Grupo Aeroportuario del Pacifico(US:PAC)2021-04-30 21:04Financial Data and Key Metrics Changes - GAP experienced a 37% decline in traffic year-over-year and a 38% decline compared to 2019, primarily due to the ongoing pandemic [5][6] - Cash and cash equivalents increased by 34% or Ps. 3.7 billion year-over-year, totaling Ps. 14.7 billion [10] - Aeronautical revenue decreased by 34%, driven by a 46.9% drop in international passenger traffic [12] - EBITDA for the quarter was Ps. 1.8 billion, with an EBITDA margin of 65% [15] Business Line Data and Key Metrics Changes - Domestic traffic showed signs of recovery, particularly in Tijuana, which saw a 9% decline compared to Q1 2019, while Guadalajara experienced a 36% decrease [6] - Commercial revenue decreased by 37%, largely due to impacts from duty-free operations [13] - Operating costs were reduced by 9% compared to Q1 2020, with significant declines in maintenance and utility expenses [14] Market Data and Key Metrics Changes - International passenger traffic continued to be affected by travel restrictions imposed by the US, Canada, and the UK [7] - The recovery of domestic traffic is expected to continue, with optimism for international recovery as vaccination rates rise [7][8] Company Strategy and Development Direction - GAP is focusing on maintaining a strong balance sheet and has restarted share repurchases, acquiring 24 million shares for Ps. 531 million [10] - The company is initiating the construction of a new commercial complex at Guadalajara airport, expected to be completed by early 2023 [14] - GAP plans to issue a new tranche of debt bonds for Ps. 3 billion to refinance maturing debt [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of domestic traffic and potential international recovery, particularly in leisure markets [7][30] - The company anticipates a traffic growth of 27% to 30% in 2021, aiming for 33 to 35 million passengers [54] - Management noted that the recovery pace will vary by airport, with Tijuana expected to recover faster than Guadalajara [21][40] Other Important Information - S&P and Moody's reaffirmed their AAA rating for GAP due to solid results [11] - The company is exploring opportunities for new routes and partnerships with airlines like AeroMexico and Boladis [28][30] Q&A Session Summary Question: What is the traffic recovery period assumption? - Management expects to return to 2019 passenger levels by 2024, but is optimistic for a quicker recovery in 2023 [21] Question: Discussions with Interjet regarding operations? - Interjet accounted for about 10% of GAP's traffic, but routes were not exclusive, allowing other airlines to fill the gap [24] Question: Tariff strategy for this year? - Management plans to gradually approach maximum tariff fulfillment by the end of 2021, expecting 100% fulfillment in the coming years [28] Question: Perspectives for traffic in Guadalajara? - Guadalajara has a mix of leisure and business traffic, with recovery expected to depend on the economy of California and domestic leisure travel [40] Question: Impact of outsourcing bill on labor costs? - The potential impact is estimated to be around Ps. 60 million to Ps. 70 million, which is less than 1% of total costs [46] Question: Growth planning and acquisitions? - Currently, there are no acquisition opportunities being reviewed aside from Barbados, but the Caribbean and Central America are regions of interest [49] Question: Construction of the second runway in Guadalajara? - The second runway is expected to be completed by 2023, with plans for increased commercial revenues through new business lines [53]