Scotiabank has lowered its rating on Asur (ASR, Financial) from Outperform to Sector Perform, revising the price target to MXN 703 from MXN 800. This adjustment reflects a shift in valuation assessments and an analysis of relative earnings momentum. The move comes as airlines are increasingly adopting strategies focused on volume over value due to improving seat supply conditions. Analysts suggest that the previous trend favoring Mexican airlines over airports might be changing. This shift in strategy and the resulting sector changes have impacted Asur's valuation standing.
ASR Key Business Developments
Release Date: April 23, 2025
- Total Revenue: MXN8.2 billion, up 14% year on year.
- Passenger Traffic: 18.6 million passengers, largely flat compared to the same period last year.
- Aeronautical Revenue: Up 9%.
- Non-Aeronautical Revenue: Up 10%.
- Commercial Revenue: Grew in the high single digits.
- Commercial Revenue per Passenger: Nearly MXN147, reflecting strong year-on-year growth in the high teens.
- Total Expenses: Up 18% year on year.
- EBITDA: MXN5.7 billion, up 12% year on year.
- Adjusted EBITDA Margin: 70%, compared to 71.4% a year ago.
- Cash and Cash Equivalents: Nearly MXN23 billion, up 35% year on year.
- Net Debt to EBITDA Ratio: Negative 0.5 times.
- Capital Expenditures: MXN645 million invested during the quarter.
- Net Majority Income: Increased 14% to MXN3.5 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Grupo Aeroportuario del Sureste SAB de CV (ASR, Financial) reported a 14% year-on-year increase in total revenues, reaching MXN8.2 billion, driven by solid growth across all operations.
- Puerto Rico and Colombia showed strong performance, with Puerto Rico maintaining a positive trend of nearly 11% in passenger traffic and Colombia experiencing a 6% rise.
- Commercial revenues grew in the high single digits, with Puerto Rico posting a 23% increase and Colombia delivering a 38% year-over-year growth.
- The company opened 40 new commercial spaces over the last 12 months, enhancing its commercial offerings and revenue potential.
- ASR's balance sheet remains strong with nearly MXN23 billion in cash and cash equivalents, up 35% year on year, and a net debt to EBITDA ratio of negative 0.5 times.
Negative Points
- Passenger traffic in Mexico declined nearly 5% during the quarter, impacted by the Easter shift and competition from the new Tulum airport.
- Cancun, ASR's largest airport, continued to experience year-on-year declines in traffic from almost all regions, including a 10.5% decrease from the US.
- Total expenses increased by 18% year on year, driven by higher concession fees, administrative costs, and a 12% increase in minimum wages in Mexico.
- The adjusted EBITDA margin decreased slightly to 70% from 71.4% a year ago, attributed to higher operating costs.
- The company anticipates increased costs as new infrastructure projects, such as the expansion of Terminal 1 in Cancun, become operational.
