Q3 2020 Grupo Aeroportuario del Sureste SAB de CV Earnings Call

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Good.

Hello, and welcome to <unk> third quarter 2020 results Conference. My name is Angel and I will be your operator.

At this time, all participants are in listen only mode.

We will conduct a question and answer, especially towards the end of todays conference. If you would like to ask a question. Please press star followed by one.

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Today's call is being recorded now I'd like to turn this call over to Mr. for [laughter] change.

Chief Executive Officer. Please go ahead Sir.

Thank you.

Good morning, everyone. Thank you were doing it.

The school to school, each state water <unk> financial and operating results.

I hope each of you and your families have managed to stay GLP.

<unk>.

I work for you is there any school.

So you think might either please note that certain statements made during the course of our discussion today may constitute forward looking statements, which are based on the grid.

Sure.

And beliefs and are subject to a number of uncertainties.

Dr business to be pretty much really.

It's pretty bark.

It would be going up gets grateful.

Excluding the impact from Nike.

Good explanation of these risks please refer to <unk> filings with the U.S. <unk> Securities and Exchange Commission and the Mexican storage.

That's true this quarter were.

Okay significantly impacted by the ongoing it begs the global 19 pandemic.

Let's continue to break even get capacity what you passengers are thinking like you.

Either the Golden traversed victory because gilts constraints.

However, the lower rates are declining monkey Rocky started marching made in June.

Only to September.

Same time of course, we outsource balance sheets has remained strong.

Which I believe that don't show shortly.

Starting with the overall travel environment, neither Mexico <unk> in should travel bans to date.

That's <unk> airports you both countries have remained.

These airports driver because you know greedy with significantly lower traffic levels.

They would come on I'm, just rattling that people like.

Commercial travelers has just didn't get started.

Our airports and your name from the Union Didier you kind of bridge, which at September that's why don't you got it right I don't we started at September 31st where it would be close I'm Richard Gracious recently, one of their district.

Within the school go.

That's why it's difficult topic, what are what down 70% year on year.

30 million passengers <unk>.

Claims of 64% in Mexico, 59%, you booked already Glenlake five second Colombia.

Mexico, Puerto Rico.

I love to see better performance in domestic dropped pretty good though.

You'd be rich.

Well international traffic was down 70, 888% year on year, respectively.

Denver, certainly Paradise midstream some flights between good when airports in Latin America and this month.

Some flights within Europe, we started.

In Colombia do you have any district traveled that's when most of the water.

Like the restaurant traffic still seems a former levels.

Previous quarter with year over year declines even need to high ninetys.

For the nine months I, we're doubling capacity just dropping like 57% year on year.

As a reminder.

Most of our commercial agreements with that or do you see what I'm eating they burned dependent passenger they're not applied to be renting dafs its passengers.

As regards the Aer Lingus field all remain <unk>.

<unk> bankruptcy prediction, namely I didn't Miss school, I've yanked, their holdings and I've done fairly well.

Can you do make regular payments.

Accordingly, we believe us worried when things should be should we need to do.

It certainly gives us a good unit, bringing on that.

And we continue to minimize cash burn outside <unk>.

One thing [laughter] Hilton 50, tropical sporting goods and passengers are sold so I was still break Norman.

No do I think when airport well be opening your line, what we expect to be open to know me at the end of October.

Yes of course, we will have an impact on that were upgrading cost expenses.

Moving on to a suicide supposition, absolutely, we dig deep and near term grids being that are like no mean weekly GGR breeding <unk> decision, but I suppose right.

Why did that was allowed to do it well.

Well the second lead time folks that were racing.

We traveled in minutes instead of <unk> <unk> perspective.

We ended the quarter with tragic has agreed to that seems to be doing that's roughly the same.

During the year and 2019.

Exactly a casual wonder that big either that's what the mix is going to want to basically go in Colombia were partially offset by a 132 million pets cashing fees importantly.

But does that does what it was.

14.7 billion up 8%.

Sure and what you're thinking.

<unk> was mainly due to the <unk> border a drill down almost $10 million from when we did like great working capital, but pretty good.

No it's ever need it doesn't go in Colombia.

The next help you much <unk> principal payments.

Principal payments of less than 1%.

Double debt maturing.

Fourth quarter, and only 6% booked a bit not drink into what people would be what.

As regard to the great exposure what was that.

Hi, George Jobina <unk> denominated in us dollars Jeez I, Yeah, I, just our subsidiary in Puerto Rico.

20%.

I mean anything big expenses and the remaining 20% in Colombia.

Go on their business.

I know well get us wouldn't be Greek debt balance sheet strength, our leverage ratio stood at 1.8 times at the close of the water compared with it. So your board eight times in the same quarter last year.

Now turning to the top line.

76 consumption decline due to expenses that you're you're doing what we said it would be cool. That's that's a source book you took screen senior dragging that are all still not up to the revenues during the quarter, Mexico was the main contributor accounting for nearly 50% of VIX or quit chipsets revenues.

Well, it's pretty good what are counted for approximately.

Accounted for approximately 37% the book the baby is what I'm definitely impacted by the street travel bans for most of the quarter.

Well, that's a great deal basis revenues exposed religion, 86% from Nike over 900 million business in the second quarter.

That's what the Mitchell various the passenger were slightly over one called <unk>. They said, that's just compared to the 99, that's that's a drag in the same period last year.

He joined to try your broader degrees if you like the sharp contraction passenger traffic is going to be they say would you comment just basis would be threat.

<unk> operating cost and expenses, excluding construction costs declined 28% year on year.

By reductions across our three countries have a pretty true.

In Mexico cost declined 25%, the lower wages and there you expenses.

Due to temporary closures booked any else do like the best case scenario.

Lower cost of sales from directly upgrading upgraded <unk> convenience stores I know.

The lower.

They're going to go I suppose that should be also contributed to.

Also contributed to the increase in Mexico at school.

The Mexican school.

The lights went back to the upset by type rubies, that's built to collections.

Right well the low demand levels that I work of official guidance, but you never experienced.

You wouldn't sort of equal we obtain a 30 premium door growth on the U.S. cares that you're in.

During the third quarter to be applied for a divorce mint airplanes expenses.

Well beat them up $8.3 million workforce, which together with a lower cost. So there's a big contributor to that at 34% declining cost during the quarter did you.

The improvement was partially offset by higher <unk> charges.

Building from the impact of basics conversion.

You know like exams don't look closely we're gonna be go were down 5% year on year.

I note here that 20 or.

$10 million remained available under the graphics.

Why don't you go people and get contracted 30% due to savings in maintenance energy density <unk> expenses, along with lower for Brazil and concession fees.

Moving down to the PML consolidated EBITDA declined 6% year on year to 750 bodies and that's the debate is a victim of Dan that I have been discussing how.

However, compared to the <unk>, that's just as it speaks exactly what it was <unk>.

When excluding the one time interest be corebody related to cure it can maybe get that quarter.

Hi, Greg Creed operates.

Right right country operations, you'd be a gaze, well well funded and they need to either that's being Mexico.

According to the dual metering <unk> water were offset by the need to be a loss of 59 vessels in Brazil.

Actually we will absolutely, but sort of day to adjust your margin declined 45% is water.

Before it was a year ago water pretty broad stroke, we bought about 1.8 in second quarter, just like you do it.

With regards to Grafix, we invested it's one of the Big Board meeting vessels in the water.

Oh, the miles, we invested over 90% or set and whether that would be nice to your business in Mexico.

What did you do but you knew executing the venture the maybe the airport.

For example.

Inspection of the checking area I'd be there you know have equal GDP and now is the operational EBITDA.

During the first nine months, we invested a total of one point popular dozens in Mexico, and we remain on schedule in cheating because drops a little bit out of the.

I don't know that that's the way to the second one way up there and therefore at the beginning of the Brits extension phase.

And then the sport.

Note that our message to them then Mexico called closed 40 best of approximately.

Like hopefully become best <unk> 20 Blake.

Well orders in Mexico continues to be sold in disruption at each of the projects under the plan.

Yes, the government the face of these delays.

I just have to see the aided approvals to proceed with 2.1 of the best.

Well construction work during 2021 that's.

As a final note in Mexico, not smoke our capacity, but now it's nice to be open Europe would you do.

However, I spoke to date, there has not been there huh.

Being no decent lesion about where exactly it will be located.

Well, we'll upgrade the airport nor the type of abuse, an equal set.

But for equal we invested.

70 Board to your best was made for major maintenance repairs to run with Abaxis.

For major me make those football reports in Colombia, we invested nearly 2 million vessel you ended water.

It was over Capex when we look for these airports worst reached last year, where you met your meat goes garbage we maintained its coaching.

Before taking questions I hope the border I wish blip, besides wants to get a better group booking.

Operating from a position I still states you name.

Enabling.

Oh good success is actually navigate there's a there's a big <unk> and then on our business. In addition doors. So the balance sheet. We continue carefully managing cash was reducing Banco calls where we get.

Better Lane, then within the travel the levers. We therefore remain confident that we will be well positioned we travel can be sure you get sustainable strike.

That ends my prepared remarks April we open the line for questions.

Thank you I get to the audience its star one.

Question and again, please make sure your mute function is turned off.

So a lot of your signal to reach our equipment once again star one.

This time and we'll first hear from I, when I see us of Bank of America.

Hi, Good morning. Thank you for the color just a quick question on Colombia.

Just to what have you seen on traffic.

Recovery in Colombia is if the numbers are they are encouraging and it's.

Is it a fair assumption that there will be a slower recovery than what we have seen in Mexico.

Thank you.

Oh, Hi, good morning, and thanks for your question in there.

Because of Colombia, and I have to say that the we made troubled you'd see the same kind of recovery process that we saw that in Mexico.

Good.

The only thing.

Point that could be.

And I got the effect will be recorded process he or she.

Depletion that some of these tragic events you believe from what they deem to bullet that you would be good traffic. So that's the way to the have there been quoted process either.

Okay.

Thank you.

[laughter] some mccullough.

Hi, Doug.

Sorry, I was hoping to for the coal in due course room for all sooner. The first one is c. diff.

Well do them to be big picture in negotiation.

Spies, we understand he you called into question I renegotiation so.

I'm curious on the core institutes.

Do you have some sort of sorry the dime.

He producer in negotiation.

Hi, I have a good morning, and indicates just what German engineers.

In accordance with that weren't quite sure uses a data that indicates that the Mexican getting beat up by more than 5% last <unk> and that has an impact of traffic. We may have request I think somebody Lexington Division.

That number up like that.

5.3.

Negative GDP for Mexico over the last 12 months was already spent on this page six yes.

Then we are working that dropped as well and we are in the process within the word after that always I believe it may be five to do at the port what have you.

Okay. Thank you.

Mm.

My second question, if somebody gets shocked reimbursement the pretty cool you. So considering that you have to use roughly five beyond these third quarter third and there are some additional insights medium or they level.

What's the expectation going forward to use it it probably makes smart they go now.

Before you deployed though on the fourth quarter or it's gonna be I'd, rather well the deployment going forward.

Good Yeah Kratos deployments.

I'm sure that there is some of these will be in play 21.

Okay. Thank you a wonderful.

You're welcome.

Next we'll hear from already said must be less she'd be yeah.

Hi, good morning about well thank you for taking my question.

Well, just the Cold war and what's not.

Yeah.

I was going to happen.

Thanks.

I think so.

Just kinda.

It could be as far as.

You got it.

[laughter].

Okay.

Uh huh.

Well you can share with us.

Hi, good Inmobi should the boring and we are exactly that process. So that we can document I think probably less than that.

Division so.

Yeah, I cannot share with you any any of those longer so do they.

Okay.

Sorry, My second question.

Hi, I hear.

That sounds good.

So.

Your lunch Charlotte much.

Sure.

I got it.

Right.

Why.

Sure.

Yes, the 2.1 billion would be a gross profit mix yeah.

<unk> Jude.

So how how much in the fourth quarter.

So we were expecting 5.3 billion people that for the year.

You have the numbers up the third quarter and.

And you have to but don't be deployed one a that would be the first public the.

Our next year.

Okay perfect.

Perfect. Thank you also.

You're welcome.

I see lots of Barclays.

Hi, good morning since for taking my question.

Ah I.

My question is Oh structure to go over time, you're going to really open terminal three kind of gone can you. Please provide some guy that's how you expect your costs trending for that specific do you see the consulate services coverage, probably little Spike I don't know at some point in 2021 or did it didn't do how do you see cost trend. Thank you.

Yeah, Hi, good morning, well apart from the did the call.

<unk> expenses would have to say.

Because of that kills your thinking up two or three we have made some of these shows sales around the company.

So it's important to understand that during the second quarter.

Besides all the meal.

Mm three or two where as I mentioned earlier in the remarks. They have two was opened in July.

We are expecting to open to me I mean at the end of October.

I believe that the proposed you would see some pretty big.

Pretty dated close for the fourth quarter not at the levels, which are luckier.

Okay, you start to get to.

Very close to the levels that you probably into 2019, you teamed up like 2021, where we're going to get there.

Well, it's hard to say and nobody knows exactly what's going to happen it will be set in that situation.

But if things go back to normal I believe that we will have to go back to normal again.

That would be something that we can decide to put your thinking.

Yeah.

Okay. Thank you.

You're welcome.

Next we'll hear from us close by but still of Citi.

Hi, everyone. Thanks for calling in for taking my questions Hello, Paul I Hope you're doing well just a couple of questions from my side first could you.

Could you provide some additional color on on the parents that funding that's <unk>.

Well it could be it did it come from there right.

Yeah, Hi, Mike was it because the grant from the U.S. government to all the airports.

That's all right.

<unk> or to go to their <unk>.

We've got a adeptra little was 33.4 million.

I've seen what we have to boot there's remaining de Boer seven that we'll be at these foresee the future.

Okay. Thank you and my second question that I tell them what can be done.

I noted by Mike look I think we will begin to abate Eric.

Okay.

They want they want and if I got the division.

Oh, sorry, I still watch lower income was so low in terms of volume you can possibly with weapons steroid tweaking 18.

Of course as you do.

These are not big.

It today in the World have added almost as any back has a large deal we would have to respect what is the board the plane that yet.

This is not something that we can de door that is something that is a big pick up the worst we have seen over the last 20 years, Washington <unk>.

I would say probably like she had to that yeah. I mean three years in 30 years.

Okay. Thank you very much.

Next we'll hear from a phone almost oh, that's called <unk>.

Morning unfold. Thank you for taking my question most of my body Jets.

Can you give us a little bit, though oh color on how much was cell trafficking bucked the gains among both footwear.

Sure thing.

Thank you.

Well if the kids are victory and I can say that hopefully one day and I have has to be lost its from the airports with GEC when a consumer's.

In terms of passenger traffic.

Sorry, how much.

One day in Uh Huh.

Okay. Thank you.

As a reminder, if you would like to ask a question or make a comment press star one at this time.

Next well hear from that.

I've been teaching.

Well, we'll talk a lot for taking my question.

Sure.

Oh, Gosh 1.0, well, we all probably not but I wish you want all in all its a good question Keith.

<unk> airports and holds up what they should do well.

Being too long I went to school or your opinion.

And.

Oh, Yeah, Daniel Jones, who will be beneficial in Baltimore.

Well you know on the G live nation.

I'm sorry for that.

Thanks for your for your words.

It is a perpetual that were expecting.

Through here what are they then showed some die or it isn't and therefore do more or less to like to be sure.

We'll have to wait and see what are their expenses are obese or project.

Okay and regarding to Walmart or do you have.

In the fourth.

There.

They're in the kitchen.

The airport the two little less I said in my remarks, if we do not have a piece of information as of today.

And are the most important questions. We have at the moment are the ones that Uh huh.

I said during the remarks.

<unk>.

Okay. Thank you.

You're welcome.

<unk>.

Gabriel.

Oh.

Sure.

Hi, Thanks for the call just two quick question.

For Oh, Dear you reported a decrease in accounts receivables for Colombia, and Mexico can you give us a bit of color on how much was due.

Well I think there's lots of problems collection, how much write offs.

And second well you mentioned in the press release that you have been receiving the payment a problem I don't think he called.

Yeah, I've young Guy how long have you seen any deterioration in the payments or any other carrier.

Thanks.

Well in the kids So every day.

The reduction in accounts receivable was one of the or the principal effect is of course the bid dosing in sales.

So you can track these oh, let's use an idea on one side and compare that with the previous quarter themself write offs or as I said the rest of the markets. We have even been I believe you said it well for Dr. <unk> <unk> accounts.

From the top of my head because I don't have that figure, but let's say that during the quarter it should be around $30 million.

In terms of the remaining analytes or I would say more or less all of them are being looked at her with exception of one.

These are the kids are being digits.

Okay. Thanks.

You're welcome.

I'm that I've talked about also.

Sorry, she removed himself from the queue, what do you say.

What do you feel about female GBM has a follow up.

Yes. Thank you. Thank you for taking my follow up question.

I will.

Well you got to give more color on customer service.

Customer service.

It's a bit today on your expectations for that all works.

What we saw this quarter.

Practically.

Let's hope so.

Hi.

Pardon.

Borrower or next year.

How much do you think Oh, Oh Oh.

Well I imagine that that would be a journey that might be.

But what what are your expectations.

Surgeons.

But nobody should I say as I said, the ability and they got the impact we believe.

Got it and expect for the fourth quarter being the opening of dumb it ought to be so you would see.

And he agrees they're supposed to have been able to stimulate that he has to do with every call repos and the additional measures we have to.

<unk>, we have two big <unk> observed which.

Terms of social distancing animals.

And of course to get back Steve what accepted the same that's even less before these measures were implemented so the only six or again is it still leaves a indicates a dozen they'll dream.

Perfect. Thank you.

You're welcome.

[noise] once again, if you would like to ask a question or make a comment to press star one at this time well pause for a moment.

And that concludes the question and answer a question of today's conference call I would now like to turn the call back over.

Mr. Castro for closing remarks.

Thank you Phil and thank you again for everybody's bidding that were similarly, our third quarter sales governance on behalf of us doing that sort of we we should with the young Jesus They say goodbye.

Again, ladies and gentlemen that.

[laughter] Gosselin third quarter 2020 results conference call.

I'd like to thank you again for your participation you may now disconnect.

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