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Grupo Aeroportuario del Sureste, S.A.B. de C.V. (



Q4 2011 Earnings Call

February 24, 2012 10:00 am ET


Adolfo Castro Rivas – Chief Executive Officer


Vanesa Quiroga – Credit Suisse

Augusto Ensiki – Morgan Stanley

Vivian Salomon – ITAU

Luis Willard – GBM

Neal Dihora – Morningstar, Inc.

Francisco Suarez Savin – HSBC



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Good day, ladies and gentlemen, and welcome to the ASUR’s Fourth Quarter 2011 Results Conference Call. My name is [Monita] and I’d be your operator for today.

At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. For opening remarks and introductions, I would like to turn this call over to Mr. Adolfo Castro, Chief Executive Officer. Please proceed.

Adolfo Castro Rivas

Thank you, [Monita] and good morning everybody. Thank you for joining today for the conference call for the fourth quarter 2011 results.

Allow me to remind you that certain statements made during the course of our discussion today may constitute forward-looking statements, which are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially, including those that may be beyond our company’s control. For an explanation of these risks, please refer to ASUR’s filings with the Securities and Exchange Commission and the Mexican Stock Exchange.

On today’s call, I will provide an update on key events that took place during the quarter and the different projects we have been discussing this year. Afterwards, I will comment on passenger traffic performance and environment and results for the quarter.

As you know on January the 4


, 2012 Fernando Chico Pardo showed 49% of IETU towards the decline, and almost half of the P shares to Aeroportuario. Fernando Chico Pardo remained Chairman of the Group and our strategy remains the same.

As they all operate a bus transport logistics business and already operate bus terminals at several of our airport, including Cancun, Merida, and Villahermorsa. As they all have been in business for 70 years, and last year they reported approximately 160 million pesos.

In terms of our international expansion strategy, earlier this month we participated together with Advent International in the auction of 51% equity sales for the Veracruz Airport. Our bid however did not qualify among the three (Inaudible) ones for the first phase of the auction. This basically reflects our idea that our business objective is not just to win a bidding process, but also to preserve returns to shareholders. Just to give an idea our bid for the Veracruz Airport came in 100% below the winning bid or almost 4.8 times the minimum requirement by the state government.

We do not believe that someone can provide the right service to customers and return to shareholders with that number.

With respect to the presentation of San Juan, Puerto Rico International airport, as you know, we are shortlisted for the bidding process and the process continues on track. The net debt is to present an indicative bid on March 15.

Before moving onto results, let me comment on a new development that we announced yesterday – on yesterday’s release. We had – we notified by the Ministry of France the biggest that we with the multi station rate we use for the concession income form, which was agreed by the Ministry of Communications and Transport, at the time of the bidding of the (inaudible) of the Mexican Airport Groups.

In fact, the Ministry of Communications and Transport used this basic principle as the key selling point when they sold the shares of the three airport groups. We believe someone in the Ministry of Finance is waiting this long and will go to the [court] to overturn this termination. But although we believe we have a strong legal position and ruling have been given to reflect that we are right. We cannot assure that our peer groups prevail if we were to lose the appeal; we estimate that this will result in a charge of 334.2 million pesos.

Turning now to the results. This was a very good quarter. Passenger traffic increased 11.66% year-on-year, reflecting [easy] comparisons mainly in terms of the domestic traffic, which was up by 17%.

Total traffic rose by 10.6% in October, 8.3% in November, and 15.3% in December. Despite the strong traffic performance, traffic still remain below previous levels as a result of the lack of domestic airlines seat capacity following the reduction of Mexicana operation and the suspension of (inaudible) in 2010.

Nevertheless, as on September 2011 through January 2012 these have been the highest passenger traffic numbers for (inaudible). The share of international passenger traffic fell to 52.8% of the total traffic from 55% in the fourth quarter of 2010.

Passenger traffic between Mexico, Canada and the United States represented 88.7% of total traffic compared with 88.9% a year-ago. Consolidated revenues were up 14.58% this quarter, driven by revenue growth across the board. Excluding construction services, total revenue would have increased 21%.

Commercial revenues per passenger were up to 72.38 pesos, the highest quarter ever. Remember that this quarter also includes revenue from the direct operations of 14 convenience stores that we opened in fourth quarter [2010]. In the fourth quarter 2010 were operated by a third party. As a result, we now include the total revenue from that operation instead of the corresponding concession fee as was the case before.

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