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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 November, 2019

 

Commission File Number: 001-38354

 

 

 

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): ¨

 

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): ¨

 

 

 

 

 

 

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: November 22, 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 November 22, 2019 - Corporación América Airports S.A. Announces 3Q19 results.

 

 

 

 

 

 

 

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

 

 

CORPORACION AMERICA AIRPORTS ANNOUNCES 3Q19 RESULTS

Passenger traffic up 1.4% with growth of 7.8% YoY in Argentina, 16.6% in Armenia and 5.5% in Peru, despite declines in Brazil, Ecuador, Italy and Uruguay

 

Luxembourg, November 22, 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 nine- month periods ended September 30, 2019. Financial results are expressed in millions of U.S. dollars and are prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”) as issued by the International Accounting Standards Board.

 

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 19.

 

Third Quarter 2019 Highlights

§Consolidated revenues of $417.1 million, up 19.9% YoY. Excluding the impact of IFRS rule IAS 29, revenues increased 12.6% to $438.0, mainly due to higher construction service revenue in Argentina reflecting higher capex in the period.
§Performance of key operating metrics:

§Passenger traffic up 1.4% YoY to 22.5 million
§Cargo volume increased 4.1% to 98.6 thousand tons
§Aircraft movements declined 2.3% to 225.7 thousand

§Operating Income declined 29.0% YoY, to $61.8 from $87.0, mainly impacted by a bad debt provision of $23.1 in Argentina and the impact of IAS 29. The operating margin contracted to 14.8% from 25.0% in 3Q18
§Adjusted EBITDA was $99.9 million, down 18.5% YoY, with Adjusted EBITDA margin Ex-IFRIC12 contracting 812 bps to 32.3%. Excluding, the bad debt provision recorded in Argentina, Adjusted EBITDA would have been $125.2 million

§Ex-IAS 29, Adjusted EBITDA declined 25.5% YoY, to $102.1 million, and Adjusted EBITDA margin Ex-IFRIC12 contracted 898 bps to 31.7%. Excluding, the bad debt provision recorded in Argentina, the Adjusted EBITDA margin Ex-IFRIC12 would have been 38.9%

 

CEO Message

Commenting on third quarter 2019 results, Mr. Martín Eurnekian, CEO of Corporación América Airports, noted: “We continue to navigate unfavorable market conditions, particularly in Argentina, our largest market, and to a lesser extent in Brazil, which impacted our performance in this quarter. Over 22 million passengers travelled through our 52 airports in 3Q19, up over 1% year-on-year, reflecting 4% and 3% growth in domestic and international traffic, respectively, partially offset by a double-digit decline in transit passengers. Traffic at our Brazilian airports continued to be impacted by the cessation of operations of Avianca Brasil.

 

In Argentina, we continue to experience a mix shift towards more affordable domestic traffic and weaker commercial revenues. Profitability in this market was also impacted by a $23.1 million bad debt provision recorded this quarter related to past due commercial revenues and aircraft fees accumulated for over a year from a local airline.

 

Despite these challenges, and excluding this bad debt charge, comparable Adjusted EBITDA margin Ex-IFRIC12 was at 39%.

 

Looking ahead, while we face complex macroeconomic dynamics and low visibility in Argentina, we continue advancing on our investment program to capture additional growth when the economy picks up. In Brazil, we remain focused on adding new domestic and international routes to gradually restore Avianca Brasil’s former capacity at Brasilia Airport. In Italy, we expect to deliver positive traffic growth this year and have begun works at Pisa Airport as we continue to monitor the evolution of Alitalia and the development of Brexit.

 

In sum, while in the near term we continue to face several headwinds, principally in Argentina and Brazil, we have a successful track record of operating in Argentina for over two decades in different macro cycles. Our resilient business model with over 80% of revenues generated in US dollars is further supported by a solid balance sheet. This provides flexibility as we move ahead in the execution of our investment projects to further expand and modernize our airport network to meet growing demand when the macro environment improves.

  

 

 

 

Operating & Financial Highlights

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

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Passenger Traffic (Million Passengers) (1) 22.5 22.2 1.4%   22.5 22.2 1.4%
Revenue 417.1 348.0 19.9% -20.9 438.0 388.9 12.6%
Aeronautical Revenues 184.8 177.1 4.4% -7.5 192.4 196.0 -1.9%
Non-Aeronautical Revenues 232.3 170.9 35.9% -13.4 245.7 192.8 27.4%
Revenue excluding construction service 308.8 302.4 2.1% -11.9 320.8 335.3 -4.3%
Operating Income 61.8 87.0 -29.0% -14.8 76.6 109.7 -30.2%
Operating Margin 14.8% 25.0% -1020 - 17.5% 28.2% -1073
Net (Loss) / Income Attributable to Owners of the Parent -24.6 -15.2 61.9% 0.6 -25.2 -26.9 -6.3%
EPS (US$) -0.15 -0.09 61.9% 0.00 -0.16 -0.17 -6.3%
Adjusted EBITDA 99.9 122.5 -18.5% -2.2 102.1 137.0 -25.5%
Adjusted EBITDA Margin 23.9% 35.2% -1,126 - 23.3% 35.2%            -1,191
Adjusted EBITDA Margin excluding Construction Service 32.3% 40.4% -812 - 31.7% 40.7%                -898
Net Debt to LTM EBITDA 2.14 2.09 514 - - - -

Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.

1)Preliminary data on 750 flights in August and 873 flights in September at Brasilia Airport, due to delays in the submission of information by third parties

 

Operating & Financial Highlights

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

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Passenger Traffic (Million Passengers) (1) 32.2 29.6 8.9% - 32.2 29.6 8.9%
Revenue          1,129.2             947.2 19.2%              -78.6          1,207.8          1,175.5 2.7%
Aeronautical Revenues             530.0             485.3 9.2%              -33.0             563.0             586.5 -4.0%
Non-Aeronautical Revenues             599.2             461.9 29.7%              -45.6             644.8             589.0 9.5%
Revenue excluding construction service             880.3             829.0 6.2%              -52.2             932.4          1,002.6 -7.0%
Operating Income             202.8             217.9 -6.9%              -55.8             258.5             313.4 -17.5%
Operating Margin 18.0% 23.0% -505 0.0% 21.4% 26.7% -529
Net (Loss) / Income Attributable to Owners of the Parent                42.8              -26.7 -260.4%                 -9.9                52.7              -23.1 -328.1%
EPS (US$) 0.27 -0.17 -258.1% -0.06 0.33 -0.15 -320.5%
Adjusted EBITDA             317.1             317.3 -0.1%              -20.1             337.1             394.8 -14.6%
Adjusted EBITDA Margin 28.1% 33.5% -542 - 27.9% 33.6%                -568
Adjusted EBITDA Margin excluding Construction Service 35.8% 38.1% -227 - 36.0% 39.2%                -322
Net Debt to LTM EBITDA 2.14 2.09 513.79 - - - -

Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.

2)Preliminary data on 750 flights in August and 873 flights in September at Brasilia Airport, due to delays in the submission of information by third parties

 

 

 

 

Operating Performance

 

Passenger Traffic

Total passenger traffic increased 1.4% YoY to 22.5 million, principally driven by YoY increases of 7.8% in Argentina and 16.6% in Armenia, which contributed an additional 0.8 and 0.2 million passengers, respectively, and was partially offset by traffic declines in Brazil, Ecuador, Italy and Uruguay.

 

Traffic dynamics in Argentina remained impacted by the challenging macro environment and the 58.2% quarterly average currency depreciation, resulting in slower growth in overall travel demand and a mix-shift from international to domestic traffic. Domestic traffic growth slowed to 10.3% from 22.1% in the previous quarter, while international traffic increased 0.9%, a slight recovery from the previous downward trend. During the quarter, Air Europa started a new flight connecting Iguazú Airport with Madrid, Spain, via Asunción, Paraguay. Moreover, Norwegian Air Argentina started new domestic routes to Ushuaia and Jujuy operated from Aeroparque Airport, further enhancing connectivity in the country. Furthermore, low-cost carrier Flybondi added a new international route to Rio de Janeiro, Brazil, with three weekly flights, which started operations in October.

 

Traffic in Italy declined 1.2% YoY, mainly due to a drop of 3.0% at Pisa Airport, reflecting the reduction of operations by Pobeda, which suspended the route to Saint Petersburg and decreased frequencies to Moscow, together with a reduction of flights by Ryanair and British Airways early in the quarter. This was partially offset by an increase of 3.0% at Florence Airport, reflecting additional flights to Paris, France, by Air France, additional routes by Vueling to four new destinations, and, to a lesser extent, additional flights to Madrid, Spain, by Iberia. During the quarter, Ryanair opened new routes to Brussels, Belgium, and Prague, Czech Republic at Pisa Airport, while low cost carrier Vueling inaugurated new international routes at Florence airport, with five weekly flights to Munich, Germany, four weekly flights to Prague, Czech Republic, two weekly flights to Bilbao, Spain, and a daily flight to Vienna, Austria.

 

In Brazil, estimated figures are disclosed given delays in the submission of information for 1,623 flights out of a total of 40,914 flights, due to information systems transition by third parties. Passenger traffic declined 11.8% YoY, mainly impacted by the cessation of operations by Avianca Brasil. Domestic and transit traffic declined 8.4% and 19.2% respectively, offset by a 22.1% increase in international traffic, according to the new traffic count methodology applied by ANAC since June 2018. Based on the prior methodology, international traffic would have increased 40.5% YoY at Brasilia airport. In addition, during September Gol started additional domestic routes from Brasilia airport to São José do Rio Preto, Araguaína and Barreiras, in partnership with Passaredo, in line with its strategy to expand operations at Brasilia Airport. Importantly, LATAM Airlines started executing its international network expansion at Brasilia Airport, with the opening of the route to Santiago de Chile, Chile, during October 2019, and the route to Lima, Perú during November, while the route to Asunción, Paraguay is expected to start in December.

 

Passenger traffic in Uruguay declined 2.8% YoY, mainly reflecting the cancellation of Avianca Colombia’s daily route to Bogotá, Colombia. However, Avianca has indicated that it will restore this route next December, with four weekly flights. Traffic also reflects lower passenger traffic from Argentina due to weak macro conditions, which was partially offset by the addition of two more frequencies to Madrid, Spain, by Iberia, during July 2019.

 

In Armenia, passenger traffic increased 16.6% YoY mainly due to the addition of several new routes and frequencies during 2018 and 2019, and the good performance of Azimuth Airlines’ flights to Russian destinations, together with Ural Airlines’ and Nordwind Airlines’ additional flights to Moscow, Russia. In Ecuador, traffic declined 4.0% reflecting the closure of the airport during September weekends, due to the renovation of the runway and taxiways, which offset incremental passenger traffic from the new flights by Jet Blue and Aeroméxico started earlier this year. Of note, Aeroméxico discontinued this route starting October 2019. In addition, Plus Ultra opened a new route to Madrid, Spain, during July 2019 and low-cost carrier Wingo Airlines started a new flight to Bogotá, Colombia, during August. Moreover, during October Interjet started daily routes to Ciudad de México and to Cancún, Mexico, while Iberia announced a new route to Madrid, Spain, starting in December. In Peru, passenger traffic increased 5.5% YoY.

 

Domestic passenger traffic, which accounted for 56.6% of total traffic, increased 3.5% YoY principally driven by growth of 10.3%, or 0.7 million passengers in Argentina, which more than offset the 8.4% decline in Brazil. International passenger traffic, which represented 34.2% of total traffic, posted growth of 2.6% in the period, as increases of 16.6% in Armenia, 0.9% in Argentina and 22.1% in Brazil more than offset declines of 0.6% in Italy and 2.9% in Uruguay.

 

Cargo Volume

Cargo volume increased 4.1% YoY in 3Q19 mainly as a result of higher cargo volume in Brazil and Argentina, which more than offset lower cargo in Ecuador.

 

Aircraft Movements

Total aircraft movements declined 2.3% YoY, reflecting declines of 13.2% in Brazil, 4.0% in Ecuador and 11.6% in Uruguay, partially offset by growth of 27.9% in Armenia and 0.6% in Argentina.

 

Tables with detailed passenger traffic, cargo volume and aircraft movement information for each airport can be found on page 23 of this report.

 

 

 

 

Operational Statistics: Passenger Traffic, Cargo Volume and Aircraft Movements

 

  3Q19 3Q18 % Var.
Domestic Passengers (in millions) 12.7 12.3 3.5%
International Passengers (in millions) 7.7 7.5 2.6%
Transit Passengers (in millions) 2.1 2.4 -13.1%
Total Passengers (in millions) 22.5 22.2 1.4%
Cargo Volume (in thousands of tons) 98.6 94.8 4.1%
Total Aircraft Movements (in thousands) 225.7 231.1 -2.3%

 

Passenger Traffic Breakdown   Cargo       Aircraft Movements  
Country 3Q19 3Q18 % Var.   3Q19 3Q18 % Var.   3Q19 3Q18 % Var.
  (in millions)     (in thousands of tons)     (in thousands)
Argentina 11.4 10.5 7.8%   53.5 52.4 2.1%   116.1 115.4 0.6%
Italy 2.7 2.7 -1.2%   3.1 2.7 13.8%   24.9 24.7 0.7%
Brazil(3) 4.7 5.3 -11.8%   21.0 17.4 20.9%   40.9 47.1 -13.2%
Uruguay 0.5 0.5 -2.8%   6.0 6.2 -1.8%   6.3 7.1 -11.6%
Ecuador (1) 1.2 1.2 -4.0%   8.2 9.8 -15.9%   20.0 20.8 -3.7%
Armenia 1.1 0.9 16.6%   5.4 5.2 4.8%   9.0 7.1 27.9%
Peru (2) 1.0 1.0 5.5%   1.4 1.2 13.2%   8.4 8.8 -4.9%
TOTAL 22.5 22.2 1.4%   98.6 94.8 4.1%   225.7 231.1 -2.3%
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.
3)Preliminary data on 750 flights in August and 873 flights in September at Brasilia Airport, due to delays in the submission of information by third parties

 

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 19.

 

Revenues

Consolidated Revenues increased 19.9% YoY, or $69.1 million, to $417.1 million in 3Q19, while consolidated revenues excluding the impact of IAS 29 would have increased 12.6%, or $49.2 million, to $438.0 million. Excluding IAS29, in Argentina, revenues increased 18.9% mainly reflecting higher construction service revenues as a result of significant capex in the period, which more than offset lower aeronautical and commercial revenues. In Ecuador, revenues increased 31.6% YoY, or $7.5 million, mainly due to higher construction service revenues. Growth of 11.5%, or $4.3 million, in Armenia resulted from higher fuel demand and prices, together with higher passenger traffic. By contrast, in Italy, revenues declined 8.7%, or $4.1 million, reflecting lower construction service revenues coupled with the impact of the depreciation of the euro against the US dollar. In Brazil, revenues declined 4.3%, or $1.3 million, due to lower passenger traffic and aircraft movements, coupled with a decline in commercial revenues mainly reflecting lower advertising, F&B and parking revenues.

 

Revenues in Argentina increased 18.9% YoY, or $42.2 million excluding IAS29 mainly reflecting a $57.4 million increase in construction service revenue reflecting higher capex in the period. This was partially offset by: i) a 16.6% decline in commercial revenues, mainly due to lower cargo revenues from the drop in higher-margin imports together with lower Duty Free revenues from the decline in international traffic and overall lower demand, and ii) a 2.8% decline in aeronautical revenues due to a continued mix-shift from international to domestic traffic which is linked to the local currency depreciation. Revenues were also negatively impacted by the FX translation effect on local currency revenues resulting from the 58.2% Argentine peso average depreciation in the period, which more than offset higher overall passenger traffic.

 

Revenues in Italy declined 8.7% YoY reflecting lower construction service revenues in the period. Excluding IFRIC 12, revenues in Italy declined 2.5% to $41.2 million, primarily reflecting the 4.5% average depreciation of the Euro against the US dollar in the period. In local currency, however, revenues excluding IFRIC 12 increased 1.9%, mainly due to the positive results from commercial initiatives, and increases in passenger fees which offset the decline in passenger traffic.

 

 

 

 

In Brazil, revenues declined 4.3%, or $1.3 million, due to the 11.8% decline in passenger traffic reflecting the cessation of operations of Avianca Brasil, coupled with lower advertising, F&B and parking revenues, partially offset by the increase of international traffic and higher revenues from VIP lounges.

 

Revenues in Uruguay increased 1.9%, or $0.5 million, to $28.0, mainly due to a $1.5 million increase in construction service revenue reflecting higher capex in the period, which more than offset declines of 3.7% and 3.8% in aeronautical and commercial revenues, respectively. These declines were driven by lower passenger traffic in the period, combined with lower revenues from Duty Free shops due to lower passenger traffic and demand, and lower Parking revenues, reflecting currency depreciation.

 

In Armenia, revenues increased 11.5% YoY mainly driven by higher fuel demand and prices, together with higher aeronautical revenues in the period due to increase in passenger traffic, partially offset by the FX currency translation impact from the 4.5% average depreciation of the euro against the US dollar. Revenues in Ecuador increased 31.6% YoY as a result of higher construction service revenues, and, to a lesser extent, higher international traffic in the period coupled with the increase in aeronautical fees starting January 1, 2019.

 

Excluding construction services, consolidated revenues would have increased 2.1% YoY to $308.8 million on an ‘As Reported’ basis, but declined 4.3% to $320.8 million when also excluding the impact of IAS 29.

 

Revenues by Segment (in US$ million)

 

Country

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Argentina 244.7 182.6 34.0% -20.9 265.7 223.5 18.9%
Italy 42.6 46.7 -8.7% - 42.6 46.7 -8.7%
Brazil 28.4 29.7 -4.3% - 28.4 29.7 -4.3%
Uruguay 28.0 27.4 1.9% - 28.0 27.4 1.9%
Armenia 41.9 37.6 11.5% - 41.9 37.6 11.5%
Ecuador (1) 31.3 23.7 31.6% - 31.3 23.7 31.6%
Unallocated 0.2 0.2 -17.7% - 0.2 0.2 -17.7%
Total consolidated revenue (2) 417.1 348.0 19.9% -20.9 438.0 388.9 12.6%

1 Only includes Guayaquil Airport.

2 Excluding Construction Service revenue, ‘As reported’ revenues increase 4.0% YoY in Argentina, 11.0% in Armenia and 1.1% in Ecuador, but declined 2.5% in Italy and 3.7% in Uruguay.

 

Revenue Breakdown (in US$ million)

 

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Aeronautical Revenue 184.8 177.1 4.4% -7.5 192.4 196.0 -1.9%
Non-aeronautical Revenue 232.3 170.9 35.9% -13.4 245.7 192.8 27.4%
Commercial revenue 123.3 124.7 -1.1% -4.4 127.7 138.6 -7.9%
Construction service revenue (1) 108.2 45.6 137.4% -9.0 117.3 53.6 118.7%
Other revenue 0.7 0.6 25.3% 0.0 0.7 0.6 25.3%
Total Consolidated Revenue 417.1 348.0 19.9% -20.9 438.0 388.9 12.6%
Total Revenue excluding Construction Service revenue (2) 308.8 302.4 2.1% -11.9 320.8 335.3 -4.3%

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

2 Excludes Construction Service revenue.

 

Aeronautical revenue accounted for 44.3% of total revenues and increased 4.4% YoY to $184.8 million. Had IAS 29 not been applied, Aeronautical Revenues would have decreased 1.9% YoY, or $3.7 million, mainly reflecting declines of:

 

·3.4%, or $2.8 million, in Argentina as a result of the currency translation effect on domestic traffic from the 58.2% average currency depreciation in the period and the mix-shift from international to domestic traffic.

 

 

 

 

·4.2%, or $1.3 million, in Italy, impacted by the 4.5% quarterly average depreciation of the Euro against the US dollar. In local currency, however, aeronautical revenue remained flat reflecting the increase in passenger fees which offset the 1.2% decline in passenger traffic in the period and lower handling revenues.

 

·5.2%, or $0.8 million in Brazil, reflecting the decline in passenger traffic, partially offset by a 40% increase in higher-margin international traffic.

 

By contrast, aeronautical revenues in Armenia increased 9.0% YoY, or $1.4 million, primarily driven by growth in international passenger traffic at Zvartnots Airport, which more than offset the depreciation of the Euro against the US dollar.

  

Non-Aeronautical revenues accounted for 55.7% of total revenues, and increased 35.9% YoY, or $61.4 million, to $232.3 million. Had IAS 29 not been applied, Non-aeronautical revenues would have increased 27.4% YoY, or $52.8 million, mainly driven by:

 

§A $63.6 million, increase in Construction Service revenue, to $117.3 mainly reflecting investments of $103.7 million in Argentina, and investments in Ecuador and Armenia of $7.2 million and $2.7 million, respectively.

 

§A 7.9%, or $11.0 million, decline in Commercial Revenues, to $127.7 million, mainly reflecting a decline of 16.6%, or $12.4 million, in Argentina as a result of lower cargo imports due to macro conditions, lower passenger demand, particularly in duty free, and the FX translation effect on domestic revenues from the Argentine peso depreciation. In addition, Brazil reported a 3.5%, or $0.5 million, decline in Commercial Revenues impacted by lower advertising, F&B and parking revenues, which more than offset higher VIP lounges revenues. By contrast, Commercial Revenues in Armenia increased 12.6%, or $2.4 million, mainly from higher fuel demand and prices, and increased overall commercial demand due to higher passenger traffic. In Italy, revenues remained flat due to the currency depreciation, although posted a 4.8% increase in local currency.

 

Excluding Construction Service revenue, non-aeronautical revenues would have declined 1.0% YoY to $124.0 million. Had IAS 29 not been applied, Non-aeronautical revenues excluding Construction Service revenue would have declined 7.8% YoY to $128.4 million.

 

Operating Costs and Expenses

During 3Q19, Operating Costs and Expenses increased 35.4% YoY, or $93.8 million, to $359.1 million. Had IAS 29 not been applied, Consolidated Operating Costs and Expenses would have increased 28.5% YoY, or $81.1 million, to $365.5 million, mainly reflecting higher construction service costs from capital investments in Argentina, Ecuador and Uruguay, coupled with a $23.1 million bad debt charge in Argentina, and, to a lesser extent, higher fuel costs in Armenia, which more than offset the decline in concession fees in both Argentina and Brazil.

 

Cost of Services rose 32.9% YoY, or $75.0 million, to $302.8 million. Excluding the IAS 29 impact in Argentina, Cost of services would have increased 25.8% YoY, or $62.6 million, reflecting the following increases:

 

§A $63.8 million, increase in construction service costs, primarily due to an increase in Argentina of 122.6%, or $57.3 million, and, to a lower degree, increases of $7.3 million and $1.5 million in Ecuador and Uruguay, respectively, reflecting higher capex in the period, partially offset by a $2.8 million decline in Italy.

 

§An 11.5%, or $1.4 million, increase in cost of fuel sold, reflecting higher fuel demand and prices in Armenia.

 

This more than offset a decline of 6.7%, or $3.1 million, in concession fees, mainly the result of a 8.1%, or $2.1 million, drop in Argentina related to the decline in revenues, and a decline of 16.9%, or $1.1 million, in concession fees in Brazil reflecting the impact of the change in the passenger curve by which the concession fee is calculated.

 

Excluding Construction Service cost, Cost of Services would have declined 6.7% YoY, or $12.2 million, to $194.8. When also excluding the impact of IAS29, Cost of services would have declined 0.6%, or $1.2 million.

 

Selling, General and Administrative Expenses (“SG&A”) increased 51.5% YoY, or $18.9 million, to $55.6 million in 3Q19 on an ‘As reported’ basis, and 46.4%, or $18.8 million, when excluding the impact of IAS 29, primarily reflecting a $23.1 million bad debt charge recorded in Argentina, in relation with over-an-year accumulated past due commercial revenues and aircraft fees from a local airline. This more than offset a $1.8 million decline in taxes, mainly resulting from lower sales taxes due to the decline in revenues in Argentina.

 

Excluding Construction Service cost, Operating Costs and Expenses would have increased 14.1%, or $31.0 million, to $251.2 million. Had IAS 29 not been applied, comparable Operating Costs and Expenses Ex-IFRIC12 would have increased 7.5%, or $17.4 million YoY, to $248.5 million.

 

 

 

 

Costs and Expenses (in US$ million)

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Cost of Services 302.8 227.8 32.9% -2.6 305.4 242.8 25.8%
Salaries and social security contributions 45.8 43.1 6.5% -1.7 47.5 47.2 0.8%
Concession fees 41.4 41.5 -0.2% -1.8 43.3 46.4 -6.7%
Construction service cost 108.0 45.2 139.0% -9.0 117.0 53.2 119.9%
Maintenance expenses 29.8 27.5 8.6% -2.3 32.2 32.0 0.4%
Amortization and depreciation 36.1 32.7 10.2% 12.4 23.7 24.5 -3.6%
Other 41.6 37.8 9.9% -0.2 41.8 39.5 5.8%
Cost of Services Excluding Construction Service cost 194.8 182.6 6.7% 6.4 188.4 189.6 -0.6%
Selling, general and administrative expenses 55.6 36.7 51.5% -3.7 59.4 40.6 46.4%
Other expenses 0.8 0.8 -8.2% 0.0 0.7 1.0 -26.2%
Total Costs and Expenses 359.1 265.3 35.4% -6.3 365.5 284.3 28.5%
Total Costs and Expenses Excluding Construction Service cost 251.2 220.1 14.1% 2.7 248.5 231.1 7.5%

 

Adjusted EBITDA and Adjusted EBITDA excluding Construction Service

Adjusted EBITDA in 3Q19 declined 18.5% YoY to $99.9 million, with Adjusted EBITDA margin contracting 1,126 bps to 23.9% from 35.2% in 3Q18. Excluding Construction service margin, Adjusted EBITDA margin contracted 812 bps to 32.3%, from 40.4% in 3Q18.

 

Excluding the impact of IAS 29 in 3Q19, Adjusted EBITDA would have declined 25.5% YoY, or $34.9 million, to $102.1 million, mainly reflecting a 42.0%, or $33.2 million decline in Argentina, partially offset by a $2.0 million increase in Armenia. Adjusted EBITDA margin contracted 1,191 bps YoY to 23.3%. Excluding both the impact from IAS 29 and construction service margin, Adjusted EBITDA margin would have contracted 898 bps to 31.7%, from 40.7% in 3Q18.

 

Excluding IAS29 and the $23.1 million bad debt charge recorded in Argentina, Adjusted EBITDA would have been $125.2 million, and Adjusted EBITDA margin ex-IFRIC would have contracted 176 bps to 38.9%.

 

Adjusted EBITDA by Segment (in US$ million)

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Argentina 43.6 64.6 -32.5% -2.2 45.8 79.0 -42.0%
Italy 15.1 15.8 -4.5% - 15.1 15.8 -4.5%
Brazil 4.4 6.3 -29.2% - 4.4 6.3 -29.2%
Uruguay 13.5 13.4 0.6% - 13.5 13.4 0.6%
Armenia 18.2 16.2 12.4% - 18.2 16.2 12.4%
Ecuador 6.7 6.4 4.3% - 6.7 6.4 4.3%
Unallocated -1.5 -0.7 101.4% - -1.5 -0.7 101.4%
Perú -0.2 0.5 -129.7% - -0.2 0.5 -129.7%
Total segment EBITDA 99.9 122.5 -18.5% -2.2 102.1 137.0 -25.5%

  

 

 

 

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

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Income from Continuing Operations -32.5 -21.6 50.0% 0.6 -33.1 -33.7 -1.9%
Financial Income -8.1 -15.8 -48.6% 0.6 -8.7 -43.6 -80.1%
Financial Loss 113.2 114.2 -0.9% -49.2 162.4 197.5 -17.8%
Inflation adjustment 6.3 10.0 -36.6% 6.3 0.1 0.9 -93.0%
Income Tax Expense -17.4 0.8 -2271.6% 26.9 -44.3 -10.7 313.4%
Amortization and Depreciation 38.3 34.9 9.7% 12.6 25.7 26.6 -3.7%
Adjusted EBITDA 99.9 122.5 -18.5% -2.2 102.1 137.0 -25.5%
Adjusted EBITDA Margin 23.9% 35.2% -1,126 - 23.3% 35.2% -1,191
Adjusted EBITDA excluding Construction Service 99.6 122.1 -18.4% -2.2 101.8 136.5 -25.4%
Adjusted EBITDA Margin excluding Construction Service 32.3% 40.4% -812 - 31.7% 40.7% -898

 

Financial Income and Loss

CAAP reported a Net financial loss of $111.4 million in 3Q19 compared to a loss of $108.5 million in 3Q18. Had IAS 29 not been applied, Net financial loss would have declined by 0.6%, or $0.9 million, to $153.8million, mainly reflecting lower net foreign exchange expenses/gains in Argentina in connection with its financial debts and assets, due to the depreciation of the peso against the US dollar.

 

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Financial Income 8.1 15.8 -48.6% -0.6 8.7 43.6 -80.1%
Interest income 5.0 7.3 -32.3% -0.6 5.5 8.3 -33.3%
Foreign exchange income 2.7 7.9 -66.3% 0.0 2.7 34.8 -92.3%
Other 0.5 0.5 -6.5% 0.0 0.5 0.5 -6.5%
Financial Loss -113.2 -114.2 -0.9% 49.2 -162.4 -197.5 -17.8%
Interest Expenses -23.6 -21.0 12.2% 0.9 -24.5 -21.0 16.8%
Foreign exchange transaction expenses -73.3 -72.3 1.4% 48.3 -121.6 -155.6 -21.8%
Leases financial cost -0.1 0.0 - 0.0 -0.1 0.0 -
Changes in liability for concessions -15.8 -18.7 -15.6% 0.0 -15.8 -18.7 -15.6%
Other expenses -0.4 -2.2 -82.0% 0.0 -0.4 -2.2 -82.0%
Inflation adjustment -6.3 -10.0 -36.6% -6.3 -0.1 -0.9 -93.0%
Inflation adjustment -6.3 -10.0 -36.6% -6.3 -0.1 -0.9 -93.0%
Financial Results, Net -111.4 -108.5 2.7% 42.4 -153.8 -154.8 -0.6%

See “Use of Non-IFRS Financial Measures” on page 20.

 

 

 

 

Income Tax Expense

During 3Q19, the Company reported a tax gain of $17.4 million, mainly due to a tax credit of $25.0 million in Argentina, reflecting the pre-tax loss recorded in the quarter mainly impacted by financial expenses, partially offset by tax expenses of $3.7 million in Italy, $2.7 million in Armenia, and $2.4 million in Uruguay.

 

Net Income and Net Income Attributable to Owners of the Parent

During 3Q19, CAAP reported Net Loss for the Period of $32.5 million compared to a loss of $21.6 million in 3Q18. While Operating Income declined $10.8 million YoY, higher net loss reflects higher SG&A due to bad debts recorded in Argentina, as explained above and higher financial expenses of $12.5 million, mainly attributed to the depreciation of the Argentine Peso against the US dollar, partially offset by a $17.8 million in income tax gain.

 

During 3Q19, the Company reported a Net Loss Attributable to Owners of the Parent of $24.6 million and loss per common share of $0.15, compared with a Net Loss Attributable to Owners of the Parent of $15.2 million in 3Q18 equivalent to loss per common share of $0.09 for the same period last year.

 

Consolidated Financial Position

As of September 30, 2019, cash and cash equivalents amounted to $257.6 million, a 16.3% increase from $$221.5 million as of June 30, 2019. Total Debt at the close of the quarter increased to $1,210.2, from $1,136.2 million as of June 30, 2019, mainly reflecting the two credit facility agreements entered into by our Argentine subsidiary. An amount of $762.7 million, or 63.0% of total debt is denominated in U.S. dollars, while $281.6, or 23.3%, is denominated in Brazilian reals and $165.9, or 13.7%, is in Euros.

 

The Net Debt to LTM EBITDA ratio stood at 2.14x as of September 2019, compared with Net Debt to EBITDA of 2.12x as of June 2019.

 

Consolidated Debt Indicators (in US$ million)

  As of Sept 30, 2019 As of Jun 30, 2019 As of Mar 31, 2019 As of Dec 31, 2018
Leverage        
Total Debt / LTM Adjusted EBITDA (Times)1,3 2.72x 2.63x 2.63x 2.53x
Total Net Debt / LTM Adjusted EBITDA (Times) 2,3 2.14x 2.12x 2.04x 1.98x
Total Debt 1,210.2 1,136.2 1,137.3 1,126.7
Short-Term Debt 158.6 149.6 121.2 98.9
Long-Term Debt 1,051.6 986.7 1,016.1 1,027.8
Cash & Cash Equivalents 257.6 221.5 255.0 244.9
Total Net Debt4 952.6 914.8 882.3 881.8

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.

  

Total Debt by Segment (in US$ million)    
  As of Sep 30, 2019 As of Jun 30, 2019
Argentina 504.6 398.6
Italy (1) 124.5 133.2
Brazil (2) 290.6 315.2
Uruguay 208.1 204.6
Armenia 82.4 82.3
Ecuador - 2.4
Total 1,210.2 1,136.2

1 Of which approximately $64.4 million remain at Toscana Aeroporti level.

2 Of which approximately $271.1 million remain at Inframérica Concessionaria do Aeroporto de Brasilia level.

 

 

 

 

Maturity of borrowings:

  1 year or less 1 - 2 years 2 – 5 years Over 5 years Total
Debt service 224.3 230.9 491.1 713.8 1,660.2

 

Cash by Segment (in US$ million)  
  As of Sep 30, 2019
Argentina 90.7
Italy (1) 29.1
Brazil 14.3
Uruguay 32.5
Armenia 32.4
Ecuador 21.0
Intermediate holding Companies 37.5
Total 257.6

1 Of which approximately $19.5 million remain at Toscana Aeroporti level.

2 Of which approximately $13.2 million remain at Inframérica Concessionaria do Aeroporto de Brasilia level.

 

CAPEX

During 3Q19, CAAP made capital expenditures of $ 111.8 million on an ‘As reported’ basis, or $ 119.9 million when excluding IAS 29, a 102.1% YoY increase from $59.3 million in 3Q18, mainly reflecting higher capex in Argentina. The most significant investments in 3Q19 include:

 

§$104.3 million, invested in Argentina primarily for the construction of the new departure terminal building and multilevel parking at Ezeiza Airport, the landfill for the construction of a new car parking facility on Costanera Avenue at Aeroparque Airport, the construction of new terminal buildings at Iguazú and Jujuy airports, the expansion of the terminal building at Bariloche, Mar del Plata and Esquel airports, as well as various capex programs across other airports of the concession,

 

§$7.4 million invested in Ecuador, primarily due to the refurbishment of the runway, taxiways and related works, stemming from the new capex program resulting from extension of the Guayaquil concession agreement last year,

 

§$2.9 million invested in Italy, primarily on Master plan development in Florence Airport and Pisa expansion works, together with new equipment at Florence and Pisa Airport, and

 

§$2.0 million invested in Uruguay, mainly in relation with the implementation of SISCA (Sistema Integrado de Seguridad y Control Aeroportuario) project related to the perimeter security system.

 

 

 

  

Review of Segment Results

 

Argentina

The Company’s main concession in Argentina, AA2000, accounted for approximately 10.9 million passengers, or 48.6%, of CAAP’s 22.5 million total passengers worldwide served during the quarter. Aeroparque and Ezeiza, the country’s two largest airports, had approximately 3.2 million and 3.0 million passengers in 3Q19, respectively.

 

Argentina represented 60.7% of the Company’s 3Q19 consolidated revenues and 44.9% of its adjusted EBITDA, excluding the effect of IAS 29.

 

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

 

The following table presents the impact from Hyperinflation accounting on 3Q19 under the column ‘IAS 29’, while the columns “3Q19 ex IAS 29” and “3Q18 ex IAS 29” presents 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 96.2%, 99.5% and 99.1% of passenger traffic, revenues and Adjusted EBITDA of the Argentina segment in 3Q19.

 

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

OPERATING STATISTICS              
Domestic Passengers (in millions) 7.8 7.0 10.3% - 7.8 7.0 10.3%
International Passengers (in millions) 3.2 3.2 0.9% - 3.2 3.2 0.9%
Transit Passengers (in millions) 0.4 0.3 20.7% - 0.4 0.3 20.7%
Total Passengers (in millions) 11.4 10.5 7.8% - 11.4 10.5 7.8%
Cargo Volume (in thousands of tons) 53.5 52.4 2.1% - 53.5 52.4 2.1%
Total Aircraft Movements (in thousands) 116.1 115.4 0.6% - 116.1 115.4 0.6%
FINANCIAL HIGHLIGHTS              
Aeronautical Revenue 92.0 83.4 10.3% -7.5 99.5 102.4 -2.8%
Non-aeronautical revenue 152.8 99.2 54.0% -13.4 166.2 121.1 37.2%
Commercial revenue 57.6 60.4 -4.7% -4.4 61.9 74.3 -16.6%
Construction service revenue 95.2 38.8 145.3% -9.0 104.2 46.8 122.6%
  0.0 0.0 - 0.0 0.0 0.0 -
Total Revenue 244.7 182.6 34.0% -20.9 265.7 223.5 18.9%
Total Revenue Excluding IFRIC12(1) 149.5 143.8 4.0% -11.9 161.5 176.7 -8.6%
Cost of Services 189.8 121.0 56.9% -2.6 192.5 136.0 41.5%
Selling, general and administrative expenses 35.5 16.6 114.1% -3.7 39.2 20.4 92.1%
Other expenses 0.1 0.5 -74.8% 0.0 0.1 0.7 -86.2%
Total Costs and Expenses 225.5 138.1 63.3% -6.3 231.8 157.1 47.5%
Total Costs and Expenses Excluding IFRIC12(2) 130.3 99.3 31.2% 2.7 127.6 110.3 15.7%
Adjusted Segment EBITDA 43.6 64.6 -32.5% -2.2 45.8 79.0 -42.0%
Adjusted Segment EBITDA Mg 17.8% 35.4% -1,757 - 17.2% 35.4% -1,812
Adjusted EBITDA Margin excluding IFRIC 12(3) 29.1% 44.9% -1,579 - 28.3% 44.7% -1,638
Capex 96.2 38.8 147.9% -8.0 104.3 46.8 122.7%

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.

 

 

 

 

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

OPERATING STATISTICS              
Domestic Passengers (in millions) 21.2 18.4 15.5% - 21.2 18.4 15.5%
International Passengers (in millions) 9.9 10.3 -3.7% - 9.9 10.3 -3.7%
Transit Passengers (in millions) 1.1 1.0 16.0% - 1.1 1.0 16.0%
Total Passengers (in millions) 32.2 29.6 8.9% - 32.2 29.6 8.9%
Cargo Volume (in thousands of tons) 164.4 169.5 -3.0% - 164.4 169.5 -3.0%
Total Aircraft Movements (in thousands) 338.1 334.8 1.0% - 338.1 334.8 1.0%
FINANCIAL HIGHLIGHTS              
Aeronautical Revenue 273.2 225.3 21.2% -33.0 306.2 326.5 -6.2%
Non-aeronautical revenue 391.0 264.9 47.6% -45.6 436.6 392.0 11.4%
Commercial revenue 167.7 162.7 3.1% -19.2 186.9 235.2 -20.5%
Construction service revenue 223.2 102.1 118.6% -26.4 249.7 156.8 59.2%
Total Revenue 664.2 490.2 35.5% -78.6 742.8 718.5 3.4%
Total Revenue Excluding IFRIC12(1) 440.9 388.1 13.6% -52.2 493.1 561.6 -12.2%
Cost of Services 495.3 322.2 53.7% -16.9 512.2 439.6 16.5%
Selling, general and administrative expenses 64.9 43.8 48.1% -7.2 72.1 63.1 14.2%
Other expenses 0.5 0.8 -38.4% 0.0 0.5 1.1 -53.2%
Total Costs and Expenses 560.7 366.9 52.8% -24.1 584.8 503.8 16.1%
Total Costs and Expenses Excluding IFRIC12(2) 337.6 264.8 27.5% 2.3 335.3 347.2 -3.4%
Adjusted Segment EBITDA 176.1 173.5 1.5% -20.1 196.2 251.0 -21.8%
Adjusted Segment EBITDA Mg 26.5% 35.4% -887 25.5% 26.4% 34.9% -851
Adjusted EBITDA Margin excluding IFRIC 12(3) 39.9% 44.7% -476 38.5% 39.8% 44.7% -489
Capex 223.2 101.7 119.5% 27.3 250.5 157.1 59.4

1 Excludes Construction Service revenue.

2 Excludes Construction Service cost.

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

 

Passenger Traffic in Argentina rose 7.8% YoY in 3Q19, with domestic traffic increasing 10.3% and international traffic up 0.9%, a slight recovery from the previous downward trend. Domestic traffic benefitted from the addition of new routes, low cost carriers and higher promotional activity.

 

During the quarter, Air Europa started a new flight connecting Iguazú Airport with Madrid, Spain, via Asunción, Paraguay. Moreover, Norwegian Air Argentina started new domestic routes to Ushuaia and Jujuy operated from Aeroparque, further enhancing connectivity in the country. Furthermore, low-cost carrier Flybondi added a new international route to Rio de Janeiro, Brazil, with three weekly flights, which started operations in October.

 

Cargo volume was up 2.1% YoY, showing an improvement when compared to the 3.3% decline in 2Q19, while total aircraft movements remained stable during the period.

 

Revenues increased 34.0% YoY, or $62.2 million, to $244.7 million in 3Q19. Excluding the impact of IAS 29, revenues would have been $265.7 million, up 18.9%, or $42.2 million YoY, primarily reflecting higher construction revenue in the quarter due to higher capex, partially offset by a decline in commercial and aeronautical revenues, mainly due to a mix-shift from international to domestic traffic, the FX translation effect on local currency revenues from the 58.2% quarterly average Argentine peso depreciation, and lower commercial demand.

 

·Aeronautical revenue ex-IAS29 declined 2.8%, or $2.8 million, primarily reflecting the continued mix-shift from international to domestic traffic, together with and the currency translation effect on the share of local currency denominated revenues, offsetting higher international and domestic traffic.

 

·Commercial revenues ex-IAS29 fell 16.6%, or $12.4 million, as the difficult macro environment resulted in lower cargo activity and a decline in duty free shop sales, together with the impact of the Argentine peso depreciation on the share of local currency denominated revenues. This more than offset higher Advertising revenues, from new contracts, and higher VIP lounges revenues due to increased activity.

 

 

 

 

·Construction Service revenue ex-IAS29 increased $57.4 million to $104.2, mainly reflecting higher capex in the period in line with the capex program announced for 2019.

 

Excluding construction service revenue and the impact of IAS29, total Argentina revenue in 3Q19 decreased 8.6% YoY, or $15.2 million, to $161.5 million.

 

Total Costs and Expenses increased 63.3%, or $87.4 million, to $225.5 million. Had IAS 29 not been adopted, Total cost and expenses would have increased 47.5%, or $74.7 million, primarily due to an increase of $57.4 million, in Construction Service costs reflecting significantly higher capex in the quarter, and a bad debt provision charge of $23.1 million.

 

Cost of services ex-IAS29 increased 41.5% YoY, or $56.5 million, to $192.5 million, primarily due to an increase of $57.4 million in Construction service costs reflecting significantly higher capex in the quarter. Excluding construction service costs, Cost of services would have declined 1% YoY, or $0.9 million, driven mainly by the following:

 

·An 8.1%, or $2.1 million, decline in concession fees resulting from lower revenues,

 

·A 23.9%, or $1.5 million, decline in services and fees, reflecting easier comps as in 3Q18 certain consultancy fees were incurred,

 

·A $1.8 million increase in office expenses, reflecting the classification of IATA and SITA expenses as Cost of services, instead of SG&A.

 

SG&A ex-IAS29 increased by 92.1% YoY, or $18.8 million, to $39.2 million in 3Q19, mainly due to the following:

 

·A $23.1 million bad debt charge in relation with past due commercial revenues and aircraft fees from a local airline accumulated over more than one year,

 

·A 9.2%, or $1.0 million, decline in turnover taxes related to the decline in revenues coupled with lower banking transaction taxes, and

 

·A $2.0 million decline in office expenses reflecting the classification of IATA and SITA expenses as Cost of services, instead of SG&A.

  

Adjusted Segment EBITDA in Argentina declined 32.5% YoY, or $21.0 million, to $43.6 million in 3Q19, with Adjusted Segment EBITDA margin Ex-IFRIC12 down by 1,579 bps to 29.1%. Had IAS 29 not been adopted, Adjusted Segment EBITDA would have declined 42.0%, or $33.2 million, with Adjusted EBITDA margin EX-IFRIC12 contracting 1,638 bps to 28.3% in 3Q19 from 44.7% in 3Q18.

 

During 3Q19 CAAP made capital expenditures of $96.2 on an ‘As reported’ basis, or $104.3 when excluding the impact of IAS29, primarily for the construction of the new departure terminal building and multilevel parking at Ezeiza Airport, and the landfill for the construction of a new car parking facility on Costanera Avenue at Aeroparque Airport. Investments also include the construction of new terminal buildings at Iguazú and Jujuy airports, the expansion of the terminal building at Bariloche, Mar del Plata and Esquel airports, as well as various capex programs across other airports of the concession.

 

 

 

 

Italy

CAAP’s Italian segment represented 9.7% of consolidated 3Q19 revenues and 14.8% of adjusted EBITDA, excluding the effect of IAS 29. Pisa Airport had approximately 1.8 million passengers while Florence Airport served 0.9 million passengers in 3Q19.

 

  3Q19 3Q18 % Var. 9M19 9M18 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 0.5 0.5 -3.7% 1.3 1.4 -2.7%
International Passengers (in millions) 2.2 2.2 -0.6% 5.1 5.1 0.5%
Transit Passengers (in millions) 0.0 0.0 63.5% 0.0 0.0 72.3%
Total Passengers (in millions) 2.7 2.7 -1.2% 6.4 6.4 -0.1%
Cargo Volume (in thousands of tons) 3.1 2.7 13.8% 9.6 8.4 14.2%
Total Aircraft Movements (in thousands) 24.9 24.7 0.7% 61.5 60.7 1.4%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 29.0 30.2 -4.2% 72.5 77.4 -6.3%
Non-aeronautical revenue 13.7 16.5 -17.1% 36.0 43.0 -16.2%
Commercial revenue 11.5 11.5 0.3% 29.0 28.4 2.2%
Construction service revenue 1.4 4.4 -67.9% 5.4 11.1 -51.5%
Other revenue 0.7 0.6 26.4% 1.6 3.5 -53.7%
Total Revenue 42.6 46.7 -8.7% 108.5 120.4 -9.9%
Total Revenue Excluding IFRIC12(1) 41.2 42.3 -2.5% 103.1 109.3 -5.6%
Cost of Services 26.7 30.3 -12.0% 75.8 85.8 -11.8%
Selling, general and administrative expenses 3.9 3.5 14.2% 10.8 10.3 5.3%
Total Costs and Expenses 30.6 33.8 -9.3% 86.6 96.1 -9.9%
Total Costs and Expenses Excluding IFRIC12(2) 29.3 29.7 -1.3% 82.3 86.1 -4.4%
Adjusted Segment EBITDA 15.1 15.8 -4.5% 31.2 33.1 -5.8%
Adjusted Segment EBITDA Mg 35.4% 33.9% 155 28.8% 27.5% 124
Adjusted EBITDA Margin excluding IFRIC 12(3) 36.5% 36.7% -22 29.2% 29.3% -13
Capex 2.9 5.0 -42.7% 10.5 13.2 -20.1%

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.

 

Passenger Traffic in Italy declined 1.2% YoY, mainly due to a drop of 3.0% at Pisa Airport, reflecting the reduction of operations by Pobeda, which suspended the route to Saint Petersburg and decreased frequencies to Moscow, together with a reduction of flights by Ryanair and British Airways early in the quarter. This was partially offset by an increase of 3.0% at Florence Airport, reflecting additional flights to Paris, France, by Air France, additional routes by Vueling to four new destinations, and, to a lesser extent, additional flights to Madrid, Spain, by Iberia. During the quarter, Ryanair opened new routes to Brussels, Belgium, and Prague, Czech Republic at Pisa Airport, while low cost carrier Vueling inaugurated new international routes at Florence airport, with five weekly flights to Munich, Germany, four weekly flights to Prague, Czech Republic, two weekly flights to Bilbao, Spain, and a daily flight to Vienna, Austria. Cargo volume was up 13.8%, while total aircraft movements increased 0.7% YoY.

 

Revenues in 3Q19 declined 8.7% YoY, or $4.1 million, to $42.6 million, principally reflecting a decline in construction service revenue, due to lower capex in the quarter. Excluding construction service revenue, revenues declined 2.5% YoY, or $1.1 million, to $41.2 million, impacted by the 4.5% average quarterly depreciation of the euro against the US dollar. In local currency, however, revenues excluding IFRIC12 increased 1.9% YoY.

 

·Aeronautical revenue declined 4.2%, or $1.3 million, mainly due to the effect of the depreciation of the Euro against the US dollar during the period. In local currency, aeronautical revenues were flat despite lower traffic volume, primarily reflecting, higher revenues from the increase in the Passenger with Reduced Mobility fee granted in February 2019 and the increase in passenger use fees at Florence Airport in April 2019.

 

 

 

 

·Commercial revenue remained flat at $11.5 million in an ‘As reported’ basis, but increased 4.8% when measured in local currency, mainly due to higher revenues from new agreements with car rentals at Florence Airport together with new Advertising agreements and higher VIP revenues, partially offset by decline in Parking, due to lower passenger traffic and lower demand at Pisa Airport.

 

·Construction service revenue declined $3.0 million, due to lower capex in the quarter.

 

Cost of services declined 12.0% YoY, or $3.6 million, due to lower construction service cost and currency depreciation in the quarter. An increase in services and fees from higher professional fees, an advertising campaign and a new passenger assistance contract were offset by lower Maintenance provision and a decline in salaries.

 

SG&A increased 14.2% YoY, or $0.5 million, as a result of increases in services and fees due to higher utilities tariffs and higher taxes, together with higher spending in passenger assistance due to cancelled flights. SG&A also reflects the recognition of the amortization of leased assets under the new IFRS16 lease accounting standard.

 

Adjusted Segment EBITDA in Italy declined 4.5%, or $0.7 million. Excluding construction services Adjusted Segment EBITDA margin ex-IFRIC12 contracting 22 basis points to 36.5% from 36.7% in 3Q18. Measured in local currency, Adjusted Segment EBITDA remained flat YoY.

 

During 3Q19 CAAP made capital expenditures for $2.9 million in Italy, primarily on Master plan development in Florence Airport and preliminary works related to the expansion at Pisa airport, together with new equipment at both airports.

 

 

 

 

Brazil

Brazil represented 6.5% of the Company’s consolidated 3Q19 revenues and 4.3% of its adjusted EBITDA, excluding IAS 29. Brasilia Airport and Natal Airport had approximately 4.1 million and 0.6 million passengers in 3Q19, respectively.

 

  3Q19 3Q18 % Var. 9M19 9M18 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 2.9 3.2 -8.4% 8.4 9.0 -5.8%
International Passengers (in millions) 0.1 0.1 22.1% 0.4 0.4 6.2%
Transit Passengers (in millions) 1.6 2.0 -19.2% 5.1 5.7 -10.6%
Total Passengers (in millions) 4.7 5.3 -11.8% 13.9 15.0 -7.3%
Cargo Volume (in thousands of tons) 21.0 17.4 20.9% 68.4 47.1 45.0%
Total Aircraft Movements (in thousands) 40.9 47.1 -13.2% 119.3 138.3 -13.7%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 13.8 14.6 -5.2% 41.2 45.1 -8.7%
Non-aeronautical revenue 14.6 15.1 -3.5% 45.3 47.0 -3.5%
Commercial revenue 14.6 15.1 -3.5% 45.3 47.0 -3.5%
Total Revenue 28.4 29.7 -4.3% 86.5 92.1 -6.0%
Cost of Services 23.4 24.7 -5.0% 72.3 80.2 -9.8%
Selling, general and administrative expenses 3.4 3.0 12.3% 12.7 11.4 11.4%
Other expenses 0.2 0.1 268.9% 0.3 0.3 18.5%
Total Costs and Expenses 27.1 27.8 -2.8% 85.3 91.9 -7.2%
Adjusted Segment EBITDA 4.4 6.3 -29.2% 10.5 13.0 -18.8%
Adjusted Segment EBITDA Mg 15.6% 21.1% -548 12.2% 14.1% -191
Capex 1.0 2.6 -59.8% 3.0 5.8 -47.6%

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 declined 11.8% YoY, mainly impacted by the cessation of operations by Avianca Brasil. Estimated figures are disclosed given delays in the submission of information for 1,623 flights out of a total of 40,914 flights, due to information systems transition by third parties. Domestic and transit traffic declined 8.4% and 19.2% respectively, offset by a 22.1% increase in international traffic, according to the new traffic count methodology applied by ANAC since June 2018. Based on the prior methodology, international traffic would have increased 40.5% YoY at Brasilia airport reflecting the routes to Miami, Orlando and Buenos Aires opened by Gol Airlines during 4Q18 and the new flight to Cancún opened in June 2019. In addition, during September Gol started additional domestic routes from Brasilia airport to São José do Rio Preto, Araguaína and Barreiras, in partnership with Passaredo, in line with its strategy to expand operations at Brasilia Airport. Importantly, LATAM Airlines started executing its international network expansion at Brasilia Airport, with the opening of the route to Santiago de Chile, Chile, during October 2019, and the route to Lima, Perú during November, while the route to Asunción, Paraguay is expected to start during December. Cargo volume was up 20.9%, while total aircraft movements declined 13.2% YoY.

 

Revenues in 3Q19 declined 4.3% YoY, or $1.3 million, reflecting lower passenger traffic.

 

·Aeronautical revenue declined 5.2% YoY, or $0.8 million, due to lower overall passenger traffic and lower revenues from aircraft fees, partially offset by higher revenues from the 40.5% increase in international passengers.

 

·Commercial revenue declined 3.5%, or $0.5 million, due to lower advertising, F&B and parking revenues, which more than offset an increase in VIP lounge revenues reflecting the new agreements with airlines and Bradesco entered into during 4Q18.

 

Cost of services declined 5.0% YoY, or $1.2 million, to $23.4 million, mainly reflecting 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.

 

SG&A increased 12.3% YoY, or $0.4 million, reflecting more difficult comps as 3Q18 benefited from a bad debt recovery, coupled with increased services and fees.

 

Adjusted Segment EBITDA in Brazil declined 29.2% YoY, or $1.8 million, to $4.4 million in the quarter, mainly reflecting lower passenger traffic and commercial revenues. Adjusted EBITDA margin contracted 548 bps to 15.6% from 21.1% in the year-ago quarter.

 

 

 

 

Uruguay

Uruguay represented 6.4% of the Company’s consolidated 3Q19 revenues and 13.2% of its adjusted EBITDA, excluding IAS 29. CAAP operates two airports in Uruguay, General Cesáreo Berisso International Airport (“Carrasco Airport”) and Carlos A. Curbelo Airport (“Punta del Este Airport”). During 3Q19, our Uruguayan airports had approximately 0.5 million passengers.

 

  3Q19 3Q18 % Var. 9M19 9M18 % Var.
OPERATING STATISTICS            
Domestic Passengers (in millions) 0.0 0.0 15.0% 0.0 0.0 -26.5%
International Passengers (in millions) 0.5 0.5 -2.9% 1.7 1.7 -3.8%
Transit Passengers (in millions) 0.0 0.0 6.7% 0.0 0.0 -21.0%
Total Passengers (in millions) 0.5 0.5 -2.8% 1.7 1.7 -3.9%
Cargo Volume (in thousands of tons) 6.0 6.2 -1.8% 19.0 19.7 -3.6%
Total Aircraft Movements (in thousands) 6.3 7.1 -11.6% 22.1 25.2 -12.1%
FINANCIAL HIGHLIGHTS            
Aeronautical Revenue 14.4 14.9 -3.7% 49.3 48.6 1.4%
Non-aeronautical revenue 13.6 12.5 8.5% 40.5 40.7 -0.4%
Commercial revenue 11.9 12.4 -3.8% 37.9 40.2 -5.5%
Construction service revenue 1.6 0.1 n.m. 2.5 0.5 439.3%
Other revenue 0.0 0.0 27.0% 0.0 0.0 10.2%
Total Revenue 28.0 27.4 1.9% 89.8 89.3 0.5%
Total Revenue Excluding IFRIC12(1) 26.3 27.3 -3.7% 87.3 88.8 -1.7%
Cost of Services 13.9 13.8 0.8% 43.0 42.6 0.8%
Selling, general and administrative expenses 3.0 3.0 -0.8% 10.6 10.6 -0.4%
Other expenses 0.1 0.1 -18.3% 0.2 0.2 -13.3%
Total Costs and Expenses 17.0 16.9 0.4% 53.8 53.5 0.5%
Total Costs and Expenses Excluding IFRIC12(1) 15.4 16.8 -8.4% 51.3 53.0 -3.2%
Adjusted Segment EBITDA 13.5 13.4 0.6% 44.4 44.6 -0.5%
Adjusted Segment EBITDA Mg 48.1% 48.8% -63 49.4% 49.9% -1.0%
Adjusted EBITDA Margin excluding IFRIC 12 51.0% 49.0% 199 50.8% 50.2% 1.2%
Capex 2.0 0.8 142.4% 8.2 2.5 229.9%

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 Uruguay declined 2.8% YoY, mainly reflecting the cancellation of Avianca Colombia’s daily route to Bogotá, Colombia. However, Avianca announced that it will restore this route next December, with four weekly flights. Traffic also reflects lower passenger traffic from Argentina due to weak macro conditions, which was partially offset by the addition of two more frequencies to Madrid, Spain, by Iberia, during July 2019.

 

Revenues in 3Q19 increased 1.9%, or $0.5 million, to $28.0 million, primarily due to an increase in construction service revenue reflecting higher capex in the period. Excluding construction service revenue, revenues declined 3.7% YoY, or $1.0 million, to $26.3 million.

 

·Aeronautical revenue declined 3.7% YoY, or $0.5 million, reflecting a 2.8% decrease in passenger traffic and lower aircraft fees revenues. This was partially offset by an increase to the passenger fees implemented in August 2018.

 

·Commercial revenue declined 3.8%, or $0.5 million, reflecting a 10.3%, or $0.3 million, decline in Duty Free revenues, related to lower passenger traffic and demand, and a decline in Parking revenues of 15.01%, or $0.1 million, due to lower demand, particularly by Argentine passengers, and the impact of the 12.8% average depreciation of the Uruguayan peso against the US dollar. This was partially offset by a 10.9%, or $0.1 million, increase in VIP lounge revenues, benefiting from new agreements signed in the prior quarter.

 

·Construction service revenue increased $1.5 million reflecting higher capex in the period.

 

 

 

 

Cost of services were up 0.8% YoY, or $0.1 million, to $13.9 million, driven by a $1.6 million charge in construction service cost, due to higher capex. This was partially offset by a 21.2%, or $0.7 million, YoY decline in maintenance expenses, together with a 6.4%, or $0.3 million, decline in salaries and social security contributions, reflecting the impact of the new variable compensation policy recorded in 2Q19, while last year it was recorded in 3Q18.

 

SG&A remained relative stable at $3.0 million. Lower services and fees was offset by an increase in Advertising due to a marketing campaign.

 

Adjusted Segment EBITDA in Uruguay increased 0.6%, or $0.1 million, to $13.5 million, with Adjusted Segment EBITDA margin Ex-IFRIC12 expanding 199 bps to 51.0% from 49.0% in the year-ago quarter.

 

During 3Q19 CAAP made capital expenditures for $2.0 million in Uruguay, primarily in relation with the implementation of SISCA (Sistema Integrado de Seguridad y Control Aeroportuario) project related to the perimeter security system.

 

 

 

 

 

Key Events for the Quarter

Appeal Lodged Against the Judgement by the Regional Administrative Court of Tuscany with the Council of State

On July 25, 2019 Toscana Aeroporti S.p.A. announced that it lodged an appeal with the Council of State against judgement No.793 rendered by the Regional Administrative Court of Tuscany, Section I, on May 27, 2019, that overturned the favorable Environmental Impact Assessment (VIA) decree issued on December 28, 2017, for the project outlined in 2014-2029 Master Plan for Florence Airport.

 

Corporación América Airports Approves Contributions in Subsidiaries

On July 18, 2019, CAAP subscribed and paid for new issuance of shares by Inframérica Participacões S.A. (that in turn has subscribed and paid for new issuance of shares by Inframerica Concessionária do Aeroporto de Brasilia S.A.) in an amount of R$ 107.5 million, or $28.7 million. (Infraero also subscribed and paid for new issuance of shares by Inframerica Concessionária do Aeroporto de Brasilia S.A., pro-rata to its stake i.e. 49% or R$ 102.9 million). Proceeds were used to pay the annual payment of concession fee.

 

Aeropuertos Argentina 2000 S.A. announced shareholders meeting’s results

On July 25, 2019, the Company’s subsidiary Aeropuertos Argentina 2000 S.A. held a shareholders meeting which unanimously resolved the payment of cash dividends between the shareholders classes A, B, C and D, according to their holdings, for an amount of $50.0 million, or its equivalent in Argentine pesos (which at the date of the shareholders meeting amounted to AR$ 2,143.5 million). Additionally, shareholders approved the payment of dividends on the preferred shares for the amount of AR$ 118.3 million, payable in additional preferred shares. The value was calculated based on the value of the preferred shares, as adjusted by inflation, which amounted to AR$ 5,914.0 million. The Company noted it will file an administrative claim in order to adjust the economic-financial equation of the Concession Agreement, taking into account the higher value of the preferred shares.

 

Aeropuertos Argentina 2000 S.A. announced two credit facility agreements

On August 9, 2019, CAAP’s subsidiary Aeropuertos Argentina 2000 S.A. entered into two credit facilities for a total principal amount of $120 million dollars: (a) the “onshore” credit facility agreement for a principal amount of US$85.0 million, and (b) the “offshore” credit facility agreement for a principal amount of US$35.0 million. The term for the credit facility agreements is thirty-six months as from the borrowing date. The principal amount under the credit facility agreements shall be repaid in nine quarterly equal and regular installments, starting with a first payment twelve months from the borrowing date. Proceeds shall be applied to the construction of infrastructure works in the airports under the AA2000 concession.

 

Subsequent Events

AA2000 received resolutions 2016 and 2017 from the National Airports Regulatory Organization

On October 24, CAAP announced that the National Airports Regulatory Organization approved new maximum passenger use tariffs to be charged by AA2000 effective January 1, 2020 as a result of the 2017 economic equilibrium revision. The new tariff framework implies a 4% increase in international tariffs to 51 dollars from 49 dollars today, and a 164% increase in domestic tariffs to 195 pesos from 74 pesos today. CAAP also announced it has filed a judiciary claim against the National Airports Regulatory Organization requesting that: (i) the 2016 economic equilibrium revision is declared null, and (ii) the entity carries out again, in accordance with applicable legislation, the annual review procedure of our Argentine concession for 2016.

 

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 96.0%, 98.6% and 99.2% of passenger traffic, revenues and Adjusted EBITDA, respectively, of the Argentina segment in 1Q19, is presented separately in each of the applicable sections of this earnings release, in a column denominated “IAS 29”.

 

 

 

 

3Q19 EARNINGS CONFERENCE CALL

When: 9:00 a.m. Eastern time, November 22, 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/caap191122.html
Replay: Participants can access the replay through November 29, 2019 by dialing:
  1-877-344-7529 (U.S. domestic) and 1-412-317-0088 (international). Replay ID: 10136474.

 

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 in the period. Percentage variations ex-IAS 29 figures compare results as presented in the prior year quarter before IAS 29 came into effect, against ex-IAS 29 results for this quarter as described above. For comparison purposes the impact of adopting IAS 29 in Aeropuertos Argentina 2000, the Company’s largest subsidiary in Argentina, is presented separately in each of the applicable sections of this earnings release, in a column denominated “IAS 29”. The impact from “Hyperinflation Accounting in Argentina” is described in more detail page 19 of this report.

 

Definitions and Concepts

Commercial Revenues: CAAP derives commercial revenue principally from fees resulting from warehouse usage (which includes cargo storage, stowage and warehouse services and related international cargo services), services and retail stores, duty free shops, car parking facilities, catering, hangar services, food and beverage services, retail stores, including royalties collected from retailers’ revenue, and rent of space, advertising, fuel, airport counters, VIP lounges and fees collected from other miscellaneous sources, such as telecommunications, car rentals and passenger services.

 

Construction Service revenue and cost: Investments related to improvements and upgrades to be performed in connection with concession agreements are treated under the intangible asset model established by IFRIC 12. As a result, all expenditures associated with investments required by the concession agreements are treated as revenue generating activities given that they ultimately provide future benefits, and subsequent improvements and upgrades made to the concession are recognized as intangible assets based on the principles of IFRIC 12. The revenue and expense are recognized as profit or loss when the expenditures are performed. The cost for such additions and improvements to concession assets is based on actual costs incurred by CAAP in the execution of the additions or improvements, considering the investment requirements in the concession agreements. Through bidding processes, the Company contracts third parties to carry out such construction or improvement services. The amount of revenues for these services is equal to the amount of costs incurred plus a reasonable margin, which is estimated at an average of 3.0% to 5.0%.

 

 

 

 

About Corporación América Airports

Corporación América Airports acquires, develops and operates airport concessions. The Company is 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, 2018 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: [email protected]
Phone: +5411 4852-6411

 

 

 

 

-- Operational & Financial Tables Follow –

 

Operating Statistics by Segment: Traffic, Cargo and Aircraft Movement

  3Q19 3Q18 % Var. 9M19 9M18 % Var.
Argentina            
Domestic Passengers (in millions) 7.8 7.0 10.3% 21.2 18.4 0.2
International Passengers (in millions) 3.2 3.2 0.9% 9.9 10.3 -3.7%
Transit passengers (in millions) 0.4 0.3 20.7% 1.1 1.0 16.0%
Total passengers (in millions) 11.4 10.5 7.8% 32.2 29.6 8.9%
Cargo volume (in thousands of tons) 53.5 52.4 2.1% 164.4 169.5 -3.0%
Aircraft movements (in thousands) 116.1 115.4 0.6% 338.1 334.8 1.0%
Italy            
Domestic Passengers (in millions) 0.5 0.5 -3.7% 1.3 1.4 -2.7%
International Passengers (in millions) 2.2 2.2 -0.6% 5.1 5.1 0.5%
Transit passengers (in millions) 0.0 0.0 63.5% 0.0 0.0 72.3%
Total passengers (in millions) 2.7 2.7 -1.2% 6.4 6.4 -0.1%
Cargo volume (in thousands of tons) 3.1 2.7 13.8% 9.6 8.4 14.2%
Aircraft movements (in thousands) 24.9 24.7 0.7% 61.5 60.7 1.4%
Brazil            
Domestic Passengers (in millions) 2.9 3.2 -8.4% 8.4 9.0 -5.8%
International Passengers (in millions) 0.1 0.1 22.1% 0.4 0.4 6.2%
Transit passengers (in millions) 1.6 2.0 -19.2% 5.1 5.7 -10.6%
Total passengers (in millions) 4.7 5.3 -11.8% 13.9 15.0 -7.3%
Cargo volume (in thousands of tons) 21.0 17.4 20.9% 68.4 47.1 45.0%
Aircraft movements (in thousands) 40.9 47.1 -13.2% 119.3 138.3 -13.7%
Uruguay            
Domestic Passengers (in millions) 0.0 0.0 15.0% 0.0 0.0 -26.5%
International Passengers (in millions) 0.5 0.5 -2.9% 1.7 1.7 -3.8%
Transit passengers (in millions) 0.0 0.0 6.7% 0.0 0.0 -21.0%
Total passengers (in millions) 0.5 0.5 -2.8% 1.7 1.7 -3.9%
Cargo volume (in thousands of tons) 6.0 6.2 -1.8% 19.0 19.7 -3.6%
Aircraft movements (in thousands) 6.3 7.1 -11.6% 22.1 25.2 -12.1%
Ecuador(1)            
Domestic Passengers (in millions) 0.6 0.6 -9.0% 1.8 1.8 -2.8%
International Passengers (in millions) 0.5 0.5 1.1% 1.6 1.5 6.6%
Transit passengers (in millions) 0.0 0.0 15.3% 0.1 0.1 9.5%
Total passengers (in millions) 1.2 1.2 -4.0% 3.4 3.3 1.5%
Cargo volume (in thousands of tons) 8.2 9.8 -15.9% 29.4 30.3 -3.1%
Aircraft movements (in thousands) 20.0 20.8 -3.7% 61.0 58.8 3.6%
Armenia            
Domestic Passengers (in millions) 0.0 0.0 - 0.0 0.0 -
International Passengers (in millions) 1.1 0.9 16.6% 2.4 2.2 12.7%
Transit passengers (in millions) 0.0 0.0 - 0.0 0.0 -
Total passengers (in millions) 1.1 0.9 16.6% 2.4 2.2 12.7%
Cargo volume (in thousands of tons) 5.4 5.2 4.8% 13.7 13.0 5.7%
Aircraft movements (in thousands) 9.0 7.1 27.9% 20.4 18.0 13.3%
Peru(2)            
Domestic Passengers (in millions) 1.0 1.0 4.9% 2.6 2.6 1.3%
International Passengers (in millions) 0.0 0.0 7474.1% 0.0 0.0 1245.0%
Transit passengers (in millions) 0.0 0.0 - 0.0 0.0 -
Total passengers (in millions) 1.0 1.0 5.5% 2.6 2.6 1.7%
Cargo volume (in thousands of tons) 1.4 1.2 13.2% 3.8 3.6 4.7%
Aircraft movements (in thousands) 8.4 8.8 -4.9% 22.9 24.3 -5.5%

(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.

 

 

 

 

Foreign Exchange Rate

Country 3Q19 3Q18 3Q19 3Q18 2Q19 2Q18 2Q19 2Q18 1Q19 1Q18 1Q19 1Q18
  Avg Avg EoP EoP Avg Avg EoP EoP Avg Avg EoP EoP
Argentine Peso 50.54 31.96 57.59 41.25 44.01 23.58 42.46 28.85 39.01 19.68 43.35 20.15
Euro 0.90 0.86 0.92 0.86 0.89 0.84 0.88 0.86 0.88 0.81 0.89 0.81
Brazilian Real 3.97 3.96 4.16 4.00 3.92 3.61 3.83 3.86 3.77 3.24 3.90 3.32
Uruguayan Peso 35.81 30.09 36.94 31.47 34.86 30.09 35.18 31.47 32.81 30.15 33.48 28.39

Amounts provided by units of local currency per US dollar

 

Aeronautical Breakdown (in US$ million)

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Aeronautical Revenue 184.8 177.1 4.4% -7.5 192.4 196.0 -1.9%
Passenger use fees 144.3 135.4 6.5% -6.5 150.8 151.9 -0.7%
Aircraft fees 31.8 32.2 -1.1% -1.0 32.8 34.7 -5.5%
Other 8.7 9.4 -8.0% 0.0 8.7 9.4 -8.0%

 

Commercial Revenue Breakdown (in US$ million)

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Commercial revenue 123.3 124.7 -1.1% -4.4 127.7 138.6 -7.9%
Warehouse use fees 34.9 39.8 -12.4% -2.4 37.2 47.1 -20.9%
Duty free shops 12.4 13.7 -9.8% -0.5 12.8 15.2 -15.8%
Rental of space (including hangars) 9.2 8.3 9.8% -0.3 9.5 9.0 4.9%
Parking facilities 7.6 8.3 -8.8% -0.3 7.9 9.2 -14.1%
Fuel 19.0 17.6 7.9% -0.1 19.1 18.0 6.5%
Food and beverage services 5.6 6.0 -7.5% 0.0 5.6 6.4 -12.4%
Advertising 5.5 4.6 20.3% -0.1 5.6 4.9 15.6%
Services and retail stores 4.2 4.2 0.7% 0.0 4.3 4.4 -1.8%
Catering 2.5 2.5 2.1% -0.2 2.7 2.9 -7.6%
VIP lounges 7.8 6.0 28.7% -0.1 7.9 6.4 22.6%
Walkway services 2.2 2.2 -0.4% -0.1 2.3 2.6 -9.5%
Other   12.5 11.4 9.6% -0.2 12.7 12.6 0.9%

 

 

 

 

Revenues by Segment (in US$ million)

Country

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Argentina 664.2 490.2 35.5% -78.6 742.8 718.5 3.4%
Italy 108.5 120.4 -9.9% - 108.5 120.4 -9.9%
Brazil 86.5 92.1 -6.0% - 86.5 92.1 -6.0%
Uruguay 89.8 89.3 0.5% - 89.8 89.3 0.5%
Armenia 99.9 87.3 14.4% - 99.9 87.3 14.4%
Ecuador (1) 79.8 67.3 18.6% - 79.8 67.3 18.6%
Unallocated 0.6 0.6 -1.0% - 0.6 0.6 -1.0%
Total consolidated revenue (2) 1129.3 947.2 19.2% -78.6 1207.9 1175.5 2.8%

1 Only includes Guayaquil Airport.

 

Revenue Breakdown (in US$ million)

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Aeronautical Revenue 530.0 485.3 9.2% -33.0 563.0 586.5 -4.0%
Non-aeronautical Revenue 599.2 461.9 29.7% -45.6 644.8 589.0 9.5%
Commercial revenue 348.5 340.2 2.4% -19.2 367.7 412.6 -10.9%
Construction service revenue (1) 249.0 118.2 110.6% -26.4 275.4 172.9 59.3%
Other revenue 1.7 3.5 -51.1% 0.0 1.7 3.5 -51.1%
Total Consolidated Revenue 1129.2 947.2 19.2% -78.6 1207.8 1175.5 2.7%
Total Revenue excluding Construction Service revenue (2) 880.3 829.0 6.2% -52.2 932.4 1002.6 -7.0%

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

2 Excludes Construction Service revenue.

 

Aeronautical Breakdown (in US$ million)

 

9M19

as reported

9M18

as reported

% Var

as reported

9M19 ex

IAS 29

IAS 29 

 9M19

9M18 ex

IAS 29

% Var ex

IAS 29

Aeronautical Revenue 530.0 485.3 9.2% 563.0 -33.0 586.5 -4.0%
Passenger use fees 414.2 373.0 11.1% 442.9 -28.7 457.7 -3.2%
Aircraft fees 90.9 89.5 1.6% 95.2 -4.3 104.3 -8.7%
Other 24.9 22.9 9.0% 24.9 0.0 24.4 2.3%

 

Commercial Revenue Breakdown (in US$ million)

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Commercial revenue 348.5 340.2 2.4% -19.2 367.7 412.6 -10.9%
Warehouse use fees 104.4 106.9 -2.3% -10.4 114.8 143.4 -20.0%
Duty free shops 35.7 39.0 -8.4% -2.0 37.7 30.9 22.0%
Rental of space (including hangars) 26.1 23.1 13.1% -1.2 27.4 38.4 -28.7%
Parking facilities 20.8 23.9 -12.7% -1.2 22.1 29.3 -24.6%
Fuel 45.8 40.7 12.6% -0.5 46.3 45.1 2.8%
Food and beverage services 15.9 17.7 -10.5% -0.3 16.2 20.1 -19.8%
Advertising 14.9 13.4 11.5% -0.5 15.5 17.6 -12.2%
Services and retail stores 12.3 12.4 -1.2% -0.2 12.5 15.1 -17.3%
Catering 7.6 7.5 1.5% -0.7 8.3 7.6 9.7%
VIP lounges 21.8 16.8 30.1% -0.3 22.1 17.9 23.6%
Walkway services 6.5 5.5 18.9% -0.6 7.1 7.5 -5.2%
Other   36.5 33.3 9.7% -1.3 37.8 39.7 -4.8%

 

 

 

 

Total Expenses Breakdown (in US$ million)
 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Cost of services 302.8 227.8 32.9% -2.6 305.4 242.8 25.8%
Selling, general and administrative expenses 55.6 36.7 51.5% -3.7 59.4 40.6 46.4%
Financial loss 113.2 114.2 -0.9% -49.2 162.4 197.5 -17.8%
Inflation adjustment 6.3 10.0 -36.6% 6.3 0.1 0.9 -93.0%
Other expenses 0.8 0.8 -8.2% 0.0 0.7 1.0 -26.2%
Income tax expense -17.4 0.8 -2271.6% 26.9 -44.3 -10.7 313.4%
Total expenses 461.3 390.3 18.2% -22.3 483.6 472.0 2.5%

 

Cost of Services (in US$ million)
 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Cost of Services 302.8 227.8 32.9% -2.6 305.4 242.8 25.8%
Salaries and social security contributions 45.8 43.1 6.5% -1.7 47.5 47.2 0.8%
Concession fees 41.4 41.5 -0.2% -1.8 43.3 46.4 -6.7%
Construction service cost 108.0 45.2 139.0% -9.0 117.0 53.2 119.9%
Maintenance expenses 29.8 27.5 8.6% -2.3 32.2 32.0 0.4%
Amortization and depreciation 36.1 32.7 10.2% 12.4 23.7 24.5 -3.6%
Services and fees 16.9 16.0 5.9% 0.2 16.7 17.0 -2.0%
Cost of fuel 13.9 12.5 11.5% 0.0 13.9 12.5 11.5%
Taxes 4.0 4.3 -6.6% -0.1 4.1 4.5 -8.4%
Office expenses 4.0 2.0 96.8% -0.3 4.3 2.5 69.7%
Provision for maintenance cost 0.3 1.0 -69.2% 0.0 0.3 1.0 -69.2%
Others 2.4 2.1 17.6% 0.0 2.4 2.0 21.6%

 

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

 

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

SG&A 55.6 36.7 51.5% -3.7 59.4 40.6 46.4%
Taxes 9.5 10.0 -4.7% -0.7 10.2 12.0 -14.7%
Salaries and social security contributions 7.1 7.1 -1.1% -0.2 7.3 7.8 -6.4%
Services and fees 9.8 10.0 -1.8% -0.1 9.9 10.3 -3.8%
Office expenses 0.8 2.4 -65.4% -0.1 0.9 2.9 -68.0%
Amortization and depreciation 2.2 2.2 1.1% 0.2 2.0 2.1 -4.9%
Maintenance expenses 0.5 0.7 -30.1% 0.0 0.5 0.8 -37.0%
Advertising 1.1 0.7 52.5% -0.1 1.2 0.9 29.3%
Insurances 0.4 0.4 1.3% 0.0 0.4 0.4 0.2%
Charter services 0.2 0.2 0.0% 0.0 0.2 0.2 0.0%
Bad debts recovery -0.2 -2.6 -93.6% 0.0 -0.2 -2.6 -93.6%
Bad debts 22.2 3.4 553.4% -2.8 25.0 3.7 577.7%
Others 2.0 2.2 -10.9% 0.0 2.0 2.2 -11.0%

 

 

 

 

Expenses by Segment (in US$ million)

Country

3Q19

as reported

3Q18

as reported

% Var

as reported

IAS 29

3Q19

3Q19 ex

IAS 29

3Q18 ex

IAS 29

% Var ex

IAS 29

Argentina 225.5 138.1 63.3% -6.3 231.8 157.1 47.5%
Italy 30.6 33.8 -9.3% - 30.6 33.8 -9.3%
Brazil 27.1 27.7 -2.5% - 27.1 27.8 -2.8%
Uruguay 17.0 16.9 0.4% - 17.0 16.9 0.4%
Armenia 27.2 24.4 11.7% - 27.2 24.4 11.7%
Ecuador 25.0 17.7 41.2% - 25.0 17.7 41.2%
Unallocated 6.7 6.6 1.5% - 6.7 6.6 1.5%
Total consolidated expenses (1) (2) 359.1 265.3 35.4% -6.3 365.5 284.3 28.5%
(1)Excludes income tax and financial loss
(2)We account for the results of operations of ECOGAL and AAP using the equity method

  

Costs and Expenses (in US$ million)

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Cost of Services 809.0 630.1 28.4% -16.9 825.9 747.4 10.5%
Salaries and social security contributions 137.1 127.7 7.3% -7.1 144.2 150.3 -4.1%
Concession fees 118.7 115.8 2.6% -7.9 126.7 141.4 -10.4%
Construction service cost 247.4 116.9 111.7% -26.4 273.8 171.5 59.7%
Maintenance expenses 86.1 80.0 7.6% -7.0 93.1 104.0 -10.5%
Amortization and depreciation 107.7 92.3 16.8% 34.9 72.9 74.4 -2.0%
Other 112.0 97.5 14.9% -3.3 115.3 105.7 9.1%
Cost of Services Excluding Construction Service cost 561.6 513.2 9.4% 9.5 552.1 575.9 -4.1%
Selling, general and administrative expenses 127.3 108.1 17.8% -7.2 134.5 127.4 5.6%
Other expenses 1.6 1.7 -6.6% 0.0 1.6 2.0 -19.6%
Total Costs and Expenses 937.9 739.9 26.8% -24.1 962.0 876.9 9.7%
Total Costs and Expenses Excluding Construction Service cost 690.5 623.0 10.8% 2.3 688.3 705.4 -2.4%

 

Total Expenses Breakdown (in US$ million)

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Cost of services 809.0 630.1 28.4% -16.9 825.9 747.4 10.5%
Selling, general and administrative expenses 127.3 108.1 17.8% -7.2 134.5 127.4 5.6%
Financial loss 192.8 310.8 -37.9% -119.2 312.0 482.1 -35.3%
Inflation adjustment 19.9 21.4 -7.2% 20.0 -0.1 0.9 -109.6%
Other expenses 1.6 1.7 -6.6% 0.0 1.6 2.0 -19.6%
Income tax expense -10.2 -5.7 81.0% 36.4 -46.7 8.0 -680.1%
Total expenses 1140.4 1066.4 6.9% -86.9 1227.3 1367.9 -10.3%

 

 

 

 

Cost of Services (in US$ million)              
 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Cost of Services 809.0 630.1 28.4% -16.9 825.9 747.4 10.5%
Salaries and social security contributions 137.1 127.7 7.3% -7.1 144.2 150.3 -4.1%
Concession fees 118.7 115.8 2.6% -7.9 126.7 141.4 -10.4%
Construction service cost 247.4 116.9 111.7% -26.4 273.8 171.5 59.7%
Maintenance expenses 86.1 80.0 7.6% -7.0 93.1 104.0 -10.5%
Amortization and depreciation 107.7 92.3 16.8% 34.9 72.9 74.4 -2.0%
Services and fees 47.8 40.6 17.8% -1.7 49.5 45.2 9.6%
Cost of fuel 32.0 27.7 15.3% 0.0 32.0 27.8 14.9%
Taxes 12.5 12.6 -0.9% -0.3 12.8 13.3 -4.1%
Office expenses 10.2 7.5 35.6% -1.2 11.4 10.0 13.6%
Provision for maintenance cost 1.4 1.8 -21.8% 0.0 1.4 2.1 -32.8%
Others 8.1 7.2 13.1% -0.1 8.2 7.3 13.0%

 

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

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

SG&A 127.3 108.1 17.8% -7.2 134.5 126.0 6.8%
Taxes 27.8 28.3 -1.8% -3.0 30.9 38.8 -20.4%
Salaries and social security contributions 21.2 21.9 -3.2% -1.0 22.1 25.4 -13.1%
Services and fees 27.8 29.1 -4.5% -0.3 28.1 30.0 -6.5%
Office expenses 3.3 5.9 -44.3% -0.3 3.6 8.0 -54.9%
Amortization and depreciation 7.4 6.4 15.4% 0.8 6.6 6.2 5.8%
Maintenance expenses 1.2 1.9 -36.8% 0.0 1.2 2.2 -46.5%
Advertising 1.7 2.1 -16.4% -0.1 1.9 2.2 -16.1%
  0.0 0.0 - 0.0 0.0 0.0 -100.0%
Insurances 1.3 1.6 -20.3% 0.0 1.3 1.6 -20.1%
Charter services 0.6 0.6 0.0% 0.0 0.6 0.6 0.0%
Bad debts recovery -0.6 -2.6 -78.5% 0.0 -0.6 -2.2 -74.0%
Bad debts 28.6 5.0 474.0% -3.3 31.9 5.0 537.3%
Others 6.9 7.9 -12.5% 0.0 6.9 7.9 -12.5%

 

Expenses by Segment (in US$ million)

Country

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Argentina 560.7 366.9 52.8% -24.1 584.8 503.8 16.1%
Italy 86.6 96.1 -9.9% - 86.6 96.1 -9.9%
Brazil 85.3 91.8 -7.1% - 85.3 91.8 -7.1%
Uruguay 53.8 53.5 0.5% - 53.8 53.5 0.5%
Armenia 70.6 58.9 19.7% - 70.6 58.9 19.7%
Ecuador 61.8 50.0 23.5% - 61.8 50.0 23.5%
Unallocated 19.3 22.6 -14.8% - 19.3 22.6 -14.8%
Total consolidated expenses (1) (2) 937.9 739.9 26.8% -24.1 962.1 876.8 9.7%

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

 

 

 

 

Adjusted EBITDA by Segment (in US$ million)

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Argentina 176.1 173.5 1.5% -20.1 196.2 251.0 -21.8%
Italy 31.2 33.1 -5.8% - 31.2 33.1 -5.8%
Brazil 10.5 13.1 -19.4% - 10.5 13.1 -19.4%
Uruguay 44.4 44.6 -0.5% - 44.4 44.6 -0.5%
Armenia 39.4 37.5 5.1% - 39.4 37.5 5.1%
Ecuador 19.4 20.1 -3.7% - 19.4 20.1 -3.7%
Unallocated -3.0 -4.5 -32.4% - -3.0 -4.5 -32.4%
Perú -0.9 -0.1 1097.3% - -0.9 -0.1 1097.3%
Total segment EBITDA 317.1 317.3 -0.1% -20.1 337.1 394.8 -14.6%

 

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

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Income from Continuing Operations 32.5 -50.8 -164.0% -9.9 42.4 -42.5 -199.7%
Financial Income -33.1 -57.2 -42.1% 16.9 -50.0 -107.1 -53.3%
Financial Loss 192.8 310.8 -37.9% -119.2 312.0 482.2 -35.3%
Inflation adjustment 19.9 21.4 -7.2% 20.0 -0.1 0.9 -109.6%
Income Tax Expense -10.2 -5.7 81.0% 36.4 -46.7 -19.3 142.2%
Amortization and Depreciation 115.1 98.7 16.7% 35.7 79.4 80.7 -1.5%
Adjusted EBITDA 317.1 317.3 -0.1% -20.1 337.1 394.8 -14.6%
Adjusted EBITDA Margin 28.1% 33.5% -542 0.0% 27.9% 33.6% -568
Adjusted EBITDA excluding Construction Service 315.4 315.9 -0.1% -20.1 335.5 393.4 -14.7%
Adjusted EBITDA Margin excluding Construction Service 35.8% 38.1% -227 0.0% 36.0% 39.2% -322

 

 

9M19

as reported

9M18

as reported

% Var

as reported

IAS 29

9M19

9M19 ex

IAS 29

9M18 ex

IAS 29

% Var ex

IAS 29

Financial Income 33.1 57.2 -42.1% -16.9 50.0 107.1 -53.3%
Interest income 22.2 15.7 41.0% -2.7 24.9 20.0 24.4%
Foreign exchange income 7.3 39.1 -81.3% -14.1 21.5 84.5 -74.6%
Other 3.6 2.3 54.3% 0.0 3.6 2.6 36.6%
Financial Loss -192.8 -310.8 -37.9% 119.2 -312.0 -482.1 -35.3%
Interest Expenses -66.9 -68.7 -2.7% 3.0 -69.8 -67.1 4.1%
Foreign exchange transaction expenses -60.6 -163.7 -63.0% 116.2 -176.8 -336.5 -47.5%
Leases financial cost -0.4 0.0 - 0.0 -0.4 0.0 -
Changes in liability for concessions -62.6 -69.0 -9.3% 0.0 -62.6 -69.0 -9.3%
Other expenses -2.4 -9.3 -74.6% 0.0 -2.4 -9.5 -75.2%
Inflation adjustment -19.9 -21.4 -7.2% -20.0 0.1 -0.9 -109.6%
Inflation adjustment -19.9 -21.4 -7.2% -20.0 0.1 -0.9 -109.6%
Financial Results, Net -179.6 -275.1 -34.7% 82.3 -261.9 -375.9 -30.3%

 

 

 

 

% Ownership by Concession

   
     
Aeropuertos Argentina 2000 Argentina 81.3%
Neuquén Argentina 74.1%
Bahía Blanca Argentina 81.1%
Toscana Aeroporti (Florence and Pisa airports) Italy 46.7%
ICAB (Brasilia Airport) Brasil 51.0%
ICASGA (Natal Airport) Brasil 99.9%
Puerta del Sur (Carrasco Airport) Uruguay 100.0%
CAISA (Punta del Este Airport) Uruguay 100.0%
AIA (Armenian airports) Armenia 100.0%
TAGSA (Guayaquil Airport) Ecuador 50.0%
ECOGAL (Galápagos Airport) Ecuador 99.9%
Aeropuertos Andinos del Peru Peru 50.0%

 

Selected Income Statement Data (in US$ million)

  3Q19 3Q18 % Var. 9M19 9M18 % Var.
Argentina            
Total Revenue 244.7 182.6 34.0% 664.2 490.2 35.5%
Total Revenue Excluding IFRIC12(1) 149.5 143.8 4.0% 440.9 388.1 13.6%
Operating Income 22.9 48.0 -52.4% 114.3 132.9 -14.0%
Adjusted Segment EBITDA 43.6 64.6 -32.5% 176.1 173.5 1.5%
Adjusted Segment EBITDA Mg 17.8% 35.4% -1757 26.5% 35.4% -887
Adjusted EBITDA Margin excluding IFRIC 12(1) 29.1% 44.9% -1579 39.9% 44.7% -476
Italy            
Total Revenue 42.6 46.7 -8.7% 108.5 120.4 -9.9%
Total Revenue Excluding IFRIC12(1) 41.2 42.3 -2.5% 103.1 109.3 -5.6%
Operating Income 12.0 12.9 -7.1% 21.9 24.3 -9.6%
Adjusted Segment EBITDA 15.1 15.8 -4.5% 31.2 33.1 -5.8%
Adjusted Segment EBITDA Mg 35.4% 33.9% 155 28.8% 27.5% 124
Adjusted EBITDA Margin excluding IFRIC 12(1) 36.5% 36.7% -22