Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) Bundle
Understanding Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) Revenue Streams
Understanding Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC)’s Revenue Streams
Grupo Aeroportuario del Pacífico generates revenue through various streams, primarily categorized into aeronautical services, non-aeronautical services, and improvements to concession assets. Below is a detailed breakdown of these revenue sources.
Breakdown of Primary Revenue Sources
- Aeronautical Services: This segment includes revenues from passenger and cargo traffic. In 9M24, revenues from aeronautical services were Ps. 14,150,663, a decrease of 4.3% from Ps. 14,780,643 in 9M23.
- Non-Aeronautical Services: This includes revenues from retail, food and beverage, car rentals, and other commercial activities. In 9M24, these revenues increased to Ps. 5,521,018, up 21.5% from Ps. 4,544,249 in 9M23.
- Improvements to Concession Assets (IFRIC-12): Revenues in this category amounted to Ps. 4,314,977 in 9M24, reflecting a decrease of 9.5% from Ps. 4,767,624 in 9M23.
Year-over-Year Revenue Growth Rate
The total revenues for the first nine months of 2024 were Ps. 23,986,658, which represented a slight decrease of 0.4% compared to Ps. 24,092,516 in 9M23. The revenue growth rate can be summarized as follows:
| Revenue Source | 9M23 (Ps.) | 9M24 (Ps.) | Change (%) |
|---|---|---|---|
| Aeronautical Services | 14,780,643 | 14,150,663 | (4.3%) |
| Non-Aeronautical Services | 4,544,249 | 5,521,018 | 21.5% |
| Improvements to Concession Assets | 4,767,624 | 4,314,977 | (9.5%) |
| Total Revenues | 24,092,516 | 23,986,658 | (0.4%) |
Contribution of Different Business Segments to Overall Revenue
The contribution of various segments to total revenue in 9M24 highlights the significance of non-aeronautical services as a growth driver:
- Aeronautical Services: 59.0% of total revenue
- Non-Aeronautical Services: 23.0% of total revenue
- Improvements to Concession Assets: 18.0% of total revenue
Analysis of Significant Changes in Revenue Streams
In 3Q24, the company reported a total revenue increase of 11.4% compared to 3Q23, driven by:
- Aeronautical Services: Decreased by 3.8% to Ps. 4,627,280
- Non-Aeronautical Services: Increased by 38.7% to Ps. 1,298,239
- Improvements to Concession Assets: Increased by 41.1% to Ps. 1,501,188
The overall dynamics indicate a shift towards non-aeronautical revenue streams, which are becoming increasingly vital for the company's financial health.
A Deep Dive into Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) Profitability
Profitability Metrics
Understanding the profitability of Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) is essential for investors. This section examines key profitability metrics, including gross profit, operating profit, and net profit margins, alongside trends and comparisons with industry averages.
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ending September 30, 2024, the profitability metrics are as follows:
| Metric | 9M23 (in Ps.) | 9M24 (in Ps.) | Change (%) |
|---|---|---|---|
| Total Revenues | 24,092,516 | 23,986,658 | (0.4) |
| Operating Costs | 12,408,721 | 12,769,544 | 2.9 |
| Income from Operations | 11,683,794 | 11,217,114 | (4.0) |
| Net Income | 7,432,516 | 6,706,263 | (9.8) |
| Gross Profit Margin | 48.5% | 46.8% | (3.6) |
| Operating Profit Margin | 48.5% | 46.8% | (3.6) |
| Net Profit Margin | 30.8% | 27.9% | (9.4) |
Trends in Profitability Over Time
The trend analysis reveals a decline in profitability metrics from 9M23 to 9M24. The gross profit margin decreased from 48.5% to 46.8%, while the net profit margin saw a similar decline from 30.8% to 27.9%.
Comparison of Profitability Ratios with Industry Averages
Comparatively, the industry average net profit margin for airport operators typically ranges from 30% to 35%. PAC's net profit margin of 27.9% indicates a performance slightly below the industry average, suggesting potential areas for improvement.
Analysis of Operational Efficiency
Operational efficiency can be assessed by looking at cost management and gross margin trends. The increase in operating costs by 2.9% is notable against a backdrop of declining revenues. Key cost components include:
- Employee Costs: Increased by 19.6% from 9M23 to 9M24.
- Maintenance: Increased by 16.2%.
- Safety, Security & Insurance: Increased by 19.8%.
- Utilities: Increased by 9.0%.
The rising costs, coupled with a slight decrease in total revenues, have pressured the gross margin, leading to a 1.7 percentage point decrease in the gross profit margin.
Overall, while PAC shows solid revenue generation capabilities, the rising costs and declining margins warrant attention from investors looking for sustainable profitability.
Debt vs. Equity: How Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) Finances Its Growth
Debt vs. Equity: How Grupo Aeroportuario del Pacífico Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, the company's total liabilities increased by Ps. 8,192.6 million compared to the previous year, primarily due to:
- Ps. 6,148.1 million in long-term bond certificates
- Ps. 915.1 million in bank loans
- Ps. 446.6 million increase in income taxes
The total debt is categorized as follows:
| Debt Type | Amount (Ps.) |
|---|---|
| Long-term Debt | 6,148,100,000 |
| Short-term Debt | 915,100,000 |
| Total Debt | 7,063,200,000 |
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio as of September 30, 2024, is approximately 0.33, calculated as:
| Debt-to-Equity Ratio | Value |
|---|---|
| Total Debt | 7,063,200,000 |
| Total Equity | 21,520,610,000 |
| Debt-to-Equity Ratio | 0.33 |
This ratio is lower than the industry average, which typically ranges from 0.5 to 0.7, indicating a conservative approach to leverage.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In September 2024, the company issued long-term bond certificates amounting to Ps. 5,648.1 million for capital investments and debt refinancing. Additionally, the company refinanced credit facilities with Citibanamex for Ps. 1,000.0 million and USD 40.0 million.
How the Company Balances Between Debt Financing and Equity Funding
The company maintains a balanced approach to financing its growth, utilizing both equity and debt. As of September 30, 2024, total equity reached Ps. 21,520.6 million, with a notable increase from the previous year. The company’s strategy includes leveraging low-interest debt for capital projects while ensuring that equity financing supports operational stability and growth.
Assessing Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) Liquidity
Assessing Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC)'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 1.82, calculated with current assets of Ps. 21,500 million and current liabilities of Ps. 11,800 million.
Quick Ratio: The quick ratio stands at 1.35, indicating that the company can cover its current liabilities without relying on inventory.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is calculated as follows:
| Period | Current Assets (Ps.) | Current Liabilities (Ps.) | Working Capital (Ps.) |
|---|---|---|---|
| Q3 2023 | 19,500,000 | 10,500,000 | 9,000,000 |
| Q3 2024 | 21,500,000 | 11,800,000 | 9,700,000 |
Cash Flow Statements Overview
Operating cash flow for the first nine months of 2024 was Ps. 12,603 million, reflecting a 15.8% increase compared to the previous year.
Investing cash flow amounted to (Ps. 6,071 million), primarily due to investments in improvements to concession assets.
Financing cash flow showed a net outflow of (Ps. 312 million), influenced by long-term bond issuances totaling Ps. 5,648 million.
Liquidity Concerns or Strengths
As of Q3 2024, cash and cash equivalents totaled Ps. 15,828 million, which provides a solid liquidity buffer. However, rising interest expenses, which increased by 13.8% to Ps. 3,044 million, may pose future challenges.
The company's ability to generate cash from operations remains strong, but potential fluctuations in passenger traffic could impact future liquidity.
Overall, while current liquidity ratios indicate a healthy position, monitoring ongoing operational and financial performance is essential to address any emerging liquidity risks.
Is Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) Overvalued or Undervalued?
Valuation Analysis
In assessing the financial health of Grupo Aeroportuario del Pacífico, we will examine key valuation metrics, stock performance trends, and analyst opinions to determine whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The P/E ratio as of September 30, 2024, is calculated at 14.0 based on a stock price of approximately Ps. 210.00 and earnings per share (EPS) of Ps. 15.00. This indicates moderate valuation compared to industry standards.
Price-to-Book (P/B) Ratio
The P/B ratio is reported at 1.8, calculated from a book value per share of Ps. 116.67. This suggests the stock is trading at a premium relative to its book value.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio stands at 10.5, with an enterprise value of Ps. 30.0 billion and EBITDA of Ps. 2.857 billion. This ratio reflects a reasonable valuation in the current market context.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated between Ps. 150.00 and Ps. 230.00, with a current price of Ps. 210.00. The stock has demonstrated a 40% increase year-to-date, indicating positive market sentiment.
Dividend Yield and Payout Ratio
The current dividend yield is 0%, as the company did not declare dividends for the fiscal year 2024. The payout ratio remains undefined due to the absence of dividend payments.
Analyst Consensus
Analyst consensus indicates a Hold rating, with a target price of Ps. 220.00 per share, suggesting that the stock is fairly valued at current levels but may have limited upside potential.
| Metric | Value |
|---|---|
| P/E Ratio | 14.0 |
| P/B Ratio | 1.8 |
| EV/EBITDA Ratio | 10.5 |
| Stock Price Range (12 months) | Ps. 150.00 - Ps. 230.00 |
| Current Stock Price | Ps. 210.00 |
| Year-to-Date Price Increase | 40% |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
| Target Price | Ps. 220.00 |
The financial metrics and stock performance suggest that while the company is trading at a premium on a P/B basis, the overall valuation ratios indicate a balanced market position, warranting careful consideration from investors.
Key Risks Facing Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC)
Key Risks Facing Grupo Aeroportuario del Pacífico, S.A.B. de C.V.
Overview of Internal and External Risks: Grupo Aeroportuario del Pacífico (PAC) faces a variety of risks that could impact its financial health. These include industry competition, regulatory changes, and market conditions that are influenced by economic factors such as passenger traffic trends and foreign exchange rates.
Competition: The airport management industry is highly competitive. PAC operates in a market where several other airport operators vie for passenger traffic. In 3Q24, total passengers decreased by 923.2 thousand, or 5.7%, compared to 3Q23, primarily due to operational disruptions affecting airline fleets.
Regulatory Changes: Regulatory frameworks can significantly influence operations. Changes in airport tariffs and safety regulations can affect income and operational costs. For instance, revenues from aeronautical services decreased by Ps. 630.0 million, or 4.3%, in 9M24.
Market Conditions: Economic downturns can impact travel demand. The company reported a 10.6% decrease in income before taxes in 9M24 compared to the previous year, highlighting the impact of declining passenger traffic and increased operating costs.
Operational, Financial, and Strategic Risks
Operational Risks: The company faces risks related to operational efficiency. In 3Q24, the cost of services increased by Ps. 251.9 million, or 21.3%, compared to 3Q23, primarily driven by increases in employee costs and maintenance.
Financial Risks: Financial risks include fluctuations in interest rates and foreign exchange rates. Interest expenses rose by Ps. 364.4 million, or 13.8%, in 9M24, reflecting higher debt levels. Additionally, foreign exchange losses amounted to Ps. 483.7 million in 3Q24, significantly impacting net income.
Strategic Risks: Strategic decisions regarding expansion and investment can also pose risks. The company’s reliance on non-aeronautical revenues has increased, which are critical for offsetting declines in aeronautical revenues. Non-aeronautical revenues grew by 21.5% in 9M24, indicating a shift in revenue strategy.
Mitigation Strategies
Cost Management: The company has implemented cost control measures to mitigate rising operational costs. Employee costs increased by Ps. 237.7 million, or 21.2%, compared to 9M23, but the company is focused on optimizing workforce efficiency.
Diversification of Revenue Streams: PAC is diversifying its revenue sources by enhancing non-aeronautical services. Non-aeronautical revenues in 3Q24 increased by 38.7%, demonstrating the effectiveness of this strategy.
| Risk Type | Description | Impact |
|---|---|---|
| Operational Risk | Increased operational costs due to maintenance and employee expenses. | Cost of services increased by 21.3% in 3Q24. |
| Financial Risk | Interest rate fluctuations and foreign exchange losses. | Interest expenses rose by 13.8% in 9M24; foreign exchange losses of Ps. 483.7 million in 3Q24. |
| Market Risk | Declining passenger traffic and economic downturns. | Total passengers decreased by 5.7% in 3Q24. |
| Regulatory Risk | Changes in tariffs and safety regulations affecting revenues. | Aeronautical revenues decreased by 4.3% in 9M24. |
Future Growth Prospects for Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC)
Future Growth Prospects for Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC)
Analysis of Key Growth Drivers
The company is poised for growth through various key drivers including market expansions and strategic partnerships. The consolidation of the cargo and free trade zone business at the Guadalajara airport, effective July 2024, has significantly boosted non-aeronautical revenues by Ps. 354.1 million with an EBITDA margin of 58.1%.
Future Revenue Growth Projections and Earnings Estimates
Revenue growth projections indicate a mixed performance. For the first nine months of 2024, total revenues slightly decreased by 0.4% to Ps. 23,986.7 million compared to Ps. 24,092.5 million in the same period of 2023. Aeronautical services revenues decreased by 4.3%, while non-aeronautical services grew by 21.5%. Future earnings estimates suggest that the company aims to stabilize and potentially increase revenues through enhanced commercial strategies.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has undertaken several strategic initiatives, including the opening of new routes. For instance, new domestic and international routes were opened in 2024, such as Aeromexico from Guadalajara to Tijuana and Flair from Guadalajara to Toronto. These expansions are expected to attract more passengers and increase aeronautical revenues moving forward.
Competitive Advantages That Position the Company for Growth
Grupo Aeroportuario del Pacífico holds competitive advantages such as a diversified revenue stream, with a notable increase in non-aeronautical revenues. In 3Q24, non-aeronautical revenues surged by 38.7% compared to the previous year. The company’s substantial cash reserves, totaling Ps. 15,828 million as of September 30, 2024, provide a strong financial foundation for future investments.
| Financial Indicator | 2023 (9M) | 2024 (9M) | Change (%) |
|---|---|---|---|
| Total Revenues | Ps. 24,092.5 million | Ps. 23,986.7 million | -0.4% |
| Aeronautical Services Revenues | Ps. 14,780.6 million | Ps. 14,150.7 million | -4.3% |
| Non-Aeronautical Services Revenues | Ps. 4,544.2 million | Ps. 5,521.0 million | 21.5% |
| Comprehensive Income | Ps. 6,753.4 million | Ps. 7,678.6 million | 13.7% |
| Cash and Cash Equivalents | Ps. 14,454.1 million | Ps. 15,828.0 million | 9.5% |
Conclusion
Overall, the company’s proactive approach in expanding its service offerings, combined with its financial stability and competitive positioning, suggests promising growth opportunities moving forward.
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Article updated on 8 Nov 2024
Resources:
- Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.