SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2019
GRUPO AEROPORTUARIO DEL CENTRO NORTE, S.A.B. DE C.V.
(CENTRAL NORTH AIRPORT GROUP)
(Translation of Registrant’s Name Into English)
(Jurisdiction of incorporation or organization)
Torre Latitud, L501, Piso 5
Av. Lázaro Cárdenas 2225
Col. Valle Oriente, San Pedro Garza García
Nuevo León, México
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
|Form 20-F X Form 40-F|
(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
|Yes No X|
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .)
OMA Announces First Quarter 2019
Operating and Financial Results
Monterrey, Mexico, April 24, 2019— Mexican airport operator Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., known as OMA (NASDAQ: OMAB; BMV: OMA), today reported its unaudited, consolidated financial and operating results for the first quarter 2019.
1Q19 Results Summary
|§||Passenger traffic grew 4.3%, reaching 5.1 million passengers.|
|§||Capital investments and major maintenance included in the Master Development Plans (MDPs) plus strategic investments amounted Ps. 241 million for the quarter.|
|§||Aeronautical revenues increased 9.9% and Non-Aeronautical revenues grew 13.3%|
|§||Adjusted EBITDA grew 18.4% and Net Income increased 24.7%.|
1Q19 Operating Results
Operations, Passengers, and Cargo
11 routes were opened during the quarter, including 9 domestic routes and 2 international routes, while 4 routes were cancelled. The number of available seats offered increased 5.3% compared to 1Q18.
Total passenger traffic increased 4.3%. Of total traffic, 85.5% was domestic and 14.5% was international.
Domestic passenger traffic increased 5.0%. Ten airports increased traffic. The airports with the largest increases were:
|§||Monterrey, mainly on the Mexico City, Guadalajara, Cancún and Tijuana routes.|
|§||Ciudad Juárez, on its Mexico City and Bajío routes.|
|§||Zacatecas, on its Mexico City route.|
|§||Culiacán, on its Tijuana, Guadalajara and Mexico City routes.|
International passenger traffic increased 0.8%. Nine airports recorded increases in international traffic, led by Mazatlán, as a result of increased traffic on its Los Angeles route.
OMA implemented 14 commercial initiatives in the quarter. The commercial space occupancy rate in the passenger terminals was 98.6%.
|§||The NH Collection Terminal 2 Hotel had an 80.2% occupancy rate, a decrease of 6.3 percentage points. The average room rate was Ps. 2,366 per night.|
|§||The Hilton Garden Inn had a 78.2% occupancy rate, an increase of 1.4 percentage points, with an average room rate of Ps. 2,298 per night.|
Freight Logistics Services
|§||OMA Carga’s freight handled increased 0.1% to 7,856 metric tons.|
|§||OMA VYNMSA Aero Industrial Park: Rental income from the six warehouses on lease reached Ps. 9.2 million. During the quarter, construction began for a new warehouse of 4,851 m2 and an expansion of 4,080 m2 at an existing warehouse. These are scheduled to be completed during 2Q19.|
Consolidated Financial Results
Aeronautical revenues increased 9.9%.
Non-aeronautical revenues increased
13.3%. Non-aeronautical revenues per passenger was
Commercial revenues increased 20.1%. The line items with the largest increases were:
|§||Parking, +19.0%, as a result of growth in the number of users and a higher average ticket fare in all of our airports, as well as the increased capacity in the Reynosa airport.|
|§||Advertising, +53.5%, due to the new advertising contract which started in 4Q18.|
|§||Car rental, +17.2%, due to the leasing of 25 new locations during 2018 and improved contractual terms.|
Diversification revenues grew 9.1%.
Construction revenues represent the value of improvements to concessioned assets. They are equal to construction costs and generate neither a gain nor a loss. Construction revenues and costs are determined based on the advance in the execution of projects in accordance with the airports’ Master Development Programs (MDP), and variations depend on the rate of project execution.
Costs and Operating Expenses
The sum of cost of airport services and general and administrative expenses (G&A) decreased 6.6%, mainly due to a decrease in professional fees and payroll expenses. Additionally, adoption of IFRS 16 (“Leases”) generated a decrease of Ps.2.0 million for rents included in other costs and expenses, as well as a decrease of Ps.7.7 million in cost of hotel services.
The major maintenance provision was Ps. 42 million. The outstanding balance of the maintenance provision was Ps. 953 million.
The airport concession tax increased 11.1% as a result of the growth in revenues, while the technical assistance fee decreased 11.7%. Effective January, 2019, technical assistance fee is equal to 3% of consolidated EBITDA before technical assistance, compared to the 4% applicable during 2018.
As a result of the foregoing, total operating costs and expenses decreased 17.5%. Excluding construction costs, total costs and operating expenses decreased 2.1%.
Operating Income and Adjusted EBITDA
Operating income rose 19.4%, with an operating margin of 58.1%.
Adjusted EBITDA increased 18.4%, with an Adjusted EBITDA margin of 72.6%.
Financing Income, Taxes, and Net Income
Financing Income was Ps. 44 million.
Taxes were Ps. 323 million, and the effective tax rate was 29.8%.
Consolidated net income increased 24.7% to Ps. 760 million.
Earnings per share, based on net income of the controlling interest, increased 24.4% to Ps. 1.92; earnings per ADS increased 17.7% to US$0.79. Each ADS represents eight Series B shares.
MDP and Strategic Investments
Capital investments and major maintenance works in the MDPs and strategic investments totaled Ps. 241 million, comprised of Ps. 192 million in improvements to concessioned assets, Ps. 29 million in major maintenance and Ps. 20 million in strategic investments.
The most important investment expenditures included:
As of the date of this report, OMA has no financial derivatives exposure.
Cash Flow Statement
In the first three months of 2019, cash flows from operating activities increased 42.3% to Ps. 1,097 million, compared to same period of 2018.
Investing activities used cash of Ps. 130 million in the first three months. Outflows included Ps. 167 million for improvements to concessioned assets and Ps. 24 million for acquisition of equipment.
Financing activities generated an outflow of Ps. 90 million, mainly for interest payments totaling Ps. 85 million.
Cash increased Ps. 887 million during the first quarter, to Ps. 3,821 million as of March 31, 2019.
On April 5, 2019, OMA published the call for the Annual Ordinary General Shareholders’ Meeting, to be held on April 29, 2019. Among other items, the Board of Directors is presenting a proposal for approval by the shareholders of a cash dividend of Ps. 1,600 million.
Notes to the Financial Information
Financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), and presented in accordance with IAS 34 “Interim Financial Reporting.”
Unless stated otherwise, all comparisons of operating or financial results are made with respect to the comparable prior year period. The exchange rates used to convert foreign currency amounts were Ps. 18.3445 as of March 31, 2018, Ps. 19.6566 as of December 31, 2018 and Ps. 19.3793 as of March 31, 2019.
Adjusted EBITDA and Adjusted EBITDA margin: OMA defines Adjusted EBITDA as EBITDA less construction revenue plus construction expense and maintenance provision. We calculate the Adjusted EBITDA margin as Adjusted EBITDA divided by the sum of aeronautical revenue and non-aeronautical revenue. Construction revenue and construction cost do not affect cash flow generation and the maintenance provision corresponds to capital investments. OMA defines EBITDA as net income minus net comprehensive financing income, taxes, and depreciation and amortization. Neither Adjusted EBITDA nor EBITDA should be considered as an alternative to net income as an indicator of our operating performance, or as an alternative to cash flow as an indicator of liquidity. It should be noted that neither Adjusted EBITDA nor EBITDA is defined under IFRS, and may be calculated differently by different companies.
Capital investments: includes investments in fixed assets (including investments in land, machinery, and equipment) and improvements to concessioned properties under the Master Development Plan (MDP) plus strategic investments.
Construction revenue, construction cost: IFRIC 12 “Service Concession Arrangements” addresses how service concession operators should account for the obligations they undertake and rights they receive in service concession arrangements. The concession contracts for each of OMA’s airport subsidiaries establishes that the concessionaire is obligated to carry out improvements to the infrastructure transferred in exchange for the rights over the concession granted by the Federal Government. The latter will receive all the assets at the end of the concession period. As a result the concessionaire should recognize, using the percentage of completion method, the revenues and costs associated with the improvements to the concessioned assets. The amount of the revenues and costs so recognized should be the price that the concessionaire pays or would pay in an arm’s length transaction for the execution of the works or the purchase of machinery and equipment, with no profit recognized for the construction or improvement. The application of IFRIC 12 does not affect operating income, net income, or EBITDA, but does affect calculations of margins based on total revenues.
Passengers and Terminal passengers: All references to passenger traffic volumes are to Terminal passengers, which includes passengers on the three types of aviation (commercial, charter, and general aviation), and excludes passengers in transit.
In accordance with the requirements of the Mexican Stock Exchange, the analysts covering OMA are:
This report may contain forward-looking information and statements. Forward-looking statements are statements that are not historical facts. These statements are only predictions based on our current information and expectations and projections about future events. Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “target,” “estimate,” or similar expressions. While OMA's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and are generally beyond the control of OMA, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to, those discussed in our most recent annual report filed on Form 20-F under the caption “Risk Factors.” OMA undertakes no obligation to update publicly its forward-looking statements, whether as a result of new information, future events, or otherwise.
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., known as OMA, operates 13 international airports in nine states of central and northern Mexico. OMA’s airports serve Monterrey, Mexico’s third largest metropolitan area, the tourist destinations of Acapulco, Mazatlán, and Zihuatanejo, and nine other regional centers and border cities. OMA also operates the NH Collection Hotel inside Terminal 2 of the Mexico City airport and the Hilton Garden Inn at the Monterrey airport. OMA employs over 1,000 persons in order to offer passengers and clients airport and commercial services in facilities that comply with all applicable international safety, security, and ISO 9001:2008 environmental standards. OMA is listed on the Mexican Stock Exchange (OMA) and on the NASDAQ Global Select Market (OMAB). For more information, visit:
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized. Grupo Aeroportuario del Centro
Norte, S.A.B. de C.V. Dated April 24, 2019
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.
Dated April 24, 2019