Pacific Airport Group (GAP) - Q1 2022 Financial Summary
Business Context and Reporting Period
This Form 6-K filing covers the consolidated unaudited results for Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (GAP) for the first quarter ended March 31, 2022 (1Q22). The company operates 12 airports in Mexico's Pacific region and two international airports in Jamaica (Montego Bay and Kingston). The reporting period highlights a significant recovery in passenger traffic, exceeding 2019 pre-pandemic levels by 5.8% and 2021 levels by 69.9%.
Key Financial Metrics
| Metric | 1Q22 (MXN Millions) | 1Q21 (MXN Millions) | Change vs 1Q21 |
|---|---|---|---|
| Total Revenues | 6,012.6 | 3,638.0 | +65.3% |
| EBITDA | 3,708.4 | 1,757.2 | +111.0% |
| Net Income | 2,327.5 | 1,037.6 | +124.3% |
| Operating Cash Flow | 2,168.7 | 1,808.9 | +19.9% |
| Cash and Equivalents (End of Period) | 16,899.9 | 14,728.4 | +14.7% |
| EBITDA Margin (excl. IFRIC 12) | 73.8% | 64.9% | +8.9 pts |
Debt and Liquidity: The company issued MXN 5,000.0 million in long-term debt securities to finance investments and refinance a MXN 1,500.0 million maturity. Total liabilities increased by MXN 8,643.1 million year-over-year, primarily due to new debt issuance and increased accounts payable.
Material Changes vs. Prior Period
- Revenue Growth: Aeronautical services revenue surged 85.9% and non-aeronautical revenue rose 83.6%, driven by a 69.9% increase in total passenger traffic. Revenue per passenger increased 9.2%.
- Cost Management: Cost of services increased only 15.4%, significantly lagging behind traffic growth due to strict cost controls. However, concession taxes and technical assistance fees rose 86.9% and 97.1% respectively, tied to revenue growth.
- Profitability: Operating income increased 150.6% to MXN 3,143.9 million. The operating margin (excluding IFRIC 12 effects) expanded to 62.6% from 46.3% in 1Q21.
- Financial Costs: Net financial expenses increased 244.2% to MXN 272.9 million, driven by higher interest rates, increased debt levels, and a reduction in foreign exchange gains.
Outlook, Risks, and Management Commentary
Management Commentary: Management attributes the strong performance to the recovery of tourism and business segments. The company continues to support commercial clients with rent discounts based on traffic decreases, though revenue sharing often exceeds minimum rents. No reserve provision for expected credit losses was deemed necessary due to the improved liquidity of airline and commercial clients.
Risks and Contingencies:
- Pandemic Uncertainty: While no business interruption is currently expected, the company cannot ensure the negative effects of the pandemic will continue to decrease or that global economic conditions will improve.
- Financing: The company cannot predict future availability of financing or general credit conditions.
- IFRIC 12 Impact: A significant portion of revenue and costs relates to "Improvements to concession assets" (IFRIC 12), which has no cash impact. Investors are cautioned that margins including these items may not be comparable to standard cash-based metrics.
Guidance: The filing does not provide specific numerical guidance for future quarters but states the company will continue monitoring pandemic effects and informing the market of material updates.
Key Facts for Investor Verification
- Traffic Recovery: Verify the sustainability of the 5.8% growth in total passengers compared to 1Q19, noting that international traffic at Montego Bay remains 30.5% below 1Q19 levels.
- Debt Refinancing: Confirm the terms and interest rates of the new MXN 5,000 million debt issuance used to refinance the "GAP-17" securities.
- IFRIC 12 Adjustments: Review financial performance excluding IFRIC 12 items to assess true cash-generating operational efficiency, as these non-cash items significantly inflate reported revenue and costs.
- Share Repurchases: Note the MXN 499.5 million spent on share repurchases in 1Q22, reducing the share count and impacting per-share metrics.
- Cost Inflation: Monitor the trajectory of concession taxes and technical assistance fees, which are variable costs that rise with revenue and could compress margins if traffic growth slows.