Q3 2020 Corporacion America Airports SA Earnings Call
Good morning, and welcome to put US Young America airports third quarter 2020 earnings Conference call.
Slide presentation accompanies todays webcast and is available in Investor section of course policy on America airports Investor Relations website and H.T.K.P.. So one for whats class for what's cash investors Dot Corporacion America airports Dot com as a reminder for all parties.
And so being just sitting on the Mel they'll be and opportunity to ask questions at the end of the presentation as a reminder, the.
This call is being recorded.
At this time I would like to turn the call over twice and now I want to see other Investor Relations go ahead.
Thank you good morning, everyone and thank you for them yesterday.
Speaking during two weeks goes and we might get on again, a chief Executive officer on.
Okay, that's great and on Frankel for Chief Financial Officer, and cooking channel I know on Monday.
Well I will be available for the Q and makes fiction.
Before we proceed and if they can maybe for <unk> Safe Harbor statement.
Good day Scold me contain forward looking statements and everything he played for one.
Good day and section for and they meet and beat fighting for CBS you see.
Yes, and no obligation to update Toby rice any forward looking statements. We said to me what changed even supposed to come for Kathy.
No debt for comparison purposes and for a bit on this done thing would be on the line. There's so much in the brick and thinking today and we'd be discussing and starts excluding hyperinflation accounting and Argentina.
Any big in July 2018.
I'd be Tony for Amazing in connection with the application and I see line can be found the line and to report.
No the beep sounds like a low birth for field not being on again.
Thank you for you may now.
Hello, everyone and welcome to <unk>.
Right. So you score for the remaining that might be on going effect on the go.
Good day.
We received it and government restrictions and your debt.
And what were we experienced sequentially and you know performance, mainly driven by group and key markets, you Betty and Matthew.
By going for United and you know probably bags for <unk> and.
No we're looking for the might even for electro ducts and number three good sticks and still make the growth.
For the quarter, it sounds good and be with us.
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Recently, the Gorman the line.
Some restrictions on summer approached I.
I will expand on these trends more these days.
Well were to Boston come on we we have made significant strides working for me I guess be on similar growth do you need to get the CBD every day.
Oh, that's great.
To begin with I am very proud on how are you have reacted rapidly and these unprecedented challenges to ensure the health and safety.
And your gross operations.
What was the height, they <unk> and <unk>.
So violent importance for us with several main airports already receiving independent.
Good day.
We exceeded the cost reduction goals that we established for the second and third for this year.
He said low the lower or gosh, if I can go.
And so she will be used by 48% growth.
For the same period last year.
Importantly on a basis, you've had and do you know you want.
And yet our chief operating cash break even levels in the quarter.
On the debt, we refinanced and important portion on Wall Street, and you just begun and.
We focus on strengthening our financial position.
We have also been working with regulatory bodies and go on and across our concession school. The company issued for the for these crisis and then discuss updates for the board shortly.
No a quick overview.
Third quarter when people on the results.
And the topic in the quarter was down nearly 89% year on year impacted by <unk> on that.
Well I'll fight I'm going to stick on what the what people would be loans.
This was for the supported by almost go back to the road you along with sustained the quality Carla.
Revenue ex I'd be glad to watch them.
Experts and year on year.
Gross 45 per cent when compared to the second important.
Despite exceeding our cost reduction target adjusted EBITDA.
Moving a non cash, but and works for loss of $19 million.
These well for sequential improvement from the low dose.
Yes, the price.
Nothing really significantly below the 100 and I'd be addressed adjusted.
Adjusted EBITDA reported in the same quarter last year.
Moving about the chart on the.
And because.
Look I think we'd be I think what growth and increased $280 million from 230 million book and the sick.
On quarter underpinned by at least and financing on the corporate and our strong focus on.
Cash and cash if we went in and what could be.
On 100 and could be done with the views and then deposits.
$73 million.
He's got a balance sheet teach and more of these they shop.
More details on our third quarter and so.
Couldn't be phone earnings reports filed yesterday and index you would still be person based on both of which are available on our website.
On slide for we provided an update on probably the sequencing both by the different Garmin that's on a.
Gross operations to contain the spread of their lives.
Hi, <unk>.
I can do you know what the more you got to be impact like the big property line.
And that's the commercial operations for stuff that last month.
Good day for workers or specific work or every day.
International and like I eat outbreak did and and especially with something.
Helping November Boardex, we opened 62.
Neighboring countries and and bidding would set the laguardia.
Anybody for much of the price that's without the work you're doing we bid on because were probably they're coming from certain GAAP.
Okay, and then Bruce good.
During the summer.
Oh no.
Good good just recently picking up.
I'm just not growth Europe are nowhere anything new on the bones and probably work on day one.
Why your weighted right sounds good and for that would work we book and I bought a remain go North America, and Warner and were the main growth during the summer season.
And thank them and good for underground and I'm wondering.
In the bottom line [laughter], the billings growth <unk> <unk> <unk> <unk>.
And we expect to see continued recovery.
Airports has become like on not just about the problem.
And.
Oh from holding [laughter] reported.
Now moving here with the cash on the <unk> Board and there were lifted and then.
And don't need and some requirements up on it.
Finally for most of the body and they want.
Dr and I didn't want good or those that don't requirements.
Well that all this great and remain quite bullish and Gorman.
For him aboard and why that was on the on the on.
Thanks, Lisa and the relative remains quite weak.
On page five we show preliminary monthly passenger traffic and then <unk>.
Gross.
No they flow [laughter], so on a gradual and monthly recovery and that's something that you and with that I think you know boomer boundary and 81% from the 98% growth neighbor.
The second group and what do you and maybe like the.
Great. That's it for much of abrasive early on and day back and.
Where we have been doing it one city, Brooklyn and make it.
And why go makes everybody feel I worked for reopen the new white equal.
And you got to be mine.
And no.
And then I looked and we continue to see like in <unk> and <unk>.
For the older books being worked on but then you on years ago, and I look on but who that would be.
Good day.
Despite these books and even things like on they're Lucky low do you.
They didn't debt.
Please turn to page six.
The debt going Green bean and have taken decisive actions [laughter].
Moving on the subject and he said he established at the beginning.
Okay great.
I think we'd expect.
[laughter] and cooking growth across the United States and I Love that what do you and leaders like you're right our large fleet growth.
Good day and that you've got.
Actually operating costs by 48%.
Hi, Bob our 40 for the year on year reduction.
These photos and one person reduction on during the second quarter.
These figures exclude acquisition and good production growth.
Well.
Also benefited from that day, but teach and against the U.S. dollar you know were based on corporations.
Which more than offset higher cool that and married interest me.
<unk>.
Sounds good operations and Mark.
While we expect to continue benefiting from the nice growth Dr. Nick on the border. We also expect to see some increases.
Those operating cost like traffic continues to recover and go on and Lucky and.
Program I gather you could use or discontinued.
Net.
Moving on to New York doesn't have the pieces, we liquidated garbage reported.
Given <unk> and <unk> right.
And then do you know the Gorman then that day.
Uh huh.
Colder unfortunately older and <unk> and up over time.
Which accounts for a must be reviewed for broke.
Okay, and then the 900000 daughter.
He said [laughter] could be for that extend that for the remainder of the people.
The same thing and you know we.
We applied for the refinancing.
Yes.
And do this December.
Oh I don't remember last quarter, you will see that book and give you work on the gun.
They'll be spread over two year period.
For most patients with the regulators and you wait and make whatever the reason you look good.
And then remainder and gold.
I know you've done on the November there you go through each and every month.
He led the way they work, which contemplate word for it would be okay.
We had net but.
They do a day, they're going to be compensation for the.
And they wouldn't be it wouldn't be whenever you get and that's on airports.
And I and yard they just on.
These losses for Glenn people would be one net leasing we had a balance between the Brooks is on the economy <unk> well be working every day.
Section.
Anybody.
Oh, good the regulator for the newspaper grants to directors and Dupont airports and difference in the country why do you need and Dina and you're right. We could you go on but because for me you because it and going back.
We compensate for that you can be and Buck on some debt.
Next move.
Moving on to our balance sheet and we keep on slide seven.
We go for the quarter, we need 180 million breast ducts, and if we win and 72 million Burton and actually abuse and deposits.
Well I don't think we agreed and coupon on you because like I said, yes, and <unk> compared to 200 and you'll notice.
You bet.
Benefiting from additional financing they did the border and those don't focus on cost reductions.
And I'm just line all that stupid, you got there and I love to reach for weight and GAAP low breakeven levels.
And not just market I didn't know I would have to give away and <unk> and <unk>.
In terms of financing.
Last summer, we [laughter], but it goes for can be bought are being low carbon I did you real person interest rate, we the two year maturity beat.
Net each in early November we obtain and 85 million Euro known for book will look like and actually do since we Didnt see your third and.
Do your Grace period, the loans going on deep Bobby Bobby ex for grade between agency.
You bet, he will thing and that each had six month you burden on breach about interest payments for the debt I'd guess, you'd yeah and the type of airports.
And every sucked up and your financing on during the quarter, both on the debt increased by 5% sequentially or 56 meters.
$1.2 billion.
But what does it wouldn't be good, but extra day year and wanting and that was.
No order flow debt and I see every day.
So.
While net debt that was increased slightly sequentially lower profitability.
Oh go ahead, and they been significantly and bucket our net debt to last 12 month adjusted EBITDA for <unk>.
I thought they sub debt ratio, which excludes the impact on non cash impairments increased 7.4 times from 5.3 times in the second quarter and 2.9 times net worth Gordon.
For the mean that we are not subject to bed Goldman and I think on sort of.
<unk>.
Earlier today for your we renegotiated debt.
Deeper and go in for debt as you know, it's exceeded net <unk>, either and you're right on the November blended won't be work.
Finally, subsequent to quarter and you Betty Rick.
We have obtained a waiver for the debt never had strength you're going on in connection with the Sixtyv media and Euro notes due 2000 people before for the medium and be doing and December.
And what about this.
Good day achievements, we helped make for <unk>. They are not simple season, and your body shop for your bike week.
We continue to work closely with the financial <unk>, our growth sort of patients manage our debt maturities and the challenging year.
Turning to slide eight.
As I mentioned, you know a lot going on we have adopted our airports net.
And it worked to meet the new pets and safety requirements, you need the risk of infection.
And over seats and what do you had and.
You know our loans, we are airports and she's here, where you ended up on those.
And maybe I'm on the 100 airports worldwide Hobbled Bain <unk> recently launched airports has that day basin elevate and how it's done and that's based on what we've been doing.
We are also working towards completing 88 subjugation for him and the review your line.
Yeah, he's and our airports and beat and Darren what a first and evaluate the risk you dependence on education and because.
Oh, two airports hobby operating on the.
Same street had brought the books and what.
Developed in conjunction with year over year, we gauge and industry regulators and in fact infectious disease and experts to ensure the maximum hats and the girls our airports network.
Okay, and do you see <unk> dot and that's crucial and be gaming customer on parents, who probably by air and support the could you do with your operations.
Now to wrap up turning to slide back.
Do you sense items of the crises done we immediately and that's in place.
And have been executing against it.
Why do you need to more reported year blending situation and oil.
On the markets we serve.
Our teams are working on site at <unk>.
And they wont be thinking of like what exposed to continue there for us.
Navigate these challenging and vitamin and good BGR on the flat at UTAS and they won't get stylish and what's going on at on this year.
Well Duffy being heavily weighted Debbie we have seen sequentially group and seems me mainly led by bus and that continues to be golar and supported by higher EBIT D.E. coli during the summer.
We maintain a cautious outlook for your time and money for the new outbreaks and Europe why do we expect to see improved performance in Latin America over the summer holidays.
Longer term RBC.
Okay, and you did give remains low.
[laughter] sustained recovery subject to consumers, gaining computes and has brought to the ones that have been established by the I probably didn't see worldwide.
Well this year do you think Oh Gorman distinctions the wife for somebody does your vaccines and overall improved economic conditions.
We are now ready for the questions labor needs open the line for questions.
We will now begin the question and answer session I would like to ask a question. If you would like to ask a question. Please press Star then one on your telephone keypad and.
Yes, and no speakerphone, please pick up your handset before pressing that cash to withdraw your question plus stars and tip [noise] well.
Well, what we ask that you limit yourself to one question and one follow up and.
For me into the queue for additional questions at this time, well pause momentarily to assemble our roster.
Our first question is from what I see on the from Citibank go ahead.
Hi, Hi, good morning, Oh, sorry, I already talked about that I had some share, but I'd love to know what on.
Occasion for the Argentine.
Airports.
Asia and how is the timeframe.
[laughter] for onshore discussions going on there.
[laughter].
And also if I may I ask another one on I'd like to know if you and the state further cost reduction such as maybe adjustments and your.
Workforce.
Thank you.
And what about the use of modeling. Thank you for your question and and your interest.
Regarding the discussions with different garments and and yard and you know one.
As we said earlier, we continue hobbing and engaging the regulator.
Regarding debt and then Mike and Erik do you don't think on session due to find that would find I find day D.S. and ways to compensate for these crisis.
Once we have a here.
That's feeling formation or and event and.
We we keep the marketing for and I assume that that happens, but so far we are continuing with debt with a discussion the same thing that happened in a in the rest of the <unk> and just what we're having various you mean discussions.
Each of the.
Consistent frameworks and how do we have.
And regarding your second cost for your second question on cost reductions.
They were basically on over or cost structure.
And we have some restrictions and deepen countries regarding how we can and then.
Employees.
But in places where there are no such restrictions we have made adjustments to our for your device and had gone.
And you know there's a we have taken different measures across our our cost Oh, if the company in terms of Opex on that art ER and everything you can think on we are using different methodologies in different countries to come up with the most aggressive cost reductions while she was.
Thank you very much.
Thank you.
Our next question is from O. Smith Camilo from Goldman Sachs go ahead.
Hi, Good morning, Thank you for taking my question.
Very quickly on all the yard negotiations with regulators or across the board across the board or what are your expectations for gardening.
Backs and tariffs, especially and in Argentina, and my second question would.
It would be.
How are you seeing local EPS on markets, but anything that you know I think Gina and if you're if you need to access local markets.
How we do you think you could raise cash there. Thank you.
Thank you for your questions.
First of all the discussions with the regulators are both still work on sessions.
And how they use what I'm at those we can use to.
Compensate or to create and I'll be covered it but I'm going to give you a and b them.
Ex adjustments or do you.
Length of the concession and and consistent and those are the main you never actually we can force do.
To create or to be gained it gonna make it for you and a a beast I'm I think depending on the deep and structures and bring books on the GAAP assertions, we own all of them on to enjoy these questions, but as I said before that they are still discussions once we have.
A concrete agreement, we would go back and you for.
For him and marketing and best doors as soon as soon as we can.
And do it Doesnt look like what could we do your margin do you know.
And you can imagine he sees for like what I thought you given the macro conditions and and.
And and up and then ER situation in Argentina, but I asked you last you saw in August we wouldn't want to exit the market.
We've got $40 million or no.
That was for force universe, and the interest so and again the the conditions on the market I felt like what they are but so far we've been we'd be able to access it and we keep monitoring it very closely to understand what opportunities do we have income so access to liquidity there.
Thank you very much.
Thank you.
Our next question is from Peter Bowl Li from Bank of America go ahead.
Hi, good morning, Marty and role Jorge. Thank you for your time and taking my questions I have two focused on Argentina, and given the significant progress on cost rationalization and can you share any color on how much you per se you expect these costs to persist are these cost cuts to persist as volume yeah wraps up.
Hi, and 2021 and.
And my second question is if you could share and any update on the negotiation of the syndicated bank loans, given the central bank's new foreign exchange restrictions on thank you.
[noise] [noise].
And I'll be there. Thank you for your question again.
As I mentioned before.
Deal for Trinity brought by them and then begin to go in a very very deep into our cost structure to gain efficiencies and cost.
We think that.
It's going to last and going out on the.
Going out to help on that in <unk>, and what size or how much will be we last it's difficult to say no I see we are adjusting but if I do the opening of the new topic and we understand what is required.
Okay, and Asian, and he in terms of the new measures and so on and but personally I can tell you that debt the way that these pandemic he does and that we.
Got to stop operations.
Gave us the time that we usually did not have to go very very deep into.
Yeah, and I think he's a lot costs and and the renegotiation well with many suppliers and and and also we weren't able to adopt blood GAAP.
But even the thing that the loans used to go into a lease and I do see some cost cuts. So person that you expect a leaner company and going out on the pandemic, how much compared to free pandemic levels are very difficult to say right now, but I'm sure that that day.
Teams have a use this time asked my just day, good and that we will see a the profits from that in the future but issue on it but it's very difficult to put a number on it I still do they would be up on deposits up and de that'd be helpful.
Future.
I will pass on to what got who two and to answer your second question regarding the syndicate loans, United and <unk>.
Thank you, Marty and I and she's George in connection with the second question.
Yeah.
Regarding.
On a new rule.
He should by the Central bank of Argentina or not September.
And in connection with the wouldn't seem to think that well, let me start with the ball in connection with the ball and on November 1st we weren't able to be.
Or the interest due and payable or or did that kind of Islam payable under the and or the portion of the bones debt has not participated and the exchange.
We were lucky or.
The way our debt service works and the bomb beat and.
Exactly and new rules, however, we will be meaningfully bleach and from the central bank to make that statement.
ER and we are working with the central bank in potash and it's everything that ER for the syndicated loans.
So we didn't want to see and you should there was only one portion that often and you get them on that would have to be paid and I'll try and gushing Gina because part of it is payable locally and albumin and need to be more ex Lars.
And currently we expect that.
Di di di and restrictions would not be extended beyond the period that they have.
ER determined and the first index the move up and what do you shouldn't September so in summary, he kinda comfortable for us.
Thank you very much.
Okay.
Again, if you have a question. Please press Star then one.
At this time, we have no credit no question. So will conclude our question and answer session I would like to turn the conference back over to Mike Dean and Mickey.
On for closing remarks go ahead.
[noise] I'd like to thank everybody for joining us today, we really appreciate your interest in our company and we look forward to providing updates on our business initiatives as they become available in the meantime, the team remains available to answer any questions that you may have thanks, everybody bye bye.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
[noise].