Central North Airport Group 6-K, filed Jul 31, 2023
Central North Airport Group (OMAB)
About this 6-K
Central North Airport Group filed this 6-K on July 31, 2023.
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 2023
GRUPO AEROPORTUARIO DEL CENTRO NORTE, S.A.B. DE C.V.
(CENTRAL NORTH AIRPORT GROUP)
_________________________________________________________________
(Translation of Registrant’s Name Into English)
México
_________________________________________________________________
(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 2023
Operating and Financial Results
Mexico City, Mexico, July 28, 2023— 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 2023 (2Q23).
2Q23 Summary
| § | Passenger traffic increased 12.8% during 2Q23, as compared to 2Q22, reaching 6.6 million passengers. The airports with the highest traffic growth compared to 2Q22 were Monterrey, Ciudad Juárez, Acapulco and Mazatlán. |
| § | Adjusted EBITDA increased 24.8% to Ps.2,287 million, which compares to Ps.1,832 million in 2Q22. |
| § | Capital investments and major maintenance works included in the Master Development Plans (MDPs) plus strategic investments were Ps.884 million in the quarter. |
OMA will hold its 2Q23 earnings conference call on July 31, 2023 at 1:00 p.m. Eastern time, 11:00 a.m. Mexico City time.
Call +1-877-407-9208 toll-free from the U.S. or +1-201-493-6784 from outside the U.S. The conference ID is 13739907. The conference call will also be available by webcast at http://ir.oma.aero/en/calendario-de-eventos.
2Q23 Operating Results
Operations, Passengers, and Cargo
The number of seats offered increased 11.6% compared to 2Q22.
During the quarter, 6 domestic routes and 1 new international route started operations.
Total passenger traffic reached 6.6 million passengers, an increase of 12.8% as compared to 2Q22. During the quarter, of total traffic, 88.5% was domestic and 11.5% was international.
Domestic passenger traffic increased 11.9%, compared to 2Q22, while international traffic increased 19.4%.
The airports with the largest passenger traffic growth in volume terms as compared to 2Q22, were:
| § | Monterrey (+19.8%), on its Toluca, Cancún, Querétaro, Santa Lucía (AIFA), Houston and Chihuahua routes. |
| § | Ciudad Juárez (+9.4%), on its Guadalajara, Cancún and Monterrey routes. |
| § | Acapulco (+21.2%), on its Santa Lucía (AIFA), Guadalajara, Mexico City and Tijuana routes. |
| § | Mazatlán (+12.0%), on its Mexico City and Tijuana routes. |
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Commercial Operations
The commercial space occupancy rate in the passenger terminals was 94.3% as of June 30, 2023.
Freight Logistics Services
| § | OMA Carga’s revenues decreased by 5.8%, compared to 2Q22 due to a decrease in revenues from storage and custody services related to ground import cargo. Total tonnage handled was 9,051 metric tons, 21.9% lower than 2Q22. |
Hotel Services
| § | The NH Collection Terminal 2 Hotel had an 84.7% occupancy rate, compared to 80.5% in 2Q22, with a 5.4% increase in the average room rate to Ps.2,416 per night. |
| § | Hilton Garden Inn had a 76.2% occupancy rate, compared to 75.3% in 2Q22, with a 16.7% increase in the average room rate to Ps.2,521 per night. |
Industrial Services
| § | OMA VYNMSA Aero Industrial Park: Revenues reached Ps.19.6 million, an increase of 10.0% versus 2Q22. The increase is explained by a higher number of square meters leased as compared to 2Q22. |
Consolidated Financial Results
Revenues
Aeronautical revenues increased 25.8% mainly due to an increase in passenger traffic, compared to 2Q22, as well as increases in aeronautical tariffs during the first quarter of the present year.
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Non-aeronautical revenues increased 15.7%.
Commercial revenues increased 23.3%. The line items with the largest increases were:
| § | Parking, +20.6%, as a result of an increase in passenger traffic and higher penetration in the Monterrey Chihuahua and Reynosa airports, as well as an increase in tariffs. |
| § | Car Rentals and Restaurants, +35.9% and +29.4%, respectively, as a result of an increase in revenue share and the consolidation of initiatives implemented in past quarters. |
| § | VIP Lounges, +44.1%, as a result of an increase in passenger traffic and the start of operations of the OMA Premium Lounges in Tampico and Ciudad Juárez, which were not yet in operation in the 2Q22. |
Diversification revenues increased 4.5%, mainly due to higher revenues from Hotel Services.
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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 11.2%, mainly due to higher payroll costs, minor maintenance and other costs and expenses.
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The major maintenance provision was Ps.81.9 million. The outstanding balance of the maintenance provision as of June 30, 2023 was Ps.2,119 million.
The airport concession tax was Ps.140 million and the technical assistance fee was Ps.61 million.
Total operating costs and expenses increased 3.5%.
Operating Income and Adjusted EBITDA
Operating Income was Ps.2,053 million, with an operating margin of 56.7%.
Adjusted EBITDA was Ps.2,287 million, with a margin of 78.6%.
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Financing Income and Net Income
Financing Expense was Ps.282 million, compared to Ps.183 million during 2Q22. The increase was mainly due to a higher interest expense as a result of a higher level of indebtedness and an increase in financing costs.
Consolidated net income in the quarter was Ps.1,272 million, an increase of 37.0%.
Earnings per share, based on net income of the controlling interest was Ps.3.29, and earnings per ADS was US$1.54. Each ADS represents eight Series B shares.
MDP and Strategic Investments
In 2Q23, capital investments and major maintenance works in the MDPs and strategic investments totaled Ps.884 million, comprised of Ps.710 million in improvements to concessioned assets, Ps.104 million in major maintenance, Ps.68 million in strategic investments and Ps.2 million in other concepts.
The most important investment expenditures included:
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Indebtedness
Derivatives
As of the date of this report, OMA has no financial derivatives exposure.
Cash Flow Statement
During 2Q23, cash flows from operating activities generated cash of Ps.1,777 million.
Investing activities used cash for Ps.533 million in the second quarter. Financing activities reflect mainly the first tranche of the ordinary dividend payment of Ps.1,800 million, resulting in a net cash outflow of Ps.2,044 million.
The net decrease in cash resulting from operating, investing and financing activities in 2Q23 was Ps.819 million. This, combined with the negative effect of changes in the value of cash of Ps.6.1 million, resulted in a Cash and Cash Equivalents balance as of June 30, 2023 of Ps.2,006 million.
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Relevant Events
OMA publishes Annual 2022 Sustainability Report. On July 25, 2023, OMA published its 2022 Sustainability Report, which offers a comprehensive overview of the significant progress made and highlights the various activities and initiatives adopted by OMA during 2022. This report represents our dedication to Environmental, Social, and Governance (ESG) principles, while shedding light on the meticulous actions undertaken to foster a responsible and sustainable business environment. The Report may be downloaded directly on the following link: https://ir.oma.aero/wp-content/uploads/2023/07/OMA_Sustainability_2022.pdf
Wing 1 begins operations at Monterrey International Airport. As part of the expansion and remodeling of the Monterrey International Airport, on June 20, 2023, the Wing 1 building began operations at the airport, serving passengers traveling through Terminal C. The building is located on the airside of the airport, has an area of 5,611 m2 and 7 boarding gates. The building provides the airport with an incremental capacity of approximately 1.4 million passengers per year.
OMA pays the first installment of the declared dividend. In accordance with the resolutions adopted at the Company's Annual Ordinary General Shareholders' Meeting held on April 21, 2023, it was resolved, among other items, to declare a cash dividend payment to shareholders of Ps. 2,300 million in two installments, of which the first installment of Ps.1,800 million, at Ps.4.614064804 per share was paid on June 22, 2023, and the second installment of Ps.500 million, at Ps.1.28168466, will be paid no later than September 30, 2023.
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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 period of 2022. The exchange rates used to convert foreign currency amounts were Ps.20.1443 as of June 30, 2022, Ps.19.4715 as of December 31, 2022 and Ps.17.1187 as of June 30, 2023.
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. The definition of terminal passengers of OMA may differ from the definition utilized by its shareholder VINCI Airports.
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.
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Analyst Coverage
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.
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 the NH Collection Hotel inside Terminal 2 of the Mexico City airport and the Hilton Garden Inn at the Monterrey airport. OMA employs over 1,100 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:
| · | Webpage http://ir.oma.aero |
| · | Twitter http://twitter.com/OMAeropuertos |
| · | Facebook https://www.facebook.com/OMAeropuertos |
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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 28, 2023