Corporación América Airports Reports Fourth Quarter and Full Year 2022 Results

Rhea-AI Summary

Corporación América Airports S.A. (NYSE: CAAP) announced robust financial results for Q4 2022 and the full year. Consolidated revenues reached $386.4 million, marking a 76.7% year-over-year increase, and surpassed pre-pandemic levels by 1.7%. Adjusted EBITDA for Q4 was $123 million, a 32.6% increase from the previous year. Full-year revenues rose to $1,378.7 million, a 95% YoY increase but 11.5% below 2019 levels. Passenger traffic climbed 38.3% YoY to 18.3 million in Q4. The company reported a net income of $12.1 million, reflecting a significant recovery from last year's losses.

Positive

• Consolidated revenues of $386.4 million in Q4 2022, up 76.7% YoY and 1.7% above pre-pandemic levels.
• Adjusted EBITDA reached $123 million in Q4 2022, a 32.6% increase year-over-year.
• Full-year 2022 revenues of $1,378.7 million, up 95% YoY.
• Passenger traffic grew 38.3% YoY to 18.3 million in Q4 2022.
• Net debt to LTM Adjusted EBITDA decreased to 2.4x, down from 7.1x in December 2021.

Negative

• Full-year revenues were 11.5% lower than pre-pandemic levels of 2019.
• Operating margin contracted to 22.4% in Q4 2022, down from 27.6% in Q4 2021.

Consolidated Revenues ex-IFRIC 10.6% above pre-pandemic levels

Adjusted EBITDA of $123 million in 4Q22 and $457 million in 2022; positive across all geographies

LUXEMBOURG--(BUSINESS WIRE)-- Corporación América Airports S.A. (NYSE: CAAP), (“CAAP” or the “Company”) a leading private airport operator in the world, reported today its unaudited, consolidated results for the three-month period ended December 31, 2022, and audited results for the full year 2022. Financial results are expressed in millions of U.S. dollars and are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (“IASB”).

Commencing 3Q18, the Company began reporting results of its Argentinean subsidiaries applying Hyperinflation Accounting, in accordance with IFRS rule IAS 29 (“IAS 29”), as detailed in Section “Hyperinflation Accounting in Argentina” on page 24.

Fourth Quarter 2022 Highlights

• Consolidated Revenues of $386.4 million, a 76.7% YoY increase, or 1.7% above 4Q19. Excluding the impact of IFRS rule IAS 29, revenues increased 81.9% YoY to $397.6 million, reflecting increases of $78.5 million in Aeronautical Revenues, $52.9 million in Commercial Revenues, and $44.8 million in Construction Service Revenue. Revenues ex-IAS 29 reached 106.1% of pre-pandemic levels, up from 91.3% in the third quarter.
• Delivered YoY increases across key operating metrics:
  • 38.3% in passenger traffic to 18.3 million, reaching 87.6% of 4Q19 levels.
  • 1.0% in cargo volume to 92.5 thousand tons, to 80.7% of 4Q19 levels.
  • 23.7% in aircraft movements, to 94.3% of 4Q19 levels.
• Operating Income of $86.4 million, up from $60.4 million in 4Q21, mainly reflecting the YoY recovery in passenger traffic.
• Adjusted EBITDA on an “As Reported” basis increased to $123.0 million, from $92.8 million in the year-ago period, with Adjusted EBITDA margin contracting to 31.8% from 42.4%, mainly due to higher government grants and economic compensations received in 4Q21.
• Compared to pre-pandemic levels, Adjusted EBITDA grew by 126.5%, with Adjusted EBITDA margin expanding 17.5 percentage points. To note, 4Q19 Adjusted EBITDA included a $42.8 million impairment charge in Brazil. Excluding the aforementioned impact, Adjusted EBITDA margin would have expanded by 6.2 percentage points.
• Net debt to LTM Adjusted EBITDA decreased to 2.4x, from 2.6x as of September 30.

Full Year 2022 Highlights

• Consolidated Revenues of $1,378.7 million, a 95.0% YoY increase, or 11.5% below pre-pandemic levels of 2019. Excluding the impact of IFRS rule IAS 29, revenues increased 105.2% YoY to $1,390.9 million, reflecting increases of $358.0 million in Aeronautical revenues, $269.9 million in Commercial revenues, and $81.1 million in Construction service revenue. When compared to full year 2019, revenues ex-IAS 29 declined 12.2%.
• Delivered YoY increases across key operating metrics:
  • 83.7% in passenger traffic to 65.6 million, reaching 77.9% of 2019 levels.
  • 6.1% in cargo volume to 343.1 thousand tons, to 80.8% of 2019 levels.
  • 48.5% in aircraft movements, to 86.0% of 2019 levels.
• Operating Income of $304.6 million, up from $6.5 million in 2021, mainly reflecting the YoY recovery in passenger traffic.
• Adjusted EBITDA on an “As Reported” basis increased to $456.7 million, from $149.3 million in 2021, with Adjusted EBITDA margin expanding to 33.1% from 21.1%. Compared to pre-pandemic levels of 2019, Adjusted EBITDA grew by 18.7%, with Adjusted EBITDA margin expanding 8.4 percentage points.
• Capex totaled $164.9 million, compared to $91.7 million in 2021 and $372.4 million in 2019.
• Net debt to LTM Adjusted EBITDA down to 2.4x, from 7.1x as of December 2021.

CEO Message

Commenting on the results for the quarter Mr. Martín Eurnekian, CEO of Corporación América Airports, noted: “We are pleased to have closed the year delivering another strong quarter, with revenues ex-IFRIC12 up 61% from 4Q21 levels and 11% from pre-pandemic 4Q19 levels, and Adjusted EBITDA at $123 million, increasing 33% year-on-year and 27% versus 4Q19, on a comparable basis.

Solid results for the quarter contributed to Revenues Ex-IFRIC of $1.2 billion for the full-year and Adjusted EBITDA margin Ex-IFRIC of 37% compared with 23% in 2021 and 32% in 2019. This good performance was achieved with passenger traffic at 88% of pre-pandemic levels by year-end.

We have been able to successfully further reduce our net leverage ratio to 2.4x from 2.6x in the prior quarter and 5.1x in the first quarter of the year, reflecting the continued recovery in Adjusted EBITDA.

To further enhance our airport portfolio, we have recently signed two new lease agreements for the development of large scale real estate projects in Brasilia, as part of our master plan. We also obtained economic re-equilibrium in Brazil in connection with year 2022, and are on track with the capex programs in Argentina and Uruguay, which are part of the extension agreements previously announced.

In Armenia and Italy, we are in discussions with the governments in connection with infrastructure expansion plans to support and benefit from the continued growth in travel demand in these markets.

We are also progressing in our discussions and negotiations with Nigerian authorities to finalize the terms of the concession agreements for the Abuja and Kano airports in Nigeria, where we were recently selected as preferred bidders.

Finally, we continue to selectively look at other value creation investment opportunities across different geographies.

Looking at travel demand trends for 2023, we expect passenger traffic throughout the year to continue edging up to pre-pandemic levels, with some of our countries of operations anticipated to exceed pre-pandemic levels and others to be near pre-pandemic levels. At the same time, we recognize that there are still significant macroeconomic forces pressuring consumer spending. While we are keeping a close eye on the macro and geo-political environments, we are confident we have a resilient business model and are taking strategic actions to successfully grow our business for the long-term.”

Operating & Financial Highlights

(In millions of U.S. dollars, unless otherwise noted)

	4Q22 as reported	4Q21 as reported	% Var as reported	IAS 29 4Q22	4Q22 ex IAS 29	4Q21 ex IAS 29	% Var ex IAS 29
Passenger Traffic (Million Passengers) (1)	18.3	13.2	38.3%		18.3	13.2	38.3%
Revenue	386.4	218.7	76.7%	-11.2	397.6	218.6	81.9%
Aeronautical Revenues	165.7	92.6	79.1%	-4.8	170.5	92.0	85.4%
Non-Aeronautical Revenues	220.7	126.1	75.0%	-6.4	227.1	126.6	79.4%
Revenue excluding construction service	326.8	202.7	61.2%	-7.6	334.3	200.1	67.1%
Operating Income / (Loss)	86.4	60.4	43.1%	-18.3	104.7	72.9	43.7%
Operating Margin	22.4%	27.6%	-525	0.0%	26.3%	33.3%	-701
Net (Loss) / Income Attributable to Owners of the Parent	12.1	-22.3	-154.4%	19.7	-7.6	-33.7	-77.6%
EPS (US$)	0.08	-0.14	-154.4%	0.12	-0.05	-0.21	-77.6%
Adjusted EBITDA	123.0	92.8	32.6%	-2.4	125.4	91.8	36.6%
Adjusted EBITDA Margin	31.8%	42.4%	-1059	-	31.5%	42.0%	-1046
Adjusted EBITDA Margin excluding Construction Service	37.4%	45.2%	-780	-	37.2%	45.3%	-809
Net Debt to LTM Adjusted EBITDA	2.4x	7.1x	-	-	-	-	-
Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (2)	2.4x	7.1x	-	-	-	-	-

Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.

1)		Starting November 2019, the Company has reclassified its passenger traffic figures for Brasilia Airport between international, domestic and transit retroactively since June 2018 to return to the count methodology utilized until May 2018. Notwithstanding, total traffic figures remain unchanged.
2)		LTM Adjusted EBITDA excluding impairments of intangible assets

Operating & Financial Highlights

(In millions of U.S. dollars, unless otherwise noted)

	2022 as reported	2021 as reported	% Var as reported	IAS 29 2022	2022 ex IAS 29	2021 ex IAS 29	% Var ex IAS 29
Passenger Traffic (Million Passengers) (1)	65.6	35.7	83.7%		65.6	35.7	83.7%
Revenue	1,378.7	706.9	95.0%	-12.2	1,390.9	677.7	105.2%
Aeronautical Revenues	609.8	262.8	132.0%	-3.7	613.4	255.4	140.1%
Non-Aeronautical Revenues	768.9	444.1	73.1%	-8.6	777.5	422.2	84.1%
Revenue excluding construction service	1,228.9	627.2	95.9%	-2.5	1,231.4	599.2	105.5%
Operating Income / (Loss)	304.6	6.5	4,618.3%	-66.5	371.1	52.8	602.7%
Operating Margin	22.1%	0.9%	2118	-	26.7%	7.8%	1,889
Net (Loss) / Income Attributable to Owners of the Parent	168.2	-117.8	-242.8%	128.6	39.6	-104.5	-137.9%
EPS (US$)	1.05	-0.73	-242.6%	0.80	0.25	-0.65	-137.8%
Adjusted EBITDA	456.7	149.3	205.9%	0.7	456.0	142.8	219.3%
Adjusted EBITDA Margin	33.1%	21.1%	1201	-	32.8%	21.1%	1171
Adjusted EBITDA Margin excluding Construction Service	37.1%	23.4%	1363	-	36.9%	23.4%	1344
Net Debt to LTM Adjusted EBITDA	2.4x	7.1x	-	-	-	-	-
Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (2)	2.4x	7.1x	-	-	-	-	-

Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.

1)		Starting November 2019, the Company has reclassified its passenger traffic figures for Brasilia Airport between international, domestic and transit retroactively since June 2018 to return to the count methodology utilized until May 2018. Notwithstanding, total traffic figures remain unchanged.
2)		LTM Adjusted EBITDA excluding impairments of intangible assets.

To obtain the full text of this earnings release and the earnings presentation, please click on the following link: http://investors.corporacionamericaairports.com/Results-Center

4Q22 EARNINGS CONFERENCE CALL

When:		10:00 a.m. Eastern Time, March 22, 2023
Who:		Mr. Martín Eurnekian, Chief Executive Officer
		Mr. Jorge Arruda, Chief Financial Officer
		Mr. Patricio Iñaki Esnaola, Head of Investor Relations
Dial-in:		1-404-975-4839 (U.S. Local); 1-833-470-1428 (U.S. Toll-Free); +44-208-068-2558 (UK). Participant access code: 521941
Webcast:		CAAP 4Q22 Earnings Conference Call
Replay:		1-929-458-6194 (U.S. Local); 1-866-813-9403 (U.S., Toll Free); +44-204-525-0658 (Intern.). Replay access code: 212598

Use of Non-IFRS Financial Measures

This announcement includes certain references to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA excluding Construction Service and Adjusted EBITDA Margin excluding Construction service, as well as Net Debt:

Adjusted EBITDA is defined as income for the period before financial income, financial loss, income tax expense, depreciation and amortization.

Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues.

Adjusted EBITDA excluding Construction Service (“Adjusted EBITDA ex-IFRIC”) is defined as income for the period before construction services revenue and cost, financial income, financial loss, income tax expense, depreciation and amortization.

Adjusted EBITDA Margin excluding Construction Service (“Adjusted EBITDA Margin ex-IFRIC12”) excludes the effect of IFRIC 12 with respect to the construction or improvements to assets under the concession and is calculated by dividing Adjusted EBITDA excluding Construction Service revenue and cost, by total revenues less Construction service revenue.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA excluding Construction Service and Adjusted EBITDA Margin excluding Construction Service are not measures recognized under IFRS and should not be considered as an alternative to, or more meaningful than, consolidated net income for the year as determined in accordance with IFRS or as indicators of our operating performance from continuing operations. Accordingly, readers are cautioned not to place undue reliance on this information and should note that these measures as calculated by the Company, may differ materially from similarly titled measures reported by other companies. We believe that the presentation of Adjusted EBITDA and Adjusted EBITDA excluding Construction Service enhances an investor’s understanding of our performance and are useful for investors to assess our operating performance by excluding certain items that we believe are not representative of our core business. In addition, Adjusted EBITDA and Adjusted EBITDA excluding Construction Service are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods, capital structure or income taxes and construction services (when applicable).

Net debt is calculated by deducting “Cash and cash equivalents” from total financial debt.

Figures ex-IAS 29 result from dividing nominal Argentine pesos for the Argentine Segment, by the average foreign exchange rate of the Argentine Peso against the US dollar in the period. Percentage variations ex-IAS 29 figures compare results as presented in the prior year quarter before IAS 29 came into effect, against ex-IAS 29 results for this quarter as described above. For comparison purposes, the impact of adopting IAS 29 in Aeropuertos Argentina 2000, the Company’s largest subsidiary in Argentina, is presented separately in each of the applicable sections of this earnings release, in a column denominated “IAS 29”. The impact from “Hyperinflation Accounting in Argentina” is described in more detail page 24 of this report.

Definitions and Concepts

Commercial Revenues: CAAP derives commercial revenue principally from fees resulting from warehouse usage (which includes cargo storage, stowage and warehouse services and related international cargo services), services and retail stores, duty free shops, car parking facilities, catering, hangar services, food and beverage services, retail stores, including royalties collected from retailers’ revenue, and rent of space, advertising, fuel, airport counters, VIP lounges and fees collected from other miscellaneous sources, such as telecommunications, car rentals and passenger services.

Construction Service revenue and cost: Investments related to improvements and upgrades to be performed in connection with concession agreements are treated under the intangible asset model established by IFRIC 12. As a result, all expenditures associated with investments required by the concession agreements are treated as revenue generating activities given that they ultimately provide future benefits, and subsequent improvements and upgrades made to the concession are recognized as intangible assets based on the principles of IFRIC 12. The revenue and expense are recognized as profit or loss when the expenditures are performed. The cost for such additions and improvements to concession assets is based on actual costs incurred by CAAP in the execution of the additions or improvements, considering the investment requirements in the concession agreements. Through bidding processes, the Company contracts third parties to carry out such construction or improvement services. The amount of revenues for these services is equal to the amount of costs incurred plus a reasonable margin, which is estimated at an average of 3.0% to 5.0%.

About Corporación América Airports

Corporación América Airports acquires, develops and operates airport concessions. The Company is a leading private airport operator in the world, currently operating 53 airports in 6 countries across Latin America and Europe (Argentina, Brazil, Uruguay, Ecuador, Armenia and Italy). In 2022, Corporación América Airports served 65.6 million passengers, 83.7% above the 35.7 million passengers served in 2021 and 22.1% below the 84.2 million served in 2019. The Company is listed on the New York Stock Exchange where it trades under the ticker “CAAP”. For more information, visit http://investors.corporacionamericaairports.com

Forward Looking Statements

Statements relating to our future plans, projections, events or prospects are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “believes,” “continue,” “could,” “potential,” “remain,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to: the Covid-19 impact, delays or unexpected casualties related to construction under our investment plan and master plans, our ability to generate or obtain the requisite capital to fully develop and operate our airports, general economic, political, demographic and business conditions in the geographic markets we serve, decreases in passenger traffic, changes in the fees we may charge under our concession agreements, inflation, depreciation and devaluation of the AR$, EUR, BRL, UYU or the AMD against the U.S. dollar, the early termination, revocation or failure to renew or extend any of our concession agreements, the right of the Argentine Government to buy out the AA2000 Concession Agreement, changes in our investment commitments or our ability to meet our obligations thereunder, existing and future governmental regulations, natural disaster-related losses which may not be fully insurable, terrorism in the international markets we serve, epidemics, pandemics and other public health crises and changes in interest rates or foreign exchange rates. The Company encourages you to review the ‘Cautionary Statement’ and the ‘Risk Factor’ sections of our annual report on Form 20-F for the year ended December 31, 2019 and any of CAAP’s other applicable filings with the Securities and Exchange Commission for additional information concerning factors that could cause those differences.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230322005266/en/

Investor Relations Contact

Patricio Iñaki Esnaola

Email: patricio.esnaola@caairports.com

Phone: +5411 4899-6716

Source: Corporación América Airports

FAQ

What are the Q4 2022 revenue results for CAAP?

CAAP reported Q4 2022 consolidated revenues of $386.4 million, a 76.7% increase year-over-year.

How did CAAP perform in terms of adjusted EBITDA for 2022?

CAAP's adjusted EBITDA reached $456.7 million for the full year 2022, up from $149.3 million in 2021.

What was the passenger traffic for CAAP in Q4 2022?

Passenger traffic for CAAP in Q4 2022 was 18.3 million, reflecting a 38.3% increase year-over-year.

What is the current net debt to adjusted EBITDA ratio for CAAP?

CAAP's net debt to LTM adjusted EBITDA ratio is currently 2.4x, down from 7.1x a year ago.

What challenges did CAAP face in 2022 regarding revenue?

Despite strong growth, CAAP's full-year revenues were 11.5% below pre-pandemic levels of 2019.