CAAP Corporacion America Airports SA

Passenger traffic up 13% YoY reaching 99.1% of 4Q19 pre-pandemic levels

Consolidated Revenues, ex-IFRIC12 and ex-IAS29, up 19% YoY and 37% above 4Q19

Adjusted EBITDA ex-IAS29 of $332 million includes $167 million from Natal friendly termination

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-month period ended December 31, 2023, and audited results for the full year 2023. 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 25.

Fourth Quarter 2023 Highlights

• Consolidated Revenues ex-IFRIC12 of $321.8 million, a 1.5% year-over-year (YoY) decline. Excluding rule IAS 29, consolidated revenues ex-IFRIC12 increased 18.9% YoY to $397.6 million, reflecting increases of $38.6 million in Aeronautical Revenues and $27.0 million in Commercial Revenues.
• Delivered YoY increases across key operating metrics:
  • 13.1% in passenger traffic to 20.7 million, reaching 99.1% of 4Q19 levels.
  • 9.9% in cargo volume to 101.6 thousand tons, to 88.6% of 4Q19 levels.
  • 4.5% in aircraft movements, to 98.6% of 4Q19 levels.
• Operating Income of $263.6 million, up from $86.4 million in 4Q22. Operating income in 4Q23 includes a portion ($62.7 million) of the $166.5 million EBITDA contribution from the indemnification payment received in connection with the friendly termination of the Natal airport concession agreement, in Brazil.
• Adjusted EBITDA ex-IFRIC12 increased to $298.8 million, from $122.1 million in the year-ago period, or to $132.3 million when excluding the contribution from the aforementioned indemnification payment. Excluding rule IAS 29 and the Natal impact, Adjusted EBITDA ex-IFRIC12 increased 29.4% to $161.2 million.
• Adjusted EBITDA margin ex-IFRIC12 expanded to 92.9% from 37.4% in 4Q22, or to 41.1% when excluding the Natal positive impact. Excluding both rule IAS 29 and the Natal impact, Adjusted EBITDA margin ex-IFRIC12 expanded to 40.5% from 37.2% in 4Q22.

Full Year 2023 Highlights

• Consolidated Revenues ex-IFRIC12 of $1,255.3 million, a 2.2% YoY increase. Excluding rule IAS 29, consolidated revenues ex-IFRIC12 increased 25.1% YoY to $1,541.0 million, reflecting increases of $190.2 million in Aeronautical Revenues and $118.7 million in Commercial Revenues.
• Delivered YoY increases across key operating metrics:
  • 23.7% in passenger traffic to 81.1 million, reaching 96.4% of 2019 levels.
  • 7.9% in cargo volume to 370.2 thousand tons, to 87.2% of 2019 levels.
  • 15.1% in aircraft movements, to 99.0% of 2019 levels.
• Operating Income of $540.6 million, up from $304.6 million in 2022. Operating income in 2023 includes a portion ($62.7 million) of the $166.5 million EBITDA contribution from the indemnification payment received in connection with the friendly termination of the Natal airport concession agreement, in Brazil.
• Adjusted EBITDA ex-IFRIC12 increased to $671.3 million, from $454.8 million in 2022, or to $504.8 million when excluding the contribution from the aforementioned indemnification payment. Excluding rule IAS 29 and the Natal impact, Adjusted EBITDA ex-IFRIC12 increased 39.9% to $635.3 million.
• Adjusted EBITDA margin ex-IFRIC12 expanded to 53.5% from 37.1% in 2022, or to 40.2% when excluding the Natal positive impact. Excluding both rule IAS 29 and the Natal impact, Adjusted EBITDA margin ex-IFRIC12 expanded to 41.2% from 36.9% in 2022.
• Strong cash position with Cash & cash equivalents totaling $369.8 million.
• Net debt to LTM Adjusted EBITDA improved to 1.4x as of December 31, 2023, from 1.6x as of September 30, 2023.

CEO Message

Commenting on the results for the quarter Mr. Martín Eurnekian, CEO of Corporación América Airports, noted: “The strong momentum experienced throughout the year continued into the fourth quarter, with passenger traffic growing 13% year-on-year and revenue growth ex-IAS29 surpassing the increase in traffic. This resulted in a solid expansion in revenues per PAX, which was 5% higher than 4Q22 and 39% above pre-pandemic levels. Total costs and expenses grew in line with higher activity but below revenue growth, leading to Adjusted EBITDA growth of 29% YoY and 71% when compared to 4Q19. These financial highlights include two important impacts:

First, due to the sharp devaluation of the Argentine peso last December, as reported figures included non-cash accounting impacts from applying hyperinflation accounting, in accordance with IFRS Rule IAS29, causing a $28.9 million Adjusted EBITDA reduction in our Argentina segment, which is not indicative of the underlying performance of our business. Importantly, as the majority of Argentine revenues are linked to the USD and approximately half of the costs are in ARS, we have a natural hedge against currency devaluation.

Second, a key milestone this quarter was the successful conclusion of the friendly termination process of the Natal airport concession agreement, which benefited Adjusted EBITDA by $166.5 million. The net indemnification amount to CAAP was R$465 million.

This good performance was underscored by strong momentum across all geographies and reflects our commitment to efficient execution and our ability to leverage the ongoing recovery in travel demand.

Looking ahead, we remain focused on the approval processes in Italy and Armenia in connection with significant expansion projects in our airports in Firenze and Yerevan, respectively, which will foster growth and create value for our stakeholders. In Firenze, we are working on the approval of a new master plan that will include a new runaway with much longer reach and a larger new terminal. The total investment is estimated at Euro 400 million, of which Euro 150 million will be funded with government grants. In Yerevan, we remain in negotiations with the government to expand our Zvartnots Airport and enhance commercial offerings. The total investment plan is expected to be approximately $400 million.

Keeping our focus on selectively expanding our airport network, we remain in negotiations with the government of Nigeria regarding the Abuja and Kano concession agreements while seeking additional expansion opportunities.

Regarding market dynamics, we maintain a cautiously optimistic outlook on passenger traffic across our airport network.

In sum, we are excited by the strength of our business and prospects ahead, underpinned by a robust balance sheet that positions us well for continued success as we navigate the opportunities and challenges that lie ahead.”

Operating & Financial Highlights

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

 

4Q23 as reported

4Q22 as reported

% Var as reported

IAS 29 4Q23

4Q23 ex IAS 29

4Q22 ex IAS 29

% Var ex IAS 29

Passenger Traffic (Million Passengers)

20.7

18.3

13.1%

 

20.7

18.3

13.1%

Revenue

365.0

386.4

-5.5%

-89.6

454.6

397.6

14.3%

Aeronautical Revenues

164.0

165.7

-1.0%

-45.1

209.1

170.5

22.6%

Non-Aeronautical Revenues

201.0

220.7

-8.9%

-44.5

245.5

227.1

8.1%

Revenue excluding construction service

321.8

326.8

-1.5%

-75.7

397.6

334.3

18.9%

Operating Income / (Loss)

263.6

86.4

205.1%

-41.5

305.1

104.7

191.3%

Operating Margin

72.2%

22.4%

4985

0.0%

67.1%

26.3%

4076

Net (Loss) / Income Attributable to Owners of the Parent

130.7

12.1

977.3%

95.9

34.9

-7.6

-561.4%

EPS (US$)

0.81

0.08

976.7%

0.60

0.22

-0.05

-561.2%

Adjusted EBITDA

303.4

123.0

146.6%

-28.9

332.3

125.4

164.9%

Adjusted EBITDA Margin

83.1%

31.8%

5127

-

73.1%

31.5%

4154

Adjusted EBITDA Margin excluding Construction Service

92.9%

37.4%

5549

-

82.4%

37.2%

4518

Net Debt to LTM Adjusted EBITDA

1.4x

2.4x

-

-

-

-

-

Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (1)

1.4x

2.4x

-

-

-

-

-

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)

 

2023 as reported

2022 as reported

% Var as reported

IAS 29 2023

2023 ex

IAS 29

2022 ex

IAS 29

% Var ex IAS 29

Passenger Traffic (Million Passengers)

81.1

65.6

23.7%

 

81.1

65.6

23.7%

Revenue

1,400.0

1,378.7

1.6%

-341.4

1,741.5

1,390.9

25.2%

Aeronautical Revenues

644.5

609.8

5.7%

-159.2

803.6

613.4

31.0%

Non-Aeronautical Revenues

755.6

768.9

-1.7%

-182.2

937.8

777.5

20.6%

Revenue excluding construction service

1,255.3

1,228.9

2.2%

-285.7

1,541.0

1,231.4

25.1%

Operating Income / (Loss)

540.6

304.6

77.5%

-166.4

707.0

371.1

90.5%

Operating Margin

38.6%

22.1%

1652

-

40.6%

26.7%

1392

Net (Loss) / Income Attributable to Owners of the Parent

239.5

168.2

42.4%

113.0

126.5

39.6

219.7%

EPS (US$)

1.49

1.05

42.3%

0.70

0.79

0.25

219.4%

Adjusted EBITDA

677.7

456.7

48.4%

-130.6

808.4

456.0

77.3%

Adjusted EBITDA Margin

48.4%

33.1%

1528

-

46.4%

32.8%

1363

Adjusted EBITDA Margin excluding Construction Service

53.5%

37.1%

1641

-

52.0%

37.1%

1497

Net Debt to LTM Adjusted EBITDA

1.4x

2.4x

-

-

-

-

-

Net Debt to LTM Adjusted EBITDA excl. impairment on intangible assets (1)

1.4x

2.4x

-

-

-

-

-

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

4Q23 EARNINGS CONFERENCE CALL

When:

10:00 a.m. Eastern Time, March 21, 2024

Who:

Mr. Martín Eurnekian, Chief Executive Officer

 

Mr. Jorge Arruda, Chief Financial Officer

 

Mr. Patricio Iñaki Esnaola, Head of Investor Relations

Dial-in:

1-888-886-7786 (North America, Toll Free); 1-416-764-8658 (Other locations); Conference ID: 17554167

Webcast:

CAAP 4Q23 Earnings Conference Call

Replay:

1-877-674-7070 (North America, Toll Free); 1-416-764-8692 (Other locations); Playback Passcode: 554167 #

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 25 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/20240320958991/en/

Investor Relations Contact Patricio Iñaki Esnaola Email: patricio.esnaola@caairports.com Phone: +5411 4899-6716