Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC) Q4 2025 Earnings Call Transcript

Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC) Q4 2025 Earnings Call Transcript February 25, 2026

Operator: Good morning, everyone, and welcome to GAP’s Fourth Quarter 2025 Conference Call. [Operator Instructions] Now it’s my pleasure to turn the call over to GAP’s Investor Relations team. Please go ahead.

Maria Barona: Thank you, and welcome to GAP’s Conference Call. I’d like to take a few moments to review the forward-looking statements as described in the financial disclosure statement. Please be advised that statements made today may not account for future economic circumstances, industry conditions, the company’s future performance or financial results. As such, any information discussed is based on several assumptions and factors that could change causing actual results to materially differ from current expectations. For the complete note on forward-looking statements, please refer to the quarterly report. Thank you for your attention. It is my great pleasure to introduce Mr. Raul Revuelta, GAP Chief Executive Officer; and Mr. Saul Villarreal Chief Financial Officer. The gentlemen will be our speakers today. At this time, I will turn the call over to Mr. Revuelta for his opening remarks.

Raul Musalem: Thank you, Maria. Good morning, everyone, and thank you for your time here today. I’m pleased to share with you the company’s operational and financial highlights for the fourth quarter of 2025 which concludes a solid year despite the several external challenge that I will discuss today. I will begin with the quarterly passenger traffic and then move on the financial results, followed by a brief review of the full year. Passenger traffic decreased 0.9% during the fourth quarter compared to the same period of 2024. These first 4 months stems from the 2 clear separate dynamics within our portfolio. The first, in Mexico, traffic trends remained relatively stable despite varying performance across the different airports.

While passengers growth was 2.9% of revenue was primarily supported by the implementation of the new maximum tariff approved and applied during 2025 as well as the expansion of the works in select markets. Secondly, as you are aware, Hurricane Melissa struck Jamaica on October 28, leading to the temporary suspension of operations at Montego Bay as well as Kingston Airports. This resulted in a traffic decrease of nearly 35% during the quarter. Although, there was no material damage to either airports, passenger traffic did significantly decline in November and December, mainly in Montego Bay. The main factor was the hurricane impact of the surrounding area as well as the hotel infrastructure were around 70% of the total capacity effect. On a positive note, the recovery of total capacity or total capacity as well as tourist infrastructure across the region has been better than expected.

While the actual timing of a full normalization remain unclear, the Minister of Touring has indicated that hotel capacity is expected to return to 100% by the upcoming 2026 winter season. We remain confident in the long term fundamentals of the Jamaican market and its overall structural growth potential. Now moving on to the revenues. Combined aeronautical and aeronautical service revenues increased by 12.8%, reflecting the sustained structural strength of our business model. Aeronautical revenues grew by 12.6%, primarily driven by the aforementioned maximum tariff that were approved and applied during 2025 in Mexico as well as the continued expansion of our routes. New aeronautical revenues increased by 13.3% quarter-over-quarter. In Mexico, particular, commercial revenues were strong, mainly supported by the performance of the cargo and bonded warehouse business and the opening and renegotiation of commercial spaces under improved market conditions.

The most dynamic segment includes Food & Beverage, Retail, Ground Transportation and Leasing Activities. EBITDA increased by 7.5%, reaching MXN 5.1 billion. EBITDA margin, excluding IFRIC 12, stood at 53.8%, a decrease compared to the fourth quarter ’25 as a result of the higher concession fees in Mexico, additional head count and increase in maintenance costs due to the new operations of the jet bridges and Airbuses, a path that must now be operated directly by GAP, but was previously managed by the third party. In addition, this includes the impact of lower traffic and therefore, lower revenues in Jamaica in the aftermath of the Hurricane Melissa. Net income declined compared to the fourth quarter ’24, mainly due to the higher financial expense and decrease in the interest income due to a lower cash average balance the FX effect as well as the lower interest rate.

This is in addition to the provision of the deferred tax adjustment in the aggregate balance of the year. Now let us review the full year performance. 2025 was a year of a strong structural growth for GAP. Aeronautical revenue grew by 19.4% driven mainly by the new tariff applied during 2025 and a 2.7% increase in passenger traffic in Mexico. Non-aeronautical revenue increased by 26.5% for the year, further underscoring the strategic importance of our commercial platform. Non-aeronautical revenue per passenger increased to MXN 152 in 2025 compared to the MXN 123 in 2024, reflecting improved commercial execution, product optimization and a stronger contribution from cargo among the warehouse operations. The consolidation of the business has become a meaningful contributor to our revenue diversification strategy and strengthen the long-term sustainability of our income streams.

EBITDA increased by 17.8% year-over-year, reaching MXN 21.3 billion with an EBITDA margin, excluding IFRIC 12 of 65.6% despite higher concession fee and our cost pressure, profitability remains solid and operational will remain disciplined. From a balance sheet perspective, as of December 31, 2025, we closed the deal with MXN 10.5 billion in cash and cash equivalents. During the year, we strengthened our capital structure throughout the issuance of bond certificates, while reducing certain bank loans pressures maintaining flexibility to fund our long-term commitments. In terms of CapEx, throughout 2025, we invest MXN 12.4 billion. This was comprised by the first year of execution under the 2025–2029 Master Development Program. CapEx in our Jamaican airports and the commercial investments.

The CapEx for the 5 years period in Mexico will be focused on major terminal expansion and capacity enhancements, positioning us strongly for the future passenger growth and expanded commercial opportunities. Additionally, in December at the Extraordinary Shareholders Meeting the business combination between CBX and Terminal Assistant Agreement was approved. This strategic transaction will allow us to further integrate and strengthen the Cross Border Xpress platform, enhancing operational efficiency, expanding services capabilities and reinforcing our position in the Cross Border Passenger segment. The transaction is currently in the formalization process, and we expect this to contribute possibility to GAP’s long-term value creation strategy.

Let me touch on international expansion opportunities. The Parks & Cope standard process was ultimately canceled by the government. And as has been our track record, we remain disciplined in our capital allocation decisions and our remaining focus on projects that meet our strategic and financial return criteria. Therefore, we continue allowing growth opportunities that complement our existing portfolio strength over our shareholders’ value. Before I continue with the presentation, I want to address the recent events concerning to the state of Jalisco, namely Guadalajara and Puerto Vallarta. Certain incidents were prepared throughout different locations of the state of Jalisco on February 22. And I just want to assume that gas facilities, the Guadalajara and Puerto Vallarta Airport remain fully operational on weekend and up until this moment.

As many of you may be aware, the terminals rely on the protection of the Mexican National Guard as well as the Ministry of National Defense as part of the permanent coordination and security measures with the Federal Authorities. From an operational standpoint, we experienced flight cancellations, including 171 flight in Guadalajara and 134 flights in Puerto Vallarta during February ’22 and ’23. However, this February, February ’24, we only had 4 cancellations in Puerto Vallarta and 11 in Guadalajara. And today, all the operations are back to normal. Thus, it has been a steady and consistent improvement from the weekend, as we work to regain normally after the events of the last weekend. The rest of the — our portfolio continued to operate without disruption at this stage.

We don’t anticipate any additional impact. We are monitoring the situation, and we’ll update the market as necessary. Back to the results and outlook, I would like to continue with a discussion on guidance. We do not include the CBX business combination and the Technical Assistance Agreement Internalization, which remain the formalization process. Once the final timing of the consolidation is confirmed, we will update you on the results. That being said, we expect 2026 to be another year of moderate growth, supported by the established structural drivers across our portfolio. Passengers traffic is expected to grow between 2% and 5%, reflecting the consolidation of routes developed to date, estimated load factors and the potential increasing frequencies and ship capacity across our network.

On the revenue side, Aeronautical revenues are projected to increase between 9% and 12%, driven by the implementation of current maximum tariff in Mexico and Kingston airports in Jamaica, combined with traffic performance, inflation assumptions and projected exchange rates. Non-aeronautical revenues are expected to continue expanding from 6% to 9%, driven by improved contract condition and traffic growth. As a result, total revenues are expected to grow between 8% and 11% year-over-year. We expect EBITDA to grow between 8% to 11%, while the EBITDA margins will remain solid and approximately 65% or minus 1% reflecting continued operational discipline, while maintaining flexibility to observe external volatilities. Looking ahead, we remain confident in our strategic direction as we focus on our 4 growth pillars.

The strengthening connectivity, expanding commercial revenues, disciplined execution of our infrastructure program and maintaining long-term leverage strategy. While external factors such as exchange rate volatility, natural events and global uncertainty may generate temporary expectations, cap diversified airport portfolio’s strong domestic demand base, disciplined capital structure position us solidly to continue generating sustainable long-term value. We appreciate your continued growth and support in GAP. Thank you for joining us today, and we now open the floor to your questions.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Gabriel Himelfarb of Scotiabank.

Gabriel Himelfarb Mustri: Just can you give us a bit of color on Guadalajara and Puerto Vallarta, any cancellations seen or any lower bookings? And my second question is also — is there — can you give us a bit of color on — do you think you might be expanding your footprint on the U.S. besides the CBX.

Raul Musalem: Thank you, Gabriel. In the case of Guadalajara and Puerto Vallarta as we noted, I mean, we saw on the Sunday an important number of cancellations more than 100 in both airports. For the Monday, we began to see an important recovery. Just yesterday, we only had 4 cancellations in Puerto Vallarta and 11 in Guadalajara. And today, we are expecting that all the operations are back to normal. So what we are seeing for sure has a — I mean, a major impact for — on Sunday, but after that, the services from the airlines have gradually normalization process. Saying that, we are expecting that there will not be any additional impact for our airports in the coming days. Making like a big number of the impact of these 2 days, almost 3 days of impact.

We are forecasting that — or we are seeing that the possible impact was around of 50,000 passengers in these both airports. Jumping to the second question, the footprint in the U.S. beside the CBX, for sure, they align with our discipline for capital allocation, we will continue to looking for other opportunities. And for sure, with the platform, the CBX in the U.S., it opens the possibility for new investments in the U.S. we were still looking for opportunities that we — that generates value to our shareholders and be completely accretive for the company. But yes, it will open the opportunity for additional — or review additional projects in the U.S.

Gabriel Himelfarb Mustri: And are you expecting the coming months, a decrease in traffic on Guadalajara and Puerto Vallarta from international passengers?

Raul Musalem: I mean we are expecting that the trends that we have seen in the last months continue. For the case of Guadalajara, as you know, we have a positive number with all the openings of new routes from Canadian market, mainly, and also recompression or recovery from the classic VFR market, so Guadalajara, Los Angeles and South California in general terms. But also in the coming months, we will have the first 2 matches for the last elimination of this for the World Cup. So yes, we are expecting some additional passengers for sure in the coming months. And I mean, in general terms, connecting with this terrible news of the weekend, we are not expecting any further impact on the traffic.

Operator: Our next question comes from Enrique Cantú of GBM.

Enrique Cantú: So regarding the pending tariff adjustments, could you provide more detail on expected timing and visibility around their implementation?

Raul Musalem: Yes. And then just going back on that. Last year, as you remember, in March of the last year, we have — we increased 15% of general passengers fee in all of our airports. In September 1, we had another 7.5%, and in January — on January 1, we increased around 5% to 6% depending on the airport. For all of that, we are seeing that the maximum tariff for the year, for sure, depending on the FX effect of the peso on dollar, we are growing around 95% of fulfillment. And in the summer, we will have 2 additional increases for our 2 airports Vallarta and Cabos. With all these put in place, we think that we could achieve the 95% of fulfillment on time.

Operator: We will now move to questions submitted to the webcast platform, and I’ll turn the call over to Alejandra Soto, Investor Relations Officer, to read the questions. Please go ahead.

Alejandra Soto Ayech: We have one question from Andressa Varotto from UBS. And he’s asking regarding your guidance. Can you break down traffic increase expectations for Mexico and Jamaica and how you are seeing a recovery from the Hurricane Melissa in Jamaica and the World Cup impacts in Mexico. Also — well, and the other question, it was already explained.

Raul Musalem: In terms of traffic, we are seeing, in our guidance, an increase on traffic that goes from 2% to 5%. In the other terms that we are seeing for Jamaica is, we are seeing at continuous recovery on the hotel capacity for Montego Bay, mainly. What we are seeing is for the end of the year, could be around minus 2% to 0% on increase of passengers. Why is it important to have in mind is that, the 2 main peaks of the terminal of Montego Bay or the 2 moments of increase of passengers for — is — the spring season and the winter season. . On this spring season, I will say that there will be a lack an important impact of the number of available hotel rooms in Jamaica. So we will expect that in this spring, winter — spring season, the decrease of passengers continue.

But for the winter season, that is the second big high season for Montego Bay, we are expecting that a full recovery of the total capacity of hotels on the island. With that in mind, we are expecting that minus 2% to 0% on Jamaica.

Alejandra Soto Ayech: Thank you, Raul. It is the only question on the webcast. So I will turn the call again to the questions on the floor.

Operator: We do have a question from Julia Orsi of JPMorgan.

Julia Orsi: So just a question on capital allocation. So now that the Turks and Caicos process is pretty much over. Can you comment a bit on what’s the priority on the capital allocation side? And that’s it.

Raul Musalem: Julia, I will say that in the first half of this year, we will be focused on all what means CBX and bring in all the efficiencies to our company, but that would be, I think, one of the biggest new projects bring into the company. But parallel to that, we are working in other projects and looking for other projects that could be interest for us. We will continue reviewing opportunities on the cargo facilities business. But I would say with the discipline that is like the part of the DNA of the company, we will continue only on projects that are completely accretive for our company. With that in mind, we will always continue within different projects. But for the moment, the only focus that we will have to brings additional value is all the process to bring CBX and the synergies to the company.

Julia Orsi: Got it. And just a follow-up on the CBX. What is the expected timeline for the deal to be fully integrated into GAP? And I mean do you have any updates on let’s say expected synergies throughout the year? How much should we capture this year.

Raul Musalem: Yes. I mean, in general terms, what we are talking about the formalization process, we are in the middle of that. We are expecting that in the second quarter, of the year, we could fully consolidate all the transactions. In terms of the efficiency, it will be gradually on the year. I will say that if we begin with the consolidation in the second quarter, for the fourth quarter, we could show important efficiencies on the CBX consolidation process. I would say that the full program of what we think that could be the synergies of the company, we’re going to fully implement it for the half of this year of ’27. That would be — I mean — our first view of what we think that could happen for on all these project of CBX.

Operator: There are no further questions at this time. I will turn the call back over to Mr. Raul Revuelta for closing remarks.

Raul Musalem: Thank you once again for joining us today. Please contact our Investor Relations team with an additional questions you may have. Have a great day, and thank you for your attention.

Operator: That concludes our meeting today. You may now disconnect.