GUADALAJARA, Mexico, Oct. 24, 2019 (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, 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”).
Summary of Results 3Q19 vs. 3Q18The sum of aeronautical and non-aeronautical services revenues increased by Ps. 382.6 million, or 12.2%. Total revenues increased by Ps. 783.0 million, or 22.2%.
Cost of services increased by Ps. 46.3 million, or 7.4%.
Operating income increased by Ps. 222.8 million, or 12.5%.
EBITDA increased by Ps. 270.1 million, or 12.4%. EBITDA margin (excluding the effects of IFRIC 12) increased from 69.3% in 3Q18 to 69.5% in 3Q19.
Comprehensive income increased by Ps. 480.1 million, or 49.2%, mostly due to the currency translation effect.Operating ResultsDuring 3Q19, total terminal passengers at the Company’s 13 airports increased by 803.3 thousand passengers, or 7.3%, compared to 3Q18. Over the same period, domestic passenger traffic increased by 504.3 thousand passengers, while international passenger traffic increased by 299.0 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 3Q19, the following route opened:International Routes:
Consolidated Results for the Third Quarter of 2019 (in thousands of pesos):Revenues (3Q19 vs. 3Q18)
Aeronautical services revenues increased by Ps. 223.3 million, or 9.5%Non-aeronautical services revenues increased by Ps. 159.3 million, or 20.1%Revenues from improvements to concession assets increased by Ps. 400.3 million, or 100.8%Total revenues increased by Ps. 783.0 million, or 22.2%Aeronautical services revenues include:Revenues from the Mexican airports increased by Ps. 205.5 million, or 10.3%, compared to 3Q18, generated mainly by an increase of Ps. 154.1 million in revenues from passenger charges, as result of the 7.9% growth in total passenger traffic, as well as an increase of revenues from aircraft landing and aircraft parking charges, which jointly increased by Ps. 44.4 million.Revenues from the Montego Bay airport increased by Ps. 17.8 million, or 5.3%, compared to 3Q18. This was mainly due to a 1.6% increase in passenger traffic and an increase in passenger charges due to inflation, as well as the 2.3% depreciation of the Mexican peso against the U.S. dollar, from an average exchange rate of Ps. 18.9789 in 3Q18 to an average exchange rate of Ps. 19.4195 in 3Q19. Non-aeronautical services revenues include:The Mexican airports contributed an increase of Ps. 146.0 million, or 22.3%, compared to 3Q18, mainly driven by an increase of Ps. 81.8 million in revenues from businesses operated by third parties. This was mainly due to the opening of commercial spaces at the Aguascalientes, Guanajuato, Guadalajara, Hermosillo, Puerto Vallarta and Tijuana airports, as well as the increase in revenues from car rentals and timeshares, which jointly increased by Ps. 72.5 million.
Revenues from businesses operated directly by the Company increased by Ps. 58.5 million, or 28.6%, mainly due to an increase in car parking revenues, and an increase in revenues from VIP lounges and convenience stores. The latter two categories increased as a result of the openings that took place during 2019.
Revenues from the Montego Bay airport in 3Q19 increased by Ps. 13.3 million, or 9.7%, mainly driven by an increase in revenues from duty-free stores, retail stores, leasing of space, communications and financial services, as well as by the 2.3% depreciation of the Mexican peso against the U.S. dollar during the quarter.Revenues from improvements to concession assets1
Revenues from improvements to concession assets (IFRIC 12) increased by Ps. 400.3 million, or 100.8%, compared to 3Q18, 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. 537.5 million, or 229.9%, which was offset by a decrease in revenues from improvements to concession assets at the Montego Bay airport of Ps. 137.2 million, or 83.9%.Total operating costs increased by Ps. 560.2 million, or 32.0%, compared to 3Q18, mainly due to cost of services comprised of the following:Operating costs at the Mexican airports increased by Ps. 642.3 million, or 50.3%, compared to 3Q18, mainly due to an increase in the cost of improvements to the concession assets (IFRIC 12) for Ps. 537.5 million, or 229.9%, an increase in the cost of services for Ps. 32.0 million, or 7.5%, higher technical assistance fees and cost of rights over the concession assets of Ps. 32.9 million, or 13.8%, and an increase in depreciation and amortization of Ps. 33.0 million, or 7.7%.The increase in cost of services was mainly due to:An increase in maintenance expenses of Ps. 12.0 million, or 11.2%, mainly aimed at the airside operational areas, terminal buildings, documented baggage and cleaning services, which jointly increased by Ps. 11.5 million, or 10.5%, due to the addition of square meters at the airports that recently completed their expansions, as well as for improvements in passenger service.An increase in other operating expenses of Ps. 10.4 million, or 12.1%, compared to 3Q18, mainly due to the increase in the reserve for doubtful accounts, cost of sales in the VIP lounges and convenience stores, and professional service fees, which jointly increased by Ps. 9.8 million, or 11.8%.An increase in employee costs of Ps. 12.1 million, or 7.5%, compared to 3Q18, due to salary raises, and an increase in personnel count.
Operating costs at the Montego Bay airport decreased by Ps. 82.1 million, or 17.3%, compared to 3Q18 mainly due to a decrease in improvements to concession assets (IFRIC 12) of Ps. 137.2 million, which was offset by an increase in cost of services of Ps. 7.6 million, or 6.8%, an increase in depreciation and amortization of Ps. 14.2 million or 16.4%, and higher cost of rights over the concession assets of Ps. 14.3 million.
Operating margin for 3Q19 decreased by 380 basis points, from 50.4% in 3Q18 to 46.4% in 3Q19. Excluding the effects of IFRIC 12, operating margin increased by 10 basis points, from 56.8% in 3Q18 to 56.9% in 3Q19. Operating income increased by Ps. 222.8 million, or 12.5%, compared to 3Q18.EBITDA margin decreased by 490 basis points from 61.5% in 3Q18 to 56.6% in 3Q19. Excluding the effects of IFRIC 12, EBITDA margin increased by 20 basis points from 69.3% in 3Q18 to 69.5% in 3Q19. The nominal value of EBITDA increased by Ps. 270.1 million, or 12.4%, compared to 3Q18.Financial result increased by Ps. 42.6 million, from a net expense of Ps. 126.3 million in 3Q18 to a net expense of Ps. 168.9 million in 3Q19. This increase was mainly the result of:
Foreign exchange rate gain of Ps. 70.3 million in 3Q19, compared to a gain of Ps. 15.6 million in 3Q18, mainly due to an 5.3% appreciation of the Mexican peso against the U.S. dollar in 3Q18, compared to a depreciation of 2.4% in 3Q19, thereby generating an increase in foreign exchange gain of Ps. 54.7 million. The currency translation effect represented a higher gain of Ps. 441.9 million, compared to 3Q18.
An increase in interest expenses of Ps. 130.7 million compared to 3Q18, mainly due to a higher debt derived from the issuance of long-term bond certificates (Certificados Bursátiles) and bank debt for Ps. 3,476.3 million, an increase in interest rates and a decline in the fair value of hedging instruments.
An increase in interest income of Ps. 33.4 million, or 26.2%, mainly due to the increase in the Company’s cash position.Comprehensive income increased by Ps. 480.1 million, or 49.2%, compared to 3Q18.This increase was mainly the result of a higher exchange rate gain resulting from the foreign exchange conversion effects of Ps. 441.9 million, or 126.8%.Income before income taxes increased by Ps. 180.2 million, or 10.9% in 3Q19. During 3Q19, income taxes increased by Ps. 142.4 million, or 43.4% compared to 3Q18. This was a result of the higher incurred tax of Ps. 117.9 million and the decline in the benefit from deferred income tax of Ps. 24.4 million, due to lower accumulated inflation that went from 1.5% in 3Q18 to 0.6% in 3Q19.Consolidated results for the First Nine Months of 2019 (in thousands of pesos):– 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. 19.7420 per U.S. dollar (the noon buying rate on September 30, 2019, as published by the U.S. Federal Reserve Board).
– For purposes of the consolidation of the Montego Bay airport, the average monthly exchange rate of Ps. 19.2548 per U.S. dollar for the nine months ended September 30, 2019 was used.Revenues (9M19 vs 9M18)Aeronautical services revenues increased by Ps. 740.5 million, or 10.5%.Non-aeronautical services revenues increased by Ps. 476.6 million, or 20.4%.Revenues from improvements to concession assets increased by Ps. 52.0 million, or 5.1%.Total revenues increased by Ps. 1,269.0 million, or 12.2%.Aeronautical services revenues include:Revenues from the Mexican airports in 9M19 increased by Ps. 645.9 million, or 10.8%, compared to 9M18, generated primarily by an increase of Ps. 535.1 million in revenues from passenger charges, as result of the 7.5% increase in total passenger traffic, as well as an increase of revenues from aircraft landing, aircraft parking charges and security costs, which jointly increased by Ps. 92.3 million.Revenues from the Montego Bay airport increased by Ps. 94.6 million, or 8.7%, compared to 9M18. This was primarily due to a 6.4% increase in passenger traffic and the adjustment in passenger charges as a result of inflation and to a 1.1% depreciation of the Mexican peso against the U.S. dollar, from an average exchange rate of Ps. 19.0365 in 9M18 to an average exchange rate of Ps. 19.2548 in 9M19.Non-aeronautical services revenues include:The Mexican airports contributed an increase of Ps. 434.2 million, or 22.5%, compared to 9M18, driven mainly by a Ps. 253.6 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 main business lines that grew most were food and beverage, car rentals, duty-free stores, retail stores, timeshares and commercial spaces, which jointly increased by Ps. 229.5 million.
Revenues from businesses operated directly by the Company increased by Ps. 152.4 million or 25.9%, mainly due to an increase in car parking revenues, and an increase in revenues from VIP lounges and convenience stores. The latter two categories increased as a result of the openings that took place during 2019.
Montego Bay airport revenues increased by Ps. 42.5 million, or 10.5% in 9M19, compared to 9M18, mainly due to a 9.5% increase in revenues from duty-free stores, retail stores, leasing of space and food and beverages, as well as to the 1.1% depreciation of the peso versus the U.S. dollar during 9M19.Revenues from improvements to concession assets2
Revenues from improvements to concession assets (IFRIC 12) increased by Ps. 52.0 million, or 5.1%, compared to 9M18, mainly due to an increase of Ps. 280.8 million or 40.0% in committed investments under the Master Development Program for the Mexican airports for 2019, compared to 9M18. This result was offset by a decline in revenues from improvements to concession assets at the Montego Bay airport of Ps. 228.9 million, or 73.1%, compared to 9M18.Total operating costs during 9M19 increased by Ps. 569.1 million, or 11.4%, compared to 9M18, and comprised the following:Operating Costs at the Mexican airports increased by Ps. 664.9 million, or 17.9%, mainly due to an increase in the cost of improvements to concession assets (IFRIC 12) of Ps. 280.8 million, or 40.0%, an increase in the cost of services of Ps. 203.0 million, or 14.2%, an increase in technical assistance fees and the cost of rights to concession assets of Ps. 94.8 million, or 13.6%, and depreciation and amortization of Ps. 89.4 million, or 9.9%.The increase in cost of services was explained by:Other operating expenses increased by Ps. 65.4 million or 26.0%, mainly due to an increase of Ps. 55.3 million, or 23.5%, in the reserve for doubtful accounts, cost of sales in VIP lounges and convenience stores and professional service fees.Maintenance costs increased by Ps. 56.4 million, or 19.8%, mainly due to maintenance of operating areas, terminal buildings, cleaning services and documented baggage inspection equipment.Utility costs increased by Ps. 31.4 million, or 18.9%, due to the additional square meters in terminal buildings as a result of the expansions and higher energy prices during 2019.Operating costs at the Montego Bay airport decreased by Ps. 95.7 million, or 7.4% compared to 9M18, mainly due to a decrease in improvements to concession assets (IFRIC12) of Ps. 228.9 million, which was offset by an increase in the concession assets rights of Ps. 59.9 million, or 14.6%, and depreciation and amortization of Ps. 34.0 million or 12.9%, as well as, cost of services of Ps. 20.2 million, or 6.3%.Operating margin increased by 40 basis points from 51.8% in 9M18 to 52.2% in 9M19. Operating margin, excluding the effects of IFRIC 12, increased by 10 basis points, from 57.5% to 57.6% in 9M19. Operating income increased by Ps. 699.9 million, or 13.0%, compared to 9M18.EBITDA margin increased by 20 basis points from 63.1% in 9M18 to 63.3% in 9M19. EBITDA margin, excluding the effects of IFRIC 12, decreased by 30 basis points from 69.9% in 9M18 to 69.6% in 9M19. The nominal value of EBITDA increased by Ps. 823.2 million, or 12.6%, compared to 9M18.Financial result increased by Ps. 379.3 million, from a net expense of Ps. 107.9 million in 9M18 to a net expense of Ps. 487.2 million in 9M19. This increase was mainly the result of:The foreign exchange gain decreased from a gain of Ps. 210.3 million in 9M18 to a gain of Ps. 128.6 million in 9M19 due to a 4.7% appreciation of the Mexican peso against the U.S. dollar in 9M18 compared to an appreciation of 0.2% in 9M19, which generated a decrease in foreign exchange gain of Ps. 81.7 million. In addition, the effect in foreign currency translation effect resulted in a decrease in net loss of Ps. 273.4 million compared to 9M18.
Interest expenses increased by Ps. 362.6 million compared to 9M18, mainly due to an increase in debt derived from the issuance of long-term bond certificates (Certificados Bursátiles) of Ps. 3,476.3 million, as well as an increase in interest rates and a decline in the fair value of hedging instruments.
Interest income increased by Ps. 65.0 million due to the increase in the Company’s cash position during 2019 and higher average interest rates.Comprehensive income increased by Ps. 353.3 million, or 9.7%, compared to 9M18.This increase was mainly the result of income before income taxes which increased by Ps. 321.3 million, in addition to the lower exchange loss in 9M19, as a result of the effect in foreign currency translation of Ps. 273.4 million.Income taxes increased by Ps. 240.9 million, or 18.1%, due to a decline in the benefit from deferred income tax of Ps. 138.2 million and a lower inflation rate, which went from an inflation rate of 2.6% in 9M18 to an inflation of 0.9% in 9M19, as well as the increase in taxes incurred of Ps. 102.7 million.Statement of Financial PositionTotal assets as of September 30, 2019 increased by Ps. 3,224.0 million compared to September 30, 2018, primarily due to the following items: (i) cash and cash equivalents of Ps. 1,977.0 million, (ii) improvements to concession assets of Ps. 907.0 million and (iii) machinery, equipment and improvements to leased buildings of Ps. 682.2 million. This result was offset by a decline in airport concessions of Ps. 192.8 million. Total liabilities as of September 30, 2019 increased by Ps. 3,853.4 million compared to the same period of 2018. This increase was primarily due to the following items: (i) an increase in long-term bond certificates (Certificados Bursátiles) of Ps. 3.0 billion, (ii) increase in long-term bank loans of Ps. 476.3 million and (iii) dividends payable of Ps. 210.2 million, among others.Recent EventsOn October 10, 2019 the Company took control and initiated operations of the Norman Manley International Airport (“KIN”), located in the city of Kingston, Jamaica, pursuant to the Concession Contract (“the Contract”) that the Company signed with the Government of Jamaica on October 10, 2018. In accordance with the terms of the Contract, the Company made a payment of US$ 7.1 million. During the first 36 months, for approximately US$ 60.0 million. Additionally, the Company will pay the Jamaican Government an annual concession fee of 62% of total aeronautical and commercial revenues. These concepts, as well as operating expenses, are included in the determination of airport charges.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.
Exhibit A: Operating results by airport (in thousands of pesos):
Exhibit B: Consolidated statement of financial position as of September 30 (in thousands of pesos): Exhibit C: Consolidated statement of cash flows (in thousands of pesos):Exhibit D: Consolidated statements of profit or loss and other comprehensive income (in thousands of pesos):Exhibit E: Consolidated stockholders’ equity (in thousands of pesos):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.Exhibit F: Other operating data:
_____________________________[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.
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