Earnings Report /

Grupo Aeroportuario Centro Norte: Quarterly Report 4Q21: Sustained recovery, but limited revaluation

  • Oma recorded solid growth in 4Q21, supported by passenger demand improvement and profitability expansion

  • Adjusted EBITDA continued above pre-pandemic levels and passenger traffic is getting closer to pre-pandemic figures

  • We believe the positive outlook has been reflected in the stock’s prices rise and valuation. Hence, we recommend Hold

Jose Itzamna Espitia Hernandez
Jose Itzamna Espitia Hernandez

Senior Equity Research Analyst, Infrastructure, Materials and Transportation

23 February 2022
Published byBanorte
  • Oma recorded solid growth in 4Q21, supported by passenger demand improvement and profitability expansion. Adjusted EBITDA continued above pre-pandemic levels

  • Given the rise in the share price and valuation of 11.9x FV/Adjusted EBITDA, which we believe already incorporates much of the favorable outlook, we lower our recommendation to Hold

Closes 2021 with passenger traffic getting closer to pre-pandemic figures.   Oma's quarter results showed significant progress due to greater dynamism in passengers and a low comparative base ─although a little more normalized.  Therefore, total traffic presented an annual increase of 62.1% (-10.0% vs 4Q19), which in hand with higher rates approved in the Master Development Program 2021-2025 and a better performance in diversification activities (+53.2 % y/y), led to an increase in the sum of aeronautical and non-aeronautical revenues of 65.7% y/y to MXN 2.031 billion (+6.1% vs. 4Q19), in line with our estimates. This, together with higher operating leverage and cost and expense control, resulted in an increase in Adjusted EBITDA of 78.3% to MXN 1.521 billion (+8.5% vs. 4Q19), placing the margin at 74.9% (+5.3pp), slightly better than expected. The advance at majority net income of 323.7% was surprising, driven by foreign exchange gains contrasting with the losses of 4Q20. We highlight financial strength with an Adj. ND/EBITDA of 0.4x. Positive outlook reflected in the stock price. Incorporating the figures, the FV/Adj. EBITDA multiple decreased from 13.3x to 11.9x.  However, we believe that much of the favorable perspective has already been reflected in the increase in share price (+22.1% since our 3Q21 note), with a valuation  level similar to the average of 5 years before the pandemic (12.2x).  Hence, we modify our recommendation to Hold.