• Passenger Traffic: Up 3% year-on-year to nearly 18 million passengers.
• Total Revenue: Increased nearly 18% to MXN7 billion.
• Mexico Revenue: Accounted for 74% of total revenues with an 18% increase.
• Colombia Revenue: Posted a 35% increase, driven by international traffic growth.
• Puerto Rico Revenue: Delivered 5% growth in the top line.
• Commercial Spaces: 45 new commercial spaces opened over the past 12 months.
• Commercial Revenue: Up 7%, with per passenger revenue increasing 5% to nearly MXN128.
• Cost and Expenses: Increased nearly 30% year-on-year.
• EBITDA: Up 18% year-on-year to MXN5 billion.
• Adjusted EBITDA Margin: Relatively unchanged at 69%.
• Net Majority Income: Up 50% year-on-year to MXN3.7 billion.
• Cash and Cash Equivalents: Nearly MXN15 billion.
• CapEx: Nearly MXN650 million during the quarter.

• Warning! GuruFocus has detected 2 Warning Sign with BCHMF.

Release Date: July 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Passenger traffic reached a record high for the second quarter, with nearly 18 million passengers, driven by strong growth in Puerto Rico and Colombia.
• Total revenues increased by nearly 18% to MXN7 billion, with Colombia showing top-line growth in the 30s due to international traffic recovery.
• Commercial revenues per passenger increased by 5% year-on-year, with Mexico reporting record high commercial revenues per passenger.
• Consolidated EBITDA rose by 18% year-on-year to MXN5 billion, with a strong performance across all regions.
• Grupo Aeroportuario del Sureste SAB de CV (NYSE:ASR) maintained a healthy financial position with cash and cash equivalents of nearly MXN15 billion after significant dividend payments.

Negative Points

• Passenger traffic in Mexico declined by close to 5%, with contractions in both international and domestic traffic.
• The ongoing issues with Pratt & Whitney engines and capacity reduction at Mexico City Airport negatively impacted traffic.
• Cost and expenses increased nearly 30% year-on-year, driven by higher concession fees and minimum wages in Mexico.
• Traffic from the US to Cancun is expected to be negatively affected by political rhetoric during the US election campaign.
• The legal process regarding the Punta Cana project is ongoing, with the project put on hold for at least one year.

Q & A Highlights

Q: Can you provide an update on the impact of Pratt & Whitney engine recalls on traffic and any expectations for US election impacts on international traffic? A: The Pratt & Whitney issue is expected to stabilize by the end of September, with improvements anticipated in the first quarter of next year. Regarding US elections, we expect potential impacts on traffic similar to previous election cycles, particularly affecting US-bound international traffic.

Q: How should we view the future of commercial revenues, especially with new commercial spaces opening in various regions? A: Commercial revenues have been strong, particularly in parking and car rentals. We expect Puerto Rico to normalize by year-end, while Colombia should see recovery as airlines regain lost routes.

Q: What is the current status of realized tariffs, and how might further peso depreciation affect this? A: We aim for a maximum tariff compliance of close to 99% for the year. Peso depreciation could help achieve this, as international tariffs are based in US dollars.

Q: What are your expectations for US traffic to Cancun, given recent capacity reductions by US carriers? A: Traffic to Cancun is affected by domestic issues like Pratt & Whitney and Mexico City airport capacity reductions. Additionally, US election rhetoric may negatively impact traffic from the US.

Q: Could you provide insights on the cash balance and potential uses, considering high CapEx commitments? A: We maintain a significant cash balance, with a portion in US dollars. Despite high CapEx commitments, we will review cash flow and propose dividends annually, as we did with the recent MXN6.3 billion dividend payment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.