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Grupo Aeroportuario del Pacifico Announces Results for the Third Quarter of 2020

Grupo Aeroportuario del Pacífico, S.A.B. de C.V.
·39 min read

GUADALAJARA, Mexico, Oct. 29, 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 third quarter ended September 30, 2020 (3Q20). 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 third quarter of the year, the COVID-19 pandemic affected the Companys results, mainly due to the decrease in international and domestic passenger traffic compared to 3Q19. During the quarter, activities that were categorized as non-essential in Mexico in the 2Q20 began to reactivate and the airports began to show improvements in passenger traffic, however, the general population was encouraged to remain at home. With respect to operations in the Jamaican airports, the Government lifted restrictions on incoming international flights beginning June 15, thus airports began operating normally, but with much lower levels of passenger traffic compared to 3Q19.

The level of recovery in the Companys 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.

3Q20 Company Measures :

  • During the quarter, the Company continued to offer support to the airlines and its commercial clients. For commercial contracts, the Company granted discounts on the guaranteed minimum rent amounts in accordance with the percentage of passenger traffic decrease at each airport, thereby maintaining percentage of participation over revenues. Additionally, the Company signed rent payment deferral contracts with the commercial clients. With regards to the airlines, the Company implemented an incentive program in accordance with the reactivation of routes and frequencies that were held prior to the pandemic.

  • The Company was able to limit the cost of services by closing unnecessary operating areas and with the gradual opening of such areas in accordance with the increase in passenger flow, thereby lowering the cost of cleaning services, security, maintenance, electricity, supplies, professional services and other costs.

  • During 3Q20, all 14 of our airports were certified in Airport Health Accreditation by the Airports Council International (ACI), due to its implementation of strict sanitary security protocols 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.

  • Mexican Gross Domestic Product was announced during the quarter, shrinking 5.3% for the trailing 12 months. GAP requested the Mexican Aviation Authority for an extraordinary review of the Master Development Program for the current five-year period. A formal request was also submitted to the Authority for a review of the Jamaican airports. At this time, there is no timeframe defining how long the extraordinary tariff review will take, however we expect a response by the end of 2020.

Impact of COVID-19 on the Companys Financial Position:

While the effects of the pandemic resulted in a significant decline in 3Q20 results, the Company generated a positive EBITDA. Controlling cost of services, the decrease in concession and technical assistance fees, allowed the Company to mitigate the impact of COVID-19 on revenues.

During 3Q20, the Company generated a positive cash flow in operating activities, even though significantly lower than the figures for 3Q19. The Company reported a solid financial position for the close of 3Q20, cash and cash equivalents on September 30, 2020 reached Ps. 15.2 billion. During 3Q20, the Company drew down on a bank loan at the Montego Bay Airport for Ps. 673.7 million (US$30.0 million).

During 3Q20, the Company carried out an evaluation covering the possible adverse impacts of the pandemic on the Companys 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 3Q20 being lower than in 2Q20, the Company cannot ensure that the negative effect of the pandemic will decline in the upcoming quarters, nor can it 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 Companys 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 pandemics 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.

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. 113.1 million provision as a reserve for expected credit losses.

In accordance with the estimated 2020 annual results, the Company expects an asset recovery for deferred taxes recognized in the statement of cash position, 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 3Q20 vs. 3Q19

  • The sum of aeronautical and non-aeronautical services revenues decreased by Ps.  1 .6 b illion, or 44 . 0 % . Total revenues decreased by Ps. 1.3 billion, or 28.9%.

  • Cost of services de creased by Ps. 20.1 mill ion, or 3.0 % .

  • Operating loss decreased by Ps. 1 . 4 b illion, or 70.7%.

  • EBITDA de creased by Ps. 1 .4 b illion, or 55.2 % , going from Ps. 2.5 billion in 3Q19 to Ps. 1.1 billion in 3Q20. The EBITDA margin (excluding the effects of IFRIC 12) decreased from 69.5% in 3Q19 to 55.6% in 3Q20.

  • Net loss and c omprehensive loss decreased by Ps. 1 .2 b illion, from Ps. 1.5 billion in 3Q19 to Ps. 271.7 million, or 81.3% in 3Q20.

Passenger Traffic

During 3Q20, total terminal passengers at the Companys 14 airports decreased by 6,144.7 thousand passengers, a decrease of 51.8%, compared to 3Q19. During 3Q20, there were no new route openings.


Domestic Terminal Passengers 13 a irports (in thousands) :

Airport

3Q19

3Q20

Change

9M19

9M20

Change

Guadalajara

2,671.4

1,260.0

(52.8

%)

7,765.8

3,990.3

(48.6

%)

Tijuana *

1,556.2

1,211.0

(22.2

%)

4,451.1

3,091.3

(30.5

%)

Los Cabos

562.2

305.8

(45.6

%)

1,447.7

784.6

(45.8

%)

Puerto Vallarta

539.9

230.7

(57.3

%)

1,371.2

632.5

(53.9

%)

Montego Bay

2.7

0.0

(100.0

%)

6.9

1.0

(86.1

%)

Guanajuato

528.0

241.5

(54.3

%)

1,522.3

722.0

(52.6

%)

Hermosillo

455.7

194.5

(57.3

%)

1,315.7

649.1

(50.7

%)

Mexicali

301.7

151.7

(49.7

%)

871.1

475.5

(45.4

%)

Morelia

116.9

97.3

(16.8

%)

342.8

269.2

(21.5

%)

La Paz

274.0

127.1

(53.6

%)

740.4

374.1

(49.5

%)

Aguascalientes

160.4

87.7

(45.3

%)

465.6

245.3

(47.3

%)

Los Mochis

95.6

38.3

(60.0

%)

282.8

135.7

(52.0

%)

Manzanillo

21.3

9.2

(56.8

%)

70.5

34.3

(51.4

%)

Total

7,286.1

3,954.7

(45.7

%)

20,653.8

11,404.9

(44.8

%)

*CBX users are classified as international passengers

 

 

 

 

 

 


International Terminal Passengers 13 a irports (in thousands) :

Airport

3Q19

3Q20

Change

9M19

9M20

Change

Guadalajara

1,157.8

528.4

(54.4

%)

3,234.5

1,646.2

(49.1

%)

Tijuana *

741.9

382.1

(48.5

%)

2,136.1

1,207.1

(43.5

%)

Los Cabos

745.4

284.2

(61.9

%)

2,764.7

1,259.4

(54.4

%)

Puerto Vallarta

447.6

118.5

(73.5

%)

2,418.2

1,229.8

(49.1

%)

Montego Bay

1,099.0

174.5

(84.1

%)

3,615.2

1,324.1

(63.4

%)

Guanajuato

183.0

68.7

(62.5

%)

528.2

233.8

(55.7

%)

Hermosillo

17.2

8.1

(52.9

%)

51.7

28.7

(44.4

%)

Mexicali

1.8

0.3

(80.1

%)

5.1

1.6

(67.6

%)

Morelia

105.8

53.2

(49.7

%)

312.9

162.1

(48.2

%)

La Paz

2.8

0.9

(66.4

%)

9.4

4.7

(50.0

%)

Aguascalientes

65.0

22.6

(65.2

%)

164.4

77.9

(52.6

%)

Los Mochis

1.9

0.3

(83.4

%)

5.4

1.6

(69.6

%)

Manzanillo

8.4

3.0

(64.0

%)

60.8

32.6

(46.4

%)

Total

4,577.5

1,644.9

(64.1

%)

15,306.3

7,209.7

(52.9

%)

*CBX users are classified as international passengers

 

 

 

 

 

 


Total Terminal Passengers 13 a irports (in thousands) :

Airport

3Q19

3Q20

Change

9M19

9M20

Change

Guadalajara

3,829.2

1,788.4

(53.3

%)

11,000.3

5,636.5

(48.8

%)

Tijuana *

2,298.1

1,593.1

(30.7

%)

6,587.2

4,298.4

(34.7

%)

Los Cabos

1,307.6

590.0

(54.9

%)

4,212.4

2,044.0

(51.5

%)

Puerto Vallarta

987.5

349.2

(64.6

%)

3,789.4

1,862.3

(50.9

%)

Montego Bay

1,101.7

174.5

(84.2

%)

3,622.0

1,325.1

(63.4

%)

Guanajuato

711.1

310.1

(56.4

%)

2,050.5

955.8

(53.4

%)

Hermosillo

472.9

202.5

(57.2

%)

1,367.4

677.8

(50.4

%)

Mexicali

303.5

152.0

(49.9

%)

876.2

477.2

(45.5

%)

Morelia

222.7

150.5

(32.4

%)

655.7

431.3

(34.2

%)

La Paz

276.8

128.0

(53.7

%)

749.8

378.8

(49.5

%)

Aguascalientes

225.4

110.3

(51.0

%)

630.0

323.2

(48.7

%)

Los Mochis

97.6

38.6

(60.4

%)

288.2

137.3

(52.4

%)

Manzanillo

29.7

12.2

(58.9

%)

131.2

66.8

(49.1

%)

Total

11,863.6

5,599.6

(52.8

%)

35,960.1

18,614.5

(48.2

%)

*CBX users are classified as international passengers

 

 

 

 

 

 


Kingston A irport (in thousands) :

Passegners

3Q19

3Q20

Change

9M19

9M20

Change

Domestic

N/A

0.0

N/A

N/A

1.3

N/A

Internacional

N/A

119.3

N/A

N/A

494.4

N/A

Total

N/A

119.3

N/A

N/A

495.7

N/A


Total Passengers 1 4 a irports (in thousands) :

Passengers

3Q19

3Q20

Change

9M19

9M20

Change

Domestic

7,286.1

3,954.7

(45.7

%)

20,653.8

11,406.2

(44.8

%)

Internacional

4,577.5

1,764.2

(61.5

%)

15,306.3

7,704.1

(49.7

%)

Total

11,863.6

5,718.9

(51.8

%)

35,960.1

19,110.2

(46.9

%)


CBX Users (in thousands) :

 

3Q19

3Q20

Change

9M19

9M20

Change

Tijuana

730.0

380.3

(47.9

%)

2,100.9

1,198.0

(43.0

%)


Consolidated Results for the Third Q uarter of 20 20 (in thousands of pesos) :

 

3Q19

3Q20

Change

Revenues

 

 

 

Aeronautical services

2,567,517

 

1,526,645

 

(40.5

%)

Non-aeronautical services

950,353

 

444,126

 

(53.3

%)

Improvements to concession assets (IFRIC 12)

797,548

 

1,097,300

 

37.6

%

Total revenues

4,315,418

 

3,068,071

 

(28.9

%)

 

 

 

 

Operating costs

 

 

 

Costs of services:

670,350

 

650,245

 

(3.0

%)

Employee costs

205,622

 

248,704

 

21.0

%

Maintenance

141,467

 

83,742

 

(40.8

%)

Safety, security & insurance

105,657

 

108,553

 

2.7

%

Utilities

104,375

 

101,137

 

(3.1

%)

Other operating expenses

113,229

 

108,109

 

(4.5

%)

 

 

 

 

Technical assistance fees

115,795

 

58,254

 

(49.7

%)

Concession taxes

297,308

 

176,469

 

(40.6

%)

Depreciation and amortization

439,691

 

506,982

 

15.3

%

Cost of improvements to concession assets (IFRIC 12)

797,548

 

1,097,300

 

37.6

%

Other income

(7,605

)

(7,387

)

(2.9

%)

Total operating costs

2,313,087

 

2,481,863

 

7.3

%

Income from operations

2,002,331

 

586,208

 

(70.7

%)

 

 

 

 

Financial Result

(168,861

)

(241,200

)

42.8

%

Share of loss of associates

(5

)

-

 

100.0

%

Income before income taxes

1,833,465

 

345,008

 

(81.2

%)

Income taxes

(470,746

)

7,432

 

(101.6

%)

Net income

1,362,719

 

352,440

 

(74.1

%)

Currency translation effect

93,377

 

(127,539

)

(236.6

%)

Cash flow hedges, net of income tax

-

 

58,447

 

100.0

%

Remeasurements of employee benefit net income tax

(147

)

(11,633

)

7813.6

%

Comprehensive income

1,455,949

 

271,715

 

(81.3

%)

Non-controlling interest

(33,307

)

55,306

 

266.1

%

Comprehensive income attributable to controlling interest

1,422,642

 

327,021

 

(77.0

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

3Q19

3Q20

Change

EBITDA

2,442,022

 

1,093,190

 

(55.2

%)

Comprehensive income

1,455,949

 

271,715

 

(81.3

%)

Comprehensive income per share (pesos)

2.5953

 

0

 

(81.3

%)

Comprehensive income per ADS (US dollars)

1.1748

 

0.22

 

(81.3

%)

 

 

 

 

Operating income margin

46.4

%

19.1

%

(58.8

%)

Operating income margin (excluding IFRIC 12)

56.9

%

29.7

%

(47.7

%)

EBITDA margin

56.6

%

35.6

%

(37.0

%)

EBITDA margin (excluding IFRIC 12)

69.5

%

55.6

%

(20.2

%)

Costs of services and improvements / total revenues

34.0

%

57.0

%

67.5

%

Cost of services / total revenues (excluding IFRIC 12)

19.1

%

33.0

%

73.1

%

 

 

 

 

- Net (loss) income and comprehensive income (loss) per share were calculated based on 561,000,000 outstanding shares. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 22.910 per U.S. dollar (the noon buying rate on September 30, 2020, as published by the U.S. Federal Reserve Board). 

- For purposes of the consolidation of the Montego Bay airport and the Kingston airport, the average monthly exchange rate of Ps. 22.1055 per U.S. dollar for the three months ended September 30, 2020 was used.


Revenues ( 3Q20 vs. 3Q19 )

  • Aeronautical services revenues de creased by Ps. 1 .0 b illion, or 40.5 %

  • Non-aeronautical services revenues de creased by Ps. 506.2 million, or 53.3 %

  • Revenues from improvements to concession assets incre ased by Ps. 299.8 million, or 3 7.6 %

  • Total revenues de creased by Ps. 1 .3 b illion, or 28.9 %

  • Aeronautical services revenues include:

    1. Revenues from the Mexican airports decreased by Ps. 854.6 million, or 38.7%, compared to 3Q19, generated mainly by a 49.6% decrease in passenger traffic, offset by the increase in passenger fees applicable in 2020. In addition, during 3Q20, airlines were granted exemptions for airport service fees, through incentives in accordance with the reactivation of routes.

    2. Revenues from the Montego B ay airport decreased by Ps. 275.5 million, or 77.0%, compared to 3Q19. This was mainly due to the 84.2% decrease in passenger traffic. The increase in the passenger fees for 2020 offset this decline in passenger traffic and the depreciation of the peso versus the U.S. dollar in 3Q20 of 13.8%, going from an average exchange rate of Ps. 19.4195 in 3Q19 to Ps. 22.1055 in 3Q20.

    3. The consolidation of aeronautical revenues from the Kingston a irport contributed Ps. 89.2 million to revenues.

  • Non-aeronautical services revenues include:

    1. The Mexican airport s contributions decreased by Ps. 432.9 million, or 54.1%, compared to 3Q19. Revenues from businesses operated by third parties decreased by Ps. 248.0 million. This was mainly due to a decrease in revenues from food and beverage, car rentals, duty-free stores, commercial spaces, and time shares, which jointly decreased by Ps. 225.4 million, or 57.6%. Revenues from businesses operated directly by the Company decreased by Ps. 165.3 million, or 63.6%, while the recovery of costs decreased by Ps. 19.6 million, or 41.2%.

      ii. Revenues from the Montego Bay airport decreased by Ps. 97.5 million, or 65.1% compared to 3Q19. Revenues in U.S. dollars decreased by US$ 5.3 million, or 69.9%. However, the 13.8% depreciation of the Mexican peso against U.S. dollar offset the decline in dollar revenues in 3Q20.

      iii. The consolidation of the Kingston airport contributed Ps. 24.1 million to non-aeronautical revenue.

 

3Q19

3Q20

Change

Businesses operated by third parties:

 

 

 

Duty-free

128,258

54,116

(57.8

%)

Food and beverage

126,440

44,320

(64.9

%)

Retail

95,637

43,445

(54.6

%)

Car rentals

96,563

51,512

(46.7

%)

Leasing of space

60,529

48,312

(20.2

%)

Time shares

56,749

20,612

(63.7

%)

Ground transportation

33,416

18,720

(44.0

%)

Communications and financial services

23,129

11,082

(52.1

%)

Other commercial revenues

13,362

16,612

24.3

%

Total

634,084

308,731

(51.3

%)

 

 

 

 

 

 

 

 

 

Businesses operated directly by us:

 

 

 

Car parking

102,602

58,820

(42.7

%)

VIP lounges

67,014

11,887

(82.3

%)

Advertising

50,171

9,432

(81.2

%)

Convenience stores

43,317

18,017

(58.4

%)

Total

263,104

98,156

(62.7

%)

Recovery of costs

53,165

37,239

(30.0

%)

Total Non-aeronautical Revenues

950,353

444,126

(53.3

%)

 

 

 

 

 

Figures expressed in thousands of Mexican pesos. 

 

 

 

  • Revenues from improvements to concession assets 1
    Revenues from improvements to concession assets (IFRIC12) increased by Ps. 299.8 million, or 37.6%, compared to 3Q19, mainly in the Mexican airports, which increased by Ps. 304.9 million, or 39.5%, given that 2020 marks the beginning of the 2020-2024 Master Development Program. The increase was offset by a decline in services for improvements to concession assets at the Montego Bay airport for Ps. 5.2 million, or 20.0%.


[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 Companys 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 Companys 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. 168.8 million, or 7.3%, compared to 3Q19, mainly due to the increase in the cost for improvements to concession assets (IFRIC12) of Ps. 299.8 million. Meanwhile, operating costs in the Kingston airport reached Ps. 159.2 million. Not including these costs, total operating costs declined by Ps. 290.2 million, or 12.5%. This was comprised in the following manner:

Mexican Airports:

  • Operating costs increase d by Ps. 146.5 million or 7 . 6 % , compared to 3Q19, mainly due to an increase in the cost of improvements to the concession assets (IFRIC12) for Ps. 304.9 million, or 39.5%, (excluding this cost, operating costs decreased by Ps. 158.5 million or 13.8%) and the depreciation and amortization of Ps. 34.7 million, or 10.0%. These increases were offset by a decline in the technical assistance fee and rights over concession assets for Ps. 121.6 million, or 45.8%, due to the decline in revenues, as well as a decrease in the cost of services of Ps. 75.2 million, or 13.6%.

The decline in the cost of services was mainly due to the partial closure of underutilized operating areas during 3Q20, implemented to reduce expenses:

  • Maintenance costs decreased by Ps. 58.3 million, or 48.6%, compared to 3Q19.

  • Utilities decreased by Ps. 16.6 million, or 20.8%, compared to 3Q19, due to the partial closing of the operating areas in 3Q20, which lowered energy consumption by Ps. 15.1 million.

  • Security and insurance decreased by Ps. 15.6 million, or 18.9%, compared to 3Q19, mainly due to the reduction of security personnel resulting from the partial closure of some operating areas.

  • Other operating expenses decreased by Ps. 16.0 million, or 16.6%, compared to 3Q19, mainly due to a decrease in the cost of sales in the VIP lounges and convenience stores, as well as professional service fees, travel costs and expenses for FBO services for Ps. 41.5 million, or 66.6%, jointly. There was also an increase in the estimate for the credit estimate that was expected due to the financial situation of clients, for Ps. 21.5 million, as well as the payments for expenses for hygiene for the prevention of COVID-19, which together totaled Ps. 2.5 million.

  • Employee expenses increased by Ps. 31.3 million, or 18.2%, compared to 3Q19, due to the early voluntary retirement program that the Company launched for the organizational restructure, totaling approximately Ps. 20.2 million.

Montego Bay Airport:

  • Operating costs decreased by Ps. 136.9 million , or 34.9% compared to 3Q19, mainly due to the decrease in concession fees of Ps. 134.5 million, or 91.1%, cost of services of Ps. 23.8 million, or 20.0%, and cost of improvements to the concession assets (IFRIC12) of Ps. 5.2 million, or 20.0%, which were offset by the increase in depreciation and amortization of Ps. 29.9 million, or 29.5%. Operating costs in U.S. dollars declined by US$ 5.8 million. However, this figure was offset by the 13.8% depreciation of the Mexican peso against the U.S. dollar.

Kingston Airport:

  • The consolidation of the Kingston airport resulted in an increase in expense s of Ps. 159.2 m illion in 3Q20, which was mainly comprised of concession fees for Ps. 77.8 million, cost of services for Ps. 18.2 million, security and insurance costs of Ps. 17.5 million, other operating costs of Ps. 17.4 million, employee costs of Ps. 16.4 million, and maintenance expenses of Ps. 9.4 million.

Operating margin for 3Q20 declined by 2,730 basis points, from a margin of 46.4% in 3Q19 to a margin of 19.1% in 3Q20. Excluding the effects of IFRIC-12, operating margin declined by 2,720 basis points, from 56.9% to 29.7% in 3Q20. Operating income decreased by Ps. 1.4 billion, or 70.7%, compared to 3Q19.

EBITDA margin declined by 2,100 basis points, from 56.6% in 3Q19 to 35.6% in 3Q20. Excluding the effects of IFRIC-12, EBITDA margin declined by 1,390 basis points, from 69.5% in 3Q19 to 55.6% in 3Q20. The nominal value of EBITDA was Ps. 1 .1 b illion in 3Q20 , compared to Ps. 2.5 billion in 3Q19, a decrease of 55.2%.

The net f inancial result increased by Ps. 72.3 million , from a net expense of Ps. 168.9 million in 3Q19 to a net expense of Ps. 241.2 million in 3Q20. This decrease was mainly the result of:

  • Foreign exchange rate fluctuations , which went from a Ps. 70.3 million gain in 3Q19 to a Ps. 12.4 million gain in 3Q20, mainly due to a 2.4% depreciation of the Mexican peso against the U.S. dollar in 3Q19, compared to an appreciation of 2.2% at the end of 3Q20, thereby generating a de crease in the foreign exchange loss of Ps. 57.9 million. The currency translation effect represented a loss of Ps. 220.9 million, compared to 3Q19.

  • A decrease in interest expenses of Ps. 5.9 million, or 1.5 %, compared to 3Q19, mainly due to a decline in the interest rates, which was offset by higher debt derived from the issuance of long-term bonds and bank debt disbursed during 2020.

  • I nterest income declined by Ps. 20.2 million, or 1 2. 5 %, mainly due to the decline in the investment rates.

In 3Q20 , there was c omprehensive loss of Ps. 1 .2 b illion , or 81.3% compared to 3Q19. This effect was mainly derived by the substantial passenger traffic decline, which also lowered revenues for 3Q20.

In 3Q20, the Company experienced a net loss of Ps. 1.0 billion, or 74.1% compared to 3Q19. Income taxes decreased by Ps. 478.2 million, or 101.6%, as a result of a decline of Ps. 344.0 million in income tax incurred, as well as the increase in the benefit from deferred income tax for Ps. 134.1 million, due to a higher inflation rate in 3Q20, that went from 0.6% in 3Q19 to 1.5% in 3Q20.


Consolidated Results for the First Nine Months of 2020 (in thousands of pesos) :

 

9M19

9M20

Change

Revenues

 

 

 

Aeronautical services

7,776,615

 

5,202,303

 

(33.1

%)

Non-aeronautical services

2,808,953

 

1,797,608

 

(36.0

%)

Improvements to concession assets (IFRIC 12)

1,066,398

 

2,522,058

 

136.5

%

Total revenues

11,651,966

 

9,521,968

 

(18.3

%)

 

 

 

 

Operating costs

 

 

 

Costs of services:

1,971,293

 

2,030,357

 

3.0

%

Employee costs

628,738

 

735,170

 

16.9

%

Maintenance

402,269

 

295,547

 

(26.5

%)

Safety, security & insurance

310,100

 

337,958

 

9.0

%

Utilities

269,633

 

272,456

 

1.0

%

Other operating expenses

360,553

 

389,226

 

8.0

%

 

 

 

 

Technical assistance fees

345,013

 

199,296

 

(42.2

%)

Concession taxes

915,461

 

714,896

 

(21.9

%)

Depreciation and amortization

1,287,131

 

1,494,213

 

16.1

%

Cost of improvements to concession assets (IFRIC 12)

1,066,398

 

2,522,058

 

136.5

%

Other income

(16,538

)

1,635

 

(109.9

%)

Total operating costs

5,568,758

 

6,962,454

 

25.0

%

Income from operations

6,083,208

 

2,559,514

 

(57.9

%)

 

 

 

 

Financial Result

(487,208

)

(567,383

)

16.5

%

Share of loss of associates

(12

)

3

 

125.0

%

Income before income taxes

5,595,987

 

1,992,134

 

(64.4

%)

Income taxes

(1,572,146

)

(413,839

)

(73.7

%)

Net income

4,023,841

 

1,578,295

 

(60.8

%)

Currency translation effect

(46,362

)

1,223,592

 

(2739.2

%)

Cash flow hedges, net of income tax

-

 

- 289,658

 

100.0

%

Remeasurements of employee benefit net income tax

(440

)

(21,338

)

4748.8

%

Comprehensive income

3,977,039

 

2,490,891

 

(37.4

%)

Non-controlling interest

(78,235

)

(108,803

)

(39.1

%)

Comprehensive income attributable to controlling interest

3,898,804

 

2,382,088

 

(38.9

%)

 

 

 

 

 

 

 

 

 

9M19

9M20

Change

EBITDA

7,370,338

 

4,053,727

 

(45.0

%)

Comprehensive income

3,977,039

 

2,490,891

 

(37.4

%)

Comprehensive income per share (pesos)

7.0892

 

4.4401

 

(37.4

%)

Comprehensive income per ADS (US dollars)

3.2091

 

2.0099

 

(37.4

%)

 

 

 

 

Operating income margin

52.2

%

26.9

%

(48.5

%)

Operating income margin (excluding IFRIC 12)

57.6

%

36.7

%

(36.3

%)

EBITDA margin

63.3

%

42.6

%

(32.7

%)

EBITDA margin (excluding IFRIC 12)

69.6

%

57.9

%

(16.8

%)

Costs of services and improvements / total revenues

26.1

%

47.8

%

83.4

%

Cost of services / total revenues (excluding IFRIC 12)

18.6

%

29.0

%

55.8

%

 

 

 

 

- Net income and comprehensive income per share were calculated based on 561,000,000 outstanding shares. U.S. dollar figures presented were converted from pesos to U.S. dollars at a rate of Ps. 22.0910 per U.S. dollar (the noon buying rate on September 30, 2020, as published by the U.S. Federal Reserve Board).

- For purposes of the consolidation of the Montego Bay airport and the Kingston airport, the average monthly exchange rate of Ps. 21.7746 per U.S. dollar for the nine months ended September 30, 2020 was used.


Revenues ( 9M20 vs. 9M1 9)

  • Aeronautical services revenues decreased by Ps. 2 .6 b illion, or 33.1 %

  • Non-aeronautical services revenues decreased by Ps. 1 . 0 b illion, or 36.0 %

  • Revenues from improvements to concession assets increased by Ps. 1 .5 b illion, or 136.5 %

  • Total revenues decreased by Ps. 2 . 1 b illion, or 1 8 . 3 %

  • Aeronautical services revenues include:

    1. Revenues from the Mexican airports decreased by Ps. 2.3 billion, or 34.3%, for the nine-month period of 2020, generated mainly by an 46.5% decrease in passenger traffic, partially offset by the higher passenger fees applicable in 2020.

    2. Revenues from the Montego Bay airport decreased by Ps. 587.4 million, or 49.9%, compared to 9M19. This was mainly due to a 63.4% decrease in passenger traffic. This decline was offset by the higher passenger fees applicable in 2020 and the 13.2% depreciation of the Mexican peso against the U.S. dollar during the first nine months of 2020.

    3. The consolidation of aeronautical revenues from the Kingston airport contributed Ps. 274.7 million to revenues.

  • The decrease in n on-aeronautical services revenues was as follows:

    1. The Mexican airport s decreased by Ps. 919.7 million, or 38.9%, compared to 9M19, mainly due to a decrease in revenues from businesses operated by third-parties, which declined by Ps. 521.3 million, or 35.7%, as a result of the decrease in revenues from food and beverage, duty-free stores, time shares, car rentals and rentals from commercial spaces, which jointly declined by Ps. 469.8 million or 41.1%. Businesses operated directly by the Company declined by Ps. 338.8 million, or 45.8%, mainly due to a decrease in revenues from car parking, VIP lounges and advertising. The recovery of costs declined by Ps. 59.6 million, or 37.1%.

      ii. Revenues from the Montego Bay airport decreased by Ps. 191.4 million, or 42.8% compared to 9M19, mainly due to the decline in passenger traffic.

      iii. The consolidation of the Kingston airport contributed Ps. 99.8 million to non-aeronautical revenue.

 

9M19

9M20

Change

Businesses operated by third parties:

 

 

 

Duty-free

388,398

231,790

(40.3

%)

Food and beverage

361,009

221,641

(38.6

%)

Retail

282,403

186,678

(33.9

%)

Car rentals

280,811

208,228

(25.8

%)

Leasing of space

184,703

153,509

(16.9

%)

Time shares

164,595

74,155

(54.9

%)

Ground transportation

106,163

69,393

(34.6

%)

Communications and financial services

66,371

48,010

(27.7

%)

Other commercial revenues

46,305

55,676

20.2

%

Total

1,880,759

1,249,080

(33.6

%)

 

 

 

 

Businesses operated directly by us:

 

 

 

Car parking

283,603

160,054

(43.6

%)

VIP lounges

201,532

112,574

(44.1

%)

Advertising

145,039

67,105

(53.7

%)

Convenience stores

119,598

76,829

(35.8

%)

Total

749,772

416,562

(44.4

%)

Recovery of costs

178,422

131,966

(26.0

%)

Total Non-aeronautical Revenues

2,808,953

1,797,608

(36.0

%)

 

 

 

 

Figures expressed in thousands of Mexican pesos.

 

 

  • Revenues from improvements to concession assets 2
    Revenues from improvements to concession assets (IFRIC-12) increased by Ps. 1.5 billion, or 136.5%, compared to 9M19, mainly due to an increase in the Mexican airports of Ps. 1.4 billion, or 146.6%, given that 2020 marks the beginning of the 2020-2024 Master Development Program and represents the most significant committed investment amounts to date. This also includes an increase of Ps. 16.2 million, or 19.2%, in the Montego airport, compared to 9M19.


[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 Companys 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 Companys 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. 1.4 billion, or 25.0%, compared to 9M19, mainly due to the increase of Ps. 1.5 billion, or 136.5% in the cost of improvements to the concession assets (IFRIC-12). At the Kingston airport, operating costs reached Ps. 463.3 million. Excluding this line item, operating costs declined by Ps. 525.3 million, or 9.4%, compared to 9M19.

Mexican Airports:

  • Operating costs increased by Ps. 1 .1 b illion , or 26.0 %, compared to 9M19, mainly due to an increase of Ps. 1.4 billion in the cost of improvements to the concession assets (IFRIC-12). Excluding this line item, operating costs declined by Ps. 299.6 million in 9M 20 , due to the decrease in technical assistance fees and concession fees of Ps. 304.4 million, or 38.5%, jointly, as well as a reduction in the cost of services of Ps. 120.3 million, or 7.4%. This effect was offset by a Ps. 111.9 million, or 11.3%, 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. 117.1 million, or 34.3%, due to the partial closure of operational areas and decline in non-essential maintenance beginning in 2Q20. These measures were implemented while maintaining excellence in quality of service for our passengers.

  • Security and insurance decreased by Ps. 24.1 million, or 9.9%, compared to 9M19, mainly due to the decrease in the security personnel as a result of the partial closing of some operating areas.

  • Utilities decreased by Ps. 22.9 million, or 11.6%, due to the partial closing of operating areas, thereby lowering energy consumption beginning 2Q20 for Ps. 37.8 million, offset by an increase in water consumption for Ps. 16.7 million.

  • Other operating expenses decreased by Ps. 7.1 million, or 2.2%, compared to 9M19, mainly due to the decline in cost of sales in the VIP lounges and convenience stores, professional service fees, travel expenses, advertising costs and expenses for FBO services, jointly for Ps. 91.9 million, or 35.5%, which was offset by the expected credit losses, as well as supplies and donations related to COVID-19, that jointly totaled Ps. 82.0 million, or 42.5%.

  • Personnel expenses increased by Ps. 50.9 million, or 9.6%, due to the personnel increase that took place in the 3Q19, and which was reflected in operating costs for the 3Q20, as well as the voluntary early retirement program launched by the Company in order to complete the organizational restructuring, which was for approximately Ps. 20.2 million.

Montego Bay Airport:

  • Operating costs decreased by Ps. 209.6 million , or 17.6%, compared to 9M19, mainly due to improvements to concession assets of Ps. 277.6 million, or 59.1%, and cost of services for Ps. 40.8 million, or 12.0%. These effects were offset by the increase in depreciation and amortization of Ps. 87.5 million, or 29.4%, and the increase for the costs related to improvements to concession assets (IFRIC 12) for Ps. 16.2 million.

Kingston Airport:

  • The consolidation of the Kingston airport resulted in an increase in expenses of Ps. 463.3 million in 9M20, which was mainly comprised of a concession fee of Ps. 235.6 million, employee costs of Ps. 56.8 million, security and insurance costs of Ps. 49.2 million, other operating costs of Ps. 45.6 million, utility costs of Ps. 42.4 million, and maintenance expenses of Ps. 26.1 million, among others.

Operating margin went from 52.2% in 9M19 to 26.9% in 9M20. Excluding the effects of IFRIC-12, operating margin went from 57.6% in 9M19 to 36.7% in 9M20.

EBITDA margin went from 63.3% in 9M19 to 42.6% in 9M20. Excluding the effects of IFRIC-12, EBITDA margin went from 69.6% in 9M19 to 57.9% in 9M20. The nominal value of EBITDA was Ps. 4 .1 b illion in the first nine months of 2020 .

The net financial result increased by Ps. 80.2 million, from a net expense of Ps. 487.2 million in 9M19 to a net expense of Ps. 567.4 million in 9M20. This increase was mainly the result of:

  • Foreign exchange rate fluctuations, which went from a Ps. 128.6 million gain in 9M19 to a net gain of Ps. 199.5 million in 9M20, mainly due to a 0.2% appreciation of the Mexican peso against the U.S. dollar in September 2019, compared to a depreciation of 19.2% at the end of September 2020, thereby generating an increase in the foreign exchange gain of Ps. 70.9 million. The currency translation effect represented a higher gain of Ps. 1.3 billion, compared to 9M19 and is reflected in the comprehensive income.

  • An increase in interest expenses of Ps. 51.7 million , compared to 9M19, mainly due to higher debt derived from the issuance of long-term bonds and bank debt during 9M20.

  • Interest income decreased by Ps. 99.4 million , or 26.6 %, mainly due to the reduction in the investment rates, causing a decline in interest.

C omprehensive income decreased by Ps. 1.5 billion, or 37.4%, compared to 9M19. This was mainly due to the substantial decline in passenger traffic, which also impacted revenues for the period.

Net income decreased by Ps. 2.5 billion, or 60.8% in 9M20, due to a lower operating revenue of Ps. 3.6 billion, which was offset by lower income taxes of Ps. 1.1 billion, or 73.7%, as a result of a decrease of Ps. 872.6 million in the income tax incurred, as well as the increase of Ps. 285.7 million in the benefit from deferred income tax, due to the decline in accumulated inflation, that went from 0.9% in 9M19 to 2.1% in 9M20.

S tatement of Financial Position

Total assets as of September 30, 2020 increased by Ps. 9.8 billion compared to 2019, primarily due to the following items: (i) cash and equivalents of Ps. 6.1 billion; (ii) improvements to concession assets of Ps. 2.2 billion; (iii) tax accounts receivable of Ps. 586.9 million; (iv) an increase in deferred taxes of Ps. 571.5 million; and (v) client accounts receivables for Ps. 307.7 million, among others.

Total liabilities as of September 30, 2020 increased by Ps. 6.4 billion 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 bonds, (ii) bank loans of Ps. 3.5 billion; and (iii) derivative financial instruments of Ps. 679.9 million. This was offset by: (i) dividends payable for Ps. 2.2 billion, (ii) guaranteed deposits for Ps. 495.6 million, and (iii) taxes payable for Ps. 160.1 million, among others.

Recent Events

  • On September 3, 2020, the Company contracted a credit line with The Bank of Nova Scotia Jamaica Limited and The Bank of Nova Scotia for US$ 60.0 million, of which US$ 30.0 million were disbursed. The loan has a 5-year term with an optional extension of up to 2 years for up to US$ 54.0 million, with a monthly interest rate of LIBOR plus 310 basis points for 10% of the principal in month 54, the 90% at 90% maturity. The commission for disbursement is 50 basis points payable upon closing and a commission of 55 basis points over the unused funds, payable quarterly.


Company Description

Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (GAP) operates 12 airports throughout Mexicos 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, GAPs 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 managements 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 . GAPs Audit Committee will be notified of all complaints for immediate investigation.



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

Airport

3Q19

3Q20

Change

9M19

9M20

Change

Guadalajara

 

 

 

 

 

 

Aeronautical services

814,534

511,304

 

(37.2

%)

2,203,676

1,486,854

 

(32.5

%)

Non-aeronautical services

253,117

124,227

 

(50.9

%)

716,234

426,618

 

(40.4

%)

Improvements to concession assets (IFRIC 12)

676,273

345,253

 

(48.9

%)

697,061

776,820

 

11.4

%

Total Revenues

1,743,923

980,784

 

(43.8

%)

3,616,969

2,690,291

 

(25.6

%)

Operating income

737,955

328,999

 

(55.4

%)

1,926,173

996,014

 

(48.3

%)

EBITDA

817,881

421,434

 

(48.5

%)

2,180,140

1,271,400

 

(41.7

%)

 

 

 

 

 

 

 

Tijuana

 

 

 

 

 

 

Aeronautical services

399,091

297,610

 

(25.4

%)

1,157,327

806,134

 

(30.3

%)

Non-aeronautical services

121,603

70,597

 

(41.9

%)

330,557

233,815

 

(29.3

%)

Improvements to concession assets (IFRIC 12)

5,586

191,013

 

3319.7

%

16,757

429,779

 

2464.8

%

Total Revenues

526,280

559,219

 

6.3

%

1,504,642

1,469,729

 

(2.3

%)

Operating income

328,779

191,116

 

(41.9

%)

929,142

496,414

 

(46.6

%)

EBITDA

381,598

255,741

 

(33.0

%)

1,085,763

685,116

 

(36.9

%)

 

 

 

 

 

 

 

Los Cabos

 

 

 

 

 

 

Aeronautical services

314,164

194,119

 

(38.2

%)

1,025,123

668,924

 

(34.7

%)

Non-aeronautical services

191,627

76,355

 

(60.2

%)

588,060

329,332

 

(44.0

%)

Improvements to concession assets (IFRIC 12)

61,775

216,466

 

250.4

%

185,325

487,049

 

162.8

%

Total Revenues

567,566

486,940

 

(14.2

%)

1,798,508

1,485,305

 

(17.4

%)

Operating income

306,055

107,858

 

(64.8

%)

1,045,603

500,133

 

(52.2

%)

EBITDA

363,829

175,129

 

(51.9

%)

1,219,989

699,397

 

(42.7

%)

 

 

 

 

 

 

 

Puerto Vallarta

 

 

 

 

 

 

Aeronautical services

227,336

103,106

 

(54.6

%)

888,290

587,644

 

(33.8

%)

Non-aeronautical services

101,517

34,450

 

(66.1

%)

348,785

205,160

 

(41.2

%)

Improvements to concession assets (IFRIC 12)

2,972

151,609

 

5000.6

%

8,917

341,120

 

3725.5

%

Total Revenues

331,825

289,165

 

(12.9

%)

1,245,992

1,133,923

 

(9.0

%)

Operating income

185,838

29,003

 

(84.4

%)

793,177

416,505

 

(47.5

%)

EBITDA

223,248

71,792

 

(67.8

%)

909,676

541,774

 

(40.4

%)

 

 

 

 

 

 

 

Montego Bay

 

 

 

 

 

 

Aeronautical services

357,739

82,213

 

(77.0

%)

1,176,435

589,003

 

(49.9

%)

Non-aeronautical services

149,650

52,190

 

(65.1

%)

447,253

255,863

 

(42.8

%)

Improvements to concession assets (IFRIC 12)

26,233

20,996

 

(20.0

%)

84,210

100,373

 

19.2

%

Total Revenues

533,622

155,399

 

(70.9

%)

1,707,898

945,239

 

(44.7

%)

Operating income (loss)

140,690

(100,017

)

(171.1

%)

518,497

(32,927

)

(106.4

%)

EBITDA

242,119

31,336

 

(87.1

%)

815,893

351,970

 

(56.9

%)

 

 

 

 

 

 

 

 

 

 

 


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

Airport

3Q19

3Q20

Change

9M19

9M20

Change

Guanajuato

 

 

 

 

 

 

Aeronautical services

149,323

74,120

 

(50.4

%)

435,105

237,834

 

(45.3

%)

Non-aeronautical services

48,300

20,484

 

(57.6

%)

131,762

84,437

 

(35.9

%)

Improvements to concession assets (IFRIC 12)

817

43,293

 

5201.1

%

2,450

97,408

 

3875.8

%

Total Revenues

198,440

137,897

 

(30.5

%)

569,317

419,679

 

(26.3

%)

Operating income

131,831

36,915

 

(72.0

%)

376,372

150,895

 

(59.9

%)

EBITDA

148,192

55,214

 

(62.7

%)

427,798

204,707

 

(52.1

%)

 

 

 

 

 

 

 

Hermosillo

 

 

 

 

 

 

Aeronautical services

84,047

39,962...

(52.5%)245,746140,245 (42.9%)Non-aeronautical services24,30811,473 (52.8%)70,06547,283 (32.5%)Improvements to concession assets (IFRIC 12)8325,796 596.6%2,49613,042 422.5%Total Revenues 109,187 57,231 (47.6%) 318,308 200,570 (37.0%)Operating income (loss)42,761(2,351)(105.5%)128,67129,441 (77.1%)EBITDA 60,542 16,829 (72.2%) 185,154 86,552 (53.3%) Others (1) Aeronautical services221,283224,212 1.3%644,912685,664 6.3%Non-aeronautical services60,22954,350 (9.8%)176,236215,101 22.1%Improvements to concession assets (IFRIC 12)23,061122,874 432.8%69,182276,465 299.6%Total Revenues 304,573 401,435 31.8% 890,330 1,177,230 32.2%Operating income (loss)88,039(44,549)(150.6%)252,751(60,111)(123.8%)EBITDA 136,290 16,096 (88.2%) 400,198 118,860 (70.3%) Total Aeronautical services2,567,5171,526,645 (40.5%)7,776,6155,202,303 (33.1%)Non-aeronautical services950,353444,126 (53.3%)2,808,9531,797,608 (36.0%)Improvements to concession assets (IFRIC 12)797,5481,097,300 37.6%1,066,3982,522,058 136.5%Total Revenues 4,315,417 3,068,071 (28.9%) 11,651,966 9,521,969 (18.3%)Operating income1,961,948546,974 (72.1%)5,970,3852,496,364 (58.2%)EBITDA 2,373,697 1,043,572 (56.0%) 7,224,611 3,959,777 (45.2%) (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 September 30 (in thousands of pesos):

2019

2020

Change

%

Assets

Current assets

Cash and cash equivalents

9,118,556

15,220,432

6,101,876

66.9

%

Trade accounts receivable - net

1,029,394

1,337,069

307,675

29.9

%

Other current assets

367,930

955,218

587,288

159.6

%

Total current assets

10,515,880

17,512,719

6,996,839

66.5

%

Advanced payments to suppliers

138,115

395,746

257,631

186.5

%

Machinery, equipment and improvements to leased buildings - net

2,460,484

2,077,750

(382,734

)

(15.6

%)

Improvements to concession assets - net

11,257,021

13,453,827

2,196,806

19.5

%

Airport concessions - net

11,048,433

11,171,190

122,757

1.1

%

Rights to use airport facilities - net

1,373,547

1,300,151

(73,396

)

(5.3

%)

Deferred income taxes

5,445,975

6,017,493

571,518

10.5

%

Other non-current assets

161,899

256,914

95,016

58.7

%

Total assets

42,401,354

52,185,790

9,784,437

23.1

%

Liabilities

Current liabilities

6,153,004

8,433,190

2,280,185

37.1

%

Long-term liabilities

16,516,766

20,592,268

4,075,502

24.7

%

Total liabilities

22,669,770

29,025,457

6,355,688

28.0

%

Stockholders’ Equity

Common stock

6,185,082

6,185,082

-

0.0

%

Legal reserve

1,592,552

1,592,552

-

0.0

%

Net income

3,943,311

1,608,717

(2,334,594

)

(59.2

%)

Retained earnings

4,580,118

9,940,035

5,359,917

117.0

%

Reserve for share repurchase

3,283,374

3,283,374

-

0.0

%

Repurchased shares

(1,733,374

)

(1,733,374

)

-

0.0

%

Foreign currency translation reserve

731,552

1,610,358

878,806

120.1

%

Remeasurements of employee benefit – Net

7,570

(14,732

)

(22,302

)

(294.6

%)

Cash flow hedges- Net

-

(461,752

)

(461,752

)

100.0

%

Total controlling interest

18,590,185

22,010,260

3,420,075

18.4

%

Non-controlling interest

1,141,400

1,150,073

8,673

0.8

%

Total stockholder’s equity

19,731,586

23,160,333

3,428,748

17.4

%

Total liabilities and stockholders’ equity

42,401,354

52,185,790

9,784,437

23.1

%

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):

3Q19

3Q20

Change

9M19

9M20

Change

Cash flows from operating activities:

Consolidated net income

1,362,719

352,440

(74.1

%)

4,023,841

1,578,295

(60.8

%)

Post-employment benefit costs

2,282

13,640

497.7

%

9,211

20,306

120.5

%

Allowance expected credit loss

(920

)

26,026

(2928.9

%)

24,167

113,076

367.9

%

Depreciation and amortization

439,691

506,982

15.3

%

1,287,131

1,494,213

16.1

%

(Gain) loss on sale of machinery, equipment and improvements to leased assets

(879

)

(1,780

)

102.5

%

1,183

(15,979

)

(1450.2

%)

Interest expense

301,661

409,472

35.7

%

849,182

1,035,733

22.0

%

Share of profit of associate

5

-

(100.0

%)

12

3

(73.9

%)

Provisions

1,770

885

(50.0

%)

5,160

(460

)

(108.9

%)

Income tax expense

470,746

(7,432

)

(101.6

%)

1,572,150

413,839

(73.7

%)

Unrealized exchange loss

108,000

(140,455

)

(230.1

%)

37,536

512,265

1264.7

%

Net loss on derivative financial instruments

83,052

(10,579

)

(112.7

%)

181,911

48,175

(73.5

%)

2,768,126

1,149,199

(58.5

%)

7,991,483

5,199,466

(34.9

%)

Changes in working capital:

(Increase) decrease in

Trade accounts receivable

71,449

(300,072

)

(520.0

%)

340,773

82,272

(75.9

%)

Recoverable tax on assets and other assets

(9,860

)

(167,127

)

1595.0

%

(112,028

)

(625,184

)

458.1

%

Increase (decrease) in

Concession taxes payable

14,364

16,128

12.3

%

(135,755

)

(360,201

)

165.3

%

Accounts payable

105,274

(321,158

)

(405.1

%)

(44,023

)

(664,481

)

1409.4

%

Cash generated (used) by operating activities

2,949,354

376,970

(87.2

%)

8,040,452

3,631,872

(54.8

%)

Income taxes paid

(560,749

)

(213,213

)

(62.0

%)

(1,627,565

)

(842,569

)

(48.2

%)

Net cash flows provided by operating activities

2,388,605

163,757

(93.1

%)

6,412,886

2,789,303

(56.5

%)

Cash flows from investing activities:

Machinery, equipment and improvements to concession assets

(932,010

)

(1,017,214

)

9.1

%

(1,776,637

)

(2,261,509

)

27.3

%

Cash flows from sales of machinery and equipment

1,051

2,993

184.8

%

1,759

3,185

81.1

%

Other investment activities

27,369

(9,114

)

(133.3

%)

1,795

(64,116

)

(3671.0

%)

Acquisition business

(9,586

)

-

0.0

%

-

-

0.0

%

Net cash used by investment activities

(913,177

)

(1,023,335

)

12.1

%

(1,773,083

)

(2,322,439

)

31.0

%

Cash flows from financing activities:

Dividends declared and paid

(2,212,673

)

-

(100.0

%)

(2,212,673

)

-

(100.0

%)

Capital distribution

-

-

0.0

%

(1,592,494

)

-

(100.0

%)

Debt securities

-

-

0.0

%

3,000,000

7,200,000

140.0

%

Payment from Debt securities

-

-

0.0

%

-

(2,200,000

)

100.0

%

Interest paid

(377,153

)

(379,636

)

0.7

%

(923,448

)

(988,052

)

7.0

%

Bank Loans

-

654,396

100.0

%

96,274

2,805,660

2814.2

%

Interest paid on lease

(898

)

(626

)

(30.3

%)

(2,885

)

(2,018

)

(30.0

%)

Payments of obligations for leasing

(3,649

)

(3,133

)

(14.1

%)

(12,042

)

(9,949

)

(17.4

%)

Net cash flows used in financing activities

(2,594,373

)

271,001

(110.4

%)

(1,647,268

)

6,805,641

(513.1

%)

Effects of exchange rate changes on cash held

13,099

60,180

359.4

%

(25,436

)

447,735

(1860.3

%)

Net increase in cash and cash equivalents

(1,105,846

)

(528,397

)

(52.2

%)

2,967,100

7,720,239

160.2

%

Cash and cash equivalents at beginning of year

10,224,400

15,748,829

54.0

%

6,151,457

7,500,193

21.9

%

Cash and cash equivalents at the end of year

9,118,556

15,220,432

66.9

%

9,118,556

15,220,432

66.9

%



Exhibit D: Consolidated statements of profit or loss and other comprehensive income (in thousands of pesos):

3Q19

3Q20

Change

9M19

9M20

Change

Revenues

Aeronautical services

2,567,517

1,526,645

(40.5

%)

7,776,615

5,202,303

(33.1

%)

Non-aeronautical services

950,353

444,126

(53.3

%)

2,808,953

1,797,608

(36.0

%)

Improvements to concession assets (IFRIC 12)

797,548

1,097,300

37.6

%

1,066,398

2,522,058

136.5

%

Total revenues

4,315,418

3,068,071

(28.9

%)

11,651,966

9,521,968

(18.3

%)

Operating costs

Costs of services:

670,350

650,245

(3.0

%)

1,971,293

2,030,357

3.0

%

Employee costs

205,622

248,704

21.0

%

628,738

735,170

16.9

%

Maintenance

141,467

83,742

(40.8

%)

402,269

295,547

(26.5

%)

Safety, security & insurance

105,657

108,553

2.7

%

310,100

337,958

9.0

%

Utilities

104,375

101,137

(3.1

%)

269,633

272,456

1.0

%

Other operating expenses

113,229

108,109

(4.5

%)

360,553

389,226

8.0

%

Technical assistance fees

115,795

58,254

(49.7

%)

345,013

199,296

(42.2

%)

Concession taxes

297,308

176,469

(40.6

%)

915,461

714,896

(21.9

%)

Depreciation and amortization

439,691

506,982

15.3

%

1,287,131

1,494,213

16.1

%

Cost of improvements to concession assets (IFRIC 12)

797,548

1,097,300

37.6

%

1,066,398

2,522,058

136.5

%

Other income

(7,605

)

(7,387

)

(2.9

%)

(16,538

)

1,635

(109.9

%)

Total operating costs

2,313,087

2,481,863

7.3

%

5,568,758

6,962,454

25.0

%

Income from operations

2,002,331

586,208

(70.7

%)

6,083,208

2,559,514

(57.9

%)

Financial Result

(168,861

)

(241,200

)

42.8

%

(487,208

)

(567,383

)

16.5

%

Share of loss of associates

(5

)

-

100.0

%

(12

)

3

125.0

%

Income before income taxes

1,833,465

345,008

(81.2

%)

5,595,987

1,992,134

(64.4

%)

Income taxes

(470,746

)

7,432

(101.6

%)

(1,572,146

)

(413,839

)

(73.7

%)

Net income

1,362,719

352,440

(74.1

%)

4,023,841

1,578,295

(60.8

%)

Currency translation effect

93,377

(127,539

)

(236.6

%)

(46,362

)

1,223,592

(2739.2

%)

Cash flow hedges, net of income tax

-

58,447

100.0

%

-

(289,658

)

100.0

%

Remeasurements of employee benefit – net income tax

(147

)

(11,633

)

7813.6

%

(440

)

(21,338

)

4748.8

%

Comprehensive income

1,455,949

271,715

(81.3

%)

3,977,039

2,490,891

(37.4

%)

Non-controlling interest

(33,307

)

55,306

266.1

%

(78,235

)

(108,803

)

(39.1

%)

Comprehensive income attributable to controlling interest

1,422,642

327,021

(77.0

%)

3,898,804

2,382,088

(38.9

%)

3Q19

3Q20

Change

9M19

9M20

Change

EBITDA

2,442,022

1,093,190

(55.2

%)

7,370,338

4,053,727

(45.0

%)

Comprehensive income

1,455,949

271,715

(81.3

%)

3,977,039

2,490,891

(37.4

%)

Comprehensive income per share (pesos)

2.5953

0

(81.3

%)

7.0892

4

(37.4

%)

Comprehensive income per ADS (US dollars)

1.1748

0.22

(81.3

%)

3.2091

2.01

(37.4

%)

Operating income margin

46.4

%

19.1

%

(58.8

%)

52.2

%

26.9

%

(48.5

%)

Operating income margin (excluding IFRIC 12)

56.9

%

29.7

%

(47.7

%)

57.6

%

36.7

%

(36.3

%)

EBITDA margin

56.6

%

35.6

%

(37.0

%)

63.3

%

42.6

%

(32.7

%)

EBITDA margin (excluding IFRIC 12)

69.5

%

55.6

%

(20.2

%)

69.6

%

57.9

%

(16.8

%)

Costs of services and improvements / total revenues

34.0

%

57.0

%

67.5

%

26.1

%

47.8

%

83.4

%

Cost of services / total revenues (excluding IFRIC 12)

19.1

%

33.0

%

73.1

%

18.6

%

29.0

%

55.8

%

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):

Common Stock

Legal Reserve

Reserve for Share Repurchase

Repurchased Shares

Retained Earnings

Other comprehensive income

Total controlling interest

Non-controlling interest

Total Stockholders’ Equity

Balance as of January 1, 2019

7,777,576

1,345,711

2,983,374

(1,733,374

)

9,552,069

783,629

20,708,985

1,063,165

21,772,150

Transfer of earnings

-

246,840

-

-

(246,840

)

-

-

-

-

Dividends declared

-

-

-

-

(4,425,111

)

-

(4,425,111

)

-

(4,425,111

)

Reserve for repurchase of share

-

-

300,000

-

(300,000

)

-

-

-

-

Capital distribution

(1,592,494

)

-

-

-

-

-

(1,592,494

)

-

(1,592,494

)

Comprehensive income:

Net income

-

-

-

-

3,943,311

-

3,943,311

80,530

4,023,841

Foreign currency translation reserve

-

-

-

-

-

(44,068

)

(44,068

)

(2,294

)

(46,362

)

Remeasurements of employee benefit – Net

-

-

-

-

-

(440

)

(440

)

-

(440

)

Balance as of September 30, 2019

6,185,082

1,592,551

3,283,374

(1,733,374

)

8,523,429

739,120

18,590,185

1,141,400

19,731,584

Balance as of January 1, 2020

6,185,082

1,592,551

3,283,374

(1,733,374

)

9,940,035

360,504

19,628,172

1,041,271

20,669,443

Comprehensive income:

Net income

-

-

-

-

1,608,717

-

1,608,717

(30,423

)

1,578,294

Foreign currency translation reserve

-

-

-

-

-

1,084,366

1,084,366

139,226

1,223,592

Remeasurements of employee benefit – Net

-

-

-

-

-

(21,338

)

(21,338

)

-

(21,338

)

Reserve for cash flow hedges – Net of income tax

-

-

-

-

-

(289,658

)

(289,658

)

-

(289,658

)

Balance as of September 30, 2020

6,185,082

1,592,551

3,283,374

(1,733,374

)

11,548,752

1,133,874

22,010,258

1,150,074

23,160,333

For presentation purposes, the 25.5% stake in Desarrollo de Concesiones Aeroportuarias, S.L. (“DCA”) held by Vantage appears in the Stockholders’ Equity of the Company as a non-controlling interest.

As a part of the adoption of IFRS, the effects of inflation on common stock recognized pursuant to Mexican Financial Reporting Standards (MFRS) through June 30, 2007 were reclassified as retained earnings because accumulated inflation recognized under MFRS is not considered hyperinflationary according to IFRS. For Mexican legal and tax purposes, Grupo Aeroportuario del Pacífico, S.A.B. de C.V., as an individual entity, will continue preparing separate financial information under MFRS. Therefore, for any transaction between the Company and its shareholders related to stockholders’ equity, the Company must take into consideration the accounting balances prepared under MFRS as an individual entity and determine the tax impact under tax laws applicable in Mexico, which requires the use of MFRS. For purposes of reporting to stock exchanges, the consolidated financial statements will continue being prepared in accordance with IFRS, as issued by the IASB.



Exhibit F: Other operating data:


3Q19

3Q20

Change

9M19

9M20

Change

Total passengers

11,863.4

5,718.9

(51.8

%)

35,960.2

19,110.2

(46.9

%)

Total cargo volume (in WLUs)

532.2

534.7

0.5

%

1,612.1

1,549.6

(3.9

%)

Total WLUs

12,395.6

6,253.6

(49.6

%)

37,572.2

20,659.8

(45.0

%)

Aeronautical & non aeronautical services per passenger (pesos)

296.5

344.6

16.2

%

294.4

366.3

24.4

%

Aeronautical services per WLU (pesos)

207.1

244.1

17.9

%

207.0

251.8

21.7

%

Non aeronautical services per passenger (pesos)

80.1

77.7

(3.1

%)

78.1

94.1

20.4

%

Cost of services per WLU (pesos)

54.1

104.0

92.3

%

52.5

98.3

87.3

%

WLU = Workload units represent passenger traffic plus cargo units (1 cargo unit = 100 kilograms of cargo).



IR Contacts:

Saúl Villarreal, Chief Financial Officer

svillarreal@aeropuertosgap.com.mx

Alejandra Soto, IR and Financial Planning Manager

asoto@aeropuertosgap.com.mx

Gisela Murillo, Investor Relations

gmurillo@aeropuertosgap.com.mx / +523338801100 ext. 20294

Maria Barona, i-advize Corporate Communications

mbarona@i-advize.com