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Revenues (1Q24 vs. 1Q23)

• Aeronautical services revenues decreased by Ps. 66.6 million, or 1.3%.

• Non-aeronautical services revenues increased by Ps. 223.5 million, or 15.2%.

• Revenues from improvements to concession assets decreased by Ps. 1.9 million, or 0.1%.

• Total revenues increased by Ps. 155.0 million, or 1.9%.

• The change in aeronautical services revenues was primarily due to the following factors:
  
  

  1. Revenues at our Mexican airports decreased by Ps. 68.4 million or 1.6% compared to 1Q23, mainly due to the 0.6% decrease in passenger traffic, and the compliance with the maximum tariffs of only 97%.
     

  2. Revenues from Jamaican airports increased by Ps. 1.8 million, or 0.2%, compared to 1Q23. This was mainly due to the 6.0% increase in passenger traffic. During 1Q24, there was a 9.1% appreciation of the peso versus the U.S. dollar, compared to 1Q23, which went from an average exchange rate of Ps. 18.7020 in 1Q23 to Ps. 16.9977 in 1Q24, which represented a decrease in revenues in pesos.
     
     

• The change in non-aeronautical services revenues was primarily driven by the following factors:
  
  

  1. Revenues at our Mexican airports increased by Ps. 226.3 million, or 18.6%, compared to 1Q23. Revenues from businesses operated by third parties increased by Ps. 154.2 million, or 19.6%, mainly due to the opening of new commercial spaces, and the renegotiation of contract conditions. The business lines that grew the most were food and beverages, car rentals, retail, and leasing of space, all of which increased by Ps. 127.5 million, or 24.8%. Revenues from businesses operated directly by us increased by Ps. 71.3 million, or 18.5%, while the recovery of costs increased by Ps. 0.7 million, or 1.6%.
     

  2. Revenues from the Jamaican airports decreased by Ps. 2.7 million, or 1.1%, compared to 1Q23, due to the peso appreciation. Revenues in U.S. dollars increased by US$ 1.2 million, or 8.8%.
     
     

• Revenues from improvements to concession assets ¹

Revenues from improvements to concession assets (IFRIC-12) decreased by Ps. 1.9 million, or 0.1%, compared to 1Q23. The change was composed of :

1. Improvements to concession assets at the Company’s Mexican airports, which decreased by Ps. 40.1 million, or 2.2%, in accordance with investments under the Master Development Program for the 2020-2024 period.
   

2. Improvements to concession assets at the Company’s Jamaican airports, which increased Ps. 38.2 million, or 213.4%.
   

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¹ Revenues from improvements to concession assets are recognized in accordance with International Financial Reporting Interpretation Committee 12 “Service Concession Arrangements” (IFRIC 12). However, this recognition does not have a cash impact or impact on the Company’s operating results. Amounts included as a result of the recognition of IFRIC 12 are related to construction of infrastructure in each quarter to which the Company has committed. This is in accordance with the Company’s Master Development Programs in Mexico and Capital Development Programs 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. 247.1 million, or 5.8%, compared to 1Q23, mainly due to the increase in concession taxes and technical assistance fees, which jointly increased by Ps. 107.3 million, or 12.9%, as well as an increase in the cost of services of Ps. 105.3 million, or 10.9%, and a Ps. 44.9 million, or 7.3%, increase in depreciation and amortization (excluding the cost of improvements to concession assets (IFRIC-12), operating costs increased Ps. 249.0 million, or 10.3%).

This increase in total operating costs was primarily due to the following factors: 

Mexican airports:

• Operating costs increased by Ps. 135.9 million, or 3.8%, compared to 1Q23, primarily due to an increase in the cost of services by Ps. 88.3 million, or 11.1%, a combined Ps. 41.3 million, or 8.5%, increase in technical assistance fees and concession taxes, increase in depreciation and amortization by Ps. 53.9 million, or 11.0%, offset by a decrease in the cost of improvements to the concession assets (IFRIC-12) by Ps. 40.1 million, or 2.2%, (excluding the cost of improvements to the concession assets (IFRIC-12), operating costs increased by Ps. 175.9 million or 9.9%).
  

The change in the cost of services at our Mexican airports during 1Q24 was mainly due to:

• Employee costs increased Ps. 60.7 million, or 17.5%, compared to 1Q23, mainly due to the hiring of 317 additional personnel during 2023 and 1Q24, as well as the adjustments in salaries and cost related to changes in Labor Law.

• Cost of business operated directly by us increased by Ps. 24.5 million or 49.7%, compared to 1Q23, derived from increased operations and income in VIP lounges and convenience stores.

• Maintenance costs increased by Ps. 12.9 million, or 11.4%, compared to 1Q23, mainly due to the expansion of the terminal and airfield.

• These increases were offset by a decrease in other operating expenses by Ps. 25.8 million, or 115.2%, compared to 1Q23, mainly due to a combined decrease of Ps. 25.1 million in the allowance for credit losses and travel expenses.

Jamaican Airport:

• Operating costs increased by Ps. 111.2 million, or 16.6%, compared to 1Q23, mainly due to a Ps. 66.0 million, or 19.0%, increase in concession taxes, increase in the cost of improvements to concession assets (IFRIC-12) by Ps.38.2 million, or 213.4%, and the increase in cost of services by Ps. 17.0 million, or 9.8%.
  

Operating income margin went from 48.9% in 1Q23 to 46.9% in 1Q24. Excluding the effects of IFRIC-12, the operating income margin went from 62.7% in 1Q23 to 59.9% in 1Q24. Income from operations decreased by Ps. 92.1 million, or 2.3%, compared to 1Q23.

EBITDA margin went from 56.3% in 1Q23 to 54.7% in 1Q24. Excluding the effects of IFRIC-12, EBITDA margin went from 72.3% in 1Q23 to 69.8% in 1Q24. The nominal value of EBITDA decreased by Ps. 47.2 million, or 1.0%, compared to 1Q23.

Financial results decreased by Ps. 80.6 million, or 11.9%, from a net expense of Ps. 674.3 million in 1Q23 to a net expense of Ps. 593.7 million in 1Q24. This change was mainly the result of:

• Foreign exchange rate fluctuations, which went from a loss of Ps. 166.9 million in 1Q23 to an income of Ps. 28.9 million in 1Q24. This generated a foreign exchange gain of Ps. 195.9 million. This was mainly due to the appreciation of the peso. Currency translation effect loss decreased Ps. 141.4 million, compared to 1Q23.
  

• Interest expenses increased by Ps. 80.1 million, or 9.9%, compared to 1Q23, mainly due to higher debt as a result of the issuance of long-term debt securities and the drawdown of credit lines.
  

• Interest income decreased by Ps. 35.2 million, or 11.6%, compared to 1Q23, mainly due to a decrease in the cash and cash equivalents average balance.
  

In 1Q24, comprehensive income increased by Ps. 14.3 million, or 0.7%, compared to 1Q23. Income before taxes decreased by Ps. 11.5 million, mainly due to the increase in cost of operation by Ps. 247.1 million, offset by a revenue increase of Ps. 155.0 million. Net and comprehensive income increased mainly due to the decrease of the effect of foreign currency translation by Ps. 141.4 million, offset by an increase in cash flow hedges by Ps. 32.4 million.

During 1Q24, net income decreased by Ps. 94.5 million, or 3.7%, compared to 1Q23. Income taxes increased by Ps. 60.3 million and the benefit for deferred taxes decreased by Ps. 22.7 million, mainly due to a decrease in the inflation rate, from 1.7% in 1Q23 to 1.4% in 1Q24.

Statement of Financial Position

Total assets as of March 31, 2024 increased by Ps. 907.3 million compared to March 31, 2023, primarily due to the following items: (i) an increase of Ps. 6,795.5 million in net improvements to concession assets, (ii) a Ps. 890.7 million increase in other current assets, (iii) a Ps. 330.0 million increase in trade accounts receivable, and iv) a Ps. 178.5 million combined increase in net machinery, equipment and leasehold improvements, and advances to suppliers. This increase was partially offset by a decrease of Ps. 7,349.3 million in cash and cash equivalents.
        
Total liabilities as of March 31, 2024, decreased by Ps. 223.6 million compared to March 31, 2023. This decrease was primarily due to the following items: (i) issuance of Ps. 602.0 million (net) in long-term debt securities, (ii) a decrease of Ps. 392.1 million in income taxes payable, and (iii) Ps. 312.7 million in accounts payable. This decrease was partially offset by an increase of (i) Ps. 667.0 million in bank loans, (ii) Ps. 502.5 in concession taxes payable, among others.

Adoption of accounting criteria

On November 13, 2023, a Decree was published that modifies the Mexican Federal Duties Law, establishing that as of January 1, 2024, the concession fee that concession holders must pay for the use of federal airports, was increased from 5% to 9% of their total revenues derived from such use concessioned in Mexico.

Following the Tariff Regulation, payments in favor of the government over those included in the last tariff review will be added to the Reference Value of the next review of the Maximum Tariff.

Therefore, the amount of the 4% excess over aeronautical revenues paid to the government during fiscal year 2024 will be recognized as an intangible asset under IAS 38, beginning its amortization from January 2025 and until the end of the concession period.

The amount recognized as intangible assets during 1Q24 amounts to Ps. 175.5 million, which corresponds to 4.0% of the aeronautical revenues of our airports in Mexico.

Company Description

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

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 involve criminal conduct or violations. The telephone number in Mexico, facilitated by a third party responsible for collecting these complaints, is 800 04 ETICA (38422) or WhatsApp +52 55 6538 5504. The website is www.lineadedenunciagap.com or by email at denuncia@lineadedenunciagap.com. GAP’s Audit Committee will be notified of all complaints for immediate investigation.

(1) Others include the operating results of the Aguascalientes, La Paz, Los Mochis, Manzanillo, Mexicali, Morelia, and Kingston airports.

As a part of the adoption of IFRS, the effects of inflation on common stock recognized under Mexican Financial Reporting Standards (MFRS) through December 31, 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 to be prepared following IFRS, as issued by the IASB.