PAC — Grupo Aeroportuario del Pacífico, S.A.B. de C.V.

Summary of GAP's Q3 2025 Earnings Call

1. Key Financial Results and Metrics:

• Passenger Traffic: Total passenger traffic increased by 2.5% year-over-year, reaching 15.8 million passengers. However, international traffic faced a decline due to immigration-related challenges and capacity issues with airlines.
• Revenue Growth: Total revenues rose by 17.4% compared to Q3 2024, driven by a 18.3% increase in aeronautical revenue (due to tariff adjustments) and a 15.6% increase in non-aeronautical revenue.
• Profitability: EBITDA grew by 12.8% to MXN 5.1 billion, with an EBITDA margin of 64.3%. The margin was impacted by increased concession fees from 5% to 9%.
• Liquidity: Cash and cash equivalents stood at MXN 11.7 billion as of September 30, 2025. A dividend of MXN 8.42 per share was paid during the quarter.

2. Strategic Updates and Business Highlights:

• New Routes: GAP plans to launch 8 new international routes to Canada in Q4 2025, including a historic direct connection from Los Cabos to Panama, enhancing its regional hub status.
• Commercial Expansion: Non-aeronautical revenues are being bolstered by new commercial spaces and successful renegotiations of contracts. The cargo and bonded warehouse business saw a significant revenue increase of 30.1%.
• Capital Investments: Approximately MXN 7 billion was invested in capital projects, focusing on infrastructure improvements and expansions under the master development program.

3. Forward Guidance and Outlook:

• GAP remains cautiously optimistic about future performance, despite macroeconomic uncertainties and potential exchange rate volatility. The company anticipates continued growth in both aeronautical and non-aeronautical revenues.
• Future tariff increases are planned, with expectations for a significant fulfillment of maximum tariffs by the end of 2026.

4. Challenges and Points of Concern:

• International Traffic Decline: The company is experiencing a slowdown in international passenger traffic, particularly in the VFR (visiting friends and relatives) segment, which may persist in the short term due to U.S. immigration policies.
• Cost Increases: The cost of services rose by 14.1%, primarily due to operational changes following regulatory shifts. This trend may continue, potentially impacting EBITDA margins.
• Competitive Pressures: The ongoing challenges with airlines like Volaris and Viva Aerobus, particularly related to Pratt & Whitney engine issues, may hinder capacity recovery and affect overall traffic.

5. Notable Q&A Insights:

• Management acknowledged the challenges in the VFR market and expressed optimism for recovery in the coming years as airlines increase capacity.
• The company is exploring various options for the potential acquisition of Motiva Airports, considering both independent and partnership approaches, with a focus on leveraging debt for financing.
• The impact of the upcoming World Cup on traffic is uncertain, but management expects positive effects, particularly for Guadalajara and Tijuana, depending on match allocations.
• Future commercial expansions are anticipated to significantly enhance non-aeronautical revenue, with a 55% increase in terminal space planned by 2029.

Overall, while GAP reported solid financial performance and strategic growth initiatives, it faces challenges in international traffic and rising operational costs that could impact future profitability.