Passenger traffic up 5.9% YoY in Argentina and
5.2% in Brazil, further supported by growth across most countries
of operations
Corporación América Airports S.A. (NYSE:CAAP), (“CAAP” or
the “Company”) the largest private sector airport operator based on
the number of airports under management and the tenth largest
private sector airport operator worldwide based on passenger
traffic, reported today its unaudited, consolidated results for the
three- and nine-month periods ended September 30, 2018. Financial
results are expressed in millions of U.S. dollars and are prepared
in conformity with International Accounting Standard 34 “Interim
Financial Reporting” (“IAS 34”) as issued by the International
Accounting Standards Board.
Starting in 3Q18, the Company is reporting results of its
Argentinean subsidiaries applying Hyperinflation Accounting, in
accordance to IFRS rule IAS29, as detailed on Section “Review of
Consolidated Results”.
Third Quarter 2018 Highlights
- Consolidated revenues declined 17.4%
YoY to $348.0 million. Excluding the impact of IFRS rule IAS29,
revenues declined 7.7% YoY mainly due to lower travel demand in
Argentina reflecting difficult macro conditions and the FX impact
in Argentina and Brazil, partially offset by increases in Ecuador
and Armenia
- Growth across key operating metrics:
- Passenger traffic up 5.8% YoY to 22.1
million
- Cargo volume increased 1.2% to 94.8
thousand tons
- Aircraft movements rose 2.6% to 231.1
thousand
- Operating Income declined 16.4% YoY,
mainly reflecting IAS 29 impact, with operating margin expanding 30
bps to 25.0% from 24.7% in 3Q17
- Adjusted EBITDA reached $122.5 million,
down 2.7% YoY, with Adjusted EBITDA margin Ex-IFRIC12 expanding 435
bps to 40.4%
- Ex-IAS 29, Adjusted EBITDA increased
8.8% YoY and Adjusted EBITDA margin Ex-IFRIC12 increased 469 bps to
40.7%
CEO Message
Commenting on the third quarter 2018 results, Mr. Martin
Eurnekian, CEO of Corporación América Airports, noted: “We
delivered year-on-year Adjusted EBITDA Ex IAS 29 growth of almost
9% this quarter despite the increasingly challenging macro
environment, particularly in Argentina. Moreover, Ex-IFRIC Adjusted
EBITDA margin expanded over 460 points to 40%. Our three key
markets, Argentina, Brazil and Italy contributed to this higher
profitability in the quarter.
Passenger traffic growth showed a slight deceleration this
quarter while total revenues posted a high-single digit
year-on-year decline, impacted mainly by an average quarterly
depreciation in local currencies of 85% in Argentina and 26% in
Brazil. Additionally, in Argentina, we saw a high-single digit
decline in international travel, an accelerated mix-shift to more
affordable domestic destinations, and the impact of FX translation
on local currency revenues. Brazil’s revenue in local currency
increased more than 10% reflecting continued traffic growth and the
positive contribution from recent commercial activities. Our
operations in Italy, continued to deliver a solid top line
performance, supported by healthy traffic trends and the
contribution from the redesigned VIP lounge, new retail stores as
well as new space for duty free shops. Furthermore, our cost
structure continued to benefit from the currency depreciation in
Argentina and Brazil, along with higher profitability across most
of our countries of operations.
Looking ahead, we see the difficult economic environment in
Argentina continuing to negatively impact traffic trends in the
country. Moreover, profitability is expected to be impacted more as
inflation in the country catches up with currency depreciation
lowering the strong operating leverage experienced this quarter. We
remain focused on further strengthening our global airport
platform, moving ahead in our capex initiatives particularly in
Argentina and Italy, as well as developing new routes and
frequencies while providing our passengers with a great travel
experience, which in turn should create long-term value for the
Company. This is further underscored by our strong balance
sheet.”
Operating & Financial Highlights
(In millions of U.S. dollars, unless
otherwise noted)
3Q17
3Q18 ex IAS 29
IAS 29
3Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Passenger Traffic (Million Passengers) 20.9
- - 22.1
5.8% - Revenue 421.1
388.9 -40.9 348.0
-17.4% -7.7% Aeronautical Revenues
205.1 196.0 -19.0 177.1 -13.7%
-4.4% Non-Aeronautical Revenues 216.0 192.8
-21.9 170.9 -20.9% -10.7%
Revenue excluding
construction service 348.4 335.3
-32.9 302.4 -13.2%
-3.8% Operating Income 104.0
109.7 -22.7 87.0
-16.4% 5.5% Operating Margin 24.7%
28.2% - 25.0% 30 351
Net (Loss) / Income Attributable to
Owners of the
Parent
19.0 -26.9 11.7
-15.2 -179.8% -241.4% EPS (US$)
0.13 -0.17 0.07 -0.09 -173.9%
-230.8%
Adjusted EBITDA 125.9
137.0 -14.5 122.5
-2.7% 8.8% Adjusted EBITDA Margin 29.9%
35.2% - 35.2% 531 532 Adjusted
EBITDA Margin excluding Construction Service 36.0%
40.7% - 40.4% 435 469
Net Debt to
LTM EBITDA 2.26 1.87
- 2.09 -1,774
2,143
To obtain the full text of this earnings release and the 2Q18
earnings presentation, please click on the following link:
http://investors.corporacionamericaairports.com/Results-Center
3Q18 EARNINGS CONFERENCE CALL
When: 10:00 a.m. Eastern time, Nov 27, 2018
Who: Mr. Martín Eurnekian, Chief Executive Officer
Mr. Raúl Francos, Chief Financial Officer Ms. Gimena
Albanesi, Head of Investor Relations Dial-in: 1-888-317-6016
(U.S. domestic); 1-412-317-6016 (international) Webcast:
https://services.choruscall.com/links/caap181127.html
Replay: Participants can access the replay through December
04, 2018 by dialing: 1-877-344-7529 (U.S. domestic) and
1-412-317-0088 (international). Replay ID: 10126529.
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
concessioned assets 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.
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, as shown on the table below.
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 the largest private airport
operator in the world based on the number of airports and the tenth
largest based on passenger traffic. Currently, the Company operates
52 airports in 7 countries across Latin America and Europe
(Argentina, Brazil, Uruguay, Peru, Ecuador, Armenia and Italy). In
2017, it served 76.6 million passengers. 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: 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, AMD or the PEN 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
Registration Statement on Form F-1 filed with the SEC for
additional information concerning factors that could cause those
differences.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181126005781/en/
Investor Relations ContactGimena AlbanesiHead of Investor
RelationsEmail: gimena.albanesi@caairports.comPhone: +5411
4852-6411
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