Good day, ladies and gentlemen, and Welcome to ASUR's third quarter 2026 results conference call. My name is Melissa, and I'll be your operator. At this time, all participants are in a listen-only mode. We will conduct a question and answer session toward the end of today's conference. If you would like to ask a question, please press star one. If you would like to withdraw your question at any time, please press star two. If you're using a speakerphone, please lift the handset before making a selection. As a reminder, today's call is being recorded. I'd now like to turn the call over to Mr. David Barlow, Corporate Governance Strategic Planning Manager and Investor Relations Officer at ASUR. 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 eight 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.
Although this was 10% lower year-on-year, mainly reflecting the lower traffic and passenger mix. Colombia delivered double-digit growth, reaching MXN 65.2 , while Brazil and Others added MXN 64.7 in commercial revenues per passenger. We continue expanding our commercial footprint. Over the past 12 months, we opened 39 new commercial spaces across Mexico, Puerto Rico, and Colombia, 31 in Colombia, seven in Puerto Rico, and one in Mexico. Moving on to profitability, consolidated EBITDA increased 1.7% to MXN 4.7 billion. Brazil and Others contributed MXN 313 million in September, and our U.S. commercial operations added MXN 49 million in the quarter. These, together with increases of 7% in Puerto Rico, driven by a lower operating cost and nearly 2% in Colombia, more than offset the 10% decline in Mexico. Adjusted EBITDA margin declined 7.4 percentage points year-on-year to 60.3%.
These reflect the pressure of Mexico's revenues together with the consolidation of Brazil and Others and the U.S., both of our margins. Brazil and Others reported an adjusted EBITDA margin of 46.3% for September 2026, while the U.S. reported an EBITDA margin close to 11%. Recall, this business has a different cost structure from our airport operations, including lease obligations to airport authorities, and the margin is not directly comparable. We also are incurring expenses for projects that are not yet generating revenues, including commercial spaces at our U.S. operations, which are expected to open until 2027 and 2028. On the balance sheet, we closed the quarter with cash and cash equivalents of MXN 20 billion and a total debt of nearly MXN 70 billion. Of these, 26.5% was denominated in Mexican pesos, 46.4% in U.S. dollars, corresponding mainly to Puerto Rico, and 27.1% in Brazilian reais.
Net debt of last 12 months EBITDA was 2.6 times, up from 0.2 times, reflecting the acquisition, financing, and addition of the debt from the commercial operation in U.S. and Brazil and Others. At the quarter end, Cancún Airport placed $1.8 billion senior notes in two tranches, $900 million due in 2031 and $900 million in 2036. These notes carry an investment grade rating by S&P and Fitch. We used the net proceeds to repay the bridge facilities for the U.S. and CPC acquisitions, repay the remaining Santander loan, and partially prepay the BBVA loan. This refinancing extends our debt maturities by seven years on average. Lastly, capital expenditures totaled MXN 2.7 billion during the quarter, with the majority expanded in Mexico as we advance in our master development program.
At yesterday's exchange rate converted to Mexican pesos for each region, next year, we expect to invest close to MXN 6 billion in Mexico, MXN 1.8 billion in Costa Rica, MXN 1.7 billion in Puerto Rico, MXN 1.5 billion in Brazil, MXN 414 million in our U.S. commercial operation, MXN 230 million in Colombia, and MXN 213 million in Curaçao. We expect to fund all of these with resources generated by the operation of the region, except for Puerto Rico. This is a total of MXN 11 billion. Main projects include the start of the second phase of the expansion of Terminal 4 at Cancún Airport, the beginning of the construction of a second runway at Curitiba Airport to be completed in 2029, runway refurbishing at Belo Horizonte, Goiânia, Teresina, and São Luís airports in Brazil, which are expected to be completed in 2027.
Also to be completed in 2027 is the first phase of the terminal expansion at San José Airport in Costa Rica. Also, a hangar relocation that will allow us for the second phase expansion of this terminal in 2028. Wrapping up, ASUR is making consistent progress in executing the strategic priorities, optimizing its structure, and further diversifying its geographic operations. We are accomplishing this in a challenging operating environment, particularly in Mexico, and we remain cautious on the pace of the recovery. At the same time, we completed an important acquisition, obtained approval for a more efficient corporate structure, and refinanced our acquisition bridge loans with long-term debt. Our broader airport portfolio, U.S. commercial platform, and continuing investment in capacity provide ASUR additional opportunities for long-term growth. We remain focused on operating performance, driving further efficiencies, disciplined capital allocation, and delivering value to our shareholders, including through dividend payments.
This ends our prepared remarks. We are ready to take your questions. Please, Melissa, open the floor for questions.
Thank you. We will now begin the question and answer session. To ask a question, dial in by phone and press star then one on your touch tone keypad. To make sure your mute function is turned off, and if you are using a speakerphone, please make sure to pick up your handset before pressing the star key. To withdraw your question, press star then two. Please limit yourself to one question and one follow-up, and rejoin the queue if you have additional questions. Our first question comes from the line of Rodolfo Ramos with Bradesco BBI. Please proceed with your question.
Thank you, Adolfo and David, for taking my question. My first one is on traffic, if I may. You sound realistic but still very cautious regarding the recovery into the winter season. Cancún did a little bit better than Cabo, for example, during the quarter. But can you tell us a little bit more detail as to how would you break down the decline, perhaps airline capacity decisions made to Tulum. What has been driving that decline? Just a little bit more color, if you may, into the first quarter of next year and next year in terms of how you see traffic evolving. The second, if I may, as a follow-up, Mexico EBITDA was down almost double digits. Consolidated administrative expenses roughly doubled. Can you quantify, during the quarter, what costs were non-recurring? For example, CPC on the internalization as well, you have some expenses there.
When you look at now having this multi-country platform, what would be the run rate for you going forward? Thank you.
Thank you, Rodolfo. Well, the traffic, as I said in my initial remarks, if we see the schedule of the airlines for the winter season, the only month that is up against last year is the case of December. It is not the case for the others, and that is why I am saying it is not encouraging. The principal problem we see is the case of the U.S. In terms of the decline, of course, today we have a cocktail of things that are affecting all of these, as you have mentioned. Reduced capacity from the airlines on one side. On the other side, also jumping into better markets for them in terms of yield, and still affected by the bankruptcy of Spirit. That was important for the case of Mexico, Puerto Rico, and Colombia. There are some other negatives in terms of some other regions.
That is the case of Europe and the case of South America. The only one that is positive is the case of Canada, with 5.7% during the quarter. That remains strong, but the others are not looking well for the winter season. Of course, this is not definitive. The airlines normally adjust their program as the time goes by. But for the moment, what I can say to you is that we are not so happy of what we are seeing, and we do not know when all of this conflict in the Middle East will end and will bring a better outcome for the airlines. In terms of expenses, during the quarter, yes, we had some one-time events.
That is the case of expenses related to the acquisitions of CPC, related to the internalization of the project of the technical assistance, and also the case of the bonds that will not be there in the future. Nevertheless, it is important to say that next year, in the case of Mexico, we will be affected by the reduction in the working hours that was established by the government, from 40 hours during the week to 38. That will give us additional costs during the quarter, and also the new operation of Terminal 1. We are taking all what we can in order to try to control costs, but of course, we will see the effects on the first quarter of next year.
Thank you, Adolfo.
You're welcome.
Thank you. Our next question comes from the line of Guilherme Mendes with JP Morgan. Please proceed with your question.
Hey. Hello, Adolfo, David. Good morning. Thanks for taking my question. I have a follow-up on the capital allocation discussion. Going forward, there has been news about ASUR potentially interested on the Brasília airport and some regional airports in Brazil. Just wanted to confirm if that's really the case, and if there's anything else that ASUR will be willing to consider at this point in terms of expanding its portfolio. Thank you.
Guilherme, thank you for your question. For the moment, we are focused on consolidating what we just recently acquired, that is the case of the U.S. and the 20 additional airports from CPC.
Thank you, Adolfo. If I may, a follow-up on also on capital allocations, is how you think about leverage going forward. What pace of the leverage should we expect as you consolidate the operations?
Well, as I mentioned, in terms of the most important thing that we have in front, which is the CapEx, the 11 points of the billion pesos for next year. All of these should be funded by the cash flow generation in each one of the regions. So we do not expect any more leverage next year.
Got it. Thank you.
You are welcome.
Thank you. Our next question comes from line of Fernanda Recchia with BTG Pactual. Please proceed with your question.
Hi, Adolfo. Hi, David. Thank you for taking my question. Two here from our side as well. The first, regarding Motiva profitability, the airport during the month of September posted a 47% of EBITDA margin, and we know looking for historical level that these airports usually report around 50%. So just wanted to understand if it was something specific for the month of September and margins for these airports should improve, or this is the recurring level we should see going forward? Second, still on capital allocation, a follow-up. We know that you are focused on just consolidate of what you acquired, but we also know that Infraero and Zurich are discussing the tag along within Confins Airport, and Zurich specific in Curaçao. So maybe could you elaborate how you see the timing, and if you think this tag along will indeed be exercising? Thank you.
Yes, Fernanda. Well, we just started the operation in September with this 47% EBITDA margin. I believe that we can do something better in the future. For the moment, I cannot be sure about the 50% you are talking about, but it's clear for us that there are some opportunities there. In terms of tag alongs, yes, those were included in the whole scheme of the operation with CPC. We are in the process of that, waiting for some approvals and waiting for final answers in the case of Infraero. So yes, those have been included in the transaction. It's to go from the case of Infraero, it's a 49% Confins, and the case of Zurich is a 12.5% Confins, and 10.2% in the case of Curaçao to reach 90% there.
Thank you, Adolfo.
You're welcome.
Thank you. Our next question comes from the line of Alberto Valerio with UBS. Please proceed with your question.
Hi, Adolfo, David. Thank you so much for the opportunity to make my question. Welcome to Brazil, officially now with airports in Brazil. My question goes towards the Brazilian airports and Central American airports, the new airports. Is there any regulatory commitment of CapEx for those airports?
Yes, Alberto. As I mentioned, what we are expecting for next year in the case of Brazil, most of this is regulatory. There are some additional projects, but of course those are lower in comparison with the regulatory regime. That is the case of the Brazilian airports.
Beyond next year, it's a large amount of CapEx, or a small amount of CapEx should be deployed?
Well, next year is almost the same as 2028. It's going to be almost the same as 2027, and then it reduces.
Okay. Thank you so much.
You are welcome.
Thank you. Our next question comes in line of Pablo Ricalde with Itaú BBA. Please proceed with your question.
Hi, good morning, Adolfo. On the current topic, I do not know if you can provide an update on the internalization process. Is it fair to assume that will happen as of January 1st, 2027? And if you have quantified synergies, so it is going to be 100% impact on margins, or there will be some expenses associated with reducing the technological inputs?
Thank you, Pablo. Well, the process has started, and it will take some time. We need some approvals from the Mexican tax authorities and some other approvals. In terms of the costs, we see an opportunity there, as I mentioned, MXN 401 million in 2025. Of course, we will not spend that amount of money in the future, so we see some increase in EBITDA because of this.
Perfect. Thank you.
You're welcome.
Thank you. Our next question comes from the line of Anton Mortenkotter with GBM. Please proceed with your question.
Hi, Adolfo. Thank you for taking my question. I understand ASUR appointed a new director for the Brazil region, right? José Formoso. I was thinking, what capabilities are you looking to bring into the group through this leadership choice? Also, as you integrate the acquired airports, how are you planning to measure success? I mean, which metrics will matter most? Is it commercial revenue per passenger, operating efficiencies, return on invested capital? Just looking to better understand your approach there. Thank you.
Yes, of course. Remember that the first objective, in the case of the CPC acquisition, was to use the balance sheet and to correct the too-healthy equity structure we have in the company. Now you can see that we have increased our leverage from 0.2 to 2.6 times last 12 months net EBITDA. That was the first objective. Of course, in terms of things that we're going to be focused on is the case of the commercial revenues. We believe that there are some opportunities there, and also some operational efficiencies in some of the other airports that are not in Brazil. In the case of the new CEO of Brazil, José Formoso, he has a lot of experience in managing concessions in the first place. The second one, he has been in Brazil for more than 20 years with a success story.
He was making a lot of changes with a lot of success in the countries there. That's what we were focused on. Also, he knows about how Mexicans think. That was why we decided to select him as CEO, and I can say to you that we are extremely happy for the selection we have made.
Super clear. Thank you, Adolfo.
You're welcome.
Thank you. Our next question comes from the line of Jens Spiess with Morgan Stanley. Please proceed with your question.
Yes. Hello, Adolfo. One follow-up on the technical efficiency and the reduction in costs. When you are facing the regulator in your next MDP cycle and looking at the reference value model, how you will be treating that reduction in cost? Will there be an impact from the reference value calculation or not?
Well, you know that the new regulated regime that has been published on October 19, 2023, recognizes all the expenses that the company has. Of course, if we reduce expenses, that will be impacted our future tariff or our future results from the update of the new MDP.
Okay. It will result in a lower cost in that calculation. That is awesome.
Yes.
Perfect. Thank you. Thank you, Adolfo.
You're welcome.
Thank you. Our next question comes from the line of Alan Macias with Bank of America. Please proceed with your question.
Hi, good morning, and thank you for the call. Just a question on margins on the U.S. operations, if you can provide guidance on what you expect margins to be in the long term. Thank you.
Alan, thanks for your question. The margin that we reported was 11%. That will increase, of course. As I said during the initial remarks, one of the key elements of this is still pending to start operations, which is the case of terminal 1. It has been delayed since June last year up to the end of the first quarter next year. So that will improve the margin. Today, we are still spending some money there without receiving any revenue. It is also the case for a new space, a very important new space that we are constructing at Chicago O'Hare.
Thank you.
You are welcome.
Thank you. Ladies and gentlemen, as a reminder, if you would like to join the queue, please press star one on your telephone keypad. Our next question is a follow-up from the line of Fernanda Recchia with BTG Pactual. Please proceed with your question.
Hi, thank you for the follow-up. Just one quick question here. We saw local news today saying that the incentives for airlines cooperating Tulum might be postponed. Just wondering if you have any thoughts on this and if this is something that you believe will happen. Thank you.
Well, the case of Tulum, Fernanda, if you remember, they started operation December 2023 with 40,000 passengers. In 2024, they reached 1.2 million. In 2025, using last two months, by June, July, they reached 1.5 million. My expectation for this year is that they will reach 700,000. On one side, they have been affected, the same as we have been affected in the case of Cancún, by the capacity reduction from the airlines. But on the other side, it is clear for me that there are some other decisions that have been taken in regards to this airport, which is the case of the domestic market reductions from Aeroméxico and also the case of Volaris. So my expectation for next year is that this airport will be around 700,000, 800,000 passengers.
Thank you. Our next question is a follow-up from the line of Anton Mortenkotter with GBM. Please proceed with your question.
Hi, Adolfo. Thank you for the follow-up. Just a quick one. I was wondering, how does the U.S. debt issuance affect the capital structure considered on the Mexican regulatory WACC calculation?
Mexican regulatory is just for Mexico. That does not include any other operation or any other cost in the equation, nor the leverage as well.
Thank you.
You are welcome.
Thank you.
Thank you. Once again, if you'd like to ask a question, please press star one on your telephone keypad. We'll pause a moment to allow for any others. Mr. David Barlow, it seems that there are no other questions at this time. I'll turn the floor back to you for final comments.
Thank you, Melissa. We would like to thank you all again for joining us on today's call, and we look forward to speaking to you again in the next quarter. Please do not hesitate to contact us if you have any further questions. Have a nice day, and thank you very much.
Thank you. This concludes ASUR's third quarter 2026 results call. We would like to thank you for your participation. You may now disconnect your lines.