Corporacion America Airports Reports Second Quarter 2024 Results

Rhea-AI Summary

Corporación América Airports S.A. (NYSE: CAAP) reported its Q2 2024 results:

- Consolidated Revenues ex-IFRIC12 up 0.2% YoY to $366.1 million, despite 7.8% decrease in passenger traffic

- Operating Income down to $92.9 million from $110.4 million in Q2 2023

- Adjusted EBITDA ex-IFRIC12 decreased 8.8% to $136.2 million

- Strong cash position with $439.4 million in Cash & Cash equivalents

- Net debt to LTM Adjusted EBITDA improved to 1.1x

Key factors:

• Geographic diversification mitigated soft performance in Argentina
• Revenue per passenger ex-IFRIC12 increased 9% YoY
• Strong performances in Italy and Uruguay
• Negotiating $400 million Capex plan with Armenian government
• Awaiting approval for new Florence airport master plan

Positive

• Revenue ex-IFRIC12 increased 0.2% YoY to $366.1 million, showing resilience despite traffic decline
• Revenue per passenger ex-IFRIC12 increased 9% YoY, outpacing revenue growth
• Strong cash position with $439.4 million in Cash & Cash equivalents
• Net debt to LTM Adjusted EBITDA improved to 1.1x from 1.4x in December 2023
• Strong performances in Italy and Uruguay markets
• Negotiating $400 million Capex plan with Armenian government
• Cargo volume increased 4.7% to 95.1 thousand tons

Negative

• Passenger traffic decreased 7.8% YoY to 18.2 million
• Operating Income decreased to $92.9 million from $110.4 million in Q2 2023
• Adjusted EBITDA ex-IFRIC12 decreased 8.8% to $136.2 million
• Adjusted EBITDA margin ex-IFRIC12 contracted to 37.2% from 40.9% in Q2 2023
• Commercial Revenues decreased 2.9% YoY
• Aircraft movements decreased 9.5% YoY

Insights

Financial Analyst

Corporación América Airports' Q2 2024 results show resilience amid challenges. Despite a 7.8% decrease in passenger traffic, consolidated revenues ex-IFRIC12 increased slightly by 0.2% YoY to $366.1 million. This was driven by a 3.2% increase in aeronautical revenues, offsetting a 2.9% decrease in commercial revenues.

The company's geographic diversification helped mitigate soft performance in Argentina. However, Adjusted EBITDA ex-IFRIC12 decreased by 8.8% to $136.2 million, with margins contracting to 37.2% from 40.9% in Q2 2023. This decline was primarily due to macroeconomic challenges in Argentina affecting domestic traffic and duty-free revenues.

On a positive note, CAAP's financial position remains strong. Net debt to LTM Adjusted EBITDA improved to 1.1x, down from 1.4x at the end of 2023, indicating improved leverage and financial flexibility. The company's cash position of $439.4 million provides a solid foundation for future growth initiatives and navigating near-term challenges.

Market Research Analyst

CAAP's Q2 results highlight the company's resilience in a challenging environment. The 9% increase in revenue per passenger ex-IFRIC12 demonstrates CAAP's ability to optimize revenue streams despite traffic declines. This is particularly noteworthy given the 5.4% decrease in passenger traffic (excluding Natal).

The company's geographic diversification is proving valuable, with strong performances in Italy and Uruguay offsetting challenges in Argentina and Brazil. This strategy helps mitigate country-specific risks and provides a more stable overall performance.

Looking ahead, recent open skies agreements in Argentina could boost international traffic and create new growth opportunities. Additionally, CAAP's ongoing negotiations for a $400 million Capex plan in Armenia and potential approval of Florence airport's master plan indicate a proactive approach to expansion. These initiatives, coupled with the company's strong financial position, position CAAP well for long-term growth despite near-term headwinds.

Consolidated Revenues, ex-IFRIC12 up 0.2% YoY, despite 5% traffic decline Ex-Natal

Diversified portfolio mitigated soft performance in Argentina

Strong cash position with Net Debt to LTM Adjusted EBITDA improving to 1.1x

LUXEMBOURG--(BUSINESS WIRE)-- Corporación América Airports S.A. (NYSE: CAAP), (“CAAP” or the “Company”) one of the leading private airport operators in the world, reported today its unaudited, consolidated results for the three and six-month period ended June 30, 2024. 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 22.

Second Quarter 2024 Highlights

• Consolidated Revenues ex-IFRIC12 of $366.1 million, increased 0.2% year-over-year (YoY), as the 2.9% decrease in Commercial Revenues was offset by a 3.2% increase in Aeronautical Revenues. Excluding rule IAS 29, consolidated revenues ex-IFRIC12 decreased 1.7% YoY to $363.3 million.
• Key operating metrics:
  • 7.8% decrease in passenger traffic to 18.2 million. Excluding Natal, passenger traffic decreased 5.4% YoY.
  • 4.7% increase in cargo volume to 95.1 thousand tons.
  • 9.5% decrease in aircraft movements, or 7.8%, excluding Natal.
• Operating Income of $92.9 million, down from $110.4 million in 2Q23.
• Adjusted EBITDA ex-IFRIC12 decreased 8.8% to $136.2 million, from $149.3 million in the year-ago period. Excluding rule IAS 29, Adjusted EBITDA ex-IFRIC12 decreased 10.3% to $134.6 million.
• Adjusted EBITDA margin ex-IFRIC12 contracted to 37.2% from 40.9% in 2Q23, or to 37.0% from 40.6% when excluding rule IAS 29.
• Strong cash position with Cash & Cash equivalents totaling $439.4 million as of June 2024.
• Net debt to LTM Adjusted EBITDA improved to 1.1x as of June 30, 2024, from 1.4x as of December 31, 2023.

CEO Message

Commenting on the results for the quarter Mr. Martín Eurnekian, CEO of Corporación América Airports, noted: “Despite a mild decline in overall passenger traffic, our revenues remained resilient, thanks to our geographic diversification. This is reflected in our revenue per passenger ex-IFRIC12, which increased by 9% year-over-year, outpacing revenue growth and underpinning our ability to adapt to challenging market dynamics.

EBITDA ex-IFRIC12, declined by 9% year-over-year, primarily due to the impact of Argentina's macroeconomic dynamics on our domestic traffic, duty-free revenues, and operational expenses. Nonetheless, international traffic in Argentina performed well and we have also delivered strong performances in Italy and Uruguay, underscoring the strength of our operations in those regions.

We closed the quarter with a solid balance sheet and a favorable debt maturity profile. Our net leverage ratio reached another record low of 1.1x as of June 30, 2024, demonstrating our commitment to maintaining a disciplined capital structure.

On the strategic front, we remain engaged in negotiating a new $400 million Capex plan with the Armenian government and awaiting approval for the new master plan for Florence airport. Additionally, we remain active in assessing new expansion projects across various geographies, aligning with our strategic roadmap to pursue growth opportunities.

Looking ahead, we expect the positive dynamics in Uruguay and Italy to continue throughout the year. Moreover, recent open skies bilateral agreements concluded by Argentina with multiple countries open the opportunity for airlines to offer new routes and destinations to travel from/to Argentina, contributing to improved flexibility and dynamism in the country’s aeronautical activity.

In sum, our healthy balance sheet provides the financial flexibility to support our global growth initiatives while we navigate near-term challenges in Argentina and Brazil. We have the foundation in place and are confident about the long-term growth potential of our Company.”

Operating & Financial Highlights
(In millions of U.S. dollars, unless otherwise noted)
	2Q24 as reported	2Q23 as reported	% Var as reported	IAS 29 2Q24	2Q24 ex IAS 29	2Q23 ex IAS 29	% Var ex IAS 29
Passenger Traffic (Million Passengers)	18.2	19.7	-7.8%		18.2	19.7	-7.8%
Revenue	416.2	422.7	-1.5%	4.1	412.1	428.6	-3.8%
Aeronautical Revenues	193.7	187.7	3.2%	0.4	193.2	190.1	1.6%
Non-Aeronautical Revenues	222.6	235.0	-5.3%	3.7	218.9	238.5	-8.2%
Revenue excluding construction service	366.1	365.5	0.2%	2.8	363.3	369.6	-1.7%
Operating Income / (Loss)	92.9	110.4	-15.9%	-21.0	113.9	130.5	-12.7%
Operating Margin	22.3%	26.1%	-382	0.0%	27.6%	30.5%	-282
Net (Loss) / Income Attributable to Owners of the Parent	50.2	69.8	-28.0%	-7.6	57.8	46.6	24.0%
EPS (US$)	0.31	0.43	-28.1%	-0.05	0.36	0.29	23.9%
Adjusted EBITDA	136.4	150.9	-9.6%	1.6	134.8	151.6	-11.1%
Adjusted EBITDA Margin	32.8%	35.7%	-294	-	32.7%	35.4%	-267
Adjusted EBITDA Margin excluding Construction Service	37.2%	40.9%	-367	-	37.0%	40.6%	-356
Net Debt to LTM Adjusted EBITDA	1.1x	1.8x	-	-	-	-	-
Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (1)	1.3x	1.8x	-	-	-	-	-
Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.
1) LTM Adjusted EBITDA excluding impairments of intangible assets.

Operating & Financial Highlights
(In millions of U.S. dollars, unless otherwise noted)
	6M24 as reported	6M23 as reported	% Var as reported	IAS 29 6M24	6M24 ex IAS 29	6M23 ex IAS 29	% Var ex IAS 29
Passenger Traffic (Million Passengers)	37.2	38.2	-2.7%		37.2	38.2	-2.7%
Revenue	880.4	809.4	8.8%	55.8	824.6	815.2	1.1%
Aeronautical Revenues	431.8	375.6	15.0%	29.7	402.0	377.5	6.5%
Non-Aeronautical Revenues	448.7	433.8	3.4%	26.1	422.6	437.7	-3.5%
Revenue excluding construction service	784.9	718.0	9.3%	50.3	734.6	720.6	1.9%
Operating Income / (Loss)	227.7	213.8	6.5%	-18.6	246.4	250.1	-1.5%
Operating Margin	25.9%	26.4%	-55	-	29.9%	30.7%	-80
Net (Loss) / Income Attributable to Owners of the Parent	219.9	102.1	115.4%	76.8	143.1	53.0	169.9%
EPS (US$)	1.37	0.63	115.3%	0.48	0.89	0.33	169.8%
Adjusted EBITDA	313.0	293.4	6.7%	25.7	287.3	292.8	-1.9%
Adjusted EBITDA Margin	35.5%	36.2%	-70	-	34.8%	35.9%	-109
Adjusted EBITDA Margin excluding Construction Service	39.7%	40.6%	-83	-	39.0%	40.4%	-138
Net Debt to LTM Adjusted EBITDA	1.1x	1.8x	-	-	-	-	-
Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (1)	1.3x	1.8x	-	-	-	-	-
Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.
1) 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

2Q24 EARNINGS CONFERENCE CALL

When:		09:00 a.m. Eastern Time, August 22, 2024
Who:		Mr. Martín Eurnekian, Chief Executive Officer
		Mr. Jorge Arruda, Chief Financial Officer
		Mr. Patricio Iñaki Esnaola, Head of Investor Relations
Dial-in:		1-800-549-8228 (North America, Toll Free); 1-289-819-1520 (Other locations); Conference ID: 14198
Webcast:		CAAP 2Q24 Earnings Conference Call
Replay:		1-888-660-6264 (North America, Toll Free); 1-289-819-1325 (Other locations); Playback Passcode: 14198 #

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 22 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 52 airports in 6 countries across Latin America and Europe (Argentina, Brazil, Uruguay, Ecuador, Armenia and Italy). In 2023, Corporación América Airports served 81.1 million passengers, 23.7% above the 65.6 million passengers served in 2022 and 3.6% 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/20240821984240/en/

Investor Relations Contact

Patricio Iñaki Esnaola

Email: patricio.esnaola@caairports.com

Phone: +5411 4899-6716

Source: Corporación América Airports

FAQ

What was CAAP's revenue performance in Q2 2024?

CAAP's Consolidated Revenues ex-IFRIC12 increased 0.2% year-over-year to $366.1 million in Q2 2024, despite a 7.8% decrease in passenger traffic.

How did CAAP's Adjusted EBITDA perform in Q2 2024?

CAAP's Adjusted EBITDA ex-IFRIC12 decreased 8.8% to $136.2 million in Q2 2024 compared to $149.3 million in Q2 2023.

What was CAAP's net debt to LTM Adjusted EBITDA ratio as of June 30, 2024?

CAAP's net debt to LTM Adjusted EBITDA improved to 1.1x as of June 30, 2024, compared to 1.4x as of December 31, 2023.

How did passenger traffic change for CAAP in Q2 2024?

CAAP experienced a 7.8% decrease in passenger traffic to 18.2 million passengers in Q2 2024 compared to the same period in 2023.

What strategic initiatives is CAAP currently pursuing?

CAAP is negotiating a new $400 million Capex plan with the Armenian government and awaiting approval for a new master plan for Florence airport. The company is also assessing new expansion projects across various geographies.