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.
