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Section 1: 6-K (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 April, 2019

 

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.

 

 

 

 

 

 

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: April 11, 2019

 

  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 April 11, 2019 - Corporación América Airports S.A. announces 4Q18 and full year results.

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

 

CORPORACION AMERICA AIRPORTS ANNOUNCES 4Q18 AND FULL YEAR RESULTS

Passenger traffic up 3.9% with growth of 4.0% YoY in Argentina, 2.7% in Brazil, and 5.0% in Italy

further supported by growth across most countries of operations

 

Luxembourg, April 11, 2019— 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 twelve-month periods ended December 31, 2018. Financial results are expressed in millions of U.S. dollars and are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (“IASB”).

 

Commencing 3Q18, the Company began reporting results of its Argentinean subsidiaries applying Hyperinflation Accounting, in accordance to IFRS rule IAS 29 (“IAS 29”), as detailed on Section “Hyperinflation Accounting in Argentina” on page 18. 

 

Fourth Quarter 2018 Highlights

§Consolidated revenues of $371.0 million, down 10.9% YoY. Excluding the impact of IFRS rule IAS 29, revenues declined 12.8% YoY mainly due to lower travel demand in Argentina reflecting difficult macro conditions and the FX impact in Argentina and Brazil, partially offset by increases in Ecuador and Armenia
§Growth across key operating metrics:
§Passenger traffic up 3.9% YoY to 20.3 million
§Cargo volume declined 2.0% to 118.5 thousand tons
§Aircraft movements rose 1.9% to 220.6 thousand
§Operating Income declined 42.2% YoY, mainly impacted by IAS 29, and the operating margin contracted to 14.0% from 21.5% in 4Q17
§Adjusted EBITDA was $90.4 million, down 15.4% YoY, with Adjusted EBITDA margin Ex-IFRIC12 contracting 276 bps to 28.6%
§Ex-IAS 29, Adjusted EBITDA declined 18.6% YoY and Adjusted EBITDA margin Ex-IFRIC12 contracted 331 bps to 28.1%

 

Fiscal Year 2018 Highlights

§Consolidated revenues were down 9.5% YoY, to $1,426.1 million. Excluding the impact of IFRS rule IAS 29, revenues declined 2.3% YoY mainly due to lower travel demand in Argentina reflecting difficult macro conditions and the FX impact in Argentina and Brazil, partially offset by increases in Ecuador, Uruguay and Armenia
§Growth across key operating metrics:
§Passenger traffic up 6.1% YoY to 81.3 million
§Cargo volume increased 5.2% to 410.1 thousand tons
§Aircraft movements rose 3.4% to 880.6 thousand
§Operating Income declined 19.0% YoY, mainly impacted by IAS 29, and the operating margin contracted to 21.0% from 23.4% in 2017
§Adjusted EBITDA was $445.9 million, down 3.4% YoY, with Adjusted EBITDA margin Ex-IFRIC12 expanding 142 bps to 36.1%
§Ex-IAS 29, Adjusted EBITDA increased 4.4% YoY and Adjusted EBITDA margin Ex-IFRIC12 expanded 190 bps to 36.6%

  

CEO Message

Commenting on the fourth quarter 2018 results, Mr. Martín Eurnekian, CEO of Corporación América Airports, noted: “Our results during the quarter continued to reflect the challenging macro environment in Argentina, our largest market. Passenger traffic growth showed further deceleration and total revenues were also lower, impacted by significant currency depreciation in Argentina and, to a lesser extent, in Brazil. The macro and FX environment contributed to the ongoing mix-shift to domestic destinations and the resulting drop in commercial revenues in Argentina. By contrast, in other markets, we continued to make good progress in our commercial initiatives. In Italy, we experienced a 10% increase in commercial revenues as we continued to enhance the customer experience in Florence airport, adding new retail stores and other commercial offerings. The improving economic conditions in Brazil drove an 11% increase in local currency revenues.

 

Excluding one-time items in both quarters and construction service margin, comparable Adjusted EBITDA Ex-IAS 29 declined 21.4%, impacted by the difficult economic conditions in Argentina as inflation in the country is catching up with currency depreciation reducing the strong operating leverage experienced in the prior quarter. This more than offset the increase in adjusted EBITDA achieved in the majority of our other countries of operations. In Brazil, we delivered a 60.6% increase in comparable Adjusted EBITDA, while Italy reported 40.3% growth in Adjusted EBITDA.

 

2018 was also an eventful year for us as we positioned the Company for future growth. On the financial front, a key event was our Initial Public Offering. With respect to operations we served over 81 million passengers across our airport network – up 6% year-on-year, continued to add new routes and airlines, and began operations at El Palomar, our newest airport targeting low-cost airlines in Argentina. We also continued to advance our capex program in support of future traffic growth and to further enhance the passenger experience. This included the construction of a new departure terminal at Ezeiza Airport in Argentina, expected to begin operations this year, the start of the expansion of Aeroparque Airport and of regional airports in Jujuy, San Juan, Comodoro Rivadavia and Iguazú, among others. Another important event was the agreement we entered into with Investment Corporation of Dubai whereby we will jointly identify and develop new opportunities in the airport sector in Italy, Eastern Europe and Middle East. Moreover, we extended by 5 years our concession agreement in Ecuador. We are also pleased progress made early this year with the conclusion of the environmental and urban impact studies and approvals with respect to our expansion plans at the Florence Airport, aiming to meet unsatisfied traffic demand in the region and, most recently, with the 14-year extension of the concession agreement for Punta del Este Airport in Uruguay.

 

Page 1 of 31 

 

  

Looking to the current year, we see the difficult economic environment together with the added uncertainty of a Presidential election year in Argentina to continue impacting passenger traffic trends. While the macro backdrop is anticipated to gradually improve in the second half, given the lag between the purchase decision and the actual travel date, a pick-up in international traffic is expected to flow into our results early 2020. Domestic traffic in turn, is expected to continue improving during 2019. In Brazil, we expect to see the economy to continue its improving trend throughout the year. More specific to us, we remain focused on implementing our strategy and moving ahead with key capital investments. Key to securing future growth is the ongoing development of new routes and increasing frequencies along with further enhancing our customers’ travel experience. Although we face a number of headwinds again this year, we are well positioned for when the macro environment improves. In the meantime, our healthy balance sheet enables us to continue investing to support anticipated long-term growth.” 

 

Operating & Financial Highlights

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

  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Passenger Traffic (Million Passengers) 19.6 20.3 - 20.3 3.9% 3.9%
Revenue 416.6 363.3 7.7 371.0 -10.9% -12.8%
Aeronautical Revenues 191.9 178.6 2.7 181.2 -5.6% -7.0%
Non-Aeronautical Revenues 224.7 184.8 5.0 189.8 -15.6% -17.8%
Revenue excluding construction service 338.9 307.2 6.1 313.3 -7.5% -9.3%
Operating Income 89.7 65.9 -14.1 51.9 -42.2% -26.5%
Operating Margin 21.5% 18.1% -4.2% 14.0% -756 -339
Net (Loss) / Income Attributable to Owners of the Parent -3.6 11.5 28.7 40.2 -1215.9% -419.7%
EPS (US$) -0.02 0.07 0.18 0.25 n.m. n.m.
Adjusted EBITDA 106.9 87.0 3.4 90.4 -15.4% -18.6%
Adjusted EBITDA Margin 25.7% 24.0% - 24.4% -127 -170
Adjusted EBITDA Margin excluding Construction Service 31.4% 28.1% - 28.6% -276 -331
Net Debt to LTM EBITDA 2.74 1.84  - 1.98 -7,624 -9,018

Note: Non-IFRS figures in historical dollars are included for comparison purposes.

 

Operating & Financial Highlights

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

  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Passenger Traffic (Million Passengers) 76.6 - - 81.3 6.1% -
Revenue 1,575.2 1,538.3 -112.2 1,426.1 -9.5% -2.3%
Aeronautical Revenues 767.0 764.6 -48.4 716.2 -6.6% -0.3%
Non-Aeronautical Revenues 808.1 773.8 -63.8 710.0 -12.1% -4.2%
Revenue excluding construction service 1,325.1 1,309.3 -81.6 1,227.7 -7.3% -1.2%
Operating Income 369.1 379.0 -80.0 299.0 -19.0% 2.7%
Operating Margin 23.4% 24.6% -3.7% 21.0% -247 120
Net (Loss) / Income Attributable to Owners of the Parent 63.5 -11.6 18.3 7.1 -88.8% -118.2%
EPS (US$) 0.43 -0.07 0.12 0.04 -89.5% -117.0%
Adjusted EBITDA 461.6 481.6 -35.7 445.9 -3.4% 4.3%
Adjusted EBITDA Margin 29.3% 31.3% 31.3% 196 200
Adjusted EBITDA Margin excluding Construction Service 34.7% 36.6%  - 36.1% 142 190
Net Debt to LTM EBITDA 2.74 1.84 1.98 -7,624 -9,010

Note: Non-IFRS figures in historical dollars are included for comparison purposes.

 

Page 2 of 31 

 

  

Operating Performance

 

Passenger Traffic

Total passenger traffic during 4Q18 increased 3.9% YoY to 20.3 million, principally driven by YoY increases of 4.0% in Argentina and 2.7% in Brazil, which contributed an additional 0.4 and 0.1 million passengers, respectively. This was further supported by traffic growth across the majority of CAAP’s countries of operations.

 

Traffic dynamics in Argentina remained impacted by the challenging macro conditions in the country, including the negative effect from the sharp currency depreciation in the previous quarter. This resulted in slower growth in overall travel demand and a mix-shift from international to domestic traffic. Domestic traffic increased 12.0%, while international traffic declined 8.4%. During the quarter, Norwegian Air Argentina started local operations with five domestic routes, while Chilean low-cost carrier JetSmart launched international operations from El Palomar Airport, designated an international airport last November.

 

In Brazil, traffic growth slowed to 2.7% YoY from 5.2% in the prior quarter, impacted by a reduction in less profitable frequencies by a Latin American international Airline, and a decline in frequencies by a Brazilian carrier which partially offset the benefit from new routes and airlines. Importantly, during the quarter Gol started international operations to Miami and Orlando, in United States and Buenos Aires in Argentina. Traffic in Italy increased 5.0% reflecting the addition of new routes and airlines. While passenger traffic in Uruguay remain impacted by lower traffic from Argentina, traffic contracted 2.7% posting an improvement from the 4.8% YoY decline reported in the prior quarter.

 

In Armenia, passenger traffic increased 11.6% mainly due to the addition of new frequencies to destinations in Russia. In Ecuador, traffic increased 7.3%, reflecting the good performance of Spirit Airlines flight to Fort Lauderdale introduced in March 2018. In Peru, passenger traffic increased 1.6% YoY, a deceleration from the 10% growth reported in 3Q18 following the suspension of operations of low-cost airline, LC Perú.

 

Domestic passenger traffic, which accounted for 57.6% of total traffic during 4Q18, increased 8.6% YoY principally driven by growth of 12.0% in Argentina and 6.0% in Brazil, which contributed with 0.7 million and 0.2 million additional passengers, respectively. International passenger traffic, which represented 31.2% of total traffic, posted a slight decline the period, as increases of 7.2% in Italy and 11.6% in Armenia, were offset by a decline of 8.4% in Argentina as a result of the continued challenging macro conditions. 

 

Cargo Volume

Cargo volume declined 2.0% YoY in 4Q18 mainly as a result of lower cargo volume in Argentina, reflecting the difficult economic environment. 

 

Aircraft Movements

During 4Q18, total aircraft movements increased 1.9% YoY reaching 220.6 thousand, mainly reflecting growth of 3.2% in Argentina and 14.3% in Ecuador, which contributed with 3.6 thousand and 2.6 thousand aircraft movements, respectively.

 

Tables with detailed passenger traffic, cargo volume and aircraft movement information for each airport can be found on page 21 of this report.

 

Operational Statistics: Passenger Traffic, Cargo Volume and Aircraft Movements

 

4Q18 4Q17 % Var YTD18 YTD17 % Var
Domestic Passengers (in millions) 11.7 10.8 8.6% 45.0 41.3 8.9%
International Passengers (in millions) 6.3 6.5 -1.7% 27.4 26.9 2.0%
Transit Passengers (in millions) 2.3 2.3 -2.7% 8.9 8.4 6.0%
Total Passengers (in millions) 20.3 19.6 3.9% 81.3 76.6 6.1%
Cargo Volume (in thousands of tons) 118.5 121.0 -2.0% 410.1 389.8 5.2%
Total Aircraft Movements (in thousands) 220.6 216.4 1.9% 880.6 851.3 3.4%

 

Page 3 of 31 

 

  

Passenger Traffic
Breakdown
        Cargo       Aircraft Movements
Country 4Q18 4Q17 % Var.   4Q18 4Q17 % Var.   4Q18 4Q17 % Var.
  (in millions)     (in thousands of tons)     (in thousands)  
Argentina 10.2 9.8 4.0%   70.9 76.6 -7.4%   115.5 111.9 3.2%
Italy 1.7 1.6 5.0%   3.4 2.9 15.0%   16.7 16.2 3.0%
Brazil 5.2 5.1 2.7%   18.8 15.1 24.7%   45.9 47.1 -2.5%
Uruguay 0.6 0.6 -2.7%   7.8 8.2 -4.2%   8.3 9.0 -8.0%
Ecuador (1) 1.1 1.0 7.3%   11.5 11.8 -2.6%   20.8 18.2 14.3%
Armenia 0.7 0.6 11.6%   4.9 5.1 -4.7%   6.1 6.0 2.1%
Peru (2) 0.8 0.8 1.6%   1.3 1.3 -4.0%   7.3 8.1 -9.3%
TOTAL 20.3 19.6 3.9%   118.5 121.0 -2.0%   220.6 216.4 1.9%
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.

 

Commencing 3Q18, the Company began reporting results of its Argentinean subsidiaries applying Hyperinflation Accounting, in accordance to IFRS rule IAS 29, as detailed on Section “Hyperinflation Accounting in Argentina” on page 18.

  

Revenues

Consolidated Revenues declined 10.9% YoY to $371.0 million in 4Q18, mainly reflecting a decrease of $44.3 million in Argentina, resulting from the continued challenging economic conditions in the country.

 

Excluding the impact of IAS 29, consolidated revenues would have declined 12.8%, or $53.3 million, mainly attributed to a drop of 19.3%, or $52.0 million, in Argentina. In 4Q18 the application of IAS 29 resulted in a positive impact when compared to the previous accounting rule given that the indexation effect exceeded the translation impact from using the closing exchange rate as opposed to using the average exchange rate for the reporting period.

 

Revenues in Argentina were negatively impacted by lower travel demand given the difficult macro conditions, a mix-shift from international to domestic traffic which is linked to the local currency depreciation, a decline in commercial revenues, mainly in Duty Free shops as a result of the decline in international traffic and lower demand, together with lower cargo revenues from the drop in higher-margin imports. Revenues were also negatively impacted by the FX translation effect on domestic revenues resulting from the 102% Argentine peso depreciation, which more than offset higher overall passenger traffic and aircraft movements. In Brazil, revenues declined 4.9%, or $1.6 million, primarily affected by the currency translation effect on revenues resulting from the 17% quarterly average Brazilian real depreciation, while, in local currency, revenues increased 11.6%, benefitted from the increase in passenger traffic, further supported by higher commercial revenues mainly from VIP lounges and advertising agreements. In Italy, revenues declined 7.4% YoY, or $2.8 million, mainly reflecting marketing support expenses, which in 4Q18 are deducted from Aeronautical Revenues, versus SG&A in the past, due to a change in the advertising agreement.

 

By contrast, in Armenia, revenues increased 13.2%, or $3.6 million, mainly driven by higher fuel demand and prices and, to a lesser extent, reflecting the 11.6% growth in passenger traffic. Revenues in Ecuador increased 5.1%, or $1.1 million, as a result of higher traffic in the period. In Uruguay, revenues increased 3.8%, or $1.0 million, mainly driven by the implementation of a $1.40 security tariff per passenger, partially offset by a decline in Duty free revenue, mainly driven by the reduction in passenger traffic.

 

Excluding construction services, consolidated revenues would have declined 7.5% YoY to $313.3 million on an ‘As Reported’ basis, and 9.3% to $307.2 million when also excluding the impact of IAS 29.

 

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Revenues by Segment (in US$ million)

Country 4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Argentina 268.9 217.0 7.7 224.6 -16.5% -19.3%
Italy 37.9 35.1 - 35.1 -7.4% -7.4%
Brazil 32.7 31.2 - 31.2 -4.9% -4.9%
Uruguay 26.0 27.0 - 27.0 3.8% 3.8%
Armenia 27.4 31.1 - 31.1 13.2% 13.2%
Ecuador (1) 20.8 21.9 - 21.9 5.1% 5.1%
Unallocated 2.8 0.2 - 0.2 -92.4% -92.4%
Total consolidated revenue (2) 416.6 363.3 7.7 371.0 -10.9% -12.8%

1 Only includes Guayaquil Airport.

2 Excluding Construction Service revenue, revenue decreased 13.2% YoY in Argentina and 7.9% in Italy, but increased 7.1% in Uruguay and 19.0% in Armenia. 

 

Revenue Breakdown (in US$ million)

  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Aeronautical Revenue 191.9 178.6 2.7 181.2 -5.6% -7.0%
Non-aeronautical Revenue 224.7 184.8 5.0 189.8 -15.6% -17.8%
Commercial revenue 145.8 127.7 3.4 131.1 -10.0% -12.4%
Construction service revenue (1) 77.8 56.2 1.6 57.7 -25.8% -27.8%
Other revenue 1.2 0.9 0.0 0.9 -22.7% -22.7%
Total Consolidated Revenue 416.6 363.3 7.7 371.0 -10.9% -12.8%
Total Revenue excluding Construction Service revenue (2) 338.9 307.2 6.1 313.3 -7.5% -9.3%

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

2 Excludes Construction Service revenue.

 

Aeronautical revenue accounted for 48.9% of total revenues, and declined 5.6% YoY, or $ 10.7 million, to $181.2 million. Argentina was the main contributor to this decline, with a reduction of 7.1%, or $7.9 million. Had IAS 29 not been applied, Aeronautical Revenues would have decreased 7.0%, or $13.3 million, mainly reflecting a drop of 9.6%, or $10.6 million, in Argentina as a result of the mix-shift from international to domestic traffic and the currency translation effect on domestic traffic resulting from currency devaluation that took place earlier in the year. Aeronautical revenue in Brazil was negatively affected by the 17% quarterly average depreciation of the Brazilian real against the US dollar. This more than offset the 2.7% YoY increase in traffic in Brazil, resulting in an 8.9% decline in revenues, or $1.5 million, although revenues in local currency posted an increase of 5%. In Italy, higher passenger traffic was partly offset by a $2.7 million charge for marketing support expenses, which in 4Q18 are deducted from Aeronautical revenues instead of SG&A. In Ecuador aeronautical revenues increased 9.0%, or $1.3 million, primarily driven by growth in passenger traffic. By contrast, Aeronautical revenues in Uruguay remained relatively stable driven by the new security fee introduced for the implementation of SISCA (Sistema Integrado de Seguridad y Control Aeroportuario), that partially offset by the decline in traffic, as explained above.

 

Non-Aeronautical revenues accounted for 51.1% of total revenues, and declined 15.6% YoY, or $34.9 million, to $189.8 million, mainly driven by:

 

§A 10.0%, or $14.6 million, decline in Commercial Revenues, to $131.1 million. This decline was mainly driven by a reduction of 20.8%, or $18.5 million, in Argentina, as a result of the reduction in international traffic and cargo activity due to macro conditions, as well as the impact of the Argentine peso depreciation on the share of local currency denominated revenues and lower passenger demand, particularly in duty free shops. Excluding the impact of IAS 29, Commercial Revenues would have decreased 12.4%, or $18.1 million, mainly reflecting a decline of 24.6%, or $21.9 million in Argentina. In Brazil, Commercial Revenues remained relatively stable at $15.9 million due to currency depreciation, but increased 15% YoY in local currency mainly due to higher volume in the cargo terminal, together with an increase in VIP lounges and advertising revenues. By contrast, Commercial Revenues in Armenia increased 31.3%, or $4.2 million, mainly from higher fuel demand and prices.

 

Page 5 of 31 

 

 

§A 25.8%, or $20.0 million, decline in Construction Service revenue mainly reflecting currency depreciation in Argentina, which more than offset higher capital expenditures during the period in the country. Had IAS 29 not been adopted, Construction Service revenue would have declined 27.8%, or $21.6 million, mainly as a result of the Argentine currency depreciation, as explained above.

 

Excluding Construction Service revenue, non-aeronautical revenues would have declined 10.1% YoY to $132.0 million. Had IAS 29 not been applied, Non-aeronautical revenues excluding Construction Service revenue would have declined 12.5% YoY to $128.6 million. 

 

Consolidated Operating Costs and Expenses

During 4Q18, Consolidated Operating Costs and Expenses declined 2.7%, or $8.9 million, to $326.7 million. Had IAS 29 not been applied, Consolidated Operating Costs and Expenses would have declined 9.2%, or $30.8 million YoY, mainly resulting from the effect of currency depreciation against the US dollar and the decline in concession fees in both Argentina and Brazil which more than offset fuel outlays in Armenia.

 

Cost of Services declined 3.5% YoY, or $9.7 million, to $270.5 million. Excluding a one-time $2.8 million benefit in 4Q17 from an adjustment in the concession fee in the Company’s Brazilian airports resulting from an increase in the discount rate used to calculate this fee, Cost of Services would have declined 4.4%, or $12.6 million, reflecting the following variations:

 

§A 26.2%, or $20.3 million, decline in construction service costs, principally due to the currency depreciation in Argentina, as explained above. Had IAS 29 not been applied, construction service costs would have declined 28.3%, or $21.9 million, mainly as a result of a decrease in construction service costs in Argentina of 28.1%, or $19.5 million, benefitting from the currency depreciation, which more than offset higher capex in the period in local currency.
§A 61.6%, or $15.5 million, increase in depreciation and amortization mainly from the impact of IAS 29, as explained above. Had IAS 29 not been applied, depreciation and amortization would have declined 6.7%, or $1.7 million.
§A 13.6%, or $6.8 million, decrease in concession fees (excluding the one-time benefit in Brazil during 4Q17 explained above), in an ‘As reported’ basis, or a decline of 15.0%, or $7.5 million, had IAS 29 not been applied, mainly as a result of an 18.2%, or $5.5 million, drop in Argentina related to the decline in revenues, coupled with a decline of 38.7% YoY, or $3.3 million, in concession fees in Brazil due to the depreciation of the Brazilian real against the US dollar, and the change in the passenger curve by which the concession fee is calculated. By contrast, concession fees increased in Ecuador by 18.8%, or $1.3 million, mainly as a result of the amendment to the concession agreement by which the concession fee increased from 50.25% to 55.25%.
§A 2.5%, or $1.3 million, decrease in salaries principally due to the benefit from the depreciation of the Argentine peso against the US dollar partially offset by the additions made to the employee base to further enhance passenger experience at the airports, and, to a lesser extent, the depreciation of the Brazilian real against the US dollar. Had IAS 29 not been applied, salaries would have declined 4.1%, or $2.2 million.

 

Excluding Construction Service cost and the one-time benefit in 4Q17 as explained above, Cost of Services would have increased by 6.7% YoY, or by $13.4 million, on an ‘As reported’ basis, or 3.1%, or $6.2 million, had IAS 29 not been applied.

 

Selling, General and Administrative Expenses (“SG&A”) remained stable at $54.1 million in 4Q18. In Brazil, SG&A included a $3.1 million write-off related to the redefinition of the commercial expansion project at Brasilia Airport to a lower capital-intensive business model. Excluding this and also a one-time item of $3.9 million in holding company expenses in 4Q17 in connection with CAAP’s Inicial Public Offering expenses, SG&A would have increased 1.7%, or $0.8 million. This increase in SG&A was mainly due to:

§A $3.7 million increase in bad debts, mainly attributed to a charge of $3.5 million in Brazil in relation with a Brazilian carrier’s receivables;
§A 17.2%, or $2.5 million decline in sales taxes, mainly reflecting the reduction of revenues in Argentina and Brazil;
§A 5.5%, or $0.6 million, increase in services and fees, excluding the one-time items explained above, reflecting holding companies charges of $3.0 million, mainly due to a $1.7 million charge in professional fees relating to Corporación América Italia sale to Investment Corporation of Dubai, and $1.0 million higher professional fees in relation to auditing and SOX expenses. This was partially offset by a drop of $2.7 million in marketing support expenses in Italy which in 4Q18 are deducted from Aeronautical revenues due to a change in the advertising agreement, while in 4Q17 were accounted for as SG&A.
§A 17.4%, or $1.7 million decline in salaries and social security contributions, excluding the impact of the one-time event described above, mainly reflecting currency depreciation in Argentina.

 

Had IAS 29 not been applied, SG&A would have declined 1.2%, or $0.7 million. Excluding the one-time items described above, and the impact of IAS 29, SG&A would have increased 0.3%, or $0.2 million.

 

Excluding Construction Service cost and the one-time items in 4Q17 and 4Q18, Total Operating Costs and Expenses would have increased 3.6%, or $9.3 million, to $266.6 million. Had IAS 29 not been applied, Total Operating Costs and Expenses EX-IFRIC12 and the one-time items would have declined 4.3%, or $10.9 million YoY, to $246.3 million.

 

Page 6 of 31 

 

  

Costs and Expenses (in US$ million) 

  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Cost of Services 280.2 249.3 21.2 270.5 -3.5% -11.0%
Salaries and social security contributions 53.5 51.4 0.8 52.2 -2.5% -4.1%
Concession fees 47.0 42.4 0.7 43.1 -8.4% -9.9%
Construction service cost 77.3 55.5 1.6 57.0 -26.2% -28.3%
Maintenance expenses 39.5 38.4 0.8 39.1 -0.9% -2.9%
Amortization and depreciation 25.2 23.5 17.2 40.7 61.6% -6.7%
Other 37.6 38.2 0.1 38.3 1.9% 1.6%
Cost of Services Excluding Construction Service cost 202.8 193.8 19.6 213.4 5.2% -4.5%
Selling, general and administrative expenses 54.1 53.5 0.7 54.1 0.0% -1.2%
Other expenses 1.4 2.1 0.0 2.1 56.5% 56.0%
Total Costs and Expenses 335.7 304.9 21.9 326.7 -2.7% -9.2%
Total Costs and Expenses Excluding Construction Service cost 258.3 249.4 20.3 269.7 4.4% -3.5%

  

Adjusted EBITDA and Adjusted EBITDA excluding Construction Service

Adjusted EBITDA for the fourth quarter of 2018 declined 15.4% YoY to $90.4 million, driven by a decline reported in Argentina while Adjusted EBITDA increased across most other countries of operations. Consolidated Adjusted EBITDA margin contracted 127 bps to 24.4% from 25.7%. Excluding Construction service margin, Adjusted EBITDA margin contracted 276 bps to 28.6%, from 31.4% in 4Q17.

 

Adjusted EBITDA in 4Q17 was impacted by the following one-time items:

 

§$9.4 million provision for uncollected loans in connection with the termination of the Chinchero – Cusco International Airport concession in Peru reported under the “Share of Loss in Associates” line item;

 

§$3.9 million in initial public offering expenses reported under “SG&A”;

 

§$3.1 million gain from the reversal of an impairment loss reported under the “Reversal of Previous Impairment/Impairment Loss” line item in Brazil;

 

§$2.8 million benefit from an adjustment in the concession fee in our Brazilian airports resulting from an increase in the discount rate used to calculate this fee under the “Cost of Services” line item.

 

Adjusted EBITDA in 4Q18 was impacted by a $3.1 million write-off in Brazil, related to the redefinition the commercial expansion project at Brasilia Airport as explained above.

 

Excluding the one-time items in 4Q17 and 4Q18, as explained above, and excluding Construction Service revenues and costs, Adjusted EBITDA would have declined by 18.4%, or $21.0 million, to $92.8 million, mainly due to a $18.4 million decline reported in Argentina. Adjusted EBITDA margin ex-IFRIC and excluding one-time items would have declined 396 bps to 29.6%.

 

Had IAS 29 not been adopted in the quarter, Adjusted EBITDA would have declined 18.6% YoY to $87.0 million, with Adjusted EBITDA margin contracting 170 bps to 24.0% from 25.7%. Excluding both, the impact from IAS 29 and construction service margin, Adjusted EBITDA margin would have contracted 331 bps to 28.1%, from 31.4% in 4Q17.

 

Excluding also the one-time items explained above, Adjusted EBITDA margin would have contracted 448 bps to 29.1% from 33.6% in 4Q17, mainly attributed to Argentina, where Adjusted EBITDA Ex IAS 29 would have declined 26.8%, or $21.8 million, to $59.7 million from $81.5 million in the year-ago quarter, with Adjusted Segment EBITDA margin Ex-IFRIC12 in the country contracting 514 bps. By contrast, Brazil also had an increase of 60.6% YoY, or $1.8 million, when excluding the one-time items mentioned above, with Adjusted EBITDA margin expanding 637 bps YoY, and Adjusted Segment EBITDA in Italy increased 40.3% YoY, or $1.6 million, with Adjusted Segment EBITDA margin Ex-IFRIC12 expanding 526 bps.

 

Page 7 of 31 

 

  

Adjusted EBITDA by Segment (in US$ million) 

  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Argentina 81.5 59.7 3.4 63.1 -22.6% -26.8%
Italy 4.0 5.7 - 5.7 40.3% 40.3%
Brazil 9.0 1.8 - 1.8 -80.0% -80.0%
Uruguay 12.4 13.2 - 13.2 6.7% 6.7%
Armenia 9.5 11.4 - 11.4 20.2% 20.2%
Ecuador 6.6 4.5 - 4.5 -30.8% -30.8%
Unallocated -6.7 -4.4 - -4.4 n.m. n.m.
Perú -9.4 -4.9 - -4.9 n.m. n.m.
Total segment EBITDA 106.9 87.0 3.4 90.4 -15.4% -18.6%

 

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

  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Income from Continuing Operations -5.7 44.0 1.9 46.0 -909.6% -875.3%
Financial Income -9.5 -9.0 -0.1 -9.1 -3.8% -5.3%
Financial Loss 87.8 16.7 -35.9 -19.2 -121.9% -81.0%
Inflation adjustment 0.0 0.7 10.5 11.2 - -
Income Tax Expense 7.1 8.7 9.5 18.2 156.0% 22.3%
Amortization and Depreciation 27.2 25.9 17.5 43.4 59.8% -4.6%
Adjusted EBITDA 106.9 87.0 3.4 90.4 -15.4% -18.6%
Adjusted EBITDA Margin 25.7% 24.0%   24.4% -127 -170
Adjusted EBITDA excluding Construction Service 106.5 86.3 3.4 89.8 -15.7% -18.9%
Adjusted EBITDA Margin excluding Construction Service 31.4% 28.1%   28.6% -276 -331

  

Financial Income and Loss

CAAP reported a Net financial gain of $17.1 million in 4Q18 compared to a loss of $78.3 million in 4Q17. Financial income declined 3.8% to $9.1 million. Had IAS 29 not been applied, Financial income would have been $9.0 million. During 4Q18, CAAP reported a gain under “Financial Loss” of $19.2 million, compared with a loss of $87.8 million in the year-ago quarter, primarily due to the impact of the adoption of IAS 29. Had IAS 29 not been applied, financial loss would have been $16.7 million mainly attributed to the changes in liability from Brazilian concessions of $17.3 million, down $14.5 million YoY, as a result of the currency depreciation along with the impact of lower inflation than in 4Q17 on the net present value of future concession fee payments, partially offset by a foreign exchange gain in Argentina as a result of the appreciation of the peso against the US dollar, in connection with the $400 million AA2000 bond.

 

  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Financial Income 9.5 9.0 0.1 9.1 -3.8% -5.3%
Interest income 8.6 8.4 0.1 8.6 -0.1% -1.8%
Foreign exchange income 0.9 0.0 0.0 0.0 -102.3% -102.3%
Other 0.0 0.6 0.0 0.6 -4939.5% -4939.5%
Financial Loss -87.8 -16.7 35.9 19.2 -121.9% -81.0%
Interest Expenses -23.2 -22.2 -1.7 -23.9 3.1% -4.1%
Foreign exchange transaction expenses -28.6 24.4 37.5 62.0 -316.4% -185.3%
Changes in liability for Brazilian concessions -31.8 -17.3 0.0 -17.3 -45.7% -45.7%
Other expenses -4.2 -1.6 0.0 -1.6 -61.6% -61.6%
Inflation adjustment 0.0 -0.7 -10.5 -11.2 - -
Inflation adjustment 0.0 -0.7 -10.5 -11.2 - -
Financial Results, Net -78.3 -8.4 25.5 17.1 -121.8% -89.3%

 

See “Use of Non-IFRS Financial Measures” on page 19.

 

Page 8 of 31 

 

  

Income Tax Expense

During 4Q18 the Company reported a tax loss of $18.1 million, mainly due to the combination of the reversal of the carryforward loss recorded in 3Q18 in Argentina as a result of foreign exchange gains in the fourth quarter caused by the appreciation of the Argentine peso against the US dollar, partially offset by a loss before income tax in Brazil, principally caused by the change in the fair value of the financial liability related to the Brazilian concessions. This compares with income tax expenses of $7.1 million reported in 4Q17. 

 

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

During 4Q18, CAAP reported Net Income for the Period of $46.0 million compared to a loss of $5.7 million in 4Q17. The main drivers were an increase of $95.4 million in net financial results mainly due to a $70.3 million increase in Argentina in relation with the appreciation of the peso against the US dollar related to the $400 million AA2000 bond, partially offset by the Inflation adjustment loss, together with a $20.6 million in Brazil, mainly due to lower Changes in liabilities for Brazilian concessions, that more than offset a $45.6 million reduction in Revenues, as explained above.

 

During 4Q18, the Company reported a Net Income Attributable to Owners of the Parent of $40.2 million and income per common share of $0.25, compared with a Net Loss Attributable to Owners of the Parent of $3.6 million in 4Q17 equivalent to loss per common share of $0.02 for the same period last year. 

 

Consolidated Financial Position

As of December 31, 2018, cash and cash equivalents amounted to $244.9 million, an 8.6% decline from $267.9 million at September 30, 2018. Total Debt at the close of the year decreased to $1,126.7 million, from $1,152.6 million at September 30, 2018. A total of $663.0 million, or 58.8% of total debt is denominated in U.S. dollars, while 26.6% is denominated in Brazilian reals and 14.4% in Euros.

 

The Net Debt to EBITDA ratio stood at 1.97x at the end of 2018, compared with Net Debt to LTM EBITDA of 2.09x as of September 2018. 

 

Consolidated Debt Indicators (in US$ million)

  As of Dec 31, 2018 As of Sept 30, 2018 As of Dec 31, 2017
Leverage      
Total Debt / LTM Adjusted EBITDA (Times)1,3 2.53x 2.72x 3.22x
Total Net Debt / LTM Adjusted EBITDA (Times) 2,3 1.98x 2.09x 2.74x
Total Debt 1,126.7 1,152.6 1,486.4
Short-Term Debt 98.9 106.8 372.8
Long-Term Debt 1,027.8 1,045.8 1,113.7
Cash & Cash Equivalents 244.9 267.9 221.6
Total Net Debt4 881.8 884.7 1,264.8

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.

 

Page 9 of 31 

 

  

CAPEX

During 4Q18, CAAP made capital expenditures excluding IAS 29, totaling $69.0 million, a 23.2% decrease from $89.9 million in 4Q17, reflecting mainly the currency depreciation in Argentina.

 

The most significant investments in 4Q18 include:

 

§$56.2 million, excluding the impact of IAS 29, invested in Argentina primarily for the construction of the new departures terminal building and the refurbishment and lighting of the runway and apron at Ezeiza Airport, and construction of a new terminal building and the repavement of the runway at Comodoro Rivadavia Airport, the construction of new terminal buildings at Iguazú and Jujuy airports, as well as various capex programs across other airports of the concession;
§$7.1 million invested in Italy, primarily on terminal reconfigurations for higher capacity and Master plan development in Florence Airport; and
§$2.5 million invested in Brazil, primarily from the expansion of the international boarding areas to expand capacity and add new areas for commercial spaces and baggage claim, together with the construction of runway safety areas and engineering projects at Brasilia Airport.

  

Page 10 of 31 

 

  

Review of Segment Results

 

Argentina

CAAP operates 37 airports in Argentina, including the country’s two largest airports, Aeroparque and Ezeiza, with approximately 3.3 million and 2.6 million passengers in 4Q18, respectively. The Company’s main concession in Argentina, AA2000, accounted for approximately 9.8 million passengers, or 49.8%, of CAAP’s 20.3 million total passengers worldwide served during the quarter. 

 

Starting in 3Q18, reported numbers are presented applying Hyperinflation accounting for the Company’s Argentinean subsidiaries, in accordance with IAS 29, as explained above. 

 

Argentina represented 60.5% of the Company’s 4Q18 consolidated revenues and 69.8% of its adjusted EBITDA. Excluding the effect of IAS 29, Argentina would have represented 59.7% of revenues and 68.6% of consolidated Adjusted EBITDA. 

 

The following table presents the impact from Hyperinflation accounting on 4Q18 under the column ‘IAS 29’, while the column “4Q18 ex IAS 29” presents 4Q18 results calculated without the impact from Hyperinflation accounting. The impact of IAS 29 is presented only for AA2000, the Company’s largest subsidiary in Argentina which accounted for 96.3%, 98.9% and 99.1% of passenger traffic, revenues and Adjusted EBITDA of the Argentina segment in 4Q18.

 

 

 

4Q17

4Q18 ex

IAS 29
(Non-IFRS)

IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
OPERATING STATISTICS            
Domestic Passengers (in millions) 6.0 6.7 - 6.7 12.0% 12.0%
International Passengers (in millions) 3.5 3.2 - 3.2 -8.4% -8.4%
Transit Passengers (in millions) 0.4 0.3 - 0.3 -9.0% -9.0%
Total Passengers (in millions) 9.8 10.2 - 10.2 4.0% 4.0%
Cargo Volume (in thousands of tons) 76.6 70.9 - 70.9 -7.4% -7.4%
Total Aircraft Movements (in thousands) 111.9 115.5 - 115.5 3.2% 3.2%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 110.7 100.1 2.7 102.8 -7.1% -9.6%
Non-aeronautical revenue 158.2 116.8 5.0 121.8 -23.0% -26.1%
Commercial revenue 88.8 66.9 3.4 70.3 -20.8% -24.6%
Construction service revenue 69.4 49.9 1.6 51.5 -25.8% -28.1%
Total Revenue 268.9 217.0 7.7 224.6 -16.5% -19.3%
Total Revenue Excluding IFRIC12(1) 199.5 167.0 6.1 173.1 -13.2% -16.3%
Cost of Services 173.1 147.7 21.2 168.9 -2.5% -14.7%
Selling, general and administrative expenses 27.5 21.3 0.7 22.0 -20.1% -22.5%
Other expenses 1.1 0.5 0.0 0.5 -52.1% -52.7%
Total Costs and Expenses 201.8 169.5 21.9 191.4 -5.1% -16.0%
Total Costs and Expenses Excluding IFRIC12(2) 132.4 119.6 20.3 139.9 5.7% -9.6%
Adjusted Segment EBITDA 81.5 59.7 3.4 63.1 -22.6% -26.8%
Adjusted Segment EBITDA Mg 30.3% 27.5% 44.7% 28.1% -222 -281
Adjusted EBITDA Margin excluding IFRIC 12(3) 40.9% 35.7% 56.1% 36.4% -442 -514
Capex 69.9 56.2 9.3 65.6 -6.3% -19.6%

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.

 

Page 11 of 31 

 

  

Passenger Traffic in Argentina rose 4.0% YoY in 4Q18, with domestic traffic increasing 12.0%, partially offset by an 8.4% decline in international traffic reflecting challenging macro conditions in the country together with currency depreciation in the period and a mix-shift from international to domestic traffic.

 

Traffic growth in the quarter was mainly driven by increases of 25.1% at Mendoza Airport and 11.5% at Córdoba Airport, both due to the addition of new routes by low-cost carriers Norwegian and Fly Bondi. Traffic growth was also driven by El Palomar Airport, which began operation in February 2018. By contrast, cargo volume was down 7.4%, reflecting the continued challenging macro environment, while total aircraft movements increased 3.2% during the period.

 

Revenues were down 16.5% YoY, or $44.3 million, to $224.6 million in 4Q18. Excluding the $7.7 million positive impact from IAS 29, revenues would have been $217.0 million, down 19.3% YoY, mainly reflecting lower overall demand in a difficult economic framework and the FX translation effect on local currency revenues from the sharp Argentine peso depreciation that took place earlier in the year, which more than offset higher passenger traffic and aircraft movements. Aeronautical revenue declined 7.1% YoY, or $7.9 million, reflecting a mix-shift from international to domestic traffic and the currency translation effect on the share of local currency denominated revenues, partially offset by a $2.7 million impact of IAS 29. Commercial revenues fell 20.8%, or $18.5 million, as the difficult macro environment resulted in a mix shift from imports to lower-margin exports in cargo activity and lower commercial revenues particularly in duty free shops, together with the impact of the Argentine peso depreciation on the share of local currency denominated revenues, partially offset by a $3.4 million positive impact of IAS 29. Had IAS 29 not been adopted, Aeronautical Revenues would have declined 9.6%, or $10.6 million, while Commercial Revenues would have declined 24.6%, or $21.9 million. Construction Service revenue fell 25.8% YoY, or $17.9 million, mainly reflecting currency depreciation, partially offset by a $1.6 million positive impact from the adoption of IAS 29. Had IAS 29 not been adopted, Construction Service Revenue would have declined 28.1%, or $19.5 million YoY.

 

Excluding construction service revenue, total Argentina revenue in 4Q18 decreased 13.2% YoY to $173.1 million, with a decrease of 16.3%, or $32.5 million, had IAS 29 rule not be adopted in the period.

 

Cost of services declined 2.5% YoY, or $4.3 million, to $168.9 million. Had IAS 29 not been adopted, cost of services would have declined 14.7%, or $25.5 million, primarily due to a decrease of 28.1%, or $19.5 million, in Construction Service costs mainly benefiting from the currency depreciation, a decline of 18.2%, or $5.5 million, in the concession fee, in line with lower revenues, and a reduction of 6.6%, or $1.9 million, in salaries and social security contributions which benefitted from the Argentine peso depreciation partially offset by the additions made to the employee base to further enhance the passenger experience at the airports. This was partly offset by an increase of 26.1% in maintenance expenses, mainly due to higher maintenance works in existing infrastructure and higher tariffs on utilities.

 

SG&A declined by 20.1% YoY, or $5.5 million, to $22.0 million in 4Q18, due to a reduction by 21.0%, or $2.5 million, in turnover taxes, a decrease of 38.5%, or $2.0 million in salaries and social contributions, mainly benefitting from currency depreciation, and a decrease of $1.6 million, in bad debts, reflecting a change in methodology to calculate this charge. This was partially offset by an increase of $1.4 million in advertising expenses, reflecting the launch of a new institutional marketing campaign.

 

Adjusted Segment EBITDA in Argentina declined 22.6%, or $18.4 million, to $63.1 million in 4Q18, with Adjusted Segment EBITDA margin Ex-IFRIC12 down by 442 bps to 36.4%. Had IAS 29 not been adopted, Adjusted Segment EBITDA would have declined 26.8%, or $21.8 million, with Adjusted EBITDA margin EX-IFRIC12 contracting 514 bps to 35.7% in 4Q18.

 

§During 4Q18 CAAP made capital expenditures ex-IAS 29 of $56.2 million invested in Argentina, primarily for the construction of the new departures terminal building at Ezeiza Airport and the refurbishment and lighting of the runway and apron at Ezeiza Airport, and construction of a new terminal building and the repavement of the runway at Comodoro Rivadavia Airport, the construction of new terminal buildings at Iguazú and Jujuy airports, as well as various capex programs across other airports of the concession;

 

The table below presents the impact from IAS 29 applied starting January 1, 2018 on 2018 under the column ‘IAS 29’, while the column “2018 ex IAS 29” presents results for the fiscal year ended December 31, 2018 calculated without the impact from IAS 29. The impact of IAS 29 is presented only for AA2000, the Company’s largest subsidiary in Argentina.

 

Page 12 of 31 

 

 

  YTD17 YTD18 ex
IAS 29
(Non-IFRS)
IAS 29 YTD18 as
reported
% Var as
reported
% Var ex
IAS 29
OPERATING STATISTICS            
Domestic Passengers (in millions) 22.4 25.1 - 25.1 11.9% 11.9%
International Passengers (in millions) 13.6 13.4 - 13.4 -1.1% -1.1%
Transit Passengers (in millions) 1.2 1.3 - 1.3 8.3% 8.3%
Total Passengers (in millions) 37.3 39.8 - 39.8 6.8% 6.8%
Cargo Volume (in thousands of tons) 232.0 240.4 - 240.4 3.6% 3.6%
Total Aircraft Movements (in thousands) 425.9 450.2 - 450.2 5.7% 5.7%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 429.5 426.2 -48.4 377.8 -12.1% -0.8%
Non-aeronautical revenue 569.1 508.8 -63.8 445.0 -21.8% -10.6%
Commercial revenue 338.1 302.0 -33.1 268.8 -20.5% -10.7%
Construction service revenue 231.0 206.8 -30.6 176.1 -23.8% -10.5%
Other revenue 0.0 0.0 0.0 0.0 - -
Total Revenue 998.6 934.9 -112.2 822.7 -17.6% -6.4%
Total Revenue Excluding IFRIC12(1) 767.6 728.1 -81.6 646.6 -15.8% -5.1%
Cost of Services 637.9 587.2 -25.2 562.0 -11.9% -7.9%
Selling, general and administrative expenses 96.9 84.3 -8.9 75.4 -22.1% -13.0%
Other expenses 1.3 1.7 -0.1 1.6 19.3% 29.5%
Total Costs and Expenses 736.1 673.2 -34.2 639.0 -13.2% -8.5%
Total Costs and Expenses Excluding IFRIC12(2) 505.3 466.7 -3.6 463.0 -8.4% -7.6%
Adjusted Segment EBITDA 315.2 310.5 -35.7 274.8 -12.8% -1.5%
Adjusted Segment EBITDA Mg 31.6% 33.2% 31.8% 33.4% 183 164
Adjusted EBITDA Margin excluding IFRIC 12(3) 41.0% 42.6% 43.8% 42.5% 142 157
Capex 232.0 213.3 -36.8 176.5 -23.9% -8.1%

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.

 

Page 13 of 31 

 

 

Italy

Italy represented 9.7% of the Company’s consolidated 4Q18 revenues and 6.5% of its adjusted EBITDA, excluding the effect of IAS 29. CAAP operates two airports in Italy, Aeroporto Galileo Galilei di Pisa (“Pisa Airport”) and Aeroporto di Firenze (“Florence Airport”), with approximately 1.1 million and 0.6 million passengers in 4Q18, respectively. 

 

  4Q18 4Q17 % Var. 2018 2017 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 0.4 0.4 -1.0% 1.8 1.8 -0.7%
International Passengers (in millions) 1.3 1.2 7.2% 6.3 6.1 4.6%
Transit Passengers (in millions) 0.0 0.0 370.3% 0.0 0.0 66.2%
Total Passengers (in millions) 1.7 1.6 5.0% 8.2 7.9 3.4%
Cargo Volume (in thousands of tons) 3.4 2.9 15.0% 11.8 10.8 8.8%
Total Aircraft Movements (in thousands) 16.7 16.2 3.0% 77.3 77.4 0.0%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 21.1 24.3 -13.1% 98.6 106.5 -7.5%
Non-aeronautical revenue 14.0 13.6 2.8% 56.9 48.0 18.6%
Commercial revenue 8.4 7.6 10.1% 36.8 31.9 15.2%
Construction service revenue 4.7 4.9 -3.9% 15.8 13.7 15.5%
Other revenue 0.9 1.1 -19.0% 4.3 2.3 84.5%
Total Revenue 35.1 37.9 -7.4% 155.5 154.5 0.6%
Total Revenue Excluding IFRIC12(1) 30.4 33.0 -7.9% 139.6 140.8 -0.8%
Cost of Services 29.2 29.9 -2.3% 115.1 104.3 10.4%
Selling, general and administrative expenses 3.3 7.1 -52.9% 13.6 30.8 -55.8%
Other expenses 0.0 0.0 - 0.0 0.0 -
Total Costs and Expenses 32.6 37.0 -12.0% 128.7 135.1 -4.7%
Total Costs and Expenses Excluding IFRIC12(1) 28.5 32.4 -12.1% 114.6 122.4 -6.4%
Adjusted Segment EBITDA 5.7 4.0 40.3% 38.8 29.8 30.1%
Adjusted Segment EBITDA Mg 16.1% 10.6% 548 24.9% 19.3% 565
Adjusted EBITDA Margin excluding IFRIC 12(3) 16.6% 11.3% 526 26.5% 20.4% 613
Capex 7.1 7.6 -6.8% 20.3 20.0 1.6%

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 5.0% YoY in 4Q18 driven by growth of 7.2% in international passengers which more than offset a 1% decline in domestic traffic. Cargo volume was up 15.0%, while total aircraft movements increased 3.0% YoY.

 

Revenues in 4Q18 decreased by 7.4% YoY, or $2.8 million, to $35.1 million, principally due a 13.1%, or $3.2 million, decline in aeronautical revenues mainly reflecting marketing expenses which in 4Q18 were deducted from Aeronautical revenues due to a change in the advertising agreement, while in 4Q17 they were included within SG&A. This more than offset the 10.1%, or $0.8 million, increase in commercial revenues mainly reflecting the successful opening of new retail stores and F&B in new areas of the Florence Airport, in line with the strategy of further enhancing the customer experience in this airport along with higher car rental revenues from new areas inaugurated last November.

 

Cost of services declined 2.3%, or $0.7 million, mainly resulting from a reduction of $0.8 million in the provision for risks and maintenance, reflecting easier comps as extraordinary maintenance expenses for electrical and air conditioning systems were made at Florence airport in 4Q17, together with an 11.2%, or $0.5 million, decline in construction service cost due to lower capex in the period and a decline of $0.5 million in other cost of services due to lower provision for legal claims. This was partially offset by an increase of 26.8%, or $1.2 million, in services and fees, reflecting higher audit and legal external fees, porterage and security services, coupled with advertising expenses for an institutional marketing campaign.

 

Page 14 of 31 

 

  

SG&A declined 52.9%, or $3.7 million, to $3.3 million in 4Q18, mainly as a result of marketing support expenses that are recorded under Aeronautical Revenues in 4Q18, due to a change in the advertising agreement, while in 4Q17 they were included within SG&A.

 

Adjusted Segment EBITDA in Italy increased 40.3%, or $1.6 million, to $5.7 million in 4Q18, with Adjusted Segment EBITDA margin expanding 548 basis points to 16.1% in 4Q18 from 10.6% in 4Q17. Excluding construction services, Adjusted Segment EBITDA margin would have increased 526 basis points to 16.6% from 11.3% in 3Q17.

 

During 4Q18 CAAP made capital expenditures for $7.1 million in Italy, primarily on the expansion of the terminal at Pisa Airport and Master plan development in Florence Airport.

 

Page 15 of 31 

 

 

Brazil

Brazil represented 8.6% of the Company’s consolidated 4Q18 revenues and 2.0% of its adjusted EBITDA, excluding IAS 29. CAAP operates two airports in Brazil, Presidente Juscelino Kubitschek International Airport (“Brasilia Airport”) and Airport of São Gonçalo do Amarante (“Natal Airport”) with approximately 4.6 million and 0.6 million passengers in 4Q18, respectively.

 

 

4Q18 4Q17 % Var. 2018 2017 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 3.1 3.0 6.0% 12.2 11.7 4.5%
International Passengers (in millions) 0.1 0.1 -2.0% 0.6 0.5 1.1%
Transit Passengers (in millions) 1.9 2.0 -1.8% 7.5 7.1 5.7%
Total Passengers (in millions) 5.2 5.1 2.7% 20.3 19.4 4.8%
Cargo Volume (in thousands of tons) 18.8 15.1 24.7% 65.9 54.5 20.9%
Total Aircraft Movements (in thousands) 45.9 47.1 -2.5% 184.2 185.2 -0.5%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 15.2 16.7 -8.9% 60.3 66.1 -8.7%
Non-aeronautical revenue 15.9 16.0 -0.6% 62.9 62.7 0.3%
Commercial revenue 15.9 15.9 0.1% 62.9 62.6 0.5%
Construction service revenue 0.0 0.0 - 0.0 0.0 -
Other revenue 0.0 0.1 -100.0% 0.0 0.1 -100.0%
Total Revenue 31.2 32.7 -4.9% 123.2 128.8 -4.3%
Cost of Services 23.7 27.3 -13.0% 103.9 116.2 -10.5%
Selling, general and administrative expenses 8.8 4.1 114.5% 20.2 14.3 41.0%
Other expenses 1.2 -0.6 -297.0% 1.4 1.6 -10.9%
Total Costs and Expenses 33.7 30.8 9.6% 125.6 132.1 -4.9%
Adjusted Segment EBITDA 1.8 9.0 -80.0% 14.8 16.8 -11.8%
Adjusted Segment EBITDA Mg 5.8% 27.4% -2164 12.0% 13.1% -101
Capex 2.5 4.4 -44.3% 8.3 13.6 -39.2%

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 2.7% YoY in 4Q18 driven by a 6.0% increase in domestic traffic reflecting the gradual economic improvement in the country. This was partially offset by a 2.0% decline in international traffic, principally due to the 4.4% drop reported at Brasilia Airport which remains impacted by the new traffic count methodology applied by ANAC since June 2018. This more than offset international traffic growth at this airport resulting from the good performance of daily routes to Miami and Orlando opened by Gol Airlines in November and the addition of a new direct flight to Buenos Aires during December. Based on the prior methodology, international traffic would have increased 14.5% YoY at this airport.

 

Revenues in 4Q18 declined 4.9% YoY, or $1.6 million, reaching $31.2 million, impacted by the 17% depreciation of the Brazilian real during the period. In local currency, however, revenues increased 11.6%. Aeronautical revenues declined by 8.9%, or $1.5 million, but were up 11.5% in local currency, driven by increases of 6.0% in domestic traffic and 5.8% in tariffs at Brasilia Airport starting August 2018. Commercial revenues remained stable at $15.9 million, but posted an 11.7% YoY increase in local currency. This was mainly driven by higher volume at the cargo terminal due to increased volume in pharmaceutical products, an increase in VIP lounge revenues reflecting new agreements with airlines and Bradesco, advertising agreements with new clients, and an increase in food and beverage revenues, mainly due to agreements with new tenants.

 

Cost of services declined 13.0%, or $3.5 million, to $23.7 million. Excluding a one-time $2.8 million benefit in 4Q17 from an adjustment in the concession fee in the Company’s Brazilian airports resulting from an increase in the discount rate used to calculate this fee, cost of services would have declined 21.2%, or $6.4 million, mainly due to the depreciation of the Brazilian real against the US dollar and lower concession fee charges resulting from a change in the passenger curve used to calculate the amortization of the intangible asset introduced in September 2018. This more than offset higher taxes in line with the increase in revenues in local currency.

 

Page 16 of 31 

 

  

SG&A was $8.8 million in 4Q18, up by 114.5%, or $4.7 million YoY. In this quarter, SG&A included a one-time $3.1 million write-off related to the TJK project due to the redefinition of the commercial expansion project at the Brasilia Airport. In addition, SG&A in 4Q18 was impacted by a $3.5 million increase in bad debts, mainly attributed to a Brazilian carrier’s receivables. This more than offset the depreciation of the Brazilian real against the US dollar.

 

Adjusted Segment EBITDA in Brazil declined by 80% YoY to $1.8 million in 4Q18, from $9.0 million in 4Q17. Adjusted EBITDA in 4Q17 benefitted from a $3.1 million gain from the reversal of an impairment loss at Natal Airport and a $2.8 million gain from an adjustment in the concession fee, as explained above. Adjusted EBITDA in 4Q18 was negatively impacted by a $3.1 million write off in connection with the redefinition of TJK project. Excluding the one-time items in 4Q17 and 4Q18, Adjusted EBITDA in Brazil would have increased 60.6%, or $1.8 million, mainly reflecting the reduction in the concession fee amount, as described above. Adjusted EBITDA margin excluding one-time items would have increased 637 bps to 15.6%.

 

During 4Q18 CAAP made capital expenditures of $2.5 million in Brazil, primarily for the expansion of the international boarding areas, together with the construction of runway safety areas and engineering projects at Brasilia Airport. 

 

Page 17 of 31 

 

  

Awards & Recognitions

Brasilia Airport, Brazil

Brasília International Airport was elected by passengers as the best air terminal in the country in 2018 for the second consecutive year.

The “Airports + Brazil” award presented by the Ministry of Infrastructure recognized Brasilia Airport as the best in Brazil among airports with an annual flow of over 15 million passengers.

 

Guayaquil Airport, Ecuador

On March 9, 2019 the Guayaquil Airport received from Airports Council International (ACI) World the 2018 Airport Service Quality Departures Award for Best Airport by Size and Region among airports in Latin America and the Caribbean with annual passenger traffic of between two to five million. ACI’s Airport Service Quality Award, recognizes those airports around the world that deliver the best customer experience in the opinion of their own passengers. This is the world’s leading airport passenger service and benchmarking program measuring passengers’ satisfaction across 37 key performance indicators. Three quarters of the world’s 100 busiest airports are part of the ASQ program which means that, in 2018, more than half of the world's 8.3 billion passengers through an ASQ airport.

 

Key Events for the Quarter

On November 12, 2018, El Palomar was categorized as an international airport.

In preparation for the operation of international routes, the Company finalized the terminal extension and modernization adding 1,113 square meters which included facilities for the operation of international flights, arrival and boarding areas, new baggage conveyor belts and check-in counters, as well as the extension of airplane parking areas.

  

Subsequent Events

Corporación América Airports S.A. announces the appointment of a new Board Chairman.

On February 28, 2019, the Company announced that Mr. Eduardo Eurnekian submitted his resignation as Board Chairman and Board Member of the Company on February 26, 2019, effective immediately. Mr. Eduardo Eurnekian, 86 years old and founder of Corporación América Group, will continue with his other business ventures as well as philanthropic activities. Mr. Máximo Luis Bomchil, a current Director, was appointed Board Chairman of Corporación América Airports effective February 28, 2019. The Board has also appointed Mr. Daniel Marx as new member of the Board of the Company also effective as of that date.

 

Toscana Aeroporti on the Conclusion of the Works of the Service Conference Regarding the 2014-2029 Florence Airport Master Plan

On February 6, 2019, Toscana Aeroporti announced the favorable conclusion of the works of the Service Conference establishing the urban development compliance of the Florence Airport Master Plan. The construction of a new 2,400-metre runway and a new terminal will provide the City of Florence and all of Tuscany with strategic infrastructure to meet unsatisfied traffic demand in the region and overcome the structural limits of the current runway. This infrastructure will be sustainably integrated into the local area and will also have a significant economic impact in terms of direct and indirect new jobs.

 

Corporación América Airports Announces Extension of the Punta del Este Airport Concession Agreement

On April 4, 2019, CAAP announced that the Uruguayan Executive Power approved the amendment of the concession agreement (the “Punta del Este Concession Agreement”) with CAAP’s fully-owned subsidiary Consorcio Aeropuertos Internacionales S.A. (“CAISA”), which operates and maintains the Punta del Este Airport in the city of Maldonado, by Punta del Este, Uruguay, and authorized the Ministry of Defense to grant the modification of the aforementioned contract. The amendment includes the extension of the term of the Punta del Este Concession Agreement for a fourteen–year period from 2019 through 2033. Terms of the Punta del Este Concession Agreement extension also include a minimum annual concession fee of $500,000 and CAISA’s commitment to make incremental capital expenditures of over US$35.0 million, including the construction of a new general aviation terminal building, repaving of runways and taxiways, remodeling of boarding areas and a new VIP lounge, together with implementation of technology and innovation to improve the passenger experience.

  

Hyperinflation Accounting in Argentina

Following the categorization of Argentina as a country with a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance with IFRS. Consequently, starting July 1, 2018, the Company reports results of its Argentinean subsidiaries applying IFRS rule IAS 29. IAS 29 requires that results of operations in hyperinflationary economies are reported as if these economies were highly inflationary as of January 1, 2018, and thus year-to-date results should be restated adjusting for the change in general purchasing power of the local currency, using official indices, before converting the local amounts at the closing rate of the period (i.e. December 31, 2018 closing rate for 2018 results). For comparison purposes, the impact of adopting IAS 29 in Aeropuertos Argentina 2000 (“AA2000”), the Company’s largest subsidiary in Argentina which accounted for 96.3%, 99.3% and 99.1% of passenger traffic, revenues and Adjusted EBITDA, of the Argentina segment in 4Q18, is presented separately in each of the applicable sections of this earnings release, in a column denominated “IAS 29”. In 4Q18, the application of IAS 29 has resulted in a positive impact of $9.4 million on CAAP’s revenue and of $1.9 million on its Adjusted EBITDA. For 2018, CAAP is reporting negative impacts of $110.9 million on revenue and of $31.8 million on Adjusted EBITDA from the application of IAS 29.

 

Page 18 of 31 

 

  

The 4Q18 IAS 29 adjustment results from the combined effect of: (i) the indexation to reflect changes in purchasing power on 4Q18 results against a dedicated line in the financial results, and (ii) the difference between the translation of 4Q18 results at the closing exchange rate of December 31, 2018 and the translation using the average year-to-date rate on the reported period, as applicable to non-inflationary economies. Furthermore, IAS 29 requires adjusting for cumulative inflation the non-monetary assets and liabilities on the balance sheet of operations in hyperinflationary economies. The resulting effect from the adjustment until December 31, 2017 is included in Equity and, from this date on, in a dedicated account in the financial results, reporting deferred taxes on such adjustments, when applicable. During 4Q18, the impact of Hyperinflation Accounting in accordance with the IFRS rules, resulted in: (i) a negative $0.7 million adjustment reported under financial loss, (ii) a negative impact on Operating Income of $14.1 million, and (iii) a positive impact on EPS of $0.18. 

 

4Q18 EARNINGS CONFERENCE CALL

 

When:9:00 a.m. Eastern time, April 11, 2019

 

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/caap190411.html

 

Replay:Participants can access the replay through April 18, 2019 by dialing:

 

1-877-344-7529 (U.S. domestic) and 1-412-317-0088 (international). Replay ID: 10129952.

 

Use of Non-IFRS Financial Measures

 

This announcement includes certain references to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA excluding Construction Service and Adjusted EBITDA Margin excluding Construction service, as well as Net Debt:

 

Adjusted EBITDA is defined as income for the period before financial income, financial loss, income tax expense, depreciation and amortization.

 

Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues.

 

Adjusted EBITDA excluding Construction Service (“Adjusted EBITDA ex-IFRIC”) is defined as income for the period before construction services revenue and cost, financial income, financial loss, income tax expense, depreciation and amortization.

 

Adjusted EBITDA Margin excluding Construction Service (“Adjusted EBITDA Margin ex-IFRIC12”) excludes the effect of IFRIC 12 with respect to the construction or improvements to concessioned assets and is calculated by dividing Adjusted EBITDA excluding Construction Service revenue and cost, by total revenues less Construction service revenue.

 

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA excluding Construction Service and Adjusted EBITDA Margin excluding Construction Service are not measures recognized under IFRS and should not be considered as an alternative to, or more meaningful than, consolidated net income for the year as determined in accordance with IFRS or as indicators of our operating performance from continuing operations. Accordingly, readers are cautioned not to place undue reliance on this information and should note that these measures as calculated by the Company, may differ materially from similarly titled measures reported by other companies. We believe that the presentation of Adjusted EBITDA and Adjusted EBITDA excluding Construction Service enhances an investor’s understanding of our performance and are useful for investors to assess our operating performance by excluding certain items that we believe are not representative of our core business. In addition, Adjusted EBITDA and Adjusted EBITDA excluding Construction Service are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods, capital structure or income taxes and construction services (when applicable).

 

Net debt is calculated by deducting “Cash and cash equivalents” from total financial debt.

 

Figures ex-IAS 29 result from dividing nominal Argentine pesos for the Argentine Segment, by the average foreign exchange rate of the Argentine Peso against the US Dollar. Percentage variations ex-IAS 29 figures compare results as presented in the prior year quarter before IAS 29 came into effect, against ex-IAS 29 results for this quarter as described above. For comparison purposes the impact of adopting IAS 29 in Aeropuertos Argentina 2000, the Company’s largest subsidiary in Argentina of the Argentina segment in 4Q18, is presented separately in each of the applicable sections of this earnings release, in a column denominated “IAS 29”. The impact from “Hyperinflation Accounting in Argentina” is described in more detail page 18 of this report. 

 

Page 19 of 31 

 

  

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 2018, Corporación América Airports served 81.3 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 annual report on Form 20-F for the year ended December 31, 2017 and any of CAAP’s other applicable filings with the Securities and Exchange Commission 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 20 of 31 

 

 

— Operational & Financial Tables Follow –

 

Operating Statistics by Segment: Traffic, Cargo and Aircraft Movement

  4Q18 4Q17 % Var. YTD18 YTD17 % Var.
Argentina            
Domestic Passengers (in millions) 6.7 6.0 12.0% 25.1 22.4 11.7%
International Passengers (in millions) 3.2 3.5 -8.4% 13.4 13.6 -1.2%
Transit passengers (in millions) 0.3 0.4 -9.0% 1.3 1.2 8.0%
Total passengers (in millions) 10.2 9.8 4.0% 39.8 37.3 6.9%
Cargo volume (in thousands of tons) 70.9 76.6 -7.4% 240.4 232.0 3.6%
Aircraft movements (in thousands) 115.5 111.9 3.2% 450.2 425.9 5.7%
Italy            
Domestic Passengers (in millions) 0.4 0.4 -1.0% 1.8 1.8 -0.7%
International Passengers (in millions) 1.3 1.2 7.2% 6.3 6.1 4.6%
Transit passengers (in millions) 0.0 0.0 370.3% 0.0 0.0 66.2%
Total passengers (in millions) 1.7 1.6 5.0% 8.2 7.9 3.4%
Cargo volume (in thousands of tons) 3.4 2.9 15.0% 11.8 10.8 8.8%
Aircraft movements (in thousands) 16.7 16.2 3.0% 77.3 77.4 0.0%
Brazil            
Domestic Passengers (in millions) 3.1 3.0 6.0% 12.2 11.7 4.5%
International Passengers (in millions) 0.1 0.1 -2.0% 0.6 0.5 1.1%
Transit passengers (in millions) 1.9 2.0 -1.8% 7.5 7.1 5.7%
Total passengers (in millions) 5.2 5.1 2.7% 20.3 19.4 4.8%
Cargo volume (in thousands of tons) 18.8 15.1 24.7% 65.9 54.5 20.9%
Aircraft movements (in thousands) 45.9 47.1 -2.5% 184.2 185.2 -0.5%
Uruguay            
Domestic Passengers (in millions) 0.0 0.0 -62.6% 0.0 0.0 -25.0%
International Passengers (in millions) 0.6 0.6 -2.7% 2.3 2.3 0.3%
Transit passengers (in millions) 0.0 0.0 26.8% 0.0 0.0 -28.3%
Total passengers (in millions) 0.6 0.6 -2.7% 2.3 2.3 0.1%
Cargo volume (in thousands of tons) 7.8 8.2 -4.2% 27.5 28.2 -2.5%
Aircraft movements (in thousands) 8.3 9.0 -8.0% 33.5 33.6 -0.5%
Ecuador(1)            
Domestic Passengers (in millions) 0.6 0.5 5.6% 2.4 2.2 8.2%
International Passengers (in millions) 0.5 0.4 8.6% 2.0 1.9 5.1%
Transit passengers (in millions) 0.0 0.0 30.1% 0.1 0.1 8.3%
Total passengers (in millions) 1.1 1.0 7.3% 4.4 4.1 6.8%
Cargo volume (in thousands of tons) 11.5 11.8 -2.6% 41.8 37.1 12.7%
Aircraft movements (in thousands) 20.8 18.2 14.3% 79.6 78.2 1.7%
Armenia            
Domestic Passengers (in millions) 0.0 0.0 - 0.0 0.0 -
International Passengers (in millions) 0.7 0.6 11.6% 2.9 2.6 11.9%
Transit passengers (in millions) 0.0 0.0 - 0.0 0.0 -
Total passengers (in millions) 0.7 0.6 11.6% 2.9 2.6 11.9%
Cargo volume (in thousands of tons) 4.9 5.1 -4.7% 17.9 22.2 -19.5%
Aircraft movements (in thousands) 6.1 6.0 2.1% 24.1 22.0 9.7%
Peru(2)            
Domestic Passengers (in millions) 0.8 0.8 1.6% 3.4 3.1 11.0%
International Passengers (in millions) 0.0 0.0 n.m. 0.0 0.0 517.2%
Transit passengers (in millions) 0.0 0.0 - 0.0 0.0 -
Total passengers (in millions) 0.8 0.8 1.6% 3.4 3.1 11.0%
Cargo volume (in thousands of tons) 1.3 1.3 -4.0% 4.9 5.0 -3.0%
Aircraft movements (in thousands) 7.3 8.1 -9.3% 31.6 29.0 9.2%

(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 21 of 31 

 

 

Foreign Exchange Rate

Country 4Q18 4Q17 4Q18 4Q17 3Q18 3Q17 3Q18 3Q17 2Q18 2Q17 2Q18 2Q17 1Q18 1Q17 1Q18 1Q17
  Avg Avg EoP EoP Avg Avg EoP EoP Avg Avg EoP EoP Avg Avg EoP EoP
Argentine Peso 37.19 17.55 37.70 18.65 31.96 17.29 41.25 17.31 23.58 15.75 28.85 16.60 19.68 15.68 20.15 15.39
Euro 0.88 0.85 0.87 0.83 0.86 0.85 0.86 0.85 0.84 0.89 0.86 0.88 0.81 0.94 0.81 0.94
Brazilian Real 3.81 3.25 3.87 3.31 3.96 3.15 4.00 3.17 3.61 3.21 3.86 3.31 3.24 3.14 3.32 3.17

Amounts provided by units of local currency per US dollar

 

Aeronautical Breakdown (in US$ million)      
  4Q17

4Q18 ex

IAS 29
(Non-IFRS)

IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Aeronautical Revenue 191.9 178.6 2.7 181.2 -5.6% -7.0%
Passenger use fees 148.7 139.7 2.3 142.1 -4.4% -6.0%
Aircraft fees 34.6 31.1 0.4 31.5 -9.0% -10.0%
Other 8.6 7.7 0.0 7.7 -11.1% -11.1%

 

Commercial Revenue Breakdown (in US$ million)      
  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Commercial revenue 145.8 127.7 3.4 131.1 -10.0% -12.4%
Warehouse use fees 47.6 44.7 1.1 45.8 -3.9% -6.2%
Duty free shops 17.6 12.0 0.2 12.2 -30.7% -31.7%
Rental of space (including hangars) 9.8 9.7 0.1 9.8 0.2% -0.9%
Parking facilities 10.7 7.2 0.1 7.4 -31.3% -32.5%
Fuel 10.1 16.4 0.1 16.5 63.6% 63.0%
Food and beverage services 4.9 5.0 0.1 5.2 4.8% 2.1%
Advertising 6.9 5.0 0.7 5.7 -17.1% -27.1%
Services and retail stores 5.7 4.0 0.0 4.1 -28.5% -29.3%
Catering 5.8 2.7 0.1 2.8 -51.1% -52.4%
VIP lounges 6.7 7.3 0.4 7.7 15.0% 9.6%
Walkway services 1.1 2.2 0.0 2.2 98.4% 94.2%
Other   18.8 11.3 0.5 11.8 -37.3% -39.9%

 

Revenue Breakdown (in US$ million)      
  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Aeronautical Revenue 767.0 764.6 -48.4 716.2 -6.6% -0.3%
Non-aeronautical Revenue 808.1 773.8 -63.8 710.0 -12.1% -4.2%
Commercial revenue 555.5 540.1 -33.1 507.0 -8.7% -2.8%
Construction service revenue (1) 250.1 229.1 -30.6 198.4 -20.7% -8.4%
Other revenue 2.5 4.5 0.0 4.5 81.7% 81.7%
Total Consolidated Revenue 1,575.2 1,538.3 -112.2 1,426.1 -9.5% -2.3%
Total Revenue excluding Construction Service revenue (2) 1,325.1 1,309.3 -81.6 1,227.7 -7.3% -1.2%

 

Page 22 of 31 

 

 

Revenues by Segment (in US$ million) 

Country 2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Argentina 998.6 934.9 -112.2 822.7 -17.6% -6.4%
Italy 154.5 155.5   155.5 0.7% 0.7%
Brazil 128.8 123.2   123.2 -4.3% -4.3%
Uruguay 110.1 116.3   116.3 5.6% 5.6%
Armenia 94.5 118.4   118.4 25.3% 25.3%
Ecuador (1) 85.3 89.2   89.2 4.6% 4.6%
Unallocated 3.4 0.8   0.8 -75.3% -75.3%
Total consolidated revenue (2) 1,575.2 1,538.3 -112.2 1,426.1 -9.5% -2.3%

 

Aeronautical Breakdown (in US$ million)      
  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Aeronautical Revenue 767.0 764.6 -48.4 716.2 -6.6% -0.3%
Passenger use fees 586.4 598.7 -42.4 556.3 -5.1% 2.1%
Aircraft fees 133.7 129.7 -6.0 123.7 -7.5% -3.0%
Other 47.0 36.2 0.0 36.2 -23.0% -23.0%
             
Commercial Revenue Breakdown (in US$ million)      
  2017

2018 ex

IAS 29
(Non-IFRS)

IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Commercial revenue 555.5 540.1 -33.1 507.0 -8.7% -2.8%
Warehouse use fees 190.9 182.8 -17.1 165.7 -13.2% -4.3%
Duty free shops 68.1 59.3 -4.0 55.3 -18.9% -13.0%
Rental of space (including hangars) 35.5 35.8 -1.3 34.5 -2.8% 0.9%
Parking facilities 43.3 36.6 -2.7 33.9 -21.7% -15.4%
Fuel 40.9 58.7 -0.7 57.9 41.7% 43.5%
Food and beverage services 26.4 25.2 -1.1 24.1 -8.9% -4.6%
Advertising 23.1 20.0 -0.1 19.9 -13.7% -13.3%
Services and retail stores 18.7 17.4 -0.4 17.0 -9.5% -7.2%
Catering 16.5 13.0 -1.4 11.6 -29.6% -21.4%
VIP lounges 21.4 25.9 -0.6 25.4 18.4% 21.1%
Walkway services 9.6 9.3 -0.8 8.4 -12.2% -3.4%
Other   61.2 56.3 -2.8 53.5 -12.5% -7.9%

  

Page 23 of 31 

 

 

Total Expenses Breakdown (in US$ million)      
  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Cost of services 280.2 249.3 21.2 270.5 -3.5% -11.0%
Selling, general and administrative expenses 54.1 53.5 0.7 54.1 0.0% -1.2%
Financial loss 87.8 16.7 -35.9 -19.2 -121.9% -81.0%
Inflation adjustment 0.0 0.7 10.5 11.2 - -
Other expenses 1.4 2.1 0.0 2.1 56.5% 56.0%
Income tax expense 7.1 8.7 9.5 18.2 156.0% 22.3%
Total expenses 430.5 330.9 6.0 336.9 -21.7% -23.1%
             

 Cost of Services (in US$ million)

     
  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Cost of Services 280.2 249.3 21.2 270.5 -3.5% -11.0%
Salaries and social security contributions 53.5 51.4 0.8 52.2 -2.5% -4.1%
Concession fees 47.0 42.4 0.7 43.1 -8.4% -9.9%
Construction service cost 77.3 55.5 1.6 57.0 -26.2% -28.3%
Maintenance expenses 39.5 38.4 0.8 39.1 -0.9% -2.9%
Amortization and depreciation 25.2 23.5 17.2 40.7 61.6% -6.7%
Services and fees 15.9 15.8 0.2 16.1 1.1% -0.5%
Cost of fuel 8.6 11.2 0.0 11.2 29.3% 29.3%
Taxes 5.4 4.7 0.1 4.7 -13.0% -14.1%
Office expenses 4.3 3.1 -0.2 2.8 -33.3% -28.0%
Provision for maintenance cost 1.0 0.2 0.0 0.2 -75.3% -75.3%
Others 2.4 3.2 0.0 3.3 37.8% 37.0%
             

 Selling, General and Administrative Expenses  (in US$ million)

   
  4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
SG&A 54.1 53.5 0.7 54.1 0.0% -1.2%
Taxes 14.4 11.7 0.2 11.9 -17.2% -18.8%
Salaries and social security contributions 9.7 8.9 0.0 8.8 -9.0% -8.5%
Services and fees 15.5 14.6 0.0 14.5 -6.4% -6.1%
Office expenses 3.1 3.0 0.1 3.2 2.2% -1.1%
Amortization and depreciation 2.0 2.4 0.3 2.7 36.8% 22.0%
Maintenance expenses 1.9 1.0 0.0 1.0 -46.5% -48.4%
Advertising 0.9 2.3 0.0 2.3 144.3% 140.1%
Insurances 0.9 0.4 0.0 0.4 -52.7% -52.4%
Charter services 0.2 0.2 0.0 0.2 -7.9% -7.9%
Bad debts recovery 0.0 -0.6 0.0 -0.6 n.m. n.m.
Bad debts 3.6 7.4 0.0 7.4 103.6% 102.7%
Others 1.8 2.2 0.0 2.2 18.5% 18.3%

 

Page 24 of 31 

 

 

Expenses by Segment (in US$ million)            
Country 4Q17 4Q18 ex
IAS 29
(Non-IFRS)
IAS 29 4Q18 as
reported
% Var as
reported
% Var ex
IAS 29
Argentina 201.8 169.5 21.9 191.4 -5.1% -16.0%
Italy 37.0 32.6 0.0 32.6 -12.0% -12.0%
Brazil 30.8 33.7 0.0 33.7 9.6% 9.6%
Uruguay 17.0 17.0 0.0 17.0 0.2% 0.2%
Armenia 20.9 22.9 0.0 22.9 9.4% 9.4%
Ecuador 15.8 19.2 0.0 19.2 21.7% 21.7%
Unallocated 12.4 9.9 0.0 9.9 -20.4% -20.4%
Total consolidated expenses (1) (2) 335.7 304.8 21.9 326.7 -2.7% -9.2%
(1)Excludes income tax and financial loss
(2)We account for the results of operations of ECOGAL and AAP using the equity method

 

Consolidated Operating Costs and Expenses (in US$ million)

  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Cost of Services 1,030.0 996.6 -25.2 971.4 -5.7% -3.2%
Salaries and social security contributions 210.8 201.6 -10.6 191.1 -9.4% -4.3%
Concession fees 191.9 183.8 -12.4 171.4 -10.7% -4.2%
Construction service cost 248.6 227.0 -30.6 196.3 -21.0% -8.7%
Maintenance expenses 145.8 142.4 -11.4 131.0 -10.2% -2.3%
Amortization and depreciation 100.7 98.1 43.7 141.8 40.8% -2.6%
Other 132.2 143.8 -3.9 139.8 5.8% 8.8%
Cost of Services Excluding Construction Service cost 781.4 769.7 5.4 775.1 -0.8% -1.5%
Selling, general and administrative expenses 194.2 180.8 -8.9 171.9 -11.5% -6.9%
Other expenses 4.8 4.2 -0.1 4.1 -15.5% -12.8%
Total Costs and Expenses 1,229.0 1,181.6 -34.2 1,147.4 -6.6% -3.9%
Total Costs and Expenses Excluding Construction Service cost 980.4 954.7 -3.6 951.0 -3.0% -2.6%

 

Total Expenses Breakdown (in US$ million)      
  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Cost of services 1,030.0 996.6 -25.2 971.4 -5.7% -3.2%
Selling, general and administrative expenses 194.2 180.8 -8.9 171.9 -11.5% -6.9%
Financial loss 302.0 499.8 -168.7 331.1 9.6% 65.5%
Inflation adjustment 0.0 0.9 35.6 36.5 - -
Other expenses 4.8 4.2 -0.1 4.1 -15.5% -12.8%
Income tax expense 46.9 -11.7 25.8 14.1 -69.9% -124.9%
Total expenses 1,578.0 1,670.6 -141.5 1,529.1 -3.1% 5.9%
             
Page 25 of 31 

 

 

Cost of Services (in US$ million)            
  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Cost of Services 1,030.0 996.6 -25.2 971.4 -5.7% -3.2%
Salaries and social security contributions 210.8 201.6 -10.6 191.1 -9.4% -4.3%
Concession fees 191.9 183.8 -12.4 171.4 -10.7% -4.2%
Construction service cost 248.6 227.0 -30.6 196.3 -21.0% -8.7%
Maintenance expenses 145.8 142.4 -11.4 131.0 -10.2% -2.3%
Amortization and depreciation 100.7 98.1 43.7 141.8 40.8% -2.6%
Services and fees 54.5 60.8 -1.9 58.8 8.0% 11.5%
Cost of fuel 27.8 38.9 0.0 38.9 40.0% 40.0%
Taxes 19.5 18.0 -0.2 17.7 -9.1% -7.9%
Office expenses 17.3 13.1 -1.5 11.6 -33.0% -24.3%
Provision for maintenance cost 2.3 2.1 0.0 2.1 -9.0% -9.0%
Others 10.8 10.9 -0.3 10.7 -1.1% 1.3%
             
Expenses by Segment (in US$ million)            
Country 2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Argentina 736.1 673.2 -34.2 639.0 -13.2% -8.5%
Italy 135.1 128.7   128.7 -4.7% -4.7%
Brazil 132.1 125.6   125.6 -4.9% -4.9%
Uruguay 66.5 70.5   70.5 6.0% 6.0%
Armenia 65.0 81.8   81.8 25.9% 25.9%
Ecuador 63.9 69.2   69.2 8.3% 8.3%
Unallocated 30.3 32.5   32.5 7.1% 7.1%
Total consolidated expenses (1) (2) 1,229.0 1,181.6 -34.2 1,147.4 -6.6% -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

 

Financial Income and Loss (in US$ million)

  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Financial Income 62.6 112.1 -35.8 76.3 21.9% 79.2%
Interest income 39.2 28.3 -1.1 27.2 -30.7% -27.8%
Foreign exchange income 23.1 80.9 -34.7 46.2 99.8% 250.0%
Other 0.2 2.9 0.0 2.9 1265.1% 1265.1%
Financial Loss -302.0 -499.8 168.7 -331.1 9.6% 65.5%
Interest Expenses -115.2 -89.6 -6.7 -96.3 -16.4% -22.3%
Foreign exchange transaction expenses -82.3 -313.0 175.4 -137.6 67.1% 280.2%
Changes in liability for Brazilian concessions -98.1 -86.3 0.0 -86.3 -12.0% -12.0%
Other expenses -6.4 -10.9 0.0 -10.9 71.4% 71.4%
Inflation adjustment 0.0 -0.9 -35.6 -36.5 - -
Financial Loss, Net -239.5 -388.6 97.2 -291.3 21.6% 62.3%

 

Page 26 of 31 

 

 

Adjusted EBITDA by segment (in US$ million)

  12M17 12M18 ex
IAS 29
(Non-IFRS)
IAS 29 12M18 as
reported
% Var as
reported
% Var ex
IAS 29
Argentina 315.2 310.5 -35.7 274.8 -12.8% -1.5%
Italy 29.8 38.8   38.8 30.1% 30.1%
Brazil 16.8 14.8   14.8 -11.7% -11.7%
Uruguay 55.2 57.8   57.8 4.7% 4.7%
Armenia 41.2 48.8   48.8 18.6% 18.6%
Ecuador 26.5 24.7   24.7 -6.8% -6.8%
Unallocated -7.8 -8.5   -8.5 n.m. n.m.
Perú -15.3 -5.3   -5.3 n.m. n.m.
Total segment EBITDA 461.6 481.6 -35.7 445.9 -3.4% 4.3%

 

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

  2017 2018 ex
IAS 29
(Non-IFRS)
IAS 29 2018 as
reported
% Var as
reported
% Var ex
IAS 29
Income from Continuing Operations 66.9 -2.0 -8.6 -10.6 -115.8% -103.0%
Financial Income -62.6 -112.1 35.8 -76.3 21.9% 79.2%
Financial Loss 302.0 499.8 -168.7 331.1 9.6% 65.5%
Inflation adjustment 0.0 0.9 35.6 36.5 - -
Income Tax Expense 46.9 -11.7 25.8 14.1 -69.9% -124.9%
Amortization and Depreciation 108.3 106.7 44.3 151.0 39.5% -1.5%
Adjusted EBITDA 461.6 481.6 -35.7 445.9 -3.4% 4.3%
Adjusted EBITDA Margin 29.3% 31.3%   31.3% 196 200
Adjusted EBITDA excluding Construction Service 460.1 479.5 -35.7 443.8 -3.5% 4.2%
Adjusted EBITDA Margin excluding Construction Service 34.7% 36.6%   36.1% 143 190

 

Selected Income Statement Data (in US$ million)

  4Q18 4Q17 % Var. 2018 2017 % Var.
Argentina (3)            
Total Revenue(3) 224.6 268.9 -16.5% 822.7 998.6 -17.6%
Total Revenue excluding Construction service revenue(1) (3) 173.1 199.5 -13.2% 646.6 767.6 -15.8%
Operating Income(3) 37.5 73.8 -49.1% 199.6 283.1 -29.5%
Adjusted Segment EBITDA(3) 63.1 81.5 -22.6% 274.8 315.2 -12.8%
Adjusted Segment EBITDA Mg(3) 28.1% 30.3% -222 33.4% 31.6% 183
Adjusted EBITDA Margin excluding Construction service(1) (3) 36.4% 40.9% -442 42.5% 41.0% 142
Italy            
Total Revenue 35.1 37.9 -7.4% 155.5 154.5 0.6%
Total Revenue excluding Construction service revenue(1) 30.4 33.0 -7.9% 139.6 140.8 -0.8%
Operating Income 2.5 0.9 182.1% 26.8 19.5 37.6%
Adjusted Segment EBITDA 5.7 4.0 40.3% 38.8 29.8 30.1%
Adjusted Segment EBITDA Mg 16.1% 10.6% 548 24.9% 19.3% 565
Adjusted EBITDA Margin excluding Construction service(1) 16.6% 11.3% 526 26.5% 20.4% 614
Brazil            
Total Revenue 31.2 32.7 -4.9% 123.2 128.8 -4.3%
Operating Income -1.2 5.0 -122.9% -0.2 -0.2 -35.4%
Adjusted segment EBITDA 1.8 9.0 -80.0% 14.8 16.8 -11.8%
Adjusted Segment EBITDA Mg 5.8% 27.4% -2164 12.0% 13.1% -101
Uruguay            
Total Revenue 27.0 26.0 3.8% 116.3 110.1 5.6%
Total Revenue excluding Construction service revenue(1) 26.8 25.0 7.0% 115.6 107.4 7.7%
Operating Income 10.0 9.0 10.8% 44.1 42.1 4.8%
Adjusted Segment EBITDA 13.2 12.4 6.7% 57.8 55.2 4.7%
Adjusted Segment EBITDA Mg 48.9% 47.5% 132 49.7% 50.1% -46
Adjusted EBITDA Margin excluding Construction service(1) 49.2% 49.3% -14 50.0% 51.4% -143
Ecuador            
Total Revenue 21.9 20.8 5.1% 89.2 85.3 4.6%
Operating Income 3.4 4.7 -27.3% 18.7 19.1 -1.9%
Adjusted segment EBITDA 4.5 6.6 -30.8% 24.7 26.5 -6.8%
Adjusted Segment EBITDA Mg 20.7% 31.5% -1075 27.7% 31.0% -337
Armenia            
Total Revenue 31.1 27.4 13.2% 118.4 94.5 25.3%
Total Revenue excluding Construction service revenue(1) 29.8 25.1 18.8% 112.7 92.0 22.5%
Operating Income 8.2 6.6 24.9% 36.7 29.7 23.7%
Adjusted Segment EBITDA 11.4 9.5 20.2% 48.8 41.2 18.6%
Adjusted Segment EBITDA Mg 36.6% 34.5% 213 41.2% 43.5% -230
Adjusted EBITDA Margin excluding Construction service(1) 38.2% 37.7% 43 43.3% 44.7%                    -142
Unallocated            
Total revenue 0.2 2.8 -92.4% 0.8 3.4 -75.3%
Operating income -8.6 -10.3 -15.9% -26.8 -24.1 11.4%
Adjusted segment EBITDA -4.4 -6.7 -35.3% -8.5 -7.8 9.0%
Adjusted Segment EBITDA Mg N/A N/A N/A N/A N/A N/A

1 Excludes Construction Service revenue. 

2 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. 

3 Starting in 3Q18, reported numbers are presented applying Hyperinflation accounting for our Argentinean subsidiaries, in accordance with IAS 29, as explained above. Please refer to Review of Segments – Argentina to see the effect of this rule in our Argentinean subsidiaries.

 

Page 27 of 31 

 

 

Operating Statistics by Airport: Traffic, Cargo and Aircraft Movements

  Domestic Passenger Traffic
(in thousands)
International Passenger Traffic
(in thousands)
Transit Passengers
(in thousands)
Total Passenger Traffic
(in thousands)
Cargo volume
(in tons)
Aircraft movements
  4Q'18 4Q'17 % Var. 4Q'18 4Q'17 % Var. 4Q'18 4Q'17 % Var. 4Q'18 4Q'17 % Var. 4Q'18 4Q'17 % Var. 4Q'18 4Q'17 % Var.
Argentina                                    
Aeroparque (1) 2,723 2,676 2% 411 799 -49% 192 220 -13% 3,326 3,695 -10% 367 585 -37% 31,864 34,768 -8%
Bariloche 367 292 26% 0 0 11% 4 8 -56% 371 301 23% 109 86 26% 3,331 2,856 17%
Catamarca 17 17 0% 0 0 25% 0 4 -96% 17 21 -18% 31 51 -39% 564 638 -12%
C. Rivadavia 183 170 7% 0 0 -100% 0 0 -93% 183 171 7% 295 194 53% 2,676 2,515 6%
Córdoba 622 517 20% 199 231 -14% 41 26 59% 862 773 11% 443 442 0% 8,368 7,656 9%
El Palomar (2) 265 0 - 4 0 - 0 0 - 269 0 - 0 0 - 2,222 0 -
Esquel 13 15 -16% 0 0 -100% 0 0 12% 13 15 -16% 0 0 - 214 258 -17%
Ezeiza (1) 200 204 -2% 2,352 2,247 5% 50 53 -7% 2,602 2,505 4% 66,952 70,703 -5% 19,799 17,399 14%
Formosa 21 27 -20% 0 0 -100% 0 0 - 21 27 -21% 26 36 -27% 347 522 -34%
General Pico 1 1 -18% 0 0 - 0 0 - 1 1 -18% 0 0 - 1,086 1,288 -16%
Iguazú 349 282 24% 0 0 287% 0 0 -97% 349 282 24% 0 0 - 2,916 2,585 13%
Jujuy 96 73 32% 0 0 -39% 4 1 337% 100 73 35% 29 28 4% 1,220 973 25%
La Rioja 18 19 -5% 0 0 - 0 4 -87% 18 22 -18% 34 57 -41% 490 535 -8%
Malargüe 0 0 -5% 0 0 - 0 0 -100% 0 0 -18% 0 0 - 19 54 -65%
Mar del Plata 105 78 35% 0 0 -56% 4 2 70% 109 80 36% 22 26 -15% 2,434 2,059 18%
Mendoza 403 319 26% 156 127 22% 5 4 5% 564 451 25% 330 413 -20% 6,006 4,933 22%
Parana 17 38 -56% 0 0 -98% 0 0 -95% 17 39 -56% 0 0 - 567 1,078 -47%
Posadas 80 58 39% 0 0 24% 0 0 -100% 80 58 38% 90 100 -10% 1,124 847 33%
Pto Madryn 28 27 4% 0 0 - 0 0 80% 28 27 4% 0 0 -100% 233 240 -3%
Reconquista 6 1 501% 0 0 -15% 0 0 -41% 6 1 480% 0 0 - 691 532 30%
Resistencia 75 90 -16% 0 0 24% 0 0 -46% 76 90 -16% 106 112 -6% 1,140 1,183 -4%
Río Cuarto 9 18 -48% 0 0 - 0 0 -62% 9 18 -48% 7 5 39% 238 462 -48%
Río Gallegos 66 67 -1% 0 0 -82% 1 1 -23% 67 68 -1% 130 160 -19% 854 1,048 -19%
Río Grande 37 39 -6% 0 0 25% 0 0 - 37 39 -6% 43 74 -42% 568 739 -23%
Salta 294 277 6% 15 17 -10% 3 5 -44% 312 298 5% 272 363 -25% 3,185 2,970 7%
San Fernando 6 9 -31% 5 6 -17% 0 0 - 11 15 -26% 0 0 - 11,095 11,597 -4%
San Juan 47 61 -23% 0 9 -99% 0 0 48% 47 70 -32% 0 0 - 606 747 -19%
San Luis 22 24 -7% 0 0 - 0 0 - 22 24 -7% 23 0 - 354 456 -22%
San Rafael 13 13 -5% 0 0 - 0 0 - 13 13 -5% 0 0 - 1,897 1,162 63%
Santa Rosa 12 14 -12% 0 0 - 0 0 96% 12 14 -11% 1 0 - 792 950 -17%
Santiago del Estero 36 25 42% 0 0 - 0 0 - 36 25 42% 46 62 -26% 736 437 68%
Tucumán 202 187 8% 22 19 19% 8 2 231% 232 208 12% 1,218 2,645 -54% 2,202 2,122 4%
Viedma 9 11 -18% 0 0 - 0 1 -100% 9 12 -25% 0 0 - 175 253 -31%
Villa Mercedes 0 0 -87% 0 0 - 0 0 133% 0 0 -85% 0 0 - 262 241 9%
Termas de Río Hondo 2 6 -62% 0 0 33% 0 0 - 2 6 -61% 0 3 -83% 70 148 -53%
Bahia Blanca 92 108 -15% 0 0 - 6 8 -19% 98 116 -15% 75 116 -35% 1,470 1,698 -13%
Neuquén 271 229 19% 7 8 -14% 1 9 -93% 279 246 14% 256 342 -25% 3,672 3,917 -6%
Total Argentina 6,706 5,990 12% 3,172 3,463 -8% 319 351 -9% 10,198 9,804 4% 70,906 76,603 -7% 115,487 111,866 3%
                                     
Italy                                    
Pisa 344 344 0% 780 702 11% 1 0 424% 1,125 1,046 8% 3,333 2,890 15% 8,976 8,480 6%
Florence 92 96 -4% 502 494 2% 0 0 -21% 594 590 1% 53 54 -1% 7,696 7,700 0%
Total Italy 436 440 -1% 1,282 1,196 7% 1 0 370% 1,719 1,637 5% 3,387 2,944 15% 16,672 16,180 3%
                                     
Brazil                                    
Brasilia 2,522 2,393 5% 120 125 -4% 1,931 1,967 -2% 4,572 4,485 2% 14,568 11,790 24% 40,894 42,370 -3%
Natal 627 578 8% 22 19 14% 0 0 - 649 598 9% 4,212 3,268 29% 4,992 4,686 7%
Total Brazil 3,149 2,971 6% 142 144 -2% 1,931 1,967 -2% 5,222 5,083 3% 18,780 15,057 25% 45,886 47,056 -2%
                                     
Uruguay                                    
Carrasco 0 0 -50% 517 527 -2% 2 1 26% 519 529 -2% 7,824 8,164 -4% 6,034 6,235 -3%
Punta del Este 0 0 -90% 42 47 -12% 0 0 - 42 47 -12% 0 0 - 2,271 2,791 -19%
Total Uruguay 0 1 -63% 559 574 -3% 2 1 27% 561 576 -3% 7,824 8,164 -4% 8,305 9,026 -8%
                                     
Ecuador                                    
Guayaquil 452 426 6% 484 446 9% 17 13 30% 953 885 8% 10,204 11,000 -7% 19,284 16,673 16%
Galapagos 126 121 4% 0 0 - 0 0 - 126 121 4% 1,279 784 63% 1,473 1,484 -1%
Total Ecuador 578 547 6% 484 446 9% 17 13 30% 1,079 1,006 7% 11,483 11,784 -3% 20,757 18,157 14%
                                     
Armenia                                    
Zvartnots 0 0 - 667 595 12% 0 0 - 667 595 12% 4,903 5,144 -5% 5,875 5,710 3%
Shirak 0 0 - 38 37 4% 0 0 - 38 37 4% 0 1 -100% 237 279 -15%
Total Armenia 0 0 - 705 632 12% 0 0 - 705 632 12% 4,903 5,145 -5% 6,112 5,989 2%
                                     
Peru                                    
Arequipa 479 473 1% 1 0 3471% 0 0 - 480 473 1% 579 629 -8% 3,628 3,899 -7%
Juliaca 126 112 13% 0 0 - 0 0 - 126 112 13% 230 257 -11% 1,126 966 17%
Puerto Maldonado 79 77 4% 0 0 - 0 0 - 79 77 4% 184 204 -10% 734 938 -22%
Tacna 109 113 -3% 0 0 - 0 0 - 109 113 -3% 227 219 4% 940 1,196 -21%
Ayacucho 54 60