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Section 1: 6-K/A (FORM 6-K/A)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20546

 

FORM 6-K/A

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August, 2018

 

Commission File Number: 333-221916

 

 

 

Corporación América Airports S.A.

(Name of Registrant)

 

4, rue de la Grêve
L-1643, Luxembourg
Tel: +35226258274
Fax: +35226259776

(Address of Principal Executive Office)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

 

 

EXPLANATORY NOTE

 

Corporación America Airports S.A. (the “Company”) is furnishing this Form 6-K/A in order to re-file and replace Exhibit 99.1 to the Form 6-K of CAAP filed with the Securities and Exchange Commission on August 22, 2018 (File Number: 001-38354) (the “Original 6-K”). The Company mistakenly filed a summarized version of such Exhibit 99.1. This Form 6-K/A is being furnished solely to provide a complete version of Exhibit 99.1. All other information included in the Original 6-K is correct and remains unchanged.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: August 22, 2018

  

  Corporación America Airports S.A.
     
  By: /s/ Andres Zenarruza
  Name: Andres Zenarruza
  Title: Legal Manager
     
  By:   /s/ Raúl Guillermo Francos
  Name: Raúl Guillermo Francos
  Title: Chief Financial Officer

 

 

 

 

Exhibit Index

 

Exhibit No. Description
99.1 Press release dated August 21, 2018 - Corporación América Airports S.A. announces 2Q18 YOY growth of 7.4% in Passenger Traffic and 12.9% in Adjusted EBITDA.

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

 

 

CORPORACION AMERICA AIRPORTS ANNOUNCES 2Q18 YOY GROWTH OF 7.4% IN PASSENGER TRAFFIC AND 12.9%
IN ADJUSTED EBITDA

Passenger traffic up 6.5% YoY in Argentina and 9.4% in Brazil, further supported by growth across most countries of operations

 

Luxembourg, Aug 21, 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 six-month periods ended June 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.

 

Second Quarter 2018 Highlights

§Revenues up 3.5% YoY to $397.1 million mainly driven by Armenia, Argentina and Ecuador, further supported by Uruguay.

§Growth across key operating metrics:

§Passenger traffic up 7.4% YoY to 19.2 million
§Cargo volume increased 10.4% to 98.2 thousand tons
§Aircraft movements rose 5.4% to 215.5 thousand

§  Operating Income up 17.3% YoY, with operating margin increasing to 23.7% from 20.9% in 2Q17

§Adjusted EBITDA reached $121.1 million, up 12.9% YoY, with Adjusted EBITDA margin expanding 255 basis points to 30.5%

 

CEO Message

Commenting on the second quarter 2018 results, Mr. Martin Eurnekian, CEO of Corporación América Airports, noted: “We reported solid results against a challenging macro environment in some of our key markets this quarter, evidenced in the 13% year-on-year increase in Adjusted EBITDA and 364 basis point expansion in Ex-IFRIC Adjusted EBITDA margin to slightly over 37%. Total passenger traffic rose slightly over 7% year-on-year. Despite currency depreciation and softer overall consumption in Argentina which hurt overall travel demand, passenger traffic in the country rose 6.5%, while traffic growth in Brazil increased over 9%. We also saw solid traffic growth across the majority of our countries of operations.”

 

“Revenues, however, grew at a slower pace this quarter reflecting a mix-shift from international to domestic passenger traffic together with the impact of FX translation on local currency revenues in Argentina, as well as with the impact of the currency depreciation in Brazil. By contrast, our cost structure benefitted from the currency depreciation in these two countries driving Adjusted EBITDA margin Ex-IFRIC expansion of 500 basis points in Argentina and significant growth in Adjusted EBITDA in Brazil. We also saw improvements across most of our countries of operations.”

 

“An important milestone in our long-term vision of value creation was the agreement entered into with Investment Corporation of Dubai last July, that provides a solid foundation to jointly identify and develop new future opportunities in the airport sector in Italy, Eastern Europe and Middle East, while keeping our focus on delivering on our growth strategy in key markets, primarily Argentina and Brazil.”

 

“Looking ahead to the remainder of 2018, we are cautiously optimistic and anticipate overall healthy dynamics and continued growth across our markets. Although we see traffic continuing to expand at lower rates in Argentina given currency volatility, over time we expect international inbound traffic to pick-up compensating for lower internal demand of international travel.  In the meantime, we will continue providing the best travel experience for passengers through our airports while never losing sight of our focus on further strengthening our global platform for long-term success.”

 

Operating & Financial Highlights            
(In millions of U.S. dollars, unless otherwise noted)            
  2Q18 2Q17 % Var 1H18 1H17 % Var
Passenger Traffic (Million Passengers) 19.2 17.9 7.4% 38.8 36.1 7.5%
Revenue 397.1 383.8 3.5% 787.9 737.4 6.9%
Aeronautical Revenues 185.6 183.0 1.5% 390.4 370.0 5.5%
Non-Aeronautical Revenues 211.4 200.8 5.3% 397.5 367.4 8.2%
Revenue excluding construction service 324.4 318.7 1.8% 668.7 637.8 4.8%
Operating Income 94.1 80.2 17.3% 203.7 175.4 16.1%
Operating Margin 23.7% 20.9% 279 25.8% 23.8% 207
Net Income Attributable to Owners of the Parent -22.7 15.6 -245.2% 3.8 48.1 -92.1%
EPS (US$) -0.14 0.11 -234.4% 0.02 0.32 -92.5%
Adjusted EBITDA 121.1 107.3 12.9% 257.9 228.8 12.7%
Adjusted EBITDA Margin 30.5% 28.0% 255 32.7% 31.0% 170
Adjusted EBITDA Margin excluding Construction Service 37.2% 33.5% 364 38.4% 35.8% 266
Net Debt to LTM EBITDA 1.98 - - 1.98                -    -
                       

1 Data for LTM EBITDA as of June 30, 2017 is not available as CAAP started consolidating its results in 2H16.

 

Page 1 of 26

 

 

Operating Performance

 

Passenger Traffic

During 2Q18, total passenger traffic rose 7.4% YoY to 19.2 million, principally driven by YoY increases of 6.5% in Argentina and 9.4% in Brazil, which contributed an additional 0.5 and 0.4 million passengers, respectively, along with traffic growth across the majority of CAAP’s countries of operations.

 

Challenging macro conditions in Argentina along with sharp currency depreciation in the quarter impacted traffic dynamics in the country resulting in slower growth in overall travel demand and a mix-shift from international to domestic traffic. In Brazil, despite slow recovering economic conditions traffic increased almost 11% in both April and June. Passenger traffic in May, however, increased by 6.4% in Brazil as a result of a trucker strike which limited fuel availability, causing flight cancellations or rerouting away from Brasilia airport. By contrast, passenger traffic in Uruguay declined 0.9% YoY reflecting difficult comps as the Easter Holiday this year fell in March while last year it fell in April. Moreover, while passenger traffic in Uruguay increased 3.5% in March and April and 5.9% in May, traffic experienced a contraction of 4.2% in June principally impacted by slower traffic from Argentina and Brazil. Traffic in Italy increased 3.3% reflecting the addition of new routes and airlines.

 

Peru contributed with a 0.1 million passenger increase, up 17.3% YoY, mainly driven by new frequencies and promotions by low-cost airlines driving competition and higher demand, underscored by the overall economic improvement in the country. In Ecuador, traffic increased 10.1%, continuing with the sequential improvement in passenger traffic growth.

 

Domestic passengers, that represented 54.0% of total traffic during 2Q18, increased 10.1% YoY principally due to 11.3% growth in Argentina which contributed with 0.5 million additional passengers. International passengers, which accounted for 35.7% of total traffic, increased 3.5% in the period mainly driven by increases of 4.3% and 11.0% in Italy and Armenia, respectively.

 

Cargo Volume

Cargo volume increased 10.4% YoY in 2Q18 reaching 98.2 thousand tons, mainly reflecting growth of 11.6% in Argentina which added 5.9 thousand tons. Ecuador and Brazil added 2.9 and 2.4 thousand tons each, driven by improved macroeconomic conditions in the region. By contrast, this was partially offset by lower cargo volume in Armenia and Uruguay.

 

Aircraft Movements

During 2Q18, total aircraft movements increased 5.4% YoY to 215.5 thousand, mainly reflecting growth of 7.3% in Argentina and 4.9% in Brazil, which contributed with 7.3 and 2.2 thousand aircraft movements, respectively. Growth in Argentina resulted from the addition of new airlines, routes and frequencies. The increase in aircraft movements in Brazil was a result of the economic recovery, as explained above.

 

Tables with detailed passenger traffic, cargo volume and aircraft movement information for each airport can be found on page 17 of this report.

  

Operational Statistics: Passenger Traffic, Cargo Volume and Aircraft Movements          
  2Q18 2Q17 % Var 1H18 1H17 % Var
Domestic Passengers (in millions) 10.4 9.4 10.1% 20.9 19.5 7.6%
International Passengers (in millions) 6.9 6.6 3.5% 13.6 12.9 5.2%
Transit Passengers (in millions) 2.0 1.8 7.5% 4.3 3.7 15.0%
Total Passengers (in millions) 19.2 17.9 7.4% 38.8 36.1 7.5%
Cargo Volume (in thousands of tons) 98.2 88.9 10.4% 196.8 175.1 12.3%
Total Aircraft Movements (in thousands) 215.5 204.5 5.4% 428.9 409.6 4.7%

 

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Passenger Traffic Breakdown         Cargo       Aircraft Movements  
Country 2Q18 2Q17 % Var.   2Q18 2Q17 % Var.   2Q18 2Q17 % Var.
  (in millions) (in millions)     (in thousands of tons) (in thousands of tons)     (in thousands) (in thousands)  
Argentina 8.8 8.3 6.5%   56.6 50.8 11.6%   105.9 98.7 7.3%
Italy 2.4 2.3 3.3%   3.0 2.7 14.0%   22.0 22.4 -1.7%
Brazil 4.9 4.4 9.4%   15.7 13.3 18.3%   46.4 44.3 4.9%
Uruguay 0.5 0.5 -0.9%   6.8 7.5 -9.5%   7.1 7.3 -1.9%
Ecuador (1) 1.1 1.0 10.1%   10.5 7.6 38.7%   20.1 19.7 2.0%
Armenia 0.7 0.6 11.0%   4.3 6.0 -27.8%   6.0 5.4 11.9%
Peru (2) 0.8 0.7 17.3%   1.2 1.2 1.7%   8.0 6.8 17.1%
TOTAL 19.2 17.9 7.4%   98.2 88.9 10.4%   215.5 204.5 5.4%
1)CAAP owns 99.9% of ECOGAL which operates and maintains the Galapagos Airport, but due to the terms of the concession agreement, ECOGAL’s results are accounted for by the equity method. However, 100% of ECOGAL’s passenger traffic and aircraft movements are included in this table.
2)CAAP owns 50.0% of AAP and accounts for its results by the equity method. However, 100% of AAP’s passenger traffic and aircraft movements are included in this table.

 

Review of Consolidated Results

Results for AAP Airports, the five airports CAAP operates in Peru, and ECOGAL which operates the Galapagos Airport in Ecuador, are accounted for under the equity method.

 

Revenues

Revenues increased 3.5% YoY, to $397.1 million in 2Q18, mainly reflecting an increase of 1.7%, or $4.1 million, in Argentina and a 1.3%, or $0.4 million, decline in Brazil, as a result of slower travel demand in Argentina and currency depreciation in both countries. By contrast, revenues increased 30.4%, or $6.5 million, in Armenia, and 9.0%, or $1.8 million, in Ecuador, while Italy contributed with an YoY increase of 0.7%, or $0.3 million in revenues.

 

Revenues in Argentina were negatively impacted by lower overall demand given the challenging economic conditions in the quarter, a mix-shift from international to domestic traffic which is linked to the local currency, and the FX translation effect on domestic revenues from the sharp Argentine peso depreciation in the period, which more than offset higher passenger traffic and aircraft movements. Revenues in Brazil were affected by the currency translation effect on revenues resulting from the Brazilian real depreciation, while local currency revenues benefited from the recovery in passenger traffic from the slowly improving economic environment. Measured in local currency, revenues increased approximately 51.9% in Argentina and 10.5% in Brazil YoY.

 

In Armenia, higher fuel demand and prices together with the appreciation of the Euro against the US dollar were the main drivers of revenue growth. Passenger traffic growth along with higher construction revenue as a result of investments in Shirak Airport also contributed to revenues in Armenia. Revenue growth in Ecuador, was driven by higher traffic in the period and the suspension of incentives previously granted to Air Europa. Revenues in Uruguay increased 3.0%, or $0.8 million, mainly driven by the implementation of a new $1.4 security tariff per passenger, which was partially compensated by lower construction services revenue. In Italy, revenues remained relatively flat YoY mainly reflecting marketing support expenses which in 2Q18 are deducted from Aeronautical Revenues, instead of SG&A, due to a change in the advertising agreement. This was partially offset by the appreciation of the Euro against the US dollar.

 

Excluding construction services, total revenues would have increased 1.8% YoY to $324.4 million.

 

Revenues by Segment (in US$ million)          
Country 2Q18 2Q17 % Var. 1H18 1H17 % Var.
Argentina 246.7 242.6 1.7% 495.0 467.5 5.9%
Italy 42.0 41.7 0.7% 73.7 68.0 8.4%
Brazil 30.3 30.7 -1.3% 62.4 62.6 -0.3%
Uruguay 27.0 26.2 3.0% 61.8 57.3 8.0%
Ecuador (1) 22.1 20.2 9.0% 43.6 41.9 3.9%
Armenia 28.1 21.5 30.4% 49.8 38.5 29.1%
Unallocated 0.9 0.8 12.8% 1.7 1.6 6.7%
Total consolidated revenue (2) 397.1 383.8 3.5% 787.9 737.4 6.9%

1 Only includes Guayaquil Airport.

2 Excluding Construction Service revenue, revenue decreased 0.5% YoY in Argentina and 3.2% in Italy, but increased 5.6% in Uruguay and 22.5% in Armenia.

 

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Revenue Breakdown (in US$ million)            
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Aeronautical Revenue 185.6 183.0 1.5% 390.4 370.0 5.5%
Non-aeronautical Revenue 211.4 200.8 5.3% 397.5 367.4 8.2%
Commercial revenue 138.1 135.3 2.1% 275.3 266.9 3.2%
Construction Service revenue (1) 72.7 65.1 11.7% 119.3 99.6 19.7%
Other revenue 0.7 0.5 46.4% 2.9 0.9 233.8%
Total Consolidated Revenue 397.1 383.8 3.5% 787.9 737.4 6.8%
Total Revenue excluding Construction Service revenue (2) 324.4 318.7 1.8% 668.7 637.8 4.8%

1 Construction Service revenue equals the construction or upgrade costs plus a reasonable margin.

2 Excludes Construction Service revenue.

 

Aeronautical revenue, derived from the use of airport facilities by aircrafts and passengers, accounted for 46.7% of total revenues, and increased 1.5% YoY to $185.6 million. Argentina and Armenia were the main drivers of aeronautical revenue growth, contributing with increases of $2.6 million and $1.7 million, respectively. Traffic growth of 6.5% in Argentina was mitigated by a mix-shift from international to domestic traffic and the currency translation effect on domestic traffic. Aeronautical revenue also benefitted from increases of 11.0% in traffic in Armenia and 3.3% in Italy. Aeronautical revenue in Armenia and Italy was positively impacted by the appreciation of the Euro against the US dollar. In Italy, the increase was partly offset by a 4.5 million charge for marketing support expenses, which in 2Q18 are deducted from Aeronautical revenues due to a change in the advertising agreement, while before they were accounted for as SG&A. By contrast, Brazil was negatively affected by the depreciation of the Brazilian real against the US dollar which more than offset the 9.4% YoY increase in traffic.

 

Non-Aeronautical revenues increased 5.3% YoY to $211.4 million, mainly due to the following increases:

 

§2.1%, or $2.8 million, in Commercial Revenues reaching $138.1 million. Growth was mainly driven by increases of $3.1 million in Armenia from both higher fuel demand and prices and of $1.4 million in Italy mainly reflecting the redesigned VIP lounge and passenger growth, further supported by the appreciation of the Euro against the US dollar. In addition, commercial revenues in Brazil increased by 8.5% YoY, or $1.3 million, as higher revenues from fuel, VIP lounges and space rentals more than offset the currency depreciation. This more than compensated a 4.3% YoY, or $3.6 million, decline in commercial revenues in Argentina, mainly resulting from the impact of the Argentine peso depreciation on the share of local currency denominated revenues, slower growth in international traffic and lower passenger demand.

 

§A 11.7%, or $7.6 million, increase in Construction Service revenue resulting from higher capital expenditures during the period; particularly driven by higher investments of $1.7 million, in each Armenia at Shirak Airport, and in Argentina, particularly in Ezeiza, Comodoro Rivadavia and Aeroparque. Italy contributed with a $1.5 million increase in Construction Service revenue.

 

Excluding Construction Service revenue non-aeronautical revenues would have increased 2.2% YoY to $138.8 million.

 

Consolidated Operating Costs and Expenses

During 2Q18, Consolidated Operating Costs and Expenses decreased 0.2% YoY to $307.5 million, mainly benefitting from the currency depreciation against the US dollar in Argentina and Brazil, partially offset by higher construction service costs and fuel outlays in Armenia, which are included in Cost of Services.

 

Cost of Services rose 2.1%, or $5.3 million, during 2Q18 to $263.5 million, reflecting the following variations:

§A 11.6%, or $7.5 million, increase in construction service costs, principally reflecting higher capex in Argentina and Armenia;
§A 4.8%, or $1.5 million, increase in other cost of services, mainly due to higher cost of fuel in Armenia;
§A 5.1%, or $2.8 million, decrease in salaries principally reflecting the depreciation of the Argentine peso and the Brazilian real against the US dollar, partially offset by the appreciation of the Euro against the US dollar in Italy.

 

Page 4 of 26

 

 

Excluding Construction service cost, consolidated cost of services would have decreased 1.1% YoY, or by $2.1 million, to $191.4 million.

 

Selling, General and Administrative Expenses (“SG&A”) fell 8.1% YoY, or $3.9 million, to $43.5 million in 2Q18 mainly driven by:

§A $4.5 million decrease in marketing support expenses in Italy which in 2Q18 are deducted from Aeronautical revenues due to a change in the advertising agreement, while in 2Q17 were accounted for as SG&A; and
§A $1.9 million decline in taxes in Argentina reflecting a regulatory reduction in banking transaction taxes.

 

These declines were partially offset by a $1.5 million increase in SG&A in Brazil, along with higher costs in Ecuador, Uruguay and Armenia.

 

Excluding Construction service cost, Consolidated Operating Costs and Expenses would have declined 3.3% YoY to $235.4 million in 2Q18 from $243.4 million in 2Q17.

 

Consolidated Operating Costs and Expenses (in US$ million)            
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Cost of Services 263.5 258.2 2.1% 504.6 477.7 5.6%
Salaries and social security contributions 51.7 54.5 -5.1% 103.2 103.7 -0.4%
Concession fees 46.1 46.9 -1.5% 95.1 94.7 0.3%
Construction service cost 72.1 64.6 11.6% 118.3 98.9 19.6%
Maintenance expenses 35.4 35.0 1.3% 71.9 69.9 3.0%
Amortization and depreciation 24.9 25.5 -2.4% 49.9 50.1 -0.5%
Other 33.3 31.8 4.8% 66.3 60.4 9.7%
Cost of Services Excluding Construction Service cost 191.4 193.5 -1.1% 386.4 378.8 2.0%
Selling, general and administrative expenses 43.5 47.4 -8.1% 87.5 90.9 -3.7%
Other expenses 0.5 2.5 -80.7% 1.7 2.8 -39.6%
Total Costs and Expenses 307.5 308.1 -0.2% 593.9 571.5 3.9%
Total Costs and Expenses Excluding Construction Service cost 235.4 243.4 -3.3% 475.6 472.5 0.6%

 

Adjusted EBITDA and Adjusted EBITDA excluding Construction Service

Adjusted EBITDA for the second quarter of 2018 rose 12.9% YoY to $121.1 million, with Adjusted EBITDA margin expanding by 255 bps to 30.5%, from 28.0% in the year-ago quarter. Excluding Construction service margin, Adjusted EBITDA margin increased 364 bps to 37.2%, from 33.5% in 2Q17. Argentina contributed with a 12.3% increase, or $8.7 million in Adjusted EBITDA, with Adjusted Segment EBITDA margin Ex-IFRIC increasing 500 basis points to 43.5%. All other countries of operations also reported higher Adjusted Segment EBITDA, with margin expansion in the Company’s core markets Argentina, Brazil and Italy. See “Use of Non-IFRS Financial Measures” on page 14.

 

Adjusted EBITDA Reconciliation to Income from Continuing Operations (in US$ million)

  2Q18 2Q17 % Var 1H18 1H17 % Var.
Income from Continuing Operations -34.9 16.1 -317.4% -8.6 50.8 -117.0%
Financial Income -49.6 -13.5 266.8% -63.5 -44.3 43.5%
Financial Loss 198.9 68.5 190.2% 284.7 148.0 92.4%
Income Tax Expense -20.1 8.9 -326.4% -8.6 20.5 -141.9%
Amortization and Depreciation 26.9 27.3 -1.4% 54.0 53.8 0.4%
Adjusted EBITDA 121.1 107.3 12.9% 257.9 228.8 12.7%
Adjusted EBITDA Margin 30.5% 28.0% 255 32.7% 31.0% 170
Adjusted EBITDA excluding Construction Service 120.6 106.9 12.8% 256.9 228.1 12.6%
Adjusted EBITDA Margin excluding Construction Service 37.2% 33.5% 364 38.4% 35.8% 266

 

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Financial Income and Loss

CAAP reported a Net financial loss of $149.2 million in the second quarter of 2018 compared to a loss of $55 million in 2Q17. Financial income increased by $36.1 million to $49.6 million from $13.5 million in the year-ago quarter, primarily reflecting the depreciation of the Argentine peso against the US dollar over assets held in US dollars. During 2Q18, CAAP reported a financial loss of $198.9 million, up 190.2% from a loss of $68.5 million in the year-ago quarter, primarily due to higher foreign exchange expenses in Argentina in connection with the $400M AA2000 bond. By contrast, interest expenses fell 16.4% YoY, or $4.0 million, to $20.2 million mainly due to lower debt levels. A higher liability from Brazilian concessions, resulting from the impact of higher inflation on the net present value of future concession fee payments in the country also contributed to a higher Financial loss, net.

 

Financial Income and Loss (in US$ million)            
  2Q18 2Q17 % Var 1H18 1H17 % Var.
Financial Income 49.6 13.5 266.8% 63.5 44.3 43.5%
Interest income 9.0 9.2 -1.3% 11.7 28.9 -59.4%
Foreign exchange income 39.5 4.4 804.7% 49.7 15.4 223.2%
Other 1.1 - - 2.1 - -
Financial Loss -198.9 -68.5 190.2% -284.7 -148.0 92.4%
Interest Expenses -20.2 -24.2 -16.4% -46.1 -66.3 -30.4%
Foreign exchange transaction expenses -148.2 -25.4 483.8% -180.9 -35.7 406.6%
Changes in liability for Brazilian concessions -28.8 -18.2 58.6% -50.4 -44.1 14.1%
Other expenses -1.6 -0.8 104.5% -7.3 -1.9 288.5%
Financial Loss, Net -149.2 -55.0 171.4% -221.1 -103.7 113.2%

  

Income Tax Expense

During 2Q18 the Company reported a tax gain of $20.1 million, mainly due to the combination of: i) a loss before income tax in Argentina as a result of the foreign exchange losses caused by the depreciation of the Argentine peso against the US dollar, and ii) a loss before income tax in Brazil principally caused by the change in the fair value of the financial liability related to the Brazilian concession. This compares with income tax expenses of $8.9 million reported in 2Q17.

 

Net Income/Loss and Net Income/Loss Attributable to Owners of the Parent

During 2Q18, CAAP reported Net Loss for the Period of $34.9 million compared to a gain of $16.1 million in 2Q17. The 17.3% YoY increase in Operating Income in 2Q18 was more than offset by higher non-cash net financial losses as disclosed above.

 

During 2Q18, the Company reported a Net Loss Attributable to Owners of the Parent of $22.7 million and loss per common share of $0.14, compared with a Net Income Attributable to Owners of the Parent of $15.6 million in 2Q17 equivalent to earnings per common share of $0.11 for the same period last year.

 

Consolidated Financial Position

As of June 30, 2018, cash and cash equivalents amounted to $220.1 million, a 20.2% decrease from $275.7 million at March 31, 2018. Total Debt at the close of the quarter decreased to $1,161.5 million, from $1,225.2 million at March 31, 2018, principally reflecting the FX translation effect from currency depreciation on the Brazilian real denominated debt. A total of $679.0 million, or 58.5% of total debt is denominated in U.S. dollars, while 26.0% is denominated in Brazilian reals and 15.5% in Euros.

 

The Net Debt to LTM EBITDA ratio stood at 1.98x at the end of 2Q18, compared with Net Debt to LTM EBITDA of 1.99x as of March 31, 2018.

 

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Consolidated Debt Indicators (in US$ million)    
  As of June 30, 2018 As of March 31, 2018
Leverage    
Total Debt / LTM Adjusted EBITDA (Times)1,3 2.44x 2.57x
Total Net Debt / LTM Adjusted EBITDA (Times) 2,3 1.98x 1.99x
Total Debt 1,161.5 1,225.2
Short-Term Debt 95.8 79.0
Long-Term Debt 1,065.7 1,146.2
Cash & Cash Equivalents 220.1 275.7
Total Net Debt4 941.4 949.5

1 The Total Debt to EBITDA Ratio is calculated as CAAP’s interest-bearing liabilities divided by its EBITDA.

2 The Total Net Debt to EBITDA Ratio is calculated as CAAP’s interest-bearing liabilities minus Cash & Cash Equivalents, divided by its EBITDA.

3 The Total Net Debt is calculated as Total Debt minus Cash & Cash Equivalents.

 

CAPEX

During 2Q18, CAAP made capital expenditures totaling $78.3 million, a 13.4% increase from $69.1 million in 2Q17.

 

The most significant investments in 2Q18 include:

 

§$65.8 million invested in Argentina primarily for the construction of a new terminal building and improvements to the runway at Ezeiza Airport, the remodeling of the terminal at Aeroparque Airport and the construction of a new terminal building and the expansion of the parking at Comodoro Rivadavia Airport;
§$5.9 million invested in Italy, primarily on terminal reconfigurations for higher capacity and Master plan development in Florence Airport; and
§$1.9 million invested in Brazil, primarily from engineering projects and construction of runway safety areas at Brasilia Airport and the repair of the glass facade at Natal Airport.

 

Page 7 of 26

 

 

Review of Segment Results

 

Argentina

Argentina represented 62.1% of the Company’s 2Q18 consolidated revenues and 65.2% of its adjusted EBITDA. CAAP operates 37 airports in Argentina, including the country’s two largest airports, Aeroparque and Ezeiza, with approximately 2.9 million and 2.4 million passengers in 2Q18, respectively. The Company’s main concession in Argentina, AA2000, accounted for approximately 8.5 million passengers, or 44.1%, of CAAP’s 19.2 million total passengers worldwide served during the quarter and over 90% of total passenger traffic in Argentina.

 

  2Q18 2Q17 % Var 1H18 1H17 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 5.4 4.8 11.3% 11.3 10.3 10.1%
International Passengers (in millions) 3.2 3.1 1.3% 7.1 6.7 5.3%
Transit Passengers (in millions) 0.3 0.3 -16.4% 0.6 0.5 38.1%
Total Passengers (in millions) 8.8 8.3 6.5% 19.1 17.5 9.0%
Cargo Volume (in thousands of tons) 56.6 50.8 11.6% 117.0 100.0 17.1%
Total Aircraft Movements (in thousands) 105.9 98.7 7.3% 219.3 203.0 8.0%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 102.0 99.4 2.6% 224.1 211.2 6.1%
Non-aeronautical revenue 144.7 143.1 1.1% 270.9 256.3 5.7%
Commercial revenue 79.2 82.8 -4.3% 160.9 164.2 -2.0%
Construction service revenue 65.5 60.4 8.5% 110.0 92.1 19.4%
Other revenue 0.0 0.0 - 0.0 0.0 -
Total Revenue 246.7 242.6 1.7% 495.0 467.5 5.9%
Total Revenue Excluding IFRIC12(1) 181.2 182.2 -0.5% 385.0 375.4 2.5%
Cost of Services 158.8 161.8 -1.9% 303.6 291.5 4.1%
Selling, general and administrative expenses 20.6 23.4 -12.1% 42.7 46.1 -7.4%
Other expenses 0.2 0.1 43.2% 0.5 0.3 82.0%
Total Costs and Expenses 179.5 185.3 -3.1% 346.7 337.9 2.6%
Total Costs and Expenses Excluding IFRIC12(1) 114.0 125.0 -8.7% 236.8 245.9 -3.7%
Adjusted Segment EBITDA 78.9 70.3 12.3% 172.0 155.2 10.8%
Adjusted Segment EBITDA Mg 32.0% 29.0% 303 34.7% 33.2% 155
Adjusted EBITDA Margin excluding IFRIC 12(1) 43.5% 38.5% 500 43.8% 41.3% 245
Capex 65.8 59.1 11.3% 110.3 90.9 21.3%

1 Excludes Construction Service revenue.

2 Excludes Construction Service cost.

3 Excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets, and is calculated by dividing EBITDA by total revenues less Construction Service revenue.

 

Passenger Traffic in Argentina increased 6.5% YoY in 2Q18, reflecting challenging macro conditions in the country together with the currency depreciation in the quarter which resulted in slower growth in overall travel demand and a mix-shift from international to domestic traffic. Accordingly, international traffic rose 1.3% YoY reaching 3.2 million passengers, while domestic traffic increased 11.3% to 5.4 million passengers in the quarter.

 

Traffic growth in the quarter was mainly driven by increases of 7% at Ezeiza and 21% at Córdoba airports, as well as traffic at El Palomar Airport which began operation in February 2018. In addition, traffic at Tucumán Airport rose 101% reflecting easier comps as this airport was closed one month in the quarter while the new runway was built. Growth at Ezeiza Airport reflects resolution 183/2018 issued by “Administración Nacional De Aviación Civil” (ANAC) by which starting May 3, 2018, 50% of international air traffic in Aeroparque Airport, other than flights to or from Uruguay, was reassigned to Ezeiza Airport, with the remaining 50% planned to be reassigned on April 1st, 2019. These measures intend to optimize the management and infrastructure of Aeroparque airport given the growing domestic traffic. Furthermore, cargo volume was up 11.6% while total aircraft movements increased 7.3% during the period.

 

Page 8 of 26

 

 

Revenues were up 1.7% YoY, or $4.1 million, reaching $246.7 million in 2Q18, impacted by lower overall demand given the challenging economic conditions in the quarter, a mix-shift from international to domestic traffic which is linked to the local currency, and the FX translation effect on domestic revenues from the sharp Argentine peso depreciation in the period, which more than offset higher passenger traffic and aircraft movements. As a result, aeronautical revenue increased 2.6% YoY, or $2.6 million. By contrast, commercial revenues fell 4.3%, or $3.6 million, mainly reflecting the FX depreciation on the share of local currency denominated revenues, slower growth in international traffic and lower passenger demand. Construction Service revenue increased 8.5% YoY, or $5.1 million, reflecting higher capital expenditures in the period. Measured in local currency, revenues increased YoY by 51.9%.

 

Excluding construction service revenue, total Argentina revenue in 2Q18 decreased 0.5% YoY to $181.2 million.

 

Cost of services fell 1.9% YoY, or by $3.0 million, to $158.8 million, primarily due to a decrease in salaries and social security contributions, amortization, depreciation and maintenance expenses as a result of the Argentine peso depreciation, partly offset by a 8.5%, or $5.1 million, increase in Construction Service cost as a result of higher investments in the period.

 

SG&A declined by 12.1% YoY, or $2.8 million, to $20.6 million in 2Q18, also driven by currency depreciation and a regulatory reduction in banking transaction taxes.

 

Adjusted Segment EBITDA in Argentina increased 12.3%, or $8.6 million, to $78.9 million in 2Q18, with Adjusted Segment EBITDA margin expanding by 303 basis points to 32.0% in 2Q18, from 29.0% in the year-ago quarter. Excluding construction services, Adjusted Segment EBITDA margin would have increased 500 basis points to 43.5%.

 

During 2Q18 CAAP made capital expenditures for $65.8 million invested in Argentina primarily for the construction of a new terminal building and improvements to the runway at Ezeiza Airport, the remodeling of the terminal at Aeroparque Airport and the construction of a new terminal building and the expansion of the parking at Comodoro Rivadavia Airport.

 

Page 9 of 26

 

 

Italy

Italy represented 10.6% of the Company’s consolidated 2Q18 revenues and 8.9% of its adjusted EBITDA. CAAP operates two airports in Italy, Aeroporto Galileo Galilei di Pisa (“Pisa Airport”) and Aeroporto di Firenze (“Florence Airport”), with approximately 1.6 million and 0.8 million passengers in 2Q18, respectively.

 

  2Q18 2Q17 % Var 1H18 1H17 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 0.5 0.5 -0.5% 0.9 0.9 1.1%
International Passengers (in millions) 1.9 1.8 4.3% 2.9 2.8 3.4%
Transit Passengers (in millions) 0.0 0.0 412.0% 0.0 0.0 81.7%
Total Passengers (in millions) 2.4 2.3 3.3% 3.8 3.7 2.8%
Cargo Volume (in thousands of tons) 3.0 2.7 14.0% 5.7 5.4 5.2%
Total Aircraft Movements (in thousands) 22.0 22.4 -1.7% 35.9 36.5 -1.5%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 26.7 29.5 -9.5% 47.2 47.2 0.0%
Non-aeronautical revenue 15.3 12.3 25.2% 26.5 20.8 27.4%
Commercial revenue 9.5 8.1 16.9% 16.9 13.8 22.6%
Construction service revenue 5.2 3.7 40.5% 6.7 6.2 8.7%
Other revenue 0.6 0.4 50.8% 2.9 0.8 245.6%
Total Revenue 42.0 41.7 0.7% 73.7 68.0 8.4%
Total Revenue Excluding IFRIC12(1) 36.8 38.0 -3.2% 67.0 61.8 8.4%
Cost of Services 30.7 26.3 16.7% 55.5 47.7 16.5%
Selling, general and administrative expenses 3.5 8.6 -59.1% 6.8 14.3 -52.4%
Other expenses 0.0 0.0 - 0.0 0.0 -
Total Costs and Expenses 34.2 35.0 -2.0% 62.3 62.0 0.6%
Total Costs and Expenses Excluding IFRIC12(1) 29.5 31.5 -6.4% 56.4 56.3 0.2%
Adjusted Segment EBITDA 10.7 9.1 17.7% 17.3 10.6 62.9%
Adjusted Segment EBITDA Mg 25.5% 21.9% 368 23.5% 15.6% 785
Adjusted EBITDA Margin excluding IFRIC 12(1) 28.0% 23.3% 466 24.6% 16.3% 828
Capex 5.9 5.6 6.2% 8.2 8.6 -4.5%

1 Excludes Construction Service revenue.

2 Excludes Construction Service cost.

3 Excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets, and is calculated by dividing EBITDA by total revenues less Construction Service revenue.

 

Passenger Traffic in Italy increased 3.3% YoY in 2Q18 driven by growth of 4.3% in international passengers. Cargo volume was up 14.0%, while total aircraft movements decreased by 1.7%.

 

Revenues in 2Q18 increased 0.7% YoY, or $0.3 million, to $42.0 million mainly reflecting the following variations:

 

·A 16.9%, or $1.4 million, increase in commercial revenues driven mainly by the recently redesigned VIP lounge and new retail stores at Florence Airport coupled with passenger growth. This was further supported by the appreciation of the Euro against the US dollar;

 

·A 40.5%, or $1.5 million, increase in Construction Service revenue in Italy; and

 

·A 9.5%, or $2.8 million, decline in aeronautical revenues mainly reflecting the marketing expenses which in 2Q18 were deducted from Aeronautical revenues, due to a change in the advertising agreement. This more than offset the higher traffic and the appreciation of the Euro against the US dollar.

 

Page 10 of 26

 

 

Cost of services reached $30.7 million, up 16.7% YoY, or $4.4 million, mainly due to the appreciation of the Euro against the US dollar, and, to a lesser extent, as a result of higher external services, porterage and security services, higher salaries and social security contributions corresponding to a 2% increase in employees.

 

SG&A declined 59.1%, or $5.1 million, to $3.5 million in 2Q18 as in 2Q18 marketing support expenses are recorded under Aeronautical Revenues, instead of SG&A, due to a change in the advertising agreement.

 

Adjusted Segment EBITDA in Italy increased 17.7%, or $1.6 million, to $10.7 million in 2Q18, with Adjusted Segment EBITDA margin expanding 368 basis points to 25.5% in 2Q18 from 21.9% in 2Q17. Excluding construction services, Adjusted Segment EBITDA margin would have increased 466 basis points to 28.0% from 23.3% in 2Q17.

 

During 2Q18 CAAP made capital expenditures for $5.9 million in Italy, primarily on terminal reconfigurations for higher capacity and Master plan development in Florence Airport.

 

Page 11 of 26

 

 

Brazil

Brazil represented 7.6% of the Company’s consolidated 2Q18 revenues and 2.1% of its adjusted EBITDA. CAAP operates two airports in Brazil, Presidente Juscelino Kubitschek International Airport (“Brasilia Airport”) and Airport of São Gonçalo do Amarante (“Natal Airport”) with approximately 4.3 million and 0.5 million passengers in 2Q18, respectively.

 

  2Q18 2Q17 % Var 1H18 1H17 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 3.0 2.8 8.0% 5.9 5.8 1.9%
International Passengers (in millions) 0.1 0.1 8.4% 0.3 0.3 13.1%
Transit Passengers (in millions) 1.7 1.5 12.2% 3.6 3.2 12.2%
Total Passengers (in millions) 4.9 4.4 9.4% 9.8 9.3 5.7%
Cargo Volume (in thousands of tons) 15.7 13.3 18.3% 29.8 25.9 15.2%
Total Aircraft Movements (in thousands) 46.4 44.3 4.9% 91.2 89.7 1.6%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 13.8 15.5 -10.8% 30.5 32.2 -5.1%
Non-aeronautical revenue 16.5 15.2 8.5% 31.8 30.4 4.8%
Commercial revenue 16.5 15.2 8.5% 31.8 30.4 4.8%
Construction service revenue 0.0 0.0 - 0.0 0.0 -
Other revenue 0.0 0.0 - 0.0 0.0 -
Total Revenue 30.3 30.7 -1.3% 62.4 62.6 -0.3%
Cost of Services 27.2 29.8 -8.6% 55.5 58.6 -5.3%
Selling, general and administrative expenses 4.6 3.1 48.7% 8.3 6.1 37.5%
Other expenses 0.1 2.2 -96.8% 0.2 2.2 -90.5%
Total Costs and Expenses 31.9 35.1 -9.1% 64.1 66.9 -4.2%
Adjusted Segment EBITDA 2.6 0.0 n.m. 6.8 4.3 58.9%
Adjusted Segment EBITDA Mg 8.5% 0.1% 845 10.9% 6.8% 405
Capex 1.9 2.1 -10.6% 3.2 5.0 -35.3%

Note: This segment does not include the effects of IFRIC 12 with respect to the construction or improvements to concessioned assets.

 

Passenger Traffic in Brazil increased 9.4% YoY in 2Q18 driven by the slowly recovering economic environment. Traffic rose almost 11% in both April and June, while traffic in May was 6.4% reflecting a trucker strike which limited fuel availability, causing flight cancellations or rerouting away from Brasilia airport. Total passenger traffic at Brasilia Airport, which represented 89.4% of traffic in Brazil, increased 10.6%, reflecting the continued recovery from the recession experienced earlier in the country. Furthermore, cargo volume was up 18.3% while total aircraft movements increased 4.9% during the period.

 

Revenues in 2Q18, however, were down 1.3% YoY, or $0.4 million, to $30.3 million, impacted by the depreciation of the Brazilian real during the period. Aeronautical revenues declined by 10.8%, or $1.7 million despite the 9.4% growth in passenger traffic. By contrast, commercial revenues increased by 8.5% YoY, or $1.3 million, as higher revenues from fuel, VIP lounges and space rentals more than offset the currency depreciation. Measured in local currency, revenues increased YoY by 10.5% in Brazil.

 

Cost of services declined 8.6%, or $2.6 million, to $27.2 million, mainly due to a decrease of $1.3 million, or 16%, in concession fees as a result of the depreciation of the Brazilian real against the US dollar and an adjustment in the concession fee in December 2017 resulting in an increase in the discount rate used to calculate this fee, and a decrease of 53%, or 0.8 million, in office expenses due to a reduction in utilities.

 

SG&A was $4.6 million in 2Q18, an increase of 48.7%, or $1.5 million, mainly due to higher professional services fees in relation with the renegotiation of the concession fee payment.

 

Adjusted Segment EBITDA in Brazil increased to $2.6 million in 2Q18, reaching an 8.5% Adjusted Segment EBITDA margin mainly due to higher operating leverage.

 

During 2Q18 CAAP made capital expenditures of $1.9 million, primarily from engineering projects and construction of runway safety areas at Brasilia Airport and the repair of the glass facade at Natal Airport.

 

Page 12 of 26

 

 

Awards & Recognitions

Carrasco Airport, Uruguay

In January 2018, Carrasco Airport was recognized as CEIV Pharma certified (Center of Excellence for Independent Validators in Pharmaceutical Logistics), making it the only Free Zone airport in Latin America to be granted with this certification by IATA (International Air Transport Association). This foundational step is anticipated to drive new business development opportunities for the main airport terminal in Uruguay, as the country seeks to become the pharmaceutical hub for the region. Also, in recognition of its best in class operational performance, in terms of safety, excellence and efficiency, in February 2018, Carrasco Airport was awarded with the Certificate of Airport Operator by DINACIA, the National Aeronautical Authority, making it the first airport in Latin America to be certified by the Latin American Aeronautical Regulations (“LAR”). In addition, in August 2018, Carrasco Airport inaugurated a solar energy generation plant composed of 1,540 panels, being the only airport in the region to have its own energy generation system.

 

Brasilia Airport, Brazil

Brasilia Airport was chosen as “Best Airport” in the country according to a survey conducted by the Brazilian Ministry of Transport, Ports and Civil Aviation. In all, over 20,000 passengers were interviewed by 20 Brazilian airports between April and June of 2018. This is the second time this year this airport receives the best score among airports with more than 15 million passengers per year.

 

Galapagos Airport, Ecuador

Starting this year, Galapagos Airport has embraced the UN Global Compact, setting a precedent in the industry given its commitment to best environmental practices. Since its inception, this airport has been environmentally sustainable, drawing all of its energy from the sun and wind, becoming the first “green” airport in the world granted the LEEDS GOLD certification from the US Green Building Council.

 

Guayaquil Airport, Ecuador

In March 2018, Guayaquil airport received several recognitions from the Airports Council International (ACI) World at the Airport Service Quality (ASQ) awards winning the first place within in the “Best Airport by Region” and “Best Airport by Region and Size” categories. ASQ is the only worldwide program to survey passengers at the airport on their day of travel and covers 74% of the world’s top 100 busiest airports.

 

Key Events for the Quarter

Corporación América Airports Purchases Additional 6.5% Stake in Toscana Aeroporti S.p.A.

On June 25, 2018 CAAP’s subsidiary Corporacion America Italia S.p.A. (“CAI”) entered into a share purchase agreement with Fondazione Cassa di Risparmio di Firenze (the “Agreement”) to purchase an additional stake in Toscana Aeroporti S.p.A (“Toscana Aeroporti”), the Company’s subsidiary that holds the concessions of the Pisa and Florence airports. Pursuant to the Agreement, CAI acquired additional 1,225,275 shares of Toscana Aeroporti, representing approximately 6.58% of Toscana Aeroporti’s share capital,and bringing CAI’s ownership of Toscana Aeroporti, to approximately 62.28% of its share capital, up from approximately 55.70% prior to this transaction. Pursuant to the Agreement, CAI agreed to pay Fondazione Cassa di Risparmio di Firenze (i) a purchase price of €16.50 per share, equal to a total consideration of €20.2 million and (ii) an earn-out consideration up to €3.4 million in aggregate, should certain conditions be met over a two-year period starting from the completion of the Acquisition.

 

Subsequent Events

 

Corporación América Airports and Investment Corporation of Dubai Announce Two Business Agreements

On July 27, 2018, Corporación América Airports and Investment Corporation of Dubai (“ICD”), the principal investment arm of the Government of Dubai announced they entered into a share purchase agreement whereby CAAP will sell 25% of its wholly owned subsidiary Corporación America Italia S.p.A. (“CAI”) to ICD (the “Transaction”). CAAP and ICD also entered into a Memorandum of Understanding (“MOU”) to jointly pursue new opportunities in the airport sector in Italy, Eastern Europe (exc. Russia) and the Middle East. The MOU aims to build upon CAAP’s management capabilities and deep knowledge of the airport industry as well as ICD´s unique access to financing and the capital markets. CAI is the controlling entity of Toscana Aeroporti S.p.A. (“TA”), a publicly traded Italian company which manages and holds the concessions for the Florence and Pisa airports in Italy. Since its initial public offering in February 2018, CAAP acquired an additional 11% ownership stake in TA, increasing its stake from 51% to approximately 62%. Following the closing of the Transaction, CAAP will have a 75% share ownership of CAI. The transaction is expected to close by August 31, 2018 subject to satisfaction of certain customary conditions precedent.

 

Corporación América Airports Announces Update to the Guayaquil Airport Concession Agreement

On July 9, 2018, the Company announced that its 50.0% owned subsidiary Terminal Aeroportuaria de Guayaquil S.A. (TAGSA), which operates and maintains the Guayaquil Airport in the city of Guayaquil, Ecuador, amended the concession agreement (the “Guayaquil Concession Agreement”) among TAGSA, Autoridad Aeroportuaria de Guayaquil and the Municipality of Guayaquil, including the commitment of incremental capital expenditures of US$32.2 million together with the extension of the term of the Guayaquil Concession Agreement for a five–year period from 2024 to 2029. The Guayaquil Concession Agreement amendment also includes an increase in the annual concession fee, effective as of July 1, 2018, from 50.25% to 55.25% paid over aggregate gross revenues received from tariffs and charges and certain other commercial revenues (e.g., fuel, parking spaces and use of convention center). Terms of the Guayaquil Concession Agreement amendment also sets forth an increase of US$524,600 in the administrative service fee, paid semiannually commencing February 2019.

 

Page 13 of 26

 

 

Inflation Related Accounting

IAS 29 requires that the financial statements of entities whose functional currency is that of a hyperinflationary economy be adjusted for the effects of changes in a suitable general price index and to be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. Accordingly, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed as non-monetary items.

 

To conclude whether an economy is categorized as hyperinflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceeds 100%. Considering that inflation in Argentina has increased significantly during 2018, it is expected to exceed the 100% three-year cumulative inflation rate, and that the rest of the indicators do not contradict that conclusion, the Company understands that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy for accounting purposes as from July 1, 2018, and, accordingly, it will apply IAS 29 as from that date in the financial reporting of its subsidiaries and associates located in Argentina.

 

2Q18 EARNINGS CONFERENCE CALL

 

When: 10:00 a.m. Eastern time, Aug 22, 2018
Who: Mr. Martín Eurnekian, Chief Executive Officer
  Mr. Raúl Francos, Chief Financial Officer
  Ms. Gimena Albanesi, Head of Investor Relations
Dial-in: 1-888-347-6492 (U.S. domestic); 1-412-317-5258 (international)
Webcast: https://services.choruscall.com/links/caap180822.html
Replay: Participants can access the replay through August 29, 2018 by dialing:
  1-877-344-7529 (U.S. domestic) and 1-412-317-0088 (international). Replay ID: 10123316.

 

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-IFRIC”) 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.

 

Page 14 of 26

 

 

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.

 

Investor Relations Contact

Gimena Albanesi

Head of Investor Relations

Email: gimena.albanesi@caairports.com
Phone: +5411 4852-6411

 

Page 15 of 26

 

 

 

-- Operational & Financial Tables Follow –

 

Operating Statistics by Segment: Traffic, Cargo and Aircraft Movement

  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Argentina            
Domestic Passengers (in millions) 5.4 4.8 11.3% 11.3 10.3 10.1%
International Passengers (in millions) 3.2 3.1 1.3% 7.1 6.7 5.3%
Transit passengers (in millions) 0.3 0.3 -16.4% 0.6 0.5 38.1%
Total passengers (in millions) 8.8 8.3 6.5% 19.1 17.5 9.0%
Cargo volume (in thousands of tons) 56.6 50.8 11.6% 117.0 100.0 17.1%
Aircraft movements (in thousands) 105.9 98.7 7.3% 219.3 203.0 8.0%
Italy            
Domestic Passengers (in millions) 0.5 0.5 -0.5% 0.9 0.9 1.1%
International Passengers (in millions) 1.9 1.8 4.3% 2.9 2.8 3.4%
Transit passengers (in millions) 0.0 0.0 412.0% 0.0 0.0 81.7%
Total passengers (in millions) 2.4 2.3 3.3% 3.8 3.7 2.8%
Cargo volume (in thousands of tons) 3.0 2.7 14.0% 5.7 5.4 5.2%
Aircraft movements (in thousands) 22.0 22.4 -1.7% 35.9 36.5 -1.5%
Brazil            
Domestic Passengers (in millions) 3.0 2.8 8.0% 5.9 5.8 1.9%
International Passengers (in millions) 0.1 0.1 8.4% 0.3 0.3 13.1%
Transit passengers (in millions) 1.7 1.5 12.2% 3.6 3.2 12.2%
Total passengers (in millions) 4.9 4.4 9.4% 9.8 9.3 5.7%
Cargo volume (in thousands of tons) 15.7 13.3 18.3% 29.8 25.9 15.2%
Aircraft movements (in thousands) 46.4 44.3 4.9% 91.2 89.7 1.6%
Uruguay            
Domestic Passengers (in millions) 0.0 0.0 16.7% 0.0 0.0 11.7%
International Passengers (in millions) 0.5 0.5 -1.0% 1.2 1.1 4.3%
Transit passengers (in millions) 0.0 0.0 19.6% 0.0 0.0 -38.3%
Total passengers (in millions) 0.5 0.5 -0.9% 1.2 1.1 3.9%
Cargo volume (in thousands of tons) 6.8 7.5 -9.5% 13.6 13.6 -0.1%
Aircraft movements (in thousands) 7.1 7.3 -1.9% 18.1 17.5 3.0%
Ecuador(1)            
Domestic Passengers (in millions) 0.6 0.5 10.4% 1.2 1.1 6.7%
International Passengers (in millions) 0.5 0.4 9.3% 0.9 0.9 2.7%
Transit passengers (in millions) 0.0 0.0 20.9% 0.0 0.0 -6.3%
Total passengers (in millions) 1.1 1.0 10.1% 2.1 2.0 4.7%
Cargo volume (in thousands of tons) 10.5 7.6 38.7% 20.5 17.2 19.7%
Aircraft movements (in thousands) 20.1 19.7 2.0% 38.0 39.9 -4.8%
Armenia            
Domestic Passengers (in millions) 0.0 0.0 - 0.0 0.0 -
International Passengers (in millions) 0.7 0.6 11.0% 1.2 1.1 10.5%
Transit passengers (in millions) 0.0 0.0 - 0.0 0.0 -
Total passengers (in millions) 0.7 0.6 11.0% 1.2 1.1 10.5%
Cargo volume (in thousands of tons) 4.3 6.0 -27.8% 7.8 10.9 -28.2%
Aircraft movements (in thousands) 6.0 5.4 11.9% 11.0 9.8 11.3%
Peru(2)            
Domestic Passengers (in millions) 0.8 0.7 17.3% 1.6 1.4 17.1%
International Passengers (in millions) 0.0 0.0 -36.6% 0.0 0.0 271.6%
Transit passengers (in millions) 0.0 0.0 - 0.0 0.0 -
Total passengers (in millions) 0.8 0.7 17.3% 1.6 1.4 17.1%
Cargo volume (in thousands of tons) 1.2 1.2 1.7% 2.4 2.3 2.2%
Aircraft movements (in thousands) 8.0 6.8 17.1% 15.4 13.1 18.0%

 

(1)ECOGAL’s operational data included in this table, although its results of operations are not consolidated.
(2)AAP’s operational data included in this table, although its results of operations are not consolidated.

  

Page 16 of 26

 

 

Aeronautical Breakdown (in US$ million)            
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Aeronautical Revenue 185.6 183.0 1.5% 390.4 370.1 5.5%
Passenger use fees 146.5 141.6 3.5% 305.9 282.2 8.4%
Aircraft fees 36.0 33.4 7.7% 69.6 62.5 11.3%
Other 3.2 8.0 -60.5% 15.0 25.4 -41.1%
             
Commercial Revenue Breakdown (in US$ million)            
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Commercial revenue 138.1 135.3 2.1% 275.3 266.9 3.2%
Warehouse use fees 49.2 47.9 2.7% 96.3 94.0 2.5%
Duty free shops 15.9 17.1 -7.3% 32.1 32.8 -2.3%
Rental of space (including hangars) 8.4 8.3 0.8% 17.1 16.7 2.2%
Parking facilities 9.7 10.6 -8.5% 20.2 20.7 -2.4%
Fuel 13.1 9.8 33.1% 24.3 18.3 32.5%
Food and beverage services 6.5 7.0 -8.0% 13.7 14.4 -5.3%
Advertising 5.1 5.3 -4.6% 10.1 10.8 -6.9%
Services and retail stores 4.6 4.4 4.6% 9.0 8.4 7.2%
Catering 3.5 3.6 -4.3% 7.3 7.0 3.4%
VIP lounges 6.0 4.7 28.5% 12.2 8.8 39.1%
Walkway services 2.2 2.3 -3.7% 4.7 6.1 -22.7%
Other   14.1 14.2 -0.7% 28.5 28.6 -0.3%

 

Total Expenses Breakdown (in US$ million)      
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Cost of services 263.5 258.2 2.1% 504.6 477.7 5.6%
Selling, general and administrative expenses 43.5 47.4 -8.1% 87.5 90.9 -3.7%
Financial loss 198.9 68.5 190.2% 284.7 148.0 92.3%
Other expenses 0.5 2.5 -80.7% 1.7 2.8 -40.0%
Income tax expense -20.1 8.9 -326.4% -8.6 20.5 -142.0%
Total expenses 486.3 385.5 26.2% 870.0 740.0 17.6%
             
Cost of Services (in US$ million)            
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Cost of Services 263.5 258.2 2.1% 504.6 477.7 5.6%
Salaries and social security contributions 51.7 54.5 -5.1% 103.2 103.7 -0.5%
Concession fees 46.1 46.9 -1.5% 95.0 94.8 0.3%
Construction service cost 72.1 64.6 11.6% 118.3 98.9 19.6%
Maintenance expenses 35.4 35.0 1.3% 71.9 69.9 3.0%
Amortization and depreciation 24.9 25.5 -2.4% 49.9 50.1 -0.4%
Services and fees 14.6 13.4 8.6% 28.2 26.4 6.6%
Cost of fuel 8.4 6.4 31.1% 15.3 11.0 39.0%
Taxes 4.2 4.5 -6.9% 8.8 9.2 -4.5%
Office expenses 3.3 4.2 -21.1% 7.5 7.5 0.3%
Provision for maintenance cost 0.1 0.3 -69.5% 1.2 1.0 20.1%
Others 2.8 3.0 -7.0% 5.3 5.2 1.6%

 

Page 17 of 26

 

 

             
Selling, General and Administrative Expenses  (in US$ million)      
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
SG&A 43.5 47.4 -8.1% 87.5 90.9 -3.7%
Taxes 12.3 14.3 -13.5% 26.6 27.9 -4.4%
Salaries and social security contributions 8.5 8.5 -0.5% 17.9 17.0 5.0%
Services and fees 10.7 14.1 -23.8% 21.2 26.0 -18.3%
Office expenses 2.9 2.8 2.6% 5.2 5.9 -12.4%
Amortization and depreciation 2.1 1.9 11.0% 4.2 3.7 13.8%
Maintenance expenses 0.4 0.5 -18.7% 1.5 1.5 0.4%
Advertising 1.4 0.7 109.7% 1.9 1.5 28.7%
Insurances 0.8 0.3 190.9% 1.3 0.9 46.4%
Charter services 0.2 0.2 2.8% 0.4 0.4 1.4%
Bad debts recovery 0.0 0.0 -100.0% 0.0 -0.2 -100.0%
Bad debts 0.8 1.5 -44.3% 1.7 2.0 -13.4%
Others 3.5 2.8 24.8% 5.8 4.5 28.8%
             
Expenses by Segment (in US$ million)      
Country 2Q18 2Q17 % Var. 1H18 1H17 % Var.
Argentina 179.5 185.3 -3.1% 346.7 337.9 2.6%
Italy 34.2 35.0 -2.0% 62.3 62.0 0.6%
Brazil 31.9 35.1 -9.1% 64.1 66.9 -4.2%
Uruguay 18.0 16.3 10.7% 36.5 32.7 11.8%
Ecuador 16.5 15.3 7.9% 32.3 31.5 2.6%
Armenia 19.0 14.5 30.9% 34.6 27.5 25.7%
Unallocated 8.4 6.7 26.0% 17.3 13.0 33.4%
Total consolidated expenses (1) (2) 307.5 308.1 -0.2% 593.9 571.5 3.9%

 

(1)Excludes income tax and financial loss
(2)We account for the results of operations of ECOGAL and AAP using the equity method

Page 18 of 26

 

 

Selected Income Statement Data (in US$ million)

  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Argentina            
Total Revenue 246.7 242.6 1.7% 495.0 467.5 5.9%
Total Revenue excluding Construction service revenue(1) 181.2 182.2 -0.5% 385.0 375.4 2.5%
Operating Income 71.7 61.8 16.0% 157.7 138.9 13.6%
Adjusted Segment EBITDA 78.9 70.3 12.3% 172.0 155.2 10.8%
Adjusted Segment EBITDA Mg 32.0% 29.0% 303 34.7% 33.2% 155
Adjusted EBITDA Margin excluding Construction service(1) 43.5% 38.5% 500 44.6% 41.3% 333
Italy            
Total Revenue 42.0 41.7 0.7% 73.7 68.0 8.4%
Total Revenue excluding Construction service revenue(1) 36.8 38.0 -3.2% 67.0 61.8 8.4%
Operating Income 7.8 6.8 14.9% 11.4 6.0 88.9%
Adjusted Segment EBITDA 10.7 9.1 17.7% 17.3 10.6 62.9%
Adjusted Segment EBITDA Mg 25.5% 21.9% 368 23.5% 15.6% 785
Adjusted EBITDA Margin excluding Construction service(1) 28.0% 23.3% 466 24.6% 16.3% 828
Brazil            
Total Revenue 30.3 30.7 -1.3% 62.4 62.6 -0.3%
Operating Income -1.6 -4.4 -64.1% -1.7 -4.3 -60.3%
Adjusted segment EBITDA 2.6 0.0 n.m. 6.8 4.3 58.9%
Adjusted Segment EBITDA Mg 8.5% 0.1% 845 10.9% 6.8% 405
Uruguay            
Total Revenue 27.0 26.2 3.0% 61.8 57.3 8.0%
Total Revenue excluding Construction service revenue(1) 26.8 25.4 5.6% 61.5 56.0 9.7%
Operating Income 8.5 9.4 -9.9% 24.2 23.7 2.0%
Adjusted Segment EBITDA 11.9 12.5 -5.3% 31.2 30.3 2.9%
Adjusted Segment EBITDA Mg 44.0% 47.8% -388 50.5% 53.0% -252
Adjusted EBITDA Margin excluding Construction service(1) 44.3% 49.3% -506 50.7% 54.1% -334
Ecuador            
Total Revenue 22.1 20.2 9.0% 43.6 41.9 3.9%
Operating Income 4.9 4.3 13.1% 10.0 9.2 8.8%
Adjusted segment EBITDA 6.8 6.2 9.6% 13.7 12.8 6.7%
Adjusted Segment EBITDA Mg 30.7% 30.5% 16 31.5% 30.6% 82
Armenia            
Total Revenue 28.1 21.5 30.4% 49.8 38.5 29.1%
Total Revenue excluding Construction service revenue(1) 26.3 21.5 22.5% 47.5 38.5 23.6%
Operating Income 9.1 7.1 29.5% 15.3 11.1 38.0%
Adjusted Segment EBITDA 12.1 9.9 22.6% 21.2 16.7 27.0%
Adjusted Segment EBITDA Mg 43.2% 45.9% -274 42.6% 43.4% -73
Adjusted EBITDA Margin excluding Construction service(1) 45.9% 46.1% -15 44.5% 43.4% 106
Unallocated            
Total revenue 0.9 0.8 12.8% 1.7 1.6 6.7%
Operating income -6.3 -4.7 32.8% -13.2 -9.1 44.8%
Adjusted segment EBITDA -1.3 -0.5 177.5% -3.8 -0.9 339.4%
Adjusted Segment EBITDA Mg N/A N/A N/A N/A N/A N/A

 

1Excludes Construction Service revenue.
2Excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets, and is calculated by dividing EBITDA by total revenues less Construction Service revenue.

 

Page 19 of 26

 

 

Operating Statistics by Airport: Traffic, Cargo and Aircraft Movements

 

                             
  Domestic Passenger Traffic (in thousands) International Passenger Traffic (in thousands) Transit Passengers (in thousands) (3) Total Passenger Traffic (in thousands) Cargo volume (in tons) Aircraft movements
  2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var.
Argentina                                    
Aeroparque (1) 2,274 2,214 3% 512 700 -27% 147 194 -24% 2,933 3,107 -6% 515 565 -9% 31,054 31,569 -2%
Bariloche 241 190 26% 1 0 122% 1 2 -53% 242 192 26% 71 88 -19% 2,429 2,078 17%
Catamarca 17 15 11% 0 0 - 0 4 -95% 17 18 -9% 33 40 -16% 510 432 18%
C. Rivadavia 152 140 8% 0 0 - 0 1 -81% 152 141 8% 152 151 1% 2,484 2,163 15%
Córdoba 533 431 24% 242 219 11% 34 20 75% 809 669 21% 420 375 12% 8,377 6,849 22%
El Palomar (2) 148 0 - 0 0 - 0 0 - 148 0 - 0 0 - 1,486 0 -
Esquel 11 12 -13% 0 0 - 0 0 -21% 11 12 -13% 0 0 - 191 186 3%
Ezeiza (1) 134 109 22% 2,210 2,068 7% 38 41 -7% 2,382 2,219 7% 53,198 46,661 14% 17,719 15,163 17%
Formosa 28 28 1% 0 0 388% 0 0 - 28 28 1% 35 45 -22% 463 477 -3%
General Pico 1 1 -36% 0 0 - 0 0 -50% 1 1 -36% 0 0 - 1,176 794 48%
Iguazú 147 181 -19% 0 0 -73% 0 0 -78% 147 182 -19% 0 0 -100% 1,569 1,630 -4%
Jujuy 115 57 101% 2 0 9671% 0 1 -50% 117 58 102% 29 27 7% 1,485 1,029 44%
La Rioja 18 21 -14% 0 0 - 0 4 -96% 18 24 -26% 38 46 -18% 421 471 -11%
Malargüe 0 0 650% 0 0 - 0 0 - 0 0 690% 0 0 - 56 59 -5%
Mar del Plata 92 49 87% 0 0 -56% 4 4 3% 96 53 81% 48 67 -29% 1,949 1,385 41%
Mendoza 324 298 9% 157 129 22% 6 6 -10% 487 434 12% 414 414 0% 5,120 4,739 8%
Parana 20 17 20% 0 0 123% 0 0 -93% 20 17 20% 0 1 -100% 742 803 -8%
Posadas 72 50 45% 0 0 4% 0 0 -1% 72 50 45% 102 95 7% 1,091 793 38%
Pto Madryn 21 19 10% 0 0 - 2 0 514% 23 19 21% 0 7 -100% 240 291 -18%
Reconquista 0 1 -89% 0 0 -75% 0 0 11% 0 1 -88% 0 0 - 698 702 -1%
Resistencia 77 81 -4% 0 0 686% 0 0 -62% 78 81 -4% 116 75 53% 1,244 1,123 11%
Río Cuarto 9 14 -40% 0 0 - 0 0 -100% 9 14 -40% 3 2 39% 192 347 -45%
Río Gallegos 51 56 -9% 0 0 -90% 1 1 27% 52 57 -8% 149 116 28% 745 739 1%
Río Grande 35 34 2% 0 0 -100% 0 0 -100% 35 34 2% 62 104 -40% 754 639 18%
Salta 179 220 -19% 14 18 -23% 2 9 -81% 194 247 -21% 262 337 -22% 2,149 3,247 -34%
San Fernando 6 8 -19% 2 3 -20% 0 0 - 9 11 -19% 0 0 - 8,953 9,121 -2%
San Juan 52 51 3% 5 0 4362% 0 3 -97% 57 54 6% 0 149 -100% 709 747 -5%
San Luis 23 22 5% 0 0 - 0 0 - 23 22 5% 21 37 -43% 423 432 -2%
San Rafael 12 12 -6% 0 0 - 0 0 - 12 12 -6% 0 0 - 1,147 1,079 6%
Santa Rosa 12 12 -1% 0 0 -100% 0 0 -56% 12 13 -2% 0 10 -100% 793 892 -11%
Santiago del Estero 24 25 -4% 0 0 - 0 0 -63% 24 25 -4% 53 51 3% 674 566 19%
Tucumán 204 116 75% 24 0 15573% 8 0 2550% 235 117 101% 514 852 -40% 2,609 1,221 114%
Viedma 7 8 -15% 0 0 - 0 2 -100% 7 10 -33% 0 0 - 192 288 -33%
Villa Mercedes 0 0 9% 0 0 - 0 0 -40% 0 0 6% 0 0 - 344 550 -37%
Termas de Río Hondo 9 47 -80% 0 0 -75% 0 0 - 9 47 -80% 4 53 -92% 233 605 -61%
Bahia Blanca 111 100 11% 0 0 - 6 7 -16% 117 107 9% 102 100 1% 1,657 1,567 6%
Neuquén 235 205 15% 10 0 75000% 7 8 -14% 251 213 18% 309 299 3% 3,834 3,885 -1%
Total Argentina 5,391 4,843 11% 3,179 3,138 1% 257 307 -16% 8,826 8,289 6% 56,650 50,767 12% 105,912 98,661 7%
                                     
Italy                                    
Pisa 380 382 0% 1,212 1,140 6% 1 0 594% 1,593 1,522 5% 2,917 2,598 12% 12,379 11,950 4%
Florence 104 104 0% 662 657 1% 0 0 3% 766 761 1% 112 60 87% 9,666 10,467 -8%
Total Italy 484 486 0% 1,874 1,796 4% 1 0 412% 2,359 2,283 3% 3,029 2,658 14% 22,045 22,417 -2%
                                     
Brazil                                    
Brasilia 2,552 2,332 9% 111 99 12% 1,680 1,497 12% 4,343 3,928 11% 11,826 10,221 16% 42,182 40,041 5%
Natal 496 491 1% 18 20 -10% 0 0 - 514 511 1% 3,872 3,053 27% 4,224 4,211 0%
Total Brazil 3,047 2,823 8% 129 119 8% 1,680 1,497 12% 4,857 4,439 9% 15,698 13,273 18% 46,406 44,252 5%
                                     
Uruguay                                    
Carrasco 0 0 84% 489 491 0% 3 3 20% 492 494 0% 6,795 7,512 -10% 6,146 6,002 2%
Punta del Este 0 0 -70% 18 21 -14% 0 0 - 18 21 -14% 0 0 - 976 1,255 -22%
Total Uruguay 0 0 17% 507 512 -1% 3 3 20% 510 515 -1% 6,795 7,512 -10% 7,122 7,257 -2%

 

Page 20 of 26

 

 

                             
  Domestic Passenger Traffic (in thousands) International Passenger Traffic (in thousands) Transit Passengers (in thousands) (3) Total Passenger Traffic (in thousands) Cargo volume (in tons) Aircraft movements
  2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var. 2Q18 2Q17 % Var.
                                     
Ecuador                                    
Guayaquil 462 415 11% 484 443 9% 17 14 21% 963 873 10% 9,198 6,754 36% 18,523 18,157 2%
Galapagos 139 129 8% 0 0 - 0 0 - 139 129 8% 1,290 808 60% 1,528 1,502 2%
Total Ecuador 601 544 10% 484 443 9% 17 14 21% 1,103 1,002 10% 10,488 7,561 39% 20,051 19,659 2%
                                     
Armenia                                    
Zvartnots 0 0 - 637 593 8% 0 0 - 637 593 8% 4,325 5,994 -28% 5,764 5,225 10%
Shirak 0 0 - 44 21 108% 0 0 - 44 21 108% 0 0 - 272 167 63%
Total Armenia 0 0 - 681 614 11% 0 0 - 681 614 11% 4,325 5,994 -28% 6,036 5,392 12%
                                     
Peru                                    
Arequipa 470 385 22% 0 0 -70% 0 0 - 471 385 22% 554 535 4% 4,017 3,256 23%
Juliaca 115 107 7% 0 0 -100% 0 0 - 115 107 7% 242 212 14% 1,068 1,023 4%
Puerto Maldonado 84 74 14% 0 0 - 0 0 - 84 74 14% 181 217 -16% 841 862 -2%
Tacna 109 92 18% 0 0 514% 0 0 - 109 92 18% 201 199 1% 1,159 899 29%
Ayacucho 63 60 5% 0 0 - 0 0 - 63 60 5% 16 10 63% 890 773 15%
Total Peru 840 717 17% 0 0 -37% 0 0 - 841 717 17% 1,194 1,174 2% 7,975 6,813 17%
Total CAAP 10,364 9,414 10% 6,855 6,623 4% 1,957 1,821 8% 19,176 17,857 7% 98,179 88,939 10% 215,547 204,451 5%

 

1)Starting May 3, 2018, 50% of international air traffic in Aeroparque Airport, other than flight to and from Uruguay, was reassigned to Ezeiza Airport, and the remaining 50% will be reassigned on April 1st, 2019.
2)El Palomar commenced operations in February 2018

 

Page 21 of 26

 

 

Income Statement (in US$ thousands)            
  2Q18 2Q17 % Var. 1H18 1H17 % Var.
Continuing operations            
Revenue  397,052 383,768 3.5% 787,936 737,422 6.9%
Cost of services  (263,543) (258,183) 2.1% (504,645) (477,711) 5.6%
Gross profit 133,509 125,585 6.3% 283,291 259,711 9.1%
Selling, general and administrative expenses  (43,511) (47,369) -8.1% (87,544) (90,900) -3.7%
Other operating income  4,565 4,515 1.1% 9,643 9,419 2.4%
Other operating expense  (485) (2,508) -80.7% (1,716) (2,843) -39.6%
Operating income 94,078 80,223 17.3% 203,674 175,387 16.1%
Share of income / (loss) in associates  127 (278) -145.7% 257 (328) -178.4%
Income before financial results and income tax 94,205 79,945 17.8% 203,931 175,059 16.5%
Financial income  49,632 13,531 266.8% 63,519 44,250 43.5%
Financial loss  (198,868) (68,518) 190.2% (284,656) (147,983) 92.4%
(Loss) / Income before income tax expense  (55,031) 24,958 -320.5% (17,206) 71,326 -124.1%
Income tax expense  20,109 (8,881) -326.4% 8,591 (20,496) -141.9%
(Loss) / Income for the period (34,922) 16,077 -317.2% (8,615) 50,830 -116.9%
Attributable to:            
Owners of the parent  (22,674) 15,612 -245.2% 3,821 48,069 -92.1%
Non-controlling interest  (12,248) 465 -2734.0% (12,436) 2,761 -550.4%

  

Page 22 of 26

 

 

Balance Sheet (in US$ thousands)

  Jun 30, 2018 March 31, 2018 Dec 31, 2017
ASSETS      
Non-current assets      
Intangible assets, net  2,463,317 2,797,696 2,818,354
Property, plant and equipment, net  72,966 75,244 74,483
Investments in associates  14,856 13,678 13,435
Other financial assets - - 2,500
Deferred tax assets  135,116 141,633 135,327
Other receivables  136,472 165,752 173,393
Trade receivables  4,135 4,254 4,244
Total Non-current assets 2,826,862 3,198,257 3,221,736
Current assets      
Inventories  8,686 8,115 8,564
Other financial assets at fair value through profit or loss 27,146 21,330 16,214
Other financial assets  2,691 2,600 23,582
Other receivables  62,520 61,954 183,062
Current tax assets  11,915 5,690 4,621
Trade receivables  107,850 124,478 121,834
Cash and cash equivalents  220,130 275,750 221,601
Total Current assets 440,938 499,917 579,478
Total assets  3,267,800 3,698,174 3,801,214
EQUITY      
Share capital  160,022 160,022 1,500,000
Share Premium 180,486 180,486 -
Free distributable reserve  385,055 385,055 385,055
Non-distributable Reserve 1,351,883 1,351,883 -
Currency translation adjustment  -337,760 -237,928 -217,300
Legal reserves  176 2 2
Other reserves  -1,351,962 -1,346,661 -1,344,008
Retained earnings  144,037 166,885 138,034
Total attributable to owners of the parent  531,937 659,744 461,783
Non-controlling interests  278,409 353,390 335,359
Total equity  810,346 1,013,134 797,142
LIABILITIES      
Non-current liabilities      
Borrowings  1,065,689 1,146,241 1,113,655
Deferred tax liabilities  141,954 147,574 148,301
Other liabilities  909,151 1,020,700 1,006,792
Trade payables  3,145 3,259 3,302
Total Non-current liabilities 2,119,939 2,317,774 2,272,050
Current liabilities      
Borrowings  95,846 78,971 372,790
Other liabilities  136,611 156,993 209,486
Current tax liabilities  6,413 26,951 21,934

 

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  Jun 30, 2018 March 31, 2018 Dec 31, 2017
Trade payables                     98,645                  104,351                  127,812
Total Current liabilities                  337,515                  367,266                  732,022
Total liabilities               2,457,454              2,685,040              3,004,072
Total equity and liabilities               3,267,800              3,698,174              3,801,214

 

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Statement of Cash Flow (in US$ thousands)

  Jun 30, 2018 Jun 30, 2017
Cash flows from operating activities    
(Loss) / Income for the period (8,615) 50,830
Adjustments for:    
Amortization and depreciation 68,112 69,952
Deferred income tax (27,123) (18,660)
Income tax accrued 18,532 39,156
Share of income or loss in associates (257) 328
Loss on disposals of property, plant and equipment 173 2,214
Unpaid concession fees   28,637 29,186
Changes in liability for Brazil concessions 50,364 44,133
Interest expense 46,134 66,272
Other financial results, net (6,368) (27,232)
Net foreign exchange 131,132 20,317
Other accruals 1,512 (4,288)
Acquisition of Intangible assets (115,022) (100,495)
Income tax paid (30,720) (57,021)
Changes in working capital (79,552) (83,062)
Net cash provided by operating activities 76,939 31,628
Cash flows from investing activities    
Cash contribution in associates (1,689) -
Acquisition of other financial assets (10,390) (9,275)
Disposals of other financial assets 24,313 -
Purchase of property, plant and equipment (4,952) (3,997)
Acquisition of Intangible assets (178) (152)
Loans with related parties 221 -
Piana di Castello land advance (4,504) -
Other   (88) 70
Net cash provided by /(used in) investing activities 2,733 (13,354)
Cash flows from financing activities    
Proceeds from cash contributions 43,703 3,810
Refund of cash contributions   (4,000)
Additional acquisitions in subsidiaries (40,731) -
Proceeds from borrowings 196,790 400,914
Initial Public Offering 195,601 -
Initial Public Offering expenses paid (4,253) -
Release of guarantee deposits 92,913 -
Release of restricted cash - 30,873
Loans paid (477,766) (222,896)
Interest paid (43,134) (64,691)
Dividends paid (15,403) (13,200)
Net cash (used in)/provided by financing activities (52,280) 130,810

 

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  Jun 30, 2018 Jun 30, 2017
     
Increase in cash and cash equivalents 27,392 149,084
     
Movements in cash and cash equivalents    
At the beginning of the period 221,601 182,116
Exchange rate (loss)/ income on cash and cash equivalents   (28,863) 5,142
Increase in cash and cash equivalents 27,392 149,084
At the end of the period 220,130 336,342

 

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