Grupo Aeroportuario del Centro Norte (GAERF), the Mexican airport operator, has been a quiet giant in the transportation infrastructure sector. Managing 13 international airports across Mexico, alongside hotels, industrial parks, and even a bonded warehouse, their reach is vast and their potential seemingly immense. Yet, a closer look at their recent financial data reveals a curious anomaly that raises more questions than answers – a potential billion-dollar discrepancy that seems to have slipped under the radar of most analysts.

On the surface, GAERF's financials paint a picture of robust growth and stability. Their Market Capitalization stands at a respectable $4.4 billion, and their EBITDA for the last reported period was a healthy $8.7 billion. A PE Ratio of 11.8 and a healthy Return on Assets (ROA) of 20.19% further reinforce this impression of a company firing on all cylinders.

Key Financial Highlights

Source: GAERF Q1 2024 Financial Report

However, a deeper dive into their balance sheet for the first quarter of 2024 reveals a peculiar figure: "netWorkingCapital" is reported at a staggering 2.58 billion Mexican Pesos. This is where the puzzle begins. Net Working Capital, a crucial metric representing a company's ability to meet its short-term financial obligations, is typically calculated in the same currency as the rest of the financial statement. In this case, all other figures in GAERF's Q1 2024 balance sheet are reported in US Dollars.

Why is this single figure, a vital indicator of financial health, presented in a different currency? Could it be a simple oversight, a typographical error in the data reporting? While possible, the sheer magnitude of the number, coupled with its crucial significance, makes such an explanation seem unlikely.

Let's explore the implications of this anomaly. Converting the reported 2.58 billion Mexican Pesos to US Dollars (using the current exchange rate at the time of writing) results in a figure of approximately $145 million. This is dramatically lower than what we would expect from a company of GAERF's size and performance.

For context, their Net Working Capital in the same quarter of the previous year (2023) stood at $2.63 billion. This year-on-year drop of over 90%, if accurate, would represent a seismic shift in their short-term financial position and would surely be a major talking point in any financial analysis. Yet, the discrepancy remains largely unnoticed.

"Here's where the hypothesis gets truly intriguing. Could it be that the "netWorkingCapital" figure was intended to be reported in US Dollars, but was accidentally entered as Pesos? If this is the case, the actual Net Working Capital for GAERF in Q1 2024 would be a mind-boggling $2.58 billion US Dollars."

This would represent an increase of nearly $100 million compared to the same period last year – a figure much more aligned with the company's overall growth trajectory. This hypothetical scenario would also explain the lack of analyst attention, as the reported figure, while appearing strange, wouldn't raise any immediate red flags.

Net Working Capital: A Year-on-Year Comparison

Of course, this is purely a hypothesis, and further investigation is needed to confirm the true nature of this discrepancy. However, the potential implications are significant. A $100 million swing in Net Working Capital is no small matter, and investors and analysts alike would be wise to seek clarification from GAERF regarding this unusual reporting.

What makes this even more compelling is GAERF's history. Did you know that the company was a key player in Mexico's ambitious airport privatization program in the late 1990s? This period saw the Mexican government hand over control of many major airports to private operators, aiming to boost efficiency and investment. GAERF's success since then is a testament to the potential of this strategy.

However, this history also underscores the importance of transparency and accuracy in financial reporting, especially for companies operating in a highly regulated sector. The curious case of GAERF's Net Working Capital, whether a simple error or a more complex issue, serves as a potent reminder that even in the age of big data, a keen eye for detail and a healthy dose of skepticism are essential tools for any savvy investor.

"GAERF's Monterrey International Airport (MTY) is the third busiest airport in Mexico, handling over 12 million passengers annually. It's a major hub for both domestic and international flights, connecting Monterrey to destinations across the globe."

Source: https://www.oma.aero/en/airports/monterrey