Executive Summary / Key Takeaways

• Grupo Aeroportuario del Sureste (ASUR) demonstrates robust financial resilience through its diversified airport portfolio across Mexico, Puerto Rico, and Colombia, effectively offsetting regional headwinds with strong international performance.
• Strategic capital expenditures, particularly the multi-year expansion of Cancun's Terminal 1 and Terminal 4, are poised to alleviate capacity constraints, enhance passenger experience, and unlock significant non-aeronautical revenue potential.
• Despite a decline in Mexico's international traffic, partly due to the new Tulum Airport and broader market dynamics, ASUR anticipates stabilization in 2026 as engine-related aircraft issues bottom out and Tulum normalizes operations.
• ASUR maintains a strong financial position with substantial cash reserves and a low net debt-to-EBITDA ratio, supporting a generous dividend policy and enabling continued strategic investments and potential inorganic growth opportunities.
• The company's competitive advantage stems from exclusive concessions in high-demand tourist markets and a focus on operational efficiency, which positions it favorably against rivals despite challenges in broader scalability and technological innovation.

A Global Gateway Operator's Strategic Ascent

Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR), founded in 1996, has evolved from a regional Mexican airport operator into a leading international player with a portfolio of 16 concessions across Mexico, Puerto Rico, and Colombia. This strategic diversification underpins ASUR's business model, which generates revenue from both aeronautical services, such as passenger and landing fees, and non-aeronautical services, including retail, restaurants, and car rentals. The company's history of expansion, including its Initial Public Offering around 2000 and subsequent ventures into Puerto Rico and Colombia, has shaped its current position as a resilient infrastructure provider in the Americas.

ASUR's strategic approach is deeply rooted in leveraging its exclusive airport concessions, particularly in high-demand tourist destinations like Cancun. This provides a significant competitive moat, translating into stable revenue streams and pricing power in its core markets. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, ASUR's strong performance in its key tourist gateways suggests a unique value proposition, particularly in non-aeronautical revenue generation. This specialized focus differentiates ASUR from competitors like Grupo Aeroportario del Pacífico (PAC) and Grupo Aeroportario del Centro Norte (OMA), which operate broader networks encompassing business and cargo hubs. ASUR's operational efficiency in handling seasonal passenger surges in leisure markets is a key strength, contrasting with OMA's focus on steady, year-round business traffic. Against a global player like AENA S.A. (ANJFY), ASUR's localized expertise in its core regions potentially leads to lower operating costs, though AENA's international scale may offer advantages in innovation and market access.

The company's technological differentiators are primarily embedded in its continuous investment in modern infrastructure and operational systems designed to enhance passenger experience and streamline airport operations. While ASUR does not detail proprietary core technologies with quantifiable benefits in the manner of a manufacturing firm, its strategic capital expenditures are a testament to its commitment to technological advancement in airport management. For instance, the ongoing reconstruction and expansion of Terminal 1 at Cancun Airport, slated for completion by the third quarter of next year, and Terminal 4, scheduled for completion by 2028, are critical initiatives. These projects aim to alleviate capacity pressures, particularly in non-aeronautical areas of Terminal 2, and optimize traffic flows, thereby unlocking additional commercial revenue potential. This focus on infrastructure modernization and operational efficiency acts as ASUR's technological roadmap, contributing directly to its competitive moat, financial performance through increased throughput and commercial opportunities, and its long-term growth strategy. Furthermore, ASUR's commitment to sustainability, evidenced by its completion of the first Scope 3 emissions inventory in Mexico, reflects an innovative approach to environmental responsibility, a growing imperative in the global aviation industry.

Operational Performance: A Diversified Portfolio's Resilience

ASUR's operational performance in the second quarter of 2025 underscored the resilience of its diversified portfolio, with strong international segments offsetting softness in Mexico. The company served 17.7 million passengers across all airports, with traffic remaining largely flat year-on-year.

Puerto Rico emerged as the best-performing market, posting 3% growth in passenger traffic, driven by domestic and sustained international travel. This growth is notably supported by music-related events and concerts, though management anticipates a normalization of traffic trends after benefiting from Frontier Airlines (ULCC)' expansion last year. In Colombia, traffic was up 1%, with international travel surging 12% while domestic traffic contracted slightly. This segment continues to benefit from the recovery following the suspension of two local carriers in early 2023, with Avianca (AVH) and LATAM Airlines (LTM) regaining lost routes. The opening of 35 new commercial spaces over the past 12 months also bolstered Colombia's performance.

Conversely, Mexico reported a decline of nearly 2% in total traffic, with a 1.2% increase in domestic traffic offset by a 4.5% decrease in international travel. International traffic in Mexico experienced year-on-year declines from all regions, including Europe (down 4.7%), the U.S. (down 5.3%), South America (down 2.7%), and Canada (down 1.6%). A significant portion of this decline, approximately 38%, is attributed to the ramp-up of the new Tulum Airport, which is drawing passenger growth previously concentrated in Cancun. Beyond this shift, the broader softness in international traffic reflects a more cautious demand environment across several markets. Domestic traffic in Mexico also remains affected by capacity limitations at Mexico City Airport and ongoing Pratt & Whitney engine restrictions.

Financial Strength and Shareholder Returns

ASUR's financial performance in Q2 2025 demonstrated solid top-line growth despite mixed traffic trends. Total revenues increased 5% year-on-year to MXN 7.4 billion, reflecting growth across operations, particularly in Puerto Rico and Colombia. Mexico, contributing 72% of total revenues, posted a low single-digit increase of 0.7%. Puerto Rico contributed 17.7% of total revenues with high teens growth, while Colombia, accounting for 12% of revenues, posted a 15.4% top-line growth.

Commercial revenues saw high single-digit growth, supported by the opening of 47 new commercial spaces over the last 12 months across all regions. Commercial revenue per passenger reached nearly MXN 140, representing mid-single-digit year-on-year growth. Colombia led with a 22% increase, followed by Puerto Rico with a 12% gain, while Mexico's commercial revenue per passenger rose nearly 3% to MXN 159.

Total expenses increased nearly 10% year-on-year, with Mexico's costs rising 7% primarily due to a 12% increase in the minimum wage. Consolidated EBITDA rose slightly by 2% year-over-year, reaching MXN 5 million in the quarter. Puerto Rico and Colombia posted double-digit EBITDA growth of 20% and 15%, respectively, while Mexico saw a 1.6% decrease in EBITDA. The adjusted EBITDA margin, excluding construction, stood at nearly 68%, a slight contraction from 69% in the prior year. The company's bottom line was negatively impacted by a foreign exchange loss of MXN 1,200 million due to the appreciation of the Mexican peso against the U.S. dollar.

ASUR maintains a robust balance sheet, closing Q2 2025 with nearly MXN 20 billion in cash and cash equivalents, a 32% increase year-on-year. The net debt-to-EBITDA ratio increased slightly to 0.1x, reflecting the drawdown of a MXN 9.5 billion loan facility in Mexico to maintain cash on hand for future needs, including dividend payments. In May 2025, ASUR paid a MXN 50 per share cash dividend and plans two extraordinary dividends of MXN 15 per share each in September and November. Capital expenditures in the quarter totaled MXN 1.4 billion, primarily directed towards modernization and expansion projects at Mexican airports.

Strategic Initiatives and Forward Outlook

ASUR's strategic initiatives are centered on enhancing its airport network through targeted infrastructure investments and expanding commercial opportunities to drive long-term growth. The company is heavily investing in its Mexican airports, with the reconstruction and expansion of Terminal 1 at Cancun Airport slated for completion by the third quarter of next year, and Terminal 4 scheduled for completion by 2028. These projects are crucial for alleviating existing capacity pressures, particularly in Terminal 2, and streamlining traffic flows, which is expected to unlock additional non-aeronautical revenue potential. In Puerto Rico, construction of a taxiway hotel is advancing, following the completion of runway pavements and rehabilitation in Q1 2025.

Looking ahead, ASUR anticipates Mexico's traffic to gradually stabilize over the course of next year. This stabilization is predicated on the effects of Pratt & Whitney engine-related aircraft groundings appearing to have bottomed out, and Tulum Airport reaching more normalized levels of operation. Domestic traffic is no longer decreasing and is expected to see a slight increase for the remainder of the year. While the new Tulum Airport has drawn traffic from Cancun, it is projected to handle approximately 2.9 million passengers in 2025, and ASUR expects it to stop "hurting" Cancun's figures once it reaches this operational level. Management also believes that Mexico could capture some of the diminishing tourism to the U.S. from regions like Canada and Europe, with potential positive effects seen next year. The Mexican government's recent easing of restrictions at Mexico City Airport, increasing operations from 43 to 44 per hour, could also be beneficial, as one additional operation reflects approximately 1 million passenger traffic. ASUR expects to comply with its Master Development Plan (MDP) CapEx for the year, roughly MXN 7 billion, with most of this investment occurring in the fourth quarter.

Risks and Challenges

Despite a resilient performance, ASUR faces several pertinent risks and challenges. The ongoing Pratt & Whitney (RTX) engine issues continue to affect domestic traffic in Mexico, though management believes the impact has bottomed out. Capacity limitations at Mexico City Airport also constrain traffic flows, and while there has been a slight easing, the CEO expressed doubts about a full lifting of restrictions by year-end. The ramp-up of the new Tulum Airport continues to draw passenger traffic from Cancun, impacting international figures, and its full operational normalization is a key factor to watch.

Broader macroeconomic uncertainty and a cautious demand environment across several international markets pose a risk to traffic growth. Furthermore, the sargassum situation in the Caribbean region is a significant concern, with 2025 potentially being the "worst ever" year, which could imply downside risk to traffic assumptions for the second half of the year, particularly during the crucial summer season. Foreign exchange volatility also presents a risk, as evidenced by the MXN 1,200 million foreign exchange loss in Q2 2025 due to the appreciation of the Mexican peso. ASUR's geographic concentration, particularly in Mexican tourist markets, also exposes it to regional economic downturns or shifts in travel preferences, potentially impacting revenue and market share.

Conclusion

ASUR stands as a compelling investment opportunity, underpinned by the resilience of its diversified airport portfolio and a proactive strategy of infrastructure investment. While facing headwinds in its Mexican operations from the new Tulum Airport and ongoing airline capacity constraints, the strong performance in Puerto Rico and Colombia highlights the benefits of its geographic diversification. The company's commitment to enhancing passenger experience through significant capital expenditures, such as the Cancun Terminal expansions, is expected to drive long-term growth and unlock substantial commercial revenue potential.

ASUR's robust financial health, characterized by strong cash generation and a conservative debt profile, supports its attractive dividend policy and provides the flexibility to pursue further strategic initiatives and inorganic growth opportunities. The company's competitive advantage, rooted in exclusive concessions in prime tourist destinations and a focus on operational efficiency, positions it favorably within the industry. As Mexico's traffic is anticipated to stabilize and international markets potentially rebound, ASUR's strategic investments and operational discipline are poised to fuel continued shareholder returns, making it a noteworthy consideration for discerning investors.