Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) 26 Oct 212021 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to ASUR's Third Quarter 2021 Results Conference Call. My name is Ally, and I will be your operator. At this time, all participants are in listen-only mode.

We will conduct a question-and-answer session toward the end of today’s conference. [Operator Instructions] As a reminder, today's call is being recorded. turn over to Mr. like now the to call I'd Officer. Adolfo Executive Castro, Chief Please go ahead.

and Thank XXXX morning, our you, healthy you good Thank Ally, ones loved everyone. results. hope to remain ASUR's and your operating safely. conference discuss you third and quarter financial and I that call joining for

Relations issued results our close market and available on our Additional found our after details quarterly about press yesterday in in section. the Investor website be can release, which was is

over international reaching nearly 'XX. traffic the U.S., back on of in third was passengers 'XX weaker impact the XX Securities posted statements which beliefs, vaccination made below that performance international of statements, in X.X% number the Please certain this subject with only high-XXs. Passenger Puerto including levels the of travel, third the Let call reaching filings recovery, XXXX. pre-pandemic on the differ Exchange from and traffic the up levels down forward-looking me for to that and could which remind a was across board, factors strongest XX%, beating constitute X Mexican during which to nearly total best results current may materially, more including was the may you a uncertainties to COVID-XX. of X by actual compensating Rico continued traffic quarter, beyond risks that of refer Stock levels management's quarter terms in and Mexico XX%. delivered the million in be the and based our Commission cause of are pre-pandemic Domestic the expectations and Company's process improve quarter Exchange. Again, successful quarter than to the control, are

'XX during Colombia Compared in the third levels. the recovery Airport quarter traffic below to basis, monthly domestic continued recover levels. decline the of was domestic by down and Mexico Colombia, a gradually third behind both 'XX, levels the traffic quarter traffic in 'XX. quarter traffic X X quarter. Rico 'XX a In quarter improving quarter X% Mexico Cancun On against to Colombia, driven the quarter. quarter drop X% high-XXs down posted while traffic airports the 'XX and Mexico in reached continued were from X% quarter, the Note of by by in quarter total Cancun third to At domestic same the only was levels recover was XX% which previous slightly Our XXXX. traffic as traffic last while Compared only with domestic throughout was just X%, Mexico levels, in to posted below pre-pandemic second beating Puerto recovery. smaller lagged third time, XX% pre-pandemic X%, above domestic traffic levels international by that

a Looking with of travel ahead rollout should recovery population winter outlook season. traffic a in travel our in the fully least trends, and at to operations, ongoing contribute for the the continued international one better dose XX% with XX% the vaccinated at Mexican of vaccination the U.S. the

and Mexico expect advance gradual countries. vaccination its various recovers. restrictions supported by further economy across traffic domestic also We vaccination and the roll to recovery the as of the These campaigns travel lifting continue gradual of the

recover, than resulting quarter. at more are in Mérida, Mexico, airports business in that Veracruz Villahermosa slower take below XXXX, recoveries and like expect more we travel However, during will to time XX% the which

second the therefore, in global trend, about traffic XXXX. quarter XXXX reach XX-month also and cautiously expect remain the total February to set record the that optimistic We we during of

financial ASUR's performance. the on Moving

slightly debt Ps.XX.X Ps.X.X equivalents cash ratio solid ramp of to operations billion, over with at times close X to levels. reached billion EBITDA financial quarter, Colombia. recover. Rico Ps.XX Ps.X quarter end from Mexico, billion higher conditions times meet We and more at closed coverage year-end X% as countries times X.X to at improved gradually financial continue the Net to sheet enables operations a quarter another Total doubling three cash contributed all December in last demand in balance XXXX the at position in to levels up to billion prior the the X.X from us while debt billion, was of strong in of with increases Ps.X XX Puerto interest quarter. months our the and XXXX just the Our up position. than travel Cash over

also profile. Annual of our driven at year-end at Meeting BVA Mexico XXXX per now on in XX% and its we refined payments Colombia. receivables years Ps.X.X has a in next that on that for Accounts construction dividend dropped at mainly turn of Ps.X.XX billion. maturity principal we sequentially, starting been with paid our in Note XX% X.X% a XXX% declines and in to year-on-year. our of October cash XX% fourth or We Note brought quarter X% an that Xst, share This Rico, ordinary Shareholders stepped Ps.X.X billion, healthy total Revenues in by of ex rose X.X% net seven Cancun Airport, approved Puerto extending with XXth, down the XXXX. payments October to principal debt the total maintained maturity loan year. by

a fees, in increased nearly across XX% activity the XX% costs higher Importantly, consolidated cost cost a X%, remained revenues to XX% traffic, 'XX. the concession Rico Rico respectively. assistance mainly pre-pandemic the nearly non-aeronautical in Cost accounted in despite due levels, for the of increase revenues in we basis, higher revenues services. posted along increased third in by In Puerto pre-pandemic compared increase in of XX% expenses, with ex-construction and in of in third On Rico Puerto in Mexico, reflecting operating our to EBITDA Ps.XX period. below Commercial rose nearly ex-construction with Operating the year-on-year, 'XX XXX% and higher contrast, when with quarter by 'XX. technical Colombia. XX% higher commercial compared By compared in reaching total quarter XXX% the services with level XX%. quarter Compared ex-construction. down and revenues driven declined sequential rose a revenues Mexico. and ex-construction XX% mainly revenues reduction quarter during per Ps.XXX costs the year-on-year, third aeronautical 'XX over were XX% of operations, revenues passenger 'XX, quarter XX% third over Mexico, increased year-over-year and digits distorted the represented in services basis, levels third when Puerto quarter nearly and XXX% X%. the mid-single an even increased passenger revenues ex-construction while Colombia XX% Mexico and costs ex-construction XX%, expenses but year-over-year, increase in On with achieved XX%

plant airport with Rico from of the reported quarter in in last the the PS.XXX Act we Puerto compared the million During quarter, the the reimbursement year. same of PS.XXX expenses under CARES -- expenses of million

of Puerto up Colombia. XX% in and billion bans Colombia the Rico in we vaccination to regard Mexico XX% Ps.XXX invested current the terms, quarter Compared EBITDA in year-over-year, majority reported quarter, which as X% investments the Puerto related to traffic recovery Rico the Mexico, have Ps.X.X compared for in Mexico, schedule lifted. levels. the largely that in concession in quarter, remain In of in with and invested from XX% demand just billion. quarter, million. reached and during Colombia 'XX spend Ps.X.X contributing of levels to CapEx from Mexico. in Ps.XXX Rico fees as met increased on billion expansion terminal programs while Ps.X.X invested the All and the XX% a fourth XXXX, committed Year-to-date, countries total in gains XX%. XX% quarter the we XX% up increased quarter quarter in quarter, the to in increased increased Colombia. margin Rico Puerto by 'XX. million with expenses of In in reflecting and billion, Consolidated expect third up the XX% travel nearly Puerto more XX% in billion in the excluding Mexico, of over we reflecting EBITDA IFRIC third during with over quarter Note are million Ps.XXX CapEx, XX% third in the this EBITDA the third Ps.X.X EBITDA margin, million the and operation Adjusted were was percentage Mexico, Ps.X higher was XX, worldwide Lastly, XX% With invested and building in to Adjusted EBITDA year third Mérida. travel quarter EBITDA prior in pre-pandemic advanced recovery in quarter we our Ps.X.X levels, Colombia. 'XX we in

the parallel during fourth expansion, also expected is runways during construction project the quarter to we Cancun maintenance second Terminal taxiways. runway the The Airport at in the are undertaking fourth the the repairs And second phase while major expanding of the open of to of Puerto of X open the first are phase to we and Rico, taxiway quarter. expected and

with of call, up us markets. operations recap solid review. to the enabled balance a third of Before moving ramp sheet, the consistently to the the in Q&A my quarter ASUR’s We portion a of recoveries each maintained

to all continues travel demand, growth We open rebuilding see the network and leverage because continue call. trends attractive concludes of our term for variable please unpredictable Ally, pandemic our in encouraging continue line to effectively airport and confident base managing also today's And we longer we remain cash affect to This our remarks my for markets. the passenger our across questions. remains ability cautiously costs. the ASUR's given that

And ahead. from JP we'll Mendes Please Instructions] go first Guilherme take our go from Morgan. [Operator ahead and question

Hi, actually. for I questions, Adolfo. the taking two Good thanks had And question. morning.

in traffic terms one of first The recovery. is

traffic to the quarter expect do be of back levels you by second XXXX. that mentioned You to peak

expect wondering after what we Just should that.

Should 'XX growth expect that be of next question MDP half tariffs. the the expect traffic to levels, in-time regarding consider second And second mid by the the back normalization next or the of what still is on demand? year? to So, should like we year kind for some back

situation? your much share could you terms recent implemented in If how has already of renewal

you morning. Okay. your Good questions. Thank Hi. for

we of back, growth next by year, be so we and the First, working traffic that, be is the disappears After we if have traffic second on. XXXX each should should that are seeing back February that regions peak quarter the normalized that in the we what pandemic normal, said year. one in everything everything reaching for in of reached I last the terms months the to next of passenger goes XX is

tariff to said of is not in the be that XX.X% will have maximum the due terms last is quarter's in reached the compliance we the The at terms maximum tariff, years, the have a able the is increase beginning measured that tariff In second I to XX something this what traffic over year. maximum of once we of April -- approved reach was earnings sorry, call the tariff that that year.

measure will year. be So, very once the going year. to going is of and to But, fourth I we We're the have normally XXX we away that reach. be quarter not should said, we're expect the to are going XX.X% that we how much course, from to we reach reach over, that far this as to able reach during

and Maroki next take ahead [ph] Asuka go GBM. We'll from from question our

Could some us the with color some of you debt give your refinancing regarding Santander? detail or

Yes, period. a made years of was course. refinancing three The on

can to see the have year, during Santander will natural nothing basis and that next we we ‘XX. on start you ‘XX, paying the So, report in pay

Okay.

basis that increased some points give saw Just rate that? the We [ph] on that on a you us credit. XX question. color Could follow-up

you in the see you spread the X.X. TA can see the rate, report, can is So, as over

from And question next and our Zamacona go ahead Alejandro Credit we'll from Suisse. take

tariff the on Just question a airport follow-up increase.

revenues April July. workload in the in on airport notice negotiated look we in we increases increase this per at third We when basis, fees understand sequential So, fees quarter. didn't a unit any that kicking

the can just of at already confirm least if partially airports? you in implemented, that real you terms XX% increase some Mexican So, in

Yes. Alejandro, the XX% you average. the are weighted mentioning is

in came lost can in airports It's rate. each possibility that you the of see XX.X% of extremely takes that of applied in so It increase. this possible the the then, clear the own to has this reach increase particular of its year the increase And it the So, be the between high. year. increasing months three tariff the report. April, if that months And very first was three compliance to terms us we approval maximum the we had not rates. Otherwise, to four one to

from going we're the So, far to very ultimately. to reach XX.X%, we and be that expect

Okay.

right? -- increase we load unit revenues on see load think we So, about quarter when by of working the fourth 'XX, unit, a should in working sequential

right. that's rate course, is is said measured of And annual Yes, something I that on before, basis. maximum

today, to we're we we how reaching. say So, going cannot are or reach much much reality, how in

to go on we'll from Stephen Trent And questioner Please move Citi. our ahead. from next

was AMLO kind say if some I I about Mérida, that it. random missed sure recall, build I in anything maybe and last wasn't airport to the of or news second there month, But, can something administration heard just a Mérida and you wanted you news? it's is this Airport, substantiate I

not that Well, the relocated. from of on President we from see be the someone construct and be have the that will I the case not the of. then But, that heard will that will the in be that case are can doesn't airport anything we facilities in mean I operating operator to airport. the And heard Governor to they the mentioning have of trying respect. state if have

what just commercial is Santa kind Lucía least traffic City as at your side see any of traffic flow from Perfect. Thanks, And sense Adolfo. terms quickly, potential in a expectations? would whether in there with and long-term future Okay. align of you far really as flow, Mexico airport

that terms to of extremely system whole the you most traffic the domestic traffic, area. goes know us in and because this for the the project important of comes country Well, for of or the metropolitan is

So, congested has situation, excess pandemic not Mexico course, due the today, Airport to it of is capacity. of City

to future, Of the course, we is in recourse. what the expect traffic

be capacity to once this serve will efforts. the in have we area So, inflow able of the will some importance have order of metropolitan to traffic our this additional course, the to -- happens, project you is, for

from And we'll question next from move to go ahead. on Ramos Bredesco. Rodolfo our Please

levels, see morning, your operating operating outlook this wondering we're as We But And Good you. seen. traffic your XXXX results. recover, below that elaborate where still Thank on to just Adolfo. on pressures expenses inflationary And some the was congrats some normalizing? good you you expenses. the I for if quarter. continues saw can despite you've control do

Thank morning. it really the is as Good mentioning, question. hi. some Well, is country inflation are Rodolfo, you as and you your in this basically, in for high others.

are and the are We you quarter to XXXX, and control the see doing we since as much side the can of on cost we second as brakes these results. putting the can some

expectation once normalized, course, go the to cost back the is levels. side Of is that should everything XXXX the

the that But true, of as to yes, doing a cost going crucial good of Of are course, Company. the inflation, element be it's terms on managing it's well. we in side

Thank you. if And a may, follow here up I on traffic.

peak you that mentioned year. by next quarter traffic expect You do to recover the the levels to of second

to these that to could contribute as you Just to I how you recovery color markets wondering you bookings, restrictions, back? to any what they're any if talk know that have visibility can visibility have as more or seen this if been winter segments do markets October, us we've hit or Canada, largely expect visibility, season? from far in by any have to so in if Europe into as you if absent this you how severely coming how you don't a were give about have but traffic

why a Absolutely. requests lot. the was be that outlook the initial from That I we the remarks that better have airlines. expecting But, request saying some for a will in used this winter. does Yes, not they mean is we're

But, levels. lost high they the of the slots week at So, the cancel the at the last done basically in it's pandemic January that during have Canada in this we that third they minute year. can clear season

also North Europe, of will strong are probably, for the recoveries. you them some season in of the news. that So, And us. is case Europe. a go be And the Americas, see In are case back seeing is we the we of to can if winter it and expecting the good

case -- Just to flight or years flight give example, Vienna, you the XX had from something first the ago. Vienna. an yesterday, we the was in And canceled of

after coming So, Cancun. they're XX years, to back

of yes, we recovery the So, a Europe. case from seeing are also

next go our Monsiváis We'll Barclays. question move from on from to Pablo ahead. Please

two. have I

traffic for XXXX terms concerns what important and two? to charging places one other Thank Puerto keep like tariff, are here? going want point your do is, some in are that main with you at you provided commercial full what first and you to improve recovers of are in the The that looking or your Rico? What you. mean, to you are the I invest platform in for the to thoughts Colombia

my Well, is fourth concern. the of and that let's will if pandemic we of during have some are, is concern that to we course, That's the don't we the the we the first course, we we normal winter. not say virus after for go see will next and the back do If looking another rebound of major of that go wave we year, shareholders. say, for opportunities quarter attractive third over be and --

to will a done. as be improve operations we and our course, continuous Of to increase in effort commercial we have

taken opportunities We have the some seen. you of as have case in Colombia,

We also that to able and well. you seen also as our were new empty been report airports have replace additions, spaces to have the some in to manage have as in

Okay. know, And next for I think Cancun a thoughts? years? mean, here, growing? Canadians I traffic first two, in to room if quarter into what thinking and What the strong about for Cancun to capacity next XX% in main enough fourth is Cancun, and is your -- year, I do may, and recovery can question the keep Europeans quarter growth are constraint three don't withstand, going you very of the second the

as today I saying that XX% construction is some should Well, levels. very say are construction to XXXX they over have hotel speak, in need and well, okay, soon. course, be -- we I say, projects opening can there XX%, when of you we're to say

like terms placed also that. things the region, So, in in additional of Airbnb is and being capacity

the concerned be I'm honest, about capacity. not today, to So,

about and the concerned the having are are the fourth also revenues. in in working terms and control of We increase not we cost wave, commercial

Gabriel go from Please ahead. next our We'll take Scotiabank. question Himelfarb from

Adolfo. on results. Congratulations the Hi,

Just think a -- this some planned could more Thanks. than could quick and there's costs costs is some you chain, planning? it MDP impact the rising Do to are question. steel investment be you of We constraints investments were on think but your your for some that material supply inflation planned in rising. cost

of course. Well, yes,

suffering materials. You're of absolutely speak. tough it's really of right. the and we And increase are construction the also some the that side, The problems as in here distribution we from

on to comply will But with Of we for what meet our have last, with an have as this comply basically, year. that commitment course, in have have should we Mexican the Ps.X.X CapEx. we billion impact with the -- to said I

lower and billion, be year, a Ps.X.X that Ps.X.X commitment Next it's around should billion.

So, to toughest right this meet we quarter have part hard is really commitment. work the this the to -- now, fourth and quarter

And question our to we'll go on from Andressa move UBS. from next ahead. Varotto Please

on revenue is question side. My the commercial

commercial revenue good We have expansion seen operations. quarter in this a very in

So, And you I just already? behind that? we are what commercial is to expect wanted say normalized going can know what Can that forward? revenues

said with I affected the thing. the course, of in revenues lack first the believe quarter as still you to remarks, so during I commercial have still than that less passengers Well, That's the of normal. passengers,

Parking The stores. would the expected, -- higher than is to than lower talk just car about which thing it would stores behavior, are rental and than expected. second call beverage is Food than expected. say I pandemic is, I is expected. Convenience higher convenience lot higher

to in not so prefer restaurant, stay is to people the and is people a go. -- not they grab the willing willing So, all

we behavior these normalize, the terms have as not you why it's today permanent future, will also, the one it things. convenience passenger from in mix was that increasing. And not see pandemic say believe effects side. seen, that's from of before. same important to that, as is And I the and this So the of is will in store kind

more So, proportionately Europeans, speaking, we have more U.S. domestic of

once So, that an our before. as is on in effect have it also will mix the future, passenger commercial revenues adjusted was the

go move next we'll question on and Bredesco. from Rodolfo ahead our [Operator to ahead. Please go Instructions] Ramos And from

know, quarter Act. CARES the or or amount, Do payments, expect should on is remaining follow-up you additional I what expect a in so? what don't next the we the or any Just

the given it's expect coming Yes. the over. we for And the of Rodolfo, CARES third months. in the grant was programs. case that Act, yes, and second the U.S. can government, the by We're first expecting more

So, as the no amount... detail to

your hear couldn't question. I Sorry.

You don't visibility have any amounts? the to as

prefer about not say sure not those I because yet. No, are to amounts the we

question from Citi. And Stephen we take ahead. Please from our will next go Trent

your strong. with taking financial And airlines pretty negotiating Hi, difficulties? some receivables before. through my follow-up. for should receivables of as you that going noticed what missed Adolfo. we host I I days Thanks if you think forward your said apologize trend But, continue the about some How going -- we are look

because process. -- due position Steve. the they during quarter, Hi, of basically they are have the have the Well, improved the recovery airlines to

mentioned well have of and I the it Interjet, As only in problem all The in has reporters, airlines. past we're we have case was the with that reserved. in and working the still been clear, the that's

I major expect major do problems not forward, or issues the Going from airlines.

pre-pandemic So, relation should of we that have in the of of company. operation receivables, similar levels the in numbers course, same seeing be with or terms the we

And turn that question-and-answer call over today's session to remarks. like Castro back for the to the concludes Mr. for I now closing conference. would actually

behalf good our quarter safe. Ally. results of conference. for ASUR, And you, you third you Goodbye. a On day. wish participating again Thank please stay we thank in And

results third participation. your that quarter We and Ladies call. gentlemen, for concludes XXXX thank to again would ASUR's you like conference

You disconnect. may now