Corporacion America Airports(US:CAAP)2022-04-05 16:00Passenger Traffic and Cargo Volume - In 2021, domestic passenger traffic increased by 56.0% to 22.5 million, while international passenger traffic rose by 16.5% to 8.2 million[673]. - Total passenger traffic reached 35.7 million in 2021, marking a 41.5% increase compared to 25.2 million in 2020[673]. - Cargo volumes increased by 26.6% to 323.5 thousand tons in 2021, up from 255.6 thousand tons in 2020[673]. - Total aircraft movements rose by 40.9% to 497.2 thousand in 2021, compared to 352.9 thousand in 2020[673]. - Cargo volume in Argentina was 174.4 thousand tons in 2021, a 21.2% increase from 143.9 thousand tons in 2020[675]. - Total passengers in Argentina increased to 13.3 million in 2021, a 33.3% increase from 10.0 million in 2020[675]. - Aircraft movements in Argentina rose to 227.3 thousand in 2021, a 46.1% increase from 155.6 thousand in 2020[675]. - In Brazil, domestic passengers totaled 12.3 million in 2021, a 35.5% increase from 9.1 million in 2020[675]. - Total cargo volume in Ecuador was 23.0 thousand tons in 2021, a 36.5% increase from 16.8 thousand tons in 2020[677]. - Total passengers in Peru reached 1.9 million in 2021, a 56.0% increase from 1.2 million in 2020[677]. - The company reported a 5.3% increase in total passengers across all segments in 2021 compared to 2020[677]. Financial Performance - Total consolidated revenue for 2021 was $706.9 million, a 16.4% increase from $607.4 million in 2020[680]. - Aeronautical revenue accounted for 37.2% of total revenue in 2021, increasing from 36.2% in 2020[680]. - Commercial revenue reached $362.1 million in 2021, representing 51.2% of total revenue, up from 42.8% in 2020[680]. - Total expenses for 2021 amounted to $936.9 million, a decrease of 11% from $1,052.9 million in 2020[682]. - Financial loss from continuing operations decreased to $131.3 million in 2021, down from $215.5 million in 2020[685]. - The company reported a loss for the year of $181.0 million, a 50% decrease from a loss of $361.9 million in 2020[687]. - Non-aeronautical revenue, including commercial revenue, rose by 39.4% to $362.1 million in 2021[687]. - The cost of fuel surged by 90.3% to $24.9 million in 2021, compared to $13.1 million in 2020[687]. - The company experienced a significant increase in provision for maintenance costs, which rose by 159.6% to $4.7 million in 2021[687]. - Gross profit increased by 282.9% to U.S.$84.5 million for the year ended December 31, 2021, compared to a loss of U.S.$46.2 million in 2020[721]. - The net loss decreased by 50.0% to U.S.$181.0 million for the year ended December 31, 2021, from U.S.$361.9 million in 2020[752]. Economic Conditions and Currency Exchange - The Argentine peso experienced a devaluation of 22.1% against the U.S. dollar in 2021, while inflation was reported at 50.9%[671]. - The average exchange rate for the Argentine peso in 2021 was 102.72 ARS, reflecting a 22.1% change against the prior year[665]. - The average exchange rate for the Brazilian real in 2021 was 5.40 BRL, showing a 4.7% increase compared to 2020[665]. - The company operates in a hyperinflationary economy in Argentina, requiring adjustments to financial statements under IAS 29[670]. - The company continues to assess macroeconomic conditions to identify potential impacts on business performance[670]. Capital Expenditures - Capital expenditures in Argentina amounted to U.S.$53.5 million in 2021, down from U.S.$95.8 million in 2020[756]. - In Italy, capital expenditures totaled U.S.$19.9 million in 2021, compared to U.S.$13.9 million in 2020[757]. - Capital expenditures at the Brasilia Airport were U.S.$1.8 million in 2021, a decrease from U.S.$2.9 million in 2020[760]. - The Punta del Este Airport incurred capital expenditures of U.S.$5.4 million in 2021, down from U.S.$9.7 million in 2020[764]. - The Guayaquil Airport had capital expenditures of U.S.$0.8 million in 2021, significantly lower than U.S.$10.5 million in 2020[765]. - The company expects to incur additional capital expenditures of U.S.$86.2 million at the Carrasco Airport over the next five years as required by contract[764]. - TAGSA expects to incur additional capital expenditures of U.S.$12.0 million in Guayaquil Airport over the next five years, with U.S.$8.8 million required by contract and U.S.$3.2 million as optional expenditures[766]. - ECOGAL anticipates U.S.$10 million in capital expenditures for Galapagos Airport, all required by contract, during the next five years[766]. - AIA plans to spend U.S.$9.5 million in capital expenditures at Zvartnots Airport and Shirak Airport over the next five years, contingent on reaching certain passenger level thresholds[768]. - In 2021, AIA spent U.S.$2.1 million at Zvartnots Airport and U.S.$5.5 million at Shirak Airport on capital expenditures, primarily for renovations[766]. - AAP spent U.S.$0.3 million in capital expenditures for airport equipment for the period ended December 16, 2021[769]. COVID-19 Impact and Response - The Company has taken measures to reduce operating costs, including salary reductions and freezing new hiring, to mitigate the impact of COVID-19[777]. - In Brazil, ICAB received U.S.$25.5 million in economic compensation related to the COVID-19 pandemic impact on the Brasilia Concession Agreement during 2021[783]. - The Company is negotiating with regulatory agencies to adjust concession fees and extend concession agreements to address the financial impact of COVID-19[780]. - A total of U.S.$12 million was disbursed by the European Commission to TA in August 2021 to compensate for the impact of the COVID-19 pandemic[782]. Regulatory and Compliance Issues - The estimated penalty for non-compliance with the Minimum Rating requirement is R$13 million (approximately U.S.$2.3 million) for the year 2022[789]. - As of December 31, 2021, ICAB has a current liability of U.S.$192.1 million due to non-compliance with the fixed concession fee payment[790]. - The Argentine Foreign Exchange Regulations impose restrictions on the distribution of dividends, requiring compliance with specific conditions[800]. - The company has initiated a judicial procedure to suspend actions against it related to the concession fee payment, with a federal judge granting a writ of mandamus[790]. - The combined tax rate for Argentine subsidiaries for fiscal years starting in 2021 ranges between 30.25% and 39.55% depending on the applicable progressive rate[797]. Financing Activities - Net cash used in financing activities was U.S.$3.7 million for the year ended December 31, 2021, a 104.1% decrease from U.S.$90.5 million in 2020[807]. - Loans paid increased by U.S.$195.4 million, primarily due to U.S.$113.1 million from AA2000 refinancing, U.S.$17.4 million in local bonds in Uruguay, and U.S.$68.8 million in Italy[807]. - Interest paid increased by U.S.$45.0 million, with U.S.$29.0 million related to AA2000 refinancing and U.S.$7.5 million from ICAB interest deferral[807]. - Proceeds from borrowings increased by U.S.$142.2 million, mainly in Argentina due to new notes issuance[807]. - AA2000 issued U.S.$400.0 million aggregate principal amount of 6.875% senior secured notes due 2027, with quarterly principal and interest payments starting May 1, 2019[810]. - On October 28, 2021, AA2000 issued U.S.$208.9 million of 8.5% Class I Series 2021 Additional Senior Secured Notes due 2031, exchanging 24.61% of the original Argentine Notes[815]. - AA2000 issued U.S.$62 million of Senior Secured Notes on November 4, 2021, with a maturity of seven years and an annual interest rate of 9.5%[818]. - AA2000's Argentine Additional Notes outstanding amount was U.S.$397.4 million as of December 31, 2020[814]. - The Argentine Notes are secured by revenues under the AA2000 Concession Agreement, with certain restrictions on debt and asset disposal[813]. - AA2000 may declare dividends up to 75.0% of cumulative net income, subject to certain conditions and no defaults under the Argentine Notes[811]. Loan Agreements and Financial Obligations - AA2000 entered into two credit facility agreements totaling U.S.$120 million, with U.S.$85 million for the onshore facility at a fixed rate of 9.75% and U.S.$35 million for the offshore facility at a variable rate[821]. - The 2020 Bilateral Loans amounted to AR$987 million, accruing interest at a variable rate equivalent to the corrected BADLAR rate plus a 5% margin, to be repaid in four equal installments starting September 2021[826]. - In November 2021, the 2020 Bilateral Loans were precancelled using proceeds from the Bimonetary Syndicated Loan[826]. - The Bimonetary Syndicated Loan included a disbursement of AR$3.75 billion in Argentine Pesos and U.S.$10 million, with interest rates of 10% and 8.5% respectively[830][831]. - The February 2021 Bilateral Loans totaled AR$903 million, with 48% to be repaid in four installments starting March 2022 and the remaining 52% in a lump-sum payment in February 2023[829]. - AA2000 refinanced a U.S.$10 million loan with Banco Macro S.A., deferring principal payments to July 2021 and increasing the interest rate to 10%[834]. - A new loan agreement with Banco de la Ciudad de Buenos Aires for U.S.$5 million was signed, with a 6% interest rate and a 24-month payment term[835]. - The Italian Notes issued by CA Italy amounted to €60 million at a 4.556% interest rate, maturing on December 31, 2024[836]. - The Italian Notes are secured by a first-ranking pledge of shares representing 100% of CA Italy's share capital[837]. - Mandatory redemption of the Italian Notes is required upon significant adverse changes to concessions or loss of control over TA[839]. Financial Covenants and Conditions - CA Italy has the option to redeem the Italian Notes at 100% of the principal outstanding amount plus accrued interest on any interest payment date, with specific conditions related to changes in tax laws[840]. - If CA Italy's EBITDA decreases by 15% or less, it can redeem a principal amount of the Italian Notes equal to the relevant equity cure amount; if the decrease exceeds 15%, the redemption will be limited to the equity cure amount[840]. - As of December 31, 2021, CA Italy can redeem all Italian Notes at 100% of their principal outstanding amount plus accrued interest, with a notice period of 5 to 10 days[841]. - In the event of a change of control, noteholders can require CA Italy to redeem their Italian Notes at 101% of the principal outstanding amount plus accrued interest[843]. - CA Italy is prohibited from declaring dividends or making certain payments unless specific financial conditions are met, including maintaining a leverage ratio of less than 9.00:1 until December 31, 2019, and 8.50:1 thereafter[846]. Infrastructure Financing - TA entered into bank loans totaling €52.8 million to finance infrastructure investments at Florence and Pisa Airports, with specific maturity dates ranging from January 2022 to September 2027[847]. - In 2020, TA secured an €85 million loan backed by SACE guarantees to support operations affected by the COVID-19 crisis, with a six-year term and a two-year grace period[850]. - ICASGA received a loan of R$329.3 million from BNDES for the construction of Natal Airport, secured by various pledges and guarantees[851]. - ICAB has credit facility agreements totaling R$840 million for the expansion and operation of Brasilia Airport, with strict conditions on dividend payments exceeding 25% of net profits[853]. - After financial completion, ICAB must maintain a Debt Service Coverage Ratio of at least 1.3:1.0 and an Equity Ratio of at least 25% to pay dividends exceeding 25% of net profits[855]. - In March 2018, ICAB received an additional loan of R$300.0 million from BNDES, extending the interest-only period and final maturity date for two years[856]. - As of December 31, 2021, ICAB had an outstanding amount of U.S.$192.1 million presented as current due to non-compliance with certain covenants under the BNDES Refinancing[861]. - A penalty of 1% per annum over the outstanding amount was enforced as of March 2022, estimated to total R$13 million (equivalent to U.S.$2.3 million) for the year 2022[860]. - If additional collateral is required due to non-compliance, it is expected to create an obligation of approximately R$333 million (equivalent to U.S.$59.7 million) for certain subsidiaries and the controlling shareholder[861]. - ACI Airport Sudamérica issued U.S.$200.0 million aggregate principal amount of 6.875% senior secured guaranteed notes due 2032, with a security package including pledges of shares and accounts[864]. - The Uruguayan Notes will mature on November 29, 2032, with principal and accrued interest repaid in 34 installments starting May 29, 2016[864]. - ICAB entered into a new loan in USD for $3.0 million with Banco Votorantim S.A. on May 25, 2021, due in June 2022, secured by a guarantee letter from CAAP[857]. - The BNDES Refinancing increased the size of credit facility commitments by an additional R$300.0 million, extending the final maturity and interest-only payment terms for ICAB and ICASGA loans[859]. - As of March 2022, ICAB and ICASGA were unable to comply with the Minimum Rating requirement, resulting in a penalty and additional collateral obligations[861]. - The Majority Shareholder has agreed to maintain a Minimum Rating of at least B- and not to undertake any change of control without BNDES consent[860].