PAC - Grupo Aeroportuario del Pacifico Announces Results for the Second Quarter of 2022

GUADALAJARA, Mexico, July 25, 2022 (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 second quarter ended June 30, 2022 (2Q22) (tables are presented at the end of this report comparing passenger traffic and consolidated results for 2022 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”).

Summary of Results 2Q22 vs. 2Q21 (and 2Q19 for purposes of illustrating the recovery trend) :

• The sum of aeronautical and non-aeronautical services revenues increased by Ps. 1,706.3 million, or 43.4% (Ps. 2,106.0 million, or 59.6%, as compared to 2Q19) . Total revenues increased by Ps. 1,714.3 million, or 35.0% (Ps. 2,952.7 million, or 80.7%, as compared to 2Q19) .
  
  
• Cost of services increased by Ps. 204.8 million, or 29.4% (as compared to 2Q19, cost of services increased Ps. 195.2 million, or 27.7%) .
  
  
• Income from operations increased by Ps. 1,231.8 million, or 53.9% (Ps. 1,516.2 million, or 75.7%, as compared to 2Q19) .
  
  
• EBITDA increased by Ps. 1,284.6 million, or 45.9% (Ps. 1,653.5 million, or 68.1%, as compared to 2Q19) , going from Ps. 2,797.1 million in 2Q21 to Ps. 4,081.7 million in 2Q22. EBITDA margin (excluding the effects of IFRIC 12) increased from 71.2% in 2Q21 to 72.4% in 2Q22 (EBITDA margin (excluding the effects of IFRIC 12) was 72.4% in 2Q19) .
  
  
• Net comprehensive income increased Ps. 948.2 million, or 72.9% (as compared to 2Q19, it increased Ps. 1,031.5 million, or 84.7%) , from income of Ps. 1,300.9 million in 2Q21 to income of Ps. 2,249.2 million in 2Q22.
  

Current situation post-COVID

Passenger traffic recovery:

During the second quarter ended June 30, 2022, passenger traffic increased 27.6% as compared to the same period of 2021 and increased 15.3% as compared to 2019, continuing to demonstrate a positive trend, due to the recovery of the tourism and business segments. This recovery developed in second quarter results for 2022 exceeding 2019 and 2021 and generating positive net cash flows above those generated in the previous periods.

Company’s Financial Position:

During 2Q22, results were significantly better as compared to 2Q21 because of a 35.0% increase in total revenues and an increase in cost of services of 29.4%. The Company generated positive EBITDA of Ps. 4,081.7 million, an increase of 45.9% as compared to 2Q21.

In 2Q22, operating activities continued generating positive cash flow of Ps. 3,267.6 million. The Company reported a financial position of cash and cash equivalents as of June 30, 2022 of Ps. 13,489.6 million (13.0% lower than the balance as of June 30, 2021). During 2Q22, the Company made the first installment of Ps. 7.20 (SEVEN PESOS 20/100 M.N.) per share of the dividend payment at the Annual General Shareholders Meeting. Additionally, Ps. 576.2 million in share repurchases were made during 2Q22.

Passenger Traffic

During 2Q22, total passengers at the Company’s 14 airports increased by 3,043.3 thousand passengers, an increase of 27.6%, compared to 2Q21 (as compared to 2Q19, total passengers increased by 1,873.6 thousand passengers, or 15.3%) .

During 2Q22, the following new routes were opened:

National:

^{Note: Frequencies can vary without prior notice.}

International:

^{Note: Frequencies can vary without prior notice.}

Domestic Terminal Passengers – 14 airports (in thousands) :

^{*Cross Border Xpress (CBX) users are classified as international passengers.}

International Terminal Passengers – 14 airports (in thousands) :

^{*CBX users are classified as international passengers.}

Total Terminal Passengers – 14 airports (in thousands) :

^{*CBX users are classified as international passengers.}

CBX Users (in thousands) :

Consolidated Results for the Second Quarter of 2022 (in thousands of pesos) :

<sup>- Net income and comprehensive income per share for 2Q22 were calculated based on 508,510,018 shares outstanding as of June 30, 2022 and for 2Q21 were calculated based on 520,024,505 shares outstanding as of June 30, 2021. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 20.1180 per U.S. dollar (the noon buying rate on June 30, 2022, as published by the U.S. Federal Reserve Board).
- For purposes of the consolidation of the airports in Jamaica, the average three-month exchange rate of Ps. 20.0414 per U.S. dollar for the three months ended June 30, 2022 was used.</sup>

Revenues (2Q22 vs. 2Q21)

• Aeronautical services revenues increased by Ps. 1,299.4 million, or 43.0%.
• Non-aeronautical services revenues increased by Ps. 407.0 million, or 44.7%.
• Revenues from improvements to concession assets increased by Ps. 8.0 million, or 0.8%.
• Total revenues increased by Ps. 1,714.3 million, or 35.0%.

• The change in aeronautical services revenues was composed primarily of the following factors:
  
  
  1. Revenues at our Mexican airports increased by Ps. 995.3 million or 37.4% compared to 2Q21, mainly due to the 23.1% increase in passenger traffic and the adjustment in maximum rates as a result of inflation.
     
     
  2. Revenues from the Montego Bay airport increased by Ps. 200.0 million, or 80.7%, compared to 2Q21. This was mainly due to the 76.8% increase in passenger traffic. During 2Q22, there was a 0.2% appreciation of the peso versus the U.S. dollar, which went from an average exchange rate of Ps. 20.0503 in 2Q21 to Ps. 20.0414 in 2Q22.
     
     
  3. Revenues from the Kingston airport increased by Ps. 104.1 million, or 88.4% compared to 2Q21, mainly due to a 96.7% increase in passenger traffic.
     
     
• The change in non-aeronautical services revenues was composed primarily of the following factors:
  
  
  1. Revenues at our Mexican airports increased by Ps. 326.6 million, or 42.9%, compared to 2Q21. Revenues from businesses operated by third parties increased by Ps. 200.8 million, or 38.5%. This was mainly due to the recovery of passenger traffic that resulted in revenue sharing percentages that surpassed minimum guaranteed rents. The business lines that increased the most were food and beverage, retail tenants, car rentals, duty-free stores, time shares and ground transportation, which jointly increased by Ps. 176.7 million, or 41.1%. Revenues from businesses operated directly by us increased by Ps. 122.8 million, or 61.2%, while the recovery of costs increased by Ps. 2.9 million, or 7.6%.
     
     
  2. Revenues from the Montego Bay airport increased by Ps. 61.6 million, or 53.2%, compared to 2Q21. Revenues in U.S. dollars increased US$ 3.1 million, or 55.2%.
     
     
  3. Revenues from the Kingston airport increased by Ps. 18.8 million, or 55.2%, compared to 2Q21. Revenues in U.S. dollars increased US$ 0.9 million, or 60.7%.
     
     

^{Figures expressed in thousands of Mexican pesos.}

• Revenues from improvements to concession assets ¹
  Revenues from improvements to concession assets (IFRIC12) increased by Ps. 8.0 million, or 0.8%, compared to 2Q21. The change was composed primarily of:
  
  
  1. The Company’s Mexican airports, which increased by Ps. 11.3 million, or 1.2%, 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. 3.3 million, or 15.2%. During 2Q22, no improvements to concession assets were made at the Kingston airport.

Total operating costs increased by Ps. 482.5 million, or 18.5%, compared to 2Q21, mainly due to a combined Ps. 224.4 million, or 51.1%, increase in concession taxes and technical assistance fees, a Ps. 204.8 million, or 29.4%, increase in cost of services, a Ps. 52.7 million, or 10.3%, increase in depreciation and amortization and a Ps. 8.0 million, or 0.8% increase in the cost of improvements to the concession assets (IFRIC12), (excluding the cost of improvements to concession assets, operating costs increased Ps. 474.5 million, or 28.8%).

This increase in total operating costs was composed primarily of the following factors:

Mexican Airports:

• Operating costs increased by Ps. 352.6 million, or 16.2%, compared to 2Q21, primarily due to a Ps. 176.2 million, or 32.4%, increase in cost of services, a combined Ps. 110.8 million, or 36.3%, increase in technical assistance fees and concession taxes, a Ps. 55.0 million, or 14.3%, increase in depreciation and amortization, and a Ps. 11.3 million, or 1.2%, increase in the cost of improvements to the concession assets (IFRIC12), (excluding the cost of improvements to the concession assets (IFRIC12), operating costs increased by Ps. 341.3 million or 27.7%) .
  

The change in the cost of services during 2Q22 was mainly due to:

• Employee costs increased Ps. 56.8 million, or 23.7%, compared to 2Q21, mainly due to the hiring of additional personnel as required for airport operations due to the recovery of passenger traffic and the changes in Mexico’s labor laws during 2Q21.
• Other operating expenses increased Ps. 55.5 million or 88.1%, compared to 2Q21, mainly due to a combined increase of Ps. 51.6 million, jointly, in the cost of goods and services for our VIP lounges and convenience stores due to the increase in sales of these business lines, increase in FBO services, professional fees and travel expenses.
• Maintenance costs increased by Ps. 44.2 million, or 49.7%, compared to 2Q21.
• Safety, security and insurance costs increased Ps. 11.6 million, or 13.0%, compared to 2Q21, mainly due to an increase in the number of security staff and the reopening of certain operational areas.
• Cost of services increased by Ps. 12.0 million or 11.0%, compared to 2Q21, mainly due to the increase in energy consumption derived from the opening of new operating areas, fuel and the increase in water quotas.
  

Montego Bay Airport:

• Operating costs increased by Ps. 47.1 million, or 16.6%, compared to 2Q21, mainly due to a Ps. 37.5 million, or 90.7%, increase in concession taxes, a Ps. 20.9 million, or 22.7%, increase in the cost of services, and partially offset by decreases of Ps. 5.6 million in other income and a Ps. 3.2 million, or 15.2%, in the cost of improvements to concession assets (IFRIC-12).
  

Kingston Airport:

• Operating costs increased by Ps. 82.8 million, or 53.8%, compared to 2Q21, mainly due to a Ps. 76.1 million, or 82.5%, increase in concession taxes, and a Ps. 7.7 million, or 13.1%, increase in the cost of services.
  

Operating margin went from 46.7% in 2Q21 to 53.2% in 2Q22. Excluding the effects of IFRIC-12, operating margin went from 58.1% in 2Q21 to 62.4% in 2Q22. Operating income increased Ps. 1,231.8 million, or 53.9%, compared to 2Q21.

EBITDA margin went from 57.1% in 2Q21 to 61.7% in 2Q22. Excluding the effects of IFRIC-12, EBITDA margin went from 71.2% in 2Q21 to 72.4% in 2Q22. The nominal value of EBITDA increased Ps. 1,284.6 million, or 45.9%, compared to 2Q21.

Financial cost decreased by Ps. 118.1 million, or 29.1%, from a net expense of Ps. 406.2 million in 2Q21 to a net expense of Ps. 288.1 million in 2Q22. This change was mainly the result of:

• Foreign exchange rate fluctuations, which went from an expense of Ps. 102.0 million in 2Q21 to income of Ps. 81.2 million in 2Q22. This generated an increase in the foreign exchange gain of Ps. 183.2 million. Currency translation effect income increased Ps. 14.3 million, compared to 2Q21.
  
  
• Interest expenses increased by Ps. 178.5 million, or 43.5%, compared to 2Q21, mainly due to higher debt as a result of the issuance of long-term debt securities and the increase in interest rates.
  
  
• Interest income increased by Ps. 113.4 million, or 106.6%, compared to 2Q21, mainly due to an increase in the reference interest rates.
  

In 2Q22, comprehensive income increased Ps. 948.2 million, or 72.9%, compared to 2Q21. This increase was mainly due to a Ps. 1,349.9 million increase in profit before taxes derived from the increase in passenger traffic. This increase was partially offset by an increase in income taxes of Ps. 409.2 million and a currency translation effect increase of Ps. 14.3 million.

During 2Q22, net income increased by Ps. 940.7 million, or 66.1% , compared to 2Q21. Income taxes increased by Ps. 481.4 million and were partially offset by a Ps. 72.2 million increase in the benefit for deferred taxes, mainly due an increase in the inflation rate, from 0.9% in 2Q21 to 1.5% in 2Q22.

Consolidated Results for the Six Months of 2022 (in thousands of pesos) :

<sup>- Net income and comprehensive income per share for 6M22 were calculated based on 508,510,018 shares outstanding as of June 30, 2022 and for 6M21 were calculated based on 520,024,505 shares outstanding as of June 30, 2021. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 20.1180 per U.S. dollar (the noon buying rate on June 30, 2022, as published by the U.S. Federal Reserve Board).
- For purposes of the consolidation of the airports in Jamaica, the average six-month exchange rate of Ps. 20.2822 per U.S. dollar for the six months ended June 30, 2022 was used.</sup>

Revenues (6M22 vs. 6M21)

• Aeronautical services revenues increased by Ps. 3,080.8 million, or 60.5%.
• Non-aeronautical services revenues increased by Ps. 938.9 million, or 60.7%.
• Revenues from improvements to concession assets increased by Ps. 69.2 million, or 3.7%.
• Total revenues increased by Ps. 4,088.9 million, or 47.9%.

• The change in aeronautical services revenues was composed primarily of the following factors:
  
  
  1. Revenues at our Mexican airports increased by Ps. 2,430.5 million or 53.9% compared to 6M21, mainly due to the 39.3% increase in passenger traffic and the adjustment in maximum rates as a result of inflation.
     
     
  2. Revenues from the Montego Bay airport increased by Ps. 451.4 million, or 117.8%, compared to 6M21. This was mainly due to the 117.3% increase in passenger traffic. During 6M22, there was a 0.5% depreciation of the peso versus the U.S. dollar, which went from an average exchange rate of Ps. 20.1847 in 6M21 to Ps. 20.2822 in 6M22.
     
     
  3. Revenues from the Kingston airport increased by Ps. 198.9 million, or 99.5% compared to 6M21, mainly due to a 110.5% increase in passenger traffic.
     
     
• The change in non-aeronautical services revenues was composed primarily of the following factors:
  
  
  1. Revenues at our Mexican airports increased by Ps. 763.1 million, or 59.0%, compared to 6M21. Revenues from businesses operated by third parties increased by Ps. 492.6 million, or 55.5%. This was mainly due to the recovery of passenger traffic that resulted in revenue sharing percentages that surpassed minimum guaranteed rents. The business lines that increased the most were food and beverage, retail, car rentals, duty-free stores and other revenues, which jointly increased by Ps. 446.3 million, or 63.1%. Revenues from businesses operated directly by us increased by Ps. 258.6 million, or 77.2%, while the recovery of costs increased by Ps. 11.9 million, or 16.9%.
     
     
  2. Revenues from the Montego Bay airport increased by Ps. 138.3 million, or 71.6%, compared to 6M21. Revenues in U.S. dollars increased US$ 6.8 million, or 70.8%.
     
     
  3. Revenues from the Kingston airport increased by Ps. 37.5 million, or 61.0%, compared to 6M21. Revenues in U.S. dollars increased US$ 1.8 million, or 60.2%.
     

^{Figures expressed in thousands of Mexican pesos.}

• Revenues from improvements to concession assets ²
  Revenues from improvements to concession assets (IFRIC12) increased by Ps. 69.2 million, or 3.7%, compared to 6M21. The change was composed primarily of:
  
  
  1. The Company’s Mexican airports, which increased by Ps. 57.4 million, or 3.1%, 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 increased Ps. 11.8 million, or 28.7%. During 6M22, no improvements to concession assets were made at the Kingston airport.

Total operating costs increased by Ps. 967.7 million, or 19.4%, compared to 6M21, mainly due to a combined Ps. 496.1 million, or 66.9%, increase in concession taxes and technical assistance fees, a Ps. 305.6 million, or 22.7%, increase in cost of services, and a Ps. 114.5 million, or 11.3%, increase in depreciation and amortization and a Ps. 69.2 million, or 3.7% increase in the cost of improvements to the concession assets (IFRIC12), (excluding the cost of improvements to concession assets, operating costs increased Ps. 898.5 million, or 29.0%).

This increase in total operating costs was composed primarily of the following factors:

Mexican Airports:

• Operating costs increased by Ps. 694.0 million, or 16.6%, compared to 6M21, primarily due to a combined Ps. 282.3 million, or 55.0%, increase in technical assistance fees and concession taxes, a Ps. 241.2 million, or 23.0%, increase in cost of services, a Ps. 114.7 million, or 15.0%, increase in depreciation and amortization, and a Ps. 57.4 million, or 3.1%, increase in the cost of improvements to the concession assets (IFRIC12), (excluding the cost of improvements to the concession assets (IFRIC12), operating costs increased by Ps. 636.5 million or 27.4%) .
  

The change in the cost of services during 6M22 was mainly due to:

• Employee costs increased Ps. 96.2 million, or 22.0%, compared to 6M21, mainly due to the hiring of additional personnel as required for airport operations due to the recovery of passenger traffic and the changes in Mexico’s labor laws during 6M21.
• Maintenance costs increased by Ps. 63.4 million, or 38.3%, compared to 6M21.
• Other operating expenses increased Ps. 52.6 million or 32.8%, compared to 6M21, mainly due to a combined increase of Ps. 69.9 million in the cost of goods and services for our VIP lounges and convenience stores, FBO services, professional fees and travel expenses. This increase was partially offset by a Ps. 17.6 million reduction in the allowance for credit losses.
• Safety, security and insurance costs increased Ps. 17.0 million, or 9.7%, compared to 6M21, mainly due to an increase in the number of security staff.
• Cost of services increased by Ps. 8.2 million or 12.8%, compared to 6M21, mainly due to the increase in energy consumption derived from the opening of new operating areas, fuel and the increase in water quotas.
  

Montego Bay Airport:

• Operating costs increased by Ps. 106.1 million, or 19.4%, compared to 6M21, mainly due to a Ps. 68.1 million, or 97.2%, increase in concession taxes and a Ps. 41.7 million, or 22.5%, increase in the cost of services.
  

Kingston Airport:

• Operating costs increased by Ps. 167.6 million, or 60.2%, compared to 6M21, mainly due to a Ps. 145.8 million, or 91.9%, increase in concession taxes, and a Ps. 22.7 million, or 19.9%, increase in the cost of services.
  

Operating margin went from 41.5% in 6M21 to 52.8% in 6M22. Excluding the effects of IFRIC-12, operating margin went from 53.3% in 6M21 to 62.5% in 6M22. Operating income increased Ps. 3,121.2 million, or 88.1%, compared to 6M21.

EBITDA margin went from 53.4% in 6M21 to 61.7% in 6M22. Excluding the effects of IFRIC-12, EBITDA margin went from 68.6% in 6M21 to 73.1% in 6M22. The nominal value of EBITDA increased Ps. 3,235.8 million, or 71.0%, compared to 6M21.

Financial cost increased by Ps. 75.6 million, or 15.6%, from a net expense of Ps. 485.5 million in 6M21 to a net expense of Ps. 561.1 million in 6M22. This change was mainly the result of:

• Foreign exchange rate fluctuations, which went from income of Ps. 117.5 million in 6M21 to income of Ps. 133.9 million in 6M22. This generated an increase in the foreign exchange gain of Ps. 16.3 million. Currency translation effect expense increased Ps. 254.3 million, compared to 6M21.
  
  
• Interest expenses increased by Ps. 266.1 million, or 33.4%, compared to 6M21, mainly due to higher debt as a result of the issuance of long-term debt securities and the increase in interest rates.
  
  
• Interest income increased by Ps. 174.3 million, or 90.2%, compared to 6M21, mainly due to an increase in the reference interest rates.
  

In 6M22, comprehensive income increased Ps. 1,871.9 million, or 71.5%, compared to 6M21. This increase was mainly due to a Ps. 3,045.7 million increase in profit before taxes derived from the increase in passenger traffic. This increase was partially offset by an increase in income taxes of Ps. 815.2 million and a Ps. 967.7 million increase in operating costs.

During 6M22, net income increased by Ps. 2,230.5 million, or 90.6% , compared to 6M21. Income taxes increased by Ps. 931.6 million and were partially offset by a Ps. 116.4 million increase in the benefit for deferred taxes, mainly due an increase in the inflation rate, from 3.4% in 6M21 to 4.0% in 6M22.

Statement of Financial Position

Total assets as of June 30, 2022 increased by Ps. 3,427.5 million as compared to June 30, 2021, primarily due to the following items: (i) a Ps. 3,093.9 million increase in improvements to concession assets; (ii) a Ps. 2,109.5 million increase in machinery, equipment and leasehold improvements and payment in advance to suppliers; and (iii) a Ps. 409.1 million increase in accounts receivable from customers. This increase was partially offset by a Ps. 2,013.4 million decrease in cash and cash equivalents, among others.

Total liabilities as of June 30, 2022 increased by Ps. 9,289.6 million compared to June 30, 2021. This increase was primarily due to the following items: (i) issuance of Ps. 4,500.0 million in long-term debt securities, (ii) Ps. 3,675.8 million in dividends pending payment, (iii) Ps. 1,332.2 million in accounts payable and (iv) Ps. 140.5 million in security deposits. This increase was partially offset by decreases of: (i) Ps. 203.6 million in derivative financial instruments and (ii) Ps. 112.3 million in bank loans, among others.

Recent Events

• On May 16, 2022 the Company paid the Ps. 7.2 per share, corresponding to the first installment of the dividend payment approved at the Ordinary Annual General Meeting of Shareholders held on April 22, 2022.
  
  
• The estimated growth guidance for the year 2022 is updated:

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.

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

^{(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 June 30 (in thousands of pesos) :

^{The non-controlling interest corresponds to the 25.5% stake held in the Montego Bay airport by Vantage Airport Group Limited (“Vantage”).}

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) :

^{The non-controlling interest corresponds to the 25.5% stake held in the Montego Bay airport by Vantage Airport Group Limited (“Vantage”).}

Exhibit E: Consolidated stockholders’ equity (in thousands of pesos) :