Grupo Aeroportuario del Pacífico Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
April 30, 2025
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Operator

Good morning and welcome to GAP's Conference Call. All lines have been placed on mute to prevent any background noise.

Operator

After the presentation, we will open the floor for questions. It is now my pleasure to turn the call over to GAP's Investor Relations team. Please go ahead.

Maria Barona
Managing Director at IDEAL Advisors LLC

Thank you, and welcome to the Grupo Aroportuario del Pacifico's first quarter twenty twenty five conference call. Presenting from the company today, we welcome Mr. Raul Rebuelta, GAP's Chief Executive Officer and Mr. Saul Bialarral, Chief Financial Officer. Please be advised that forward looking statements may be made during this conference call.

Maria Barona
Managing Director at IDEAL Advisors LLC

These do not account for future economic circumstances, industry conditions, the company's future performance or financial results. As such, statements made are based on several assumptions and factors that could change causing actual results to materially differ from the current expectations. For a complete note on forward looking statements, please refer to the quarterly report issued previously. At this point, I'd like to turn the call over to Mr. Raulta for his opening remarks.

Maria Barona
Managing Director at IDEAL Advisors LLC

Please begin, sir.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Thank you, Maria. Good morning, everyone, and thank you for joining our first quarter twenty twenty five results call. Let me start with highlighting our financial performance. Despite a challenging macroeconomic and travel demand environment, we delivered a strong first quarter with solid growth across all key financial and operational indicators. Total revenue grew by 26% year over year, ARS 8 point 4 billion driven by a 20.9% increase in aeronautical revenues and 41.3% growth in non aeronautical revenues.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

This was due to several positive factors that includes higher passenger traffic, the benefit of the new maximum tariff implement on March 1 due to the loss of MGP revision, the peso depreciation of around 20% and incremental revenues from new commercial spaces, which include the mixed use building that includes the hotel and the consolidation of the cargo facilities mainly in the Guadalajara Airport. On the profitability front, EBITDA increased by 21, reaching 5,600,000,000.0 with an EBITDA margin of 67.1%. Margin is slightly contracted compared to the first quarter twenty twenty four, mainly due to recognition in the P and L of the increase in the concession fee from 5% to nine percent in our Mexican airports. Although these changes was enacted in January 24, it is important to recall that under the new tariff regulation, any payment to the government exceeding those including the last tariff review will be added to the reference value for the next maximum tariff review. As such, the initial 4% of our revenue paid to the government during fiscal year twenty twenty four was recognized as an intangible asset under the IAS 38 with amortization beginning in January 2025 and continued through the end of the concession period.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

The related payments were included in the reference value for the determination of the maximum period of twenty twenty five-twenty twenty nine. This quarter marks the first time the full 9% concession fee has been recognized in the P and L. It's also important to highlight the events of the new commercial business improves our result of CASE's slight dilution on the EBITDA margins. The reason is that while these business lines significantly contribute to the top line of EBITDA in nominal terms, the AdCom margin levels are lower than those of the core airport operations. For example, JWTC and the new hotel operated with an EBITDA margin of around 50%, which also healthy is below our historical EBITDA margin profile.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

As we continue diversifying our revenue streams, we remain focused on balancing growth with profitably across all segments. From a financial standpoint, the company remains strong. As of March 31, we have 16,200,000,000.0 in cash, following a successfully Ps. 6,000,000,000 bond issuance. We also extend and refinanced key credit lines in Mexico and Jamaica, providing financial flexibility to support upcoming investments.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Following these figures, we maintain healthy leverage levels, reaching a net debt to EBITDA ratio of 1.7 times for the trailing twelve months, thus complying with all our debt covenants. Moving on to the CapEx we required, GAAP executed approximately COP 1,700,000,000.0 in capital expenditures. Just as a reminder, for the full year, the plan is to deploy around COP 13,000,000,000, This includes ARS 8,800,000,000.0 in committed investment across our Mexican airports under the master development program. And in addition to that figure, we have continued the construction of the new Puerto Vallarta terminal, which alone represents about 1,700,000,000.0, plus ARS 1,350,000,000.00 of investment in our Jamaican airports and about ARS 1,000,000,000 dedicated to commercial development. These investments are central to our strategy of enhancing infrastructure, expanding our commercial footprint and strengthening the overall passengers experience, all of which are key pillars for supporting our long term growth.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Let's now turn to the macroeconomic environment. We believe that for GAAP, the risk of a U. S. Recession, migration directives and the possible tariff impact remain key concerns. We are also closely monitoring the potential effects of passenger traffic, particularly in the discretionary and leisure segments, and we will keep the market posted going forward.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

It is important to note that the Holy Week fell in April year compared to March. So these months do not compare exactly with the last year. We will need a bit more time to fully assess the underlying trend for the leisure destination fees. That said, the data appears consistent with a broader economic slowdown in The United States, which quickly may manifest throughout reduced leisure travel and tourist spend. This is nothing that we have not seen before, and we are actively monitoring these changes so that we may adjust our assumptions accordingly.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Very interesting, we have looked at Canadian travelers and their travel tendencies. Many Canadians are seeking new places to travel instead of The U. S, which could represent an opportunity to attract additional flights from Canada to our airports. I mentioned this because we believe that these disruptions represent a strategic opportunity for Mexico. As Canadian travelers distance themselves from The U.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

S. Destinations such as Florida and California, for example, they might likely redirect their vacation plans toward Mexican beaches and the Caribbean, thereby the airlines would be inclined to rebalance their network. Most likely, Gap's leisure airports of Puerto Vallarta, Los Cabos and Montego Bay could be well positioned to benefit from this spread. Expanding connectivity is an opportunity that we are focused on. This year, GAP plans to announce 15 new domestic routes and 19 international routes, further strengthening our network, and these are a key critical advantage in today's landscape.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Before I conclude, I'd like to highlight that our ordinary shareholders meeting took place last week, during which a dividend payment of MXN 16.84 per outstanding share was approved. This dividend will be distributed over the course of the year, reflecting our continued commitment to deliver value to our shareholders. Thank you, and we are now happy to open for questions.

Operator

Our first question comes from Stephen Trent from Citi. Please go ahead, Stephen.

Steve Trent
Steve Trent
Managing Director at Citi

Yes. Good morning, gentlemen, and thanks very much for the time. I appreciate your comments about potential Canadian travel flow getting rerouted to potentially the Mexican beaches. Have you noticed anything from other regions or have maybe any observations that carriers in other regions may also be doing the same thing rerouting to Mexico versus Disney World or something like that?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Thank you, Steve. This is Raul. I mean, the first part that we are noting is the case of the Canadians. First, we see an important decrease on seats from U. S.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

From Canadian markets to U. S. Markets. And we are beginning to see some additional slots that are asking from mainly Canadian markets for the next winter and in some specific case of as well, half for instance for the summer. So we are just seeing for the moment a change in the trend in some way for Canadian market.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

For The U. S. Market, I think that it's still being really early to think if the all the economic environment will in some way change the rest of the routes from The U. S. To Mexico or to Jamaica.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

But what we are seeing right now is just some kind of a slight change on trend of Canadian markets.

Steve Trent
Steve Trent
Managing Director at Citi

Great. Thank you, Raul. Excuse me, I'm sorry. And just one quick follow-up, if I may. When we think about the limitations on air traffic movements in Benito Juarez Airport and the government's push to move some traffic to Filipe Angeles Airport.

Steve Trent
Steve Trent
Managing Director at Citi

Are there any expectations that we could see some adjustments in one or both assets in a positive manner that could affect the level of fee that GAP receives from either of those installations?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

It has been, mean, some kind of news and some kind of discussions, I mean, a public discussion about the possible increase on slots on Mexico City and in some way going back to the position that the airport has, I mean, three years ago, the number of slots per or operations per hour. For the moment, we have not seen any kind of, I mean, I would say, announcement about that possible change. What we are seeing is some specific companies as VivaRobus, for instance, are acting, I would say, more aggressively going to Santa Lucia as an other options for the city. But I mean, at the end of the day, as in airports, we always need to think that we operate as a net. So all kind of efficiency is all efficiencies in any airport is important for the I would say, for the whole net and the connectivity for all the airports.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So I mean, we are just really closely watching if there is some kind of changes on the policies in terms of the slots on Mexico City Airport. But we are, I would say, seeing really closely also the increase of routes from Santa Lucia airports, mainly from Hiberabos to other airports in Mexico.

Steve Trent
Steve Trent
Managing Director at Citi

Okay. Very helpful, Raul. Thank you for that.

Operator

And our next question comes from Ghirami Mendez from JPMorgan. Please go ahead.

Guilherme Mendes
Guilherme Mendes
Executive Director - Equity Research at JP Morgan

Hey, good morning, Raul, Saul. Thanks for taking my question. Two points. The first one on the guidance is given all the escalations on the tariff discussions, risks of a U. S.

Guilherme Mendes
Guilherme Mendes
Executive Director - Equity Research at JP Morgan

Recession as you point out, Raul, how comfortable are you guys with the full year guidance? We saw Valaris reducing its guidance for the year in the beginning of the week. So how this might impact Gap's traffic going forward? And the second one is on the Turks And Caicos potential new bid. I recall in the last conference call that you mentioned that something could come up in the near term.

Guilherme Mendes
Guilherme Mendes
Executive Director - Equity Research at JP Morgan

Just wondering if there's any news on that front. Thank you.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Thank you, Guillermo. The first time the first part, I mean, in terms of our traffic guidance, we still feel comfortable about the number that we sent. At the end of the day, always we prepare our guidance and all the numbers, the figures that are considered on guidance are factual rules that are already solicited for the different airlines for all the years. So for the moment at least, we are not seeing an important, I would say, decrease in terms of seats. The load factor still being really strong.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

And when we talk about the domestic market, the load factor still is really high and historical high because the lack of seats for the problem on the engines of the Airbuses. So in my point of view, still there be on the market some kind of demand on the domestic market that has not been completely, I would say, a pent for the lack of seats. So at least for the moment, we are not seeing a completely change on the trend of recovery that our airport has. But at the end of the day, I would say that there's a lot of cars moving right now. I mean, all the possible tariffs are changing day by day.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

I think that it's, I would say, really tough to trying to understand how going to be the final result in terms of the macroeconomics of these changes. But at least for the moment, we are not seeing any kind of change on our trends, and we continue comfortable about our guidance.

Guilherme Mendes
Guilherme Mendes
Executive Director - Equity Research at JP Morgan

Is it okay?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Yes. The case, yes, for Tortex Caicos.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Yes, just for sorry, so it was ready to ask, sorry, but we received an official letter from the government of Tortue and Caicos that they said that during May, they will make the final determination about this bidding process. So we are just waiting for the information.

Guilherme Mendes
Guilherme Mendes
Executive Director - Equity Research at JP Morgan

Very clear. Thank you, Joe.

Operator

And our next question comes from Fernanda Rechia from BTG. Please go ahead.

Fernanda Recchia
Equity Research Director at BTG Pactual

Hey, Raul. Two questions here from our side as well. So the first on the commercial revenues, looking at Q1 figures, the year over year growth was very strong, plus 40%. Of course, there is the GWTC impact in Q1. But just wondering what level of commercial growth for 2026 can we expect considering that for 2025, we already have your guidance?

Fernanda Recchia
Equity Research Director at BTG Pactual

And second, on capital allocation, you already provided an update on Turkmenco Caicos. But I am wondering if you're also looking for other process such as CCR or other opportunity in cargo division as well such as the WTC? That's it. Thank you.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Thank you, Fernando. This is Raul. I mean, yes, as you say, this first quarter was pretty strong. I mean, more than 40% of increase in aeronautical revenues. For sure, a big part was also related with the acquisition of JW2C.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

But even with that, I will say that the increase on nonorethco revenues was above the 15%, but we are not considering JW2C. That is really a robust result, just putting in the context of increase on four percent of the passengers. So I mean, we are really happy. And for sure, we have the effect of some new commercial businesses that opened during the last year. For instance, the hotel, as you remember, began operations on April of twenty twenty four.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So this first quarter, we had, let me put it in this way, a easier comp. But in general terms, we still feel comfortable with our own aeronautical revenues guidance. And talking about 2026, I will say that all the different terminal increases on capacity from our terminal buildings that we built on during the master plan of 2020, '20 '20 '5 will be fully operating in top year. So I will say that 2026 is going to be the first year that all the different businesses will be fully operated. So we are expecting, I would say, something that will be for sure close to the double digit, but going to be more, I would say, and for sure will depend on how could happen with the traffic on the coming years.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

But I mean, I will conclude that for the case of the Nairodesco revenues, we still feel really positive because, I mean, all the different changes and the layouts, all the hard work that our commercial area for develop new experience for our passengers are doing pretty good. So we're still comfortable that our business model will work on coming years and will be really resilient even with the possible downturn on the economy. In terms of the capital allocation, Raul? Yes.

Saúl Villarreal
CFO at Grupo Aeroportuario del Pacífico

Hi, Fernando.

Saúl Villarreal
CFO at Grupo Aeroportuario del Pacífico

This is Raul. Well, we will continue looking for opportunities. We as Raul said, we are waiting for the final outcome of Turks And Caicos Airport process. And related to CCR, as you were asking, we are analyzing the opportunity. We haven't decided to participate or not.

Saúl Villarreal
CFO at Grupo Aeroportuario del Pacífico

It's, as you may know, it's four different countries, more 20 airports in the pool. So the time to dedicate to analyze this will be very important and to in order to decide to participate or not. So it's something that we are aware of that, but we haven't decided to participate. And just for I mean, some additional idea of this, just for remember of all our the participants on the call, one of the key disciplines of GAP is the discipline for just accretive acquisitions. So we will continue in that same line.

Saúl Villarreal
CFO at Grupo Aeroportuario del Pacífico

Always, we will analyze the opportunities that make sense for our company, but always look in the correct view of just a creative opportunities for our shareholders. And just for the case of the Carguard positions, I mean, JW2C has a really, I would say, great acquisitions with a great result. And today, we are working really, really hard trying to get the best possible business plan for the long term in some other airports from Gap, taking like, I would say, platform of cargo growth to be in JWTC. So today, are analyzing inside that company, which will be the next move of operations cargo operation in other airports in GAP.

Fernanda Recchia
Equity Research Director at BTG Pactual

Very clear. Thank you so much for your answers.

Operator

And our next question comes from Jens Spieth from Morgan Stanley. Please go ahead.

Jens Spiess
Jens Spiess
Vice President at Morgan Stanley

Yes. Hello. Thank you for taking my question. I have a question regarding basically also like the capacity you're seeing more specifically to the traffic for this year and your guidance. So we saw relative to your the previous guidance you gave, what has changed is that local low cost carriers have obviously retrenched a bit of capacity.

Jens Spiess
Jens Spiess
Vice President at Morgan Stanley

Your numbers like the capacity numbers still look good, think, but any conversations you're having with foreign airlines that might also reduce capacity down the road? Or what are you seeing in terms of like the mix going forward? I know you already said that you feel comfortable with the traffic guidance, but just any color on that would be much appreciated. Thank you.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Thank you, Gus. We'll say that in general terms, all the different discussion with airlines are in some ways the same line. I mean, the domestic airlines are struggling with the lack of capacity for the engines' problems. So I mean, it's what it is and it's a problem that in some ways still floating in the industry. For the international companies, I will say the only market what we are seeing some kind of decrease in capacity and some change on planning and networks is the case of Montego Bay.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Specifically, American Airlines are changing some of the routes from Charlotte and Miami. Mean, some any change on the rules of Miami for American is I will say that it's difficult for any airport in The Caribbean because, as you know, Miami is one of the biggest hubs that on the hub I spoke of a strategy for all The Caribbean. So any change of American Airlines in that market is difficult, and we are seeing with important decrease on passengers on the first quarter of the year for Pontigo Bay, that's minus eight percent. But I would say that this is the only, I would say, decrease that today are, in some way, showing us the airlines, the one that is happening in Montego. In the other hand, we have, I would say, interesting possible or potential routes and negotiation with different Canadian airlines.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So I mean, that will be the main parts of our discussions today. Some, I would say, decrease on capacity on Montillo that will still even until the winter and a potential increase on capacities for different Canadians company made in Cabos, Puerto Vallarta and Guadalajara Airport. But then I would say that are the most important, I would say, discussions with the airlines right now.

Jens Spiess
Jens Spiess
Vice President at Morgan Stanley

Okay, perfect. And just one follow-up. Regarding your tariff implementation in Mexico, does it still is the schedule that you gave last time, is it still valid or any change there on the expected implementation?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

No. It's still in the same way. I mean, as always, we try to look into the market to understand perfectly the moment for a change in tariff. As you know, we just changed on the March 1 the tariff, and we already get somewhere close to 90% of fulfillment of the maximum tariff. So I mean, we are still on the same page of making another change to the end of the year.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

But I mean, it will be something that we need to perfectly analyze at the moment.

Jens Spiess
Jens Spiess
Vice President at Morgan Stanley

Okay. Sounds good. All right. Thank you.

Operator

Our next question comes from Pablo Monsieves from Barclays. Please go ahead.

Pablo Monsivais
Pablo Monsivais
Equity Research Analyst at Barclays

Hi. Good morning, Saul, Raul and Steve. Thanks for taking my question. Just a little bit of follow-up to Jen's questions about the tariff. You just mentioned that you are 90% completion.

Pablo Monsivais
Pablo Monsivais
Equity Research Analyst at Barclays

What are your plans to increase tariffs throughout the year? I remember that you were expecting to increase a little bit during the summer and also early twenty twenty six. But can you please shed some light for modeling purposes of what should we expect for tariffs to evolve this year and next year? Thank you.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Pablo, I would say that for this year, we don't expect to have another, I would say, additional changes on the tariff. We are expecting to beginning on the next change of tariff happens mainly we expect to happen on the January of coming year. But as always, we need to perfectly understand the market at that moment. As you know, for instance, exchange rate and inflation, it plays a really important role on the fulfillment of the tariff. So I will say that we will be ready to make public what would be the change on tariff on the beginning of coming year as soon as we have the full information about what happened with inflation, what is the trend of the dollar because all the passengers see international passengers see Mexico are in dollar.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So I mean, at that moment, we would have been ready for half the answer to that would be the change on tariff. But in general terms, our plan continue to be to have another change on tariff until the first quarter of the coming year.

Pablo Monsivais
Pablo Monsivais
Equity Research Analyst at Barclays

And just one follow-up, if I may. This tariff increase also is a reflection on the inflation and the discounts that you are not offering anymore. Is that correct?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Yes. I mean, for in general terms, I mean, let me put it really in a way for everybody. We increased all our fifth passenger on 15% on March 1 when we compare with the ones that we were applying on December of the last year. That was the main number.

Pablo Monsivais
Pablo Monsivais
Equity Research Analyst at Barclays

Okay. Thank you.

Operator

Our next question comes from Pablo Ricaldi from Itau. Please go ahead.

Pablo Ricalde
Research Analyst at Itaú Corretora de Valores SA

Hi, good morning, Saul and Raul. I have two questions on traffic. The first one is on Montego Bay. When do you expect turnaround in traffic in Montego Bay? And the second one, it's more long term related to the World Cup in 2026.

Pablo Ricalde
Research Analyst at Itaú Corretora de Valores SA

Have you quantified how much can impact your traffic numbers in 2026?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Okay. Thank you, Pablo. For the case of the World Cup, I mean, in the case of Guadalajara, we will now have five games here. There's different forecasting that the FIFA organization committee has made, I would say, public.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

But today, it's difficult to understand how big could be this impact. I mean, the numbers of possible attraction of tourists could be going from the 300,000 to around 600,000. I mean, it depends of the repetition. I mean, one of the things that all the FIFA committee told us is that as soon as we have the things that will be based on Guadalajara, it will be easy to understand which going to be the I mean, the possible attraction for the airport. It will depend one of the things that, for instance, we are expecting is a really important use of the Tijuana Airport crossing through CDX from markets soccer markets of South California to coming to Guadalajara, for instance.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

But at the end of the day, one of the things that will give us a more, I would say, correct understanding of the matter of which could be the potential attraction of additional passengers would be at the moment that we know which teams going to play the games in one half.

Saúl Villarreal
CFO at Grupo Aeroportuario del Pacífico

Hi, Pablo. This is Sol. Related to traffic, passenger traffic in multivariate, we don't foresee right now Wayne will come back at the same day we had. We were being discussing with different airlines, basically American Airlines, JetBlue and others in order to attract more passengers.

Saúl Villarreal
CFO at Grupo Aeroportuario del Pacífico

From the Board of Tourism in Jamaica, they are promoting business travelers S, UK and Canada. So we expect to make drive more passenger traffic to move to it. It is complicated to see right now when it will come back because The Caribbean in general, the passenger traffic is moving to other Yes.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

It's a general trend, I would say.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

All the airports and all the different destinations in The Caribbean are having an important decrease on passengers mainly from The U. S. It's a trend happening right now in The Caribbean. But for sure, as I will say, we still have working really close to airlines to and the government and the tourist authorities on Jamaica, trying to bring back some of the capacity to Jamaica. But it is important also to remark that we also are working on a cost reduction program, cost reduction strategy for MBJ to be as always, I mean, it's one of the characteristic of GAAP, be prepared to be resilient for any kind of deeper decrease on passengers.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So we are also working on the OpEx the important plan for possible reductions on that and be prepared for even a possible deeper decrease on passengers.

Pablo Ricalde
Research Analyst at Itaú Corretora de Valores SA

Perfect. That was very clear. Thanks.

Operator

And our next question comes from Alberto Valerio from UBS. Please go ahead.

Alberto Valerio
Alberto Valerio
Director - Equity Research at UBS Group

Hi, good morning, gentlemen. One question on my side about CapEx caught my attention at the same level of last year. I was expecting something higher because of the MDP. Do we expect this CapEx to go high for this year, increase quarter over quarter? And how is the labor force in Mexico at this moment, if you have everything hired or if you need to hire the workforce for doing the CapEx?

Alberto Valerio
Alberto Valerio
Director - Equity Research at UBS Group

If you could provide any details, it would be very helpful. Thank you very much.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

You, Alastair. This is Raul. I mean, each time when there's a new master plan, at the end of the day, all the let me put it in this way, all the clear out or essentials of what's going be your plans for the coming year happened in the last quarter of the last year. So always the first year of master plan at the beginning of the first quarter, the first six months of the plan. I would say that we're struggling a little bit on begin to move all our infrastructure department and to begin all the to move all of what have been the plan.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So for sure, we are still optimistic that we will completely fulfill our plans of CapEx during this year. We are really comfortable because some of the most important plans for this year right now are beginning just too wrong with the constructors. Are I would say, we think that our all our commitments of investment will be fulfilled for the end of this year. So I will say like a final remark on this is that always it's five years. The first six months, it's, I would say, difficult to begin all the to move all the moving parts of the infrastructure to begin with to deploy all the plants.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

But we are optimistic that we will be on the target for ending with the commitment for this year.

Alberto Valerio
Alberto Valerio
Director - Equity Research at UBS Group

Thank you very much. Very clear.

Operator

At this time, there are no further phone questions.

Alejandra Soto
Investor Relations Officer & Social Responsibility Officer at Grupo Aeroportuario del Pacífico

Well, we have some questions from the webcast. So we are going to start with the ones from Jorge Vargas from GBM. And he's asking, margins declined two eighty basis points year over year to 67.1%, mainly due to higher cost and the full recognition of the 9% concession fee. Do you expect margins to stabilize at this level? Or is this or is there potential for further compression in the next quarters?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Hi, Jorge. This is Raul. Yes, this will be the levels of margin that we would see from now. As we explained during call, we are paying already and recognizing the P and L, the concession fee payment to the government, the 9% increase from 5% to 9%. So it is important to understand that talking about the 69%, the 70% will be complicated to return to those levels.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So to be in the range of 66% to 67%, sixty seven point five in this year will be the right level. We do not expect any change in the following months.

Alejandra Soto
Investor Relations Officer & Social Responsibility Officer at Grupo Aeroportuario del Pacífico

And well, there is another one that says now that the cargo operations are fully consolidated. How should we think about their margin contribution going forward? Are there any efficiencies initiatives in place to improve profitability in this segment?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Yes. I mean, are working with the new acquisitions. For sure, we are taking different increases on margins on that and efficiencies on that specific acquisition. For sure, one of the key parts is GAP has a really important, let me put it this way, the technology and optimizations in some of the administrative concepts that we are bringing to JWC and will bring us additional efficiencies for the operation of this business. So we are just on that.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

We are in this process of digesting all this new business As soon as we could bring all these efficiencies to this new business, we're going to be ready for looking for another possible developments in our airports. But I would say that right now, or this year, we're having used for optimizing operation of JWT.

Alejandra Soto
Investor Relations Officer & Social Responsibility Officer at Grupo Aeroportuario del Pacífico

And then we have some questions from Etzon Murdia from Sumacap that are like a following question that says, regarding cargo and bundled warehouses, how sustainable is the revenue growth for the following quarters?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

It's a good question. I mean, on the first quarter of this year, we experienced an important increase in terms of cargo, all the cargo because with all the noise about the possible tariffs, some companies made or sent additional inventories to their warehouse. So it's not pretty clear how much time would be or how longer the increase on revenues from the cargo will continue. I mean, we are really growing that rate base of almost 30% of the first cargo for that for JWC. But we will I mean, we will wait and see for what's going to happen in the coming months.

Alejandra Soto
Investor Relations Officer & Social Responsibility Officer at Grupo Aeroportuario del Pacífico

Well, from Edson as well, he's asking regarding the employees' costs, can we expect the same cost for the following quarters?

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

It's Ezul. Yes, basically, yes, we will see at the same level of cost of personnel and salaries. We have to consider that integration and consolidation of GWPC implies an additional cost. At the end, it's something that we have considered in our guidance. It's something that we climb into our growth budget.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

So it the level of cost that we would see in the following quarters.

Alejandra Soto
Investor Relations Officer & Social Responsibility Officer at Grupo Aeroportuario del Pacífico

Yes. And it's on the last one that you're asking about the CapEx for Puerto Vallarta Airport. Yes, it is going to be 1,700,000,000.0 during 2025. That's correct. And well, is the last question that we have in the webcast.

Raul Musalem
Chief Executive Officer at Grupo Aeroportuario del Pacífico

Okay. So thank you once again for joining us today for our first quarter results conference. Our team is available to address any questions you may have. Have a great day. Thank you.

Operator

This does conclude GAP's conference call. Thank you for your participation. You may disconnect at any time.

Analysts
    • Maria Barona
      Managing Director at IDEAL Advisors LLC
    • Raul Musalem
      Chief Executive Officer at Grupo Aeroportuario del Pacífico
    • Steve Trent
      Managing Director at Citi
    • Guilherme Mendes
      Executive Director - Equity Research at JP Morgan
    • Fernanda Recchia
      Equity Research Director at BTG Pactual
    • Saúl Villarreal
      CFO at Grupo Aeroportuario del Pacífico
    • Jens Spiess
      Vice President at Morgan Stanley
    • Pablo Monsivais
      Equity Research Analyst at Barclays
    • Pablo Ricalde
      Research Analyst at Itaú Corretora de Valores SA
    • Alberto Valerio
      Director - Equity Research at UBS Group
    • Alejandra Soto
      Investor Relations Officer & Social Responsibility Officer at Grupo Aeroportuario del Pacífico
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Key Takeaways

  • Despite a challenging environment, total revenue grew 26% year-over-year to ARS 8.4 billion, driven by a 20.9% rise in aeronautical and a 41.3% jump in non-aeronautical revenues due to higher traffic, new tariffs, peso depreciation and new commercial spaces.
  • EBITDA increased 21% to ARS 5.6 billion with a margin of 67.1%, slightly down on the full recognition of a 9% concession fee under IAS 38 and the integration of new lower-margin commercial businesses.
  • Financial position remains strong with ARS 16.2 billion in cash post a ARS 6 billion bond, refinanced credit lines, a net debt/EBITDA ratio of 1.7× and Q1 CapEx of ARS 1.7 billion towards a full-year ARS 13 billion investment program.
  • Management highlighted macro risks from a potential U.S. slowdown and migration directives but sees a strategic opportunity as Canadian travelers shift to Mexican and Caribbean airports, supporting plans for 15 new domestic and 19 international routes.
  • A dividend of MXN 16.84 per share was approved at the recent shareholders’ meeting, to be distributed over the course of the year, reflecting continued commitment to shareholder returns.
AI Generated. May Contain Errors.
Earnings Conference Call
Grupo Aeroportuario del Pacífico Q1 2025
00:00 / 00:00

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