Q3 2024 Grupo Aeroportuario del Sureste SAB de C V Earnings Call
Good day, ladies and gentlemen, and welcome to Ishares third quarter 'twenty 'twenty four results conference call. My name is Sherry and I will be your operator at this time all participants are in a listen only mode. We will conduct a question and answer session towards the end of todays conference.
We would like to ask a question. Please press star one if you want to withdraw your question at any time. Please press star two if you.
Today's speaker phone please lift the handset before making a selection as a reminder, today's call is being recorded I would now like to turn the call over to Mr. Adolfo Castro Chief Executive Officer. Please go ahead Sir.
Adolfo Castro: Thank you Terry.
Adolfo Castro: Morning, everyone before I begin discussing our results.
Adolfo Castro: Sure.
Speaker Change: Hey, Jason.
Speaker Change: They may constitute forward.
Speaker Change: Which are basically.
Speaker Change: Sure.
Okay.
Speaker Change: Certainly.
Speaker Change: Go.
Speaker Change: So.
Speaker Change: Exactly.
Speaker Change: Okay great.
Speaker Change: Have you seen what are you doing.
Joel: It's Joel.
Joel: Press release, which was.
Joel: You should get to.
Joel: Market close.
Joel: Based on our website is basically.
Joel: Section.
Joel: One of them.
Joel: I was gonna be a favorable.
And you're still all components of these schools will be year on year on license.
Joel: Otherwise.
Joel: Thank you.
Joel: You walked us through.
Joel: Performance for the quarter.
Joel: Okay.
Joel: 2%.
Joel: Yeah.
Joel: Sure.
Joel: Cause blanket.
Joel: 17 million passengers and solid performance in Colombia or equal.
Joel: Nearly all sick weaker traffic in Mexico.
Joel: Okay.
Joel: Coffee tea and water, Colombia continued to post a strong performance in passenger traffic.
Joel: The 16% year on year increase back from the easier comps.
Joel: Pension.
Joel: Local operators.
Joel: Last year.
Joel: Sure.
Joel: Dynamic people missed it.
Joel: Okay.
Joel: Which were up 3%.
Joel: 14%.
Joel: <unk>.
Joel: Yeah.
Joel: Cool.
Joel: Practice.
Joel: The remaining of the year.
Regain some lost drops.
Joel: We expect to see a continued recovery.
Joel: Towards the end of the year and then normalizing.
Normalizing.
Joel: First quarter next year.
Joel: The next step for me market.
Joel: Cool, which was which reported.
Speaker Change: Thank you.
Joel: P J.
You can find more single digit gross domestic profit like the basketball tropical so you can do.
Joel: We expect that to get booked.
Joel: If you didn't get normalized as last year benefited from the pre separation.
Joel: I think the debate passenger traffic in Mexico remain weak decline.
Joel: Yeah.
Joel: That's just timing.
Joel: Domestic traffic in the high single digits.
Joel: In terms of international traffic, we saw declines from all of the regions.
Joel: From Europe.
8%.
Joel: Yes.
Speaker Change: That's helpful. Mike.
Joel: Yeah.
Joel: Domestic traffic remains impacted.
Joel: Okay.
Joel: B into problems experienced in the past few quarters.
Joel: We expect this to persist through the second.
Joel: Next year.
Joel: Exactly.
Joel: Okay.
Joel: Mexico City Airport since early this year.
Speaker Change: Now turning to the P&L Gogo Olga to grab and that's of course, excluding construction.
Joel: Okay.
Joel: We're up 14%.
Joel: Yes.
Joel: Solid performance.
Page <unk>.
Joel: Oh my goodness.
Joel: With a strong top line growth.
Joel: Okay.
Joel: Benefiting from the pickup truck.
Joel: In Mexico.
Speaker Change: I'm totally cool.
Speaker Change: The bookings.
Speaker Change: Mexico, which contributed 71% of revenues that would be great.
Speaker Change: Good morning.
Speaker Change: Sure.
Speaker Change: This positive performance was largely driven.
Speaker Change: 19%.
Speaker Change: Revenues, resulting from the recent pictures my model globally.
Speaker Change: The previous year.
Speaker Change: Yes.
Puerto Rico economy.
Nearly 60%.
Speaker Change: Reported second because you didn't book lie.
Speaker Change: The increase is up nearly 4% at 15%.
Speaker Change: Okay.
Speaker Change: And it is benefiting from the ethics compulsion.
Speaker Change: Your password.
Speaker Change: Colombia, which represented 13% of David it's actually been interesting, 80% increase in top line growth.
Speaker Change: Despite a good boost.
Speaker Change: Oh no no no no.
Speaker Change: Yes.
Speaker Change: We're off.
20.
Speaker Change: Respectively.
Speaker Change: This segment benefited from growth in domestic and international traffic as well all see.
Speaker Change: Okay.
Speaker Change: Advancing our strategy of expanding commercial offerings.
Speaker Change: Hum.
Speaker Change: Our new commercial spaces in the past two months.
Speaker Change: 18, where status in Mexico.
Speaker Change: In Puerto Rico, one belonging.
Speaker Change: So with stroke, we achieved a 5% increase in commission.
Speaker Change: Commission revenues, mainly reflecting increased nearly 15% could go public school and then.
Speaker Change: So 38% below.
Speaker Change: Which more than offset it close.
Speaker Change: New commercial programs in Mexico.
Speaker Change: On a per passenger basis commercial revenues were up 70% year on year, reaching 145 patients in the quarter.
Speaker Change: This good performance was mainly driven by solid growth across the market.
Speaker Change: Yes sure.
Speaker Change: Piece.
Speaker Change: 20%.
Speaker Change: Mexico, Puerto Rico could be a great pieces of nearly 10%.
Speaker Change: From a stronger U S book.
Speaker Change: Moving down to the P&L cost and expenses increased 18% year on year.
Speaker Change: By geography.
Speaker Change: In Mexico were up 2%.
Speaker Change: I see it probably warrants each year.
Speaker Change: The drivers behind these whereas this is 80% people in tissue.
Still despite the Mexican government and 20% is minimum wages, mainly in cleaning and security.
Speaker Change: Yeah.
Speaker Change: While Boston D C.
Speaker Change: Akshay.
Speaker Change: Yeah.
Speaker Change: The record reported when you say, 2% okay.
Speaker Change: Natural white cliffs in Colombia increased 28% below revenue growth.
Speaker Change: Consolidated.
Speaker Change: It was up 2% year on year.
Speaker Change: Two 4 billion.
Speaker Change: In the quarter, while the adjusted EBITDA margin, which excludes the obstruction.
Speaker Change: Okay 30 basis points to 68, three from 69 six in the third quarter.
Speaker Change: Tony.
Speaker Change: These pro forma figures.
Speaker Change: Well, probably get closer to the beach, Colombia reported the strongest performance with EBITDA up 20.
Speaker Change: 8%.
Speaker Change: Mexico would be big.
Speaker Change: They log in person.
Speaker Change: We booked it at 7% D C D J.
Speaker Change: Our balance sheet remains robust low seem to quite a good cash and cash equivalents of Colgate 18 billion pesos.
Speaker Change: Up to the last 12 months' adjusted Yeah.
But to your point.
Speaker Change: Lastly, during the quarter, we made capital investments of over 1 billion.
Speaker Change: One nine P M.
Speaker Change: Most of the year the main projects include expansion.
Speaker Change: Sure.
Speaker Change: And the big construction and expansion.
Speaker Change: As well as the expansion again.
Speaker Change: And why.
Speaker Change: It's a reminder.
Brooks you work will take place outside the original areas that will not affect functioning of these yet.
Speaker Change: In sum.
Speaker Change: We delivered a solid quarter, even as we navigate the challenges.
Speaker Change: Challenges posed by the Pea.
It would be a problem and the reduction of capacity in Mexico.
Speaker Change: Yeah.
Speaker Change: All 48% year on year to $3 4 billion passes is good performance also benefited from it.
Speaker Change: Okay.
Speaker Change: During the quarter.
Speaker Change: So going forward at seven 6% water and depreciation of the Mexican peso against the U S.
Speaker Change: Okay with the 43 billion FX gain reported in the three quarter put entity.
Speaker Change: E N E.
Speaker Change: My presentation remarks, Sherry please open the floor for questions.
Speaker Change: Okay.
Speaker Change: Thank you if he would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Confirmation tone will indicate your line is in the question queue.
Speaker Change: If you would like.
Speaker Change: A question from the queue.
Speaker Change: Please press star two.
Speaker Change: As a reminder, if you're on speakerphone, please pick up your handset.
Speaker Change: Our first question is from Alan Macias with Bank of America. Please proceed.
Alan Macias: Hi, Good morning, I've always wanted to thank you for the call.
Just one question given the new administration in Mexico are I guess are there continuing to use it's very close to the last administration's policies are any indication that you have seen that.
Alan Macias: Some policies towards Mexican airports might be changing or or do you see.
Alan Macias: Things continue as.
Alan Macias: As with past the administration. Thank you.
Speaker Change: Hi, good morning.
Speaker Change: On your question I don't see any major change.
Speaker Change: It's in more countries.
Speaker Change: In previous calls.
Well what.
Speaker Change: What I do expect these.
Yeah.
Speaker Change: Okay.
Speaker Change: Because the Sydney airport's reduction.
Speaker Change: Goodbye.
Speaker Change: Yeah, I hope that the.
Speaker Change: Don't you have a problem.
Speaker Change: Yeah.
Speaker Change: Oh.
Speaker Change: Yes.
Speaker Change: The debt reduction.
So I'm describing.
Speaker Change: Describing that impact.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question is from Brian ponds with precise.
Speaker Change: Please proceed.
Brian ponds: Also good morning, and thanks for taking my questions. So the share of Mexican tourist destinations in the U S. Travel market has been decreasing all year, which seems to be favorite in Europe. So from your perspective, how much of this is related to airline capacity constraints in the U S or is it simply tough comps.
Brian ponds: The pandemic search. Thanks, that's my first question I have a second one.
Speaker Change: Yeah, it's one well.
Speaker Change: What I'm seeing is exactly what we saw in 2018.
Speaker Change: Plenty of people was all so that shouldn't be a cooking class you see our numbers.
Speaker Change: The comparison between 2009.
Speaker Change: Yeah.
Speaker Change: We'd love to help them with.
Speaker Change:
Speaker Change: And this is in my opinion, the most important reason why we're seeing.
Speaker Change: The decrease of course did you push it.
Speaker Change: It's not just in Mexico.
Speaker Change: Uh huh.
Speaker Change: Well the most important is why what are you doing stuff.
Speaker Change: Okay, that's clear and you mentioned in your in your remarks.
Speaker Change: Domestic traffic impacted by the Pratt and Whitney should continue until the second quarter of 2025 I. Just wanted to clarify is that do you mean that by the second quarter of 2025 do you expect to be completely recovered or will the recovery beginning in the second quarter and then you know it will take some time for you to completely.
Speaker Change: Normalized thanks.
Speaker Change: Okay.
Speaker Change: Becky.
Well.
Speaker Change: After that.
Speaker Change: The second quarter.
Speaker Change: Yeah.
Speaker Change: Got it thank you very much all of them.
Speaker Change: You're welcome.
Speaker Change: Our next question is from Fernando Ricky that with D. P. T. Pactual. Please proceed.
Speaker Change: Okay.
Speaker Change: Fernando Please check and see if your line is muted.
Speaker Change: We are not able to hear you.
Okay.
Speaker Change: Go ahead Fernando we can hear you now.
Okay, we will move onto the next question.
Speaker Change: Our next question is from.
Speaker Change: Gen six with Morgan Stanley. Please proceed.
Speaker Change: Yeah.
Speaker Change: Yes, Hello, Adolfo I have a few questions.
Speaker Change: The situations and in Cancun in particular.
Speaker Change: I mean, according to two it's like flight schedule data, we're tracking it seems that the situation will remain challenging the rest of the year and slightly improved towards the beginning of next year are.
Speaker Change: Are you seeing the same as we are and secondly, if you could give us just some indication.
Speaker Change: Off of traffic.
Speaker Change: First is what you assumed in the last M. D. P review.
Speaker Change: Is it tracking above or below that.
Speaker Change: The assumptions that you agreed with the government. Thank you.
Speaker Change: And yes, I do agree with you that.
Speaker Change: But the interesting some looks better than what we see now.
Speaker Change: Winter season starts basically with the.
Even though you added so I would say at the analyst day.
Speaker Change: Getting a little concerned there.
Speaker Change: Up to April next year.
Speaker Change: In terms of the.
Speaker Change: So far we aren't seeing it.
Speaker Change: It decreased traffic or lower down there.
Speaker Change: We forecast it in and get to peak.
Alright, perfect very clear thank you.
Speaker Change: Yeah.
Speaker Change: Our next question is from Isabella Salazar with GBM. Please proceed.
Speaker Change: Yeah.
Speaker Change: Thank you for taking my question.
Isabella Salazar: I was wondering if you could provide some insights on capital allocation given the company right.
Speaker Change: Hi crush.
Speaker Change: <unk>.
Just kind of on that in terms of that.
Speaker Change: James could you have been saying.
Speaker Change: Yeah.
Speaker Change: Which is we want to grow.
Speaker Change: I'll start with the greater we are looking for more opportunities.
Speaker Change: <unk> is basically a good drug.
Speaker Change: Attractive investment opportunities for shareholders.
Speaker Change: Furthermore, we have to say, we don't have anything in France.
Speaker Change: Sure.
Speaker Change: We do not have anything in France.
Speaker Change: We will do is as we have been doing.
Speaker Change: There's one back to show homes.
Speaker Change: Thank you.
Speaker Change: Our next question is from Stephen Trent with Citi. Please proceed.
Stephen Trent: Hey, good morning, Adolfo and thanks very much for taking my question.
Stephen Trent: I was just trying to get.
Stephen Trent: Get color around how we should think about full year capex spend so the first nine months of the year. Your amount of Capex is running well below what do you have an end to.
Stephen Trent: M D P by itself and you know maybe how we should think about the fourth quarter. Thank you.
Speaker Change: Of course.
Speaker Change: The nine months of the year, it's $1 9 billion were expecting.
Speaker Change: We have to comply with.
Speaker Change: We have committed with the government.
Oh seven vessels.
Speaker Change: I'll explain the difference.
Speaker Change: Sure.
Speaker Change: I appreciate it all for an eye and just as a quick follow up would.
Speaker Change: What do you expect sort of the ratio of MVP capex to non M. D. P. Capex for the full year to be around the same level as it was over the nine months period.
Speaker Change: Yeah, well for the moment, we are not doing too much promotions.
Speaker Change: Yes.
Okay very clear thanks Adolfo.
Speaker Change: You will.
Speaker Change: Our next question is from Joel <unk> with Goldman Sachs. Please proceed.
Speaker Change: Hey, good morning, Thanks for taking my question I have just a quick follow up I'm sorry, if I missed this in your initial remarks.
Speaker Change: But I just wanted to understand a bit more on the commerce.
Speaker Change: Health care revenues, sorry in Mexico, if we look quarter over quarter.
Speaker Change: It was basically flat despite the currency depreciated by roughly 10% sequentially. So just wanted to understand what drove it this weakness.
Speaker Change: And whether we should expect this to continue into the fourth quarter or we should see a recovery back to levels of commercial revenues are in dollars per passenger we signed our first half of it is here. Thank you.
Speaker Change: Well, Joe and intense.
Speaker Change: <unk> revenues.
Speaker Change: I'd be careful of tobacco, saying no not at all because a piece of work on them.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: First of all.
Speaker Change: Bonds would be okay, I think that's it.
Speaker Change: Excluding construction.
Speaker Change: Minus promotion should be designated indications promotion, yes.
Speaker Change: Someday.
Speaker Change: No.
Speaker Change: Remember that the second quarter.
Speaker Change: Most of that.
Speaker Change: Traffic is domestic.
Speaker Change: And then they have to do anything.
A simple yes.
Speaker Change: Sure.
Speaker Change: The commercial revenues per passenger increase even with the.
Speaker Change: The decrease in good traffic.
Speaker Change: Remember the whole store.
Speaker Change: Yeah, we are losing opportunities today.
Speaker Change: Indications.
Speaker Change: It's a key.
Speaker Change: So it would be so I think Jeff.
Speaker Change: Yeah that should be sold once we open.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: And that should of cure and that's.
Speaker Change: Got it.
Speaker Change: 26.
Speaker Change: So far we would feel it.
Speaker Change: And suffering.
Speaker Change: Of course with governments across the globe.
Speaker Change: Passenger basis.
Got it thank you very much.
Speaker Change: Yeah.
Speaker Change: Our next question is from Prime popular non surveys with Barclays. Please proceed.
Hi, Good morning, Thanks for taking my question just a clinical follow up question from James.
Speaker Change: Regarding the your expectations on the MVP or for example, the impact on Bloom to who can go and.
Speaker Change: How has it being.
Speaker Change: The traffic evolution of a prolonged versus what you initially expected.
Speaker Change: Thank you.
Speaker Change: Good morning, and put them on some line of work.
Speaker Change: Victor.
Speaker Change: And what do you expect for the full year is one 5 billion.
Speaker Change: Yeah.
Speaker Change: Wrapping up well.
Speaker Change: But it's so far.
Language.
Speaker Change: What we are we expect.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: And a follow up if I may.
Speaker Change: What is the compensation or the.
Speaker Change: Uh huh.
Speaker Change: How's the dialogue that you have with U S carriers are it seems like yes, they are pulling out capacity and.
Speaker Change: And they have said so and in their earnings call.
Speaker Change: What what did you discuss with them what their plans for 2025.
Speaker Change: Well, it's as you know I'm.
Speaker Change: They're not swapping from also lack of trying.
Speaker Change: With me.
Speaker Change: The conversations with them or are there.
Speaker Change: They're expecting a winter season.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Youre welcome.
Speaker Change: As a reminder, it is star one if he would like to ask a question wave a pause for a brief moment to see if there's any final questions.
Speaker Change: Okay with no further questions. This will conclude the question and answer portion of today's conference call.
Speaker Change: Turning it back over to Mr. Castro for closing remarks.
Adolfo Castro: Thank you Carrie and thank you all of you again for joining us today. Please.
Speaker Change: Edward 34 conference call, we wish you a good day and goodbye.
Speaker Change: Ladies and gentlemen that concludes our third quarter 2024 results conference call.
Speaker Change: Thank you again for your participation you may now disconnect.