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 July 2021
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 ☒ 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 ☒|
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .)
OMA Announces Second Quarter 2021
Operating and Financial Results
Mexico City, Mexico, July 27, 2021— 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 second quarter 2021 (2Q21).
|▪||Passenger traffic increased 679% as compared to 2Q20, reaching 4.5 million passengers, and decreased 23.9% as compared to 2Q19. The airports with the highest traffic recovery compared to 2Q19 were Mazatlán, Durango, Reynosa, Ciudad Juárez and Culiacán.|
|▪||Adjusted EBITDA was Ps.1,308 million, which compares to Ps.25 million in 2Q20, and was 9.2% lower than in 2Q19.|
|▪||Adjusted EBITDA margin reached 74.7%, as compared to 7.3% in 2Q20 and 73.9% in 2Q19.|
|▪||Capital investments and major maintenance works included in the Master Development Plans (MDPs) plus strategic investments were Ps.482 million for the quarter.|
2Q21 Operating Results
Operations, Passengers, and Cargo
The number of seats offered increased 410% as compared to 2Q20 and decreased 23.6% as compared to the second quarter of 2019, mainly due to the number of routes suspended by the airlines.
Total passenger traffic reached 4.5 million passengers, representing an increase of 679% as compared to 2Q20 and decreased 23.9% versus 2Q19. During the quarter, of total traffic, 85.9% was domestic and 14.1% was international.
Domestic passenger traffic increased 610% as compared to 2Q20, while international traffic increased 17.8x. As compared to 2Q19, domestic passenger traffic and international passenger traffic decreased 26.6% and 1.5%, respectively.
The airports with the largest contribution to passenger traffic recovery, in volume terms as compared to 2Q19, were:
|▪||Mazatlán (+1.9%), on its Tijuana and Chihuahua routes.|
|▪||Durango (-6.0%), on its Dallas and Tijuana routes.|
|▪||Reynosa (-14.2%), on its Tapachula and Villahermosa routes.|
|▪||Ciudad Juárez (-16.6%), on its Cancún, Tijuana and Puerto Vallarta routes.|
|▪||Culiacán (-18.0%), on its Phoenix and Tijuana routes.|
The commercial space occupancy rate in the passenger terminals was 84.9% as of June 30, 2021. During the quarter, a total of 471 m2 in commercial spaces were vacated.
Freight Logistics Services
OMA Carga’s revenues increased by 69.3%, as compared to 2Q20 due to higher handling, storage and custody activity related to air import cargo during the quarter. Total tonnage handled was of 9,667 metric tons, 102.2% higher than 2Q20.
The NH Collection Terminal 2 Hotel had a 55.8% occupancy rate. The average room rate was Ps.2,053 per night, during the quarter.
Hilton Garden Inn had a 45.8% occupancy rate. The average room rate was Ps.1,886 per night during the quarter.
OMA VYNMSA Aero Industrial Park: Revenues reached Ps.15 million, representing an increase of 25.6% versus 2Q20. The increase is due to additional revenues generated from three warehouses rented during 2020. which started generating revenues since 4Q20.
Consolidated Financial Results
Aeronautical revenues increased 778% mainly due to an increase in passenger traffic as compared to 2Q20.
Non-aeronautical revenues increased 107%.
Commercial revenues increased 87.8%. The line items with the largest variations were:
Parking, +580% as a result of an increase in passenger traffic.
Restaurants, Car Rentals and Retail, +104%, +63.2% and +51.2%, respectively, as a result of lower levels of discounts granted, as well as an increase in revenues from revenue shares.
Diversification revenues increased 114%, mainly due to higher revenues from hotel services and OMA Carga.
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) increased 6.9%, mainly due to higher contracted services costs and an increase to minor maintenance cost, as a result of passenger traffic growth during the quarter.
The major maintenance provision was Ps.151 million, and reflects a higher level of future executions of major maintenance works, pursuant to the Master Development Program for the period 2021-2025. The outstanding balance of the maintenance provision as of June 30, 2021 was Ps.1,553 million.
The airport concession tax was Ps.81 million and the technical assistance fee was Ps.34 million.
As a result of the foregoing, total operating costs and expenses increased 45.8%. Excluding construction cost, total operating costs and expenses increased 43.6%
Operating Income and Adjusted EBITDA
Operating Income was Ps.1,037 million, with an operating margin of 47.5%.
Adjusted EBITDA was Ps.1,308 million, with a margin of 74.7%.
Financing Income, Taxes, and Net Income
Financing Expense was Ps.169 million, mainly due to a higher interest expense recorded and an exchange loss.
Consolidated net income in the quarter was Ps.620 million.
Earnings per share, based on net income of the controlling interest, was Ps.1.59; earnings per ADS was US$0.64. Each ADS represents eight Series B shares.
MDP and Strategic Investments
In 2Q21, capital investments and major maintenance works in the MDPs and strategic investments totaled Ps.482 million, comprised of Ps.431 million in improvements to concessioned assets, Ps.18 million in major maintenance, and Ps.33 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 2Q21, cash flows from operating activities generated cash of Ps.1,118 million. This increase was mainly due to a positive income from operations.
Investing activities used cash of Ps.386 million in the second quarter. Financing activities generated a cash inflow of Ps.361 million, mainly due to the issuance of two bonds (OMA 21V and OMA 21-2) for an aggregate value of Ps.3,500 million, net of the early redemption of the Ps.3,000 million OMA 14 bond.
The net increase in cash resulting from operating, investing and financing activities in 2Q21 was Ps.1,094 million. However, due to the effect of the appreciation of the Mexican peso against the U.S. dollar in the quarter, which resulted in an impact of Ps.62 million, the Cash and Cash Equivalents balance at June 30, 2021 was Ps.4,191 million.
During the second quarter of 2021, passenger traffic continued to show a recovery as compared to 2Q19, due to a higher mobility level in the country, as permitted by the epidemiological risk traffic light system. As of the date of this report, 1 state in which OMA operates is in red, while 3 states are in orange, 4 in yellow and 1 in green.
During April, May and June, total passenger traffic decreased 27.9%, 22.8% and 21.0% as compared to the same periods in 2019. During the quarter, international passenger traffic represented 98.5% of international passengers in 2Q19. This recovery was mainly driven by flights to the United States.
As of June 30, 2021, OMA had 131 origin-destination routes in operation, compared to 140 origin-destination routes as of December 31, 2020, and 183 as of December 31, 2019.
Tender Offer by Aerodrome Infrastructure S.à.r.l. On July 7, 2021, Aerodrome Infrastructure S.à.r.l., an affiliate of Fintech Holdings, Inc., settled and concluded the tender offer. On that date, Aerodrome acquired 60,155,201 Series B shares for a total of Ps.8,241 million, which represent 15.4% of OMA´s capital stock. As a result, Fintech Holdings Inc., indirectly owns 30.1% of OMA’s capital stock.
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.” For more information, please refer to our Quarterly Financial Information submitted to the Mexican Stock Exchange (www.bmv.com.mx)
Unless stated otherwise, all comparisons of operating or financial results are made with respect to the comparable prior of 2020. The exchange rates used to convert foreign currency amounts were Ps.19.1685 as of June 30, 2019, Ps. 23.1325 as of June 30, 2020, Ps. 19.9352 as of December 31, 2020, and Ps.19.8157 as of June 30, 2021.
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.
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.
Strategic Investments: Refers only to those capital investments additional to the Master Development Program.
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.
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.
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 and security measures. OMA is listed on the Mexican Stock Exchange (OMA) and on the NASDAQ Global Select Market (OMAB). For more information, visit:
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.|
|By:||/s/ Ruffo Pérez Pliego|
|Ruffo Pérez Pliego|
|Chief Financial Officer|
Dated: July 27, 2021