Grupo Aeroportuario del Pacifico Announces Results for the Third Quarter of 2021

·42 min read

GUADALAJARA, Mexico, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE: PAC; BMV: GAP) (“the Company” or “GAP”) reported its consolidated results for the third quarter ended September 30, 2021 (3Q21) (at the end of this report, tables are presented comparing passenger traffic and consolidated results for 2021 compared to 2019, in order to illustrate the recovery of these metrics and their trend). Figures are unaudited and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

COVID-19 Impact

During the nine months ended September 30, 2021 (9M21), passenger traffic increased 57.9% as compared to the same period of 2020 and decreased 16.1% as compared to 2019, demonstrating a better-than-expected recovery, despite continuing restrictions on international travel. The Canadian Government reopened non-essential flights beginning on September 7 for passengers meeting certain eligibility requirements including being fully vaccinated and presenting a negative COVID-19 PCR test. For its part, the United States Government announced that beginning in November it would begin gradually reopening land-border crossings to fully vaccinated individuals, this could bring a positive result for the Tijuana airport.

Company measures during 3Q21:

  • The Company continued supporting commercial clients during the quarter by granting discounts on guaranteed minimum rent amounts in accordance with the percentage decrease in passenger traffic at each airport as compared to 3Q19, while maintaining our revenue share. With regards to support for the airlines, the Company continued its incentive program in accordance with the reactivation of routes and frequencies that were held prior to the pandemic.

  • Operating cost control measures were maintained; however, because of the trend in passenger traffic during 3Q21, we have gradually increased certain costs such as maintenance, security, personnel, cleaning services, among others related with the quality and passenger experience.

Impact of COVID-19 on the Company’s Financial Position:

During 3Q21, results were significantly better as compared to 3Q20. The Company generated positive EBITDA of Ps. 3,098.4 million as a result of a 72.5% increase in total revenues and an increase in cost of services of 16.8%.

In 3Q21, operating activities continued generating positive cash flow. The Company reported a financial position of cash and cash equivalents as of September 30, 2021, of Ps. 10,650.8 million (30.0% lower than the 3Q20 balance). During 3Q21, the Company made a capital reduction payment of Ps. 7.80 per share outstanding for a total of Ps. 4,014.7 million and a maturity payment on the “GAP16” debt securities of Ps. 1,500.0 million from the proceeds of the issuance of debt securities during 2Q21. Additionally, Ps. 1,151.3 million in share repurchases were made during 3Q21.

In 3Q21, the Company performed an assessment of the portfolio risk of our airlines and commercial clients in terms of liquidity. Because of this assessment, the Company recognized a reserve provision of Ps. 11.6 million for expected credit losses in costs of operation.

During 3Q21, the Company continued evaluating the possible adverse impacts of the pandemic on its financial condition and operating results. The Company also reviewed key indicators and impairment tests of significant long-term assets, expected credit losses and recovery of assets due to deferred taxes. In this evaluation, the Company reviewed financial results for the short, medium, and long term, concluding that a significant deterioration of the Company’s assets is not expected. As such, the Company does not foresee a business interruption or closing operations at any of its airports. However, the Company cannot ensure that the negative effect of the pandemic will continue decreasing in the coming quarter, nor can it ensure that local and global economic conditions will improve. The Company can also not predict the availability of financing, or what general credit conditions will be. The Company will continue to monitor the pandemic’s adverse effects on the results of operations and will continue informing the market in a timely manner regarding future material updates on airport operations and the measures adopted for preserving liquidity and ensuring business continuity.

Summary of Results 3Q21 vs. 3Q20 (and 3Q19 for purposes of illustrating the recovery trend):

  • The sum of aeronautical and non-aeronautical services revenues increased by Ps. 2,382.9 million, or 120.9% (Ps. 835.8 million, or 23.8%, as compared to 3Q19). Total revenues increased by Ps. 2,224.7 million, or 72.5% (Ps. 977.4 million, or 22.6%, as compared to 3Q19).

  • Cost of services increased by Ps. 109.1 million, or 16.8% (cost of services increased Ps. 89.0 million, or 13.3%, as compared to 3Q19).

  • Income from operations increased by Ps. 1,994.2 million, or 340.2% (Ps. 578.0 million, or 28.9%, as compared to 3Q19).

  • EBITDA increased by Ps. 2,005.2 million, or 183.4% (Ps. 656.4 million, or 26.9%, as compared to 3Q19), going from Ps. 1,093.2 million in 3Q20 to Ps. 3,098.4 million in 3Q21. EBITDA margin (excluding the effects of IFRIC-12) increased from 55.6% in 3Q20 to 71.3% in 3Q21 (EBITDA margin (excluding the effects of IFRIC-12) was 69.5% in 3Q19).

  • Net comprehensive income increased Ps. 1,743.0 million, or 641.5% (Ps. 558.7 million, or 38.4%, as compared to 3Q19), from Ps. 271.7 million in 3Q20 to Ps. 2,014.7 million in 3Q21.

Passenger Traffic

During 3Q21, total passengers at the Company’s 14 airports increased by 6,010.9 thousand passengers, an increase of 105.1%, compared to 3Q20 (total passengers decreased by 133.9 thousand passengers, or 1.1%, as compared to 3Q19). During 3Q21, the following new routes were opened:

National:

Airline

Departure

Arrival

Opening date

Frequencies

Aeromar

Aguascalientes

Monterrey

July 1, 2021

2 weekly frequencies

Aeromar

La Paz

Mazatlán

July 2, 2021

3 weekly frequencies


Note: Frequencies can vary without prior notice.

International:

Airline

Departure

Arrival

Opening date

Frequencies

Spirit

Puerto Vallarta

Dallas Fort Worth

July 1, 2021

3 weekly frequencies

Spirit

Puerto Vallarta

Houston

July 1, 2021

3 weekly frequencies

Spirit

Puerto Vallarta

Los Ángeles

July 1, 2021

7 weekly frequencies

Note: Frequencies can vary without prior notice.

Domestic Terminal Passengers – 14 airports (in thousands):

Airport

3Q20

3Q21

Change

9M20

9M21

Change

Guadalajara

1,260.0

2,246.8

78.3

%

3,990.3

5,998.2

50.3

%

Tijuana *

1,211.0

1,837.2

51.7

%

3,091.3

5,021.2

62.4

%

Los Cabos

305.8

558.0

82.5

%

784.6

1,445.4

84.2

%

Puerto Vallarta

230.7

540.6

134.3

%

632.5

1,294.2

104.6

%

Guanajuato

241.5

401.8

66.4

%

722.0

1,082.7

50.0

%

Montego Bay

0.0

0.0

0.0

%

1.0

0.0

(100.0

%)

Hermosillo

194.5

390.0

100.5

%

649.1

1,008.3

55.4

%

Mexicali

151.7

300.9

98.4

%

475.5

764.1

60.7

%

Morelia

97.3

138.4

42.3

%

269.2

394.1

46.4

%

La Paz

127.1

237.4

86.8

%

374.1

635.1

69.7

%

Aguascalientes

87.7

162.3

85.1

%

245.3

404.7

65.0

%

Kingston

0.0

0.3

100.0

%

1.3

1.0

(26.5

%)

Los Mochis

38.3

89.4

133.6

%

135.7

252.0

85.8

%

Manzanillo

9.2

20.8

126.7

%

34.3

61.0

78.1

%

Total

3,954.7

6,924.0

75.1

%

11,406.2

18,362.1

61.0

%

*CBX users are classified as international passengers.

International Terminal Passengers – 14 airports (in thousands):

Airport

3Q20

3Q21

Change

9M20

9M21

Change

Guadalajara

528.4

1,098.9

108.0

%

1,646.2

2,643.2

60.6

%

Tijuana *

382.1

738.5

93.3

%

1,207.1

1,901.1

57.5

%

Los Cabos

284.2

944.3

232.3

%

1,259.4

2,462.1

95.5

%

Puerto Vallarta

118.5

529.7

347.1

%

1,229.8

1,457.9

18.5

%

Guanajuato

68.7

198.5

189.2

%

233.8

447.3

91.4

%

Montego Bay

174.5

799.0

357.9

%

1,324.1

1,760.6

33.0

%

Hermosillo

8.1

30.7

280.7

%

28.7

76.6

166.5

%

Mexicali

0.3

1.8

419.0

%

1.6

3.6

120.1

%

Morelia

53.2

116.1

118.1

%

162.1

292.9

80.7

%

La Paz

0.9

5.4

483.7

%

4.7

13.7

191.7

%

Aguascalientes

22.6

63.4

180.2

%

77.9

152.0

95.0

%

Kingston

119.3

268.0

124.7

%

494.4

566.8

14.6

%

Los Mochis

0.3

3.1

874.1

%

1.6

7.1

329.7

%

Manzanillo

3.0

8.2

170.5

%

32.6

29.7

(8.9

%)

Total

1,764.2

4,805.8

172.4

%

7,704.1

11,814.5

53.4

%

*CBX users are classified as international passengers.

Total Terminal Passengers – 14 airports (in thousands):

Airport

3Q20

3Q21

Change

9M20

9M21

Change

Guadalajara

1,788.4

3,345.7

87.1

%

5,636.5

8,641.5

53.3

%

Tijuana *

1,593.1

2,575.7

61.7

%

4,298.4

6,922.3

61.0

%

Los Cabos

590.0

1,502.3

154.6

%

2,044.0

3,907.5

91.2

%

Puerto Vallarta

349.2

1,070.3

206.5

%

1,862.3

2,752.1

47.8

%

Guanajuato

310.1

600.3

93.6

%

955.8

1,530.0

60.1

%

Montego Bay

174.5

799.0

357.9

%

1,325.1

1,760.6

32.9

%

Hermosillo

202.5

420.7

107.7

%

677.8

1,084.9

60.1

%

Mexicali

152.0

302.7

99.2

%

477.2

767.8

60.9

%

Morelia

150.5

254.5

69.1

%

431.3

687.0

59.3

%

La Paz

128.0

242.8

89.7

%

378.8

648.8

71.3

%

Aguascalientes

110.3

225.7

104.6

%

323.2

556.7

72.2

%

Kingston

119.3

268.3

124.9

%

495.7

567.7

14.5

%

Los Mochis

38.6

92.5

139.7

%

137.3

259.1

88.7

%

Manzanillo

12.2

29.0

137.6

%

66.8

90.7

35.7

%

Total

5,718.9

11,729.8

105.1

%

19,110.2

30,176.6

57.9

%

*CBX users are classified as international passengers.

CBX Users (in thousands):

Airport

3Q20

3Q21

Change

9M20

9M21

Change

Tijuana

380.3

725.5

90.8

%

1,198.0

1,878.2

56.8

%

Consolidated Results for the Third Quarter of 2021 (in thousands of pesos):

3Q20

3Q21

Change

Revenues

Aeronautical services

1,526,645

3,316,240

117.2

%

Non-aeronautical services

444,126

1,037,416

133.6

%

Improvements to concession assets (IFRIC-12)

1,097,300

939,145

(14.4

%)

Total revenues

3,068,071

5,292,801

72.5

%

Operating costs

Costs of services:

650,245

759,323

16.8

%

Employee costs

248,704

276,236

11.1

%

Maintenance

83,742

136,477

63.0

%

Safety, security & insurance

108,553

124,716

14.9

%

Utilities

101,137

111,739

10.5

%

Other operating expenses

108,109

110,155

1.9

%

Technical assistance fees

58,254

146,706

151.8

%

Concession taxes

176,469

353,984

100.6

%

Depreciation and amortization

506,982

518,005

2.2

%

Cost of improvements to concession assets (IFRIC-12)

1,097,300

939,145

(14.4

%)

Other (income)

(7,387

)

(4,735

)

(35.9

%)

Total operating costs

2,481,863

2,712,428

9.3

%

Income from operations

586,209

2,580,373

340.2

%

Financial Result

(241,200

)

(214,047

)

(11.3

%)

Income before income taxes

345,009

2,366,325

585.9

%

Income taxes

7,432

(586,599

)

7992.9

%

Net income

352,441

1,779,726

405.0

%

Currency translation effect

(127,539

)

60,978

(147.8

%)

Cash flow hedges, net of income tax

58,447

164,213

181.0

%

Remeasurements of employee benefit – net income tax

(11,633

)

9,777

184.0

%

Comprehensive income

271,716

2,014,694

641.5

%

Non-controlling interest

55,306

(45,769

)

(182.8

%)

Comprehensive income attributable to controlling interest

327,021

1,968,925

502.1

%

3Q20

3Q21

Change

EBITDA

1,093,190

3,098,378

183.4

%

Comprehensive income

271,716

2,014,694

641.5

%

Comprehensive income per share (pesos)

0.5170

3.9143

657.1

%

Comprehensive income per ADS (US dollars)

0.2514

1.9036

657.1

%

Operating income margin

19.1

%

48.8

%

155.2

%

Operating income margin (excluding IFRIC-12)

29.7

%

59.3

%

99.3

%

EBITDA margin

35.6

%

58.5

%

64.3

%

EBITDA margin (excluding IFRIC-12)

55.6

%

71.3

%

28.2

%

Costs of services and improvements / total revenues

57.0

%

32.1

%

(43.7

%)

Cost of services / total revenues (excluding IFRIC-12)

33.0

%

17.4

%

(47.1

%)

- Net income and comprehensive income per share for 3Q21 were calculated based on 514,705,326 shares outstanding as of September 30, 2021, and for 3Q20 were calculated based on 525,575,547 shares outstanding as of September 30, 2020. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 20.5620 per U.S. dollar (the noon buying rate on September 30, 2021, as published by the U.S. Federal Reserve Board).
- For purposes of the consolidation of the Montego Bay and Kingston airports, the average three-month exchange rate of Ps. 20.0092 per U.S. dollar for the three months ended September 30, 2021, was used.

Revenues (3Q21 vs. 3Q20)

  • Aeronautical services revenues increased by Ps. 1,789.6 million, or 117.2%.

  • Non-aeronautical services revenues increased by Ps. 593.3 million, or 133.6%.

  • Revenues from improvements to concession assets decreased by Ps. 158.2 million, or 14.4%.

  • Total revenues increased by Ps. 2,224.7 million, or 72.5%.

  • The change in aeronautical services revenues was composed primarily of the following factors:

    1. Revenues at the Company’s Mexican airports increased by Ps. 1,497.6 million or 110.5% compared to 3Q20, mainly as a result of the 96.5% increase in passenger traffic and the adjustment in maximum rates.

    2. Revenues from the Montego Bay airport increased by Ps. 225.5 million, or 274.5%, compared to 3Q20. This was mainly due to the 357.9% increase in passenger traffic. The passenger traffic increase was partially offset by the 9.5% appreciation of the peso versus the U.S. dollar during 3Q21, which went from an average exchange rate of Ps. 22.1055 in 3Q20 to Ps. 20.0092 in 3Q21.

    3. Revenues from the Kingston airport increased by Ps. 66.4 million, or 74.4% compared to 3Q20, mainly due to a 124.9% increase in passenger traffic. The appreciation of the peso versus the dollar partially offset the increase in passenger traffic.

  • The change in non-aeronautical services revenues was composed primarily of the following factors :

    1. The Company’s revenues from the Mexican airports increased by Ps. 499.2 million, or 135.7%, compared to 3Q20. Revenues from businesses operated by third parties increased by Ps. 353.7 million. This was mainly due to the recovery of passenger traffic that resulted in the gradual phase-out of discounts to our tenants. The business lines that increased the most were food and beverage, duty-free stores, retail, car rentals, time shares and ground transportation, which jointly increased by Ps. 329.3 million, or 180.0%. Revenues from businesses operated directly by the Company increased by Ps. 137.0 million, or 145.0%, while the recovery of costs increased by Ps. 8.4 million, or 30.2%.

    2. Revenues from the Montego Bay airport increased by Ps. 72.4 million, or 138.8%, compared to 3Q20. Revenues in U.S. dollars increased by US$ 3.9 million, or 163.8%. However, the 9.5% appreciation of the peso versus the dollar partially offset the revenue increase in 3Q21.

    3. Revenues from the Kingston airport increased by Ps. 21.7 million, or 89.8%, compared to 3Q20. Revenues in U.S. dollars increased by US$ 1.2 million, or 109.7%.

3Q20

3Q21

Change

Businesses operated by third parties:

Duty-free

54,116

153,167

183.0

%

Food and beverage

44,320

163,585

269.1

%

Retail

43,445

119,901

176.0

%

Car rentals

51,512

112,400

118.2

%

Leasing of space

48,312

65,596

35.8

%

Time shares

20,612

54,657

165.2

%

Ground transportation

18,720

36,733

96.2

%

Communications and financial services

11,082

22,325

101.4

%

Other commercial revenues

16,612

24,357

46.6

%

Total

308,731

752,719

143.8

%

Businesses operated directly by us:

Car parking

58,820

106,057

80.3

%

VIP lounges

11,887

60,774

411.3

%

Advertising

9,432

11,813

25.2

%

Convenience stores

18,017

59,391

229.6

%

Total

98,156

238,034

142.5

%

Recovery of costs

37,239

46,661

25.3

%

Total Non-aeronautical Revenues

444,126

1,037,416

133.6

%

Figures expressed in thousands of Mexican pesos.

  • Revenues from improvements to concession assets1
    Revenues from improvements to concession assets (IFRIC-12) decreased by Ps. 158.2 million, or 14.4%, compared to 3Q20, mainly in:

  1. The Company’s Mexican airports, which decreased by Ps. 151.8 million, or 14.1%, as a result of the adjustment in committed investments in the Master Development Program for the 2020-2024 period.

  2. Improvements to concession assets at the Montego Bay airport decreased Ps. 6.4 million, or 30.1%. During 3Q21, no investments in improvements to concession assets were made at the Kingston airport.

________________________

[1] Revenues from improvements to concession assets are recognized in accordance with International Financial Reporting Interpretation Committee 12 “Service Concession Arrangements” (IFRIC 12), but this recognition does not have a cash impact or an impact on the Company’s operating results. Amounts included as a result of the recognition of IFRIC 12 are related to construction of infrastructure in each quarter to which the Company has committed in accordance with the Company’s Master Development Programs in Mexico and Capital Development Program in Jamaica. All margins and ratios calculated using “Total Revenues” include revenues from improvements to concession assets (IFRIC 12), and, consequently, such margins and ratios may not be comparable to other ratios and margins, such as EBITDA margin, operating margin or other similar ratios that are calculated based on those results of the Company that do have a cash impact.

Total operating costs increased by Ps. 230.6 million, or 9.3%, compared to 3Q20, mainly due to a Ps. 266.0 million, or 113.3%, increase in concession taxes and technical assistance fees, and a Ps. 109.1 million, or 16.8% increase in cost of services. This increase was partially offset by a Ps. 158.2 million, or 14.4%, decrease in the cost of improvements to the concession assets (IFRIC-12). Excluding the cost of improvements to concession assets, operating costs increased Ps. 388.8 million, or 28.1%. This was composed primarily of the following factors:

Mexican Airports:

  • Operating costs increased by Ps. 173.5 million, or 8.4%, compared to 3Q20, primarily due to a combined Ps. 184.1 million, or 127.9%, increase in technical assistance fees and concession taxes, a Ps. 115.4 million, or 24.3%, increase in cost of services and a Ps. 23.6 million, or 6.3%, increase in depreciation and amortization. This increase was partially offset by a Ps. 151.8 million, or 14.1%, decrease in the cost of improvements to the concession assets (IFRIC-12). Excluding this cost, operating costs increased by Ps. 325.3 million or 32.9%.

The increase in the cost of services during 3Q21 was mainly due to:

  • Maintenance costs increased by Ps. 51.4 million, or 83.5%, compared to 3Q20.

  • Employee costs increased Ps. 24.1 million, or 11.8%, compared to 3Q20, mainly due to the recognition of labor provisions in accordance with the Labor Reform Law and the hiring of additional personnel as required for airport operations due to the recovery of passenger traffic.

  • Safety, security and insurance costs increased Ps. 23.9 million, or 35.7%, compared to 3Q20, mainly due to an increase in the number of security staff as compared to 3Q20 when the partial closure of some operating areas reduced the need for personnel.

  • Utilities increased by Ps. 12.3 million or 19.4%, compared to 3Q20.

Montego Bay Airport:

  • Operating costs increased by Ps. 18.7 million, or 7.3%, compared to 3Q20, mainly due to a Ps. 36.8 million, or 281.1%, increase in concession taxes. The increase was partially offset by a Ps. 6.3 million, or 30.1%, decrease in cost of improvements to the concession assets (IFRIC-12), a Ps. 12.9 million, or 9.8%, decrease in depreciation and amortization as a result of the 9.5% appreciation of the Mexican peso against the U.S. dollar.

Kingston Airport:

  • Operating costs increased by Ps. 38.4 million, or 24.1% compared to 3Q20, mainly due to a Ps. 45.1 million, or 58.0%, increase in concession taxes and was partially offset by a Ps. 6.9 million, or 8.7%, decrease in the cost of services.

Operating margin went from 19.1% in 3Q20 to 48.8% in 3Q21. Excluding the effects of IFRIC-12, operating margin went from 29.7% to 59.3% in 3Q21. Operating income increased Ps. 1,994.2 million, or 340.2%, compared to 3Q20.

EBITDA margin went from 35.6% in 3Q20 to 58.5% in 3Q21. Excluding the effects of IFRIC-12, EBITDA margin went from 55.6% in 3Q20 to 71.3% in 3Q21. The nominal value of EBITDA increased Ps. 2,005.2 million, or 183.4%, compared to 3Q20.

Financial cost decreased by Ps. 27.2 million, or 11.3%, from a net expense of Ps. 241.2 million in 3Q20 to a net expense of Ps. 214.0 million in 3Q21. This decrease was mainly the result of:

  • Foreign exchange rate fluctuations, which went from income of Ps. 12.4 million in 3Q20 to income of Ps. 87.6 million in 3Q21. This generated an increase in the foreign exchange gain of Ps. 75.2 million. The currency translation effect income increased Ps. 188.5 million, compared to 3Q20.

  • An increase in interest expenses of Ps. 22.5 million, or 5.9%, compared to 3Q20, mainly due to higher debt as a result of the issuance of long-term bonds.

  • Interest income decreased by Ps. 25.5 million, or 20.1%, compared to 3Q20, mainly due to a decrease in the average balance of cash and cash equivalents during 3Q21 as compared to 3Q20.

In 3Q21, comprehensive income increased Ps. 1,743.0 million, or 641.5%, compared to 3Q20. This increase was mainly due to the Ps. 2,021.3 million increase in profit before taxes derived from the significant increase in passenger traffic, as well as the Ps. 188.5 million increase in currency translation effect. This increase was partially offset by an increase in income taxes of Ps. 594.0 million.

During 3Q21, net income increased by Ps. 1,427.3 million, or 405.0%, compared to 3Q20. Income taxes increased by Ps. 487.7 million and the benefit for deferred taxes decreased by Ps. 106.3 million, mainly due to the application of tax losses in Ps. 62.9 million and a decrease in the inflation rate, that went from 1.7% in 3Q20 to 1.5% in 3Q21.

Consolidated Results for the First Nine Months of 2021 (in thousands of pesos):

9M20

9M21

Change

Revenues

Aeronautical services

5,202,303

8,412,610

61.7

%

Non-aeronautical services

1,797,608

2,584,554

43.8

%

Improvements to concession assets (IFRIC-12)

2,522,058

2,829,371

12.2

%

Total revenues

9,521,968

13,826,535

45.2

%

Operating costs

Costs of services:

2,030,357

2,107,665

3.8

%

Employee costs

735,170

809,698

10.1

%

Maintenance

295,547

339,953

15.0

%

Safety, security & insurance

337,958

373,147

10.4

%

Utilities

272,456

284,503

4.4

%

Other operating expenses

389,226

300,364

(22.8

%)

Technical assistance fees

199,296

370,504

85.9

%

Concession taxes

714,896

871,641

21.9

%

Depreciation and amortization

1,494,213

1,531,129

2.5

%

Cost of improvements to concession assets (IFRIC 12)

2,522,058

2,829,371

12.2

%

Other expense (income)

1,635

(5,372

)

(428.5

%)

Total operating costs

6,962,454

7,704,938

10.7

%

Income from operations

2,559,514

6,121,597

139.2

%

Financial Result

(567,380

)

(699,548

)

23.3

%

Income before income taxes

1,992,134

5,422,049

172.2

%

Income taxes

(413,839

)

(1,180,768

)

185.3

%

Net income

1,578,295

4,241,281

168.7

%

Currency translation effect

1,223,592

(24,246

)

(102.0

%)

Cash flow hedges, net of income tax

(289,658

)

404,240

239.6

%

Remeasurements of employee benefit – net income tax

(21,338

)

11,614

154.4

%

Comprehensive income

2,490,891

4,632,889

86.0

%

Non-controlling interest

(108,803

)

(45,120

)

58.5

%

Comprehensive income attributable to controlling interest

2,382,088

4,587,769

92.6

%

9M20

9M21

Change

EBITDA

4,053,727

7,652,727

88.8

%

Comprehensive income

2,490,891

4,632,889

86.0

%

Comprehensive income per share (pesos)

4.7394

9.0011

89.9

%

Comprehensive income per ADS (US dollars)

2.3049

4.3775

89.9

%

Operating income margin

26.9

%

44.3

%

64.7

%

Operating income margin (excluding IFRIC-12)

36.7

%

55.7

%

51.8

%

EBITDA margin

42.6

%

55.3

%

30.0

%

EBITDA margin (excluding IFRIC-12)

57.9

%

69.6

%

20.2

%

Costs of services and improvements / total revenues

47.8

%

35.7

%

(25.3

%)

Cost of services / total revenues (excluding IFRIC-12)

29.0

%

19.2

%

(33.9

%)

- Net income and comprehensive income per share for the nine-month period ended September 30, 2021, were calculated based on 514,705,326 shares outstanding as of September 30, 2021, and for the nine-month period ended September 30, 2020, were calculated based on 525,575,547 shares outstanding as of September 30, 2020. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 20.5620 per U.S. dollar (the noon buying rate on September 30, 2021, as published by the U.S. Federal Reserve Board).
- For purposes of the consolidation of the Montego Bay and Kingston airports, the average nine-month exchange rate of Ps. 20.1262 per U.S. dollar for the nine months ended September 30, 2021, was used.

Revenues (9M21 vs 9M20)

  • Aeronautical services revenues increased by Ps. 3,210.3 million, or 61.7%.

  • Non-aeronautical services revenues increased by Ps. 786.9 million, or 43.8%.

  • Revenues from improvements to concession assets increased by Ps. 307.3 million, or 12.2%.

  • Total revenues increased by Ps. 4,304.6 million, or 45.2%.

  • The change in aeronautical services revenues was composed of the following factors:

    1. Revenues at the Company’s Mexican airports increased by Ps. 3,027.4 million or 69.8% during the period from January to September 2021, mainly as a result of the 61.1% increase in passenger traffic and the increase in the maximum rates applicable for 2021 as a result of the Extraordinary Review Process of our Master Development Program.

    2. Revenues from the Montego Bay airport increased by Ps. 102.1 million, or 17.3%, compared to the same period in 2020. This was mainly due to the 32.9% increase in passenger traffic and partially offset by the 7.6% appreciation of the peso versus the U.S. dollar during the nine months ended September 30, 2021.

    3. Revenues from the Kingston airport increased by Ps. 80.8 million, or 29.4% compared to 2020, mainly due to a 14.5% increase in passenger traffic and partially offset by the 7.6% appreciation of the peso versus the dollar during the period from January to September 2021.

  • The change in non-aeronautical services revenues was composed primarily of the following factors :

    1. The revenues from the Company’s Mexican airports increased by Ps. 717.7 million, or 49.8%, compared to 2020. Revenues from businesses operated by third parties increased by Ps. 547.0 million, or 58.2%. This was mainly due to the recovery of passenger traffic that resulted in the gradual phase-out of discounts to tenants. The business lines that increased the most were food and beverage, duty-free stores, retail, car rentals, time shares and other commercial income, which jointly increased by Ps. 494.7 million, or 70.1%. Revenues from businesses operated directly by the Company increased by Ps. 164.7 million, or 41.0%. This increase was primarily due to an increase in revenue from parking, convenience stores and VIP lounges which jointly increased Ps. 195.9 million and was partially offset by a Ps. 31.2 million decrease in revenues from publicity. The recovery of costs increased by Ps. 6.0 million, or 6.0%.

    2. Revenues from the Montego Bay airport increased by Ps. 61.8 million, or 24.2%, compared to 2020, primarily due to a 32.9% increase in passenger traffic.

    3. The consolidation of the Kingston airport contributed an increase of Ps. 7.4 million, or 7.4%, to non-aeronautical services revenues as compared to 2020.

9M20

9M21

Change

Businesses operated by third parties:

Duty-free

231,790

375,606

62.0

%

Food and beverage

221,641

367,414

65.8

%

Retail

186,678

285,563

53.0

%

Car rentals

208,228

288,053

38.3

%

Leasing of space

153,509

175,840

14.5

%

Time shares

74,155

134,677

81.6

%

Ground transportation

69,393

97,805

40.9

%

Communications and financial services

48,010

61,200

27.5

%

Other commercial revenues

55,676

82,678

48.5

%

Total

1,249,080

1,868,836

49.6

%

Businesses operated directly by us:

Car parking

160,054

273,322

70.8

%

VIP lounges

112,574

145,184

29.0

%

Advertising

67,105

33,669

(49.8

%)

Convenience stores

76,829

128,436

67.2

%

Total

416,562

580,611

39.4

%

Recovery of costs

131,966

135,107

2.4

%

Total Non-aeronautical Revenues

1,797,608

2,584,554

43.8

%

Figures expressed in thousands of Mexican pesos.

  • Revenues from improvements to concession assets2
    Revenues from improvements to concession assets (IFRIC-12) increased by Ps. 307.3 million, or 12.2%, compared to 2020, mainly in:

    1. The Company’s Mexican airports, which increased by Ps. 351.7 million, or 14.5%, as a result of the increase in committed investments in the Master Development Program for the 2020-2024 period.

    2. Improvements to concession assets at the Montego Bay airport decreased Ps. 44.4 million, or 44.3%. During the 2021 period, no investments in improvements to concession assets were made at the Kingston airport.

________________________
[2] Revenues from improvements to concession assets are recognized in accordance with International Financial Reporting Interpretation Committee 12 “Service Concession Arrangements” (IFRIC 12), but this recognition does not have a cash impact or an impact on the Company’s operating results. Amounts included as a result of the recognition of IFRIC 12 are related to construction of infrastructure in each quarter to which the Company has committed in accordance with the Company’s Master Development Programs in Mexico and Capital Development Program in Jamaica. All margins and ratios calculated using “Total Revenues” include revenues from improvements to concession assets (IFRIC 12), and, consequently, such margins and ratios may not be comparable to other ratios and margins, such as EBITDA margin, operating margin or other similar ratios that are calculated based on those results of the Company that do have a cash impact.

Total operating costs increased by Ps. 742.5 million, or 10.7%, compared to the same period of 2020, mainly due to a Ps. 328.0 million, or 35.9%, increase in concession taxes and technical assistance fees, Ps. 307.3 million, or 12.2%, increase in the cost of improvements to the concession assets (IFRIC-12) and Ps. 77.3 million, or 3.8%, increase in the cost of services. Excluding the cost of improvements to concession assets (IFRIC-12), operating costs increased Ps. 435.2 million, or 9.8%. This was composed primarily of the following factors:

Mexican Airports:

  • Operating costs increased by Ps. 889.9 million, or 16.1%, compared to the same period of 2020, primarily due to a Ps. 354.3 million, or 72.8%, increase in concession taxes and technical assistance fees, a Ps. 351.7 million, or 14.5%, increase in the cost of improvements to the concession assets (IFRIC-12), a Ps. 59.0 million, or 5.4%, increase in depreciation and amortization and a Ps. 128.4 million, or 8.5%, increase in the cost of services.

The cost of services was mainly comprised of the following:

  • Employee costs increased Ps. 82.6 million, or 14.2%, compared to the same period of 2020, mainly due to the recognition of labor provisions in accordance with the Labor Reform Law and the hiring of additional personnel as required for airport operations.

  • Maintenance costs increased by Ps. 54.1 million, or 24.1%, as a result of the increase in essential maintenance required as a result of the increase in passenger traffic.

  • Safety, security and insurance costs increased Ps. 47.3 million, or 21.5%, compared to the same period of 2020.

  • Utilities increased by Ps. 10.2 million or 5.9%, compared to the same period of 2020.

  • These increases were partially offset by a decrease in Other operating expenses of Ps. 65.8 million or 21.2%, compared to the same period of 2020, mainly due to a Ps. 85.1 million combined decrease in the allowance for credit losses, sanitation supplies, the purchase of supplies and donations to the medical sector for the prevention of COVID-19, professional services, and publicity. This decrease was partially offset by a combined increase of Ps. 24.1 million in the cost of goods and services for our VIP lounges and convenience stores, FBO services, among others.

Montego Bay Airport:

  • Operating costs decreased by Ps. 159.1 million, or 16.2%, compared to the same period of 2020, mainly due to a Ps. 72.1 million, or 37.5%, decrease in concession taxes, a Ps. 44.4 million, or 44.3%, decrease in the cost of improvements to concession assets (IFRIC-12), a Ps. 23.0 million, or 6.0%, decrease in depreciation and amortization and a Ps. 17.2 million, or 5.8%, decrease in the cost of services.

Kingston Airport:

  • The consolidation of the airport generated an increase in operating costs of Ps. 12.7 million during the January to September period of 2021, mainly due to a Ps. 45.8 million, or 19.4%, increase in concession taxes and partially offset by a Ps. 33.8 million, or 15.4%, decrease in the cost of services, primarily as a result of a Ps. 23.0 million, or 50.5%, decrease in other operating expenses in the allowance for credit losses.

Operating margin went from 26.9% in the period from January to September 2020 to 44.3% in the same period of 2021. Excluding the effects of IFRIC-12, operating margin went from 36.7% in the 2020 period to 55.7% in the same period of 2021. Operating income increased Ps. 3,562.1 million, or 139.2%, compared to the 2020 period.

EBITDA margin increased 1,270 basis points from 42.6% in the January to September 2020 period to 55.3% in the same period of 2021. Excluding the effects of IFRIC-12, EBITDA margin increased 1,170 basis points from 57.9% in the 2020 period to 69.6% in the 2021 period. The nominal value of EBITDA was Ps. 7,652.7 million from January to September 2021 compared to Ps. 4,053.7 million during the same period of 2020, an increase of 88.8%.

Financial cost increased by Ps. 132.2 million, from a net expense of Ps. 567.4 million during the period from January to September 2020 to a net expense of Ps. 699.6 million during the same period of 2021. This increase was mainly the result of:

  • Foreign exchange rate fluctuations went from income of Ps. 199.5 million during the period from January to September 2020 to income of Ps. 205.2 million during the same period of 2021. This generated an increase in the foreign exchange gain of Ps. 5.7 million. Currency translation effect income also decreased by 1,247.8 million as compared to the 2020 period due to the fact that the exchange rate as of September 30, 2020, closed at Ps. 22.4573 as compared to Ps. 20.3060 as of September 30, 2021, an appreciation by the peso of 9.6%.

  • An increase in interest expense of Ps. 94.8 million, or 8.6%, compared to the 2020 period, mainly due to higher debt as a result of the issuance of long-term bonds issued during 2021.

  • Interest income decreased by Ps. 43.1 million, or 12.7%, compared to the 2020 period, mainly due to a decrease in the average balance of cash and cash equivalents during the 2021 period.

Comprehensive income increased Ps. 2,142.0 million, or 86.0% compared to the 2020 period. This increase was mainly due to a Ps. 3,429.9 million increase in profit before taxes and a Ps. 693.9 million increase in the cash flow hedge reserve. This increase was partially offset by a Ps. 1,247.8 million decrease in currency translation effect.

Net income increased Ps. 2,663.0 million, or 168.7% during the nine months ended September 30, 2021. Income taxes increased by Ps. 766.9 million, or 185.3%, as a result of a Ps. 819.8 million increase in current income taxes and a Ps. 52.9 million increase in the benefit for deferred taxes, mainly due to the application of tax losses of Ps. 142.2 million and partially offset by an increase in the inflation rate, that went from 2.1% in the 2020 period to 4.9% during the same period of 2021.

Statement of Financial Position

Total assets as of September 30, 2021, decreased by Ps. 3,085.9 million as compared to September 30, 2020, primarily due to the following items: (i) a Ps. 4,569.6 million decrease in cash and cash equivalents and ii) a Ps. 784.3 million decrease in the value of concession assets (due to the valuation of the Jamaica concessions in U.S. dollars and the appreciation of the peso). These decreases were partially offset by increases of: i) Ps. 1,042.4 million in improvements to concession assets; (ii) Ps. 948.3 million in machinery, equipment and leasehold improvements and advances to suppliers; and (iii) Ps. 241.5 million in other current assets, among others.

Total liabilities as of September 30, 2021, increased by Ps. 965.8 million compared to September 30, 2020. This increase was primarily due to the following items: (i) Long-term bonds (net) of Ps. 3,000.0 million; (ii) income taxes of Ps. 841.0 million and (iii) concession taxes of Ps. 154.3 million. This was partially offset by decreases of: (i) Ps. 2,000.0 million in bank loans, (ii) Ps. 590.5 million in derivative financial instruments and (iii) Ps. 170.2 million in deferred taxes, among others.

Recent Events

  • On October 15, 2021, the Company successfully issued in Mexico 25 million long-term debt securities (Certificados Bursátiles) for a total Ps. 2,500.0 million, in accordance with the following terms: i) Ps. 1,500.0 million of these securities have a variable interest rate of TIIE-28 plus 25 basis points, and the principal payment will be made on October 9, 2026; and ii) Ps. 1,000.0 million have a fixed interest rate of 7.91% with the principal payment due on April 28, 2028.

  • As of the date of this report, the Company has repurchased 11,252,916 shares at an average price of Ps. 218.45 per share, for a total of Ps. 2,458.2 million.

Company Description

Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (GAP) operates 12 airports throughout Mexico’s Pacific region, including the major cities of Guadalajara and Tijuana, the four tourist destinations of Puerto Vallarta, Los Cabos, La Paz and Manzanillo, and six other mid-sized cities: Hermosillo, Guanajuato, Morelia, Aguascalientes, Mexicali and Los Mochis. In February 2006, GAP’s shares were listed on the New York Stock Exchange under the ticker symbol “PAC” and on the Mexican Stock Exchange under the ticker symbol “GAP”. In April 2015, GAP acquired 100% of Desarrollo de Concesiones Aeroportuarias, S.L., which owns a majority stake in MBJ Airports Limited, a company operating Sangster International Airport in Montego Bay, Jamaica. In October 2018, GAP entered into a concession agreement for the operation of the Norman Manley International Airport in Kingston, Jamaica and took control of the operation in October 2019.

This press release contains references to EBITDA, a financial performance measure not recognized under IFRS and which does not purport to be an alternative to IFRS measures of operating performance or liquidity. We caution investors not to place undue reliance on non-GAAP financial measures such as EBITDA, as these have limitations as analytical tools and should be considered as a supplement to, not a substitute for, the corresponding measures calculated in accordance with IFRS.

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management’s current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

In accordance with Section 806 of the Sarbanes-Oxley Act of 2002 and article 42 of the “Ley del Mercado de Valores”, GAP has implemented a “whistleblower” program, which allows complainants to anonymously and confidentially report suspected activities that may involve criminal conduct or violations. The telephone number in Mexico, facilitated by a third party that is in charge of collecting these complaints, is 01 800 563 00 47. The web site is www.lineadedenuncia.com/gap. GAP’s Audit Committee will be notified of all complaints for immediate investigation.

Exhibit A: Operating results by airport (in thousands of pesos):

Airport

3Q20

3Q21

Change

9M20

9M21

Change

Guadalajara

Aeronautical services

511,304

936,476

83.2

%

1,486,854

2,364,802

59.0

%

Non-aeronautical services

124,227

216,335

74.1

%

426,618

588,628

38.0

%

Improvements to concession assets (IFRIC 12)

345,253

281,771

(18.4

%)

776,820

845,313

8.8

%

Total Revenues

980,784

1,434,583

46.3

%

2,690,291

3,798,741

41.2

%

Operating income

328,999

742,786

125.8

%

996,014

1,887,733

89.5

%

EBITDA

421,434

839,895

99.3

%

1,271,400

2,180,329

71.5

%

Tijuana

Aeronautical services

297,610

511,009

71.7

%

806,134

1,345,821

66.9

%

Non-aeronautical services

70,597

114,533

62.2

%

233,815

315,577

35.0

%

Improvements to concession assets (IFRIC 12)

191,013

407,033

113.1

%

429,779

1,221,098

184.1

%

Total Revenues

559,219

1,032,575

84.6

%

1,469,729

2,882,497

96.1

%

Operating income

191,116

394,096

106.2

%

496,414

1,038,858

109.3

%

EBITDA

255,741

456,547

78.5

%

685,116

1,230,993

79.7

%

Los Cabos

Aeronautical services

194,119

540,223

178.3

%

668,924

1,403,875

109.9

%

Non-aeronautical services

76,355

257,178

236.8

%

329,332

603,269

83.2

%

Improvements to concession assets (IFRIC 12)

216,466

111,408

(48.5

%)

487,049

334,223

(31.4

%)

Total Revenues

486,940

908,809

86.6

%

1,485,305

2,341,367

57.6

%

Operating income

107,858

548,226

408.3

%

500,133

1,367,260

173.4

%

EBITDA

175,129

615,771

251.6

%

699,397

1,561,092

123.2

%

Puerto Vallarta

Aeronautical services

103,106

338,057

227.9

%

587,644

893,818

52.1

%

Non-aeronautical services

34,450

108,579

215.2

%

205,160

284,093

38.5

%

Improvements to concession assets (IFRIC 12)

151,609

77,817

(48.7

%)

341,120

233,450

(31.6

%)

Total Revenues

289,165

524,452

81.4

%

1,133,923

1,411,361

24.5

%

Operating income

29,003

270,060

831.1

%

416,505

723,078

73.6

%

EBITDA

71,792

313,466

336.6

%

541,774

855,602

57.9

%

Montego Bay

Aeronautical services

82,213

307,859

274.5

%

589,003

691,064

17.3

%

Non-aeronautical services

52,190

124,623

138.8

%

255,863

317,675

24.2

%

Improvements to concession assets (IFRIC 12)

20,996

14,669

(30.1

%)

100,373

55,942

(44.3

%)

Total Revenues

155,399

447,151

187.7

%

945,239

1,064,680

12.6

%

Operating (loss) income

(100,017

)

173,069

273.0

%

(32,927

)

245,554

845.8

%

EBITDA

31,336

291,557

830.4

%

351,970

607,449

72.6

%

Exhibit A: Operating results by airport (in thousands of pesos): (continued)

Airport

3Q20

3Q21

Change

9M20

9M21

Change

Guanajuato

Aeronautical services

74,120

164,660

122.2

%

237,834

413,189

73.7

%

Non-aeronautical services

20,484

38,165

86.3

%

84,437

100,736

19.3

%

Improvements to concession assets (IFRIC 12)

43,293

3,094

(92.9

%)

97,408

9,281

(90.5

%)

Total Revenues

137,897

205,919

49.3

%

419,679

523,205

24.7

%

Operating (loss) income

36,915

120,450

226.3

%

150,895

306,508

103.1

%

EBITDA

55,214

139,476

152.6

%

204,707

362,832

77.2

%

Hermosillo

Aeronautical services

39,962

91,901

130.0

%

140,245

234,903

67.5

%

Non-aeronautical services

11,473

17,851

55.6

%

47,283

53,613

13.4

%

Improvements to concession assets (IFRIC 12)

5,796

4,341

(25.1

%)

13,042

13,024

(0.1

%)

Total Revenues

57,231

114,093

99.4

%

200,570

301,539

50.3

%

Operating (loss) income

(2,351

)

32,619

1487.3

%

29,441

102,965

249.7

%

EBITDA

16,829

51,321

205.0

%

86,552

160,427

85.4

%

Others (1)

Aeronautical services

224,212

426,055

90.0

%

685,664

1,065,138

55.3

%

Non-aeronautical services

54,350

99,456

83.0

%

215,101

257,858

19.9

%

Improvements to concession assets (IFRIC 12)

122,874

39,014

(68.2

%)

276,465

117,041

(57.7

%)

Total Revenues

401,435

564,525

40.6

%

1,177,230

1,440,038

22.3

%

Operating (loss) income

(44,549

)

54,564

222.5

%

(60,111

)

189,062

414.5

%

EBITDA

16,096

128,777

700.0

%

118,860

393,287

230.9

%

Total

Aeronautical services

1,526,645

3,316,240

117.2

%

5,202,303

8,412,610

61.7

%

Non-aeronautical services

444,126

976,722

119.9

%

1,797,608

2,521,447

40.3

%

Improvements to concession assets (IFRIC 12)

1,097,300

939,145

(14.4

%)

2,522,058

2,829,371

12.2

%

Total Revenues

3,068,071

5,232,106

70.5

%

9,521,969

13,763,428

44.5

%

Operating income

546,974

2,335,870

327.1

%

2,496,364

5,861,017

134.8

%

EBITDA

1,043,572

2,836,810

171.8

%

3,959,777

7,352,009

85.7

%

(1) Others include the operating results of the Aguascalientes, La Paz, Los Mochis, Manzanillo, Mexicali, Morelia and Kingston airports.

Exhibit B: Consolidated statement of financial position as of September 30 (in thousands of pesos):

2020

2021

Change

%

Assets

Current assets

Cash and cash equivalents

15,220,432

10,650,840

(4,569,592

)

(30.0

%)

Trade accounts receivable - Net

1,337,069

1,419,022

1,419,022

6.1

%

Other current assets

955,218

1,196,699

1,196,699

25.3

%

Total current assets

17,512,719

13,266,561

(4,246,157

)

(24.2

%)

Advanced payments to suppliers

395,746

879,342

483,596

122.2

%

Machinery, equipment and improvements to leased buildings - Net

2,077,750

2,542,454

464,704

22.4

%

Improvements to concession assets - Net

13,453,827

14,496,214

1,042,387

7.7

%

Airport concessions - Net

11,171,190

10,386,868

(784,322

)

(7.0

%)

Rights to use airport facilities - Net

1,300,151

1,226,755

(73,396

)

(5.6

%)

Deferred income taxes - Net

6,017,493

6,114,888

97,395

1.6

%

Other non-current assets

256,914

186,772

(70,143

)

(27.3

%)

Total assets

52,185,790

49,099,854

(3,085,936

)

(5.9

%)

Liabilities

Current liabilities

8,433,190

4,338,720

(4,094,470

)

(48.6

%)

Long-term liabilities

20,592,268

25,652,501

5,060,233

24.6

%

Total liabilities

29,025,458

29,991,221

965,763

3.3

%

Stockholders' Equity

Common stock

6,185,082

170,381

(6,014,701

)

(97.2

%)

Legal reserve

1,592,551

1,592,551

-

0.0

%

Net income

1,608,717

4,217,345

2,608,628

162.2

%

Retained earnings

9,940,035

7,927,599

(2,012,436

)

(20.2

%)

3,283,374

5,531,293

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