Corporacion America Airports Announces 3Q18 YoY Growth of 5.8% in Passenger Traffic
LUXEMBOURG--(BUSINESS WIRE)--Nov 26, 2018--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 HighlightsConsolidated 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 millionCargo volume increased 1.2% to 94.8 thousand tonsAircraft 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%
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.”
3Q18 EARNINGS CONFERENCE CALL
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.
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CONTACT: Investor Relations Contact
Head of Investor Relations
Phone: +5411 4852-6411
KEYWORD: ARGENTINA LUXEMBOURG BRAZIL EUROPE SOUTH AMERICA
INDUSTRY KEYWORD: TRANSPORT AIR TRAVEL TRANSPORTATION
SOURCE: Corporación América Airports S.A.
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PUB: 11/26/2018 05:46 PM/DISC: 11/26/2018 05:46 PM