Corporacion America Airports Reports Third Quarter 2022 Results

Rhea-AI Summary

Corporación América Airports S.A. (NYSE: CAAP) reported its 3Q22 results, showcasing a significant revenue increase of 111.6% YoY, totaling $395.5 million, driven by growth in Aeronautical and Commercial revenues. Passenger traffic surged by 78.6% to 18.7 million, achieving 82.4% of 3Q19 levels. Adjusted EBITDA rose to $131.1 million, exceeding pre-pandemic levels by 31%. Notably, net debt to LTM Adjusted EBITDA improved to 2.6x, reflecting effective cost management and revenue recovery. The company anticipates continued growth in passenger traffic amid a recovering economic environment.

Positive

• Revenue increased 111.6% YoY to $395.5 million.
• Passenger traffic rose by 78.6% to 18.7 million, reaching 82.4% of 3Q19 levels.
• Adjusted EBITDA increased to $131.1 million, 31% above 3Q19 levels.
• Net debt to LTM Adjusted EBITDA improved to 2.6x from 3.5x.

Negative

• Revenue remains 5.2% below 3Q19 levels.

Total revenues ex-IFRIC above pre-pandemic levels, with traffic at 82%

Adjusted EBITDA ex-IFRIC 31% above 3Q19; positive in all countries of operations

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 and nine-month periods ended September 30, 2022, and as at that date. 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.

Third Quarter 2022 Highlights

• Consolidated Revenues of $395.5 million, a 111.6% YoY increase, or 5.2% below 3Q19. Excluding the impact of IFRS rule IAS 29, revenues increased 116.7% YoY to $399.8 million, reflecting increases of $97.3 million in Aeronautical revenues, $84.3 million in Commercial revenues, and $34.0 million in Construction service revenue. Revenues ex-IAS 29 reached 91.3% of pre-pandemic levels, up from 84.7% in the second quarter.
• Delivered YoY increases across key operating metrics:
  • 78.6% in passenger traffic to 18.7 million, reaching 82.4% of 3Q19 levels.
  • 1.2% in cargo volume to 81.8 thousand tons, to 82.2% of 3Q19 levels.
  • 42.1% in aircraft movements, to 88.7% of 3Q19 levels.
• Operating Income of $92.5 million, up from $2.8 million in 3Q21, mainly reflecting the YoY recovery in passenger traffic.
• Adjusted EBITDA on an “As Reported” basis increased to $131.1 million, from $39.6 million in the year-ago period, exceeding 3Q19 levels by 31.0%. Adjusted EBITDA margin expanded to 33.1% from 21.2% in 3Q21 and 24.0% in 3Q19.
• Ex-IAS 29, Adjusted EBITDA totaled $131.2 million, compared with $38.8 million in 3Q21 and $102.3 million in 3Q19. Adjusted EBITDA margin Ex-IFRIC12 increased to 37.5% from 23.1% in 3Q21 and 31.8% in 3Q19.
• Net debt to LTM Adjusted EBITDA down to 2.6x, from 3.5x as of June 30.

CEO Message

Commenting on the results for the quarter Mr. Martín Eurnekian, CEO of Corporación América Airports, noted: “We reported another strong quarter, generating Adjusted EBITDA of $131 million driven by positive contributions across all geographies, more than tripling year-on-year and 31% above 3Q19 levels. Continued recovery in passenger traffic and cargo, along with strong commercial revenues and ongoing cost controls contributed to an Adjusted EBITDA margin ex-IFRIC12 of 38%, exceeding pre-pandemic levels.

Moreover, sustained recovery in Adjusted EBITDA has allowed us to further reduce our leverage ratio to 2.6x this quarter, from 3.5x in the prior quarter and 5.1x in the first quarter of the year. We also maintain a healthy debt maturity profile with no major maturities until late 2024.

We are also advancing on different initiatives aimed at driving sustainable long-term growth. This month, we received an economic compensation for our concession in Brazil and remain focused on progressing with the economic re-equilibrium process in Armenia. We were also appointed preferred bidders to operate Abuja and Kano airports in Nigeria, and now are discussing and negotiating with Nigerian authorities the final terms of the concession agreements.

Looking ahead, we anticipate passenger traffic across our airports to continue the recovery trend. In the near term we expect to benefit from the start of the summer season in South America where we are already seeing higher demand, while we remain vigilant of the overall macroeconomic and geopolitical environment. We also remain focused on developing new routes to continue serving our passengers across our airport network, selectively looking at additional value creation investment opportunities.”

Operating & Financial Highlights

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

	3Q22 as reported	3Q21 as reported	% Var as reported	IAS 29 3Q22	3Q22 ex IAS 29	3Q21 ex IAS 29	% Var ex IAS 29
Passenger Traffic (Million Passengers) (1)(2)	18.7	10.5	78.6%		18.7	10.5	78.6%
Revenue	395.5	186.9	111.6%	-4.3	399.8	184.5	116.7%
Aeronautical Revenues	171.1	75.4	127.0%	-1.4	172.5	75.2	129.3%
Non-Aeronautical Revenues	224.4	111.5	101.3%	-2.9	227.3	109.3	108.0%
Revenue excluding construction service	346.9	168.6	105.7%	-1.8	348.7	167.4	108.3%
Operating Income / (Loss)	92.5	2.8	3232.6%	-17.3	109.8	14.7	648.0%
Operating Margin	23.4%	1.5%	2190	0.0%	27.5%	8.0%	1951
Net (Loss) / Income Attributable to Owners of the Parent	57.2	-15.0	-480.6%	34.7	22.5	-24.7	-191.2%
EPS (US$)	0.36	-0.09	-479.9%	0.22	0.14	-0.15	-191.0%
Adjusted EBITDA	131.1	39.6	231.4%	-0.1	131.2	38.8	237.8%
Adjusted EBITDA Margin	33.1%	21.2%	1198	-	32.8%	21.0%	1177
Adjusted EBITDA Margin excluding Construction Service	37.7%	23.4%	1434	-	37.5%	23.1%	1443
Net Debt to LTM Adjusted EBITDA	2.6x	7.5x	-	-	-	-	-
Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (3)	2.6x	7.2x	-	-	-	-	-

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

1)		Note that preliminary passenger traffic figures for Ezeiza Airport, in Argentina, for January 2020 were adjusted to include additional inbound passengers not accounted for in the initial count, for an average of approximately 5% of total passenger traffic at Ezeiza Airport and 1% of total traffic at CAAP, during that period. Importantly, inbound traffic does not affect revenues, as tariffs are applicable on departure passengers.
2)		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.
3)		LTM Adjusted EBITDA excluding impairments of intangible assets

Operating & Financial Highlights

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

	9M22 as reported	9M21 as reported	% Var as reported	IAS 29 9M22	9M22 ex IAS 29	9M21 ex IAS 29	% Var ex IAS 29
Passenger Traffic (Million Passengers) (1)(2)	47.3	22.4	110.5%		47.3	22.4	110.5%
Revenue	1006.1	474.0	112.3%	12.7	993.4	459.1	116.4%
Aeronautical Revenues	450.0	167.0	169.4%	7.1	442.9	163.4	171.0%
Non-Aeronautical Revenues	556.1	307.0	81.2%	5.6	550.4	295.6	86.2%
Revenue excluding construction service	914.0	412.7	121.5%	16.8	897.1	399.1	124.8%
Operating Income / (Loss)	221.9	-52.3	-524.2%	-44.4	266.3	-19.6	-1460.4%
Operating Margin	22.1%	-11.0%	3309	-	26.8%	-4.3%	3108
Net (Loss) / Income Attributable to Owners of the Parent	160.5	-94.6	-269.7%	114.4	46.2	-70.4	-165.6%
EPS (US$)	1.00	-0.59	-269.5%	0.71	0.29	-0.44	-165.5%
Adjusted EBITDA	339.1	56.5	499.7%	8.5	330.6	53.0	524.1%
Adjusted EBITDA Margin	33.7%	11.9%	2177	-	33.3%	11.5%	2174
Adjusted EBITDA Margin excluding Construction Service	37.0%	13.0%	2402	-	36.7%	13.0%	2377
Net Debt to LTM Adjusted EBITDA	2.6x	7.5x	-	-	-	-	-
Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (3)	2.6x	7.2x	-	-	-	-	-

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

1)		Note that preliminary passenger traffic figures for Ezeiza Airport, in Argentina, for January 2020 were adjusted to include additional inbound passengers not accounted for in the initial count, for an average of approximately 5% of total passenger traffic at Ezeiza Airport and 1% of total traffic at CAAP, during that period. Importantly, inbound traffic does not affect revenues, as tariffs are applicable on departure passengers.
2)		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.
3)		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

3Q22 EARNINGS CONFERENCE CALL

When:		10:00 a.m. Eastern Time, November 18, 2022
Who:		Mr. Martín Eurnekian, Chief Executive Officer
		Mr. Jorge Arruda, Chief Financial Officer
		Mr. Patricio Iñaki Esnaola, Head of Investor Relations
Dial-in:		1-646-904-5544 (U.S. Local); 1-226-828-7575 (Canada, Local); +1-929-526-1599 (Intern.). Participant access code: 126719
Webcast:		CAAP 3Q22 Earnings Conference Call
Replay:		1-929-458-6194 (U.S. Local); 1-226-828-7578 (Canada, Local); +44-204-525-0658 (Intern.). Replay access code: 993788

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 53 airports in 6 countries across Latin America and Europe (Argentina, Brazil, Uruguay, Ecuador, Armenia and Italy). In 2021, Corporación América Airports served 35.7 million passengers, 57.6% lower than the 84.2 million served prior to the pandemic, 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/20221117005879/en/

Investor Relations Contact

Patricio Iñaki Esnaola

Email: patricio.esnaola@caairports.com

Phone: +5411 4899-6716

Source: Corporación América Airports

FAQ

What were the total revenues of CAAP in 3Q22?

CAAP reported total revenues of $395.5 million in 3Q22.

How much did CAAP's passenger traffic increase in 3Q22?

CAAP's passenger traffic increased by 78.6% to 18.7 million in 3Q22.

What is the Adjusted EBITDA for CAAP in 3Q22?

CAAP's Adjusted EBITDA for 3Q22 was $131.1 million.

What is the net debt to Adjusted EBITDA ratio for CAAP?

CAAP's net debt to LTM Adjusted EBITDA ratio improved to 2.6x in 3Q22.

Did CAAP's revenue exceed pre-pandemic levels in 3Q22?

No, CAAP's revenue was 5.2% below pre-pandemic levels in 3Q19.