UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
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 2012
GRUPO AEROPORTUARIO DEL CENTRO NORTE, S.A.B. DE C.V.
(CENTRAL NORTH AIRPORT GROUP)
México
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 Second Quarter 2012 Earnings
Monterrey, Mexico, July 25, 2012 –Mexican airport operator Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., known as OMA (NASDAQ: OMAB; BMV: OMA), reported its unaudited results for the second quarter of 2012 today.1
Summary
OMA recorded solid results in the second quarter of 2012, with significant growth from the three lines of business: aeronautical operations, commercial activities, and diversification projects. Adjusted EBITDA increased 19.1%, and Consolidated Net Income rose 23.7%.
The 4.3% increase in passenger traffic drove a 15% increase in aeronautical revenues. Commercial initiatives included new stores and passenger services in all 13 airports, the expansion of commercial areas, alternative advertising, and the start of operations of checked baggage screening. Diversification projects also contributed, with continued revenue growth of the NH Terminal 2 Hotel in Mexico City and the lease out of space in the first phase of the Monterrey airport cargo and logistics hub. All ten non-aeronautical categories grew, and total non-aeronautical revenues increased 17%. The Adjusted EBITDA margin increased to 51.6%.
The principal developments of the quarter included:
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Passenger traffic increased 4.3% to 3.0 million in 2Q12; domestic traffic increased 4.5%, and international traffic increased 3.3%. Six of our airline clients had traffic growth in the quarter.
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Aeronautical revenues increased 15.3%, principally as the result of the growth in passenger traffic and the increase in passenger charges and aeronautical services tariffs in October 2011 and April 2012.
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1 Unless otherwise stated, all references are to the second quarter of 2012 (2Q12), and all percentage changes are with respect to the same period of the prior year. The exchange rate used to convert foreign currency amounts was Ps. 13.4084 per U.S. dollar.
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Non-aeronautical revenues increased 17.1%, principally as the result of increased use of parking lots, an increase in rates at the NH Terminal 2 Hotel, and alternative advertising in the airports.
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The NH T2 hotel in the Mexico City International Airport increased revenues 13.1%, principally as a result of higher room rates and increased restaurant revenues.
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The sum of aeronautical and non-aeronautical revenues per passenger increased 10.9% to Ps. 225.4.
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Three new domestic routes and one new international route opened, as a result of route development efforts.
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48 new retail, advertising, restaurant, passenger service, telecommunications, and time share locales opened in the 13 airports, as part of the commercial strategy.
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Adjusted EBITDA2 increased 19.1% to Ps. 353 million in 2Q12. The Adjusted EBITDA margin reached 51.6%, an increase of 150 basis points, reflecting OMA’S efforts to sustain cash flow generation.
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Consolidated net income increased 23.7% to Ps. 161 million. Earnings per share were Ps. 0.40, or US$0.24 per American Depositary Share (ADS).
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Capital expenditures were Ps. 139 million in 2Q12.
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Operating Results
Passenger Traffic, flight operations, and cargo volumes
The total number of flight operations (takeoffs and landings) decreased 3.1%, to 82,944 operations. Domestic flight operations decreased 4.1%, and international operations increased 3.5%.
Total passenger traffic increased 4.3% (+126,370) terminal passengers).
Traffic increased most in the Monterrey (+6.5%), Culiacán (+12.4%), Reynosa (+30.5%), and Tampico (+4.1%) airports. VivaAerobus, Copa Airlines, Volaris, Magnicharter, Delta Airlines, and American Airlines saw increases in passenger volumes. The Acapulco (-3.8%), Mazatlán (-10.6%), and Zihuatanejo (-12.2%) airports had the largest decreases. (See Annex Table 1, Passenger Traffic for more detail.)
Of total passenger traffic, 86.3% was domestic and 13.7% was international. Commercial aviation accounted for 97.2% of passenger traffic and general aviation 2.8%. Monterrey generated 49.5% of passenger traffic, Culiacán 9.6%, and Chihuahua 6.6%.
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2 Adjusted EBITDA excludes the non-cash maintenance provision and construction revenue and construction expense. OMA provides a full reconciliation of Adjusted EBITDA in the corresponding section of this report; see also the Notes to the Financial Information.
Seven airports had increases in domestic traffic. Monterrey (+5.7%) had increases principally on the routes to Mexico City and Cancún. Culiacán (+12.4%) had increases on the Tijuana and Guadalajara routes. Reynosa (+30.3%) and Chihuahua (+5.2%) had increases on the Mexico City routes. Tampico (+4.5%) had an increase on the route to Monterrey.
Traffic decreased most at the Zihuatanejo (-15.2%) airport, principally on the routes to Toluca and Mexico City.
Three domestic routes opened and two closed during the quarter.
International passenger traffic increased 3.3%.
Nine airports had increases in international traffic. The most significant increases were in Monterrey (+11.5%) with increases from the routes to San Antonio and Dallas; San Luis Potosi (+41.8%) with increases on the Houston and Dallas routes; and Zacatecas (+27.0%) with an increase on the Chicago route.
Four airports had decreases in international passenger traffic, with the most significant in Acapulco (-32.0%), Mazatlán (-28.1%), and Zihuatanejo (-5.0%). In Acapulco and Zihuatanejo, the decreases were principally on the Houston routes, and in Mazatlán, the reductions were on the Toronto and Calgary routes.
One international route opened in the quarter, and four closed.
Air Cargo volumes increased 7.6%. Of total air cargo volume, 60.6% was domestic and 39.4% was international. Cargo revenues increased 24% to Ps. 8 million in 2Q12.
Non-aeronautical and commercial operations
During 2Q12, we continued to increase and improve the commercial offering and passenger services available in our airport terminals. Forty-eight new retail, advertising, restaurant, passenger service, telecommunication, and time share marketing operations opened in the 13 airports, improving our services. The occupancy rate of our commercial space was 92%, as a result of the initiatives to achieve steady growth of commercial revenues even while expanding the total amount of space available.
NH Terminal 2 Hotel Operations
The NH T2 hotel in the Mexico City International Airport had an average occupancy rate of 75.5%, as compared to 82.6% in 2Q11. The decrease reflects in part the relocation of United/Continental operations to Terminal 1 and the opening of a Courtyard Marriott in Terminal 1. Revenue per available room3 was Ps. 1,460 in 2Q12, 13% higher than the Ps. 1,291 realized in 2Q11. The NH T2 hotel had an 18.4% share in the Mexico City airport hotel market.
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Financial Results
Revenues
The sum of aeronautical and non-aeronautical revenues increased 15.7% to Ps. 685 million. Construction revenues were Ps. 37 million compared to Ps. 106 million in 2Q11. As a result, total revenues increased 3.4% to Ps. 722 million.
The increase in aeronautical revenues was principally the result of the increase in passenger traffic, the positive effect on dollar denominated revenues of the depreciation of the peso, and the increases in passenger charges and tariffs for airport services effective October 2011 and April 2012. Non-aeronautical revenues rose 17.1%, principally because of the commercial initiatives, advertising revenue, and higher revenue from the NH T2 hotel.
In 2Q12, non-aeronautical revenues were 23.8% of total aeronautical and non-aeronautical revenues. In 2006, when OMA carried out its IPO, non-aeronautical revenues were only 18.8% of the total.
The Monterrey airport contributed 46.9% of the sum of aeronautical and non-aeronautical revenues (Ps. 685 million), Culiacán 8.1%, and Chihuahua 6.0%.
Construction revenues represent the value of improvements to concessioned assets made during the quarter. (See Notes to the Financial Information.)
Aeronautical revenues increased 15.3% to Ps. 522 million. Domestic passenger charges increased 13.5% principally as a result of increased domestic traffic. International passenger charges increased 33.7%, principally as a result of exchange rate movements and the increase in rates authorized under the 2010 maximum rate agreement. Aeronautical revenues per passenger increased 10.5% to Ps. 171.8.
Non-aeronautical revenues increased 17.1%, principally because of the start of operations for screening checked baggage, increased advertising revenues, and the increase in NH T2 hotel room rates.
NH T2 hotel revenues increased 13.1% to Ps. 38 million; room rentals were 76.6% of hotel revenues, food and beverages 20.0%, and other services 3.4%.
In our airports, checked baggage screening generated Ps. 5 million in revenues. Advertising increased 30.1%, principally as a result of alternative advertising campaigns in all three Monterrey terminals and in the Mazatlán airport. Parking grew 8.1%, as a result of increased passenger traffic and the lease of spaces to car rental companies. Hotel revenues increased 13.1%, principally because of the increase in average room rates and increased restaurant revenues. Car rental revenue rose 21.4%.
Monterrey contributed 43.2% of non-aeronautical revenues, the NH T2 hotel 23.4%, Mazatlán 5.5%, and Chihuahua 4.1%.
Non-aeronautical revenues per passenger increased 4.0% to Ps. 52.5. Non-aeronautical revenues per passenger, excluding the NH T2 hotel, increased 13.4% to Ps. 41.1.
Costs and operating expenses
Total cost of services and general and administrative expenses, excluding the maintenance provision, construction costs, and hotel costs and expenses, increased 10.9%, principally because of the contracting of personnel to staff the checked baggage screening equipment, the renegotiation of the security services contract last year, and an increase in insurance payments related to the baggage screening initiative.
The airport concession tax increased 16.0% because of the growth in revenues. The technical assistance fee increased 38.5%, in line with the increase in EBITDA.
Depreciation and amortization increased 11.7%, principally as a result of increased capex, including the expansion of Terminal C in Monterrey.
As a result of the foregoing and the decrease in construction costs, total costs and expenses decreased 6.0% to Ps. 456 million in 2Q12.
Adjusted EBITDA and Operating Income
Adjusted EBITDA was Ps. 353 million in 2Q12, an increase of 19.1%. The Adjusted EBITDA margin was 51.6%.
OMA calculates Adjusted EBITDA as shown in the table below. The Adjusted EBITDA margin is calculated against the sum of aeronautical and non-aeronautical revenues. (See Notes to the Financial Information for additional discussion of Adjusted EBITDA.)
Operating income increased 24.6% to Ps. 266 million, and the operating margin was 36.8%.
Financing expense and taxes
Comprehensive financing expense was Ps. 28 million in 2Q12, unchanged from 2Q11. Reduced interest expense was offset by an increase in the exchange loss, as a result of the effect of the depreciation of the peso and its accounting effect on dollar-denominated debt.
The income tax provision rose 38.8%, principally because of the increase in pretax income. In addition, since the Monterrey airport has used all its tax losses, effective 2012 it generates tax expense. There was also a reduction in IETU tax credits, which increased deferred taxes.
Net Income
Consolidated net income and Net income of controlling interest each increased 23% to Ps. 160 million.
Earnings per share were Ps. 0.40, and earnings per ADS were US$0.24 per ADS. Each ADS represents eight Series B shares. (See Annex Table 3.)
Capital expenditures
During 2Q12, capital expenditures were Ps. 139 million, including Master Development Plan (MDP) projects and acquisitions as well as strategic investments. Of total Capex, Ps. 84 million corresponds to major maintenance and was a charge against the maintenance provision, reducing this long term liability. The most important investments during the second quarter were:
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Relocation of the security checkpoint and expansion of the terminal building in the Culiacán airport.
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Design, installation, and start of operations of closed circuit TV systems and access controls for Terminals A and C of the Monterrey airport.
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Preparations for the installation of a Category 1 ILS system for the Reynosa airport.
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Rehabilitation of the Tampico airport runway.
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Expansion and remodeling of the Chihuahua airport terminal building.
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Rehabilitation of taxiways and roadways inside the Durango airport perimeter and construction of a service road.
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Reconfiguration of the security checkpoint and remodeling of the boarding lounge of the Zihuatanejo airport terminal.
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Acquisition of solar panels and the start of construction of the Zacatecas airport pilot solar power project.
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Cash flow statement
In the first six months of 2012, operating activities generated cash of Ps. 460 million compared to Ps. 303 million during the 2011 period. The increase was principally because of increased revenues and improved working capital management in 2012.
Financing activities generated an outflow of Ps. 519 million, generated principally by the payment of the capital reduction to shareholders of Ps. 500 million on June 4, 2012, as approved by the Annual Shareholders’ Meeting on April 18, 2012.
As of June 30, 2012, the balance sheet included short-term debt of Ps. 250 million. The revolving credit facilities finance working capital needs and have an interest rate of 28-day TIIE + 120 bp. Long-term debt totaled Ps. 1,506 million, of which Ps. 1,300 million are the 5 year notes (certificados bursatiles) that OMA placed in July 2011 at a rate of 28-day TIIE + 70 bp. In addition, there is a US$ 18.7 million long term financing with UPS Capital for the checked baggage screening equipment; this credit has a rate of 3-month Libor + 125 bp.
Investment activities used cash of Ps. 96 million.
Dividend payments during the first six months of 2012 were Ps. 198 million plus the reimbursement of capital for Ps. 500 million.
OMA had a net decrease in cash of Ps. 155 million in the first six months of 2012, with a balance of cash and cash equivalents of Ps. 368 million as of June 30, 2012. (See Annex Table 4).
OMA has no exposure to any financial derivative instruments as of the date of this report.
Revised 2012 Outlook
Based on the first six months 2012 results, which have exceeded expectations, OMA is revising its full year outlook.
OMA estimates that passenger traffic growth in 2012 will be between 3.5% and 4.5%. The sum of aeronautical and non-aeronautical revenues is expected to increase between 10% and 13%. The Adjusted EBITDA margin is expected to be in the range of 48.5% to 51.0%. Capital expenditures under the Master Development Plan will be approximately Ps. 840 million.
OMA is providing this outlook based on internal estimates. A number of factors could have a significant effect on the estimates of traffic, revenue growth, Adjusted EBITDA, and Capex. These include changes in airline expansion plans, ticket prices and other factors affecting traffic volumes, the evolution of commercial and diversification projects, and economic conditions, among others. OMA can provide no assurance that the Company will achieve these results.
| OMA (NASDAQ: OMAB; BMV: OMA) will hold a conference call on July 26, 2012 at 10:00 am Eastern time, 9:00 am Mexico City time.
The conference call is accessible by calling 1-888-846-5003 toll-free from the U.S. or 1-480-629-9856 from outside the U.S. The conference ID is 4552207. A taped replay will be available through August 2, 2012 at 877-870-5176 toll free or + 1-858-384-5517, using the same ID.
The conference call will also be available by webcast at http://ir.oma.aero/events.cfm.
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Annex Table 1
Annex Table 2
Annex Table 3
Annex Table 4
Annex Table 5
Annex Table 6
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.”
Adjusted EBITDA: OMA defines Adjusted EBITDA as net income minus net comprehensive financing income plus taxes and depreciation and amortization minus construction revenue plus construction expense and maintenance provision. Adjusted EBITDA should be not 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. Our management believes that Adjusted EBITDA provide a useful measure of our performance that is widely used by investors and analysts to evaluate our performance and compare it with other companies. Financial ratios calculated on the base of Adjusted EBITDA are also widely used by credit providers in order to gauge the debt servicing capacity of companies. Adjusted EBITDA is not defined under IFRS or U.S. GAAP, and may be calculated differently by different companies.
Aeronautical revenues: are revenues from rate-regulated services. These include revenue from airport services, regulated leases, and access fees from third parties to provide complementary and ground transportation services. Airport service revenues include principally departing domestic and international passenger charges (TUA), landing fees, aircraft parking charges, passenger and carry-on baggage screening, and use of passenger jetways, among others. Revenue from third party access fees to provide complementary services include revenue sharing for ramp services, aircraft towing, water loading and unloading, cabin cleaning, electricity supply, catering, security, and aircraft maintenance, among others. Revenues from regulated leases include principally rental to airlines of office space, hangars, and check-in and ticket sales counters. Revenues from access charges for providers of ground transportation services include charges for taxis and buses.
Airport Concession Tax (DUAC): This tax, the Derecho de Uso de Activos Concesionados, is equal to 5% of gross revenues, in accordance with the Federal Royalties Law.
American Depositary Shares (ADS): Securities issued by a U.S. depositary institution representing ownership interests in the deposited securities of non-U.S. companies. OMA’s depositary bank is Bank of New York Mellon. Each OMA ADS represents eight Series B shares.
Capital expenditures, Capex: includes investments in fixed assets (including investments in land, machinery, and equipment) and improvements to concessioned properties.
Cargo unit: equivalent to 100 kg of cargo.
Construction revenue, construction cost: IFRIC 12 “Service Concession Arrangements” addresses how service concession operators should apply existing International Financial Reporting Standards (IFRSs) to 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 construction or 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 change does not affect operating income, net income, or EBITDA, but does affect calculations of margins based on total revenues.
Earnings per share and ADS: use the weighted average of shares or ADS outstanding for each period, excluding Treasury shares from the operation of the share purchase program.
IAS 34 “Interim Financial Reporting”: This norm establishes the minimum content that interim financial statements should include, as well as the criteria for the formulation of the financial statements.
International Financial Reporting Standards (IFRS)
In January 2009, the National Banking and Securities Commission (CNBV) published amendments to its Circular for Issuers to make mandatory the presentation of financial statements prepared in accordance with International Financial Reporting Standards (IFRS) starting with the year ending December 31, 2012, but allowing for early adoption. OMA’s Board of Directors approved early adoption of IFRS for the year ending December 31, 2011. The financial statements for the year ended December 31, 2010 were the last statements that were prepared in accordance with Mexican Financial Reporting Standards (MFRS). These financial statements have been reformulated for comparative effects under IFRS.
Financial statements and other information are presented in accordance with IFRS and their Interpretations. These standards differ in certain significant respects from U.S. GAAP.
Maintenance Provision: represents the obligation for future disbursements resulting from wear and tear or deterioration of the concessioned assets used in operations including: runways, platforms, taxiways, and terminal buildings. The provision is increased periodically for the wear and tear to the concessioned assets and the Company’s estimates of the disbursements it need to make. The use of the provision corresponds to the outflows made for the conservation of these operational assets.
Master Development Plan (MDP): The investment plan agreed to with the government every five years, under the terms of the concession agreement. These include capital investments and maintenance for aeronautical activities, and exclude commercial and other non-aeronautical investments. The investment horizon is 15 years, of which the first five years are committed investments.
Maximum Rate System: The Ministry of Communications and Transportation (SCT) regulates all our aeronautical revenues under a maximum rate system, which establishes the maximum amount of revenues per workload unit (one terminal passenger or 100kg of cargo) that may be earned by each airport each year from all regulated revenue sources. The concessionaire sets and registers the specific prices for services subject to regulation, which may be adjusted every six months as long as the combined revenue from regulated services per workload unit at an airport does not exceed the maximum rate. The SCT reviews compliance with maximum rates on an annual basis after the close of each year.
NH T2 hotel: The NH hotel in Terminal 2 of the Mexico City International Airport.
Non-aeronautical revenues: are revenues that are not subject to rate regulation. These include commercial services such as parking, advertising, car rentals, leasing of commercial space, freight management and handling, and other lease income, among others.
Passengers: all references to passenger traffic volumes are to terminal passengers.
Passenger charges (TUA, Tarifa de Uso de Aeropuerto): are paid by departing passengers (excluding connecting passengers, diplomats, and infants). Rates are established for each airport and are different for domestic and international travel.
Prior period comparisons: unless stated otherwise, all comparisons of operating or financial results are made with respect to the comparable prior year period. Percentage changes for passenger traffic or financial items are calculated based on actual numbers.
Strategic investments: refers only to those investments that are additional to those in the Master Development Plan.
Technical Assistance Fee: This fee is charged as the higher of US$3.0 million per year or 5% of EBITDA before technical assistance. The operating results of the NH T2 hotel are not included in calculating the airport concession tax or the technical assistance fee.
Terminal passengers: includes passengers on the three types of aviation (commercial, charter, and general aviation), and excludes passengers in transit.
Unaudited financials: financial statements are unaudited statements for the periods covered by the report.
Workload Unit: one terminal passenger or one cargo unit.
Analyst Coverage: In accordance with the regulations of the Mexican Stock Exchange, the analysts who cover OMA are:
Citigroup – Stephen Trent
Santander – Rogelio Urrutia
HSBC – Francisco Suárez
This report contains forward-looking information and statements. Forward-looking statements are statements that are not historical facts. These statements are only predictions based on our current expectations and projections about future events. Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “target,” 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 publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise.
About OMA
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 a hotel and commercial areas inside Terminal 2 of the Mexico City 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 standards, and ISO 9001:2008. OMA’s strategic shareholder members are ICA, Mexico’s largest engineering, procurement, and construction company, and Aéroports de Paris Management, subsidiary of Aéroports de Paris, the second largest European airports operator. OMA is listed on the Mexican Stock Exchange (OMA) and on the NASDAQ Global Select Market (OMAB). For more information, please visit us at:
| ■ | Website: | http://www.oma.aero |
| ■ | Twitter: | http://twitter.com/OMAeropuertos |
| ■ | Facebook: | http://www.facebook.com/pages/OMA/137924482889484 |
SIGNATURES
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. | |||
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By:
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/s/ José Luis Guerrero Cortés | ||
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José Luis Guerrero Cortés
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Chief Financial Officer
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Date: July 26, 2012