Q1 2020 Earnings Call
Slide presentation accompanies today's webcast and that's available in the Investor section of course, what else you own American airports Investor Relations website, and H T T P.
Investors that corporate Us Young America airports Dot com.
As a reminder, all participants will be in listen only melt they'll be an opportunity to ask questions at the end of the presentation as I remember as a reminder, this call is being recorded.
At this time I would like to turn the call over to see men I I never see I've Investor Relations. Please go ahead.
Thank you good morning, everyone. Thank you for bringing us to me.
It's the they called when you have to be one again a ticket.
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By now I have money.
I would be available on the journey fiction.
Before we will be I'd like to make the policies because I was saying.
We've got a week, we think well let me stay like.
Thanks, I, usually when did they seemed like they chose <unk> and <unk> and we think biting we'd be happy.
We assume no obligation to update or revise any forward looking statement, we said New York change even though.
No that spoken Viking BOPUS piece as well, but on the something with me are the maker for my.
What do they wouldn't be stuck with both it's moving type B meeting, that's something in Argentina, which became effective into like when you see.
To me well make me when they come to the reputation of <unk> Stelmi, Bobby <unk> M before.
No when they do tend to go overboard be all my feeling again.
Thank you.
Hello, everyone welcome to today's call.
I wish you and your bombing exactly.
Great and dynamics, we have seen since the second half March are not compatible anything we have seen before.
The company's 19 outbreak heavily impacted wood pellet industry worldwide needing to understand good situation in which are exactly have dropped a minimum that was not there.
Please go ahead.
I will discuss we always you break even financial highlights for the fourth quarter.
And the most recent trends across our network.
Then provide an update.
Well the stub did you give me should be we shared with you know with previous close to mitigate the impact that looks like what our business.
Before I begin I would like if I like the significant progress how about you over the past few weeks.
Why don't you want to strengthen liquidity.
We successfully refinanced nearly 50%.
But I mean just bitumen.
The next was one with the recent that's actually doubled that I will cover in more detail later in Beijing.
No.
Don't even to a brief overview workforce walk through each towards passenger traffic, so almost 17% mainly due to the 45% golf we sold in March.
Well most of our operations, we got this Judy.
Oh I'm in shutdowns actress.
Oh, that's nice what's really pick up significantly impacted by deployed they'd be funding.
This coupled with difficult macro conditions, you know Dino and expect depreciation both Yaki you didn't end up in the starts the year on year declined nearly 17%.
Yes, I think Blake in the fourth quarter.
And does that we'd be.
Most well all cost and expense reduction initiatives were implemented late March in early April benefit from this metric did not know cool that's what really starts.
Therefore comparable adjusted EBITDA declined 30% to 86 million border, we'd be modeling takes I could well constructed 33% drove 39% in the fourth quarter often get ending.
No that's comparable adjusted EBITDA in what do you think the blended excuse.
4.5 million Blair known catching back ended up seeing dispute.
We invested 52 million motorists and you've got fixing the fourth there must be Lloyd before the old govies they'd be pandemic, mainly in works and it takes up and that a buck airports in Argentina.
That's what anything you'd like it could be a nickel.
Since then you have to spend that none of them so topics to be surpassed and I will discuss discussed that more in depth.
Sure.
More of the thing that's about first walk of book it wouldn't be results can be phone you know what earnings report.
And do you see one of these getting big.
Please turn to slide four.
Beginning in March Gordon I guess are comfortable operations establish a few receptor rather than simply because you're going to date the spread of goodbye.
Mhm right you can see that that'd be.
Each of our operations I stepped away.
At the moment, Yeah can you go Ecuador, and bring board birds eye, either close with bad in domestic and international flights.
And our and our airports are only operating parallel and we've got the Asian flights.
You mean, only in Uruguay borders or close to commercial passenger traffic.
No there was based on recent.
Resolution well hear anything or likes to say if he gets for traveler before September 1st.
The rest of the Congress border have not been gold.
But we are only operating guard and domestic like except for media.
We also.
Our operating there and actually looked like.
Moving over like pipe you can see on the truck on the left I think.
Yeah, maybe they would be passenger traffic trends for April amazed wouldn't get wouldn't be.
The impact of the top and bottom enjoyed you need March go eurone or declines of approximately 98% in each of those rigs.
After we might either.
What do you usually do not be skills. They leave me very weak <unk>, yeah for Whiting and gets bigger and he's going to share with you how he called me thinking, but let me ask impacted our business.
On the Rightside life, we provide an update on the most recently bought the cargo trends.
Why do you can do you see some kind of what you would be actually we are supposed to be painting transportation.
I think I'd venture licensed to support the continuity of supply chain cargo was down 56% you don't hear last April.
This was driven by all the countries, except your wife, which benefited.
In some extraordinary goggle movements that more.
Please turn to safety.
You know your and Golly, we shared with you or action plans to mitigate <unk>, but you had.
We have been working focusing on four key areas.
Starting with the one being reported basis passengers.
This is our top priority and we have been working seems to be one to detect them.
We haven't had safety and that's been hygiene pockets across our operations establish remote working and only a center stuff has been working on Bradley.
We added with good that figure.
Okay victory.
Late I spoke with the Corlanor virus response are being reviewed I guess are comfortable operations. We have begun to prepare safety policies to ensure a successful transition back to walk you probably wouldn't distinctions are they.
Second our real focus it's got some thoughts I'm glad trash preservation.
Yeah, they made significant reductions in both expenses in the food you're right.
And I mean, you.
Millennial somebody was actually.
Okay.
And the reductions of working hours in Uruguay embedded Armenia.
Some of our games on the bundle I already we are ready receiving Gordon I didn't bring in subsidies.
Yes, we are receiving going in the system.
A portion of April salaries recently, a month or we need a 1.2 million more.
We have applied to receive these would be made and now we can go on them support.
The Gordon.
Good eventually led to an extent diesel system.
We also reviewed maintenance contracts across auto a country some operational driving nipigon savings that do we expect to see mystic important for instance, nothing yet how does it do you.
One of the to run boys and girls one of the to be or did you mean with expenses.
It wasn't particularly if we do we successfully negotiated we also like in the extension of things don't I crossed the weakness.
Importantly, stopping the neighborhood on capital investments were suspended.
Nope, but you do we get embarrassing but to the fourth quarter or took over most of the meeting we began its got fixed line for the year.
So we do not expect to encourage you mentioned that significant got baked into your.
We need to cost reduction measures, we expect to obtain a year on year reduction of approximately 43% BOPUS cash operating cost and expenses, excluding once I should be.
Most of the benefit from the only because the majority of wishing you said the beginning in the second quarter.
These if you made the do it actually was based on our second quarter Blakey linking the two cash operating cost and expenses.
You don't just like seven.
I forget the basis, you know previous going as we navigate these unprecedented crisis, we started discussions with regulatory agencies to renegotiate physicians you bake.
They.
We have made progress when we spoke that anybody and they're moving forward with conversations with regulators newborn and they go to.
We still before the real thing they've got to the if we want to be fair to be somewhat going deeper into the body of it and fixed concession fee payment, but where do you.
In May in July.
More recently.
We keep the they're not they're going up we really need to be there did you write down to 51, they suddenly I mean like an assessment keeping them or are you then do you like to be Doug.
Because the nation.
No you wouldn't be made based on the actual number of passengers indefinitely.
We don't just inside of the mid and long term, even Butte work under review of the we believe room overly concerned that remains at gross out up with network.
Reminder, acquisition conducting or do you know that he and I mean, you have guaranteed returns.
Betsy and make where we have concession contracts that condensate force majeure guesses.
Yes, we have initiated conversations to begin the process requesting it but let me give you even before they get together and the type of concessions.
Right, Nick what were we have filed a request, giving you an economic we have pretty good process or what have you gotten sick.
Finally yervoy.
We will soon begin that brought us to request that you're dealing with Lehman optical system. That's one.
After you mentioned you know are less quoted.
Got a mutual stages will discuss this which requires school I believe because they've really got 30 tournaments.
We will be providing updates overtime they become available.
Turning to slide eight.
We have also made significant progress on the strengthening of our debt profile.
Well the bus me.
We have entered into a series of negotiations we are the only goes and Doug and I'm very proud to announce doesn't have that 50 to extend that almost half of our maturities due over the next 12 months.
We do Brett do felt over 156 million put us in principle and interest payment.
And there can be no we have contributed to the Texas.
Last Wednesday, we completed an exchange offer for our 400 million international nodes do 20 can be so when we 86 point.
Seven 3% of the principal amount that under 40 exchange.
The second allowed us to be for $60 million too busy but I'm. Just statements. We also have thing we were certain debt covenants on the November blends into one.
Second we burn that don't tell US 36.6 million literacy breached both due to the blended in connection with over 100 of blunt. The median great facility and it doesn't mean they are buying up it alone.
Doug do you know.
We only have a total of both the wondering endorsing financial debt due this year.
We started to slow down.
You're right, we always say lunch and exchanges work well 200 million notes due to don't be 32.
We have little thing approximately 92% because it brings about among them there for the exchange.
Early participation that like.
Before we got the option to be for up to $20.5 million Invincible I think the Cleveland well lead you had to do over the next 18 months.
In Asia, we first at both Oh $8.7 million in principle payments duplicate gunby under our local news.
More than thing on the terms and conditions. All these transactions can be found in flight.
Our earnings report and we think they 6K filings.
You don't just like that.
Yes, you read our efforts to strengthen <unk> and extend our debt maturity profile.
As you can see on the left chart.
We had 278 million what else in principle and interest payments due over the next 12 months.
There is some of that you find that needs to be.
The good news to me because they are debt maturities, we get the.
Over 149, because there's no do during this period.
Moving on.
Well, our balance sheet and degrees here on slide 11.
We closed the fourth quarter Olympic then.
<unk> 173 million endorsing gasoline agreement and the net debt EBITDA ratio 2.9 times.
Also had approximately.
Thank you then billion minutes and actually mean.
And then deposits not included in gosh. The degree of is that the way that additional liquidity if needed.
We have several you should think something away to preserve our cash and strengthened our liquidity, which I have been sharing with you over at least presentation.
I'm very pleased with the significant progress we made so far.
We successfully bird hundred don't be that'd be good working interest and principal payments or reason to review over the next 12 months and can only nonessential copies I think that.
We also implemented significant cost expense reductions and suspended during the third party <unk> an equity.
Moreover, we obtain additional funding in the first quarter for an amount of $37 billion.
No please turn to slide.
As we end up to the new normally.
We are developing customized what they're going to talk with our country's operations to ensure maximum pet safety and Gulfport, where our passengers anybodys guess articles.
We have established dedicated team that's working together with you have you shouldn't industry has the regulators to said and really buying new safety and has broken those.
At the close I also being moved their money book and would be up to bite in Texas excuse experts.
Our efforts are being adapted to this new written vitamin implementing measures to minimize the risk of infectious of our passengers and employees.
While ensuring uninterrupted operations.
These groups had said he'd be teaching institutions distance mixtures screening and bio security become drove procedures for old passengers and putting their airports and beat them in patients.
Have you done solutions to reduce gone back.
We've been why limiting the crowds.
When you need the Bakken regarding will depend on how class, we regained customer computer do probably by making our passengers in safe.
No.
Turning to slide 15.
These unprecedented rights it has to be early disrupted the traveling the world wide, resulting in significant decline buttons are dropping over the last month.
The block we recall what do you.
He remains uncertain and he's dependent on a number of factors, including the successful development of medical treatment or but can you.
Gordmans the system gotten work opioids to Dallas and utilization of the global economies.
Well what advice, none we have rapidly into these measures to strengthen our financial position.
Refinance our debts in Argentina, Uruguay, extending maturities and enhancing Vicki really be.
We made significant progress and protecting our liquidity by reducing costs limiting capex wise, we continue to work on a thing have you should that funding.
At the same time, we started negotiations with regulators to review economic recovery room of concession agreements.
Despite the overall uncertainties surrounding everything they do.
The situation is very good.
For example in Europe.
If you will see earlier by the virus Congress are starting to discuss listing buttons on domestic garland and or open borders for regular flights in the near term.
That's right after considering these didnt quite in teams.
Yes, good indicated that we are starting to see the new show signs of a gradual recovery process.
With this anyway, we have started building a recovery plan.
They didn't 40 new world.
And developing the news done that's a stellar W will be critical to reactivate the television mistreatment near future.
I wish we think our teams and bought her worldwide for older how to work in this difficult time as we move together in overcoming these unprecedented challenge and reviewed travel again.
Yeah, I'm not ready to take questions. Operator, please open the lines for questions.
We will now begin the question and answer session. If you would like to ask a question. Please press Star then one on your telephone keypad.
If you use enough speakerphone, please pick up your handset before pressing the keys to withdraw your question. Please press Star then too.
Yes, that's a limit yourself to one question and one follow up you may reenter the queue for additional questions at this time, well pause momentarily to assemble a roster.
Our first question is from Iran, and so I see no from Oppenheimer. Please go ahead.
Hey, Good morning, guys. This is mark on for years. Thanks for taking your question I'm just quickly on your Capex that can cause for show how much of 52 million of Capex in the quarter maintenance versus a expansionary and then sort of thought can you just give a sense of you know what's a normal.
Normal capex required for operations going forward and how much can you potentially take that down by thank you.
Okay.
[laughter].
No we on a monthly thank you for the ones, who we have right maybe not.
Topic in a in a minimum they've now but most of our main must meet that usually every quarter and Oh I think so gain coming in there that they eat a minimum Brad although we don't have that they've done well not right now and we'll see if the medium that would be like that.
Just to give you a a navy oh.
Most of those even when I don't be now where you know that we are developing and though have been developing if they signed up okay. It was I know so from what they need to happen. Thank you Glenn that are mainly by national topic. So although we don't have the bell media mainly for.
Samsung or not so much more oh my goodness.
Okay Gotcha. Thank you very much and then just another quick one I believe you guys have mentioned that you start to see sorry, that's recovery can you I sure any metrics or maybe you know that are passenger traffic in several regions or you know what sort of.
What's where sartre recovery are you guys see thanks.
Sure I'm not so.
HM East somebody else that's.
Being a you know about it they live copy that 19 does anyone have you keep an eye industry demos.
We have started to see some initial buying oh, it's probably maybe we'll need to companies that Brad do I need, but they'll go deep distinct shows including sounds okay. So the open with border and so that's going to stay that way, especially as it comes down we probably although.
I said.
There's no remains on track.
[laughter], they we I'm not able to provide asking myself how long a decision.
And we made it is today or.
You made some oh, we call them in the next in line.
Okay, great. Thank you guys very much.
Again, if you want to ask a question. Please press Star then one.
Our next question is from Chris that chart real from Marathon asset management go ahead.
Hi, good morning, Thanks, Thanks for having the call and thanks for taking my question.
I guess it just two things.
Possible could give us an idea of sort of what.
Like monthly cash burn you have given its current strip, where we're you were 90% reduction of passengers.
Just sort of how how if we come to sort of does is general sense, though you know what the monthly cash one is now expected obviously be reducing as as a traffic goes back but that would be helpful. If you can number one and then number two.
Well I don't expect there have been.
Has been much progress on this given the sovereign restructuring and and the client of ours issues and everything else I'm. Just curious if there's any progress made on Ah talks about extending the concession in Argentina.
Thanks.
So okay. So let me take the stars, but so does that mean, a freshman and I know it's been correctly with the first one on one of his pod <unk> that's in the Oh enough our concave HM.
I've been 19, so Oh, we stop doing because we we have me, yes, I keep me we stuck between active really needs to be on buses actually mainly on may nine salaries and go on so and poor.
I need to make it a cashman for April.
Around and that before being young I wasn't going along with the nice thing and.
Well they said before the first nine months with funding, but Oh I mean, the claim that you could be as well as I mentioned I or faster, but that's sort of Vincent.
When I asked condiments and not being born to pick one question.
Thank you ma'am.
I think you for question Chris.
Well.
Regarding regarding the extension as we've been saying before these onetime cash.
Hi, every ingredient do we really do have dozens question would be more Monday, how did before these huge crises.
And remove that given what is going on now it becomes even more obvious the need for for the extension of the contract.
Having said that we would you hope to begin negotiations with the warm and as soon as possible but.
Given the Gordon deems and and the priorities that have shifted towards the crisis.
That has not happened yet, but we hope to do begin as soon as possible.
That makes sense, thanks a lot.
Again, if you have a question. Please press Star then one.
At this time, we have no question. So we will conclude our question and answer session I would now like to turn the conference back over to my Dean.
Neil can for closing remarks go ahead.
I'm sorry, there's another I know Theres no question I'm sorry. It just came up Okay. Go ahead, Okay does of course I'm from all that stuff where to see our name from Citibank go ahead.
Hi, good morning, I'm, sorry, I'm dialing Pam Scott, So I couldn't press or what type.
Just a quick question on our aiming Goldman.
Such I think some level financial support beyond the deferral off the call session. They met.
And just double checking you said all 14 needle.
A 14 million or cash break it the right just double checking thanks.
Thank you have about Oh, Oh boy the question as well that's the discussions for anything it's 14. One for you then lastly, if they may be a pathway.
Yeah, because I didn't mean as they support for Devon than.
I would say that one.
Already made easy he was there, though oh fishing season, both Debbie I need Sunny, yes. Indeed, that's one Oh go ahead for the isn't that a school fishing thinking that you why oh. So it wasn't was hmm that is let me.
But so far.
Ladies and then.
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I know they let me Oh, it's only been being.
Hi nationally need no.
No.
So deep dive bronze borne by the government is doing well it sounds funny.
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That's one way or.
In any way movement for what will we.
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And the Michelin boy did indicate what those that is not make yet.
We'll let you know I assume that we have something and that's more from [noise].
Great. Thanks, Thanks very much.
At this time, we have no question. So we will conclude our question and answer session I would like to turn the conference back over to Mike gain and Nick Yeah for closing remarks go ahead.
I'd like to thank everybody for joining us doing a really appreciate your interest in our company, we brought to providing updates and or weakness you should use if they become available in the meantime didn't even so it was was there any question that you might have thank you everybody bye bye.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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