Grupo Aeroportuario del Sureste SA de CV Q1 FY2025 earnings call

• Traffic: Total passengers across three countries were 18.6 million, largely flat year-on-year. Puerto Rico up nearly 11%, Colombia up over 6%, Mexico down nearly 5% due to Easter shift and other factors. Cancun affected by Tulum Airport ramp-up.
• Financials: Revenues up 14% to MXN8.2 billion. Costs up 18% year-on-year. Balance sheet strong with nearly MXN23 billion in cash and cash equivalents.
• Commercial: Opened 40 new commercial spaces over last 12 months. Commercial revenues grew in high single-digits.
• Sustainability: 2024 marked progress in ESG goals, including expanding social investment, completing Scope 3 emissions inventory, biodiversity preservation, and proposing female Board appointment.

Total revenues were up 14% year-on-year to MXN8.2 billion. Mexico represented 73% of total revenues, with aeronautical revenues up 9% and commercial revenues showing a low single-digit increase. Puerto Rico contributed 15% of total revenues, with steady growth in the high 20s driven by aeronautical and non-aeronautical revenues. Colombia accounted for 12% of total revenues, with solid top line growth in the low 30s driven by aeronautical and non-aeronautical revenues. Total commercial revenues grew in the high single-digits, with Puerto Rico up early 23% and Colombia up 38%. Total expenses were up 18% year-on-year. Consolidated EBITDA rose 12% year-on-year to MXN5.7 billion, with adjusted EBITDA margin at 70% compared to 71.4% a year ago. Puerto Rico and Colombia posted double-digit EBITDA growth of 24% and 30% respectively, while Mexico saw an 8% increase in EBITDA despite lower passenger traffic.

• Traffic: Anticipate traffic in Mexico to stabilize next year as Pratt & Whitney engine issue fades and Tulum Airport completes ramp-up. Expect passenger volumes at Cancun and Tulum to expand in line with regional growth dynamics.
• 2025: Expect solid remainder of 2025 as continuing to invest in infrastructure, elevate passenger experience, and deliver sustainable growth.

• Pratt & Whitney engine restriction impacting Mexico traffic.
• Capacity limitations at Mexico City Airport affecting domestic traffic in Mexico.
• Global macro uncertainties and potential U.S. recession impacting travel to Mexico.

Q: Regarding driver of strong commercial revenue and CapEx impact.

A: Peso depreciation helped in Puerto Rico and Colombia. CapEx in Terminal 1 remodeling to be completed by third quarter 2026 with new areas requiring maintenance.

Q: Capital allocation and interest in CCR's airport assets in Brazil.

A: Proposed dividend almost from cash on hand. Analyzing CCR's offering carefully, considering if funded by debt.

Q: Weakness from airlines removing frequencies due to macro uncertainty.

A: Too early to tell, but Tulum Airport ramp-up affecting Cancun numbers.

Q: Mexico City restrictions and Tulum passenger expectations.

A: Expect Mexico City restriction lifted by third quarter 2025, Tulum expected 2.9 million passengers in 2025 similar to MDP expectations.

Q: Mexico tariffs percentage and expected rate hikes.

A: Last year maximum tariff compliance was 99%, tariffs measured once a year, not quarter by quarter.

Q: MDP CapEx deployment.

A: Expect CapEx in Mexico around $7 billion, Puerto Rico $25 million, Colombia small amount, first quarter lowest seasonally.

Q: Colombia commercial strategy impact on results.

A: Colombia's commercial results due to exchange rate, new spaces opened, and business as usual strategy.

Q: Tulum traffic draw from commercial vs charter.

A: Some charter flights switching from Cancun to Tulum, some commercial flights also operating.

Q: Dividend sourcing and future dividends.

A: Proposed dividend from accumulated retained earnings and share buyback reserves, future dividends dependent on future results.

Q: Puerto Rico, Colombia traffic outlook and Mexico Terminal 2 remodeling impact.

A: Puerto Rico traffic still strong, Colombia normalizing, Mexico Terminal 2 remodeling expected to increase commercial revenue per passenger once operational.

Q: Updates on Aeropuerto de Bavaro investment.

A: No updates, still in legal process.

Q: U.S. recession impact on international traffic to Cancun.

A: Historical data shows resilience during U.S. recessions, but global macro uncertainties monitored.

Q: MAX tariff compliance and FX volatility.

A: Maximum rate is contract-based, exchange rate changes provide room to maneuver, expecting similar maximum compliance results as last year.