% of ASUR’s total debt was denominated in Mexican pesos, 56.8% in U.S. Dollars (at Aerostar) and 14.7% in Colombian pesos. Net Debt to LTM EBITDA stood at 0.8x at the close of 3Q19, while the Interest Coverage ratio was 10.3x as of September 30, 2019. This compares with Net Debt to LTM EBITDA of 1.0x and an Interest Coverage Ratio of 8.7x as of December 31, 2018.

 

Table 5: Consolidated Debt Indicators      
  September 30, 2018 December 31, 2018 September 30, 2019
Leverage      
Total Debt / LTM EBITDA (Times) 1 1.7 1.5 1.4
Total Net Debt / LTM EBITDA (Times) 2 1.2 1.0 0.8
Interest Coverage Ratio 3 9.7 8.7 10.3
Total Debt 15,575,869 14,500,381 13,974,527
Short-term Debt 295,206 500,105 277,847
Long-term Debt 15,280,663 14,000,276 13,696,680
Cash & Cash Equivalents 4,569,129 4,584,507 6,196,806
Total Net Debt 4 11,006,740 9,915,874 7,777,721

 

1 The Total Debt to EBITDA Ratio is calculated as ASUR’s interest-bearing liabilities divided by its EBITDA.

2 The Total Net Debt to EBITDA Ratio is calculated as ASUR’s interest-bearing liabilities minus Cash & Cash Equivalents, divided by its EBITDA.

3 The Interest Coverage Ratio is calculated as ASUR’s EBIT divided by its interest expenses.

4 Total Net Debt is calculated as Total Debt minus Cash & Cash Equivalents.

 

ASUR 3Q19 Page 6 of 24    
 

 

Table 6: Consolidated Debt Profile
(in millions) 		               
  Airport Payment of principal Currency Interest Rate Amortization Schedule 
  2019 2020 2021 /23 2024 /35 Total
 5 Yr-Syndicated Credit Facility  Cancun  To the expiration    $PMx  Tiie + 1.25%             -             - 2,000.0             - 2,000.0
 7 Yr-Syndicated Credit Facility  Cancun  Semi-Annual Amort.  $PMx  Tiie + 1.25%             - 20.0 1,860.0 120.0 2,000.0
 22 Yr-Senior Note 2035  San Juan  Semi-Annual Amort.  $Usd 5.75%             - 9.3 31.0 277.2 317.5
 20 Yr-Senior Note 2035  San Juan  Semi-Annual Amort.  $Usd 6.75%             - 1.4 4.4 39.6 45.4
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 2,625.0 12,000.0 44,250.0 81,000.0 139,875.0
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 1,785.0 8,160.0 30,090.0 55,077.0 95,112.0
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 1,575.0 7,200.0 26,550.0 48,600.0 83,925.0
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 647.5 2,960.0 10,915.0 19,980.0 34,502.5
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 647.5 2,960.0 10,915.0 19,980.0 34,502.5
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 140.0 640.0 2,360.0 4,320.0 7,460.0
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 140.0 640.0 2,360.0 4,320.0 7,460.0
 12 Yr-Syndicated Credit Facility  Colombia  Qtly. Amort.  $Pcol DTF1 + 4 140.0 640.0 2,360.0 4,320.0 7,460.0
 

Note: Mexican syndicated loans were contracted in October 2017, Puerto Rico bonds were contracted in March 2013 and June 2015, respectively, and the syndicated loan from Colombia was contracted in June 2015 with a three-year grace period.

1 DTF is an average 90-day rate to which the credit facilities in Colombia are pegged.

 

Capex

 

Capex during 3Q19 ammounted to Ps.445.7 million. Of this, Ps.339.4 million reflect the Company’s plan to modernize its Mexican airports pursuant to its master development plans, Ps.59.4 million were made by Aerostar in Puerto Rico and Ps.46.9 million by Airplan in Colombia. This compares with Ps.363.4 million invested in 3Q18, Ps.102.8 million in Mexico, Ps.245.6 million in Puerto Rico, and Ps.14.9 million in Colombia.

 

During 9M19 ASUR invested a total of Ps.886.9 million, Ps.542.3 million in Mexico, Ps.238.4 million in Puerto Rico, and Ps.106.2 million in Colombia. This compares with capex of Ps.1,369.8 million in 9M18, of which Ps.329.6 million were invested in Mexico mainly for the construction of Terminal 4, in line with the Master Development Plan, Ps.645.9 million in Puerto Rico and Ps.394.2 million in Colombia.

 

Review of Mexico Operations

 

 

Table 7: Mexico Revenues & Commercial Revenues Per Passenger

(in thousands of Mexican pesos)

    Third Quarter % Chg.   Nine-Months % Chg.
    2018 2019   2018 2019
  Total Passenger (in thousands) 8,333 8,365 0.4   25,263 25,884 2.5
                 
  Total Revenues 2,585,641 2,745,561 6.2   7,762,541 8,315,658 7.1
  Aeronautical Services 1,495,944 1,552,105 3.8   4,483,133 4,765,464 6.3
  Non-Aeronautical Services 997,370 1,056,224 5.9   3,154,213 3,358,960 6.5
  Construction Revenues 92,327 137,232 48.6   125,195 191,234 52.7
  Total Revenues Excluding Construction Revenues 2,493,314 2,608,329 4.6   7,637,346 8,124,424 6.4
                 
  Total Commercial Revenues 900,884 955,752 6.1   2,843,468 3,036,476 6.8
  Commercial Revenues from Direct Operations 183,285 190,006 3.7   568,518 609,054 7.1
  Commercial Revenues Excluding Direct Operations 717,599 765,746 6.7   2,274,950 2,427,422 6.7
                 
  Total Commercial Revenues per Passenger 108.1 114.3 5.7   112.6 117.3 4.2
  Commercial Revenues from Direct Operations per Passenger 1 22.0 22.7 3.2   22.5 23.5 4.6
  Commercial Revenues Excl. Direct Operations per Passenger 86.1 91.5 6.3   90.1 93.8 4.1
  Note: For purpose of this table, approximately 29.0 and 31.7 thousand transit and general aviation passengers are included in 3Q18 and 3Q19, respectively, while 105.0 and 100.3 thousand transit and general aviation passengers are included in 9M18 and 9M19.  
   
  1 Represents the operation of ASUR in its convenience stores in Mexico.  
                   

 

ASUR 3Q19 Page 7 of 24    
 

 

Mexico Revenues

 

Mexico Revenues for 3Q19 increased 6.2% YoY to Ps.2,745.6 million. Excluding construction, revenues rose 4.6% YoY, reflecting the following increases:

 

● 3.8% in revenues from aeronautical services, principally due to the 0.4% increase in passenger traffic; and

 

● 5.9% in revenues from non-aeronautical services, principally reflecting the 6.1% growth in commercial revenues.

 

Commercial Revenues increased 6.1% YoY, mainly due to the 0.4% increase in total passenger traffic (including transit and general aviation passengers) and reported increases across all categories, except car rentals, as shown on Table 8.

 

Commercial Revenues per Passenger for 3Q19 increased 5.7% YoY to Ps.114.3 from Ps.108.1 in 3Q18.

 

ASUR classifies commercial revenues as those derived from the following activities: duty-free stores, car rentals, retail operations, banking and currency exchange services, advertising, teleservices, non-permanent ground transportation, food and beverage operations, and parking lot fees.

 

As shown in Table 9, during the last 12 months, ASUR opened 7 new commercial spaces at Cancun Airport, and one commercial space at its other eight Mexican airports. More details of these openings can be found on page 20 of this report.

 

Table 8: Mexico Commercial Revenue Performance     Table 9: Mexico Summary Retail and Other Commercial Spaces Opened since September 30, 2018.
       
Business Line YoY Chg   Type of Commercial Space 1 # Of
Spaces
Opened
3Q19 9M19  
Teleservices 16.5% 11.4%   Cancun 7
Advertising Revenues 10.0% 20.2%   Retail Operations 5
Ground Transportation 9.5% 14.5%   Other Revenue 2
Food and Beverage Operations 8.6% 9.8%   8 Others Airport 1
Duty Free 8.4% 5.0%   Car Rental Revenues 1
Other Revenue 5.9% 9.3%   Mexico 8
Retail Operations 5.1% 5.5%   1 Only includes new stores opened during the period and excludes remodelings or contract renewals.
Parking Lot Fees 3.1% 7.1%  
Banking and Currency Exchange Services 2.7% (3.5%)  
Car Rental Revenues (1.7%) 5.5%      
Total Commercial Revenues 6.1% 6.8%      
             

Mexico Operating Costs and Expenses

 

Table 10: Mexico Operating Costs & Expenses              
Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Cost of Services 483,261 491,336 1.7   1,328,522 1,419,733 6.9
Administrative 56,436 64,333 14.0   173,738 185,212 6.6
Technical Assistance 92,038 96,883 5.3   289,607 307,911 6.3
Concession Fees 113,389 118,119 4.2   344,895 367,034 6.4
Depreciation and Amortization 169,226 172,228 1.8   506,298 515,234 1.8
Operating Costs and Expenses Excluding Construction Costs 914,350 942,899 3.1   2,643,060 2,795,124 5.8
Construction Costs 92,327 137,232 48.6   125,195 191,234 52.7
Total Operating Costs & Expenses 1,006,677 1,080,131 7.3   2,768,255 2,986,358 7.9

 

Total Mexico Operating Costs and Expenses for 3Q19 increased 7.3% YoY. This includes construction costs, which rose 48.6%, reflecting higher levels of capital improvements made to concessioned assets during the period. Excluding construction costs, operating costs and expenses increased 3.1% to Ps.942.9 million.

 

Cost of Services rose 1.7% YoY, mainly due to higher legal fees, partially offset by a decline in maintenance and energy expenses.

 

ASUR 3Q19 Page 8 of 24    
 

 

Administrative expenses increased by 14.0% YoY, principally as a result of higher salaries and professional fees.

 

The 5.3% increase in the Technical Assistance fee paid to ITA reflects EBITDA growth in Mexico, excluding extraordinary items in the quarter, a factor in the calculation of the fee.

 

Concession Fees, which include fees paid to the Mexican government, rose 4.2%, mainly due to an increase in regulated revenues, a factor in the calculation of the fee.

 

Depreciation and Amortization increased 1.8% YoY, reflecting higher investments to-date.

 

Mexico Consolidated Comprehensive Financing Gain (Loss)

 

Table 11: Mexico Comprehensive Financing Gain (Loss)
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Interest Income 70,836 78,385 10.7   251,529 264,400 5.1
Interest Expense (114,677) (101,770) (11.3)   (351,684) (309,136) 12.1
Foreign Exchange Gain (Loss), Net (39,479) 70,735 n/a   32,906 60,725 84.5
Total (83,320) 47,350 n/a   (67,249) 15,989 n/a

 

ASUR’s Mexico operations reported a Ps.47.4 million Comprehensive Financing Gain, compared to an Ps.83.3 million loss in 3Q18. Mexican operations reported a foreign exchange gain of Ps.70.7 million in the quarter, resulting from the 1.14% quarterly average Mexican peso depreciation against the U.S. dollar on a lower foreign currency net asset position, compared with a Ps.39.5 million foreign exchange loss in 3Q18, resulting from the 3.8% quarterly average Mexican peso appreciation during that period and a higher foreign currency net asset position.

 

In addition, interest expense declined 11.3% YoY to Ps.101.8 million as the Company paid down debt between June and November 2018. Furthermore, interest income increased 10.7%, reflecting a higher cash balance.

 

Mexico Operating Profit and EBITDA

   
Table 12: Mexico Operating Profit & EBITDA              
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Total Revenue 2,585,641 2,745,561 6.2   7,762,541 8,315,658 7.1
Total Revenues Excluding Construction Revenues 2,493,314 2,608,329 4.6   7,637,346 8,124,424 6.4
Operating Profit 1,578,964 1,665,430 5.5   4,994,286 5,329,300 6.7
Operating Margin 61.1% 60.7% (41 bps)   64.3% 64.1% (25 bps)
Adjusted Operating Margin 1 63.3% 63.9% 52 bps   65.4% 65.6% 20 bps
Net Profit 2 1,072,267 1,206,695 12.5   3,525,768 3,767,755 6.9
EBITDA 1,748,064 1,837,658 5.1   5,500,592 5,844,534 6.3
EBITDA Margin 67.6% 66.9% (67 bps)   70.9% 70.3% (58 bps)
Adjusted EBITDA Margin 3 70.1% 70.5% 34 bps   72.0% 71.9% (8 bps)
                 
1 Adjusted Operating Margin excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets and is equal to operating profit divided by total revenues less construction services revenues.
2 Net Income for 3Q19 and 3Q18 include gains of Ps.64.3 million and Ps.48.8 million, respectively, rom the participation in the results of Aerostar in Puerto Rico. Airplan in Colombia contributed with gains of Ps.118.1 million and Ps.97.6 million in 3Q19 and 3Q18, respectively.
3 Adjusted EBITDA Margin excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets and is calculated by dividing EBITDA by total revenues less construction services revenues.
                   

Mexico reported an Operating Profit of Ps.1,665.4 million in 3Q19, resulting in an Operating Margin of 60.7% compared with 61.1% in 3Q18 mainly as a result of a YoY increase in construction works in 3Q19.

 

Adjusted Operating Margin in 3Q19, which excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets and is calculated as operating profit divided by total revenues excluding construction services revenues, was 63.9%, compared to 63.3% in 3Q18 reflecting higher cost dilution.

 

EBITDA increased 5.1% to Ps.1,837.7 million from Ps.1,748.1 million in 2Q18, resulting in an EBITDA Margin of 66.9% in 3Q19, compared with 67.6% in 3Q18.

 

ASUR 3Q19 Page 9 of 24    
 

 

During 3Q19, ASUR’s operations in Mexico recognized Ps.137.2 million in “Construction Revenues,” a year-on-year increase of 48.6%, due to higher capital expenditures and investments in concessioned assets. Adjusted EBITDA Margin, which excludes the effect of IFRIC 12 with respect to the construction of/or improvements to concessioned assets, increased 34 bps to 70.5%.

 

Mexico Tariff Regulation

 

The Mexican Ministry of Communications and Transportation regulates the majority of ASUR’s activities by setting maximum rates, which represent the maximum possible revenues allowed per traffic unit at each airport.

 

ASUR’s accumulated regulated revenues at its Mexican operations as of September 30, 2019 totaled Ps.4,988.9 million, with an average tariff per workload unit of Ps.189.9 (December 2018 pesos), accounting for approximately 60.8% of total Mexico income (excluding construction income) for the period.

 

The Mexican Ministry of Communications and Transportation reviews compliance with maximum rate regulations at the close of each year.

 

Mexico Capital Expenditures

 

During 3Q19, ASUR’s operations in Mexico made capital investments of Ps.339.4 million in connection with the Company’s plan to modernize its Mexican airports pursuant to its master development plans. This compares with capex of Ps.102.8 million in 3Q18. Accumulated capex for 9M19 amounted to Ps.542.3 million, compared to Ps.329.7 million in 9M18.

 

Review of Puerto Rico Operations

 

As of September 30, 2019, the valuation of ASUR’s investment in Aerostar in accordance with IFRS 3 "Business Combinations" resulted in the following effects on the balance sheet: i) the recognition of a net intangible asset of Ps.6,013.5 million, ii) goodwill of Ps.887.2 (net of an impairment of Ps.4,719.1 million), iii) deferred taxes of Ps.601.4 million, and iv) a minority interest of Ps.5,366.2 million within stockholders' equity.

 

Table 13: Puerto Rico Revenues & Commercial Revenues Per Passenger          
In thousands of Mexican pesos                
  Third Quarter % Chg   Nine - Months % Chg  
  2018 2019   2018 2019  
Total Passenger (in thousands) 2,227 2,354 5.7   6,363 7,072 11.2  
                 
Total Revenues 692,466 808,251 16.7   2,166,832 2,444,942 12.8  
Aeronautical Services 433,814 460,754 6.2   1,297,806 1,376,422 6.1  
Non-Aeronautical Services 242,769 294,383 21.3   716,170 848,199 18.4  
Construction Revenues 15,883 53,114 234.4   152,856 220,321 44.1  
Total Revenues Excluding Construction Revenues 676,583 755,137 11.6   2,013,976 2,224,621 10.5  
                 
Total Commercial Revenues 240,567 292,373 21.5   708,901 840,516 18.6  
Commercial Revenues from Direct Operations 50,183 60,012 19.6   146,523 180,204 23.0  
Commercial Revenues Excluding Direct Operations 190,384 232,361 22.0   562,378 660,312 17.4  
                 
Total Commercial Revenues per Passenger 108.0 124.2 14.9   111.4 118.9 6.7  
Commercial Revenues from Direct Operations per Passenger 1 22.5 25.5 13.1   23.0 25.5 10.6  
Commercial Revenues Excl. Direct Operations per Passenger 85.5 98.7 15.4   88.4 93.4 5.6  
Figures in pesos at the average exchange rate Ps.19.8584= US$1.00            
             
1 Represents ASUR´s operations in convenience stores in Puerto Rico.            
                 

Puerto Rico Revenues

 

Total Puerto Rico Revenues for 3Q19 increased 16.7% YoY to Ps.808.2 million, mainly due to the following increases:

 

● 6.2% in revenues from aeronautical services reflecting the 5.7% increase in passenger traffic;

 

ASUR 3Q19 Page 10 of 24    
 

 

● 21.3% in revenues from non-aeronautical services, principally reflecting the 21.5% increase in commercial revenues; and

 

● 234.4% in construction services revenues reflecting higher capital investments in 3Q19

 

Commercial Revenues per Passenger increased to Ps.124.2 from Ps.108.0 in 3Q18.

 

Thirteen commercial spaces were opened at LMM Airport over the last 12 months, as shown in Table 15. More details of these openings can be found on page 20 of this report.

 

ASUR classifies commercial revenues as those derived from the following activities: duty-free stores, car rentals, retail operations, advertising, non-permanent ground transportation, food and beverage operations, and parking lot fees.

 

Table 14: Puerto Rico Commercial Revenue Performance   Table 15: Puerto Rico Summary Retail and Other Commercial Space Opened since September 30, 2018
     
Business Line YoY Chg   Type of Commercial Space 1 # of Spaces Opened
3Q19 9M19  
Advertising Revenues 200.0% 140.5%   Retail Operations 6
Car Rental Revenues 42.7% 23.9%   Food and Beverage Operations 3
Retail Operations 21.8% 24.6%   Car Rental Revenues 1
Ground Transportation 17.9% 129.1%   Other Revenue 1
Food and Beverage Operations 10.0% 14.6%   Duty Free 1
Duty Free 4.0% 4.0%   Advertising Revenues 1
Parking Lot Fees (1.8%) (2.3%)   Total Commercial Spaces 13
Other Revenue (19.7%) (4.8%)      
Total Commercial Revenues 21.5% 18.6%  

1 Only includes new stores opened during the period and excludes remodelings or contract renewals.

 

Puerto Rico Operating Costs and Expenses

 

Table 16: Puerto Rico Operating Costs & Expenses              
In thousands of Mexican pesos              
  Third Quarter % Chg   Nine - Months % Chg
  2018 2019   2018 2019
Cost of Services 313,962 350,902 11.8   966,316 994,186 2.9
Concession Fees 32,028 36,313 13.4   96,459 106,302 10.2
Depreciation and Amortization 150,253 170,664 13.6   462,327 497,937 7.7
Operating Costs and Expenses Excluding Construction Costs 496,243 557,879 12.4   1,525,102 1,598,425 4.8
Construction Costs 15,883 53,114 234.4   152,856 220,321 44.1
Total Operating Costs & Expenses 512,126 610,993 19.3   1,677,958 1,818,746 8.4

Figures in pesos at the average exchange rate Ps.19.8584= US$1.00

 

Total Operating Costs and Expenses at LMM Airport in 3Q19, increased 19.3% YoY to Ps.611.0 million. During 3Q19, Aerostar reported construction costs of Ps.53.1 million, reflecting capital investments in concessioned assets. Excluding construction costs, operating costs and expenses increased 12.4% to Ps.557.9 million.

 

Cost of Services increased 11.8% YoY, or by Ps.36.9 million mainly reflecting higher payroll and professional fees.

 

Concession Fees paid to the Puerto Rican government increased YoY by Ps.4.3 million, to Ps.36.3 million from Ps.32.0 million in 3Q18. In line with the concession agreement, starting in 2018, the concession fee is based on revenues and impacts results.

 

Depreciation and Amortization increased YoY by 13.6%, or Ps.20.4 million, principally reflecting higher investments in 2018.

 

ASUR 3Q19 Page 11 of 24    
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ASUR 3Q19 Page 12 of 24    
 

 

Puerto Rico Comprehensive Financing Gain (Loss)

 

Table 17: Puerto Rico Comprehensive Financing Gain (Loss)

In thousands of Mexican pesos

  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Interest Income 3,809 4,801 26.0   4,786 11,787 146.3
Interest Expense (127,533) (128,351) (0.6)   (381,086) (380,921) 0.0
Total (123,724) (123,550) 0.1   (376,300) (369,134) 1.9

Figures in pesos at the average exchange rate Ps.19.8584= US$1.00

 

During 3Q19, LMM Airport reported a Ps.123.6 million Comprehensive Financing Loss, compared with a Ps.123.7 million loss in 3Q18, mainly reflecting interest rate movements and the impact from the valuation to present value of future obligations under IFRIC 12 and NIC 37.

 

On February 22, 2013, and as part of the financing of the concession agreement, Aerostar entered into a subordinated term loan with Cancun Airport in the amount of US$100 million at an annual interest rate of LIBOR plus 2.10%, payable each July 1 and January 1, and with no fixed maturity date. As of September 30, 2019, the remaining balance was US$47.0 million.

 

On March 22, 2013, Aerostar carried out a private bond placement for a total of US$350 million to finance a portion of the Concession Agreement payment to the Puerto Rican Ports Authority and certain other costs and expenditures associated with it.

 

On June 24, 2015, Aerostar carried out a private bond placement for a total of US$50 million. In December 2015, Aerostar also contracted a line of revolving credit, which, as of September 30, 2019, had not been utilized.

 

All long-term debt is collateralized by Aerostar’s total assets.

 

Puerto Rico Operating Profit and EBITDA

 

Table 18: Puerto Rico Operating Profit & EBITDA

In thousands of Mexican pesos

             
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Total Revenue 692,466 808,251 16.7   2,166,832 2,444,942 12.8
Total Revenues Excluding Construction Revenues 676,583 755,137 11.6   2,013,976 2,224,621 10.5
Other Income           204,074 n/a
Operating Profit 180,340 197,258 9.4   488,874 830,270 69.8
Operating Margin 26.0% 24.4% (164 bps)   22.6% 34.0% 1140 bps
Adjusted Operating Margin 1 26.7% 26.1% (53 bps)   24.3% 37.3% 1305 bps
Net Profit 46,301 64,509 39.3   87,344 433,177 395.9
EBITDA 329,682 367,921 11.6   981,305 1,329,939 35.5
EBITDA Margin 47.6% 45.5% (209 bps)   45.3% 54.4% 911 bps
Adjusted EBITDA Margin 2 48.7% 48.7% (1 bps)   48.7% 59.8% 1106 bps

 

Figures in pesos at the average exchange rate Ps.19.8584= US$1.00

 

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

 

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

                   

Operating Profit at Puerto Rico in 3Q19 increased to Ps.197.3 million, with Operating Margin of 24.4% in 3Q19 compared with 26.0% in 3Q18.

 

EBITDA increased 11.6% to Ps.367.9 million from Ps.329.7 million in 3Q18. EBITDA Margin contracted to 45.5% from 47.6% in 3Q18, while the adjusted EBITDA Margin, excluding IFRIC 12, remained unchanged YoY at 48.7%.

 

ASUR 3Q19 Page 13 of 24    
 

 

Puerto Rico Capital Expenditures

 

During 3Q19, Aerostar invested Ps.59.4 million to modernize LMM Airport, compared with investments of Ps.245.6 million in 3Q18. Accumulated capex for 9M19 ammounted to Ps.238.4 million compared with Ps.645.9 million invested in 9M18.

 

Puerto Rico Tariff Regulation

 

The Airport Use Agreement signed by Aerostar, the airlines serving LMM Airport, and the Puerto Rico Ports Authority governs the relationship between Aerostar and the principal airlines serving LMM Airport. The agreement entitles Aerostar to an annual contribution from the airlines of US$62 million during the first five years of the term. From year six onwards, the total annual contribution for the prior year increases in accordance with an adjusted consumer price index factor based on the U.S. non-core consumer price index. The annual fee is divided between the airlines that operate at LMM Airport in accordance with the regulations and structure defined under the Airport Use Agreement to establish the contribution of each airline for each particular year.

 

Review of Colombia Operations

 

The following discussion compares Airplan's independent results for the three- and nine-month periods ended September 30, 2018 and 2019.

 

The valuation of ASUR’s investment in Airplan in accordance with IFRS 3 "Business Combinations" resulted in the following effects on the balance sheet as of September 30, 2019: i) the recognition of a net intangible asset of Ps.1,337.0 million, ii) goodwill of Ps.1,504.9, iii) deferred taxes of Ps.212.0 million, and iv) Ps.630.4 million from the recognition of bank loans at fair value.

 

Table 19: Airplan, Colombia Revenues & Commercial Revenues Per Passenger        
In thousands of Mexican pesos              
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Total Passenger (in thousands) 2,872 3,247 13.1   7,849 8,983 14.5
               
Total Revenues 403,940 552,454 36.8   1,556,638 1,516,395 (2.6)
Aeronautical Services 321,357 367,786 14.4   934,194 1,039,989 11.3
Non-Aeronautical Services 100,476 137,784 37.1   289,910 370,151 27.7
Construction Revenues 1 (17,893) 46,884 n/a   332,534 106,255 (68.0)
Total Revenues Excluding Construction Revenues 421,833 505,570 19.9   1,224,104 1,410,140 15.2
Total Commercial Revenues 100,467 137,004 36.4   288,494 365,822 26.8
Total Commercial Revenues per Passenger 35.0 42.2 20.6   36.8 40.7 10.8

Figures in pesos at an average exchange rate of COP172.0571 = Ps.1.00

 

Note: For purpose of this table, approximately 71.4 and 54.9 thousand transit and general aviation passengers are included in 3Q18 and 3Q19, and 167.6 and 175.9 thousand transit and general aviation passengers are included in 9M18 and 9M19.

 

1 Construction revenues for Airplan in 3Q18 include the actual construction revenues which is equal to the construction cost of Ps.63.1 million and an estimate to the downside of income derived from the valuation of the intangible to present value (construction income) of Ps.80.9 million, according to IFRIC 12. Construction revenues for Airplan 3Q19 are equal to the construction cost of Ps.46.9 million.

 

Colombia Revenues

 

Total Colombia Revenues for 3Q19 increased 36.8% YoY to Ps.552.5 million. Excluding construction services revenues, revenues rose 19.9% mainly reflecting the following increases:

 

● 14.4% in revenues from aeronautical services; and

 

● 37.1% in revenues from non-aeronautical services, mainly due to the 36.4% increase in commercial revenues.

 

Commercial Revenues per Passenger increased 20.6% year-on-year to Ps.42.2 from Ps.35.0 in 3Q18.

 

As shown in Table 21, during the last twelve months, 20 new commercial spaces were opened in Colombia. More details of these openings can be found on page 20 of this report.

 

ASUR 3Q19 Page 14 of 24    
 

 

ASUR classifies commercial revenues as those derived from the following activities: duty-free stores, car rentals, retail operations, advertising, non-permanent ground transportation, food and beverage operations, and parking lot fees.

 

Table 20: Colombia Commercial Revenue Performance       Table 21: Colombia Summary Retail and Other Commercial Space Opened since September 30, 2018
         
Business Line YoY Chg   Type of Commercial Space 1 # of
Spaces
Opened
3Q19 9M19  
Ground Transportation 161.9% 45.4%   Retail Operations 8
Car Rental Revenues 160.4% 116.4%   Other Revenue 11
Retail Operations 116.5% 81.4%   Banking and Currency Exchange Services 1
Parking Lot Fees 79.0% 58.1%   Total Commercial Spaces 20
Food and Beverage Operations 43.2% 40.4%      
Other Revenue 11.2% 7.6%   1 Only includes new stores opened during the period and excludes remodelings or contract renewals.
Teleservices 1.8% 4.7%  
Duty Free 100.0% 100.0%      
Banking and Currency Exchange Services (0.0%) (0.8%)    
Advertising Revenues (9.5%) (4.6%)  
Total Commercial Revenues 36.4% 26.8%      

 

Table 22: Airplan, Colombia Operating Costs and Expenses

             
In thousands of Mexican pesos              
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Cost of Services 139,774 137,907 (1.3)   374,681 427,469 14.1
Technical Assistance 1,598 1,559 (2.4)   5,419 4,407 (18.7)
Concession Fees 79,887 96,081 20.3   232,070 269,176 16.0
Depreciation and Amortization 222,375 106,101 (52.3)   546,561 377,347 (31.0)
Operating Costs and Expenses Excluding Construction Costs 443,634 341,648 (23.0)   1,158,731 1,078,399 (6.9)
Construction Costs 63,075 46,884 (25.7)   229,794 106,255 (53.8)
Total Operating Costs & Expenses 506,709 388,532 (23.3)   1,388,525 1,184,654 (14.7)
 

Note: Figures in pesos at an average exchange rate of COP172.0571 = Ps.1.00

 

Total Operating Costs and Expenses in Colombia declined 23.3% YoY in 3Q19 to Ps.388.5 million. Excluding construction costs, operating costs and expenses declined 23.0% to Ps.341.6 million.

 

Cost of Services declined 1.3% YoY, or Ps.1.9 million, mainly reflecting higher legal fees in 3Q18 partially offset by an increase in the maintenance provision for future replacement of assets in 3Q19, in line with IFRIC 12.

 

Construction Costs declined 25.7% YoY to Ps.46.9 million, reflecting lower investments in complementary works to concessioned assets during the period.

 

Concession Fees, which include fees paid to the Colombian government, increased 20.3% YoY, mainly reflecting higher regulated and non-regulated revenues during the period.

 

Depreciation and Amortization declined by 52.3%, or Ps.116.2 million, principally reflecting a change in amortization methodology, which starting January 2019 is on a straight-line basis instead of the percentage of completion method which implied variations in the accumulated amortization rate of the concession.

 

Colombia Comprehensive Financing Gain (Loss)

 

Table 23: Airplan, Colombia, Comprehensive Financing Gain (Loss)

In thousands of Mexican pesos

  Third Quarter % Chg.   Nine-Months %
Chg.
  2018 2019   2018 2019
Interest Income 1,760 5,711 224.5   4,542 44,482 879.3
Interest Expense (74,978) (64,958) 13.4   (233,938) (195,893) 16.3
Foreign Exchange Gain (Loss), Net (13) (347) (2,569.2)   189 (145) n/a
Total (73,231) (59,594) 18.6   (229,207) (151,556) (33.9)

Figures in pesos at an average exchange rate of COP172.0571 = Ps.1.00

 

ASUR 3Q19 Page 15 of 24    
 

 

During 3Q19, Airplan reported a Ps.59.6 million Comprehensive Financing Loss, compared with a Ps.73.2 million loss in 3Q18, mainly reflecting lower interest expenses in 3Q19 resulting from debt payments in 3Q18 and 4Q18.

 

On June 1, 2015, Airplan entered into 12-Year Syndicated Loan Facility with eight banks with a 3-year grace period, with a net balance of Ps.2,972.9 million. Airplan made a Ps.44.3 million capital payment during the quarter.

 

Colombia Operating Profit and EBITDA

 

Table 24: Airplan, Colombia Profit & EBITDA

In thousands of Mexican pesos

             
  Third Quarter % Chg.   Nine-Months % Chg.
  2018 2019   2018 2019
Total Revenue 403,940 552,454 36.8   1,556,638 1,516,395 (2.6)
Total Revenues Excluding Construction Revenues 421,833 505,570 19.9   1,224,104 1,410,140 15.2
Operating Profit (102,769) 163,922 n/a   168,113 331,741 97.3
Operating Margin (25.4%) 29.7% 5511 bps   10.8% 21.9% 1108 bps
Adjusted Operating Margin 1 (24.4%) 32.4% 5679 bps   13.7% 23.5% 979 bps
Net Profit (111,993) 69,228 n/a   (41,051) 182,156 n/a
EBITDA 200,574 270,024 34.6   611,934 709,088 15.9
EBITDA Margin 49.7% 48.9% (78 bps)   39.3% 46.8% 745 bps
Adjusted EBITDA Margin 2 47.5% 53.4% 586 bps   50.0% 50.3% 29 bps

 

Figures in pesos at an average exchange rate of COP172.0571 = Ps.1.00

 

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

 

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

 

Airplan reported an Operating Gain of Ps.163.9 million in 3Q19, compared with an operating loss of Ps.102.8 million in 3Q18. Operating Margin expanded to 29.7% in 3Q19 from negative 25.4% in 3Q18. Adjusted Operating Margin, which excludes the impact of IFRIC 12 with respect to construction or improvements to concessioned assets, increased to 32.4% in 3Q19 from negative 24.4% in 3Q18, reflecting a 36.8% increase in revenues along with a 23.3% decline in costs.

 

During 3Q19 EBITDA increased 34.6% to Ps.270.0 million from Ps.200.6 million in 3Q18, mainly reflecting a Ps.148.5 million increase in revenues while expenses declined Ps.118.2 million during the period.

 

EBITDA Margin declined to 48.9% in 3Q19, from 49.7% in 3Q18. Adjusted EBITDA Margin, which excludes the impact of IFRIC 12 with respect to construction or improvements to concessioned assets, increased to 53.4% in 3Q19, from 47.5% in 3Q18.

 

Colombia Capital Expenditures

 

During 3Q19, Airplan made capital expenditures of Ps.46.9 million compared with Ps.14.9 million in 3Q18. Accumulated capex for 9M19 ammounted to Ps.106.2 million, compared with Ps.394.2 million in 9M18.

 

Colombia Tariff Regulation

 

Functions of the Special Administrative Unit of Civil Aeronautics include establishing and collecting fees, tariffs, and rights for the provision of aeronautical and airport services or those that are generated by the concessions, authorizations, licenses, or any other type of income or property. As a result, Resolution 04530, issued on September 21, 2007, establishes the tariffs for the rights and the rates conceded to the concessionaire of the following airports: José María Córdova of Rionegro, Enrique Olaya Herrera of Medellín, Los Garzones of Montería, El Caraño of Quibdó, Antonio Roldán Betancourt of Carepa, and Las Brujas of Corozal. This resolution also established the methodology to update and the mechanisms to collect such fees, tariffs, and rights. Airplan's regulated revenues for 3Q19 amounted to Ps.367.8 million.

 

ASUR 3Q19 Page 16 of 24    
 

 

Definitions

 

Concession Services Agreements (IFRIC 12 interpretation). In Mexico and Puerto Rico, ASUR is required by IFRIC 12 to include in its income statement an income line, “Construction Revenues,” reflecting the revenue from construction or improvements to concessioned assets made during the relevant period. The same amount is recognized under the expense line “Construction Costs” because ASUR hires third parties to provide construction services. Because equal amounts of Construction Revenues and Construction Costs have been included in ASUR's income statement as a result of the application of IFRIC 12, the amount of Construction Revenues does not have an impact on EBITDA, but it does have an impact on EBITDA Margin. In Colombia, “Construction Revenues” include the recognition of the revenue to which the concessionaire is entitled for carrying out the infrastructure works in the development of the concession, while “Construction Costs” represents the actual costs incurred in the execution of such additions or improvements to the concessioned assets.

 

Majority Net Income reflects ASUR’s equity interests in each of its subsidiaries and therefore excludes the 40% interest in Aerostar that is owned by other shareholders. Other than Aerostar, ASUR owns (directly or indirectly) 100% of its subsidiaries.

 

EBITDA means net income before provision for taxes, deferred taxes, profit sharing, non-ordinary items, participation in the results of associates, comprehensive financing cost, and depreciation and amortization. EBITDA should not be considered as an alternative to net income, as an indicator of our operating performance or as an alternative to cash flow as an indicator of liquidity. Our management believes that EBITDA provides a useful measure that is widely used by investors and analysts to evaluate our performance and compare it with other companies. EBITDA is not defined under U.S. GAAP or IFRS and may be calculated differently by different companies.

 

Adjusted EBITDA Margin is calculated by dividing EBITDA by total revenues excluding construction services revenues for Mexico, Puerto Rico, and Colombia and excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets. ASUR is required by IFRIC 12 to include in its income statement an income line reflecting the revenue from construction or improvements to concessioned assets made during the relevant period. The same amount is recognized under the expense line “Construction Costs” because ASUR hires third parties to provide construction services. In Mexico and Puerto Rico, because equal amounts of Construction Revenues and Construction Costs have been included in ASUR's income statement as a result of the application of IFRIC 12, the amount of Construction Revenues does not have an impact on EBITDA, but it does have an impact on EBITDA Margin, as the increase in revenues that relates to Construction Revenues does not result in a corresponding increase in EBITDA. In Colombia, construction revenues do have an impact on EBITDA, as construction revenues include a reasonable margin over the actual cost of construction. Like EBITDA Margin, Adjusted EBITDA Margin should not be considered as an indicator of our operating performance or as an alternative to cash flow as an indicator of liquidity and is not defined under U.S. GAAP or IFRS and may be calculated differently by different companies.

 

About ASUR

Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR) is a leading international airport operator with a portfolio of concessions to operate, maintain, and develop 16 airports in the Americas. These comprise nine airports in southeast Mexico, including Cancun Airport, the most important tourist destination in Mexico, the Caribbean, and Latin America, and six airports in northern Colombia, including José María Córdova International Airport (Rionegro), the second busiest airport in Colombia. ASUR is also a 60% JV partner in Aerostar Airport Holdings, LLC, operator of the Luis Muñoz Marín International Airport serving the capital of Puerto Rico, San Juan. San Juan’s Airport is the island’s primary gateway for international and mainland-US destinations and was the first and currently the only major airport in the US to have successfully completed a public–private partnership under the FAA Pilot Program. Headquartered in Mexico, ASUR is listed both on the Mexican Bolsa, where it trades under the symbol ASUR, and on the NYSE in the U.S., where it trades under the symbol ASR. One ADS represents ten (10) series B shares. For more information, visit www.asur.com.mx

 

Analyst Coverage

In accordance with Mexican Stock Exchange Internal Rules Article 4.033.01, ASUR reports that the stock is covered by the following broker-dealers: Actinver Casa de Bolsa, Banorte, Barclays, BBVA Bancomer, BofA Merrill Lynch, BX+, Bradesco, BTG Pactual, Citi Investment Research, Credit Suisse, Goldman Sachs, Grupo Bursatil Mexicano, Grupo Financiero Interacciones, Grupo Financiero Monex, HSBC, Intercam Casa de Bolsa,

 

ASUR 3Q19 Page 17 of 24    
 

 

Insight Investment Research, Itau BBA Securities, INVEX, JP Morgan, Morgan Stanley, Morningstar, Nau Securities, Punto Casa de Bolsa, Santander Investment, Scotia Capital, UBS Casa de Bolsa and Vector.

 

Please note that any opinions, estimates or forecasts regarding the performance of ASUR issued by these analysts reflect their own views, and therefore do not represent the opinions, estimates or forecasts of ASUR or its management. Although ASUR may refer to or distribute such statements, this does not imply that ASUR agrees with or endorses any information, conclusions or recommendations included therein.

 

Some of the statements contained in this press release discuss future expectations or state other forward-looking information. Those statements are subject to risks identified in this press release and in ASUR’s filings with the SEC. Actual developments could differ significantly from those contemplated in these forward-looking statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Our forward-looking statements speak only as of the date they are made and, except as may be required by applicable law, we do not have an obligation to update or revise them, whether as a result of new information, future or otherwise.

 

Contacts:

 

ASUR

Adolfo Castro

+1-52-55-5284-0408

acastro@asur.com.mx

InspIR Group

Susan Borinelli

+1-646-330-5907

susan@inspirgroup.com

 

– SELECTED OPERATING TABLES & FINANCIAL STATEMENTS FOLLOW –

 

ASUR 3Q19 Page 18 of 24    
 

 

Passenger Traffic Breakdown by Airport
                 
Mexico Passenger Traffic 1          
    Third Quarter % Chg   Nine - Months % Chg
    2018 2019   2018 2019
Domestic Traffic 4,342,594 4,469,498 2.9   11,725,081 12,367,374 5.5
CUN Cancun 2,493,382 2,484,484 (0.4)   6,525,887 6,703,534 2.7
CZM Cozumel 50,933 49,573 (2.7)   123,926 147,802 19.3
HUX Huatulco 184,182 206,173 11.9   512,051 575,881 12.5
MID Merida 571,059 655,168 14.7   1,625,425 1,883,658 15.9
MTT Minatitlan 50,126 34,696 (30.8)   144,693 105,315 (27.2)
OAX Oaxaca 218,120 273,004 25.2   618,995 740,248 19.6
TAP Tapachula 80,991 88,949 9.8   226,050 269,869 19.4
VER Veracruz 379,428 363,427 (4.2)   1,060,565 1,035,408 (2.4)
VSA Villahermosa 314,373 314,024 (0.1)   887,489 905,659 2.0
International Traffic 3,960,965 3,863,729 (2.5)   13,433,337 13,416,487 (0.1)
CUN Cancun 3,757,924 3,675,731 (2.2)   12,663,402 12,671,074 0.1
CZM Cozumel 87,049 57,406 (34.1)   328,763 286,592 (12.8)
HUX Huatulco 6,491 6,591 1.5   108,559 107,659 (0.8)
MID Mérida 53,348 50,592 (5.2)   167,846 157,264 (6.3)
MTT Minatitlan 2,176 2,262 4.0   5,533 5,987 8.2
OAX Oaxaca 25,681 40,992 59.6   73,221 109,149 49.1
TAP Tapachula 3,801 3,925 3.3   12,096 10,295 (14.9)
VER Veracruz 18,865 19,943 5.7   50,607 52,349 3.4
VSA Villahermosa 5,630 6,287 11.7   23,310 16,118 (30.9)
Total Traffic México 8,303,559 8,333,227 0.4   25,158,418 25,783,861 2.5
CUN Cancun 6,251,306 6,160,215 (1.5)   19,189,289 19,374,608 1.0
CZM Cozumel 137,982 106,979 (22.5)   452,689 434,394 (4.0)
HUX Huatulco 190,673 212,764 11.6   620,610 683,540 10.1
MID Merida 624,407 705,760 13.0   1,793,271 2,040,922 13.8
MTT Minatitlan 52,302 36,958 (29.3)   150,226 111,302 (25.9)
OAX Oaxaca 243,801 313,996 28.8   692,216 849,397 22.7
TAP Tapachula 84,792 92,874 9.5   238,146 280,164 17.6
VER Veracruz 398,293 383,370 (3.7)   1,111,172 1,087,757 (2.1)
VSA Villahermosa 320,003 320,311 0.1   910,799 921,777 1.2
                 
US Passenger Traffic, San Juan Airport (LMM)          
    Third Quarter % Chg   Nine - Months % Chg
    2018 2019   2018 2019
SJU Total 1 2,226,595 2,354,372 5.7   6,362,573 7,072,180 11.2
Domestic Traffic 1,957,414 2,098,971 7.2   5,672,204 6,315,138 11.3
International Traffic 269,181 255,401 (5.1)   690,369 757,042 9.7
                 
Colombia, Passenger Traffic Airplan            
    Third Quarter % Chg   Nine - Months % Chg
    2018 2019   2018 2019
Domestic Traffic 2,393,455 2,699,836 12.8   6,516,614 7,457,666 14.4
MDE Medellín (Rionegro) 1,700,850 1,964,307 15.5   4,586,746 5,409,532 17.9
EOH Medellín 276,977 291,980 5.4   779,603 801,648 2.8
MTR Montería 254,985 261,804 2.7   682,242 734,571 7.7
APO Carepa 88,169 99,093 12.4   259,320 279,172 7.7
UIB Quibdó 51,916 59,030 13.7   146,438 163,387 11.6
CZU Corozal 20,558 23,622 14.9   62,265 69,356 11.4
International Traffic 407,275 492,749 21.0   1,164,804 1,349,885 15.9
MDE Medellín (Rionegro) 407,275 492,749 21.0   1,164,804 1,349,885 15.9
EOH Medellín                                   -                                     -                                   -                                    -                                     -                                    -
MTR Montería                                   -                                     -                                   -                                    -                                     -                                    -
APO Carepa                                   -                                     -                                   -                                    -                                     -                                    -
UIB Quibdó                                   -                                     -                                   -                                    -                                     -                                    -
CZU Corozal                                   -                                     -                                   -                                    -                                     -                                    -
Total Traffic Colombia 2,800,730 3,192,585 14.0   7,681,418 8,807,551 14.7
MDE Medellín (Rionegro) 2,108,125 2,457,056 16.6   5,751,550 6,759,417 17.5
EOH Medellín 276,977 291,980 5.4   779,603 801,648 2.8
MTR Montería 254,985 261,804 2.7   682,242 734,571 7.7
APO Carepa 88,169 99,093 12.4   259,320 279,172 7.7
UIB Quibdó 51,916 59,030 13.7   146,438 163,387 11.6
CZU Corozal 20,558 23,622 14.9   62,265 69,356 11.4
                 
1 Passenger figures for Mexico and Colombia exclude transit and general aviation passengers, and SJU include transit passengers and general aviation.

 

ASUR 3Q19 Page 19 of 24    
 

 

Grupo Aeroportuario del Sureste, S.A.B. de C.V.
Comercial Spaces
     
ASUR Retail and Other Commercial Space Opened since September 30, 20181  
Business Name Type Opening Date
MEXICO
Cancun
Mini Market (Tienda ODC) Retail March 2019
Todo a $10 usd (Bisuteria) Retail March 2019
Business Lounge (T4) Internacional Other Revenue April 2019
Business Lounge (T4) Nacional Other Revenue April 2019
Sunglass Hut Retail April 2019
Gold Elements Retail May 2019
Bijoux Retail September 2019
Tapachula    
Alquiladora de Vehiculos Automotores Car Rental December 2018
SAN JUAN, PUERTO RICO    
Cabrera Car and Truck Rental Car Rental October 2018
Sunny Planet Retail December 2018
VIP Lounge Other Revenue December 2018
Carl's Jr. Food and Beverage January 2019
Invicta Retail May 2019
Invicta Retail May 2019
The Destillery Retail June 2019
Metropol Food and Beverage June 2019
Grab at the Gate Food and Beverage June 2019
Innovative Media Advertising August 2019
Sunglasses Duty Free September 2019
Baggage Storage Retail September 2019
Sunny Planet Retail September 2019
COLOMBIA    
Rionegro    
SAPIA CI SAS Retail December 2018
SAPIA CI SAS Retail January 2019
AEROREPUBLICA S.A. Other Revenue April 2019
ABC AEROLINEAS SA DE CV SUCURSAL COLOMBIA Other Revenue May 2019
AIR EUROPA LINEAS AEREAS SOCIEDAD ANONIMA Other Revenue May 2019
Olaya herrera    
CENTRAL CHARTER DE COLOMBIA Other Revenue November 2018
ELKIN LEONCIO CASTAÑO CIRO Retail December 2018
DEPARTAMENTO DE ANTIOQUIA Other Revenue April 2019
Monteria    
SAPIA CI SAS Retail December 2018
SAPIA CI SAS Retail December 2018
DAVIVIENDA S.A Banking and Currency Exchange Services February 2019
Quibdo    
SATENA Other Revenue October 2018
MARCAPASOS S.A.S Other Revenue May 2019
RENTERIA PALACIO EDWARD FRANCISCO Food and Beverage May 2019
Corozal    
FIGUEROA GOMEZ WISTON Food and Beverage September 2018
AEROVIAS DEL CONTINENTE AMERICANO S.A. AVIANCA Other Revenue October 2018
AEROVIAS DEL CONTINENTE AMERICANO S.A. AVIANCA Other Revenue October 2018
SECURITAS COLOMBIA S.A. Other Revenue October 2018
SERVICIOS AEROPORTUARIOS INTEGRADOS - SAI  LTDA Other Revenue October 2018
Centro de Servicios
CUEROS VELEZ S.A.S Retail October 2018
COMPAÑIA MANUFACTURERA MANISOL S A Retail February 2018
* Only includes new stores opened during the period and excludes remodelings or contract renewals.

 

ASUR 3Q19 Page 20 of 24    
 

 

Grupo Aeroportuario del Sureste, S.A.B. de C.V.
Operating Results per Airport
Thousands of mexican pesos
               
Item 3Q
2018 		3Q 2018 Per
Workload Unit 		3Q
2019 		3Q 2019 Per
Workload Unit 		  YoY %
Chg. 		Per Workload
Unit YoY %
Chg.
Mexico              
Cancun 1            
Aeronautical Revenues 1,102,521 174.2 1,102,236 176.8   (0.0) 1.5
Non-Aeronautical Revenues 911,544 144.0 966,568 155.0   6.0 7.6
Construction Services Revenues 79,647 12.6 37,218 6.0   (53.3) (52.4)
Total Revenues 2,093,712 330.8 2,106,022 337.7   0.6 2.1
Operating Profit 1,271,160 200.8 1,314,352 210.8   3.4 5.0
EBITDA 1,384,972 218.8 1,430,486 229.4   3.3 4.8
Merida            
Aeronautical Revenues 119,730 177.6 147,429 193.5   23.1 9.0
Non-Aeronautical Revenues 30,357 45.0 34,064 44.7   12.2 (0.7)
Construction Services Revenues 651 1.0 11,274 14.8   1,631.8 1,380.0
Other 2 23                                       - 23                                       -                              - n/a
Total Revenues 150,761 223.7 192,790 253.0   27.9 13.1
Operating Profit 74,543 110.6 97,535 128.0   30.8 15.7
EBITDA 86,576 128.5 109,625 143.9   26.6 12.0
Villahermosa            
Aeronautical Revenues 52,994 159.6 68,145 204.0   28.6 27.8
Non-Aeronautical Revenues 15,931 48.0 15,050 45.1   (5.5) (6.0)
Construction Services Revenues 2,888 8.7 8,987 26.9   211.2 209.2
Other 2 26 0.1 25 0.1   (3.8)                                       -
Total Revenues 71,839 216.4 92,207 276.1   28.4 27.6
Operating Profit 32,273 97.2 43,373 129.9   34.4 33.6
EBITDA 39,824 120.0 51,032 152.8   28.1 27.3
Other Airports 3            
Aeronautical Revenues 220,699 196.4 234,295 200.9   6.2 2.3
Non-Aeronautical Revenues 39,538 35.2 40,542 34.8   2.5 (1.1)
Construction Services Revenues 9,141 8.1 79,753 68.4   772.5 744.4
Other 2 65 0.1 68 0.1   4.6                                       -
Total Revenues 269,443 239.7 354,658 304.2   31.6 26.9
Operating Profit 109,483 97.4 114,399 98.1   4.5 0.7
EBITDA 145,161 129.1 150,609 129.2   3.8 0.1
Holding & Service Companies 4            
Construction Services Revenues                              - n/a                              - n/a   n/a n/a
Other 2 357,241 n/a 384,599 n/a   7.7 n/a
Total Revenues 357,241 n/a 384,599 n/a   7.7 n/a
Operating Profit 91,505 n/a 95,771 n/a   4.7 n/a
EBITDA 91,531 n/a 95,906 n/a   4.8 n/a
Consolidation Adjustment Mexico            
Consolidation Adjustment (357,355) n/a (384,715) n/a   7.7 n/a
Total Mexico            
Aeronautical Revenues 1,495,944 176.8 1,552,105 182.6   3.8 3.3
Non-Aeronautical Revenues 997,370 117.9 1,056,224 124.3   5.9 5.4
Construction Services Revenues 92,327 10.9 137,232 16.1   48.6 47.7
Total Revenues 2,585,641 305.7 2,745,561 323.1   6.2 5.7
Operating Profit 1,578,964 186.7 1,665,430 196.0   5.5 5.0
EBITDA 1,748,064 206.7 1,837,658 216.2   5.1 4.6
San Juan Puerto Rico, US 5              
Aeronautical Revenues 433,814 n/a 460,754 n/a   6.2 n/a
Non-Aeronautical Revenues 242,769 n/a 294,383 n/a   21.3 n/a
Construction Services Revenues 15,883 n/a 53,114 n/a   234.4 n/a
Total Revenues 692,466 n/a 808,251 n/a   16.7 n/a
Operating Profit 180,340 n/a 197,258 n/a   9.4 n/a
EBITDA 329,682 n/a 367,921 n/a   11.6 n/a
Consolidation Adjustment San Juan            
Consolidation Adjustment                              - n/a                              - n/a   n/a n/a
Colombia 6              
Aeronautical Revenues 321,357 n/a 367,786 n/a   14.4 n/a
Non-Aeronautical Revenues 100,476 n/a 137,784 n/a   37.1 n/a
Construction Services Revenues (17,893) n/a 46,884 n/a   (362.0) n/a
Total Revenues 403,940 n/a 552,454 n/a   36.8 n/a
Operating Profit (102,769) n/a 163,922 n/a   (259.5) n/a
EBITDA 200,574 n/a 270,024 n/a   34.6 n/a
Consolidation Adjustment Colombia            
Consolidation Adjustment   n/a                              - n/a   n/a n/a
CONSOLIDATED ASUR              
Aeronautical Revenues 2,251,115 n/a 2,380,645 n/a   5.8 n/a
Non-Aeronautical Revenues 1,340,615 n/a 1,488,391 n/a   11.0 n/a
Construction Services Revenues 90,317 n/a 237,230 n/a   162.7 n/a
Total Revenues 3,682,047 n/a 4,106,266 n/a   11.5 n/a
Operating Profit 1,656,535 n/a 2,026,610 n/a   22.3 n/a
EBITDA 2,278,320 n/a 2,475,603 n/a   8.7 n/a
               
1 Reflects the results of operations of Cancun Airport and two Cancun Airport Services subsidiaries on a consolidated basis.
2 Reflects revenues under intercompany agreements which are eliminated in the consolidation adjustment.
3 Reflects the results of operations of our airports located in Cozumel, Huatulco, Minatitlan, Oaxaca, Tapachula and Veracruz.
4 Reflects the results of operations of our parent holding company and our services subsidiaries. Because none of these entities hold the concessions for our airports, we do not report workload unit data for theses entities.
5 Reflects the results of operation of  San Juan Airport, Puerto Rico, US for 3Q19.
6 Reflects the results of operation of  Airplan, Colombia, for 3Q19.

 

ASUR 3Q19 Page 21 of 24    
 

 

Grupo Aeroportuario del Sureste, S.A.B. de C.V.
Consolidated Statement of Income from January 1 to September 30,  2019 and 2018
Thousands of mexican pesos
               
Item 9M 9M %   3Q 3Q %
2018 2019 Chg   2018 2019 Chg
Revenues              
Aeronautical Services 6,715,133 7,181,875 7.0   2,251,115 2,380,645 5.8
Non-Aeronautical Services 4,160,293 4,577,310 10.0   1,340,615 1,488,391 11.0
Construction Services 610,585 517,810 (15.2)   90,317 237,230 162.7
Total Revenues 11,486,011 12,276,995 6.9   3,682,047 4,106,266 11.5
               
Operating Expenses              
Cost of Services 2,669,519 2,841,388 6.4   936,997 980,145 4.6
Cost of Construction 507,845 517,810 2.0   171,285 237,230 38.5
General and Administrative Expenses 173,738 185,212 6.6   56,436 64,333 14.0
Technical Assistance 295,026 312,318 5.9   93,636 98,442 5.1
Concession Fee 673,424 742,512 10.3   225,304 250,513 11.2
Depreciation and Amortization 1,515,186 1,390,518 (8.2)   541,854 448,993 (17.1)
Total Operating Expenses 5,834,738 5,989,758 2.7   2,025,512 2,079,656 2.7
               
Other Revenues   204,074 n/a        
               
Operating Income 5,651,273 6,491,311 14.9   1,656,535 2,026,610 22.3
               
Comprehensive Financing Cost (672,756) (504,701) 25.0   (280,275) (135,794) 51.5
               
Income Before Income Taxes 4,978,517 5,986,610 20.2   1,376,260 1,890,816 37.4
               
Provision for Income Tax 1,322,065 1,564,665 18.4   427,884 513,291 20.0
Provision for Asset Tax 699   n/a   233   n/a
Deferred Income Taxes 83,691 38,857 (53.6)   (58,431) 37,093 163.5
               
Net Income for the Year 3,572,062 4,383,088 22.7   1,006,574 1,340,432 33.2
               
Majority Net Income 3,529,012 4,209,817 19.3   988,054 1,314,628 33.1
Non- controlling interests 43,050 173,271 302.5   18,520 25,804 39.3
               
Earning per Share 11.7634 14.0327 19.3   3.2935 4.3821 33.1
Earning per American Depositary Share (in U.S. Dollars) 5.9608 7.1108 19.3   1.6689 2.2205 33.1
Exchange Rate per Dollar Ps. 19.7345              

 

ASUR 3Q19 Page 22 of 24    
 

 

Grupo Aeroportuario del Sureste, S.A.B. de C.V.
Consolidated Balance Sheet as of  September 30, 2019 and December 31, 2018
Thousands of mexican pesos
         
Item September
2019 		December
2018 		Variation %
Assets        
Current Assets        
Cash and Cash Equivalents 6,196,806 4,584,507 1,612,299 35.2
Cash and cash equivalents restricted 205,897 47,332 158,565 335.0
Accounts Receivable, net 355,769 793,110 (437,341) (55.1)
Recoverable Taxes and Other Current Assets 958,659 575,963 382,696 66.4
Total Current Assets 7,717,131 6,000,912 1,716,219 28.6
         
Non Current Assets        
Machinery, Furniture and Equipment, net 505,510 558,480 (52,970) (9.5)
Intangible assets, airport concessions and Goodwill-Net 48,722,829 49,586,322 (863,493) (1.7)
Document Receivable 26,549 36,107 (9,558) (26.5)
Total  Assets 56,972,019 56,181,821 790,198 1.4
         
Liabilities and Stockholders' Equity        
Current Liabilities        
Trade Accounts Payable 247,117 313,576 (66,459) (21.2)
Bank Loans and short term debt 277,847 500,105 (222,258) (44.4)
Accrued Expenses and Others Payables 1,676,202 1,594,541 81,661 5.1
Total Current Liabilities 2,201,166 2,408,222 (207,056) (8.6)
         
Long Term Liabilities        
Bank Loans 6,905,296 7,042,598 (137,302) (1.9)
Long Term Debt 6,791,384 6,957,678 (166,294) (2.4)
Deferred Income Taxes 3,089,010 3,081,667 7,343 0.2
Employee Benefits 11,208 10,267 941 9.2
Total Long Term Liabilities 16,796,898 17,092,210 (295,312) (1.7)
         
Total Liabilities 18,998,064 19,500,432 (502,368) (2.6)
         
Stockholders' Equity        
Capital Stock 7,767,276 7,767,276  -  -
Legal Reserve 1,616,533 1,366,867 249,666 18.3
Mayority Net Income for the Period 4,209,817 4,987,601 (777,784) (15.6)
Cumulative Effect of Conversion of Foreign Currency 75,219 189,791 (114,572) (60.4)
Retained Earnings 16,531,952 14,794,650 1,737,302 11.7
Non- Controlling interests 7,773,158 7,575,204 197,954 2.6
Total Stockholders' Equity 37,973,955 36,681,389 1,292,566 3.5
         
Total Liabilities and Stockholders' Equity 56,972,019 56,181,821 790,198 1.4
Exchange Rate per Dollar Ps. 19.7345        

 

ASUR 3Q19 Page 23 of 24    
 

 

Grupo Aeroportuario del Sureste, S.A.B. de C.V.
 Consolidated Statement of Cash flow as of September 30,  2019 and 2018
Thousands of mexican pesos
               
Item 9M 9M %   3Q 3Q %
2018 2019 Chg   2018 2019 Chg
Operating Activities              
Income Before Income Taxes 4,978,517 5,986,610 20.2   1,376,260 1,890,816 37.4
Items Related with Investing Activities:              
Depreciation and Amortization 1,515,186 1,390,518 (8.2)   541,854 448,993 (17.1)
Interest Income (209,010) (272,744) 30.5   (58,148) (73,708) 26.8
Interest payables 925,895 838,025 (9.5)   298,930 279,891 (6.4)
Foreign Exchange Gain (loss), net unearned (10,705) (13,244) 23.7   (11,027) (30,561) 177.1
Sub-Total 7,199,883 7,929,165 10.1   2,147,869 2,515,431 17.1
Increase in Trade Receivables 425,016 491,537 15.7   273,321 221,563 (18.9)
Decrease in Recoverable Taxes and other Current Assets (27,207) (115,393) 324.1   51,066 63,404 24.2
Income Tax Paid (1,662,922) (1,627,112) (2.2)   (563,155) (510,378) (9.4)
Trade Accounts Payable (186,240) (69,983) (62.4)   (146,162) (108,745) (25.6)
               
Net Cash Flow Provided by Operating Activities 5,748,530 6,608,214 15.0   1,762,939 2,181,275 23.7
               
Investing Activities              
Investments in Associates (402,578)   n/a   (186,167)   n/a
Loans granted to Associates              
Restricted cash 102,896 (158,772) n/a     71,098 n/a
Investments in Machinery, Furniture and Equipment, net (1,369,809) (886,888) (35.3)   (363,379) (445,755) 22.7
Interest Income 199,683 253,538 27.0   52,581 68,908 31.1
               
Net Cash Flow used by Investing Activities (1,469,808) (792,122) (46.1)   (496,965) (305,749) (38.5)
               
Excess Cash to Use in Financing Activities 4,278,722 5,816,092 35.9   1,265,974 1,875,526 48.1
               
Bank Loans paid   (110,634) n/a     (44,288) n/a
Long term debt paid   (205,744) n/a     (103,054) n/a
Interest paid (2,549,246) (887,415) (65.2)   (581,952) (382,638) (34.2)
Dividends Paid (2,034,000) (3,000,000) 47.5        
Increase in capital 196,199   n/a   196,199   n/a
               
Net Cash Flow used by Financing Activities (4,387,047) (4,203,793) (4.2)   (385,753) (529,980) 37.4
               
Net Increase in Cash and Cash Equivalents (108,325) 1,612,299 n/a   880,221 1,345,546 52.9
               
Cash and Cash Equivalents at Beginning of Period 4,677,454 4,584,507 (2.0)   3,688,908 4,851,260 31.5
               
Cash and Cash Equivalents at the End of Period 4,569,129 6,196,806 35.6   4,569,129 6,196,806 35.6

 

ASUR 3Q19 Page 24 of 24    
 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  

  Grupo Aeroportuario del Sureste, S.A.B. de C.V.
   
  By: /s/ ADOLFO CASTRO RIVAS  
    Adolfo Castro Rivas
    Chief Executive Officer

   

Date: October 24, 2019

 

 

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