Q1 2022 Corporacion America Airports SA Earnings Call

Good morning, and welcome to the Corporacion America airports first quarter 'twenty to 'twenty two earnings conference call a slide presentation accompanies today's webcast tonnage available in the investors section of the Coker has shown America airports.

The relations websites.

A reminder, all participants will be in listen only mode.

There will be an opportunity to watch questions at the end of the presentation.

At this time I would like to turn the call over to Patricio Nokia So NOLA head of Investor Relations. Please go ahead.

Thank you good morning, everyone and thank you for joining us today.

Speaking during today's call will be you know what I mean again, our chief Executive Officer and go together with our Chief Financial Officer.

Before we proceed I would like to make the following safe Harbor statement.

Today's call will contain forward looking statements and I refer you to the forward looking statements section of our earnings release and recent filings with the SEC.

We assume no obligation to update or revise any forward looking statements to reflect new or changed events or circumstances.

Now, let me turn the call over to our CEO .

And again.

Thank you Yankee Hello, everyone and welcome toward first quarter.

Earnings call.

We started the year on a strong footing.

Delivering any group performance I think key operational and financial metrics.

<unk> will go over our financial results in a few minutes, but let me point out some of the key highlights for the quarter.

Adjusted EBITDA increased $89 million up from 7 million, but I've seen the fourth quarter of last year.

Importantly, this good performance was supported by improvements across all of our countries of operations.

Adjusted EBITDA margin.

Reached 36, 3% up from mid single digit margin in the second quarter of last year. When we were in the midst of the pandemic.

We also saw a strong recovery in revenues.

<unk> reached 82% despite the impact of what Mcgartland travel demand in the first few months of the quarter.

But if adjustments you can some statements and a linear cost structure.

This game alone with strong growth in commercial revenues, which exceeded the first quarter.

Evidenced by high single digits.

On the balance sheet front during the quarter, we secured financing to meet capex obligations in Argentina and ended the quarter with a significantly stronger debt maturity profile.

Lastly in February .

Hey, good thousand were sold to redeem all outstanding preferred shares with a total redemption value of 17 2 million Argentine.

We went into around $155 million.

But total.

One 1 billion pesos or approximately 100 million dividends were paid in April with the balance to be paid before December 31st 20 does before with the possibility of partial payments.

Now taking a deeper dive in the traffic trends on slide four.

As you can see on the left hand chart, a total of $13 5 million passengers traveled across our airport network in the world reaching 65%.

Note that the impact of the <unk>.

Well, it's limited the January and February .

Solid pent up demand.

Lifting of government restrictions continue to support the recovery and definitely I mean previous routes and frequencies across different territories.

For example.

<unk> continues to lead the recovery, we bought into the traffic.

Nearly 99% of the first quarter levels.

With January and February slightly well pre COVID-19 traffic weekly frequencies are up over 160% of the summer, but it just doesn't it doesn't the one seven.

Seven new airlines are lunching operations to serve higher demand.

But I think in Armenia is 100% internationally.

We are seeing increased activity in our opinion, we remain vigilant regarding the developments in Ukraine.

In Italy, I think for the quarter reflect this shortly but the Wilmington, but in Miami in January .

But we cover up to 68% of pre pandemic levels in March and 78% in April .

We are expecting that during the summer assistance with destinations I never liked at 93 or 98% pre pandemic levels respectively.

But on the activity experienced in the summer.

But I think reached 77%.

With a rebound in March up Theres, some type installations at some airlines due to Covid cases, we didn't decrease in January and February .

Argentina, and Uruguay stood at 64% and 50% of the pre buy I think leverage respectively. During the quarter.

The positive been convenient, but I think the.

Neighborhood, which 75% of the levels of the same month in the MD&A.

Note that your wife, you sort of radio, but anything that 63% pre COVID-19 levels in April with weekly frequencies up 14% versus the first quarter.

Hey, good convenience the steady recovery, reaching 79% of pre buy because I think and it's already at 95% of the neighborhood, we'd routes to the U S and Europe remaining above one.

Lewis.

Now turning to slide five gigabit liberation spokes to sustained globally across all territories, reaching nearly 80% of first quarter of 'twenty.

In Williams.

I think we are equally your weight in Armenia oops. The strong performance, we've gotta go volumes beeping couldn't didn't delever.

Argentina, Brazil, and Ecuador, which together accounted for more than 80%.

Volume continued to post strong contributions.

Noteworthy the cargo revenue surplus for the first quarter of Clinton Lewis by nearly 19% reflecting adjustments.

In the last year.

I will now go through quite a bit which will give you our financial results.

Okay go ahead.

Thank you Martin and good day, everyone, starting with our top line on slide six total revenues ex <unk> 12 continued to show a strong recovery, reaching 82% to pre pandemic levels in the first quarter of 2022.

It's called revenues increased almost 180% year on year, mainly driven by higher passenger traffic and increased tariffs in terms of segment, notably in Armenia electrical revenues in the first quarter 2022 well above 2019 levels. We are very encouraged by that.

Performance of our commercial revenues this quarter, which surpassed pre pandemic levels by almost 10% and the war.

84% year on year. This was mainly driven by tariff adjustments in our cargo business and solid performance in fuel related revenues as well as in food and beverage and beauty <unk> graphics.

Reflecting our efforts to continue increasing our topline revenue per passenger extended to $81 this quarter up from <unk>.

14.6 dollars in the first quarter 2019.

Now turning to our cost structure on slide seven our ongoing focus on cost control is allowing us to maintain a junior and more efficient operation.

In first quarter 2022, total cost and operating expenses.

<unk> increased 41%.

On a year, reflecting higher business activity, but this increase was well below the 121% revenue growth.

When compared to 2019 operating cost and expenses ex this week for the quarter declined by 14%.

Now moving down the P&L on slide eight we achieved adjusted EBITDA of $89 million up from $7 million recorded in the same quarter last year and only 24% below pre pandemic levels importantly, we saw adjusted EBITDA improvements across.

All countries of operations recovering faster.

Then passenger traffic.

We achieved significant margin expansion driven by top line growth and cost efficiencies.

In first quarter 2022, adjusted EBITDA margin ex <unk> 12 extended to 36, 3%.

Five 7% in the first quarter 2021 why do we see room for continued expansion one compared to <unk>.

Nearly 39% margin posted in the first quarter 2019.

Turning to slide nine.

We ended the quarter with.

Total liquidity position of $646 million.

$451 million at the end of 2021.

We delivered six consecutive quarters.

Positive operating cash flow.

Most of our segments and remain operating cash flow positive across most countries of operation.

Moving on to our debt maturity profile on slide 10.

Total debt at the end of the quarter was $1 $6 billion, while our net debt stood at $1 $2 billion.

Still above historical levels.

Two last 12 months' adjusted EBITDA.

Got ratio showed significant improvement this quarter declining to five one times.

Seven one times at the end of 2021.

Also note that all our subsidiaries remain in compliance with debt covenants.

And remember that kept itself has no direct investments.

We were successful in liability management initiatives that we carry out in the 'twenty 'twenty 2021 period.

Allowed us to significantly improve our debt profile more recently, the issuance of $174 million in local knowledge in Argentina last Saturday secured funding to comply with Capex obligations in 2000.

I will now hand back the call to my team, who will present, our closing remarks on slide 12.

Thank you called again.

To wrap up our remarks, please turn to slide one.

Looking ahead, we expect demand to continue to drive the recovery in passenger traffic.

Our airport network throughout the year.

In the near term all variables are pointing to a very strong summer season in Europe , whereas we remain vigilant regarding the blower do you believe you got a vitamin anybody what the initial impact this could have on that I think trends in our business.

Today, we face the future with a recovery and sustainably balance sheet following the liability management transactions and the economics to make news on processes.

The past two years together with the addition of that financing obtained the last February didn't Peter.

We will continue to maintain our financial discipline and value creation mindset.

I agree.

We remain fully committed to finalizing the economy.

This is Brazil, and Armenia to fully restore the equity value of our regions, while advancing our lens to selectively develop additional value creation opportunities with this I would like to thank you for your attention we are now.

And now ready to answer your questions.

Please open the line for questions.

Thank you for all Q&A, if you'd like to ask a question. Please press star followed by one on your telephone keypad.

Have you changed your mind, please press thoughtful about two.

Wanted to ask your questions. Please ensure you have the bushes on mute locally and we ask you. Please limit yourself to one question and one follow up.

As a reminder, that star one on your telephone keypad now.

Yeah.

We have no questions I'll now hand back to Martin <unk> for.

For closing remarks.

Yeah.

What I like to thank everybody for joining us today the team remains available to you.

Are there any questions that you may have decent enjoy the rest of the day. Thank you very much.

Today's call is now concluded let's thank you for your participation you may now disconnect your lines.

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