Earnings Report /
Mexico

ASUR: Quarterly Report 1Q22: The highest growth in the sector

  • ASUR registered a strong growth in 1Q22 figures, exceeding our estimates, due to higher fares and costs control

  • The group continues to stand out in the sector with the highest growth year over year

  • ASUR’s outlook remains positive, alongside a still-look-attractive valuation that confirms our favorable opinion

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

Banorte
9 May 2022
Published by

The highest growth in the sector

  • Asur's results showed strong growth, supported by better passenger performance, a low comparative base and efficiencies that boosted profitability, exceeding estimates

  • Despite environment challenges, the groups’ outlook remains positive, alongside a still-look-attractive valuation, confirms our favorable opinion for the company

Strong demand, higher fares and costs control drive the group's figures.  Asur recorded significant annual advances (although more moderate growth vs. previous quarters attributable to a more normalized base), supported by positive traffic performance and higher maximum fares. Thus, total passengers increased 71.4% y/y (+8.8% vs 1Q19), while operating revenues (sum of aeronautical and non-aeronautical) rose 91.2% y/y to MXN 5.174 billion (+31.2% vs 1Q19), better than expected. Operating leverage and efficiencies (mainly in Mexico), reflected an EBITDA increase of 130.8% y/y to MXN 3.676 billion (+38.1% vs 1Q19), with a respective margin expansion (excluding construction services) of 12.2pp to 71.0%, above our estimate of 68.4%. On the other hand, majority net income grew 132.1% to MXN 2.194 billion, due to operating performance, partially offset by a higher comprehensive financing costs (foreign exchange gains vs. 1Q21 losses) and taxes (due to a tax base increase and higher rates in Colombia). Incorporating the figures, the FV/EBITDA multiple decrease from 13.3x to 10.9x.

Positive report which should be well received by the market.  The strong results support our positive outlook for the group. This, alongside a healthy financial situation (ND/EBITDA of 0.3x) and a very attractive valuation with a current FV/EBITDA of 10.9x (vs. the pre-pandemic 5-year average of 15.0x), makes us reiterate our Buy stock recommendation.