Yahoo Finance Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR) Q1 2024 Earnings Call Transcript
Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR) Q1 2024 Earnings Call Transcript April 23, 2024
Grupo Aeroportuario del Sureste, S. A. B. de C. V. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, ladies and gentlemen, and welcome to ASUR’s First Quarter 2024 Results Conference Call. My name is Sherry, and I will be your operator. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, today's call is being recorded. Now, I would like to turn the call over to Mr. Adolfo Castro, Chief Executive Officer. Please go ahead, sir.
Adolfo Castro: Thank you Sherry. And good morning everyone. Before I begin discussing our results, let me remind you that certain statements made during this call may constitute forward-looking statements which are based on current management expectations and beliefs and are subject to several risk and uncertainties that could cause actual results to differ material, including factors that may be beyond our company's control. As usual, additional details about our quarterly results can be found in our press release, which was issued yesterday after market close and is available on our website in the Investor Relations section. Following my presentation, I will be available for Q&A. Moving on to the review of ASUR's operational and financial performance for the quarter.
As usual, all comparison discussed will be year-on-year unless specified otherwise. We saw record high passenger traffic in the quarter at 18.6 million travelers up 4% year-on-year. [Indiscernible] performance was mainly driven by increases of 4% in Mexico, 12% in Puerto Rico, which more than upset the low single-digit decline in Colombia. By region, Puerto Rico, again, stood at the region with the strongest traffic growth, with traffic up nearly 12% driven by a double-digit increases in both domestic and international traffic. Traffic in Mexico was up nearly 4% as high single-digit growth in international and passenger driven mainly by traffic to and from the United States and Canada more than offset the low single-digit decline in domestic travel.
In addition to the impact from the initial effects of the Pratt & Whitney engine problems we have experienced in the last quarters domestic traffic was also affected by reduction in air traffic movements at Mexico City Airport, starting January 8th this year. Recall this airport accounted for 45% of tourist domestic traffic in 2023 and we expect this to continue negatively impacting domestic traffic this year. Lastly, in Colombia, traffic had started to recover with year-over-year decline small [Indiscernible]. Down only 2% in the quarter driven by [Indiscernible] account, domestic traffic following the suspension of two local airlines in February of last year that accounted 20% of our traffic in Colombia in 2022 and 19% increasing international travel.
We expect the recovery in traffic in Colombia to continue through the remaining of the year as Avianca and Latam continue to recover some of the lost routes, with March already posting a 9% growth in total traffic in Colombia. Now turning to the P&L, as a reminder, all reference to revenues and costs exclude construction and cost of revenues. Total revenues increased 14% to just over MXN 7 billion in the first quarter. Mexico and Colombia stood out with growth in the mid-teens, while Puerto Rico delivered low single-digit revenue growth impacted by stronger peso despite the double-digit traffic growth. Mexico, which accounted for 76% of total revenues, posted a 16% increase in its top line. This was mainly explained by growth in aeronautical services in the mid-20s, while non-aeronautical revenues increased below single digit.
Revenues in Puerto Rico, which accounted for 14% of the total, increased nearly 2% at 10% growth in non-aeronautical revenues, was partially offset by a 5% reduction in aeronautical revenues, reflecting the strong peso. Lastly, Colombia, which represented 10% of the revenues, posted a mid-teen increase in the top line, reflecting a good performance in both aeronautical and non-aeronautical revenues, which benefited from the international traffic growth and the strong Colombian peso. Executing our strategy of expanding our commercial offering over the past 12 months, we opened 17 new commercial spaces in Mexico, 6 in Puerto Rico, 22 in Colombia. Commercial revenues were up nearly 5%, slightly above passenger traffic growth, mainly driven by increases of 10% in Mexico, while Puerto Rico and Colombia posted increases of 10% and 14% respectively.
On a per passenger basis, commercial revenues increased 2% year-on-year to nearly MXN 125. This performance was mainly driven by growth in the high teens in Colombia, again reflecting a strong FX, which more than offset low single digits in Mexico and Puerto Rico. On the cost front, consolidated expenses increased nearly by 14%, generally in line with revenue growth in the quarter. This was mainly driven by Mexico, which reported a higher concession fee due to increases by 80% established by the Mexican government and 20% increase in minimum wages, both effective January 1st, partially offset by the 50% reduction in annual assistance fees. Consolidated EVA increased 13% year-on-year to MXN 5.1 billion in the quarter, while the adjusted dividend margin, which excludes construction, was MXN 71.4 compared with MXN 71.9 in the year ago quarter.
All regions contributed to EBITDA growth. Mexico remains the main driver of profitability, with EBITDA increasing 15%, followed by Colombia with an increase of nearly 11% and Puerto Rico just over 1%. Moving on to the balance sheet, we closed the quarter with a strong cash and cash equivalents position of nearly MSN 17 billion, up 21% from the same quarter last year. Total debt declined 4% from the year end 2023, reflecting the position of the Mexican and Colombian pesos and the payment of principal amounts of outstanding debt in Mexico. In turn, the leverage ratio was negative 0.3 times. Tomorrow, April 24th, the annual shareholders meeting is being held, for which we have proposed the distribution of an ordinary cash dividend of MXN 10 or MXN 90.6 a share payable in May and an extraordinary cash dividend of MXN 10 payable this June.
Lastly, last week we published our 2023 sustainability report, the third year report and the secular UNICEF [ph] and encourage you to read them, all of which can be found on our website. Wrapping up, first quarter 2024 delivered solid results, even as we faced the ongoing issues with the Pratt & Whitney engines and the capacity reduction at Mexico City Airport. Our good performance reflects increased traffic through our airports, along with improved passenger experience we are delivering. These trends bode well for the remaining of the year. We are committed to report our growth potential and enhancing the passenger experience through the investment in capacity in our commercial offerings. Importantly, our financial position is healthy and our capital allocation priorities are balanced between investing for growth and returning cash to shareholders.
This ends my prepared remarks. Sherry, please open the floor for questions.
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