Monday, March 18, 2013

A Look at ASUR's Performance and Financial Results in Mexico

For those looking for clues about the potential future performance of Grupo Aeroportuario del Sureste, S.A.B. de C.V. (NYSE: ASR), (ASUR), as new administrator of Puerto Rico's Luis Muñoz Marín Airport it is useful to examine the company's results for the three and twelve-month periods ended December 31, 2012. ASUR is the first privatized airport group in Mexico and operator of Cancun Airport and eight other airports in southeast Mexico.

Passenger Traffic
According to the company, for the fourth quarter of 2012, total passenger traffic increased year-over-year by 11.06%. Domestic passenger traffic rose by 12.15% while international passenger traffic increased by 10.08%.

The 12.15% growth in domestic passenger traffic was driven by an increase at Cancun. The 10.08% growth in international passenger traffic resulted mainly from an increase of 10.86% in international traffic at the Cancun airport.

Passenger traffic for fiscal year 2012 increased 9.73%, reflecting increases of 15.83% in domestic passenger traffic and 5.22% in international passenger traffic.

Financial Results
Total revenues for 4Q12 declined year-over-year by 2.23%. This was mainly due to a decrease of 36.78% in revenues from construction services as a result of lower capital expenditures and other investments in concessioned assets during the period, which more than offset increases of:

- 12.13% in revenues from aeronautical services, principally as a result of the 11.06% rise in passenger traffic;

- 13.29% in revenues from non-aeronautical services.

ASUR classifies commercial revenues as those derived from the following activities: duty-free stores, car rentals, retail operations, banking and currency exchange services, advertising, teleservices, non-permanent ground transportation, food and beverage, and parking lot fees. Commercial revenues increased by 16.53% year-over-year during the quarter, principally due to the 11.06% increase in passenger traffic.

There were increases in revenues stemming from advertising, food and beverage, ground transportation, duty-free stores, parking lot fees, retail operations, banking and currency exchange services, and teleservices. These increases more than offset the 2.19% decline in car rental revenues.

Total operating costs and expenses for 4Q12 declined 12.23% year-over-year. This was primarily due to the 36.78% decline in construction costs, reflecting lower committed improvements made to concessioned assets during the period, which more than offset the following increases in the costs of services, principally reflecting higher sales volumes, and therefore higher costs of sales at the convenience stores directly operated by ASUR, and higher fees paid to third parties in connection with ASUR's participation in the Luis Munoz Marin (LMM) Airport in San Juan, Puerto Rico project.

There was also a reported rise in administrative expenses mainly due to higher professional fees paid to third parties and travel expenses in connection with ASUR's participation in the LMM project.


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