Grupo Aeroportuario del Sureste SAB de CV (ASR) Q2 2025 Earnings Call Highlights: Strong ...

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3 days ago

Release Date: July 23, 2025
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 (NYSE:ASR) reported a 5% year-on-year increase in total revenues, reaching 7.4 billion pesos.
Puerto Rico and Colombia showed strong performance with double-digit revenue growth, contributing significantly to the overall revenue increase.
The company opened 47 new commercial spaces over the last 12 months, enhancing its commercial offerings and supporting revenue growth.
ASR maintained a strong cash position, closing the quarter with nearly 20 billion pesos in cash and cash equivalents, up 32% year-on-year.
The company announced plans to pay two extraordinary dividends of 15 pesos per share each in September and November, reflecting its solid financial position.
Negative Points
Passenger traffic in Mexico declined by nearly 2%, with international travel decreasing by 4.5%, impacting overall performance.
The appreciation of the Mexican peso against the US dollar resulted in a foreign exchange loss of 1,200 million pesos, negatively affecting the bottom line.
Total expenses increased by nearly 10% year-on-year, driven by a 12% increase in minimum wage and other cost pressures.
The EBITDA margin slightly contracted to nearly 68% from 69% in the same quarter last year, primarily due to a decline in Mexico.
The ramp-up of the new airport in Tulum continues to draw passengers away from Cancun Airport, contributing to the decline in international traffic.
Q & A Highlights
Q: What drove the sequential decline in non-aeronautical revenues, and how might the DOT situation with the US impact passenger traffic? A: The decline in non-aeronautical revenues was influenced by the exchange rate and a slight difference in passenger mix, particularly international versus domestic. Regarding the DOT situation, ASR does not expect a significant impact as the exposure to affected airlines is minimal. If capacity restrictions in Mexico City are lifted, it could positively impact passenger traffic. - Respondent: CEO
Q: Is charter traffic still the primary type of traffic moving from Cancun to Tulum, or is there a shift towards commercial traffic? A: While there are some charter flights, most of the traffic moving to Tulum is commercial flights, primarily from the US. - Respondent: CEO
Q: Can you provide clarity on the impact of FX on commercial revenues during the quarter? A: The FX impact on commercial revenues is related to the exchange rate and duty-free sales. The situation at Terminal 2 also contributed to softer non-aeronautical revenues in the second quarter compared to the first quarter. - Respondent: CEO
Q: What should we expect for commercial revenues in the next two quarters, given the situation at Terminal 2? A: The situation at Terminal 2 is expected to persist for the next four quarters until the reconstruction and expansion of Terminal 1 is completed, which should alleviate the situation significantly. - Respondent: CEO
Q: What is the outlook for Mexican traffic in the second half of 2025, and how does the FX impact affect commercial revenues? A: Domestic traffic is expected to improve as the engine issues have bottomed out. The FX impact on commercial revenues is due to the exchange rate and duty-free sales, with a softer performance in the second quarter compared to the first. - Respondent: CEO
Q: What is the rationale behind the new debt, and how is ASR planning to deploy its high cash balance? A: The new debt is related to taxes and expenses at Cancun Airport. ASR aims to maintain a strong cash position to support dividend payments and future needs. - Respondent: CEO
Q: How is international traffic performing in Puerto Rico and Colombia, and is this growth sustainable? A: International traffic in Puerto Rico is driven by events such as concerts, while in Colombia, it is primarily influenced by US traffic. The growth is expected to continue in the near term. - Respondent: CEO
Q: What are the dynamics in smaller Mexican airports like Merida and Oaxaca, and what is the outlook? A: Each airport has its own dynamics. Merida is experiencing growth, while Oaxaca faces challenges due to public demonstrations. Overall, smaller airports have their unique situations affecting performance. - Respondent: CEO
Q: How is the sargassum situation in the Caribbean affecting traffic, and what are the expectations for the second half of the year? A: The sargassum situation is challenging, particularly during the summer, which is a peak season. It may impact traffic, but the extent will depend on how the situation evolves. - Respondent: CEO
Q: Are there any updates on inorganic growth opportunities, such as Bavaro Airport? A: The Bavaro Airport project is currently on hold due to legal processes. ASR is evaluating other opportunities but cannot comment further at this time. - Respondent: CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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