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

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20546

 

FORM 6-K

 

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.

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2018 AND 2017

 

This report of foreign private issuer on Form 6-K (this “Form 6-K”) is being filed by Corporación América Airports S.A. (“CAAP” or the “Company”) with the Securities and Exchange Commission (the “SEC”). The Company is filing this report on Form 6-K for the purpose of filing a copy of the Company’s unaudited condensed consolidated interim financial statements for the six-month period ended June 30, 2018 and 2017 (the “Consolidated Financial Statements”) as Exhibit 99.1. The Consolidated Financial Statements are presented in U.S. Dollars and prepared in accordance with IAS 34 (“Interim Financial Reporting”). These Consolidated Financial Statements, should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) of the International Accounting Standard Board (“IASB”) and the interpretations of the International Financial Reporting Interpretation Committee (“IFRIC”).

 

 

 

 

Exhibit Index

 

Exhibit No.   Description
     
99.1   CAAP Unaudited Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017.

 

 

 

  

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 23, 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

 

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

Corporación América Airports S.A.

 

CONDENSED CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

 

For the six-month period ended June 30, 2018 and 2017

 

R.C.S. Luxembourg B 174.140

 

4, rue de la Grêve

L-1643, Luxembourg

 

 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME

 

      For the three-month period
ended June 30,
  

For the six-month period

ended June 30,

 
      2018   2017   2018   2017 
   Notes  Unaudited   Unaudited   Unaudited   Unaudited 
Continuing operations                       
Revenue  4   397,052    383,768    787,936    737,422 
Cost of services  5   (263,543)   (258,183)   (504,645)   (477,711)
Gross profit      133,509    125,585    283,291    259,711 
Selling, general and administrative expenses  6   (43,511)   (47,369)   (87,544)   (90,900)
Other operating income  7   4,565    4,515    9,643    9,419 
Other operating expense      (485)   (2,508)   (1,716)   (2,843)
Operating income      94,078    80,223    203,674    175,387 
Share of income / (loss) in associates      127    (278)   257    (328)
Income before financial results and income tax      94,205    79,945    203,931    175,059 
Financial income  8   49,632    13,531    63,519    44,250 
Financial loss  8   (198,868)   (68,518)   (284,656)   (147,983)
(Loss) / income before income tax expense      (55,031)   24,958    (17,206)   71,326 
Income tax expense  9   20,109    (8,881)   8,591    (20,496)
(Loss) / income for the period      (34,922)   16,077    (8,615)   50,830 
Attributable to:                       
Owners of the parent      (22,674)   15,612    3,821    48,069 
Non-controlling interest      (12,248)   465    (12,436)   2,761 
       (34,922)   16,077    (8,615)   50,830 
                        
Earnings per share attributable to the owners of the parent                       
Weigthed average number of ordinary shares (thousands)      160,022    148,118    157,654    148,118 
                        
Basic and diluted earnings per share      (0.14)   0.11    0.02    0.32 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2017.

 - 1 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

 

   For the three-month period
ended June 30,
   For the six-month period
ended June 30,
 
   2018   2017   2018   2017 
   Unaudited   Unaudited   Unaudited   Unaudited 
(Loss) / income for the period   (34,922)   16,077    (8,615)   50,830 
                     
Items that will not be reclassified subsequently to profit or loss:                    
Remeasurement of defined benefit obligation   199    265    208    303 
                     
Items that may be subsequently reclassified to profit or loss:                    
Share of other comprehensive (loss) / income from associates   (493)   52    (378)   94 
Currency translation adjustment   (138,525)   (10,703)   (162,782)   4,947 
Other comprehensive (loss) / income for the period, net of income tax   (138,819)   (10,386)   (162,952)   5,344 
Total comprehensive (loss) / income for the period   (173,741)   5,691    (171,567)   56,174 
Attributable to:                    
Owners of the parent   (122,407)   3,433    (116,535)   45,355 
Non-controlling interest   (51,334)   2,258    (55,032)   10,819 
    (173,741)   5,691    (171,567)   56,174 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2017.

 - 2 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

CONDENSED cONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

 

   Notes 

At June 30, 2018

Unaudited

   At December 31, 2017
Audited
 
            
ASSETS             
Non-current assets             
Intangible assets, net  10   2,463,317    2,818,354 
Property, plant and equipment, net      72,966    74,483 
Investments in associates      14,856    13,435 
Other financial assets at amortized cost      -    2,500 
Deferred tax assets      135,116    135,327 
Other receivables      136,472    173,393 
Trade receivables      4,135    4,244 
       2,826,862    3,221,736 
Current assets             
Inventories      8,686    8,564 
Other financial assets at fair value through profit or loss      27,146    16,214 
Other financial assets at amortized cost      2,691    23,582 
Other receivables      62,520    183,062 
Current tax assets      11,915    4,621 
Trade receivables      107,850    121,834 
Cash and cash equivalents  11   220,130    221,601 
       440,938    579,478 
Total assets      3,267,800    3,801,214 
              
EQUITY  14          
Share capital      160,022    1,500,000 
Share premium      180,486    - 
Free distributable reserve      385,055    385,055 
Non-distributable reserve      1,351,883    - 
Currency translation adjustment      (337,760)   (217,300)
Legal reserves      176    2 
Other reserves      (1,351,962)   (1,344,008)
Retained earnings      144,037    138,034 
Total attributable to owners of the parent      531,937    461,783 
Non-controlling interests      278,409    335,359 
Total equity      810,346    797,142 
              
LIABILITIES             
Non-current liabilities             
Borrowings  12   1,065,689    1,113,655 
Deferred tax liabilities      141,954    148,301 
Other liabilities  13   909,151    1,006,792 
Trade payables      3,145    3,302 
       2,119,939    2,272,050 
Current liabilities             
Borrowings  12   95,846    372,790 
Other liabilities  13   136,611    209,486 
Current tax liabilities      6,413    21,934 
Trade payables      98,645    127,812 
       337,515    732,022 
Total liabilities      2,457,454    3,004,072 
Total equity and liabilities      3,267,800    3,801,214 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2017.

 

 - 3 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

 

           Attributable to owners of the parent         
   Share
Capital
   Share
premium
  

Free
Distributable

Reserves

   Non-
Distributable
Reserves
   Legal
Reserves
   Currency
Translation
Adjustment
   Other
Reserves
   Retained
Earnings  (1)
   Total   Non-
controlling
interests
   Total 
Balance at December 31, 2017   1,500,000    -    385,055    -    2    (217,300)   (1,344,008)   138,034    461,783    335,359    797,142 
Adjustment on adoption of IFRS 9 (net of tax) (Note 2.2 (a))   -    -    -    -    -    -    -    2,356    2,356    542    2,898 
Adjusted balance at January 1, 2018   1,500,000    -    385,055    -    2    (217,300)   (1,344,008)   140,390    464,139    335,901    800,040 
Shareholders contributions (Note 14)   -    -    -    -    -    -    -    -    -    43,703    43,703 
Income / (loss) for the period   -    -    -    -    -    -    -    3,821    3,821    (12,436)   (8,615)
Transfer to legal reserve   -    -    -    -    174    -    -    (174)   -    -    - 
Reverse stock split (Note 14)   (1,351,883)   -    -    1,351,883    -    -    -    -    -    -    - 
Initial Public Offering (Note 14)   11,905    180,486    -    -    -    -    -    -    192,391    -    192,391 
Other comprehensive (loss) / income for the period   -    -    -    -    -    (120,460)   104    -    (120,356)   (42,596)   (162,952)
Changes of non-controlling interests   -    -    -    -    -    -    (8,058)   -    (8,058)   (46,163)   (54,221)
Balance at June 30, 2018   160,022    180,486    385,055    1,351,883    176    (337,760)   (1,351,962)   144,037    531,937    278,409    810,346 
                                                        
Balance at January 1, 2017   20    -    1,907,328    -    2    (188,721)   (1,344,022)   74,543    449,150    354,174    803,324 
Shareholders contributions (Note 14)   -    -    3,810    -    -    -    -    -    3,810    -    3,810 
Refund of cash contributions (Note 14)   -    -    (4,000)   -    -    -    -    -    (4,000)   -    (4,000)
Income for the period   -    -    -    -    -    -    -    48,069    48,069    2,761    50,830 
Other comprehensive (loss) / income for the period   -    -    -    -    -    (2,865)   151    -    (2,714)   8,058    5,344 
Changes of non-controlling interests   -    -    -    -    -    -    -    -    -    (26,119)   (26,119)
Balance at June 30, 2017   20    -    1,907,138    -    2    (191,586)   (1,343,871)   122,612    494,315    338,874    833,189 

 

(1) Retained Earnings calculated according to Luxembourg Law are disclosed in Note 15.

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2017.

 

 - 4 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

 

      For the six-month period ended  
June 30,
 
   Notes 

2018

Unaudited

  

2017

Unaudited

 
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  9   (27,123)   (18,660)
Income tax accrued  9   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    20,315 
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  17   (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  15   (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  14   (40,731)   - 
Proceeds from borrowings      196,790    400,914 
Initial Public Offering  14   195,601    - 
Initial Public Offering expenses paid      (4,253)   - 
Release of guarantee deposits      92,913    - 
Release of restricted cash      -    30,873 
Loans paid  12   (477,766)   (222,896)
Interest paid  12   (43,134)   (64,691)
Dividends paid      (15,403)   (13,200)
Net cash (used in)/provided by financing activities      (52,280)   130,810 
              
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  11   220,130    336,342 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2017.

 

 - 5 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

  1 General information and company conversion
  2 Basis of presentation and accounting policies
  3 Segment information
  4 Revenue
  5 Cost of services
  6 Selling, general and administrative expenses
  7 Other operating income
  8 Financial results, net
  9 Income tax expense
  10 Intangible assets, net
  11 Cash and cash equivalents
  12 Borrowings
  13 Other liabilities
  14 Equity
  15 Contingencies, commitments and restrictions on the distribution of profits
  16 Related party balances and transactions
  17 Cash flow disclosures
  18 Fair value measurement of financial instruments
  19 Subsequent events
 - 6 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

1General information and company conversion

 

General Information

 

Corporación América Airports S.A. (the “Company” or “CAAP”) is a holding company primarily engaged through its operating subsidiaries in the acquisition, development and operation of airport concessions. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”.

 

The Company was formed as a private limited liability company under the laws of the Grand Duchy of Luxembourg on December 14, 2012. The Company is ultimately controlled by Southern Cone Foundation (“SCF”), a foundation, organized under the laws of the Principality of Liechtenstein. The address of its registered office is in Vaduz.

 

The Group currently has operations in Argentina, Brazil, Uruguay, Armenia, Italy, Ecuador and Perú.

 

A list of the principal Group’s subsidiaries is included in Note 2 of the Consolidated Financial Statements as of December 31, 2017.

 

Company conversion

 

The Company was converted on September 14, 2017, from a Luxembourg Limited Liability Company named A.C.I. Airports International S.à r.l. (“ACI”) into a Luxembourg Corporation and changed its name to Corporación América Airports S.A. (the “Conversion”). In conjunction with the Conversion, all of the Company’s outstanding equity interests were converted into one billion five hundred million (1,500,000,000) shares of common stock which were held by ACI Airports S.à r.l. (controlling shareholder). In connection with the Conversion, Corporación América Airports S.A. has continued to hold all assets of ACI and has assumed all of its liabilities and obligations.

 

The main adjustment of the Conversion principally gave effect to the recognition of the share capital of Corporación América Airports S.A. for a total nominal value of USD 1,500 million (USD 1 per share) and the elimination of the shares of A.C.I. Airports International S.à. r.l. for a total amount of USD 20 thousands and of the Free distributable reserves for a total amount of USD 1,499.9 million.

 

A detailed explanation of movements of share capital that have occurred in 2018, including reverse stock and Initial Public Offering, are included in Note 14.

 

These condensed consolidated interim financial statements have been approved for issuance by the Company on August 22, 2018.

 

2Basis of presentation and accounting policies

 

The principal accounting policies applied in the preparation of these Condensed Consolidated Interim Financial Statements are consistent with the Consolidated Financial Statements ended at December 31, 2017. These policies have been consistently applied to all the years presented, unless otherwise stated.

 

 - 7 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

2Basis of presentation and accounting policies (Cont.)

 

2.1 Basis of presentation

 

These Condensed Consolidated Interim Financial Statements have been prepared in accordance with IAS 34, “Interim Financial Reporting”. The accounting policies used in the preparation of these Condensed Consolidated Interim Financial Statements are consistent with those used in the audited Consolidated Financial Statements for the year ended December 31, 2017, except for changes explained in Note 2.2. These Condensed Consolidated Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2017, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) of the International Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC).

 

Elimination of all material intercompany transactions and balances between the Company and the other companies and their respective subsidiaries have been made.

 

The preparation of Condensed Consolidated Interim Financial Statements in conformity with IFRS requires management to make certain accounting estimates and assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the reporting dates, and the reported amounts of revenues and expenses during the reporting years. Actual results may differ from these estimates.

 

In the preparation of these Condensed Consolidated Interim Financial Statements, the significant areas of judgment by management in the application of the Group’s accounting policies and the main areas of assumptions and estimates are consistently as those applied in the Consolidated Financial Statements for the year ended December 31, 2017.

 

Assets and liabilities are classified as current if settlement is expected within 12 months.

 

There were no changes in valuation techniques during the period, except for changes explained in Note 2.2, and there were no changes in risk management policies since the end of the year ended December 31, 2017.

 

2.2 Changes in the accounting polices

 

The group has applied the following standards and amendments for the first time for their quarter reporting period commencing January 1, 2018:

 

IFRS 9, “Financial Instruments”

 

The group has adopted IFRS 9 as issued in July 2014, which resulted in changes in accounting policies and adjustments to the amounts recognized in the Consolidated Financial Statements for the year ended 31 December 2017.

 

This standard replaces the previously issued versions and establishes new requirements for hedge accounting and a new model of impairment for financial assets, effective from January 1, 2018.

 

The new impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses, as is the case under IAS 39.

 

The accounting policies were changed to comply with IFRS 9 as issued by the IASB in July 2014.

 

IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities; derecognition of financial instruments; impairment of financial assets and hedge accounting. IFRS 9 also significantly amends other standards dealing with financial instruments such as IFRS 7 Financial Instruments: Disclosures.

 

 - 8 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

2Basis of presentation and accounting policies (Cont.)

 

2.2 Changes in the accounting polices (Cont.)

 

As permitted by the transitional provisions of IFRS 9, the Group has elected not to restate comparative figures.

 

(a) Impact of adopting IFRS 9

 

The total impact on the Group’s retained earnings due to measurement of financial instruments as of January 1, 2018 is as follows:

 

   Retained Earnings   Non- controlling
interests
 
Opening balance - IAS 39   138,034    335,359 
Decrease in provision for trade receivables   3,142    723 
Decrease in deferred tax assets relating to impairment provisions   (786)   (181)
Adjustment to retained earnings from adoption of IFRS 9   2,356    542 
Opening balance – IFRS 9   140,390    335,901 

 

(b) Classification and measurement of financial instruments

 

On January 1, 2018, the Group’s management has assessed which business models apply to the financial assets held by the group at the date of initial application of IFRS 9 (January 1, 2018) and has classified its financial instruments into the appropriate IFRS 9 categories.

 

Reclassifications of financial instruments on adoption of IFRS 9

 

On the date of initial application, January 1, 2018, the financial instruments of the group were as follows, with any reclassifications noted:

 

   Measurement category  Carrying amount     
   Original (IAS 39)  New (IFRS 9)  Original   New   Difference 
Assets as per the statement of financial position                     
Other financial assets  AC*  AC*   26,082    26,082    - 
Other financial assets  FVPL**  FVPL**   16,214    16,214    - 
Other receivables  AC*  AC*   293,578    293,578    - 
Trade receivables  AC*  AC*   126,078    129,943    3,865 
Cash and cash equivalents  AC*  AC*   221,601    221,601    - 
Liabilities as per the statement of financial position                     
Borrowings  AC*  AC*   1,486,445    1,486,445    - 
Trade payables and other liabilities  AC*  AC*   1,198,562    1,198,562    - 

 

* AC = financial instruments measured at amortized cost

** FVPL = financial instruments measured at fair value through profit or loss

 

(c) IFRS 9 Financial Instruments – Accounting policies applied from January 1, 2018

 

From January 1, 2018, the Company classifies its financial assets in the following measurement categories:

 

(i)Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method.
 - 9 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

2Basis of presentation and accounting policies (Cont.)

 

2.2 Changes in the accounting polices (Cont.)

 

(ii)Fair value through other comprehensive income (“FVOCI”): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss.

 

(iii)Fair value through profit or loss (“FVPL”): Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises.

 

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

 

IFRS 15, “Revenue from contracts with customers”

 

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.

 

Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The Company´s management has determined that the adoption of this standard did not have a significant impact on the Company´s financial condition or results of operations.

 

Effective January 1, 2018, the Group adopted this standard using the modified retrospective adoption approach. There was no impact on the condensed consolidated interim financial statements and no cumulative effect adjustment was recognized.

 

There were no other changes on accounting policies and accounting methods. The standards that are mandatory effective on or after January 1, 2018 were applied by the group.

 

New and amended standards not yet adopted for CAAP.

 

Certain new accounting standards and interpretations have been published that are not mandatory for June 30, 2018 reporting periods and have not been early adopted by the group. The group’s assessment of the impact of these new standards and interpretations is set out below.

 

IFRS 16, “Leases”

 

In January 2016, the IASB issued IFRS 16, "Leases", which will result in almost all leases being recognized on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. IFRS 16 must be applied on annual periods beginning on or after January 1, 2019. The Company's management is currently assessing the potential impact that the application of this standard may have on the Company's financial condition or results of operations.

 - 10 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

2Basis of presentation and accounting policies (Cont.)

 

2.2 Changes in the accounting polices (Cont.)

 

New and amended standards not yet adopted for CAAP (Cont.)

 

Other standards and interpretations non-significant for the Company’s financial statements:

-Amendment to IFRS 2 - Classification and Measurement of Share-based Payment Transactions -Annual Improvements to IFRS 2014-2016 cycle.

- IFRIC 22 - Foreign Currency Transactions and Advance Consideration.

- IFRIC 23 - Uncertainty over Income Tax Treatments.

 

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

 

3Segment information

 

Operating segments are components of an enterprise where separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Group’s chief operating decision maker is its Board of Directors. The Group’s operating segments are managed separately because each operating segment represents a strategic business unit providing airport and non-airport services (“others”) to clients in different countries. The Group’s reportable operating segments are the seven countries in which the Group currently operates, which are Argentina, Brazil, Uruguay, Armenia, Ecuador, Italy and Peru.

 

Within each reportable segment, the Group develops and operates airport concessions (“Airports”) and provides other services not directly related to airport concessions (“Others”).

 

Assets, liabilities and results of sub-holding and/or holding companies are not allocated and are reported within the “Unallocated” column. This column also includes head office and group services.

 

The elimination of any intersegment revenues and other significant intercompany operations are included in the “Intersegment Adjustments” column.

 

The information regarding the Company’s reportable operating segments is consistent with the information presented in Notes 2.U and 4 included in our audited Consolidated Financial Statements for the year ended December 31, 2017 and should be read in conjunction with them.

 

The performance of each reportable segment is measured by its adjusted EBITDA, defined, with respect to each segment, as net income before financial income, financial loss, income tax expense, depreciation and amortization for such segment. The Adjusted EBITDA for the Brazil segment does not exclude the amortization of the intangible asset related to the fee payable to the Brazilian government for the operation of the Brazilian airport concessions.

 

Effective April 1, 2018, the CODM revised the current segment reporting to also include another metric of performance. In addition, the CODM considers each reportable segment’s Adjusted EBITDA before Construction Services margin as a relevant performance measure. Prior periods information have been revised to conform to the current period presentation.

 

Adjusted EBITDA excluding Construction Services is defined, with respect to each segment, as net income before construction services revenue, financial income, construction services cost, financial loss, income tax expense, depreciation and amortization for such segment. The Adjusted EBITDA excluding construction services revenue and construction services cost for the Brazil segment does not exclude the amortization of the intangible asset related to the fee payable to the Brazilian government for the operation of the Brazilian airport concessions.

 

 - 11 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

3Segment information (Cont.)

 

   Argentina   Brazil   Uruguay   Armenia   Ecuador   Italy   Perú             

For the three-month period ended

June 30, 2018 (Unaudited)

  Airports   Others   Airports   Airports   Others   Airports   Airports   Airports   Airports   Intrasegment
Adjustments
   Unallocated   Total 
Revenue   246,712    152    30,319    24,343    4,458    28,085    22,056    42,000    -    (2,536)   1,463    397,052 
Cost of services   (158,908)   (35)   (27,222)   (13,347)   (3,442)   (15,880)   (12,894)   (30,710)   -    2,536    (3,641)   (263,543)
Gross profit   87,804    117    3,097    10,996    1,016    12,205    9,162    11,290    -    -    (2,178)   133,509 
Selling, general and administrative expenses   (20,495)   (58)   (4,601)   (3,191)   (346)   (2,915)   (4,263)   (3,532)   -    -    (4,110)   (43,511)
Other operating income   4,449    -    7    46    31    17    16    -    -    -    (1)   4,565 
Other operating expenses   (149)   (1)   (70)   (51)   (31)   (159)   (8)   -    -    -    (16)   (485)
Operating income   71,609    58    (1,567)   7,800    670    9,148    4,907    7,758    -    -    (6,305)   94,078 
Share of loss in associates   -    -    -    -    -    -    -    43    (564)   -    648    127 
Amortization and depreciation   7,279    -    4,149    3,210    197    2,973    1,864    2,926    -    -    4,308    26,906 
Adjusted Ebitda   78,888    58    2,582    11,010    867    12,121    6,771    10,727    (564)   -    (1,349)   121,111 
Construction services revenue   (65,488)   -     -    (203)   -    (1,792)   -    (5,184)   -    -    -    (72,667)
Construction services cost   65,439    -    -    197    -    1,740    -    4,756    -    -    -    72,132 
Adjusted Ebitda excluding Construction Services   78,839    58    2,582    11,004    867    12,069    6,771    10,299    (564)   -    (1,349)   120,576 
Construction services revenue   65,488    -    -    203    -    1,792    -    5,184    -    -    -    72,667 
Construction services cost   (65,439)   -    -    (197)   -    (1,740)   -    (4,756)   -    -    -    (72,132)
Adjusted Ebitda   78,888    58    2,582    11,010    867    12,121    6,771    10,727    (564)   -    (1,349)   121,111 
Financial income                                                          49,632 
Financial loss                                                          (198,868)
Amortization and depreciation                                                          (26,906)
Loss before income tax expense                                                          (55,031)
Income tax expense                                                          20,109 
Loss for the period                                                          (34,922)
                                                             
For the three-month period ended June 30, 2017 (Unaudited)                                                            
Revenue   242,584    107    30,714    23,872    3,917    21,542    20,236    41,706    -    (2,242)   1,332    383,768 
Cost of services   (161,879)   (36)   (29,779)   (12,035)   (3,147)   (11,570)   (11,981)   (26,313)   -    2,242    (3,685)   (258,183)
Gross profit   80,705    71    935    11,837    770    9,972    8,255    15,393    -    -    (2,353)   125,585 
Selling, general and administrative expenses   (23,317)   (60)   (3,103)   (2,916)   (297)   (2,728)   (3,913)   (8,638)   -    -    (2,397)   (47,369)
Other operating income   4,487    -    -    21    (3)   9    2    -    -    -    (1)   4,515 
Other operating expenses   (105)   -    (2,201)   (27)   17    (187)   (5)   -    -    -    -    (2,508)
Operating income   61,770    11    (4,369)   8,915    487    7,066    4,339    6,755    -    -    (4,751)   80,223 
Share of loss in associates   -    -    -    -    -    -    -    16    (424)   -    130    (278)
Amortization and depreciation   8,489    -    4,371    2,993    150    2,821    1,841    2,484    -    -    4,174    27,323 
Adjusted Ebitda   70,259    11    2    11,908    637    9,887    6,180    9,255    (424)   -    (447)   107,268 
Construction services revenue   (60,370)   -    -    (843)   -    (77)   -    (3,775)   -    -    -    (65,065)
Construction services cost   60,318    -    -    818    -    75    -    3,439    -    -    -    64,650 
Adjusted Ebitda excluding Construction Services   70,207    11    2    11,883    637    9,885    6,180    8,919    (424)   -    (447)   106,853 
Construction services revenue   60,370    -    -    843    -    77    -    3,775    -    -    -    65,065 
Construction services cost   (60,318)   -    -    (818)   -    (75)   -    (3,439)   -    -    -    (64,650)
Adjusted Ebitda   70,259    11    2    11,908    637    9,887    6,180    9,255    (424)   -    (447)   107,268 
Financial income                                                          13,531 
Financial loss                                                          (68,518)
Amortization and depreciation                                                          (27,323)
Income before income tax expense                                                          24,958 
Income tax expense                                                          (8,881)
Income for the period                                                          16,077 

 

 - 12 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

3Segment information (Cont.)

 

   Argentina   Brazil   Uruguay   Armenia   Ecuador   Italy   Perú             

For the six-month period ended

June 30, 2018 (Unaudited)

  Airports   Others   Airports   Airports   Others   Airports   Airports   Airports   Airports   Intrasegment
Adjustments
   Unallocated   Total 
Revenue   494,988    168    62,368    56,496    8,924    49,762    43,582    73,708    -    (4,963)   2,903    787,936 
Cost of services   (303,742)   (67)   (55,547)   (26,878)   (6,711)   (28,744)   (25,066)   (55,528)   -    4,963    (7,325)   (504,645)
Gross profit   191,246    101    6,821    29,618    2,213    21,018    18,516    18,180    -    -    (4,422)   283,291 
Selling, general and administrative expenses   (42,544)   (116)   (8,346)   (6,920)   (701)   (5,511)   (8,537)   (6,812)   -    -    (8,057)   (87,544)
Other operating income   9,471    -    7    62    41    45    16    -    -    -    1    9,643 
Other operating expenses   (454)   (1)   (210)   (79)   (30)   (286)   (15)   -    -    -    (641)   (1,716)
Operating income   157,719    (16)   (1,728)   22,681    1,523    15,266    9,980    11,368    -    -    (13,119)   203,674 
Share of income in associates   -    -    -    -    -    -    -    43    (434)   -    648    257 
Amortization and depreciation   14,253    -    8,510    6,610    385    5,956    3,724    5,886    -    -    8,663    53,987 
Adjusted Ebitda   171,972    (16)   6,782    29,291    1,908    21,222    13,704    17,297    (434)   -    (3,808)   257,918 
Construction services revenue   (110,006)   -    -    (341)   -    (2,224)   -    (6,712)   -    -    -    (119,283)
Construction services cost   109,888    -    -    331    -    2,159    -    5,916    -    -    -    118,294 
Adjusted Ebitda excluding Construction Services   171,854    (16)   6,782    29,281    1,908    21,157    13,704    16,501    (434)   -    (3,808)   256,929 
Construction services revenue   110,006    -    -    341    -    2,224    -    6,712    -    -    -    119,283 
Construction services cost   (109,888)   -    -    (331)   -    (2,159)   -    (5,916)   -    -    -    (118,294)
Adjusted Ebitda   171,972    (16)   6,782    29,291    1,908    21,222    13,704    17,297    (434)   -    (3,808)   257,918 
Financial income                                                          63,519 
Financial loss                                                          (284,656)
Amortization and depreciation                                                          (53,987)
Loss before income tax expense                                                          (17,206)
Income tax expense                                                          8,591 
Loss for the period                                                          (8,615)
                                                             
June 30, 2018 (Unaudited)                                                            
Current assets   189,179    263    46,468    22,190    4,456    42,327    19,774    56,522    -    (102,300)   162,059    440,938 
Non-current assets   546,641    4    1,230,996    154,423    5,119    169,061    49,539    236,123    13,016    (1,069)   423,009    2,826,862 
Capital Expenditure   110,319    -    3,247    1,162    503    3,352    1,322    8,243    -    -    15    128,163 
Current liabilities   106,514    33    52,282    21,036    3,671    22,136    28,088    95,250    -    (101,643)   110,148    337,515 
Non-current liabilities   396,331    -    1,154,353    58,924    2,925    83,391    4,339    69,572    -    (1,727)   351,831    2,119,939 
                                                             

 

 - 13 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

3Segment information (Cont.)

 

   Argentina   Brazil   Uruguay   Armenia   Ecuador   Italy   Perú             

For the six-month period ended

June 30, 2017 (Unaudited)

  Airports   Others   Airports   Airports   Others   Airports   Airports   Airports   Airports   Intrasegment
Adjustments
   Unallocated   Total 
Revenue   467,518    215    62,585    52,650    7,671    38,540    41,948    67,995    -    (4,186)   2,486    737,422 
Cost of services   (291,714)   (68)   (58,643)   (24,204)   (6,021)   (21,658)   (24,823)   (47,660)   -    4,186    (7,106)   (477,711)
Gross profit   175,804    147    3,942    28,446    1,650    16,882    17,125    20,335    -    -    (4,620)   259,711 
Selling, general and administrative expenses   (45,980)   (109)   (6,089)   (5,737)   (622)   (5,556)   (7,944)   (14,318)   -    -    (4,545)   (90,900)
Other operating income   9,258    -    -    44    -    28    3    -    -    -    86    9,419 
Other operating expenses   (246)   (4)   (2,201)   (73)   17    (295)   (12)   -    -    -    (29)   (2,843)
Operating income   138,836    34    (4,348)   22,680    1,045    11,059    9,172    6,017    -    -    (9,108)   175,387 
Share of loss in associates   -    -    -    -    -    -    -    54    (390)   -    8    (328)
Amortization and depreciation   16,297    -    8,597    6,300    303    5,655    3,677    4,687    -    -    8,268    53,784 
Adjusted Ebitda   155,133    34    4,249    28,980    1,348    16,714    12,849    10,758    (390)   -    (832)   228,843 
Construction services revenue   (92,094)   -    -    (1,208)   -    (80)   -    (6,255)   -    -    -    (99,637)
Construction services cost   91,997    -    -    1,173    -    78    -    5,658    -    -    -    98,906 
Adjusted Ebitda excluding Construction Services   155,036    34    4,249    28,945    1,348    16,712    12,849    10,161    (390)   -    (832)   228,112 
Construction services revenue   92,094    -    -    1,208    -    80    -    6,255    -    -    -    99,637 
Construction services cost   (91,997)   -    -    (1,173)   -    (78)   -    (5,658)   -    -    -    (98,906)
Adjusted Ebitda   155,133    34    4,249    28,980    1,348    16,714    12,849    10,758    (390)   -    (832)   228,843 
Financial income                                                          44,250 
Financial loss                                                          (147,983)
Amortization and depreciation                                                          (53,784)
Income before income tax expense                                                          71,326 
Income tax expense                                                          (20,496)
Income for the period                                                          50,830 
                                                             
December 31, 2017 (Audited)                                                            
Current assets   200,982    425    66,631    24,697    2,887    38,110    42,760    62,144    -    (74,280)   215,122    579,478 
Non-current assets   709,689    7    1,432,833    159,880    5,121    173,087    51,941    236,893    11,790    (1,093)   441,588    3,221,736 
Capital Expenditure   231,998    41    13,589    6,327    852    5,778    934    20,013    -    -    24    279,556 
Current liabilities   151,794    64    262,624    23,536    3,755    22,741    42,929    89,057    -    (73,004)   208,526    732,022 
Non-current liabilities   412,242    -    1,271,776    64,050    1,175    95,159    6,571    73,762    -    (2,369)   349,684    2,272,050 

 

 - 14 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

4Revenue

 

  

For the three-month period ended

June 30,

  

For the six-month period ended

June 30,

 
  

2018

(Unaudited)

  

2017

(Unaudited)

  

2018

(Unaudited)

  

2017

(Unaudited)

 
Aeronautical revenue   185,616    182,961    390,418    370,030 
Non-aeronautical revenue                    
 Commercial revenue   138,106    135,289    275,316    266,881 
 Construction service revenue   72,667    65,065    119,283    99,637 
 Other revenue   663    453    2,919    874 
    397,052    383,768    787,936    737,422 

 

5Cost of services

 

  

For the three-month period ended

June 30,

  

For the six-month period ended

June 30,

 
  

2018

(Unaudited)

  

2017

(Unaudited)

  

2018

(Unaudited)

  

2017

(Unaudited)

 
Salaries and social security contributions   (51,685)   (54,464)   (103,223)   (103,674)
Concession fees (**)   (46,144)   (46,868)   (95,051)   (94,749)
Construction services cost   (72,132)   (64,650)   (118,294)   (98,906)
Maintenance expenses   (35,425)   (34,960)   (71,931)   (69,856)
Amortization and depreciation   (24,850)   (25,472)   (49,870)   (50,120)
Services and fees   (14,554)   (13,404)   (28,178)   (26,448)
Cost of fuel   (8,389)   (6,399)   (15,244)   (11,026)
Taxes (*)   (4,167)   (4,476)   (8,795)   (9,211)
Office expenses   (3,279)   (4,157)   (7,485)   (7,439)
Provision for maintenance cost   (88)   (289)   (1,199)   (1,006)
Others   (2,830)   (3,044)   (5,375)   (5,276)
    (263,543)   (258,183)   (504,645)   (477,711)

 

(*) Mainly includes tax from turnover and municipal taxes.

(**) Includes depreciation for Brazil concession assets of USD 14,125 as of June 30, 2018 (USD 16,168 as of June 30, 2017).

 

6Selling, general and administrative expenses

 

  

For the three-month period ended

June 30,

  

For the six-month period ended

June 30,

 
  

2018

(Unaudited)

  

2017

(Unaudited)

  

2018

(Unaudited)

  

2017

(Unaudited)

 
Taxes (*)   (12,335)   (14,253)   (26,654)   (27,813)
Services and fees   (10,710)   (14,057)   (21,178)   (25,945)
Salaries and social security contributions   (8,467)   (8,509)   (17,871)   (17,017)
Office expenses   (2,864)   (2,793)   (5,185)   (5,850)
Amortization and depreciation   (2,056)   (1,851)   (4,117)   (3,664)
Maintenance expenses   (410)   (503)   (1,487)   (1,543)
Bad debts   (843)   (1,513)   (1,780)   (2,046)
Advertising   (1,372)   (654)   (1,869)   (1,441)
Insurance   (762)   (262)   (1,236)   (880)
Charter service   (208)   (201)   (415)   (403)
Bad debts recovery   -    23    -    239 
Other   (3,484)   (2,796)   (5,752)   (4,537)
    (43,511)   (47,369)   (87,544)   (90,900)

 

(*) Mainly includes tax from taxes over banks transactions and tax on revenue.

 

 - 15 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

7Other operating income

 

  

For the three-month period ended

June 30,

  

For the six-month period ended

June 30,

 
  

2018

(Unaudited)

  

2017

(Unaudited)

  

2018

(Unaudited)

  

2017

(Unaudited)

 
Government grant (*)   4,450    4,487    9,471    9,258 
Other   115    28    172    161 
    4,565    4,515    9,643    9,419 

 

(*) Corresponds to government grant for the development of airport infrastructure in Group A (operated by AA2000) of the National Airport System. There are no unfulfilled conditions or other contingencies attaching to these grants. The group did not benefit directly from any other forms of government assistance.

 

8Financial results, net

 

  

For the three-month period ended

June 30,

  

For the six-month period ended

June 30,

 
  

2018

(Unaudited)

  

2017

(Unaudited)

  

2018

(Unaudited)

  

2017

(Unaudited)

 
                 
Interest income   9,040    9,163    11,708    28,863 
Foreign exchange income   39,517    4,368    49,737    15,387 
Other   1,075    -    2,074    - 
Financial income   49,632    13,531    63,519    44,250 
                     
Interest expense   (20,209)   (24,171)   (46,134)   (66,272)
Foreign exchange expenses   (148,224)   (25,388)   (180,869)   (35,702)
Changes in liability for Brazil concessions   (28,787)   (18,153)   (50,364)   (44,133)
Other   (1,648)   (806)   (7,289)   (1,876)
Financial loss   (198,868)   (68,518)   (284,656)   (147,983)
Net financial results   (149,236)   (54,987)   (221,137)   (103,733)

 

9Income tax expense

 

  

For the three-month period ended

June 30,

  

For the six-month period ended

June 30,

 
  

2018

(Unaudited)

  

2017

(Unaudited)

  

2018

(Unaudited)

  

2017

(Unaudited)

 
Current income tax   6,686    (17,816)   (18,532)   (39,156)
Deferred income tax   13,423    8,935    27,123    18,660 
    20,109    (8,881)   8,591    (20,496)

 

 - 16 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

10Intangible assets, net

 

   Concession
Assets
   Goodwill   Patent,
intellectual
property rights
and others
   Total 
                 
Cost                    
Balances at January 1, 2018   3,312,006    57,049    14,867    3,383,922 
Acquisitions   123,033    -    178    123,211 
Translation differences   (473,291)   (286)   (733)   (474,310)
    2,961,748    56,763    14,312    3,032,823 
Depreciation                    
Accumulated at January 1, 2018   553,767    313    11,488    565,568 
Depreciation of the period   63,018    -    619    63,637 
Translation differences   (59,195)   (110)   (394)   (59,699)
    557,590    203    11,713    569,506 
At June 30, 2018   2,404,158    56,560    2,599    2,463,317 
                     
Cost                    
Balances at January 1, 2017   3,334,564    56,013    15,162    3,405,739 
Acquisitions   103,656    -    152    103,808 
Disposals   (1,176)   -    (850)   (2,026)
Transfer   (417)   -    417    - 
Increase   197    -    -    197 
Translation differences   (42,800)   383    18,340    (24,077)
    3,394,024    56,396    33,221    3,483,641 
Depreciation                    
Accumulated at January 1, 2017   569,090    306    11,156    580,552 
Depreciation of the period   65,896    -    151    66,047 
Translation differences   (11,068)   16    907    (10,145)
    623,918    322    12,214    636,454 
At June 30, 2017   2,770,106    56,074    21,007    2,847,187 
 - 17 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

11Cash and cash equivalents

 

  

At June 30,

2018

(Unaudited)

  

At December 31,

2017

(Audited)

 
Cash to be deposited   2,151    1,483 
Cash at banks   162,253    189,283 
Time deposits   54,722    29,003 
Other cash equivalents   1,004    1,832 
    220,130    221,601 

 

The Group operates with investment grade - financial institutions.

 

For the purposes of cash flow interim statement, cash and cash equivalents include the following:

 

  

At June 30,

2018

(Unaudited)

  

At June 30,
2017

(Unaudited)

 
Cash and cash equivalents   220,130    336,342 
Bank overdraft   -    - 
    220,130    336,342 

 

12Borrowings

 

  

At June 30,

2018

(Unaudited)

  

At December

31, 2017

(Audited)

 
Non-current          
Bank and financial borrowings (**)   414,892    453,428 
Notes (*)   649,608    658,109 
Others   1,189    2,118 
    1,065,689    1,113,655 
Current          
Bank and financial borrowings (**)   58,744    311,902 
Notes (*)   34,926    24,306 
Loans with related parties (Note 16)   500    34,651 
Others   1,676    1,931 
    95,846    372,790 
Total Borrowings   1,161,535    1,486,445 

 

Changes in borrowings during the period is as follows:

 

   For the six-month period ended
June 30,
 
  

2018

(Unaudited)

  

2017

(Unaudited)

 
Balances at the beginning of the period   1,486,445    1,107,241 
Loans obtained   197,495    401,134 
Loans paid   (477,766)   (222,896)
Interest paid   (43,134)   (64,691)
Accrued interest for the period   52,137    68,276 
Translation differences   (53,642)   12,751 
At the end of the period   1,161,535    1,301,815 

 

The maturity of borrowings is as follows:

 

   1 year or less   1 - 2
years
   2 – 5
years
   Over 5
years
   Total 
At June 30, 2018 (1)   145,011    138,905    498,990    922,439    1,705,345 
At December 31, 2017 (1)   422,746    230,464    523,855    803,436    1,980,501 

 

(1)The amounts disclosed in the table are undiscounted cash flows of principal and estimated interest. Variable interest rate cash flows have been estimated using variable interest rates applicable at the end of the reporting period.

 

 - 18 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

12Borrowings (Cont.)

 

(*) Notes include the following:

 

-In 2007 Puerta del Sur S.A. issued 7.75% secured guaranteed notes for USD 87 million, due 2021. The principal balance of the Puerta del Sur Notes, together with accrued interest, will be repaid in 22 total installments, with individual installments occurring on April 29 and October 29 of each year beginning in 2011 and ending in 2021. The main covenants on these bonds are limitations on liens and encumbrances and compliance with certain financial ratios. Puerta del Sur may be limited to declare, make or pay any dividends unless the debt coverage service ratio exceeds 1.7x and the indebtedness ratio is less than 3.0. As of June 30, 2018 and December 31, 2017 Puerta del Sur S.A. was in compliance with all of its covenants. Puerta del Sur Notes are secured by a trust to which Puerta del Sur has transferred the following sums: (a) the sum of funds which Puerta del Sur has or has rights to for services offered in administration, construction, and maintenance of Carrasco Airport; (b) the sum of funds received from the duty-free store in Carrasco Airport; (c) the sum of funds received as a result of the permitted operation of the cargo terminal in Carrasco Airport; and (d) the sum of funds Puerta del Sur has received or will have right to receive from the government or from a third party successor as a result of a management agreement, or as a consequence of the redemption, termination, mutual dissolution and/or resolution of the management agreement for whatever reason, this trust is only use in case of non-compliance with the Notes obligations.

 

-In 2015, ACI Airport Sudamérica S.A.U. issued 6.875% senior secured guaranteed notes, for USD 200 million due in 2032. The principal balance will be repaid in 34 installments, May 29 and November 29 of each year, commencing on May 29, 2016 while accrued interest will be repaid commencing on November 29, 2015. The main covenants on these bonds are limitations on take additional indebtedness, make payments of dividends and other payments that are specifically restricted, selling assets as well as requiring compliance with certain financial ratios. The holders of these notes benefit from a guarantee and a security package including the pledge of the shares in Puerta del Sur S.A. and Cerealsur S.A., and certain accounts of Cerealsur and ACI Airport Sudamérica. As of June 30, 2018 and December 31, 2017 they were guaranteed with a stand by letter of credit of CAAP with Bank of América. These notes are fully and unconditionally guaranteed by Cerealsur S.A. As of June 30, 2018 and December 31, 2017, ACI Airport Sudamérica S.A.U. was in compliance with all of its covenants.

 

-On January 8, 2018, Corporación América Italia S.p.A. (“CAI”) issued € 60.0 million (USD 71.8 million) aggregate principal amount of 4.556% secured notes due 2024 (the “Italian Notes”). The proceeds of the Italian Notes were used to refinance and replace the 6.250% secured notes due 2019 issued by CAI in December 2014. Interest on the Italian Notes is payable annually in arrears on June 30 of each year. The Italian Notes will mature on December 31, 2024. The main covenants on these bonds are limitations on take additional indebtedness, make payments of dividends and other payments that are specifically restricted, selling assets as well as requiring compliance with certain financial ratios.

 

The Italian Notes are secured by an economic first ranking pledge in respect of all the shares representing 100% of the share capital of CAI, 100% of the share capital of Dicasa Spain S.A.U. and the shares representing CAI’s holding in Toscana Aeroporti S.p.A. As of June 30, 2018, CAI was in compliance with all of its covenants.

 

-Notes issued in April and December 2010 by AA2000, totalling USD 328 million maturing in 2020. Annual Interest rates on these notes are 10% and 10.75% respectively. As long as these notes are outstanding AA2000 is required to comply with certain commitments, such as certain limitations to liens on its assets, mergers, spin-offs, sale of assets, new debts, distribution of dividends and payment to its shareholders. On March 13, 2017 AA2000 early redeemed in full the notes issued in December 2010 for a principal amount of USD 157.5 million, recognizing a loss of approximately USD 13 million on the extinguishment that was included in interest expenses in financial loss. As a result of the renegotiation of its borrowings, the restrictions on distribution of dividends has significantly eased.

 

-On February 6, 2017, AA2000 issued 6.875% senior secured notes for a nominal amount of USD 400 million due 2027. The principal will be amortized in 32 equal quarterly installments as from May 1, 2019. The main covenants of these bonds require compliance with certain financial ratios as well as restriction to incur in additional debt and limitations on the payments of dividends if any default or unmatured default has occurred. As of June 30, 2018 AA2000 was in compliance with all of its covenants.

 

 - 19 - 

 

 

Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2018 and 2017 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).

 

12Borrowings (Cont.)

 

(**) As of June 30, 2018 significant bank and financial borrowings include the following:

 

                      Outstanding      
Company   Lender   Currency   Maturity     Interest Rate  

(In millions

of USD)

    Capitalization(3)
Inframérica Concessionaria do Aeroporto Sao Goncalo do Amarante S.A.       BNDES   Brazilian Reales     September 2032     Variable   TJLP (1) plus spread     8.3     A
  BNDES   Brazilian Reales     June 2032     Variable   T.R.plus spread plus IPCA     2.0      
  BNDES   Brazilian Reales     September 2032     Variable   T.R. plus spread plus IPCA     5.3      
  BNDES   Brazilian Reales     September 2022     Fixed   2.5%     2.4      
  BNDES   Brazilian Reales     July 2032     Variable   T.R. plus spread plus IPCA     2.4      
Inframérica Concessionaria do Aeroporto de Brasilia S.A.     BNDES   Brazilian Reales     December 2033     Variable   TJLP (1) plus spread