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01/11 03:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows strong financial performance with a 30.6% YoY revenue growth and a healthy financial position with a low debt-to-EBITDA ratio. The dividend payments and strategic expansion plans, including new routes and international growth opportunities, are positive indicators. The Q&A section highlighted strong growth in directly operated business lines and strategic tariff increases, though some uncertainties remain regarding international traffic and tariff fulfillment. Overall, the positive aspects outweigh the negatives, suggesting a likely positive stock price movement over the next two weeks.
Passenger Traffic Total passenger traffic across GAP's 14 airports increased by 2.5% year-over-year, reaching 15.8 million passengers in the quarter. This growth was supported by new routes and additional frequencies, which offset the decline in international traffic caused by immigration-related challenges and Pratt & Whitney engine issues.
Total Revenues Total revenues increased by 17.4% year-over-year, driven by strong performance in both aeronautical and non-aeronautical businesses. Aeronautical revenue grew by 18.3% due to the implementation of a new maximum tariff, while non-aeronautical revenues increased by 15.6%, supported by strong performance in Mexico and Jamaica and the consolidation of the cargo and bonded warehouse business.
Cost of Services Cost of services increased by 14.1% year-over-year, primarily due to the operation of jet bridges and airport buses, which were previously managed by third parties. Excluding this cost, the increase would have been around 4.8%.
EBITDA EBITDA grew by 12.8% year-over-year, reaching MXN 5.1 billion, with an EBITDA margin of 64.3%. The margin was lower than in 2024 due to the change in concession fees for Mexican airports from 5% to 9%, which impacted profitability.
Cash and Cash Equivalents Cash and cash equivalents stood at MXN 11.7 billion as of September 30, 2025, reflecting a strong liquidity position.
Dividend Payment A second and final dividend installment of MXN 8.42 per outstanding share was paid during the quarter, as approved at the Annual General Ordinary Shareholders' Meeting.
Bond Issuance and Debt Management Two new bond certifications were issued under the long-term program for a total of MXN 8.5 billion. The proceeds were used to finance approximately MXN 7 billion in capital investment and to repay MXN 1.5 billion in bank loans. Additionally, a USD 40 million credit line with Banamex was refinanced, extending its maturity to 2030.
Capital Expenditures (CapEx) Approximately MXN 7 billion was invested in the first 9 months of the year, primarily for major infrastructure projects under the master development program, including terminal expansions and air site improvements.
New international routes: 8 new international routes to Canada will be launched in Q4 2025, enhancing connectivity and supporting demand during the high winter season. Additionally, Los Cabos will be connected directly to Panama for the first time, expanding the network into Central America.
Passenger traffic: Total passenger traffic increased by 2.5% year-over-year, reaching 15.8 million passengers in Q3 2025, supported by new routes and additional frequencies despite challenges in international traffic.
Revenue growth: Total revenues increased by 17.4% compared to Q3 2024, driven by strong performance in aeronautical and non-aeronautical businesses.
Cost of services: Costs increased by 14.1% due to regulatory changes requiring GAP to directly operate jet bridges and airport buses, previously managed by third parties.
Profitability: EBITDA grew by 12.8% to MXN 5.1 billion, with an EBITDA margin of 64.3%, reflecting changes in concession fees.
Strategic expansion: GAP is pursuing the Turks and Caicos tender and analyzing the potential acquisition of Motiva Airports, with no resolutions announced yet.
Passenger Traffic Slowdown: International passenger traffic declined due to immigration-related challenges and restrictive perceptions under the current U.S. administration, affecting VFR and leisure passengers.
Engine Issues Impacting Airlines: Ongoing Pratt & Whitney engine issues are limiting seat capacity recovery for Volaris and Viva Aerobus, with full recovery expected only by 2027.
Cost of Services Increase: Costs increased by 14.1% due to regulatory changes requiring GAP to directly operate jet bridges and airport buses, previously managed by third parties.
Concession Fee Increase: Concession fees for Mexican airports increased from 5% to 9%, impacting profitability and EBITDA margins.
Macroeconomic Uncertainty: Macroeconomic uncertainty and exchange rate volatility pose short-term challenges to financial performance.
Turks and Caicos Tender Uncertainty: The ongoing evaluation of the Turks and Caicos tender creates uncertainty in strategic expansion opportunities.
Passenger Traffic Growth: Looking ahead, GAP plans to launch 8 new international routes to Canada during the fourth quarter, which will enhance passenger traffic and support demand during the high winter season. Additionally, Los Cabos will be connected directly to Panama for the first time, expanding the network into Central America and strengthening GAP's position as a regional hub.
Revenue Growth: GAP expects to continue optimizing its commercial offering and leveraging passenger flow growth to enhance value creation across all airports. Non-aeronautical revenues are expected to drive diversification and resilience in the business model.
Cost Management: Despite a 14.1% increase in the cost of services, GAP remains focused on strict cost discipline to maximize operational efficiency and long-term sustainability while maintaining high service quality and safety standards.
Financial Position: GAP remains in a strong liquidity position with MXN 11.7 billion in cash and cash equivalents. The company has refinanced credit lines and issued new bonds to support long-term investment commitments and potential inorganic growth.
Capital Expenditures: GAP has invested approximately MXN 7 billion in the first 9 months of the year, focusing on major infrastructure projects under the master development program, including terminal expansions and air site improvements. The company remains cautiously optimistic despite macroeconomic uncertainty and exchange rate volatility.
Strategic Expansion: GAP is pursuing strategic expansion opportunities, including the ongoing Turks and Caicos tender and the potential acquisition of Motiva Airports. The company is analyzing transaction details and developing financial models for these opportunities.
Dividend Payment: In the third quarter '25, GAP paid the second and final dividend installment of MXN 8.42 per outstanding share, which was approved at the Annual General Ordinary Shareholders' Meeting.
The earnings call summary shows strong financial performance with a 30.6% YoY revenue growth and a healthy financial position with a low debt-to-EBITDA ratio. The dividend payments and strategic expansion plans, including new routes and international growth opportunities, are positive indicators. The Q&A section highlighted strong growth in directly operated business lines and strategic tariff increases, though some uncertainties remain regarding international traffic and tariff fulfillment. Overall, the positive aspects outweigh the negatives, suggesting a likely positive stock price movement over the next two weeks.
The earnings call presented a mixed outlook. While there are positive aspects like expected tariff increases, capacity growth, and sustainable distributions, there are concerns such as decreased passenger traffic due to U.S. immigration policies and grounded planes. The Q&A session revealed uncertainties around new routes and regulatory impacts. The lack of clear guidance on some issues and the absence of major positive catalysts like partnerships or record revenue suggest a neutral sentiment. Without market cap data, the prediction remains neutral, as the mixed signals balance each other out.
The earnings call presents a mixed outlook. While there is a positive growth in non-aeronautical revenue and infrastructure investments, the decline in passenger traffic and aeronautical revenue, coupled with increased operational expenses, present concerns. The lack of a share buyback program and unclear responses in the Q&A add uncertainty. Despite some optimism in future growth and strategic expansions, the overall sentiment remains neutral due to these offsetting factors.
The earnings call highlights several negative factors: declining passenger numbers, decreased aeronautical revenue, increased costs, and a drop in EBITDA. The Q&A section reveals management's unclear responses on key financial metrics, further raising concerns. Despite some positive commercial revenue growth and sustainability initiatives, the overall sentiment is negative due to financial strain, inflationary pressures, and regulatory changes. The market is likely to react negatively to the financial strain and lack of clear guidance, leading to a predicted stock price decrease between -2% to -8% over the next two weeks.
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