Grupo Aeroportuario del Sureste SA de CV Q2 FY2024 earnings call

Management Statement and Operational Highlights

• Sustainability: Compliance with ESG reporting, near completion of scope-3 carbon emissions data collection, renewed social project with Pronatura, talks with UNICEF and anti-human trafficking NGO.
• Operational Performance: Passenger traffic trends by region, revenue drivers including aeronautical and non-aeronautical revenues, 45 new commercial spaces opened over 12 months, EBITDA and margin details.

Segment Performance

• Passenger Traffic: Up 3% year-on-year to nearly 18 million passengers. Colombia saw 21% growth, Puerto Rico 9% growth, and Mexico a 5% decline.
• Revenues: Total revenues increased nearly 18% to MXN7 billion. Mexico accounted for 74% of total revenues with an 18% increase, Puerto Rico 15% with 5% growth, and Colombia 11% with 35% growth. Commercial revenues up 7%, per passenger MXN128.
• Costs: Increased nearly 30% year-on-year. Mexico saw 18% cost increase due to concession fees and wages, Puerto Rico 10% increase, and Colombia 19% increase.
• EBITDA: Consolidated EBITDA up 18% to MXN5 billion, adjusted EBITDA margin 69%.

Guidance

• Traffic: Expect Puerto Rico to normalize, Colombia's recovery to continue, Mexico's domestic traffic to remain impacted by Pratt & Whitney and Mexico City Airport capacity issues.
• Tariffs: Working towards 99% tied compliance, Mexican peso devaluation aids international tariffs based in dollars.
• CapEx: MDPs for the year around MXN3.8 billion, with projects like Cancun expansion, Terminal 4, etc., in progress.

Risks

• Pratt & Whitney: Ongoing engine issues affecting planes, with planes expected back by end of Sept 2024, then stabilizing.
• U.S. Elections: Potential impact on U.S. international traffic to Mexico.
• Mexico City Airport Capacity: Impact on domestic traffic.

Question and Answer Q: On traffic, thoughts on Pratt & Whitney recall impact and U.S. election impact on international traffic, and pricing status.

A: Pratt & Whitney planes expected back end of Sept 2024, U.S. elections may impact traffic; working towards 99% tied compliance with pricing adjustments.

Q: On commercial revenues and CapEx split.

A: Commercial revenues plans in Colombia and Puerto Rico; MDPs for the year around MXN3.8 billion.

Q: On U.S. traffic to Cancun and commercial revenues plans.

A: Weakness in U.S. traffic to Cancun due to Pratt & Whitney and elections; details on commercial revenues plans in Colombia and Puerto Rico.

Q: On new airlines in Mexico and domestic industry outlook.

A: Mexicana de Aviación not significant yet, major airlines mitigating Pratt & Whitney impact, strong recovery expected next year.

Q: On cash balance and use.

A: Cash mix of dollars and pesos; cash flow generation with CapEx, dividends paid in May and June.