GUADALAJARA, Mexico, Feb. 20, 2020 (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 fourth quarter ended December 31, 2019. Figures are unaudited and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). On October 10, 2019, the Company took control and began to operate the Kingston airport, therefore figures corresponding to 4Q19 and fiscal year 2019 include information of this airport as of that date.
Summary of Results 4Q19 vs. 4Q18The sum of aeronautical and non-aeronautical services revenues increased by Ps. 419.5 million, or 12.7%. Total revenues increased by Ps. 834.1 million, or 22.3%.
 Cost of services increased by Ps. 67.9 million, or 9.6%.
 Operating income increased by Ps. 72.7 million, or 3.9%.
 EBITDA increased by Ps. 155.8 million, or 6.9%. EBITDA margin (excluding the effects of IFRIC 12) decreased from 68.4% in 4Q18 to 65.0% in 4Q19.
 Net income and comprehensive income decreased by Ps. 376.4 million, or 26.7%, mainly due to the currency translation effect, as well as the cash flow reserve. Net income increased by Ps. 235.6 million, or 19.7%.Operating ResultsDuring 4Q19, total terminal passengers at the Company’s 14 airports increased by 1,283.1 thousand passengers, or 11.2%, compared to 4Q18. Over the same period, domestic passenger traffic increased by 529.7 thousand passengers, while international passenger traffic increased by 750.2 thousand passengers.In the traffic tables below, we have reflected the users of the Cross Border Xpress (CBX) under the international passenger numbers for the Tijuana airport.During 4Q19, the following routes opened: 

– Net income and comprehensive income per share were calculated based on 561,000,000 outstanding shares. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 18.8600 per U.S. dollar (the noon buying rate on December 31, 2019, as published by the U.S. Federal Reserve Board).
– For purposes of the consolidation of the Montego Bay airport and the Kingston airport, the average monthly exchange rate of Ps. 19.2819 per U.S. dollar for the three months ended December 31, 2019 was used.Revenues (4Q19 vs. 4Q18)Aeronautical services revenues increased by Ps. 308.1 million, or 12.5%Non-aeronautical services revenues increased by Ps. 111.4 million, or 13.1%Revenues from improvements to concession assets increased by Ps. 414.6 million, or 97.4%Total revenues increased by Ps. 834.1 million, or 22.3%– Aeronautical services revenues include:i. Revenues from the Mexican airports increased by Ps. 168.5 million, or 7.9%, compared to 4Q18, generated mainly by an increase of Ps. 86.1 million in revenues from passenger charges, as result of the 8.3% growth in total passenger traffic, as well as an increase of revenues from aircraft landing and aircraft parking charges of Ps. 73.4 million. Inflation applicable to the passenger charges for 4Q19 decreased by 0.2%.ii. Revenues from the Montego Bay airport decreased by Ps. 2.1 million, or 0.6%, compared to 4Q18. This was mainly due to a 2.8% appreciation of the Mexican peso against the U.S. dollar, from an average exchange rate of Ps. 19.8333 in 4Q18 to an average exchange rate of Ps. 19.2819 in 4Q19.  Despite this decrease in revenues, dollar-generated revenues increased by 2.2% due to an increase in passenger traffic of 0.6%, as well as an increase in passenger charges due to inflation effects.iii. The consolidation of aeronautical revenues from the Kingston airport contributed Ps. 141.7 million to revenues.– Non-aeronautical services revenues include:i. The Mexican airports contributed an increase of Ps. 74.2 million, or 10.4%, compared to 4Q18, mainly driven by an increase of Ps. 57.0 million in revenues from businesses operated by third parties. This was mainly due to the opening of commercial spaces at the Aguascalientes, Guadalajara, Puerto Vallarta and Tijuana airports, as well as the increase in revenues from car rentals, food and beverages, commercial spaces, timeshares and duty-free stores.Revenues from businesses operated directly by the Company increased by Ps. 15.2 million, or 7.0%, mainly due to an increase in revenues from VIP lounges and convenience stores, which increased as a result of the openings that took place during 2019.ii. Revenues from the Montego Bay airport in 4Q19 decreased by Ps. 0.8 million, or 0.6%, mainly driven by the 2.8% appreciation of the Mexican peso against the U.S. dollar during the quarter. However, revenues in 4Q19 increased by 2.2%, mainly due to an increase in revenues from food and beverages, commercial spaces and duty-free stores.iii. The consolidation of the Kingston airport contributed Ps. 38.0 million to non-aeronautical revenue. – Revenues from improvements to concession assets¹
Revenues from improvements to concession assets (IFRIC 12) increased by Ps. 414.6 million, or 97.4%, compared to 4Q18, mainly due to an increase in committed investments under the Master Development Program for the Mexican airports for 2019, which resulted in an increase of Ps. 595.4 million, or 308.7% that was offset by a decrease in revenues from improvements to concession assets at the Montego Bay airport of Ps. 180.7 million, or 77.6%.Total operating costs increased by Ps. 761.4 million, or 40.5%, compared to 4Q18, comprised of the following:Mexican Airports:– Operating costs increases of Ps. 743.9 million, or 57.4%, compared to 4Q18, mainly due to an increase in the cost of improvements to the concession assets (IFRIC 12) for Ps. 595.4 million, technical assistance fees and cost of rights over the concession assets of Ps. 20.8 million, or 8.4%, jointly, depreciation and amortization of Ps. 70.2 million, or 22.3%. This was offset by a decrease in other revenues of Ps. 58.3 million and a decrease in the cost of services of Ps. 1.0 million.The decrease in the cost of services was mainly due to:A decrease in maintenance expenses of Ps. 18.9 million, or 11.4%, compared to 4Q18, mainly due to lower maintenance costs with respect to the operational areas of the terminal buildings, documented baggage inspection equipment, road developments, and license renewals, which costs jointly decreased by Ps. 15.5 million, or 9.3%.A decrease in other operating expenses of Ps. 16.0 million, or 13.0%, compared to 4Q18, mainly due to lower legal service fees, which decreased by Ps. 11.5 million, or 9.9%.An increase in employee costs of Ps. 34.6 million, or 22.2%, compared to 4Q18, due to salary raises, and an increase in personnel count.Montego Bay Airport:– Operating costs decreased by Ps. 166.3 million, or 28.6%, compared to 4Q18, mainly due to a decrease in improvements to concession assets (IFRIC 12) of Ps. 180.7 million, and a decrease in cost of services of Ps. 5.2 million, which was offset by an increase in depreciation and amortization of Ps. 10.8 million or 11.8%, and higher cost of rights over the concession assets of Ps. 8.8 million.Kingston Airport:– The consolidation of the Kingston airport resulted in an increase in expenses of Ps. 183.8 million in 4Q19, mainly due to costs for rights over concession assets of Ps. 107.6 million, employee costs of Ps. 23.8 million, utility costs of Ps. 21.8 million, security and insurance costs of Ps. 15.7 million and maintenance expenses of Ps. 7.8 million.Operating margin for 4Q19 decreased by 750 basis points, from 49.8% in 4Q18 to 42.3% in 4Q19. Excluding the effects of IFRIC 12, operating margin decreased by 440 basis points, from 56.2% in 4Q18 to 51.8% in 4Q19. Operating income increased by Ps. 72.7 million, or 3.9%, compared to 4Q18.EBITDA margin decreased by 760 basis points from 60.6% in 4Q18 to 53.0% in 4Q19. Excluding the effects of IFRIC 12, EBITDA margin decreased by 340 basis points from 68.4% in 4Q18 to 65.0% in 4Q19. The decrease was mainly due to the consolidations of the Kingston airport. The nominal value of EBITDA increased by Ps. 155.8 million, or 6.9%, compared to 4Q18.The net financial result increased by Ps. 55.8 million, from a net expense of Ps. 128.1 million in 4Q18 to a net expense of Ps. 183.9 million in 4Q19. This increase was mainly the result of:Foreign exchange rate fluctuations, which went from a Ps. 10.5 million expense in 4Q18 to Ps. 39.8 million in 4Q19, mainly due to an 4.7% depreciation of the Mexican peso against the U.S. dollar in 4Q18, compared to an appreciation of 4.0% in 4Q19, thereby generating an increase in the foreign exchange expense of Ps. 29.2 million. The currency translation effect represented a higher loss of Ps. 435.1 million, compared to 4Q18 and is reflected in the consolidated income.
 An increase in interest expenses of Ps. 3.7 million compared to 4Q18, mainly due to a the decline in the fair value of hedging instruments, which was offset by higher debt derived from the issuance of long-term bond certificates (Certificados Bursátiles) and bank debt for Ps. 3,095.1 million, and an increase in interest rates.
 A decrease in interest income of Ps. 22.9.4 million, or 13.9%, mainly due to the decline in the fair value of the hedging instruments for Ps. 30.5 million, and offset by an increase in interest of Ps. 7.6 million due to an increase in the average monthly treasury amount during 4Q19.Comprehensive income decreased by Ps. 376.4 million, or 26.7%, compared to 4Q18.This decrease was mainly the result of an exchange rate loss resulting from the foreign exchange conversion effects of Ps. 435.1 million, or 203.2%, as well as the valuation of the fair value of the hedging instruments for cash flow coverage for Ps. 172.1 million. Net income rose by Ps. 235.6 million, or 19.7% in 4Q19.Income taxes decreased by Ps. 218.5 million, or 40.6% in 4Q19. This was a result of a lower incurred tax of Ps. 164.4 million and the decline in the benefit from deferred income tax of Ps. 54.1 million, due to lower accumulated inflation that went from 2.3% in 4Q18 to an inflation of 1.9% in 4Q19. – Net income and comprehensive income per share were calculated based on 561,000,000 outstanding shares. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 18.8600 per U.S. dollar (the noon buying rate on December 31, 2019, as published by the U.S. Federal Reserve Board).
– For purposes of the consolidation of the Montego Bay airport and the Kingston airport, the average monthly exchange rate of Ps. 19.2616 per U.S. dollar for the twelve months ended December 31, 2019 was used.Revenues (12M19 vs 12M18)Aeronautical services revenues increased by Ps. 1,048.6 million, or 11.0%.Non-aeronautical services revenues increased by Ps. 588.0 million, or 18.5%.Revenues from improvements to concession assets increased by Ps. 466.6 million, or 32.4%.Total revenues increased by Ps. 2,103.1 million, or 14.9%.– Aeronautical services revenues include:i. Revenues from the Mexican airports in 12M19 increased by Ps. 814.4 million, or 10.1%, compared to 12M18, generated primarily by an increase of Ps. 589.9 million in revenues from passenger charges, as result of the 7.7% increase in total passenger traffic, as well as an increase of revenues from aircraft landing, aircraft parking fees and other airport services, which jointly increased by Ps. 205.1 million. Inflation applicable to the passenger charges for the 12M19 was 0.7%.iii. The consolidation of the Kingston airport contributed Ps. 141.7 million to non-aeronautical revenue. – Non-aeronautical services revenues include:i. The Mexican airports contributed an increase of Ps. 508.5 million, or 19.3%, compared to 12M18, driven mainly by a Ps. 310.6 million increase in revenues from third-party operated businesses. This was mainly due to the expansions of the terminal buildings and contract renegotiations at the Aguascalientes, Guanajuato, Guadalajara, Hermosillo, Puerto Vallarta and Tijuana airports. The business lines that experienced the most growth were food and beverage, car rentals, duty-free stores, retail stores, timeshares and commercial spaces, which jointly increased by Ps. 283.7 million.Revenues from businesses operated directly by the Company increased by Ps. 168.2 million or 20.6%, mainly due to an increase in car parking revenues, convenience stores and VIP lounges. The latter two categories increased as a result of the openings that took place during 2019.The recovery of cost increase by Ps. 29.7 million compared to 12M18.ii. Montego Bay airport revenues increased by Ps. 41.5 million, or 7.6% in 12M19, compared to 12M18, mainly due to a 7.2% increase in revenues from duty-free stores, retail stores, leasing of space and food and beverages, as well as to the 0.1% depreciation of the peso versus the U.S. dollar during 12M19.iii. The consolidation of the Kingston airport contributed Ps. 38.0 million to non-aeronautical revenue.– Revenues from improvements to concession assets²
Revenues from improvements to concession assets (IFRIC 12) increased by Ps. 466.6 million, or 32.4%, compared to 12M18, mainly due to an increase of Ps. 876.2 million or 98.0% in committed investments under the Master Development Program for the Mexican airports for the year 2019, compared to the year 2018. This result was offset by a decrease in revenues from improvements to concession assets at the Montego Bay airport of Ps. 409.6 million, or 75.0%, compared to 2018.Total operating costs during 12M19 increased by Ps. 1,330.5 million, or 19.3%, compared to 12M18, and included the following:Mexican Airports:– Operating Costs increased by Ps. 1,408.7 million, or 28.1%, mainly due to an increase in the cost of improvements to concession assets (IFRIC 12) of Ps. 876.2 million, or 98.0%, an increase in the cost of services of Ps. 202.2 million, or 10.1%, an increase in technical assistance fees and the cost of rights to concession assets of Ps. 115.6 million, or 12.2%, and depreciation and amortization of Ps. 159.6 million, or 13.1%.The increase in the cost of services was mainly due to:An increase in employee costs of Ps. 71.1 million, or 10.9%, mainly due to an increase in personnel count and salary raises.Other operating expenses increased by Ps. 50.4 million or 13.7%, mainly due to an increase of Ps. 45.1 million, or 41.0%, in cost of sales in VIP lounges, convenience stores, as well as professional service fees.Maintenance costs increased by Ps. 37.6 million, or 8.3%, mainly due to maintenance of operating areas, terminal buildings, cleaning services and documented baggage inspection equipment.Utility costs increased by Ps. 30.0 million, or 13.0%, due to the additional square meters in terminal buildings as a result of the expansions and higher energy prices during 2019.Montego Bay Airport:– Operating costs decreased by Ps. 262.0 million, or 14.0% compared to 2018, mainly due to a decrease in improvements to concession assets (IFRIC12) of Ps. 409.6 million, which was offset by an increase in the concession assets rights of Ps. 68.7 million, or 12.7%, depreciation and amortization of Ps. 44.8 million or 12.6%, as well as, cost of services of Ps. 14.9 million, or 3.4%.– The consolidation of the Kingston airport resulted in an increase in expenses of Ps. 183.8 million during 4Q19, mainly due to costs for rights over concession assets of Ps. 107.6 million, employee costs of Ps. 23.8 million, utility costs of Ps. 21.8 million, security and insurance costs of Ps. 15.7 million and maintenance expenses of Ps. 7.8 million.Operating margin decreased by 190 basis points from 51.3% in 12M18 to 49.4% in 12M19. Operating margin, excluding the effects of IFRIC 12, decreased by 100 basis points, from 57.1% to 56.1% in 12M19. Operating income increased by Ps. 772.6 million, or 10.7%, compared to 12M18.EBITDA margin decrease by 200 basis points from 62.4% in 12M18 to 60.4% in 12M19. EBITDA margin, excluding the effects of IFRIC 12, decreased by 110 basis points from 69.5% in 12M18 to 68.4% in 12M19. The nominal value of EBITDA increased by Ps. 979.1 million, or 11.1%, compared to 12M18.The net financial result increased by Ps. 435.1 million, from a net expense of Ps. 236.0 million in 12M18 to a net expense of Ps. 671.1 million in 12M19. This increase was mainly the result of:The foreign exchange gain decreased from a gain of Ps. 199.7 million in 12M18 to a gain of Ps. 88.8 million in 12M19, due to a 0.3% appreciation of the Mexican peso against the U.S. dollar in 12M18 compared to an appreciation of 4.3% in 12M19, which generated a decrease in foreign exchange gain of Ps. 110.9 million. In addition, the effect in foreign currency translation effect resulted in an increase in net loss of Ps. 161.7 million compared to 12M18. This result is reflected in the comprehensive income line item.
 Interest expenses increased by Ps. 419.7 million compared to 12M18, mainly due to an increase in debt derived from the issuance of long-term bond certificates (Certificados Bursátiles) of Ps. 3,095.1 million, as well as an increase in interest rates compared to 12M18.
 Interest income increased by Ps. 95.5 million, due to the increase in the Company’s cash position during 2019 and higher average interest rates.Comprehensive income decreased by Ps. 23.1 million, or 0.5%, compared to 12M18.This decline was mainly the result of higher foreign exchange conversion effects of Ps. 165.9 million and the fair value variation of free cash flow hedging instruments of Ps. 172.1 million. Net Income increased by Ps. 316.1 million or 6.2% in 12M19.Income taxes increased by Ps. 22.4 million, or 1.2%, due to a decline in the benefit from deferred income tax of Ps. 84.1 million, derived from a lower inflation rate, which went from an inflation rate of 4.8% in 12M18 to an inflation of 2.8% in 2019, as well as the decrease in taxes incurred of Ps. 61.7 million.Statement of Financial PositionTotal assets as of December 31, 2019 increased by Ps. 2,027.3 million compared to December 31, 2018, primarily due to the following items, among others: (i) cash and cash equivalents of Ps. 1,348.7 million, (ii) improvements to concession assets of Ps. 1,080.5 million, and (iii) an increase in deferred taxes of Ps. 176.7 million. This result was offset by a decrease in airport concessions of Ps. 590.5 million.Total liabilities as of December 31, 2019 increased by Ps. 3,129.6 million compared to the same period of 2018. This increase was primarily due to the following items, among other: (i) an increase in long-term bond certificates (Certificados Bursátiles) of Ps. 3.0 billion and (ii) an increase in derivative instruments of Ps. 265.9 million.Recent EventsOn February 13, 2020 the Company issued 30 million long-term bond certificates (Certificados Bursátiles) in Mexico under the ticker symbol “GAP20”, at a nominal value of Ps. 100 each, for a total value of Ps. 3.0 billion. These bond certificates were issued under the following terms, among others, (i) interest will be payable every 28 days at a variable rate of TIIE-28 plus 17 basis points and (ii) principal will be due at maturity on February 6, 2025. The proceeds from the issuance will be allocated towards the payment of the bond certificates that were issued on February 20, 2015 under the ticker symbol “GAP15” and towards initiating the capital investments set forth in the Company’s Master Development Plan for 2020.On February 14, 2020 the Company made the maturity payment of the “GAP15” issuance, equivalent to 22 million bond certificates for a value of Ps. 2.2 billion.Company DescriptionGrupo 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.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. 
 
For presentation purposes, the 25.5% stake in Desarrollo de Concesiones Aeroportuarias, S.L. (“DCA”) held by Vantage appears in the Stockholders’ Equity of the Company as a non-controlling interest.As a part of the adoption of IFRS, the effects of inflation on common stock recognized pursuant to Mexican Financial Reporting Standards (MFRS) through December 31, 2007 were reclassified as retained earnings because accumulated inflation recognized under MFRS is not considered hyperinflationary according to IFRS. For Mexican legal and tax purposes, Grupo Aeroportuario del Pacífico, S.A.B. de C.V., as an individual entity, will continue preparing separate financial information under MFRS. Therefore, for any transaction between the Company and its shareholders related to stockholders’ equity, the Company must take into consideration the accounting balances prepared under MFRS as an individual entity and determine the tax impact under tax laws applicable in Mexico, which requires the use of MFRS. For purposes of reporting to stock exchanges, the consolidated financial statements will continue being prepared in accordance with IFRS, as issued by the IASB. 
______________________________[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.[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.
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