Grupo Aeroportuario Del Sureste (ASR-NYSE, $149.94) files 20-F.

The recent 20-F filing indicates that construction of the Cancun International Terminal 4 is now underway.

“The construction of the Terminal 4 has commenced, The new terminal is to be located to the west of the existing airport facilities, between runways 12L and 12R. The terminal building will initially have a surface area of more than 64,000 square meters, as well as 10 security filters, and 12 aircraft parking stands, each with its own boarding bridge. It has been designed to be easily expandable when capacity increases are required, without causing disruption in day-to-day operations, and so that it may be used by both domestic and international passengers while maintaining completely separate passenger flows. The terminal is laid out on two levels, with the upper level for departing passengers and the mezzanine and lower levels for arriving passengers.”

To place the scope of this expansion into perspective, terminal 4 will be roughly 42% larger than the existing terminal 3. Retail space at the new terminal should exceed the total retail space that now exists at terminals 1,2 and 3. The total non-aeronautical revenues generated at the Cancun International Airport for 2015 exceeded $128 million USD.

Operating income margins at the Cancun Airport, adjusted for the accounting driven construction revenue line, was roughly 65% for 2015. There can be no doubt that when the total square footage at the airport devoted to retail space doubles, all else being equal, the result will be accretion of EBITDA on a go-forward basis.

I believe, once the expansion is complete and that all of the retail space has been leased up, the absolute increase in EBITDA will be substantial.

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