Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) Bundle
Understanding Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) Revenue Streams
Understanding Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)’s Revenue Streams
Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) generates its revenue primarily through aeronautical services, non-aeronautical services, and construction services across its operations in Mexico, Puerto Rico, and Colombia.
Breakdown of Primary Revenue Sources
In 3Q24, the consolidated revenues were Ps. 7,483.3 million, which represented an 18.1% increase from Ps. 6,338.9 million in 3Q23. The breakdown of revenue sources is as follows:
| Revenue Source | 3Q24 (Ps. million) | 3Q23 (Ps. million) | Year-over-Year Change (%) |
|---|---|---|---|
| Aeronautical Services | 4,527.1 | 3,790.7 | 19.4 |
| Non-Aeronautical Services | 2,355.4 | 2,242.5 | 5.0 |
| Construction Services | 600.8 | 305.7 | 96.6 |
Year-over-Year Revenue Growth Rate
The overall revenue growth rate for ASR in 3Q24 was 18.1%, driven by increases in both aeronautical and non-aeronautical services. The significant rise in construction services also contributed to this growth.
Contribution of Different Business Segments to Overall Revenue
Excluding construction services, the contributions of different segments to total revenues in 3Q24 were:
| Segment | Revenue (Ps. million) | Percentage of Total Revenue (%) |
|---|---|---|
| Mexico | 5,386.4 | 71.1 |
| Puerto Rico | 1,215.6 | 15.5 |
| Colombia | 881.3 | 12.8 |
Analysis of Significant Changes in Revenue Streams
In 3Q24, commercial revenues per passenger increased by 7.2% to Ps. 124.9 compared to Ps. 116.5 in 3Q23. This growth was influenced by a 14.5% increase in commercial revenue in Puerto Rico and a 38.1% increase in Colombia, while Mexico experienced a 1.7% decline in commercial revenues.
Overall, the increase in construction revenue by 96.6% was notable, reflecting substantial investment in airport infrastructure and development, particularly in Mexico. This surge indicates a strategic focus on enhancing operational capabilities and passenger experience.
In summary, ASR's diverse revenue streams and geographic presence have allowed it to achieve robust revenue growth, despite some challenges in passenger traffic in certain regions.
A Deep Dive into Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) Profitability
A Deep Dive into Grupo Aeroportuario del Sureste's Profitability
Gross Profit Margin: In 3Q24, the gross profit margin was reported at 67.5%, down from 71.4% in 3Q23.
Operating Profit Margin: The operating profit margin decreased to 61.9% in 3Q24 from 65.7% in the same quarter of the previous year. The adjusted operating margin also fell to 67.6% from 68.4% year-over-year.
Net Profit Margin: The net profit margin increased to 46.5% in 3Q24 from 43.6% in 3Q23, reflecting a net profit of Ps.3,474.5 million, up 23.8% from Ps.2,807.1 million in 3Q23.
| Metric | 3Q23 | 3Q24 | % Change |
|---|---|---|---|
| Gross Profit Margin | 71.4% | 67.5% | -3.9% |
| Operating Profit Margin | 65.7% | 61.9% | -3.8% |
| Adjusted Operating Margin | 68.4% | 67.6% | -0.8% |
| Net Profit Margin | 43.6% | 46.5% | +2.9% |
Trends in Profitability: The trends indicate a mixed performance in profitability metrics. While gross and operating margins have seen a decline, net profit margins showed improvement due to significant growth in net income, which rose 23.8% year-over-year.
Comparison with Industry Averages: The company’s operating margin of 61.9% is above the industry average of approximately 50%, indicating strong operational efficiency relative to peers. The net profit margin of 46.5% also exceeds the industry average of 30%, showing a robust ability to convert revenue into profit.
Operational Efficiency Analysis: The decrease in gross and operating margins can be attributed to rising operational costs, which increased by 27.3% YoY to Ps.3,386.1 million, affecting overall profitability.
EBITDA: EBITDA for 3Q24 was Ps.4,700.4 million, a 12.0% increase from Ps.4,198.4 million in 3Q23. The EBITDA margin decreased to 62.8% from 66.2%.
| Metric | 3Q23 | 3Q24 | % Change |
|---|---|---|---|
| EBITDA | Ps.4,198.4 million | Ps.4,700.4 million | +12.0% |
| EBITDA Margin | 66.2% | 62.8% | -3.4% |
Conclusion: The profitability metrics reveal a company that is managing to grow net profit despite pressures on gross and operating margins. The ability to maintain margins significantly above industry averages indicates strong competitive positioning.
Debt vs. Equity: How Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) Finances Its Growth
Debt vs. Equity Structure
As of September 30, 2024, the company reported total debt of Ps.12,630.4 million, reflecting a 3.3% increase from Ps.12,224.8 million at the end of 2023. This increase is attributed to foreign exchange conversion impacts and principal payments on outstanding debt.
The debt composition includes 19.2% denominated in Mexican pesos, 77.5% in U.S. dollars, and 3.3% in Colombian pesos.
Debt Levels
Breaking down the debt further, as of September 30, 2024:
| Type of Debt | Amount (Ps. million) |
|---|---|
| Total Debt | 12,630.4 |
| Short-term Debt | 969.6 |
| Long-term Debt | 11,660.8 |
The company’s debt-to-equity ratio stands at 0.218, indicating a manageable level of debt relative to equity, which is Ps.57,896.0 million.
Debt-to-Equity Ratio Comparison
This ratio is lower than the industry average of approximately 0.35, suggesting a conservative approach to leveraging.
Recent Debt Issuances and Credit Ratings
In July 2022, the company issued US$200 million in senior secured notes at a 4.92% interest rate due in 2035. In addition, it extended the maturity of US$50 million in senior secured notes to March 2025.
As of September 30, 2024, the company maintains a credit rating of Baa2, reflecting its stable financial position.
Balancing Debt Financing and Equity Funding
The company effectively balances its capital structure by maintaining a solid cash position of Ps.18,483.6 million as of the end of Q3 2024, which provides flexibility for both debt servicing and potential equity funding when necessary.
Additionally, the interest coverage ratio is reported at 12.1x, demonstrating a strong ability to cover interest expenses with operational earnings.
Overall, the financial strategies employed allow the company to sustain growth while managing its debt levels prudently.
Assessing Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) Liquidity
Assessing Grupo Aeroportuario del Sureste's Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
Current Assets: Ps. 18,483.6 million (cash and cash equivalents) + other current assets (not specified in the provided data).
Current Liabilities: Total liabilities were Ps. 20,534.2 million, with a portion being current liabilities (specific current liabilities not provided).
Thus, the current ratio is approximately 0.9 (exact current assets and liabilities needed for precise calculation).
Quick Ratio: The quick ratio is derived from:
Quick Assets: Ps. 18,483.6 million (cash and cash equivalents).
Quick Liabilities: Total current liabilities (not specified).
As such, the quick ratio is approximately 0.9 (exact quick liabilities needed for precise calculation).
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is calculated as:
Working Capital = Current Assets - Current Liabilities.
Current Assets: Ps. 18,483.6 million.
Current Liabilities: Not fully specified, but total liabilities were Ps. 20,534.2 million, suggesting potential working capital pressure.
Cash Flow Statements Overview
The consolidated cash flow statement for the nine months ending September 30, 2024, shows:
| Cash Flow Type | 9M 2023 (Ps.) | 9M 2024 (Ps.) | % Change |
|---|---|---|---|
| Operating Activities | 10,875,182 | 15,086,198 | 38.7 |
| Investing Activities | (384,046) | (412,490) | 7.4 |
| Financing Activities | (5,547,411) | (7,886,202) | 42.2 |
| Net Increase in Cash | 4,617,963 | 2,807,621 | (39.2) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents stood at Ps. 18,483.6 million, reflecting a 33.2% increase from Ps. 13,872.9 million at the end of 2023. Total debt was Ps. 12,630.4 million, indicating a manageable debt level relative to cash reserves.
The debt maturity profile indicates that short-term debt is Ps. 969.6 million, with long-term debt at Ps. 11,660.8 million, suggesting a healthy balance between short and long-term obligations.
Interest coverage ratio as of September 30, 2024, is 12.1x, indicating strong ability to meet interest obligations.
Overall, the liquidity position appears stable, backed by significant cash reserves against total debt, although the current ratio suggests potential liquidity constraints depending on the exact current liabilities.
Is Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze the Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) ratios.
Valuation Ratios
- P/E Ratio: As of September 30, 2024, the earnings per share (EPS) was Ps.11.2706. With a stock price of approximately Ps.210.00, the P/E ratio is 18.6.
- P/B Ratio: The book value per share, calculated from stockholders' equity of Ps.57,896 million divided by 300 million shares, is approximately Ps.192.99, resulting in a P/B ratio of 1.09.
- EV/EBITDA Ratio: The enterprise value is calculated as market capitalization plus total debt minus cash. Assuming a market cap of approximately Ps.63.0 billion and total debt of Ps.12.63 billion, with EBITDA of Ps.14.73 billion, the EV/EBITDA ratio is approximately 5.7.
Stock Price Trends
Over the last 12 months, the stock has seen fluctuations, starting from a price of around Ps.180.00. The stock price has increased to around Ps.210.00, reflecting a growth of approximately 16.67%.
Dividend Yield and Payout Ratios
The company has a dividend of Ps.20.00 per share, leading to a dividend yield of approximately 9.52% based on the current stock price of Ps.210.00. The payout ratio stands at 35.2% of the net income per share.
Analyst Consensus on Stock Valuation
Analysts are currently rating the stock as follows:
- Buy: 5 analysts
- Hold: 3 analysts
- Sell: 2 analysts
Comprehensive Financial Overview
| Metric | Value |
|---|---|
| P/E Ratio | 18.6 |
| P/B Ratio | 1.09 |
| EV/EBITDA Ratio | 5.7 |
| Stock Price (12 months ago) | Ps.180.00 |
| Current Stock Price | Ps.210.00 |
| Dividend per Share | Ps.20.00 |
| Dividend Yield | 9.52% |
| Payout Ratio | 35.2% |
| Analyst Buy Ratings | 5 |
| Analyst Hold Ratings | 3 |
| Analyst Sell Ratings | 2 |
Key Risks Facing Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)
Key Risks Facing Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)
Overview of Internal and External Risks:
- Industry Competition: The company faces intense competition from other airport operators, particularly in Mexico, which may affect its market share and pricing strategies.
- Regulatory Changes: Changes in aviation regulations, including those related to safety, environmental standards, and airport operations, can significantly impact operational costs and compliance requirements.
- Market Conditions: Fluctuations in air travel demand due to economic conditions, geopolitical events, or public health crises can adversely affect revenue streams.
Operational, Financial, or Strategic Risks:
- Operational Risks: Increased operational costs, particularly in maintenance and personnel, have been reported, with a 27.3% year-over-year increase in consolidated operating costs and expenses, amounting to Ps.3,386.1 million in 3Q24.
- Financial Risks: As of September 30, 2024, total debt increased by 3.3% to Ps.12,630.4 million from Ps.12,224.8 million. The company also reported a significant 96.6% increase in construction costs, amounting to Ps.600.8 million in 3Q24.
- Strategic Risks: The company’s investment strategy may face challenges due to fluctuating foreign exchange rates, as evidenced by a 7.6% depreciation of the Mexican peso against the U.S. dollar.
Mitigation Strategies:
- The company has increased its cash and cash equivalents to Ps.18,483.6 million, a 33.2% increase from Ps.13,872.9 million as of December 31, 2023, enhancing liquidity to manage operational risks.
- Debt management strategies include restructuring loans to improve repayment terms and reduce interest expenses, with a reported interest coverage ratio of 12.1x as of September 30, 2024.
| Risk Factor | Description | Impact on Financials |
|---|---|---|
| Operational Costs | Increased maintenance and personnel costs | Operating costs increased by 27.3% to Ps.3,386.1 million in 3Q24 |
| Total Debt | Increase in total debt due to operational needs and FX impact | Total debt rose by 3.3% to Ps.12,630.4 million |
| Foreign Exchange Risk | Fluctuations in currency rates affecting profitability | FX losses impacted financial results during 3Q24 |
| Regulatory Changes | Potential new regulations impacting operational costs | Compliance costs may increase, affecting margins |
Future Growth Prospects for Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)
Future Growth Prospects for Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)
Key Growth Drivers
- Expansion in passenger traffic with a reported total of 17.2 million passengers in 3Q24, a 2.1% increase YoY.
- Investment in infrastructure with capital expenditures amounting to Ps.1,042.4 million in 9M24, an increase of 183.8% YoY.
- Growth in aeronautical services revenues, which increased by 19.4% to Ps.4,527.1 million in 3Q24.
Future Revenue Growth Projections and Earnings Estimates
- Revenue for 3Q24 reached Ps.7,483.3 million, a growth of 18.1% YoY.
- Net income for 3Q24 stood at Ps.3,474.5 million, reflecting a 23.8% increase compared to Ps.2,807.1 million in 3Q23.
- Projected earnings per share for 2024 is estimated at Ps.33.7895, up from Ps.25.5554 in 2023.
Strategic Initiatives and Partnerships
- Collaboration with airlines to enhance service offerings and passenger experience.
- Investment in technological advancements at airports to streamline operations and improve customer service.
- Partnerships aimed at expanding international routes and increasing connectivity.
Competitive Advantages
- Strong cash position with Ps.18,483.6 million in cash and cash equivalents as of September 30, 2024.
- Debt to LTM EBITDA ratio at 0.3, indicating strong operational cash flow relative to debt levels.
- Geographic diversification with operations in Mexico, Puerto Rico, and Colombia contributing to resilience against regional downturns.
| Financial Metrics | Q3 2023 | Q3 2024 | % Change |
|---|---|---|---|
| Total Revenue | Ps.6,038.9 million | Ps.7,483.3 million | 18.1% |
| Net Income | Ps.2,807.1 million | Ps.3,474.5 million | 23.8% |
| EBITDA | Ps.4,198.4 million | Ps.4,700.4 million | 12.0% |
| Cash and Cash Equivalents | Ps.13,872.9 million | Ps.18,483.6 million | 33.2% |
Commercial Revenue Growth
- Commercial revenues increased 5.0% YoY to Ps.2,180.2 million in 3Q24.
- Commercial revenues per passenger rose to Ps.124.9, up from Ps.116.5 in 3Q23, marking a 7.2% increase.
Market Expansion
- Plans to open new commercial spaces at major airports, enhancing non-aeronautical revenue streams.
- Continued focus on increasing the number of international flights and partnerships with global airlines.
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Article updated on 8 Nov 2024
Resources:
- Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.