Grupo Aeroportuario del Pacifico(PAC) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved a record adjusted EBITDA of MXN 17.7 billion, up 9.7% compared to 2022 [29] - Cash increased significantly during 2023, reaching MXN 10 billion by year-end, with a net debt-to-EBITDA ratio of 1.7 times [30][28] - Passenger traffic reached a record 64 million, although a decrease of 3% to 5% is anticipated for 2024 due to various challenges [32][28] Business Line Data and Key Metrics Changes - Commercial revenue from car rentals saw significant growth, particularly due to billing processes at Los Cabos airport, with expectations for continued double-digit growth in 2024 [6] - Non-aeronautical revenues are expected to grow by 12% to 14% in 2024, driven by new commercial projects [56][99] Market Data and Key Metrics Changes - The company anticipates a slowdown in passenger traffic across its airport network due to the Pratt & Whitney engine inspections, which will impact aeronautical revenues by a decrease of 2% to 4% [32] - International passenger traffic at Guadalajara airport increased by 20.5% in January, indicating strong demand in international markets [62] Company Strategy and Development Direction - The company is focusing on cost control and efficiency improvements, with plans to freeze headcount growth except for new business lines [13][8] - Expansion projects are underway at Guadalajara, Los Cabos, and Puerto Vallarta airports, along with a mixed-use building project in Guadalajara [30][32] Management Comments on Operating Environment and Future Outlook - Management highlighted challenges such as regulatory changes, labor law adjustments, and increased concession fees, which are expected to pressure costs and profitability [52][33] - Despite these challenges, management remains confident in the underlying fundamentals of the business and its ability to navigate regulatory changes [58] Other Important Information - The company plans to propose a capital reimbursement of MXN 13.86 per share, subject to shareholder approval in April 2024 [93] - A significant capital expenditure of around MXN 9 billion is expected for the coming year, including investments in commercial projects and airport expansions [57] Q&A Session Summary Question: What is the company's strategy to manage salary pressures? - The company plans to freeze headcount growth, focusing on efficiency and technology to manage costs [13][120] Question: What are the expectations for tariffs and CapEx for the renegotiation of the MDP? - A 6% discount will be applied to nine airports for 2024, with CapEx expected to align with historical levels around MXN 100 per passenger [68][69] Question: How is the company addressing the impact of the Pratt & Whitney engine inspections on traffic? - Management noted a shift in airline operations towards more profitable routes, with an increase in international passengers at Guadalajara airport [60][39] Question: What is the outlook for commercial projects and their contribution to revenues? - The mixed-use building in Guadalajara is expected to start operations in April, significantly boosting parking revenue and overall commercial revenues [80][81] Question: How is the company managing regulatory changes and tariff adjustments? - The company is actively engaging with regulatory bodies to navigate changes and maintain shareholder value [52][84]