Equity Analysis /
Mexico

Grupo Aeroportuario Centro Norte: Quarterly Report 3Q22: Results support it as one of our favorites

  • Oma's figures showed significant increases, in line with expectations, due to continued strong demand

  • Operating leverage and cost and expense control led to a further increase in Adjusted EBITDA and higher profitability

  • Oma’s favorable growth outlook and financial strength reaffirm it as one of our top-picks

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

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Banorte
31 October 2022
Published byBanorte

Results support it as one of our favorites

  • Oma's figures showed significant increases, in line with expectations, due to continued strong demand, as well as higher margins given efficiencies and cost control

  • The positive report confirms the company's favorable growth outlook, while maintaining a solid financial position, which reaffirms Oma's position within our top-picks

Passengers finally surpassed pre-pandemic levels and cost discipline supported higher profitability. Oma continued to post solid increases in 3Q22 driven by improved demand performance. Thus, total traffic presented an annual growth of 22.8% y/y (+2.0% vs 3Q19), which together with higher tariffs approved in the Master Development Program and a better performance in diversification activities (+34.6% y/y), reflected an increase in the sum of aeronautical and non-aeronautical revenues of 27.2% y/y to MXN 2.49 billion, in line with estimates. In turn, higher operating leverage and cost and expense control led to a further increase in Adjusted EBITDA of 29.5% to MXN 1.91 billion, bringing the margin to 76.5% (+1.3pp), slightly better than our projection of 76.1%. Finally, majority net income rose 35.7% y/y, supported by operating performance and higher interest costs (additional debt) and an unfavorable foreign exchange effect. We highlight the financial strength with an Adjusted ND/EBITDA of 1.1x.

Growth to continue despite the complex environment. Incorporating the figures, the FV/EBITDA multiple showed a significant decrease from 12.2x to 11.1x. The results confirm the positive outlook for the company, which includes sustained and profitable growth, as well as increased cash flow generation, which is noteworthy in the complex environment.