Upside guidance due to better 1H22 performance
Gap reported a positive 2Q22, in line with expectations, highlighting margins expansion. The group increased the 2022 guidance anticipating a greater advance in passengers and profitability
The report should be well received by the market, with a FV/EBITDA multiple falling from 12.3x to 11.5x after incorporating the figures, although it is still above the average (11.0x)
Operational growth and higher margins continue. Gap showed in 2Q22 a passenger’s traffic growth of 27.6% y/y, derived from a good demand dynamism, and a still easy comparative basis. This, alongside with higher tariffs, boosted the increase in the sum of aeronautical and non-aeronautical revenues from 43.4% to MXN 5.6 billion, in line with expectations. Considering this and operating leverage, the EBITDA advance was 45.9% to MXN 4.1 billion, also benefiting from the strict control of costs and expenses, therefore the respective margin, excluding accounting changes (without impact on EBITDA), rose 1.3pp, standing at 72.4%, exceeding our 70.6% estimate. Finally, the group showed an annual growth in comprehensive income attributable to controlling interest of 67.2% to MXN 2.2 billion, given the better operating performance and a foreign exchange gain of MXN 183 million vs. the loss of MXN 102 million in 2Q21. Increased its 2022 guidance, which we anticipated and have already incorporated in our estimates, considering the best performance in 1H22. Now the group expects a traffic passengers’ growth between 26% and 30% (vs. 14%-20%e previous), as well as an advance in operating revenues and EBITDA between 33% and 37% (vs. 18%-24%e previous), with a margin of 71%±1% (vs. 69%±1% previously). While the outlook is positive, it is important to remember that the premium it represents in valuation vs. comparables makes it, in our opinion, the least attractive in the sector. We reiterate our Hold recommendation.