December 2021 passenger traffic recovered to 66.8% of December 2019 levels

4Q21 Adjusted EBITDA margin expanded 7.3pp YoY, supported by passenger traffic recovery and strategic execution

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 reported today its unaudited, consolidated results for the three months ended December 31, 2021, and audited results for the full year 2021. Financial results are expressed in millions of U.S. dollars and are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (“IASB”).

Commencing 3Q18, the Company began reporting results of its Argentinean subsidiaries applying Hyperinflation Accounting, in accordance to IFRS rule IAS 29 (“IAS 29”), as detailed on Section “Hyperinflation Accounting in Argentina” on page 26.

Fourth Quarter 2021 Highlights¹

• Consolidated Revenues of $218.7 million, an increase of 69.1% YoY, or 42.5% below pre-pandemic levels of 4Q19. Excluding the impact of IFRS rule IAS 29, revenues increased 64.0% YoY, to $218.6 million, mainly reflecting increases of $55.7 million in Aeronautical revenues and $42.7 million in Commercial revenues, partially offset by a $13.0 million decline in construction service revenue. When compared to 4Q19, revenues ex-IAS 29 declined 41.7%.
• Key operating metrics improved YoY:
  • Passenger traffic increased 1.6x to 13.2 million YoY, reaching 63.4% of 4Q19 levels.
  • Cargo volume increased 27.0% YoY to 91.6 thousand tons, reaching 80% of 4Q19 levels.
  • Aircraft movements totaled 162.1 thousand, an 89.0% YoY increase, reaching 76.2% of 4Q19 levels.
• Operating Income of $60.4 million versus $5.3 million reported in 4Q20, mainly reflecting YoY passenger traffic recovery. Operating income in 4Q21 included a $25.5 million economic compensation granted by the Brazilian government, together with a Eur. 9.5 million, or $10.9 million, government grant obtained in Italy. To note, operating income in 4Q20 also included a $36.6 million economic compensation in Brazil and a $12.0 million government grant in Italy.
• Adjusted EBITDA on an “As Reported” basis was $92.8 million, versus $45.5 million in the year ago period, and increased 70.8% when compared to 4Q19. Adjusted EBITDA margin expanded to 42.4% from 35.1% in 4Q20 and 14.3% in 4Q19.
• Ex-IAS 29, Adjusted EBITDA totaled $91.8 million, compared with $45.0 million in 4Q20 and Adjusted EBITDA of $52.2 million in 4Q19. Adjusted EBITDA margin ExIFRIC12 increased to 45.3% from 44.5% in 4Q20 and 17.8% in 4Q19.
• When also adjusting for impairment charges, Adjusted EBITDA improved to $91.9 million in 4Q21 from $44.0 million in 4Q20, and was 3.3% below the $95.0 million posted in 4Q19. To note, As Reported Adjusted EBITDA figures included (i) economic compensations of $25.5 million in 4Q21 in Brazil and $10.9 in Italy, in 4Q21, (ii) economic compensations of $46.7 million in Brazil and Italy, in 4Q20.

Full Year 2021 Highlights¹

• Consolidated Revenues of $706.9 million, an increase of 16.4% YoY, or 54.6% below pre-pandemic levels of 2019. Excluding the impact of IFRS rule IAS 29, revenues increased 8.8% YoY, to $677.7 million, mainly reflecting increases of $79.0 million in Commercial revenues and $31.0 million in Aeronautical revenues, partially offset by a $55.4 million decline in construction service revenue. When compared to full year 2019, revenues ex-IAS 29 declined 57.2%.
• Key operating metrics improved YoY:
  • Passenger traffic increased 41.5% YoY to 35.7 million, reaching 42.4% of 2019 levels.
  • Cargo volume increased 26.6% YoY to 323.5 thousand tons, reaching 76.2% of 2019 levels.
  • Aircraft movements totaled 497.2 thousand, a 40.9% YoY increase, reaching 58.0% of 2019 levels.
• Operating Income of $6.5 million versus a loss of $163.7 million in 2020, mainly reflecting YoY passenger traffic recovery, and down from operating income of $223.6 million in 2019.
• Adjusted EBITDA on an “As Reported” basis was $149.3 million, versus $18.1 million in 2020, and decreased 61.2% when compared to the $384.7 reported in 2019. Adjusted EBITDA margin expanded to 21.1% from 3.0% in 2020 but contracted 3.6pp from 24.7% in 2019.
• Ex-IAS 29, Adjusted EBITDA totaled $142.8 million, compared with $20.0 million in 2020 and Adjusted EBITDA of $389.7 million in 2019. Adjusted EBITDA margin ExIFRIC12 increased to 23.4% from 3.8% in 2020 and was down 8.3pp from 31.7% in 2019.
• When also adjusting for impairment charges, Adjusted EBITDA improved to $143.2 million in 2021 from $82.3 million in 2020, and was 68.4% below the $453.3 million posted in 2019.

CEO Message

Commenting on the results for the quarter Mr. Martín Eurnekian, CEO of Corporación América Airports, noted, “Our performance this quarter demonstrates the successful execution of the multiple initiatives we have been undertaking since the onset of the pandemic. Today, we have a leaner cost structure, a strengthened financial position and have made significant progress towards further enhancing the equity value of our business.”

“Passenger traffic continued to recover throughout our operations driven by pent-up demand and the overall reduction in traffic restrictions, including the opening of borders in Argentina and Uruguay starting November 1, 2021. Passenger traffic, therefore, increased to 63% of the 21 million passengers served in 4Q19, with a significant sequential improvement compared to the 46% of pre-pandemic levels reached in 3Q21. Cargo operations also continued to perform well at 80% of 4Q19 levels.”

“Increased traffic brought a strong recovery in revenues, ex-IFRIC12, which nearly doubled year-on-year to $200 million, to close to 70% of 4Q19 revenues, up from the 55% of pre-pandemic levels achieved in the prior quarter. We also delivered substantially higher profitability in the quarter, with $92 million Comparable Adjusted EBITDA, doubling 4Q20 levels. Results benefited from improved top line performance and a leaner cost structure following cost reduction initiatives implemented over the past two years, as well as a $26 million compensation recorded this quarter related to the re-equilibrium of the Brasilia Airport concession for the 2021 calendar year, reinforcing the intrinsic value of our concessions. We also accounted a 9.5 million euro government grant in Italy in the fourth quarter.”

“During the quarter we extended debt maturities for a combined amount of $425 million in Argentina and Uruguay; further strengthening the Company´s liquidity position and improving our debt profile. We also obtained new long term financing for more than $350 million in these two countries, including $174 million raised last February.”

“On the ESG front, and building on our commitment to sustainability, this year we joined the World Economic Forum´s “Clean Skies for Tomorrow 2030” coalition that aims to accelerate the supply and use of sustainable aviation fuel technologies to reach 10% of global jet aviation fuel supply by 2030.”

“Looking ahead, we expect to see a sustained recovery in passenger traffic trends led by pent-up demand and lower travel restrictions. While we observed a slowdown in traffic in January due to concerns around the Omicron variant, February already showed an improvement. In the near term, we are closely monitoring the impact of Omicron, as well as the rapidly developing conflict in the Ukraine, which at this time is not impacting our operations. In this context, we remain fully-committed to advancing on our Action Plan which has proven to deliver solid results, despite passenger traffic levels not having reached full recovery, while actively developing additional value creation opportunities and expanding our capabilities.”

Update on Action Plan to Compensate for Impact of Covid-19 in CAAP´s Business

Governmental Flight Restrictions

Most of CAAP’s markets have been gradually lifting travel restrictions:

• In Argentina, effective November 1, 2021, borders are open to all foreigners, regardless of their origin country, and since January 29, 2022, a PCR test for inbound fully vaccinated nationals and residents, and for foreigners arriving from neighboring countries, is no longer required. The remaining travelers are required to present a complete vaccination schedule and a negative PCR test within 72 hours (or a negative antigen test within 48 hours) prior to boarding. All bans on domestic travel were lifted by the end of October 2020.
• In Italy, the government has eased the restrictions and travelers are now required to present a full vaccination certificate together with a negative antigen test within 48 hours prior to boarding, or a negative PCR test within 72 hours prior to boarding.
• In Brazil, there are currently no restrictions on entry, however, all arriving passengers require an antigen test within 24 hours prior to boarding, or a negative PCR test within 72 hours prior to boarding.
• In Uruguay, borders are fully open effective November 1, 2021, for all travelers who present a complete vaccination schedule and a negative PCR/Antigen test within at least 72/24 hours prior to boarding, regardless of their origin country.
• In Armenia, there are no restrictions on air travel although some requirements apply upon entry including a negative PCR test upon arrival or a Covid-19 full vaccination certificate.
• In Ecuador, there are no restrictions to domestic or international travel. International passengers, however, are required to present a negative PCR test within 72 hours prior to boarding, or a Covid-19 full vaccination certificate.

Impact of Covid-19 on CAAP’s Passenger Traffic and Cargo Activity

Compared to the 2019 pre-pandemic corresponding months, total passenger traffic showed a monthly sequential improvement within the quarter, declining 41.6% in October 2021, 35.0% in November, and 33.2% in December. During 4Q21, commercial flights were operated across all CAAP’s countries of operations and overall traffic experienced a strong sequential recovery when compared to 3Q21, as travel restrictions commenced to gradually relax, although certain requirements still applied. Cargo activity continued to perform well and stood at 80% of 4Q19 pre-pandemic levels.

Action Plan

Since the onset of the pandemic, CAAP has consistently made significant progress on the implementation of its action plan to mitigate the impact of the crisis, including:

Cost controls and cash preservation measures: The Company achieved a 24% reduction in cash operating costs and expenses in the quarter against 4Q19, compared with YoY reductions of 43%, 34%, 43% and 46% in 3Q21, 2Q21, 1Q21 and 4Q20, respectively. Note this excludes concession fees and construction costs.

Financial position and liquidity: As cash preservation is a critical focus, since the beginning of the pandemic the Company has renegotiated a significant portion of its debt maturing in 2020 and 2021 in key markets, renegotiated debt covenants, and secured additional debt financing.

Debt Transactions:

• In April 2021, Puerta del Sur (Uruguay) obtained a $10.0 million facility from a local commercial bank.
• In May 2021, AA2000 (Argentina) extended a total of $40.0 million in principal payments under a syndicated bank loan, maturing in May, August and November 2021 for an amount of $13.3 million each, deferring those payments to May, August and November 2022. In addition, in July 2021, AA2000 extended $10.0 million in principal payments under a bilateral bank loan originally due in July 2021, now maturing under a new schedule in July, October and December 2022.
• In November 2021, AA2000 completed an exchange offer and issued $208.9 million aggregate principal amount of 8.5% Class I Series 2021 Additional Senior Secured Notes due 2031 in exchange of the Series 2017 and Series 2020 Notes, and also raised $126.0 million of new money in two tranches: i) $64.0 million in additional Series 2021 Notes, which are fungible with the bonds issued pursuant to the exchange offer, and ii) $62.0 million in new 9.5% Senior Secured Notes due 2028.
• In February 2022, AA2000 successfully completed a local offering of $174 million in dollar-linked notes.
• In November 2021, ACI Sudamerica (holding company of PDS, Uruguay), completed an exchange offer and issued $246.2 million aggregate principal amount of 6.875% Senior Secured Guaranteed Notes due 2034 in exchange of the Series 2015 and Series 2020 Notes, which included new financing of $52.9 million under the same terms as the exchange notes, which will be primarily used to fund the capex program agreed with the government pursuant to the concession extension.

Re-equilibrium of the Concession Agreements:

• In Brazil, Inframerica obtained $25.5 million in connection with the economic re-equilibrium from the impact of Covid-19 during 2021 at the Brasilia concession, in addition to the compensation of $36.6 million received in December 2020. The Company is monitoring the market to define its strategy in connection with 2022 and beyond.
• In Ecuador, in July 2021, Terminal Aeroportuaria de Guayaquil S.A. (TAGSA) and the local authorities agreed on a mechanism to compensate for the impact of Covid-19 for the year 2020 which, among other things, included a 2-year extension of the Guayaquil concession and a reduction in the concession fee. The agreement also introduced the mechanism that will be used to compensate the impact of the pandemic in 2021 and beyond, which will be measured annually.
• In Uruguay, in November 2021, CAAP signed an agreement with the Government to amend the existing concession agreement which, among other things, included a 20-year extension of the concession term.
• In Italy, the European Commission approved in March 2021 a total of Eur. 10 million to Toscana Aeroporti to compensate for the Covid-19 impact in 2020. Funds were received in August 2021. In addition, the Italian Budget Law, that became effective on January 1, 2021, contains provisions to allocate a Eur. 800 million fund in support of the overall airport sector in the country. In December 2021, Toscana Aeroporti, accounted Eur. 9.5 million, or $10.9 million, from the aforementioned fund. Eur. 3.64 million was collected on March 8, 2022, and the remaining amount is expected to be received within the first half of the year.

4Q21 Operating Performance

Passenger Traffic

Total passenger traffic increased 1.6x YoY to 13.2 million passengers, reflecting a recovery in travel demand and easing travel restrictions. When compared to 4Q19, total passenger traffic decreased 36.6%, with Armenia and Brazil leading the recovery, reaching 90% and 82% of pre-pandemic traffic levels, respectively. Traffic in Argentina and Uruguay, the two countries with prolonged government-imposed travel restrictions, stood at 53% and 50% of 4Q19 levels, respectively, recovering strongly from the past quarter, following the opening of borders, effective November 1, 2021. International and domestic traffic grew by 2.7x and 1.8x YoY, reaching 47.7% and 70.3% of 4Q19 levels, respectively. Sequentially, passenger traffic grew by 26.6% when compared to 3Q21, with strong improvements in Argentina, Brazil and Uruguay. On a monthly basis, traffic in October, November and December of 2021, increased to 58.4%, 65.0% and 66.8%, of traffic for the same months in 2019, respectively.

Passenger Traffic in Argentina increased 5.2x YoY and improved to 52.5% of 4Q19 levels. International passenger traffic increased 2.1x YoY in 4Q21 and reached 29.8% of 4Q19 traffic, showing a sequential quarterly improvement following the re-opening of borders to non-resident foreigners, effective November 1, 2021. Domestic passenger traffic, which accounted for 80% of total traffic in the quarter, increased 7.2x YoY and improved to 63.4% of 4Q19 levels, showing a continued sequential recovery.

In Italy, passenger traffic increased 3.7x YoY, and was 18% down versus 3Q21. As compared to 4Q19, traffic declined 39.8%, reflecting prolonged air travel restrictions in the country. Domestic and international traffic increased by 2.1x and 5.4x YoY, respectively, and stood at 80.0% and 53.6% of 4Q19 pre-pandemic levels. Traffic in the quarter was impacted by weaker demand caused by the emergence of the Omicron variant, in the last months of the year.

In Brazil, total passenger traffic grew 37.2 YoY, and was 18.3% below pre-pandemic levels of 4Q19. Domestic passenger traffic, which accounted for 66% of total traffic in the quarter, was up 48.2 YoY and reached nearly 90% of 4Q19 pre-pandemic levels, while transit passengers accounted for the remaining 33% of total traffic and increased 16.7% YoY to 77.9% of 4Q19 traffic.

In Uruguay, passenger traffic increased 4.1x YoY, reaching 50.2% of 4Q19 levels, showing a strong sequential recovery versus 3Q21, reflecting the re-opening of borders to non-resident foreigners, effective November 1, 2021. Borders had only partially opened to property-owners, on September 1, 2021.

In Armenia, where traffic is 100% international, traffic has been increasing sequentially since the elimination of restrictions on air travel in September 2020 and the opening of Russian borders to foreigners, although some requirements apply upon entry. Total traffic improved 3.7x YoY, or stood at 90% of 4Q19 pre-pandemic levels.

In Ecuador, total passenger traffic grew 1.2x YoY, and increased to 76.2% of 4Q19 levels. Both, domestic and international passenger traffic continued to improve sequentially since the third quarter of 2020.

Cargo Volume

Cargo volume increased 27.0% YoY in 4Q21, and stood at 79.9% of pre-pandemic levels of 4Q19, with strong contributions from Argentina, Brazil and Uruguay, which together accounted for more than 80% of total volume, in the quarter. Notably, cargo volume in Italy and Uruguay was above 4Q19 levels.

Aircraft Movements

Total aircraft movements increased 89.0% YoY in 4Q21, and reached 76.2% of 4Q19 levels, impacted by travel restrictions and lower travel demand across all segments particularly in Argentina, which accounted for almost two thirds of the aircraft movement reduction, when compared to 2019.

Tables with detailed passenger traffic, cargo volume and aircraft movement information for each airport can be found on page 39 of this report.

Review of Consolidated Results

Results for ECOGAL, which operates the Galapagos Airport in Ecuador, are accounted for under the equity method. In December 2021, CAAP signed an agreement to transfer its 50% ownership interest in Aeropuertos Andinos del Perú S.A. to Andino Investment Holding S.A. and, consequently, stop operating the five airports that were under concession. As such, fourth quarter and full year 2020 figures have been adjusted to reflect the discontinuation of the Peru business in 2021, for comparison purposes.

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 26.

Revenues

Consolidated Revenues increased 69.1% YoY to $218.7 million in 4Q21. When excluding Construction Services and the impact of IAS 29, revenues increased 96.5% YoY to $200.1 million, reaching 69.1% of 4Q19 levels, reflecting the impacts of the pandemic and currency depreciation over the share of local currency revenues in Argentina, Brazil and Uruguay. Compared to 3Q21, revenues ex IFRIC 12 improved 20.2% sequentially, with strong performance in Argentina (+50.7%) and Uruguay (+34.7%), reflecting higher passenger traffic following the re-opening of borders on November 1, 2021, coupled with a positive seasonal impact.

The following table shows revenue performance by country. More detail on the performance of CAAP´s key countries of operations can be found on page 17.

Aeronautical Revenues accounted for 42.3% of total revenues and increased 1.6x YoY. When compared to 4Q19, aeronautical revenues declined 46.1% to $92.0 million had IAS 29 not been applied, reflecting the continued impact of the pandemic in traffic volumes, despite the gradual relaxation of travel restrictions in materially all markets. During the quarter and excluding IAS 29, aeronautical revenue declined 59.7%, or $54.3 million, in Argentina, 38.8%, or $8.6 million, in Italy, and 48.7%, or $6.3 million, in Uruguay, compared to the same quarter of 2019. Moreover, Brazil declined 44.9%, or $6.7 million, and Ecuador declined 18.6%, or $3.2 million, while aeronautical revenues in Armenia increased 2.7%, compared to pre-pandemic levels of 4Q19.

Non-Aeronautical Revenues accounted for 57.7% of total revenues and increased 34.9% YoY, to $126.1 million. When compared to 4Q19 and excluding the impact of IAS 29, non-aeronautical revenues declined 38.0% to $126.6 million, mainly driven by the following decreases:

• 9.1%, or $10.7 million, in Commercial Revenues, to $107.2 million, with declines of $5.3 million in Brazil, $4.0 million in Italy and $3.0 million in Armenia, partially offset by an increase of $4.0 million in Argentina. The revenue decline was heavily impacted by the significant reduction in overall passenger traffic and was mostly related to reductions in Fueling services, VIP lounges, Duty free and Advertising, partially offset by a strong increase in Cargo revenues and, to a lesser extent, Rental of space; and
• 78.3%, or $66.8 million, in Construction Service Revenue, to $18.5 million, mainly reflecting lower capex in Argentina.

Excluding Construction Service Revenue and the impact of IAS 29, non-aeronautical revenues declined 9.0% against 4Q19, to $108.1 million.

Operating Costs and Expenses

During 4Q21, Operating Costs and Expenses, excluding Construction Service Cost, increased 27.2% YoY to $182.8 million, mainly driven by higher Salaries and social security contributions, Concession fees and Maintenance expenses, in line with higher YoY activity. When compared to 4Q19, Operating Costs and Expenses, excluding Construction Service Cost and IAS 29, declined 37.7% to $167.6 million. The decline is mainly explained by reductions in Maintenance expenses resulting from lower services and renegotiation with suppliers, together with lower Concession Fees, Salaries and Social Contributions and SG&A expenses. Currency depreciation in Argentina, Brazil and Uruguay also benefited costs.

Cost of Services increased 14.1% YoY, to $162.4 million. When compared to 4Q19 and excluding IAS29, Cost of Services declined 43.6%, to $154.8 million, mainly reflecting the following declines:

• 79.5%, or $67.3 million, in Construction Service Cost, reflecting lower capex,
• 35.1%, or $13.2 million, in Maintenance Expenses, mainly driven by the renegotiation of agreements with suppliers to adapt services to lower activity, coupled with FX depreciation against the US dollar,
• 23.5%, or $11.4 million, in Salaries and Social Security Contributions, driven by a reduction in salaries, a furlough scheme and/or a reduction in workforce across the board, coupled with local currency depreciation in main markets,
• 28.6%, or $11.3 million, in Concession Fees, in line with lower revenues, and
• 22.3%, or $3.6 million decline in Services and Fees, mainly reflecting the suspension of certain services and renegotiation of scope and fees with suppliers, coupled with local currency depreciation in Argentina and Brazil.

Excluding Construction Service cost, Cost of Services increased 29.7% YoY, to $147.5 million. On a comparable basis against 4Q19 and excluding the impact of IAS29, Cost of Services declined 27.5%, or $52.3 million, to $137.4 million.

Selling, General and Administrative Expenses (“SG&A”) increased 18.7% YoY, to $33.7 million in 4Q21 on an ‘As reported’ basis. When compared to 4Q19 and excluding the impact of IAS 29, SG&A declined 17.9%, to $28.7 million.

Other Operating Expenses were $1.4 million in 4Q21, down 43.3% from the $2.5 million recorded in 4Q20 and relatively in line with the $1.1 million posted in 4Q19.

Adjusted EBITDA and Adjusted EBITDA excluding Construction Service

During 4Q21, CAAP reported Adjusted EBITDA of $92.8 million, up from an Adjusted EBITDA of $45.5 million in the year-ago period, and 70.8% higher than the $54.3 million reported in 4Q19. All countries of operations reported positive Adjusted EBITDA in the quarter, with strong contributions from Argentina, Brazil, Armenia and Italy, which together accounted for more than 88% of the consolidated Adjusted EBITDA. Adjusted EBITDA margin ex-IFRIC12, expanded to 45.2% from 45.3% in 4Q20 and 18.2% in 4Q19.

Excluding the impact from IAS 29, Adjusted EBITDA was $91.8 million, up from an Adjusted EBITDA of $45.0 million in the year ago period and $52.2 million in 4Q19, while Adjusted EBITDA margin excluding construction service expanded to 45.3%, from 44.5% in 4Q20 and 17.8% in 4Q19. When also adjusting for impairment charges, Adjusted EBITDA improved to $91.9 million in 4Q21 from $44.0 million in 4Q20, and was 3.3% below the $95.0 million posted in 4Q19.

As Reported Adjusted EBITDA figures included: (i) economic compensations of $25.5 million in Brazil and $10.9 million in Italy, in 4Q21, (ii) economic compensations of $46.7 million in Brazil and Italy, in 4Q20, and (iii) an impairment loss of $42.8 million in Brazil, in 4Q19.

Financial Income and Loss

CAAP reported a Net financial loss of $24.0 million in 4Q21 compared to a loss of $64.5 million in 4Q20. Had IAS 29 not been applied, and compared to 4Q19, Net financial loss increased 26.4%, or $16.6 million, to $79.4 million, mainly driven by higher net interest expenses resulting from higher outstanding debt.

Income Tax Expense

During 4Q21, the Company reported an income tax expense of $38.5 million. Excluding the impact of IAS 29, CAAP reported an income tax expense of $7.0 million compared to income tax benefit of $30.5 million in the year ago quarter and an expense of $13.3 million in 4Q19. Income tax expense in the quarter reflected better year-over-year results.

Net Income and Net Income Attributable to Owners of the Parent

During 4Q21, CAAP reported a Net Loss of $0.2 million compared to a Net Loss of $47.6 million in 4Q20, mainly explained by: (i) operating income of $60.4 million in 4Q21 versus $5.3 million in 4Q20, and (ii) lower net financial losses, partially offset by (iii) higher income tax expenses.

During 4Q21, the Company reported a Net Loss Attributed to Owners of the Parent of $22.3 million and a loss per common share of $0.14, compared with a Net Loss Attributable to Owners of the Parent of $38.8 million in 4Q20 equivalent to a loss per common share of $0.24. In 4Q19, the Company reported a Net Loss Attributed to Owners of the Parent of $37.3 million and a loss per common share of $0.23.

Consolidated Financial Position

As of December 31, 2021, cash and cash equivalents amounted to $375.8 million, increasing 72.3%, or $157.7 million, from the $218.1 million reported as of September 30, 2021, and improving 33.7%, or $94.8 million, from the $281.0 million reported as of December 31, 2020. Total liquidity position at December 31, 2021, which included cash and cash equivalents as well as other financial assets, was $451.1 million, up $154.2 million, or 51.9%, from $296.9 million at September 30, 2021.

Total Debt at the close of the fourth quarter increased 7.0%, or $94.8 million, to $1,439.6 million, from $1,344.8 million as of December 31, 2020. An amount of $912.2 million, or 63.4% of total debt is denominated in U.S. dollars, while $264.6 million, or 18.4%, is denominated in Euros, $221.8 million, or 15.4%, is in Brazilian Reals, $40.7 million, or 2.8%, is in Argentine Pesos, and $0.3 million is denominated in Armenian Drams.

The Net Debt to LTM Adjusted EBITDA (excluding impairment of intangible assets) ratio stood at 7.11x as of December 2021, down from 14.02x as of December 2020, reflecting the year-over-year Adjusted EBITDA growth, supported by traffic recovery and tight cost control measures. As of December 31, 2021, all of CAAP’s subsidiaries were in compliance with their covenants.

CAPEX

During 4Q21, CAAP made capital expenditures of $24.0 million, a 40.3% YoY decline from $40.2 million in 4Q20, mainly reflecting lower investments in Argentina during the quarter, in line with the Company´s strategy of preserving liquidity in the current environment. Excluding IAS29, total Capex amounted to $23.1 million versus $33.8 million in the year ago period.

Review of Segment Results

Argentina

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 under the column ‘IAS 29’, while the columns indicated with “ex IAS 29” present 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 over 95% of passenger traffic, revenues and Adjusted EBITDA of the Argentina segment in 4Q21.

Passenger Traffic increased 5.2x YoY in 4Q21, reflecting the recovery in passenger traffic as travel restrictions were much tougher in the corresponding year ago period, and was 47.5% below 4Q19 pre-pandemic levels. This result reflected a strong quarterly sequential improvement from the 72.1% decline in traffic recorded in 3Q21 (vs. 3Q19), helped by better sanitary conditions in the country and the re-opening of borders to all foreigners on November 1, 2021. Domestic passenger traffic, which accounted for 80% of total traffic in the quarter, increased 7.2x YoY, as domestic travel continued to recover, but was 36.6% below 4Q19 levels showing, however, a strong sequential improvement.

Revenues increased 50.9% YoY to $108.9 million in 4Q21 on an ‘As reported’ basis or 43.0% to $108.8 million when excluding the impact of rule IAS29, primarily due to a significant increase in Aeronautical revenues, reflecting higher year-over-year activity and easier passenger traffic comparisons, as 4Q20 was severely impacted by the Covid-19 pandemic. This was partially offset by lower construction revenues as a result of lower Capex in the quarter. When compared to 4Q19 and excluding both Construction Service and the impact of IAS 29, revenues declined 34.1%, or $50.2 million to $96.8 million, mainly impacted by the pandemic and the FX translation effect on local currency revenues resulting from the 69.4% average depreciation of the Argentine peso since 4Q19.

• Aeronautical Revenues ex-IAS29 declined 59.7% against 4Q19, or $54.3 million, primarily reflecting the decline in passenger traffic as a result of the Covid-19 pandemic, partially offset by a higher international passenger fee introduced on March 15, 2021.
• Commercial Revenues ex-IAS29 increased 7.2% compared to 4Q19, or $4.0 million, mainly driven by an increase of 27%, or $8.3 million in Cargo revenues, primarily reflecting a 10% tariff increase on import activities applied in October 2020. This was partially offset by a decline of 33%, or $5.7 million, in passenger-related services, including VIP Lounges, Duty Free, Parking, Catering and F&B revenues, due to lower passenger traffic, combined with minor declines in Fuel, Walkway services, Advertising and Retail stores.

Total Costs and Expenses increased 8.3% YoY to $94.8 million in 4Q21 on an ‘As reported’ basis, mainly reflecting increases of 6.1% in Cost of Services and 19.9% in SG&A, in line with higher year-over-year activity. Excluding Construction Service and the impact of IAS 29, Total Cost and Expenses increased 35.3% YoY, due to the rise in operating costs following traffic recovery from the minimum levels posted in the same period of last year. When compared to 4Q19, however, Total Cost and Expenses excluding the impact of rule IAS 29 and Construction Services declined 35.9%, or $39.3 million, primarily due to lower operating expenses and Concession Fees.

• Cost of Services ex-IAS29 and excluding Construction Service Costs would have declined 35.3% compared to 4Q19, or $39.0 million, driven mainly by the following declines:
  • 40%, or $11.5 million, in Maintenance expenses due to the renegotiation of agreements with suppliers to adapt services to lower activity, coupled with lower maintenance of infrastructure and the depreciation of the local currency against the US dollar,
  • 35%, or $7.8 million, in Concession Fees, in line with lower revenues,
  • 23%, or $5.7 million, in Salaries and Social Security Contribution expenses, primarily due to the reduction in salaries and a furlough scheme under which no social contributions are required to be paid, coupled with local currency depreciation,
  • 35%, or $1.8 million, in Services and Fees, mainly driven by suspension of all non-essential services due to the Covid-19 pandemic and decline in airport activity, and
  • 52%, or $1.6 million, in Office Expenses, due to a decrease in mobility and office expenses along with lower overall expenses due to a reduction in passenger traffic.
• SG&A ex-IAS29 decreased by 50.9% against 4Q19, or $8.9 million, to $8.5 million in 4Q21, mainly due to the following declines:
  • 29%, or $2.7 million, in Taxes reflecting lower turnover taxes, related to the decline in revenues, and
  • 83%, or $1.1 million, in Advertising.

Adjusted Segment EBITDA increased $21.3 million YoY to $31.0 million in 4Q21 on an ‘As reported basis’. When excluding the impact of IAS 29, Adjusted Segment EBITDA was $30.0 million with Adjusted EBITDA margin EX-IFRIC12 of 31.0% in the quarter, compared to 18.0% in 4Q20. Compared to pre-pandemic levels of 4Q19, Adjusted EBITDA excluding IAS 29 declined 40.0%, or $20.1 million from $50.1 million, while Adjusted EBITDA margin EX-IFRIC12 contracted 3.0 percentage points from 34.0%.

During 4Q21, CAAP made Capital Expenditures ex-IAS29 of $12.0 million, compared to $24.6 million in 4Q20 and $69.4 million in 4Q19, mainly related to expansion works at Aeroparque Airport.

Italy