Pacific Airport Group (GAP) - Q1 2024 Financial Summary
Business Context and Reporting Period
This Form 6-K filing reports the unaudited consolidated results for Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (GAP) for the first quarter ended March 31, 2024 (1Q24). The company operates 12 airports in Mexico's Pacific region and two international airports in Jamaica (Montego Bay and Kingston). Financial figures are presented in Mexican Pesos (Ps.) and prepared under International Financial Reporting Standards (IFRS).
Key Financial Metrics
| Metric | 1Q23 | 1Q24 | Change |
|---|---|---|---|
| Total Revenues | Ps. 8,339.9 million | Ps. 8,495.0 million | +1.9% |
| EBITDA | Ps. 4,696.1 million | Ps. 4,649.0 million | -1.0% |
| EBITDA Margin (excl. IFRIC-12) | 72.3% | 69.8% | -2.5 pts |
| Net Income | Ps. 2,565.2 million | Ps. 2,470.7 million | -3.7% |
| Comprehensive Income | Ps. 2,149.9 million | Ps. 2,164.2 million | +0.7% |
| Operating Cash Flow | Ps. 4,045.7 million | Ps. 4,534.3 million | +12.1% |
| Cash & Equivalents (End of Period) | Ps. 18,890.9 million | Ps. 11,541.6 million | -38.9% |
Material Changes vs. Prior Period
- Revenue Mix: Total revenues grew 1.9%, driven by a 15.2% increase in non-aeronautical services (Ps. 1,694.4 million), which offset a 1.3% decline in aeronautical services (Ps. 4,962.1 million). Non-aeronautical growth was fueled by third-party businesses (food/beverage, duty-free, leasing) and direct operations (convenience stores, advertising).
- Cost Pressures: Total operating costs rose 5.8% to Ps. 4,509.0 million. Key drivers included a 17.3% increase in concession taxes (due to a regulatory fee hike from 5% to 9%) and a 15.7% rise in employee costs. Cost of services increased 10.9%.
- Profitability: Operating income decreased 2.3% to Ps. 3,986.0 million. EBITDA declined 1.0% to Ps. 4,649.0 million. Margins compressed due to higher costs outpacing revenue growth.
- Passenger Traffic: Total terminal passengers increased marginally by 0.1% (15.61 million). International traffic grew 7.5%, while domestic traffic fell 6.3%. Significant declines were noted at Guadalajara (-9.7% domestic) and Mexicali (-16.8% domestic), while Los Mochis (+33.8%) and Manzanillo (+32.7%) saw strong growth.
- Debt and Liquidity: The company issued Ps. 3,000.0 million in long-term bonds to refinance maturing debt ("GAP 19"). Cash balances decreased significantly by Ps. 7,349.3 million, primarily due to investing activities and exchange rate effects.
Outlook, Risks, and Unusual Items
- Regulatory Change: A new Mexican Federal Duties Law increased the concession fee from 5% to 9% of aeronautical revenues effective January 1, 2024. The 4% excess payment is being recognized as an intangible asset (Ps. 175.5 million in 1Q24) to be amortized starting in 2025.
- Currency Impact: The Mexican peso appreciated 9.1% against the U.S. dollar in 1Q24 compared to 1Q23. This appreciation reduced reported revenues from Jamaican airports when converted to pesos, despite an 8.8% increase in USD terms.
- Forward-Looking Statements: Management notes that future results depend on economic conditions, industry trends, and capital expenditure plans. No specific numerical guidance for the full year was provided in this filing.
- IFRIC-12 Impact: Revenues and costs related to "Improvements to concession assets" (IFRIC-12) are significant (approx. Ps. 1.8 billion) but have no cash impact. Margins excluding these items are lower than reported total margins.
Investor Verification Checklist
- Concession Tax Impact: Verify the long-term effect of the 4% fee increase on future operating margins and the amortization schedule of the newly recognized intangible asset.
- Currency Sensitivity: Assess the exposure of Jamaican airport revenues to USD/MXN exchange rate fluctuations, which significantly impacted Q1 results.
- Domestic Traffic Trends: Investigate the causes behind the 6.3% decline in domestic passenger traffic, particularly at major hubs like Guadalajara and Mexicali.
- Liquidity Position: Monitor the reduction in cash and cash equivalents (down 38.9%) and the company's ability to fund capital expenditures while servicing debt.
- Non-Aeronautical Growth: Confirm the sustainability of the 15.2% growth in non-aeronautical revenues, specifically the 93.3% surge in leasing of space.