PAC - Earnings call transcript Q1 2022 | Grupo Aeroportuario del Pacífico, S.A.B. de C.V.

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Operator

Good morning and welcome to GAP's First Quarter 2022 Conference Call. All lines have been placed on mute to prevent any background noise. After the presentation, we will open the floor for questions, and at that time instructions will be given if you would like to ask a question. It is now my pleasure to turn the call over to GAP's Investor Relations team. Please go ahead.

Maria Barona

to call. Aeroportuario welcome quarter Pacifico's and conference XXXX you, the del Grupo first Thank the today, from Presenting company we welcome Mr. Chief Raul GAP Executive Mr. and Revuelta, Officer; Saul Villarreal, Chief Officer. Financial conference may be made Please forward-looking statements that during advised this call. be These do circumstances, the future company's future or results. industry financial conditions, performance account not for economic

on made from factors the expectations. assumptions that to could such, statements several results differ As change materially are based and causing actual current

this note on over quarterly the forward-looking At refer like please I'd the earlier Revuelta to for call complete statements, report his Please to to issued opening a week. Raul the point, this remarks. For turn sir. begin Mr.

Raul Revuelta

of reaching network XX% the increased of the GAP's performing numbers experienced The airports an year Guadalajara passenger well as the since We XX% Notably, did maximum positive almost reflecting XX% driven Thank versus throughout and today. This business and outstanding reached Aeronautica throughout for you, results, result of solid Cabos by comparing for to first industry. results of Mexican time first growth and thank Good Tijuana XXXX, passenger tariff. XXXX. passengers compared well has recovered traffic everyone, XX mainly the travel X% as GAP tariff revenues the almost in to evidence recovery the during an the prevailing increase been you to the for market. by our XXXX. the the March, recovered that XXXX also straining the was [ph] strongest experienced morning, and joining during us pandemic, appropriate Los million of traffic Maria. driven increase maximum crowded XXXX, quarter by the

retail Most have place. by discounts as XX%, we commercial operation that tenant foot the well discussed beverage, of and revenues, XXXX. in previously on Moving duty as The came increase from free. the to compared rose continue

share. [ph] most paying the However, passenger's tenant recovery, traffic the given revenue

more the previous contracts, the the financial for positive set terms call, we went were in of we several in company. resulted that which As mentioned to conditions

with for result of did margin the were revenues, use meters, extra land in revenues is in the versus This several on we of increase outstanding EBITDA addition, actual maximum continues XX% the spaces was XXXX. in the recovery, of business only are passenger including solid XX%. to to higher instance, commercial XXXX. the opened which marketing more Only XX% enhance square can XXXX. In tariff quarter enter airport a using EBITDA October offset lock advertising XX%, that advertising, MXNX.X Kingston the partially to minus billion and both we of that with see The airport, excluding total reached that of around not commercial an however, compared we this the of showrooms. strategies of for the the That since XXXX. reflective of this brand consolidation mitigate portfolio service digital to the our increase working experience, development XX% cost by impact, increase by airplane traffic

worked cost maintain hard some to accordance expect cost coming do we control higher have expansions We our our but effects. inflationary with and in policy,

trench the On The and increased of a for MXNXX.X by that reaching to total MXNX.X cash cash of total the financial MXNXX.X proceeds issues be of billion. this market for this new Moving GAAP EBITDA covenants. of includes This with this XX% to a MXNX our pay XX other continue that A year, will was net to for healthy agencies strong mention due result just local the rating reaching portion months S&P important of debt trailing March, billion. that levels a accordance to bonds a on Mexican solid the a we [ph] performance, scale, all portion allocated complying billion. this XXXX, In to XX ratio towards debt the as gave debt on remaining reached due with figures, fundamental. bond in CapEx GAAP these of with well and X.X billion. of figure front, times investment. rating another a is were for commercial as mandatory It the AAA both

XX. building as May to with rarely square This complementing were the been the expand of the official better serve you will terminal the airport, bridge. the functionality construction as finalized continue update it great markets CapEx event the if and well a meters Moving our new of international border Same event, on see to ability scheduled opening GAAP first XX,XXX planned we are in will we finished XXXX project. as half the the and building. a building around the of cross of for an use work in you progressed has the able processor commercial to In second date add mixed runway almost Tijuana, construction lot our new

XX% I We international expect you meters, Los construction that those project look also be it's expansion continuously additional Cabos, in terminal to to with the around and rate. building XXXX that sharing which forward future XX,XXX priority during has the adding we will building commercial this want square updates reached includes completed communication. mention expenses. The

for design which for meeting mention to proposal took shareholders in shareholder another approved and are for [ph], meeting the were in that that the meeting. our external terminal and successfully in port and with already the I external on ordinary XX.X% week end accrual stage of XX% last place we the is currently shareholders the building want To construction. ordinary of working the conclude, second Additionally, first

ask GAAP a for in it will I to that's mentioned, operator processor question. the my point, as Tijuana. the very attended new I I please say want you have who open your our Day put to we As just floor together. those who to for At all terminal well thank building team in as to successful a it remarks. this special the

Operator

question from JPMorgan. And Mendes comes Guilherme first with [Operator the instructions]

is Your line open now

Guilherme Mendes

Hi have guys. questions. Saul. morning Good Raul, two I

cost going performance, you in You just incoming over The margins forward? of My mentioned the question is is the forward, terms question the in expect Thanks. what margins quarters? in how XXXX? first is what of terms the for second about pressures traffic we regarding but And is going can margins. question see sustainable outlook traffic

Raul Revuelta

want that Raul. on Guilherme, additional expansion this with cost. pressure around in the meters that airport for exactly or we happening one In world and will the for airport, on have is hand, second square cost the is that part, will general of say we on putting pressure that I terms, inflation to the have additional all some Tijuana the into year, instance, we with sure our portfolio are this for

that a, with say shaky would a something that So say XX% I are we that will inflation. be in on sustainable we be will around XX% really that moment to would about I again, margins in time. could talking are realigned talking when But

course So of about guidance, from I would outlook say deliveries on no that other increase going we of all one we in are planes, fleets about the for additional also that times, we of the area for the but of aligned that the for the Mexican of said, that XXXX, additional year. problem planes the in could Talking off we assuming talk Again, pandemic guidance are have, of with XX% traffic length, pressure or guidance, increase. there's this our in to traffic, this of XX% expecting range we be or air as

Guilherme Mendes

Very Thanks. clear Raul.

Operator

And from Suisse. Alejandro question the next comes Zamacona Credit with

now is open. line Your

Alejandro Zamacona

on taking Thank questions. you for [indiscernible]. question Hi my Two Raul.

up to fair it [ph]? assume a and catch is So MXNXX.X how in that [ph] R&D [ph] billion revenue the take should going we for MXNXX.X dividend some for way the forward

Raul Revuelta

previous applying have to are tranches we in we will We in to to make recently the our as try this the Alex, mentioned Raul we dividend just hi to but pandemic. we is see in previous have the quarters, the of Well Indeed, normalization announced the year. Yes. payment meeting of pay during as the payment. this two per Revuelta. to dividend fair two MXNXX.X shareholders normalize approved different it's year, the before share the for

XXXX we any concerned only but are and the normalize year dividend, for didn't that So to continue coming the was pay we years.

Alejandro Zamacona

of I point? staff the impact you quarters the be quarter terms, my a new and for in or the have any this the terminal plans potential Raul. if on hiring cost, Okay, in question upcoming thank bonds And do upcoming that you, could in then may, cost curious labor expansions, just

Raul Revuelta

for the Yes. Alejandro, passengers designed in remember the calls, So we least this passenger of is because some put of or the expand cost possibility we kind with attempt the at different place of first day, talked the years. the works in it to is facility airports five important scale? Raul, conference somewhere than new economies is a is when the GAAP all the that always arise for facility end just to six as at

for that put say operations, we will I in sure, slightly we the or terminals, jumps see going the we So on to different put in as cost. place,

meters will we the total the airport end the one Tijuana than At the this that operation weeks we new square first with in happen The day, the the would terminal building. of the in of Airport, more XX%, coming are of new facility. increasing

consumptions, building. a yes, maintenance, see in services, insurance, a for to additional for additional are cost, ask going example, this including we're new our energy, So to services, jump going we because security everything

see of of that that some cost would that sure, the want and to coming May give some also will this of such I the know in the sure, only for I the for expansion I So additional more we [indiscernible] kind cost clear management, months, be will two for this and that but could that pressure a say of Cabos end we for some to Los the the will see facilities in kind operate we effects they to us for jump terminal say some the sure. up in will are the additional year, operation effect, for in we of site begin have jump, have operation. the going of will these but TX for scenario and for when also say impact Tijuana in are in sure, we'll

will all as our something truth possible that happening the contractors. the this is world. to try of is that the on with avoid But different We impact around is negotiation

effect. this maintained to say that So it will difficult be be will GAAP natural to

Alejandro Zamacona

thank much. you very Okay,

Operator

And comes with from the [indiscernible] Juan GBM. next question

Your line not is open.

UnidentifiedAnalyst

congrats thanks quarter, deployment is weak the your considering for you the Hi, and the call have you deployment report. timeline Could on the full year. the CapEx? give for saw some possible a We color for guidance regarding lightly question a My of on for the CapEx. us

Saul Villarreal

higher a commercial of the year, higher Hi, is for the according some deploy projects, conclude to is the level have also not MDP, to the we which the a year Yes, we in and in Juan. will mandatory the CapEx, only first make because it in but the but advancing quarter complicated for is CapEx, we projects. pace

projects the way. several on have which is already second runway Guadalajara, We like

We mixed are Guadalajara, and Airport, have the construction expansion of for we CapEx the use on also the which is Cabos the Tijuana in already terminal finishing Los way. expansion. are finishing the Also of the we the X building

the months. be it So accelerated following will in

we So that in CapEx are to confident we guidance. pretty our reach level of the announce

UnidentifiedAnalyst

Okay, great. on the for Thanks and caller the congrats results.

Operator

next the Amorim Bruno from comes with And Sachs. Goldman question

open. not is line Your

Bruno Amorim

of and don't this growth for you Thank it If think by growth forecast multiply your year traffic guidance Thank much. that to Is guided there four, the a question. the on pretty on conservative? way on Thank during my full the could I is traffic the a you you. of as you year. your quarter midpoint fair in your first for which a guidance extent question for simplify additional the year, a the assumption much have taking XX% make? to be year, just kind to the implies we year, growth is range very

Raul Revuelta

Yeah, for sure.

for in to being happening someway for the let's instance that with because airline the domestic pandemic. that changes [ph] the what different pandemic calculated second used of biggest to terms operations that be are in stop used We a be traffic think for is some Mexico,

that Mexico, in of having capacity in So of the terms lack planes. we we know a are domestic

factors sure are plane. in of there, but for know really and higher demand their way, the in different some So low in we for that know airlines, instance, some [indiscernible] we that factor just a the load getting the the space is seeing

fleet. the announced trying for I'm say that that give day, And in question us that is say by additional us market or is what of on their is in There's some even some some possible has to the fleet the that parts other all the on could some everybody of asking sort capacity planes. way will give in So the more big area, Ukraine. more jump, the additional the airline to job way, additional in for prioritizing bring new traffic, to at the end depends in one sure but world, result of that some

of planes terms in Some have a for of investor of instance, the tariff. shorter titanium a the shortness parts --

day the coming sure that if a but risk for at risks some end going positive general the numbers sure, cash even So that original in the I that of the year. or if their say kind are positive our in Mexican sure, as we for see risk guidance we're horizon. account I could for of for this different the be the could sure I will the fleet, side additional we result announced say Bruno airlines plan that more on have not be of more were in for terms, plans or fulfil will taking for but occur seeing always to and But the higher,

Bruno Amorim

subjectivity tariff very near follow interest are you rise. process the process? any straightforward say, the up components now they the Do are and on let's an are highs, for of Is that? very question, XX-year into of being if there of for and sake sort multiyear in five I a return the just simplicity the that reflected rates to are it let's see remain the they clear. rates, allowed XX-year around every think, is Mexico Thank where you important you near may MDP the during much, Or years. assume They And rates X%. adjustment

Raul Revuelta

Hi the are for this we the obviously new approval the The tariff consider at of Yes, now the Raul. going interest new but higher in moment, it at and the of is MDP exclusion review Bruno right. you're rates moment are of depends the that right this, new to the rates.

Yes, moment fixed. have position, rates our favor. defence So absolutely because, way, a in it's this of XX% is a have interest we something in some that we because our

an average a which of the will but we months last have the around consider is for interest circumstances, the according of the tariff We good, to average very cost X%, negotiation, rates. XX finance the of of

So rates. we implies case level it in negotiation, are consider we in middle of higher that of will that the a

are you correct. So

Bruno Amorim

Thank much. you very

Operator

from comes with Citibank. And the next question Nielsen Filipe

open. line Your not is

Filipe Nielsen

my question. have Hello and I thank you for taking my from two questions side.

And see The recovery? it regarding in Mexico? Jamaican I'll South do how recovery. and traffic you one from second stealing one. building the this ask the up the up coming traffic one versus is do see recovery traffic you Mexican first tourism? first That's quarters the tourism building how Jamaica How in some tourism And to then Mexico see do you like compared

Raul Revuelta

more been close peak the in about they to Talking the to the of has Jamaica, past for Okay. important the in that the the also Thank Jamaica season from the that let's and peak March. the remember traffic is they been travelers authority you. Jamaica the has time recovery remember manage that year runs COVID aggressive island. in more the last in, way time for completely November is the some in What

So Jamaica the winter of course, year government place, in restrictions part the of the of in part or that the year. and season part put last of the

Jamaica that the will winter November. we say results in So next the next season, have I really the of that are positive will for

developed enormous that rooms. Montego true and now, seeing in road for is happening is is leisure area additional of key are rooms the would is of say of We the I key happening Bay at the destination expansion right is change our to important most Montego

positive are new attraction Jamaica middle the So I say of of still the in term because long and we hotels happening. will that

happening For of the the [indiscernible] case is also same.

project Barta. We at years really here, is in project coming for rooms important of that of group are One least is huge in key that delay place the example construction put the a our of [ph] in the on of case [indiscernible]. [indiscernible] that

blended this that Manzanillo, sense way be future for the of in us Cabos, stage and will Vallarta, that when change estate haul of Cabos, boom in really this is of that mixed seeing say past, good of as the also is in the in real in that not optimistic give open some with this give that or the the long the it's assuming world, Los we of on working and seeing trends first kind project hotel, Puerto be year. are of the years, of I'll traffic people the also there's Cabos. as Also the will that Bay. some for seeing the we the that in at will ability in a development result key and more past. vacation interesting trend excellent sure leisure that for Cabos, The of accelerate some in a US are important We're be Vallarta estate market in real our for of rooms recognition us growth than will going closer of really Montego that of destination area that all also or coming November future

Filipe Nielsen

the the a of future? if then see you and second question how or aside may, I do Barbados very And for negotiations any in studies in, have answer. new projects airports the interested new for Thank that are I you

Raul Revuelta

that is moment are the Barbados. we the only project For seeing

and are We disciplinary as know, about you about strategies. all really careful the

seeing So Barbados. project for like only that moment, is will the the we I say are that

Filipe Nielsen

very Great. much. Thanks

Operator

And Group. the with from question Compass comes next Lucila Gomez

is not line open. Your

Lucila Gomez

you question. for thank Hi, my taking

to quarter your, discounts do to are have coming current be the other that and first and for help pandemic, no in two looking may have you are question my you during on or currently on the longer help XXX%, to the forward more you example, My side, be, them restaurants increase and the maximum do question. tariff discounts stores on reach you month one you place, any would So in commercial I rent? out feel the the, would have giving any be or on confident

Raul Revuelta

This level is adjust from maximum Revuelta. bigger airports you the tariff. Raul are of of Lucila? some charges about we We in Right of for of so in in April the passenger we Mexico. questions. Yes, confident Hi Thank some the fulfilment. just feel your now XX% our

this we the we believe with continues, and continue of we maximum if traffic so the the passenger tariff. So will reach trend total

with taking have an rate and have also maximum more maximum effect Higher favor, the consider and inflation. We consider XXX% height. the inflation or to to the the higher of account, of tariff we the reach complicated exchange to fulfilment is in the

it of pretty two those confident to but we depends So external reach XXX%. for factors, the now, are

the commercial given program discounts incentives of side, supporting our have terms of some In our in we to airport. been and some our according of tenants

to providing. -- and the traffic due irrelevant. see we we very, our effect continue recovery, However, is not do are passenger very We that will training

We royalty the that clients take are our and to in paying already of rental, discounts have the fee, account minimum rental. most is the which higher than are over minimum the

the moment. fact are of the at relevant So discounts not this

Lucila Gomez

Thank Perfect. you.

Operator

Pablo [Operator from with instructions] comes Monsivais next Barclays. question The

line open. Your not is

Pablo Monsivais

but number inflation be to that last few that if more an flattish my we Can us I quarters taking following a some have see it's there's I call I that of seen airport. renegotiated question. that is detail that growth? little contracts increasing, XX% non-revenue you. over the what And for great. you bit see have know, or beginning to at I X% on a please at thanks caller the give would your going or don't or Hi your just you contracts on we a expectations Thank passenger just should because on the be commercial the said some per improvement quick one. recall you want an chance

Raul Revuelta

result big will Thank you, that revenues. parts in or that us to two helping Pablo. a on that way are some better I are us to, parts commercial helping to, there's say three get

the sure for first The is passengers.

the the for in Vallarta, some even jump revenues. commercial better, see volume, passengers but Montego, on also we if key on we a international additional part will So Cabos the is a there recovery better and sure see

as The biggest, of one revenue the you know, in per related everyone revenue second commercial, has the for passengers in US per Cabos is instance, commercial spaces, ratio Mexico.

the as building of or the new, So And we're to going we say the What have, in beginning Vallarta. of related the last passenger November everybody system Cabos will terminal our for we Vallarta, contract quarter more the Cabos, for additional we the last That years I negotiate be of will that in building. of have XXXX. in time have of happened some or results. on knows, we as some mainly two are jump in new construction expansion operative in the or buildings on the the new

advantage the have we mid-term, in years need a least of terminal at of the half the two take and that actual in passengers. So recovery we the to some

we some the time really get Vallarta. negotiation a and some contracts years short So of case to for half begin two additional of of revenues

would on I increase passenger. So of results terms, say commercial for our we are optimistic that more passive in even or maintain commercial, the to revenue general ratio

per passenger we will MXNXX growing the first that end trend We quarter. will of the that of for continue year. the I say have almost for

Pablo Monsivais

Thank you much. Perfect. very

Operator

up JPMorgan. [Operator with you a have Mendes Guilherme instructions] question And from follow

line not Your open. is

Guilherme Mendes

rebalance negotiation Hi, the has the question Jamaica, contract? on everybody. Quick up how in regarding follow been potential

Raul Revuelta

working the this. terms authorities the been are The of regarding with Hi negotiation. have in begin government of Jamaica some we Guilherme, with advisories hiring

the we government, we done will from have that finalize perception will different the at government. special is Our though be is the a negotiation even it good by integrated with year, important very by a end that team the of relationship ministers

So wait are the with is to the and fully advisors begin to have ready until we negotiation. integrated this

of year. end So June order finalize at our the estimate to best is in and in to begin the

Guilherme Mendes

Very Okay. Thanks. clear.

Operator

over the any to call are like questions this this for at would at I team phone the remarks. time. hand no closing time, further over there And the And to

Guilherme Mendes

of answer day. first we and again choir any everyone you you GAP, we behalf great joining conference. are us you in that On always Thank our to We today to remind a available wish for question. results open want

Operator

does today's conclude you Thank call. this Thank for participation. your you. And

now disconnect. may You

Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) 27 Apr 222022 Q1 Earnings call transcript