ASUR 3Q07 PASSENGER TRAFFIC UP 13.78% YOY

 

3Q07 Highlights¹:

 

 

 

 

 

 

 

México D.F., October 24, 2007 Grupo Aeroportuario del Sureste, S.A.B. de C.V. (NYSE:ASR; BMV:ASUR), (ASUR) the first privatized airport group in Mexico and operator of Cancun Airport and eight others in the southeast of Mexico, today announced results for the three- and nine-month periods ended September 30, 2007.

 

                             

 

¹ Unless otherwise stated, all financial figures discussed in this announcement are unaudited, prepared in accordance with Mexican Financial Reporting Standards, expressed in constant Mexican pesos as of September 30, 2007, and represent comparisons between the three-month period ended September 30, 2007, and the equivalent three-month period ended September 30, 2006. Tables state figures in thousands of pesos, unless otherwise noted. Passenger figures exclude transit and general aviation passengers. Commercial revenues include revenues from the activities of non-permanent ground transportation and parking lots. All U.S. dollar figures are calculated at the exchange rate of US$1 = Ps.10.9315.

² EBITDA means net income before: provision for income taxes, deferred taxes, deferred employees profit sharing, non-ordinary item, comprehensive financing cost, and depreciation and amortization.

 

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Passenger Traffic

 

For the third quarter of 2007, total passenger traffic increased year-over-year by 13.78%. Domestic passenger traffic increased by 28.28% and international passenger traffic rose by 2.17%.

 

The 13.78% year-over-year increase in total passenger traffic primarily reflected lower passenger traffic in the third quarter of 2006, due to the lingering effect of Hurricane Wilma on Cancun, the Mayan Riviera and Cozumel. Hurricane Wilma struck the Yucatan peninsula in October 2005 and inflicted widespread damage on the region’s infrastructure. Travel and tourism in Cancun and the Mayan Riviera regions have since recovered.

 

The 2.17% rise in international passenger traffic resulted mainly from increases of 1.58% and 18.57% at the Cancun and Cozumel airports, respectively. The increases at Cancun and Cozumel were principally due to favorable year-over-year comparisons with the 3Q06 base numbers affected by Hurricane Wilma, as noted above. The increase in international passenger traffic was partially offset by a 31.91% decrease in international passenger traffic to Oaxaca in the wake of a period of social unrest in the region.

 

The 28.28% rise in domestic passenger traffic resulted mainly from increases of 26.85%, 38.86%, 48.08%, 27.93%, 27.21% at the Cancun, Merida, Veracruz, Villahermosa and Cozumel airports, respectively. The increases at Cancun and Cozumel were principally due to the favorable year-over-year comparison described above. The increases in Merida, Veracruz and Villahermosa were principally due to the opening of new airline services at those airports.

 

For the 9M07, total passenger traffic rose by 18.91% compared to 9M06, with international passenger traffic up 15.56% and domestic passenger traffic up 23.76%.

 

 

 

 

 

 

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Table I: Domestic Passengers (in thousands)

 

 

Table II: International Passengers (in thousands)

 

 

Table III: Total Passengers (in thousands)

 

 

 

 

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Consolidated Results for 3Q07

 

Total revenues for 3Q07 increased year-over-year by 19.54% to Ps.688.0 million. This was mainly due to increases of:

 

 

 

ASUR classifies commercial revenues as those derived from the following activities: duty-free services, car rental, retail, banking and currency exchange, advertising, teleservices, non-permanent ground transportation, food and beverage, and parking lots.

 

Commercial revenues rose by 59.45% year-over-year during the quarter, principally as a result of revenue increases from the following areas:

 

 

The growth in each of these areas resulted generally from the rise in passenger traffic and in particular from the opening on May 18, 2007 of Cancun Airport’s new Terminal 3, including the following commercial establishments:

 

 

 

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Food and Beverage

 

 

Retail and Other Commercial Space

 

 

 

Other factors also boosted revenues during the quarter. Retail revenues benefited from higher concession fees charged to local crafts and specialty shops beginning in May, 2007. Revenues from car rental companies increased due to improved economic terms with concessionaires as of

 

 

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October, 2007, and the opening of new commercial spaces in Terminal 3. The increase in parking lot revenues was partially due to annual rate increases at several airports that went into effect in January, 2007. The rise in Food & Beverage revenues also reflects a final payment of Ps. 18.0 million received from Hoteleria e Inmmobiliaria, S.A. de C.V. for the lease of a restaurant that until July 2006 had been operated directly by ASUR.

 

Total operating costs and expenses for 3Q07 increased 5.46% year over year, primarily as a result of:

 

 

 

 

 

These increases were partially offset by a 2.86% decline in the cost of services.

 

Operating margin for the quarter rose to 41.32% from 33.48% in 3Q06. This was mainly the result of the 19.54% increase in total revenues, which more than offset the increase in costs during the period.

 

Mexican companies are generally required to pay the greater of their income tax liability or their asset tax liability (determined at a rate of 1.25% of the average tax value of virtually all of the company’s assets including, in ASUR’s case, its concessions, without deducting the average tax value of certain liabilities). ASUR made asset tax payments of Ps.22.8 million for 3Q07. Of these payments, Ps.5.5 million was recorded as an expense in the results for the quarter. The difference was recorded as an asset, since ASUR expects to recover Ps.17.3 million as a credit against future income tax payments.

 

Net income for 3Q07 was Ps.238.5 million, an increase of 177.55% from 3Q06. Earnings per common share for the quarter were Ps.0.7952, or earnings per ADS (EPADS) of US$0.7274 (one ADS represents ten series B common shares). This compares with Ps.0.2865, or EPADS of US$0.2621, for the same period last year.

 

 

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Table IV: Summary of Consolidated Results for 3Q07

Note: Figures are in thousands of constant Mexican pesos as of September 30, 2007. U.S. dollar figures are calculated at the exchange rate of US$1 = Ps. 10.9315.

 

Table V: Commercial Revenues per Passenger for 3Q07

 

 

 

 

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Table VI: Operating Costs and Expenses for 3Q07

 

 

Consolidated Results for the Nine-Months Ended September 30, 2007

 

Total revenues for the nine-month period increased year-over-year by 22.05% to Ps.2,091.9 million. This was mainly due to increases of:

 

 

 

Commercial revenues for the nine-month period rose by 38.41% year-over-year, principally as a result of revenue increases from the following areas:

 

 

 

 

 

 

 

 

 

 

 

 

 

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Total operating costs and expenses for the nine-month period increased year-over-year by 9.17%, mainly due to the following:

 

 

 

 

 

 

Operating margin increased to 43.80% for the nine-month period ended September 30, 2007, up from 37.17% for the year-ago period. This was mainly the result of the 22.05% increase in revenues, which more than offset the 9.17% increase in costs and expenses during the period.

 

Net income for the nine-month period ended September 30, 2007 increased by 73.14% to Ps.702.5 million. Earnings per common share for the period were Ps.2.3418, or earnings per ADS (EPADS) of US$2.1423 (one ADS represents ten series B common shares). This compares with Ps.1.3526, or EPADS of US$1.2373, for the same period last year.

 

 

 

 

 

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Table VII:       Summary of Consolidated Results for the Nine-Month Period

Note: Figures are in thousands of constant Mexican pesos as of September 30, 2007. U.S. dollar figures are calculated at the exchange rate of US$1 = Ps. 10.9315.

 

Table VIII: Commercial Revenues for the Nine-Month Period

 

 

 

 

 

 

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Table IX:            Operating Costs and Expenses for the Nine-Month Period

 

Tariff Regulation

 

The Mexican Ministry of Communications and Transportation regulates the majority of ASUR’s activities by setting maximum rates, which represent the rates for the maximum possible revenues allowed per traffic unit at each airport.

 

ASUR’s regulated revenues for 9M07 were Ps. 1,499.38 million, resulting in an annual average tariff per workload unit of Ps.119.49. ASUR’s regulated revenues accounted for approximately 71.67% of total income for the period.

The Mexican Ministry of Communications and Transportation reviews compliance with the maximum rates on an annual basis at the close of each year.

 

Balance Sheet

 

On September 30, 2007, Airport Facility Usage Rights and Airport Concessions represented 82.73% of the Company’s total assets, with current assets representing 13.23% and other assets representing 4.04%.

 

On September 30, 2007, cash and marketable securities were Ps.1,766.23 million. On the same date, shareholder’s equity was Ps.14,476.90 million and total liabilities were Ps.1,357.92 million, representing 91.50% and 8.57% of total assets, respectively. Total deferred liabilities represented 82.28% of the Company’s total liabilities.

 

Capex

 

During the quarter, ASUR made investments of Ps.76.73 million as part of ASUR’s ongoing plan to modernize its airports pursuant to its master development plans. During the nine-months ended September 30, 2007 ASUR made capital investments of Ps.451.92 million.

 

 

 

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Opinion of the Federal Competition Commission

 

On October 1, 2007, the President of the Federal Competition Commission issued an opinion regarding the competitiveness of Mexican airports. A copy of the opinion is available at http://www.asur.com.mx/asur/artman/uploads/110__opini_n_de_la_cfc_sobre_aeropuertos__011007_.pdf, and an English translation of the opinion prepared by ASUR for information purposes is available at http://www.asur.com.mx/asur/artman/uploads/126__opinion_of_the_fcc__011007___ingl_s_.pdf

 

On October 4, 2007 the three publicly traded airport groups in Mexico, including ASUR, issued a joint announcement responding to this Opinion. A copy of this announcement in available at http://www.asur.com.mx/asur/artman/uploads/111__comunicado_de_prensa_conjunto_grupos_aeroportuarios__191007_.pdf An English version of this announcement is available at http://www.asur.com.mx/asur/artman/uploads/126__joint_press_release__191097___ingl_s_.pdf

 

 

3Q07 Earnings Conference Call

 

 

 

 

 

 

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About ASUR:

 

Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR) is a Mexican airport operator with concessions to operate, maintain and develop the airports of Cancun, Merida, Cozumel, Villahermosa, Oaxaca, Veracruz, Huatulco, Tapachula and Minatitlan in the southeast of Mexico. The Company is listed both on the NYSE in the U.S., where it trades under the symbol ASR, and on the Mexican Bolsa, where it trades under the symbol ASUR. One ADS represents ten (10) series B shares.

 

Some of the statements contained in this press release discuss future expectations or state other forward-looking information. Those statements are subject to risks identified in this press release and in ASUR’s filings with the SEC. Actual developments could differ significantly from those contemplated in these forward-looking statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Our forward-looking statements speak only as of the date they are made and, except as may be required by applicable law, we do not have an obligation to update or revise them, whether as a result of new information, future or otherwise.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Grupo Aeroportuario del Sureste, S.A.B. de C.V.
	By:   /s/ ADOLFO CASTRO RIVAS
		Adolfo Castro Rivas
		Director of Finance

 

Date: October 24, 2007