Grupo Aeroportuario Posts Positive

Earlier this week, Grupo Aeroportuario del Centro Norte (OMAB - Snapshot Report) reported encouraging results for the third quarter of 2009. 

With the occurrence of swine flu in the Mexico City Airport Terminal 2 Hotel during the quarter, the company took a decisive step in the development of additional sources of non-aeronautical revenues. Total revenues were higher than the three previous quarters, in part as a result of initiatives to preserve aeronautical revenues. 

In addition, Grupo Aeroportuario continued to implement cost control measures. These actions contributed to offsetting most of the impact of lower traffic volumes on revenues and to an increase in adjusted EBITDA of 2.6% as compared to the third quarter of 2008, with an adjusted EBITDA margin of 54.0%. 

Passenger traffic decreased 15.4% to 3.0 million. Domestic traffic decreased 13.8% and international traffic decreased 25.0%. The suspension of Aviacsa operations since Jul 6, 2009, was one of the principal factors affecting traffic during the quarter. 

Total revenues decreased less than passenger traffic. Total revenues were MXN$488 million, a reduction of 1.6%. Aeronautical revenues per passenger increased 16.6% and non-aeronautical revenues per passenger increased 14.6%. Monterrey, Grupo Aeroportuario's principal airport, contributed 47.7% of the revenues. 

Total operating costs and general and administrative expenses decreased 7.1% to MXN$188 million in the quarter from MXN$202 million in the same quarter last year. The company continued to implement cost control measures in order to minimize the impact on margins of rising prices and the decrease in passenger traffic. These measures included reductions in consumption of energy, water and materials and supplies, among others. 

Operating income decreased 5.1% to MXN$162 million and the operating margin was 33.1%. Adjusted EBITDA increased 2.6% to MXN$263 million, equivalent to a 54.0% margin. However, consolidated net income was MXN$108 million, a reduction of 17.1% as compared to the prior year period. Earnings per share were MXN$0.27, or US$0.16 per ADR. 

Moreover, the Mexican economy could face a tight monetary period in the upcoming quarters as the Bank of Mexico has recently lowered its benchmark interest rate by just 25 basis points to 4.5%, reducing the scope for further rate cuts. The Mexican economy is rapidly slowing down and the trend is likely to continue in the short term. Thus, it certainly would be a difficult year for Grupo Aeroportuario del Centro Norte, Grupo Aeroportuario del Sureste S.A. de C.V. (ASR - Analyst Report) and Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (PAC - Analyst Report).