Grupo Aeroportuario del Sureste, S.A. de C.V. American Depositary Shares 2026 Q3 Earnings Call

Please go ahead, sir. Thank you, Melissa.

Thank you everyone for joining us today to discuss ASUR results for the third quarter 2026. With me on today's call is Adolfo Castro, Chief Executive Officer. Additional details about our results can be found in our press release, which was issued yesterday after market close, and is available on our website. As usual, all comparisons discussed on this call will be year-on-year, and all figures are expressed in MXN unless specified otherwise. As a reminder, certain statements made during the call today may constitute forward-looking statements, which are based on current management expectations and beliefs and are subject to several risks and uncertainties that could cause actual results to differ materially, including factors that may be beyond our company's control. Please refer to the forward-looking statements disclosure included in this earnings presentation for additional information.

With that, I'll now turn the call to Adolfo.

Please go ahead, Adolfo. Thank you, David, and good morning, everyone.

The third quarter marked an important milestone for ASUR. On September 1, we completed acquisition of CPC Aeroportos from Motiva, which added 20 airports to our portfolio, the majority of which are located in Brazil. Coupled with our December 2025 acquisition of the U.S. commercial operations, we have taken significant actions in diversifying ASUR's operations. In turn, ASUR has evolved into the leading international airport operator across the Americas. Today, our portfolio spans 36 airports across seven countries, complemented by commercial operations at three major U.S. airports. To put this scale in perspective, the combined airport portfolio served approximately 120 million passengers in 2025 on a pro forma basis, up from 70 million we reported last year. We now have much broader business than the Mexican airport group that was established nearly three decades ago.

CPC Aeroportos had 17 airports in Brazil, one in Ecuador, Costa Rica, and Curaçao. This gave us an established presence in Brazil, Latin America's largest aviation market, and expands our operation into three additional markets. The final purchase price was BRL 5.5 billion, or approximately $992 million, after customary closing adjustments. Our results for the third quarter include operations solely for the month of September, which are consolidated under the region called Brazil and Others. As a larger, more diverse company, our operations are now spread across more markets with different passenger profiles, reducing our dependence on one market. It also provides more opportunities to apply the operating and commercial experience we have built up many years. While we do not expect to capture significant operating synergies, our focus now is on implementing seamless integration while maintaining our disciplined approach to investment.

We are making changes to our organizational structure to better support the large growing business. To that end, on August 20th, shareholders approved bringing in-house the technical assistance technology transfer service provided by ITA. Once completed, the merger will bring these capabilities and personnel directly into ASUR, simplifying our structure and keeping the expertise within the company. As a reminder, we will assume the cost of providing these services and eliminate the recurring external technical assistance fee, which amounted approximately MXN 401 million in 2025. Our U.S. commercial business gives us another avenue for growth. At JFK, LAX, and Chicago O'Hare, we are building a platform on non-regulated dollar-denominated commercial revenues. The next major project is the new Terminal 1, expected to be open toward the end of the first quarter next year. We are also continuing developing commercial spaces at LAX to be ready for the Olympic Games in 2028.

The business today is only a small contribution of what we expect the longer-term potential of this new business to be. While we are very excited about these new opportunities, at the same time, Mexico remains central to our business and investment program. Within Mexico, Cancún is an important market for us with significant investments on the way to improve operational efficiencies and support future growth. We are taking a long-term view of Cancún's development while managing the current operating environment. First, the expected remodel and expanded Terminal 1 construction will be completed during this fourth quarter, and then we will proceed with the operational readiness and airport transfer to start operations in the first quarter. Terminal 1 will allow us to redistribute passenger flows and relieve pressure on Terminal 2. It will also create additional commercial capabilities and improve passenger experience.

We are also investing in Terminal 4, with the project expected to be operational at year-end 2028. This investment will provide 12 additional boarding gates on top of the four we added during 2027, and three more due to the expansion of Terminal 1 and a connecting taxiway and related infrastructure. Our capital allocation continues to balance investment into business to support growth and improve efficiencies with returns to shareholders. There are two extraordinary dividends of MXN 10 each, payable on November 30th and December 23rd this year. Turning to our energy strategy. During the third quarter, we began procuring clean energy from a third-party supplier in Mexico. We purchased 13.1 million kilowatt hours, representing more than 40% of the electricity consumption at our Mexican airports during the quarter. We also began the executive design of additional solar panels in our parking facilities.

These are expected to become operational in 2027 and could generate an additional 8 million kilowatt hours of renewable energy annually. Our efforts to advance renewable energy also earned recognition during the quarter, with Airports Council International awarding the Green Airport Recognition for our digital renewable energy management system project. Moving on to passenger traffic. Total traffic decreased 1.2% to 20.9 million passengers and includes one month contribution from Brazil and Others. Considering September 2025 data for comparison purposes, lower traffic in Mexico and Puerto Rico was partially offset by growth in Colombia at the acquired portfolio. Mexico traffic declined nearly 5%, primarily due to weaker international traffic at Cancún. Growth in domestic traffic across our other 8 Mexican airports partially offset this weakness. Airline capacity constraints, including a Spirit Airlines bankruptcy, higher jet fuel prices, continue to weigh on demand, particularly for international travel.

Passenger volumes by region to and from the U.S., Europe, South America decreased by 14.9%, 14.4%, 7.9% respectively, while Canada increased by 5.7%. In Puerto Rico, traffic declined slightly over 3% due to continued impact from the bankruptcy of Spirit Airlines early May and softness in both domestic and international demand. On a positive note, September showed an improvement, with total traffic increasing just over 3%, following the declines in July and August. Colombia continued to outperform the rest of the portfolio, with traffic just over 5%, reflecting a trend in both domestic and international traffic, benefiting from better connectivity and healthy demand. Total traffic figures for the quarter also include one month contribution from operations in Brazil and Others, which as a whole increased just over 1% and added nearly 4 million passengers in September.

This is mainly driven by low single-digit growth in Brazil and Ecuador, more than offsetting the low single-digit declines in Costa Rica and Curaçao. On a bigger picture macro front, we do not see any near-term improvement as conditions remain challenging, particularly for international traffic in Mexico although airlines scheduled for the winter season indicate only more seat capacity for December than a year ago, which is not encouraging for the whole winter season. The September improvement in Puerto Rico is encouraging while Colombia continues to grow. We remain cautious of the pace of recovery, while at the same time are focused on supporting the long-term demand fundamentals across our broader portfolio. With CPC, we diminish the dependence in Mexico and basically in one airport. Turning next to the financial performance. As a reminder, the figures I will discuss exclude construction revenue and construction costs, unless otherwise noted.

Revenues increased nearly 13% to MXN 7.8 billion. Non-aeronautical revenues grew just under 27%, including MXN 456 million from the U.S. operations, MXN 362 million from the first month of consolidation of Brazil and Others, and 16% growth in Colombia, offsetting the softer performance in Mexico and Puerto Rico. Aeronautical revenues were up 5% to MXN 4.8 billion, including MXN 315 million contribution from Brazil and Others. Higher passenger traffic supported higher aeronautical revenues in Colombia, while Puerto Rico's aeronautical revenues increased primarily due to the exchange rate difference. These gains were partially offset by softer traffic in Mexico. Commercial revenue per passenger increased 3.5% to MXN 130.5, mainly reflecting the contribution of our U.S. commercial operations. Puerto Rico posted the highest commercial revenue per passenger at MXN 163.3, up 2%, followed by Mexico with MXN 129.