Grupo Aeroportuario del Sureste, S. A. B. de C. V. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Announced acquisition of URW Airports for $295 million, a significant step in international expansion with presence in major US airports like LA, Chicago, JFK.
• Third quarter passenger traffic: Mexico down 1%, Puerto Rico up 1%, Colombia up 3%.
• Financial results: Total revenues up mid-single digits, EBITDA declined just over 1% year-on-year, adjusted EBITDA margin declined by 157 basis points.
• Commercial development: Added 45 new commercial spaces across airports in last 12 months.
• Balance sheet: Solid cash position, net debt-to-EBITDA ratio at 0.2x, dividends paid, and investments in infrastructure projects.

Segment Performance

• Mexico: Traffic declined 1% to nearly 10 million passengers. Revenues at 70% of total revenues posted a slight low single-digit decline, with aeronautical revenues practically flat and non-aeronautical revenues down in the mid-single digits. Costs increased 4% largely due to higher minimum wages and service costs. EBITDA declined close to 4%.
• Puerto Rico: Total traffic was up 1%, reaching over 3 million passengers. Revenues nearly 18% of total revenues reported high single-digit revenue growth. Costs increased nearly 8% reflecting inflationary pressures and higher operating activity. EBITDA growth nearly 5%.
• Colombia: Passenger traffic rose 3% to close to 5 million. Revenues 30% of total revenues delivered high single-digit revenue growth. Costs increased 76% mainly driven by an adjustment in amortization method of the concession (would have been 5.4% without this increase). EBITDA growth 10%.

Guidance

• Anticipate more balanced operating environment across portfolio; Mexico traffic to gradually stabilize over next year, Puerto Rico and Colombia to continue positive momentum.
• URW acquisition closing expected during second half of 2025, subject to customary regulatory approvals.

Risks

• Forward-looking statements subject to risks and uncertainties beyond control.
• Weak demand in Mexico, impact of Mexican peso depreciation against USD on profitability.

Q: Can you shed light on the economics, revenue per pax, and EBITDA contribution expected from the URW acquisition? And on the Colombia concession amortization adjustment, is it one-off?

A: For URW, cannot share numbers yet. In Colombia, adjustment to amortization method is not one-off, aligning with revenue generation as regulated revenues won't be received by 2027 and concession ends in 2032.

Q: What are the synergies and strategic rationale behind the URW acquisition?

A: Important to get a foot in the US market, which is 22% of global aviation market, and these terminals are key for future growth in US.

Q: Any information on Motiva Airports interest? And thoughts on Mexico traffic trends and impact on Cancun airport?

A: Cannot comment on Motiva. Traffic in Mexico is weak due to factors like Pratt & Whitney engines, region traffic down 3.1% in first 8 months, 5.1% in August.

Q: Is Cancun Airport's new terminal still expected to open in Q3 2026?

A: Expected to open during Q3 2026.

Q: Any shift in capacity allocation from Cancun? And will decrease in traffic accelerate tariff increase to maximum?

A: Not seeing shift in capacity. Weak demand, but maximum tariff compliance this year expected to be similar to last year, over 99%.