Earnings Report /

ASUR: Quarterly Report 4Q21: Exceeds expectations with an attractive valuation

  • Significant recovery, supported by a very low base, improved passengers and cost savings that boosted profitability

  • Recovery places the group close to 2Q19 numbers, a faster demand dynamism underpins the favorable outlook for Asur

  • Strategies to drive growth, savings initiatives and financial strength, position Asur as our favorite in the sector

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

3 March 2022
Published byBanorte
  • Asur's results showed strong growth, supported by better passenger performance, a low comparative base and efficiencies that boosted profitability, exceeding estimates

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

Passenger traffic, operating revenues, and EBITDA above pre-pandemic levels.  Asur recorded solid advances, although at moderated rates due to a more normalized base, because of traffic’s positive behavior and higher maximum fares. In this way, total passengers grew annually 93.5% (+6.6% vs 4Q19), while operating revenues (sum of aeronautical and non-aeronautical) increased 95.3% y/y to MXN 4.764 billion (+24.5% vs 4Q19), in line with expectations.  On the other hand, higher operating leverage and efficiencies (mainly in Colombia), resulted in an EBITDA increase of 146.8% y/y to MXN 3.285 billion (+34.8% vs 4Q19), reflecting a margin expansion (excluding construction services) of 14.4pp to 69.0%, exceeding our expectations. At net level, the company noted a majority profit increase of 300.2% to MXN 2.013 billion, given better operating performance and a slight foreign exchange profit, which compares favorably with 4Q20 losses. Incorporating the results, the FV/EBITDA multiple decreased from 16.7x to 13.7x.

The report should be well received by the market. The company's solid results confirm favorable growth prospects, also highlighting a healthy financial balance sheet (ND/EBITDA of 0.5x) and a valuation that still looks attractive, compared to pre-pandemic’s L5Y average of 15.0x, therefore we reiterate our Buy recommendation. However, there’s a challenge to consider, given the current complex environment due to the significant rise in energy prices issue.