PAC - Grupo Aeroportuario del Pacifico Announces Results for the Second Quarter of 2020

GUADALAJARA, Mexico, July 24, 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 second quarter ended June 30, 2020 (2Q20). Figures are unaudited and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

COVID-19 Impact

During the second quarter of the year, the COVID-19 pandemic considerably affected the Company’s results, mainly with the decrease in international and domestic passenger traffic. Even though the Government of Mexico did not issue any flight restrictions during the quarter, during the months of April and May, activity for certain economic sectors did suffer restrictions. Other sectors, deemed essential, could continue operating, among them are airports. Additionally, a media campaign was implemented to incentivize the general population to stay home. Beginning in June, the Mexican Government established a plan to gradually reactivate economic activities, which permitted some domestic passenger traffic recovery. With respect Jamaican airport operations, the Government of Jamaica restricted entry of all international flights beginning on March 25. This restriction was lifted on June 15 and, as a result, airports have initiated regular operations, but with lower levels of passenger traffic.
      
The level of recovery in the Company’s operations and results will depend on the duration and containment of the pandemic by the Mexican, Jamaican and U.S. governments, as the main origin-destination. Due to the nature of the pandemic, the Company cannot completely estimate its impact on the financial situation or the operating results of the Company for the short, medium or long term.

2Q20 Company Measures:

• To support the airlines and commercial clients, the Company granted discounts for services rendered and minimum guaranteed rents. Additionally, the Company signed agreements for payment deferrals. This allowed the Company’s clients to maintain liquidity and re-initiate regular activities in our airports beginning in June.
   
• The Company was able to limit operating expenses by closing unnecessary operating areas. As a result, cost of cleaning services, security, maintenance, electricity, supplies, professional services and other costs, were adjusted downward.
   
• Strict security protocols were implemented across all the Company’s airports in order to protect the health of passengers and employees. At the same time, the Company maintained the caliber of its operations and security to ensure a lower contagion risk and provide passengers with the confidence to travel. These measures will remain in place permanently.

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

While the effects of the pandemic resulted in a significant decline in 2Q20 results, the Company generated a positive EBITDA. Controlling cost of services, the decrease in concession fees and technical assistance fees, allowed the Company to mitigate the impact of COVID-19 on revenues.

Despite the negative operating cash flow, the Company reported a solid financial position at the close of 2Q20. The balance of cash and cash equivalents on June 30, 2020 reached Ps. 15,748.8 million, compared to Ps. 10,973.9 million at the close of March 31, 2020. During 2Q20, the Company drew down on two credit lines, together representing Ps. 2.0 billion, one drew down in the Montego Bay airport for Ps. 151.3 million (US$7.0 million) and issued long-term bond certificates (Certificados Bursátiles) for a value of Ps. 4.2 billion. The cash decrease in 2Q20 was Ps. 1,576.4 million. 

During 2Q20, the Company carried out a second evaluation covering the possible adverse impacts of the pandemic on the Company’s financial condition and operating results, as well as a review of the indicators and deterioration of the larger long-term assets, expected credit losses and recovery of assets due to deferred taxes. The conclusion was that, despite the impact of COVID-19 on 2Q20 being lower than expected, the Company cannot ensure that the negative effect of the pandemic will decline in the upcoming quarters, nor can ensure that local and global economic conditions will improve. The Company can also not ensure the availability of financing, or that general credit conditions will remain favorable.

In this evaluation, the Company reviewed financial results for the short, medium and long term, concluding that a significant deterioration of the Company’s assets is not expected. As such, the Company does not foresee business interruption or closing of operations at any of its airports.

The Company will continue to monitor the pandemic’s adverse effects on the results of the operations, including the monitoring of key indicators, deterioration tests, projections, budgets, fair values, future cash flow related to the recovery of the financial and non-financial assets, as well as possible contingencies.

It is important to mention that, at the close of 2Q20, the Company satisfied all covenants in accordance with the bank loan contracts and with all the obligations established for the bond certificates.

The Company carried out the risk valuation that represents the portfolio of airlines and commercial clients in terms of liquidity. Thus, the cost of operation recognizes a Ps. 87.0 million provision as reserves for expected credit losses.

In accordance with the estimated 2020 annual results, the Company expects an asset recovery for deferred taxes recognized in the cash flow statement, even though the results declined with respect to 2019.

The Company will continue informing the market in a timely manner regarding future material updates to the airport operations, as well as measures that are adopted for preserving liquidity and business continuity.

Summary of Results 2Q20 vs. 2Q19

• The sum of aeronautical and non-aeronautical services revenues decreased by Ps. 2,651.5 million, or 75.0%. Total revenues decreased by Ps. 2,172.4 million, or 59.4%.
   
• Cost of services decreased by Ps. 61.8 million, or 8.8%.
   
• Operating loss of Ps. 368.7 million, which represents a decrease of Ps. 2,371.1 million, or 118.4%.
   
• EBITDA decreased by Ps. 2,291.7 million, or 94.4%, going from Ps. 2,428.2 million in 2Q19 to Ps. 136.5 million in 2Q20. The EBITDA margin (excluding the effects of IFRIC 12) decreased from 68.8% in 2Q19 to 15.6% in 2Q20.
   
• Net loss and comprehensive loss of Ps. 946.0 million, a decrease of Ps. 2,163.6 million, or 177.7% compared to 2Q19. 

Passenger Traffic

During 2Q20, total terminal passengers at the Company’s 14 airports decreased by 10,543.0 thousand passengers, or 86.4%, compared to 2Q19. During 2Q20, there were no new route openings.

Revenues (2Q20 vs. 2Q19)

• Aeronautical services revenues decreased by Ps. 2,025.9 million, or 78.6%
• Non-aeronautical services revenues decreased by Ps. 625.6 million, or 65.4%
• Revenues from improvements to concession assets increased by Ps. 479.2 million, or 391.6%
• Total revenues decreased by Ps. 2,172.4 million, or 59.4%

• Aeronautical services revenues include:
  
  i. Revenues from the Mexican airports decreased by Ps. 1,741.0 million, or 79.2%, compared to 2Q19, generated mainly by an 85.2% decrease in passenger traffic, offset by the increase in passenger fees applicable in 2020. In addition, during 2Q20, airlines were granted exemptions for airport service fees.
  
  ii. Revenues from the Montego Bay airport decreased by Ps. 329.5 million, or 86.8%, compared to 2Q19. This was mainly due to a 98.6% decrease in passenger traffic. The increase in the passenger fees for 2020 offset this decline in passenger traffic.
  
  iii. The consolidation of aeronautical revenues from the Kingston airport contributed Ps. 44.7 million to revenues. 

• Non-aeronautical services revenues include:
  
  i. The Mexican airport contributions decreased by Ps. 561.5 million, or 69.2%, compared to 2Q19. Revenues from businesses operated by third parties decreased by Ps. 338.9 million. This was mainly due to a decrease in revenues from food and beverage, duty-free stores, time shares, car rentals and commercial spaces, which jointly decreased by Ps. 304.6 million, or 79.2%. Revenues from businesses operated directly by the Company decreased by Ps. 192.9 million, or 72.7%, while the recovery of costs decreased by Ps. 29.6 million, or 55.4%.
  
  ii. Revenues from the Montego Bay airport decreased by Ps. 87.8 million, or 60.2% compared to 2Q19. Revenues in U.S. dollars decreased by US$ 5.1 million, or 67.0%. However, the 22.2% depreciation of the Mexican peso against U.S. dollar offset the decline in dollar revenues, going from an average exchange rate of Ps. 19.1250 in 2Q19 to Ps. 23.3631 in 2Q20.
  
  iii. The consolidation of the Kingston airport contributed Ps. 23.6 million to non-aeronautical revenue. 

• Revenues from improvements to concession assets¹ 
  Revenues from improvements to concession assets (IFRIC-12) increased by Ps. 479.2 million, or 391.6%, compared to 2Q19, mainly in the Mexican airports, which increased by Ps. 432.7 million, or 410.4%, given that 2020 marks the beginning of the 2020-2024 Master Development Program. The increase in services for improvements to concession assets at the Montego Bay airport was Ps. 46.5 million, or 274.5%.

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

Total operating costs increased by Ps. 198.7 million, or 12.0%, compared to 2Q19, mainly due to the increase in the cost for improvements to concession assets (IFRIC-12) of Ps. 479.2 million. Not including this cost, total operating costs declined by Ps. 280.5 million, or 18.3%. This was comprised in the following manner:

Mexican Airports:

• Operating costs increased by Ps. 163.7 million or 12.8%, compared to 2Q19, mainly due to an increase in the cost of improvements to the concession assets (IFRIC-12) for Ps. 432.7 million, or 410.4%, and the depreciation and amortization of Ps. 39.7 million, or 12.2%. These increases were offset by a decline in the technical assistance fee and rights over concession assets for Ps. 219.3 million, or 83.3%, due to the decline in revenues, as well as a decrease in the cost of services of Ps. 93.7 million, or 15.8%.

The decline in the cost of services was mainly due to the partial closure of underutilized operating areas during 2Q20, implemented to reduce expenses:

• Maintenance costs decreased by Ps. 51.2 million, or 40.2%, compared to 2Q19; despite the adjustments in this line item, the Company continued operating within the same quality standards.
• Utilities decreased by Ps. 11.7 million, or 17.1%, compared to 2Q19, due to the partial closing of operating areas during 2Q20, lowering energy consumption by Ps. 26.5 million, and offset by higher water consumption of Ps. 15.6 million, among others.
• Employee expenses decreased by Ps. 9.6 million, or 4.9%, compared to 2Q19, due to the suspension of salary increases and a freeze on the hiring of additional personnel for vacant positions.
• Security and insurance decreased by Ps. 13.6 million, or 16.8%, compared to 2Q19, mainly due to the reduction of security personnel resulting from the partial closure of some operating areas.
• Other operating expenses decreased by Ps. 7.6 million, or 6.4%, compared to 2Q19, mainly due to a decrease in the sales costs in the VIP lounges and convenience stores, as well as professional service fees, expenses for FBO services and advertising for Ps. 52.9 million, or 66.6%, jointly. On the other side, there was an increase in the estimate for the credit estimate that was expected due to the financial situation of clients, for Ps. 39.0 million, and payments for expenses for hygiene, purchase of supplies and donations to the medical sector for the prevention of COVID-19, which together totaled Ps. 6.6 million.

Montego Bay Airport:

• Operating costs decreased by Ps. 64.2 million, or 17.2%, compared to 2Q19, mainly due to concession fees of Ps. 127.3 million, or 89.0%, and cost of services for Ps. 20.8 million, or 18.4%. These effects were offset by the increase in the costs related to improvement to concession assets (IFRIC-12) of Ps. 46.5 million and for the depreciation and amortization of Ps. 36.8 million, or 36.7%. Operating costs in U.S. dollars declined by US$ 6.3 million. However, this figure was offset by the 22.2% depreciation of the Mexican peso against the U.S. dollar.

Kingston Airport:

• The consolidation of the Kingston airport resulted in an increase in expenses of Ps. 99.2 million in 2Q20, which was mainly comprised by a concession fee of Ps. 43.6 million, employee costs of Ps. 19.6 million, security and insurance costs of Ps. 15.5 million, utility costs of Ps. 11.1 million, and maintenance expenses of Ps. 6.3 million.

Operating margin for 2Q20 weakened, from a margin of 54.7% in 2Q19 to a margin of (24.8%) in 2Q20. Excluding the effects of IFRIC-12, operating margin went from 56.6% in 2Q19 to a margin of (41.7%) in 2Q20. Operating losses for the 2Q20 were Ps. 368.7 million, representing a decline of Ps. 2,371.1 million, or (118.4%) compared to 2Q19.

EBITDA margin went from 66.4% in 2Q19 to 9.2% in 2Q20. Excluding the effects of IFRIC-12, EBITDA margin went from 68.8% in 2Q19 to 15.6% in 2Q20. The nominal value of EBITDA was Ps. 136.5 million in 2Q20, compared to Ps. 2,428.2 million in 2Q19, a change of (94.4%).

The net financial result increased by Ps. 75.3 million, from a net expense of Ps. 235.7 million in 2Q19 to a net expense of Ps. 311.1 million in 2Q20. This decrease was mainly the result of:

• Foreign exchange rate fluctuations, which went from a Ps. 11.1 million cost in 2Q19 to a Ps. 49.3 million cost in 2Q20, mainly due to an 1.1% appreciation of the Mexican peso against the U.S. dollar in 2Q19, compared to an appreciation of 2.3% at the end of 2Q20, thereby generating an increase in the foreign exchange loss of Ps. 38.2 million. The currency translation effect represented a higher loss of Ps. 20.4 million, compared to 2Q19, which is reflected in the comprehensive loss for 2Q20.
   
• A decrease in interest expenses of Ps. 2.5 million, or 0.5%, compared to 2Q19, mainly due to a decline in the fair value of hedging instruments of Ps. 14.3 million, which was offset by higher debt derived from the issuance of long-term bond certificates (Certificados Bursátiles) and bank debt disbursed during 2Q20 for       Ps. 11.3 million.
   
• Interest income declined by Ps. 39.6 million, or 29.2%, mainly due to the decline in the investment rates of Ps. 34.6 million, as well as a decline in the fair value of the hedging instruments of Ps. 5.0 million.

In 2Q20, there was comprehensive loss of Ps. 946.0 million, compared to a net income and comprehensive gain of Ps. 1,217.6 million in 2Q19. This effect was mainly derived by the substantial passenger traffic decline, which also impacted revenues for 2Q20.

In 2Q20, the Company experienced a net loss of Ps. 582.2 million, while in 2Q19, the Company experienced a net gain of Ps. 1,263.6 million. Income taxes decreased by Ps. 600.7 million, or 119.4%, as a result of a decline of  Ps. 638.9 million in income tax incurred, which was offset by the decline of Ps. 38.2 million in the benefit from deferred income tax, resulting from the increase in  the 2Q20 deflation, that went from 0.1% in 2Q19 to 0.6% in 2Q20.

Revenues (1H20 vs. 1H19)

• Aeronautical services revenues decreased by Ps. 1,533.4 million, or 29.4%
• Non-aeronautical services revenues decreased by Ps. 505.1 million, or 27.2%
• Revenues from improvements to concession assets increased by Ps. 1,155.9 million, or 429.9%
• Total revenues decreased by Ps. 882.7 million, or 12.0%

• Aeronautical services revenues include:
  
  i. Revenues from the Mexican airports decreased by Ps. 1,406.9 million, or 32.0%, compared to 1H19, generated mainly by an 45.0% decrease in passenger traffic, partially offset by the higher passenger fees applicable in 2020.
  
  ii. Revenues from the Montego Bay airport decreased by Ps. 311.9 million, or 38.1%, compared to 1H19. This was mainly due to a 54.3% decrease in passenger traffic and was offset by higher passenger fees applicable in 2020 and the 12.7% depreciation of the Mexican peso against the U.S. dollar in 1H20.
  
  iii. The consolidation of aeronautical revenues from the Kingston airport contributed Ps. 185.4 million to revenues. 
  
  
• The decrease in non-aeronautical services revenues was as follows:
  
  i. The Mexican airports contributed a decrease of Ps. 486.9 million, or 31.2%, compared to 1H19, mainly due to a decrease in revenues from businesses operated by third-parties, which declined by Ps. 273.3 million, or 28.3%, as a result of decrease in revenues from duty-free stores, time shares, food and beverage, rentals from commercial spaces and car rentals. Businesses operated directly by the Company declined by Ps. 173.5 million, or 36.1%, mainly due to a decrease in revenues from car parking, advertising and VIP lounges. The recovery of costs declined by Ps. 40.1 million, or 35.5%.
  
  ii. Revenues from the Montego Bay airport decreased by Ps. 93.9 million, or 31.6% compared to 1H19, mainly due to the decline in passenger traffic.
  
  iii. The consolidation of the Kingston airport contributed Ps. 75.6 million to non-aeronautical revenue. 

• Revenues from improvements to concession assets² 
  Revenues from improvements to concession assets (IFRIC-12) increased by Ps. 1,155.9 million, or 429.9%, compared to 1H19, mainly due to an increase in the Mexican airports of Ps. 1,134.5 million, or 538.0%, given that 2020 marks the beginning of the 2020-2024 Master Development Program and represents the most significant committed investment amounts to date. This increase also includes an increase of Ps. 21.4 million, or 36.9%, in revenues from improvements to concession assets at the Montego Bay airport.

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

Total operating costs increased by Ps. 1,224.9 million, or 37.6%, compared to 1H19, mainly due to the increase of Ps. 1,155.9 million in the cost of improvements to the concession assets (IFRIC-12). Excluding this line item, operating costs declined by Ps. 69.0 million in 1H20.

Mexican Airports:

• Operating costs increased by Ps. 993.5 million, or 40.4%, compared to 1H19, mainly due to an increase of Ps. 1,134.5 million in the cost of improvements to the concession assets (IFRIC-12). Excluding this line item, operating costs declined by Ps. 141.0 million in 1H20, due to the decrease in technical assistance fees and concession fees of Ps. 182.7 million, or 34.8%, jointly, as well as a reduction in the cost of services of Ps. 45.1 million, or 4.2%. This effect was offset by a Ps. 77.1 million, or 11.8%, increase in depreciation and amortization, among others.

The decline in the cost of services was mainly due to the following:

• Maintenance costs decreased by Ps. 58.7 million, or 26.5%, compared to 1H19, due to the partial closure of operational areas and decline in non-essential maintenance during 2Q20. These measures were implemented while maintaining excellence in quality of service for our passengers.
• Utilities decreased by Ps. 6.3 million, or 5.4%, due to the partial closing of operating areas, thereby lowering energy consumption during 2Q20.
• Personnel expenses increased by Ps. 19.5 million, or 5.4%, compared to 1H19, due to the personnel increase that took place in the second half of 2019, which was reflected in operating costs for the first half of 2020.
• Other operating expenses increased by Ps. 8.8 million, or 4.0%, compared to 1H19, mainly due to the expected credit losses, as well as supplies and donations related to COVID-19, that jointly totaled Ps. 45.1 million, or 45.6%. This effect was offset by lower cost of sales at the VIP lounges and retail stores, professional service fees and advertising, which jointly totaled Ps. 37.3 million, or 30.9%.

Montego Bay Airport:

• Operating costs decreased by Ps. 72.6 million, or 9.1%, compared to 1H19, mainly due to improvements to concession assets of Ps. 143.0 million, or 44.4%, and cost of services for Ps. 16.9 million, or 7.7%. These effects were offset by the increase in depreciation and amortization of Ps. 57.6 million, or 29.4%, for the costs related to improvements to concession assets (IFRIC-12) for Ps. 21.4 million.

Kingston Airport:

• The consolidation of the Kingston airport resulted in an increase in expenses of Ps. 304.1 million in 1H20, which was mainly comprised of a concession fee of Ps. 157.9 million, employee costs of Ps. 40.5 million, security and insurance costs of Ps. 31.7 million, other operating costs of Ps. 28.1 million, utility costs of Ps. 24.2 million, and maintenance expenses of Ps. 16.7 million, among others.

Operating margin went from 55.6% in 1H19 to 30.6% in 1H20. Excluding the effects of IFRIC 12, operating margin went from 57.7% in 1H19 to 39.3% in 1H20.

EBITDA margin went from 67.2% in 1H19 to 45.9% in 1H20. Excluding the effects of IFRIC-12, EBITDA margin went from 69.7% in 1H19 to 58.9% in 1H20. The nominal value of EBITDA was Ps. 2,960.5 million in the first half of 2020.

The net financial result increased by Ps. 7.8 million, from a net expense of Ps. 318.3 million in 1H19 to a net expense of Ps. 326.1 million in 1H20. This decrease was mainly the result of:

• Foreign exchange rate fluctuations, which went from a Ps. 58.3 million gain in 1H19 to a net gain of Ps. 187.1 million in 1H20, mainly due to an 2.6% appreciation of the Mexican peso against the U.S. dollar in 1H19, compared to an depreciation of 21.9% at the end of 1H20, thereby generating an increase in the foreign exchange loss of Ps. 128.9 million. The currency translation effect represented a higher gain of Ps. 1,490.9 million, compared to 1H19 and is reflected in the comprehensive income.
   
• An increase in interest expenses of Ps. 41.6 million, compared to 1H19, mainly due to higher debt derived from the issuance of long-term bond certificates (Certificados Bursátiles) and bank debt of Ps. 23.5 million and a decline in the fair value of the hedging instruments of Ps. 22.6 million.
   
• Interest income decreased by Ps. 90.8 million, or 32.2%, mainly due to the reduction in the investment rates, causing a decline in interest of Ps. 61.6 million, as well as a decline in the fair value of the hedging instruments of Ps. 29.2 million, due to the decrease in interest rates.

Comprehensive income decreased by Ps. 301.9 million, or 12.0%, compared to 1H19. This was mainly due to the substantial decline in passenger traffic, which also impacted revenues for the period.

Net income decreased by Ps. 1,435.3 million, or 53.9% in 1H20, due to a lower operating revenue of Ps. 2,107.6 million, which was offset by lower income taxes of Ps. 680.1 million, or 61.8%,  as a result of a decrease of Ps. 528.5 million in the income tax incurred, as well as the increase of Ps. 151.6 million in the benefit from deferred income tax, due to the decline in accumulated inflation, that went from 1.1% in 1H19 to 0.6% in 1HQ20.

Statement of Financial Position

Total assets as of June 30, 2020 increased by Ps. 8,874.9 million compared to 2019, primarily due to the following items: (i) cash and equivalents of Ps. 5,524.4 million; (ii) improvements to concession assets of Ps. 1,844.0 million; (iii) an increase in deferred taxes of Ps. 465.8 million; (iv) tax accounts receivable of Ps. 444.1 million; and (v) airport concessions of Ps. 337.9 million (due to the valuation of the concessions in Jamaica in U.S. dollars and the depreciation of the Mexican peso),  among others.
               
Total liabilities as of June 30, 2020 increased by Ps. 4,261.6 million compared to the same period of 2019. This increase was primarily due to the following items: (i) Payment and issuance of Ps. 5.0 billion (net) in long-term bond certificates (Certificados bursátiles), (ii) bank loans of Ps. 2,151.3 million; (iii) derivative financial instruments of Ps. 823.1 million, and iv) Accounts payable of Ps. 570.2 million. This was offset by: (i) dividends payable for Ps. 4,425.4 million, among others.

Recent Events

On June 25, the Company successfully completed the issuance of 42 million long-term bond certificates (Certificados bursátiles) in Mexico for a total value of Ps. 4.2 billion. The amount of the issuance was up to Ps. 3.0 billion with a greenshoe option of up to 40%, which was reached at the closing of the issuance: i) Ps. 602.0 million of these bonds certificates are at a variable rate of TIIE-28 plus 85 basis points, with principal due at maturity on June 22, 2023; ii) Ps. 3.598 billion at a fixed rate of 8.14%, with principal due at maturity on June 17, 2027.

- On June 30, Aeromexico announced the initiation of a voluntary restructuring process under Chapter 11 of the United States Bankruptcy Code, which will be carried out while the airline continues its operations. Currently, Aeromexico represents 10% of passenger traffic in the Company’s airport network and does not have any past due debts.

Company Description

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

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

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

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

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

Exhibit B: Consolidated statement of financial position as of June 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):