Q1 2025 Grupo Aeroportuario del Sureste SAB de CV Earnings Call
Speaker Change: Andressa Varotto, Juan Ponce, Juan Ponce, Juan Ponce, Juan Ponce
Speaker Change: Good day, ladies and gentlemen, and welcome to a source first quarter 2025 results conference call.
Daryl: My name is Darrell and I'll be your operator. At this time, all participants are in a listen-only mode. We will conduct a question and answer session toward the end of today's conference.
Daryl: If you would like to ask a question, please press star then one. If you want to withdraw your question at any time, please press star then two. If you're using a speaker phone, please lift a hand set before making a selection. Thank you.
Speaker Change: As a reminder, today's call is being recorded. Now, I'd like to turn this call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead, sir.
Thank you very, and good morning, everyone.
Speaker Change: Additional details about our first quarter 2025 sold can be found in our press release.
Following my presentation, I will be available for Q&A.
Speaker Change: During the quarter, we welcome a total of 18.6 million passengers across our three countries of operations.
Speaker Change: Larly flat, compared to the same period last year. Continue growing Puerto Rico and Colombia of set of software platforms in Mexico.
Looking more closely at the traffic response by country.
Speaker Change: with international traffic expanding in the high teens and domestic traffic in the low double digits.
Speaker Change: While traffic remains resilient, we continue to expect normalization after benefiting from frontier and lens expansion of operations last year.
Speaker Change: writing just over 6% grieving growth in international traffic in the mid-teens and domestic traffic in the low single digits [inaudible]
Speaker Change: Declangios below 1% can coon our largest airport continued to fill the effects of Dulum Airport.
A specifically traffic from Euro Decree, 0.8%
Speaker Change: Domestic traffic remained affected by continued capacity limitation at Mexico City Airport since early 24, with respect to be late 30th in the second half of the year.
Speaker Change: As I have mentioned in class, beyond that, we expect passenger polines, Adolf, Cancun, and Tulum to expand the line with the crota dynamics.
Speaker Change: Currently, the global macro situation is fluid and unpredictable. However, Patrick's disruptions particularly related to the US and the impact on travel to Mexico have proven not to be, happy to be short-life.
Speaker Change: Now, as we move to review our financial performance, recall that all reference to revenue and cost figures exclude construction.
Dr. Vermilig, we're up 14% year and year to 8.2 billion deaths.
Speaker Change: Adromaptican revenues were up 9% with Adromaptican revenues rising 10% reflecting the strong commercial revenues per passenger
Speaker Change: Puerto Rico contribute 15% of the total revenues and continue to deliver the steady growth in the high 20s.
Driven by foam aeronautical and not aeronautical prejudice. [inaudible]
Whether supported by extended benefits from weaker person. [inaudible]
Speaker Change: Columbia Accounting for 12% of total revenues, hosting continuous short-it offline clothing for 30s.
Speaker Change: So what's given by both Arunotical and Non-Arotical Revenues, which benefited from a continuing recovery in domestic and international traffic, and the opening of 26 new commercial spaces over the past 12 months, also benefited from the weaker past.
Speaker Change: Attacking every strategy to expand commercial offerings, we opened four new commercial spaces over the last 12 months.
Speaker Change: This included Alan in Mexico, free import of Rico, and 26 in Colombia.
Speaker Change: As a result of the commercial revenues brewing the high single visits with Porta Rico posting an early 23% increase in Colombia, delivering a strong year over the growth of 28%.
Speaker Change: commercial revenues with passenger reach nearly 1.47 pesos in the quarter reflecting a stone strong year-and-year in high teens, robust growth across all three regions supporting these performance.
I wish I remember the name of the passengers.
Speaker Change: The commercial revenues increasing the high 20s, driven by a traveler, will accentuate in Mexico and in Puerto Rico.
Speaker Change: Reaching 169 business professors' support to be part by currency effects.
As I've shown, consummated DVDA rooms 12% year and year.
Speaker Change: In the corner, we invested $6.45 million pesos in capital expenditures, and we deployed toward the modernization and expansion effort in our Mexican efforts.
Speaker Change: Ming Projects here in the quarter included technical construction and expansion of terminal 1 of Concordia put, as well as expansion of terminal in Wohakao.
Speaker Change: Recall that all construction activities are taking place outside the operational areas to ensure not disruption to airport operations.
As mentioned during our pre-prior-earning call, [inaudible]
Speaker Change: We continue on this space rather increasing capital as we move forward with several strategic infrastructure projects this year.
Speaker Change: He signs the streamlined traffic flows, particularly from South America, are looking at the show's commercial revenue potential.
Speaker Change: as part of our ongoing commitment to delivering value to your partners.
Speaker Change: In light of our solid financial performance, subject to approval at two days and on general meeting, the board of directors proposed at the broadcasted it from accumulate three ten annals and chamber back to serve to be paid in three ten princess.
Speaker Change: The first branch includes an initial ordinary net cast dividend of 50 test pressure, payable in May 2025, followed by two extraordinary net cast dividends of 15 each, payable in September and November 2025.
Speaker Change: Let me take a great moment to provide an update on our sustainability efforts. I am pleased to share that 2024.
Marked a year of meaningful problems.
Speaker Change: We took several keys that store achieving our ESG with goals building on our long-term vision.
Speaker Change: We expanded our flagship social investment program to a third indigenous community in Yucatan.
Speaker Change: On the climate front, following our 2023 commitment to this science-based started initiative, we completed our first scope, three emissions inventory in Mexico.
Speaker Change: This mindset helped us better understand the broader impact our value change as we move forward.
to next ever missions.
Speaker Change: Your diversity, precipitation, remained at drop priority. In 2024, we began building long-term alliances with global organizations to protect emblematic species and restore natural ecosystems in the southeast of Mexico.
Gladly from a gopindance perspective.
Speaker Change: We are proposing that moment of a new female board at our upcoming annals you come for this meeting. If approved, this will bring female representation on our board to 36% while 57% of the board will be independent. Thank you.
despite navigating industry challenges such as pattern with the engine.
Speaker Change: The capacity reductions at Mexico City Airport reported a 14% increase in net maturity income to 3.5 billion.
Speaker Change: Or else equal, we expect the sole remainder of 2025 as we continue investing in infrastructure, elevating the passenger experience and delivering sustainable growth.
Speaker Change: At the same time, we are cognizant of the potential of macrochallenge on a global basis that we are monitoring closely.
Speaker Change: Darryl, that concludes my prepared remarks. Please open the floor for questions.
Thank you. Again, to the audience, it is
Speaker Change: Our first questions come from the line of Rodolfo Ramos with Ferdesco BBI. Please proceed with your questions.
Speaker Change: Good morning, Alan. Thanks for taking my question. I have a couple if I may. The first one is regarding the driver of your strong commercial revenue. Thank you very much.
Speaker Change: You made some comments on this run, but if you can elaborate a little bit more more.
Speaker Change: on the performance that we saw during the quarter, perhaps your outlook, I mean, the Mexican peso...
Speaker Change: But I don't know if there's anything when you look at what you've already invested so far.
Speaker Change: As you open more areas or more expansions, just want to get a sense of when we could start seeing your cost structure swelling up as a result of these investments, if at all. Thank you.
Speaker Change: and a donor versus the person. We go back to the end of the first quarter last year, the exchange rate with the daughter of the Mexican person was 16.5.
Speaker Change: and then you are right in the sense to say that because we'll change once this great infrastructure is open.
Speaker Change: Of course, we would have new areas and we would have to maintain and secure a lot of these new spaces.
Speaker Change: In the case of Daniel and Paul, as I mentioned, we are expecting to conclude the project by the end of 2028.
I don't know if this answered your questions [inaudible]
Yes, thank you, Adolfo. You're welcome.
Speaker Change: Thank you. Our next questions come from the line of Jens Spiess with Morgan Stanley . Please proceed with your questions.
Jens Wiest: Yes, hello Adolfo. I have a question regarding capital allocation and the dividend you will be paying. And in light of that, you probably saw that CCR is selling their airport assets in Brazil.
Jens Wiest: Do you have interest in those or can we read from your dividend that basically that's not part of your upcoming capital allocation? Thank you
Jens Wiest: Yes, we are seeing the project and the operating of CPI, we analysing this carefully. In the case of, this will be funded by that.
Jens Wiest: Okay, perfect, thank you. And if I may just one more question regarding any weakness that you're potentially seeing from like airlines.
Speaker Change: Removing frequencies may be due to the ongoing trade tensions and macro uncertainty. Specifically, the weaker demand that some of the US airlines are seeing. Do you see any weakness coming from that, or is it still too early to tell at this moment? [inaudible]
Thank you.
Speaker Change: I think it's too early to tell. I don't see any effect of these at the moment. Of course, when you see the traffic in Mexico and when you see the traffic, you can go particularly. Thank you very much.
Speaker Change: You will see the effect of the report, you know. The report, as I was saying in my initial remarks, we are expecting these to reach 2.9 million passengers this year.
Speaker Change: Thank you. Our next questions come from the line of Guilherme Mendes with JP Morgan. Please proceed with your questions.
Speaker Change: Hey Adolfo, good morning and thanks for taking my question. I have two follow-ups on traffic. The first one is regarding the Mexico City restrictions. You mentioned that you would expect some of the restrictions to be lifted in the second half of this year. Can you elaborate a little bit more your expectations on how this should translate into traffic for a sewer?
Speaker Change: They come in deciding both of the restrictions in terms of capacity. F.
Speaker Change: The restriction was to have 43 abrasions per hour coming from 52 abrasions per hour.
Speaker Change: This restriction, in my opinion, is too strong, no, considering that you have one runway and a half.
Speaker Change: One-ron Leipen can sustain 58 m per hour, so if we save one-ron one and a half, that should be 75 one.
Today, at 43, it's particularly good.
Speaker Change: Why this so important because from the Italian Mexico? Pablo?
Speaker Change: Search extremely important that next to CV to look after my phone.
Speaker Change: If we come back in time, I would invite you to compare what it was in 2019 or the IFA was not in place, no?
Speaker Change: If you see what the use of Matthew is well, you will see that?
Speaker Change: after five years, almost six years, there is only a quarter of one million.
Speaker Change: And this is extremely important for us, so I have to believe that by the end of...
Speaker Change: The third quarter, the comments eliminate or changes this restriction to at least go back to the 52 against Bravo that we have at the end of 23.
Speaker Change: Also, keep in mind that next year we will have the world cup in Mexico and it will be extremely important to have or to be a very detailed Mexico City.
Speaker Change: What we expect for this year is to point nine in the case of the MVP, it was almost the same I was expecting probably 30 million for this year. So not too much difference.
The reality versus what I was expecting.
Very clear, thank you, Rodolfo [inaudible]
You're welcome.
Speaker Change: Thank you. Our next questions come from the line of Pablo Recaldé with Attal, please please proceed with your questions.
Speaker Change: Hi, good morning, I want to thank you for taking my picture. I have a question on Mexico tight. Based on my understanding, you have been raised tight these years. So, the two questions, if everyone is, if each person gets your maximum tight, you are charging now. And the second one you expect to raise tight to Mexico. And the second one you expect to raise tight to Mexico.
Speaker Change: No, you cannot say that you will be measuring that squad by squad.
Speaker Change: 99% So I would say today that the report that we presented yesterday, that we disclosed yesterday to the market
So...
Speaker Change: What we will be expecting for the end of the year, it's all of the same result that we've got class year. It's not that today we are above the maximum breakdown, that's not the case on the first side. And on the other side you can now again measure these on a quarterly basis.
Thank you.
You're welcome.
Speaker Change: Thank you. Our next questions come from the line of Anton Mortenkotter with GBM, please proceed with your questions.
Speaker Change: to increase the prices in some of your contracts or to do some catch-up in the commercial side. I was just wondering if the results of this quarter are a result of this and should we expect to see some more of that trend going forward? Thank you very much.
Speaker Change: Coyote and good morning. Well, in the kiss of Colombia, again, I would believe.
Speaker Change: The recommendation there would be to follow since the end of 2020, since the end of 2017.
and of business association that we continue to operate there in Colombia.
Thank you.
Speaker Change: Thank you. Our next questions come from the line of Stephen Trent with Citibank. Please proceed with your questions.
Stephen Trent: Good morning Adolfo, and thanks very much for taking my question. The first is actually just a follow-up.
Stephen Trent: Do you have a sense for the extent to which some of the draw is coming from commercial traffic, as opposed to charter and private traffic going to Tulum instead of Canton?
Well, of course.
Stephen Trent: Basically switching from time going to to long, they should not fly, you can't go any more. If the final destination is very close to to long, there's one piece of course, in the piece of commercial activities. Thank you very much.
Stephen Trent: You can see that Lincoln Airlines is flying there, and Tudari is flying there, and we are flying there, and we are flying there, and we are also making an alliance.
Stephen Trent: flying there. Those are basically the commercial areas and we have some flight, one flight from from Europe , what they have, one flight from Europe , at the end of last year, it was from France.
percentage of the company's retained earnings. How should we think about...
moving forward. How is your mic?
Stephen Trent: Potentially source, you know, future dividends when it come from a different piece of surehold as equity or should we assume kind of steady state thank you.
Speaker Change: And yes, deep water in the kisser, what we have composed to become is a suddenly.
Stephen Trent: of what we had told in the past and now we're in front of the poem.
Stephen Trent: Some of the questions before we have any more building puzzles in cash and cash equivalence at the end of the quarter, no?
Stephen Trent: 22 Billings, and the president proposed him for the three countries, almost 24 Billions, so we're just paying what we have achieved in terms of resource of the company. [inaudible]
Stephen Trent: Going forward, we would have to see what the results are, and come back, we would propose some conclusion about this incident.
Okay, I appreciate it, thanks Adolfo.
You want to think?
Speaker Change: Thank you. Our next questions come from a line of Fernando Arekia with BTG. Please proceed with your questions.
Hey, good morning, Adolfo. Thank you for taking my question.
and Juan Puerto Rico should start to normalize. [inaudible]
Speaker Change: Should we anticipate, because of this conclusion, would be great. Thank you.
Speaker Change: Isabela will then track it in Puerto Rico, as I mentioned in my initial remark to his dear Boris Sargo.
Speaker Change: No single digits, but it's still strong, but very fast forward. [inaudible]
Speaker Change: Elminating emotional opportunities that we have today, my love for Georgia, in the middle of the day, there's no chance.
Speaker Change: with the passenger to have a meal because all the spaces are closed. Once we open the new one, we will work in the new tool to improve the situation and that will host with increase or have an impact on commercial revenue deficit. Thank you.
Speaker Change: It's no easy for me to say how much it would be, you know, we would have to wait and see, once these spaces are fully operational and that should appeal for Guarere Maxia.
Okay, thank you.
Speaker Change: Hi, we're Martin Delafo, go ahead and resolve some. Thank you for visiting my question. Just a quick round from my side. Are there any updates on the Adolfo Valerio's investment or any other international investment? Thank you.
Speaker Change: Dragboin, no, no dates on Barbaro, the situation is still the same in reality and process.
Okay, thank you.
You're welcome.
Speaker Change: Thank you. Our next questions come from the line of Gabriel Heidelberg with Scotia Bank. Please proceed with your questions.
Speaker Change: In the cases of a U.S. recession, how much do you think it might drop international traffic and visitors coming from the U.S. and Canada to Cancun? I know it's difficult to forecast, but a date on your past experience.
Speaker Change: Hi, Gabriel. Well, let me tell you a story. If you see the presentation that we have in our show, good page.
Speaker Change: and we decided to go back in 1990 because that was at the moment the last year's economic recession. [inaudible]
if you see the charts.
Sure
Ind accents at the monument we received.
Speaker Change: For the US economic recession, I don't know what will happen today and the recession will be there or not, but on the other side I have to say that what we are seeing today in the case of the United States. [inaudible]
It's a very strongly dream of tourism towards these countries
Speaker Change: And if we can catch up some of these effects, it would be great for us [inaudible]
That's all I need.
Speaker Change: Catch some of these decrease, they will be excellent for us, you know what, they are not willing to go there, and we will try to relocate our commercial. Thank you very much.
Speaker Change: Okay, and have you seen any kind of ramp up from Canadian traffic? Like, you're moving from the U.S. to Canada? What from traveling to the U.S. instead traveling to Mexico?
Speaker Change: Well, if you see what I said during the mission from March, the only region that was flat for the quarter or that was not negative for the quarter was Canada.
Okay.
OK, thank you.
You're welcome.
Speaker Change: Thank you. Our next questions come from the line of Jens Spiess with Morgan Stanley . Please proceed with your questions.
Speaker Change: Yes, thank you. Just one follow-up on, also like on Pablo's question regarding the max tariffs. I know that compliance is annual so quarterly we shouldn't be worrying, but for the first quarter I think you published that the
Speaker Change: Let me try to explain the case of the Maximum Greats, and I'm just going to just say one was to be more walking on like such. If we say that Maximum Great is counter.
And we, during the quarter, obtain, let's say, a hundred and five.
for the world.
Speaker Change: If the maximum rate is 100 and the result is 98, what you are going to see in the P&L is 98.
Speaker Change: So, in terms of exchange rate, just to put this very clear, the end of last year, the end of last year.
Sorry, the end no.
The end of 24 was 2178.
Speaker Change: The end of March was 20.43 and the current exchange rate was around 19.5 [inaudible]
Coming from 16.5 to 19.5 today.
Speaker Change: He was a lot of room to my room. So that is why I was saying that we spent for this year almost the same last in terms of maximum dark compliance of what we got last year.
OK, that's clear. Thank you, those.
You look.
Speaker Change: Thank you. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad.
Speaker Change: Thank you. I'm showing no further questions at this time. That does conclude the question and answer portion of today's conference call. I would like to turn the call back over to Mr. Castro for closing remarks.
Mr. Castro: Thank you, Daryl, and thank you all again for joining us today for the first quarter of 2025 Conference School. We wish you a good day and good bath. Now you may disconnect.
Mr. Castro: Thank you that does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time.
Enjoy the rest of your day.