Corporacion America Airports(CAAP) - 2021 Q3 - Quarterly Report

Condensed Consolidated Interim Financial Statements Index and Company Information This section lists the financial statements included in the report, defines key currencies, and provides essential company registration details, including its legal address, principal activity, and share capital structure - Aeropuertos Argentina 2000 S.A. (AA2000) is registered under number 1645890, primarily engaged in airport exploitation, administration, and operation[4][6] Issued and Paid-in Share Capital | Issued Shares | Subscribed $ | Paid-in | | :----------------------------------------------------------------------- | :-------------- | :------------ | | 79,105,489 Class "A" common shares of AR$ 1 par value and 1 vote each | 79,105,489 | 79,105,489 | | 79,105,489 Class "B" common shares of AR$ 1 par value and 1 vote each | 79,105,489 | 79,105,489 | | 61,526,492 Class "C" common shares of AR$ 1 par value and 1 vote each | 61,526,492 | 61,526,492 | | 38,779,829 Class "D" common shares of AR$ 1 par value and 1 vote each | 38,779,829 | 38,779,829 | | 910,978,514 Preferred shares of AR$ 1 par value with no voting rights | 910,978,514 | 910,978,514 | | Total | 1,169,495,813 | 1,169,495,813 | Consolidated Statements of Comprehensive Income The Consolidated Statements of Comprehensive Income show a significant improvement in net income for the three-month period ended September 30, 2021, compared to the prior year, though the nine-month period still reflects a net loss, albeit substantially reduced Consolidated Statements of Comprehensive Income (in $) | Metric | Three Months at 09.30.2021 | Three Months at 09.30.2020 | Nine Months at 09.30.2021 | Nine Months at 09.30.2020 | | :------------------------------------------ | :------------------------- | :------------------------- | :------------------------ | :------------------------ | | Revenue | 6,506,850,270 | 4,030,540,583 | 19,523,257,186 | 23,208,647,257 | | Operating profit | (645,605,318) | (4,144,143,339) | (1,832,293,438) | (5,148,345,133) | | Income before income tax | 861,928,649 | (6,488,822,845) | 2,220,273,550 | (11,904,658,897) | | Net Income for the period | 808,946,090 | (6,042,420,976) | (754,846,371) | (7,510,232,729) | | Income per share basic and diluted (in $) | 2.8469 | (23.6525) | (3.76710) | (29.8831) | - Net Income for the nine-month period significantly improved from a loss of $7.51 billion in 2020 to a loss of $754.8 million in 2021[10] Consolidated Statements of Financial Position The Consolidated Statements of Financial Position show a decrease in total assets and liabilities as of September 30, 2021, compared to December 31, 2020, with a slight reduction in total shareholders' equity Consolidated Statements of Financial Position (in $) | Metric | 09.30.2021 $ | 12.31.2020 $ | | :--------------------------- | :---------------- | :---------------- | | Total Non-Current Assets | 129,570,291,549 | 133,153,639,318 | | Total Current Assets | 9,887,753,750 | 16,434,881,171 | | Total Assets | 139,458,045,299 | 149,588,520,489 | | Total Shareholders' Equity | 59,871,003,697 | 60,625,850,068 | | Total Non-Current Liabilities| 48,407,715,940 | 58,252,270,912 | | Total Current Liabilities | 31,179,325,662 | 30,710,399,509 | | Total Liabilities | 79,587,041,602 | 88,962,670,421 | - Total Assets decreased by approximately $10.1 billion from December 31, 2020, to September 30, 2021[13] - Total Liabilities decreased by approximately $9.4 billion over the same period[13] Consolidated Statements of Changes in Equity The Consolidated Statements of Changes in Equity illustrate the movements in the company's equity for the nine-month periods ended September 30, 2021 and 2020, primarily reflecting the impact of net income for the period on retained earnings Consolidated Statements of Changes in Equity (in $) | Equity Component | Balance at 01.01.21 | Net Income for the period | Balance at 09.30.2021 | | :---------------------------- | :------------------ | :------------------------ | :-------------------- | | Capital Stock Common Shares | 258,517,299 | - | 258,517,299 | | Capital Stock Preferred Shares| 910,978,514 | - | 910,978,514 | | Share Premium | 137,280,595 | - | 137,280,595 | | Adjustment of capital | 22,436,671,286 | - | 22,436,671,286 | | Legal Reserve | 1,588,849,678 | - | 1,588,849,678 | | Facultative Reserve | 45,350,624,545 | - | 45,350,624,545 | | Other Reserves | 205,896,811 | - | 205,896,811 | | Retained Earnings | (10,263,898,728) | (755,030,152) | (11,018,928,880) | | Total Shareholders' Equity | 60,625,850,068 | (754,846,371) | 59,871,003,697 | - Total Shareholders' Equity decreased by $754.8 million during the nine-month period ended September 30, 2021, primarily due to the net loss for the period[16] Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows indicate a significant net cash outflow from financing activities in 2021, leading to an overall net decrease in cash and cash equivalents, despite positive cash flow from operating activities Consolidated Statements of Cash Flows (in $) | Cash Flow Activity | 09.30.2021 $ | 09.30.2020 $ | | :------------------------------------------------ | :---------------- | :---------------- | | Net income for the period | (754,846,371) | (7,510,232,729) | | Net cash generated by operating activities | 1,670,299,627 | 3,724,751,642 | | Net Cash Flow generated by investing activities | 1,066,709,408 | 122,962,332 | | Net Cash (used in) generated by financing activities | (6,173,454,265) | 524,812,630 | | Net (decrease) /Increase in cash and cash equivalents | (3,436,445,230) | 4,372,526,604 | | Cash and cash equivalents at the end of the period | 3,797,012,128 | 8,477,079,405 | - Net cash generated by operating activities decreased by 55.1% from $3.72 billion in 2020 to $1.67 billion in 2021[19] - Financing activities shifted from generating $524.8 million in 2020 to using $6.17 billion in 2021, primarily due to increased financial debt payments[19] Notes to the Condensed Consolidated Interim Financial Statements NOTE 1 – Company Activities Aeropuertos Argentina 2000 S.A. (AA2000) operates 35 airports in Argentina under a concession agreement, which was extended to February 13, 2038. The agreement maintains exclusivity in the Metropolitan Region of Buenos Aires and for fiscal warehouses, while the National Government retains a buyout right with compensation - AA2000 holds concession rights for the operation, administration, and exploitation of 35 airports in Argentina[21][22] - The concession period was extended to February 13, 2038, maintaining exclusivity in the Metropolitan Region of Buenos Aires and for fiscal warehouses nationwide[23][25][26] - The Argentine National Government has the right to buyout the concession as of February 13, 2018, with a requirement to pay compensation to the Company[27] NOTE 2 - Basis for Consolidation The condensed consolidated interim financial statements include AA2000 and its subsidiaries, where the Company exercises control through majority ownership or administrative influence, ensuring consistent application of accounting policies across the Group - The Group consolidates subsidiaries where AA2000 has control, including Servicios y Tecnología Aeroportuarios S.A. (99.30% ownership), Cargo & Logistics SA (98.63% ownership), and Paoletti América S.A. (50% ownership with administrative control)[30][31][32][33] Subsidiaries and Ownership (in $) | Subsidiaries (1) | Number of common shares | in capital and possible votes | Book entry value at 09.30.2021 | Net Shareholders 'equity at closing $ | Income for the period | | :------------------------------- | :---------------------- | :---------------------------- | :----------------------------- | :------------------------------------ | :-------------------- | | Servicios y Tecnología Aeroportuarios S.A. (2) | 14,398,848 | 99.30% | 150,670,496 | 151,728,192 | 29,540,408 | | Cargo & Logistics SA. | 1,637,116 | 98.63% | 2,509,880 | 2,544,743 | (1,127,874) | | Paoletti América S.A. | 6,000 | 50.00% | 15,526 | 31,051 | (5,585) | NOTE 3 – Accounting Policies The financial statements are presented in Argentine Pesos, prepared under IFRS and IAS 34, and consistently apply accounting policies from the prior annual statements. A key aspect is the mandatory application of IAS 29 for hyperinflationary economies since July 1, 2018, requiring restatement of non-monetary items and equity to reflect inflation - The financial statements are presented in Argentine Pesos and prepared in accordance with International Financial Reporting Standards (IFRS) and International Accounting Standard (IAS) No. 34 'Intermediate Financial Information'[35][38] - Argentina has been classified as a hyperinflationary economy under IAS 29 since July 1, 2018, due to a cumulative inflation rate exceeding 100% over three years[56] - In accordance with IAS 29, non-monetary assets, liabilities, and equity accounts are restated using general price indices to reflect the effects of inflation, with the coefficient for the nine-month period ended September 30, 2021, being 1.3068[60][61][66] NOTE 4 – Breakdown of Certain Items of Financial Position and Comprehensive Income This note provides detailed breakdowns of various asset and liability accounts from the Consolidated Statements of Financial Position, including receivables, investments, cash, and payables. It also elaborates on revenue composition (aeronautical vs. non-aeronautical), other net income/expenses, and finance income/costs from the Consolidated Statements of Comprehensive Income Financial Position Items (in $) | Item | 09.30.2021 $ | 12.31.2020 $ | | :--------------------------------- | :---------------- | :---------------- | | Other non-current receivables | 5,729,405,159 | 8,276,950,017 | | Other current receivables | 1,895,212,436 | 3,541,501,899 | | Trade receivables, net | 2,921,702,119 | 3,242,208,800 | | Investments | 1,273,827,067 | 2,692,664,643 | | Cash and cash equivalents | 3,797,012,128 | 6,958,505,829 | | Accounts payable and other non-current | 824,620,247 | 1,007,128,021 | | Accounts payable and other current | 8,363,439,137 | 13,445,590,163 | Comprehensive Income Items (in $) | Revenues | Nine Months at 09.30.2021 | Nine Months at 09.30.2020 | | :------------------------ | :------------------------ | :------------------------ | | Aeronautical revenues | 5,342,466,791 | 10,663,873,205 | | Non-Aeronautical revenues | 14,180,790,395 | 12,544,774,052 | | Total Revenues | 19,523,257,186 | 23,208,647,257 | | Other net incomes and expenses | (829,000,259) | 319,933,414 | | Finance Income | 713,038,377 | 1,526,524,155 | | Finance Costs | 3,142,364,516 | (6,391,498,633) | | Income Tax | (2,975,119,921) | 4,394,426,168 | NOTE 5 – Intangible Assets This note details the changes in intangible assets, showing an increase in original values and accumulated amortization for the nine-month period ended September 30, 2021, compared to the beginning of the year Intangible Assets (in $) | Intangible Assets | 09.30.2021 $ | 2020 $ | | :------------------------ | :---------------- | :---------------- | | Balance at January 1 | 186,458,032,038 | 175,805,232,196 | | Acquisitions of the period| 4,102,150,601 | 8,468,728,710 | | Balance at September 30 | 190,560,182,639 | 184,273,960,906 | | Accumulated Amortization: | | | | Balance at January 1 | (62,446,977,661) | (50,298,948,790) | | Amortization of the period| (4,914,977,133) | (9,736,747,772) | | Balance at September 30 | (67,361,954,794) | (60,035,696,562) | - Original values of intangible assets increased by $4.10 billion during the nine-month period ended September 30, 2021[83] NOTE 6 – Financial Debts This note provides a comprehensive overview of the company's financial debts, detailing non-current and current bank borrowings and negotiable obligations. It highlights significant debt refinancing activities, new loan agreements, and extensions undertaken during 2020 and 2021 to manage liquidity and capital structure, particularly in response to economic conditions Financial Debts Composition (in $) | Financial Debts Composition | 09.30.2021 $ | 31.12.2020 $ | | :-------------------------- | :---------------- | :---------------- | | Non-current | | | | Bank borrowings | 3,285,507,963 | 6,571,099,124 | | Negotiable Obligations | 30,131,799,298 | 40,502,951,851 | | Total Non-Current | 33,118,425,235 | 46,607,433,874 | | Current | | | | Bank borrowings | 7,430,877,451 | 8,369,589,179 | | Negotiable Obligations | 9,853,708,606 | 5,538,436,971 | | Total Current | 17,196,144,427 | 13,808,281,352 | | Total | 50,314,569,662 | 60,415,715,226 | Breakdown of Financial Debts (in $) | Breakdown of Financial Debts | 2021 $ | 2020 $ | | :--------------------------- | :---------------- | :---------------- | | Balance at January 1 | 60,415,715,226 | 54,344,291,232 | | New financial debts | 6,956,876,413 | 7,187,544,812 | | Financial debts paid | (12,883,397,934) | (6,354,967,946) | | Accrued interest | 4,498,599,676 | 3,174,849,092 | | Foreign Exchange differences | (7,850,181,847) | 2,038,415,099 | | Inflation adjustment | (823,041,872) | 104,085,853 | | Net Balance at September 30 | 50,314,569,662 | 60,494,218,142 | - The company expanded its Global Program for the Issuance of Negotiable Obligations from US$500 million to US$1.5 billion in June 2021[90] - Multiple loan agreements were signed and refinanced with various banks, including deferrals of capital amortization installments and new loans to cover existing debt payments, particularly in 2020 and 2021[103][104][105][107][108][109][110][111][112][114][116][117][119][120] NOTE 7 – Balances and Transactions with Related Parties This note details the balances and transactions with related parties, including trade receivables, other receivables, accounts payable, and provisions. It also identifies Corporación América S.A. as the immediate controlling entity and Southern Cone Foundation as the ultimate beneficiary Related Party Balances (in $) | Related Party Balances | 09.30.2021 $ | 12.31.2020 $ | | :---------------------------- | :----------- | :----------- | | Trade receivables net- Current| 134,483,136 | 106,852,961 | | Other current receivables | 63,701,846 | 35,303,504 | | Accounts payable and other- Current | 206,956,125 | 322,384,148 | | Provisions and other charges | 220,807,088 | 255,954,630 | - Short-term compensation to key management increased from $71.9 million in 2020 to $91.4 million in 2021 for the nine-month periods[126] - Corporación América S.A. is the immediate controlling entity (45.90% direct, 29.75% indirect ownership), and Southern Cone Foundation is the ultimate beneficiary of the Company[126][128][129] NOTE 8 – Bad Debt Provisions This note outlines the changes in the bad debt provision, showing a decrease in the final balance at September 30, 2021, compared to the initial balance, influenced by increases, usage, and inflation adjustments Bad Debt Provisions (in $) | Bad Debt Provisions | 2021 $ | 2020 $ | | :---------------------------- | :------------ | :------------ | | Initial balance at January 1 | 4,791,494,790 | 4,183,038,687 |\ | Increases () | 779,064,936 | 1,380,795,664 |\ | Usage | (2,429,666) | (35,041,613) |\ | Inflation adjustment | (1,363,167,775)| (882,888,194) |\ | Final Balance at September 30 | 4,204,962,285 | 4,645,904,544 | - The final balance of bad debt provisions decreased by $586.5 million from January 1, 2021, to September 30, 2021[130] NOTE 9 – Provisions and Other Charges This note provides a detailed breakdown of various provisions and other charges, including litigations, deferred income, trust for works, guarantees received, upfront fees, and dividends payable, showing their evolution and current/non-current classification Provisions and Other Liabilities (in $) | Provision Item | At January 1 2021 $ | Increases / (Recovery) $ | Decreases $ | Inflation Adjustment $ | Accruals $ | Exchange rate differences $ | At September 30, 2021 $ | Total Non Current $ | Total current $ | | :---------------------------- | :------------------ | :----------------------- | :---------- | :--------------------- | :--------- | :-------------------------- | :---------------------- | :------------------ | :-------------- | | Litigations Related Parties | 105,913,826 | 728,101,554 | (51,584,595)| (151,421,175) | - | 39,625,046 | 670,634,656 | 356,258,528 | 314,376,128 | | Deferred Income | 1,417,530,538 | 566,374,998 | - | (137,510,193) | (423,703,304)| 48,318,564 | 1,471,010,603 | 560,826,115 | 910,184,488 | | Trust for works | 1,597,880,014 | 405,778,952 | - | (484,980,233) | 220,840,911| - | 1,739,519,644 | 1,289,586,133 | 449,933,511 | | Guarantees Received | 173,409,264 | 41,242,556 | (30,616,506)| (34,864,286) | - | 7,529,194 | 156,700,222 | - | 156,700,222 | | Upfront fees from Concessionaires | 244,102,598 | 45,091,293 | - | - | (55,514,046)| - | 233,679,845 | 173,152,797 | 60,527,048 | | Dividends to be paid | 255,375,058 | - | - | (73,387,084) | - | 38,392,865 | 220,380,839 | - | 220,380,839 | | Others | - | 577,570,541 | - | (40,646,199) | - | 11,270,379 | 548,194,721 | 307,417,218 | 240,777,503 | | Total of provisions and other liabilities | 3,794,790,870 | 2,364,159,894 | (82,201,101)| (922,962,493) | (258,376,439)| 145,136,048 | 5,040,546,779 | 2,687,240,791 | 2,353,305,988 | - Total provisions and other liabilities increased by $1.25 billion from January 1, 2021, to September 30, 2021[133] NOTE 10 - Costs of Sales, Administrative, Distribution, and Selling Expenses This note presents a detailed breakdown of costs of sales, administrative expenses, and selling expenses for the nine-month periods ended September 30, 2021 and 2020, highlighting significant components such as specific allocation of revenues, airport services, amortization, and salaries Costs of Sales, Administrative, and Selling Expenses (Nine months ended 09.30.2021, in $) | Item (Nine month period ended at 09.30.2021) | Cost of sales $ | selling expenses $ | Administrative expenses $ | Total $ | | :------------------------------------------- | :---------------- | :----------------- | :------------------------ | :-------------- | | Specific allocation of revenues | 2,882,289,985 | - | - | 2,882,289,985 | | Airport services and maintenance | 3,992,959,327 | - | 1,239,928 | 3,994,199,255 | | Amortization of intangible assets | 4,872,466,913 | 1,217,958 | 41,292,262 | 4,914,977,133 | | Salaries and social security contributions | 4,823,105,803 | 39,380,494 | 510,138,697 | 5,372,624,994 | | Taxes | 200,483,503 | 1,044,859,575 | 218,499,471 | 1,463,842,549 | | Bad debts charges | - | 166,211,599 | - | 166,211,599 | | Total at 09.30.2021 | 18,233,101,776| 1,275,603,327 | 1,025,934,843 | 20,534,639,946| Costs of Sales, Administrative, and Selling Expenses (Nine months ended 09.30.2020, in $) | Item (Nine month period ended at 09.30.2020) | Cost of sales $ | selling expenses $ | Administrative expenses $ | Total $ | | :------------------------------------------- | :---------------- | :----------------- | :------------------------ | :-------------- | | Specific allocation of revenues | 3,436,124,480 | - | - | 3,436,124,480 | | Airport Services and maintenance | 5,483,240,309 | - | 74,690,629 | 5,557,930,938 | | Amortization of intangible assets | 9,587,955,393 | 4,242,681 | 144,549,698 | 9,736,747,772 | | Salaries and social security contributions | 5,296,882,964 | 73,078,326 | 581,420,310 | 5,951,381,600 | | Taxes | 257,577,995 | 1,154,764,426 | 244,438,497 | 1,656,780,918 | | Bad debts charges | - | 481,028,238 | - | 481,028,238 | | Total at 09.30.2020 | 25,651,089,059| 1,743,333,652 | 1,294,455,934 | 28,688,878,645| - Total costs of sales, administrative, and selling expenses decreased by approximately $8.15 billion from $28.69 billion in 2020 to $20.53 billion in 2021[135] NOTE 11- Foreign Currency Assets and Liabilities This note details the company's foreign currency denominated assets and liabilities, primarily in US Dollars and Euros, as of September 30, 2021, and December 31, 2020, showing a net liability position in foreign currency Foreign Currency Assets and Liabilities (in $) | Item | 09.30.2021 $ | 12.31.2020 $ | | :---------------------------------- | :---------------- | :---------------- | | Total current assets | 3,936,100,459 | 5,824,302,629 | | Total assets | 3,936,100,459 | 5,824,302,629 | | Total current liabilities | 17,716,953,576 | 18,265,199,613 | | Total non-current liabilities | 34,102,001,102 | 47,444,364,156 | | Total liabilities | 51,818,954,678 | 65,709,563,769 | | Net liability position | 47,882,854,219 | 59,885,261,140 | - The company's net foreign currency liability position decreased from $59.89 billion at December 31, 2020, to $47.88 billion at September 30, 2021[137] NOTE 12 – Other Restricted Assets This note highlights other restricted assets, specifically guarantees granted to third parties in connection with lease agreements and fixed-term placements used as collateral - Other receivables in current assets include $1.25 million (Sep 30, 2021) and $1.71 million (Dec 31, 2020) corresponding to guarantees granted to third parties in connection with lease agreements[137] - As of December 31, 2020, the Investments item included $251.13 million corresponding to fixed-term placements granted as collateral[137] NOTE 13 - Capital Stock This note details the composition of the company's capital stock, consisting of common shares and preferred non-voting shares, and outlines the specific voting rights of preferred shares under certain conditions Capital Stock (in $) | Capital Stock Item | Par Value $ | | :----------------- | :---------------- | | Paid-in and subscribed | 1,169,495,813 | | Registered with the Public Registry of Commerce | 1,006,046,708 | - The Company's capital stock is comprised of 258.5 million common shares of $1 par value and 911.0 million preferred non-voting shares of $1 par value[139] - Preferred shares will have voting rights on matters such as partial or total capital reimbursement, during periods when preferred shareholder benefits are granted but not received, and for the appointment of directors and syndics[139] NOTE 14 - Dividends by Preferred Shares This note explains the accrual and payment conditions for preferential dividends, noting that dividends for fiscal year 2020 and the nine-month period ended September 30, 2021, are accumulated and will be paid when the company generates realized and liquid profit - The preferential dividend accrued for fiscal year ended December 31, 2020, amounting to $237.8 million, will be accumulated and paid in the first fiscal year with a realized and liquid profit[141] - The preferential dividend accrued for the nine-month period ended September 30, 2021, is $219.0 million and will be recorded upon approval by the Shareholders' Meeting[142] NOTE 15 – Resolutions of Shareholders' Ordinary and Special Meeting This note summarizes key resolutions from the Shareholders' meetings in April 2020 and April 2021, including the allocation of 2019 results to legal reserve, preferred share dividends (payable in preferred shares), and an optional reserve for future works. It also notes the resolution to carry forward the negative result of 2020 and defer preferred share dividends until liquid gains are available - The April 22, 2020, meeting resolved to allocate 2019 results: $318.5 million for legal reserve, $163.4 million for preferred share dividends (payable in preferred shares), and $5.89 billion for an optional reserve for future works[142] - The 2020 meeting also approved increasing share capital by $163.4 million through the issuance of 163.4 million preferred shares to the National State[143][145] - The April 20, 2021, meeting resolved to carry forward the negative result of ($7.59 billion) for 2020 and defer the payment of preferred share dividends ($237.8 million) until the company has realized and liquid gains[146][147] NOTE 16 – Earnings Per Share This note explains the calculation of earnings per share, which is derived from net income less accrued preferred share dividends, divided by the number of common shares, and provides the basic and diluted EPS for the periods Earnings Per Share (in $) | Metric | 09.30.2021 | 09.30.2020 | | :------------------------------------ | :------------ | :------------ | | Income for the year, net accrued dividends | (973,853,664) | (7,725,289,183)| | Amount of ordinary shares | 258,517,299 | 258,517,299 | | Earnings per shares | (3.7671) | (29.8831) | - Earnings per share for the nine-month period ended September 30, 2021, improved to $(3.7671) from $(29.8831) in the prior year[149] NOTE 17- Financial Risk Management The company is exposed to various financial risks, including market risk (exchange rate, interest rate, price), credit risk, and liquidity risk. Recent monetary authority restrictions on foreign exchange transactions have impacted the company, which is actively monitoring these variables and implementing measures to strengthen its financial position and maintain liquidity - The Company is exposed to market risk (exchange rate, fair value due to interest rate, and price risk), credit risk, and liquidity risk[150] - In September 2020, the monetary authority imposed greater exchange restrictions, affecting foreign currency value and requiring prior authorization for certain transactions in the Single Free Exchange Market (MULC)[151] - Management is continuously monitoring these variables and undertaking actions to strengthen the company's financial position and maintain liquidity[152] NOTE 18 - Impact of COVID-19 on Operations The COVID-19 pandemic has significantly impacted the company's operations through government-imposed travel restrictions, border closures, and flight suspensions. While restrictions are gradually easing, the company has implemented mitigation efforts, including receiving government assistance and rationalizing costs, and anticipates a recovery in traffic and income with increased vaccination and border openings - The COVID-19 pandemic led to a public health emergency, border closures, mandatory quarantine, and suspension/reduction of flights, severely impacting the company's operations[155][157] - Government measures included limiting international passenger arrivals (e.g., 600 daily passengers in June 2021), which were gradually lifted, with complete elimination of restrictions on resident passengers by October 19, 2021, and non-resident passengers by November 1, 2021[158] - The company received government assistance through the Emergency Assistance Program for Work and Production, including reductions in social charges and wage subsidies (Compensatory Allocation to the Salary, REPRO II)[159][160][162] - Management continues to monitor the situation, rationalize operating costs, and implement financial measures, expecting a positive effect on results from the lifting of entry restrictions and progress in vaccination[163][164] NOTE 19 - Events Subsequent to the End of the Year This note reports on significant events occurring after September 30, 2021, including the finalization of an exchange offer for negotiable obligations, the issuance of new Series 2021 and Class 4 Negotiable Obligations to secure financing for infrastructure works, and the refinancing of syndicated loans - On October 27, 2021, the company finalized an exchange offer for existing negotiable obligations (2017 and 2020 Series) for new Series 2021 Negotiable Obligations, with 66.83% of 2020 Series and 24.61% of 2017 Series tendered[166][167] - New Series 2021 Negotiable Obligations (US$208.9 million) were issued on October 28, 2021, and an additional US$126 million in negotiable obligations (Series 2021 and Class 4) were placed on November 1, 2021, to fund infrastructure works[170][171] - Syndicated loans were refinanced, deferring capital amortization installments totaling US$58 million and bilateral loans totaling $3.61 billion[173][174] Summary of Information required by Resolution N ° 368/01 of the National Securities Commission 1. General Considerations This section reiterates the application of IFRS and IAS 29 for hyperinflationary economies, highlights the seasonality of air traffic affecting revenues, and provides an update on ongoing and reactivated infrastructure projects at various airports, many of which were paused due to the COVID-19 pandemic - The financial statements are prepared in accordance with IFRS and IAS 29, reflecting Argentina's hyperinflationary economy[179][180] - Company revenues are highly influenced by the seasonality of air traffic, with higher income during summer and winter holiday periods (December-February and July-August)[182] - Infrastructure projects at various airports (e.g., Ezeiza, Jorge Newbery, Córdoba, Iguazú) are underway, with many reactivated after pandemic-related halts, including new control towers, runway rehabilitations, and terminal expansions[185][187][188][189][191][192][193][194][195][196][197] 2. Equity Structure This section presents a comparative overview of the company's equity structure from 2017 to 2021, showing trends in assets, liabilities, and net equity, all restated in constant currency Equity Structure (in Thousands $) | Metric | 09.30.2021 (Thousands $) | 09.30.2020 (Thousands $) | 09.30.2019 (Thousands $) | 09.30.2018 (Thousands $) | 09.30.2017 (Thousands $) | | :------------------------------------------ | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Current Asset | 9,887,754 | 17,166,571 | 23,419,521 | 23,232,124 | 3,578,403 | | Non-current Assets | 129,570,292 | 134,824,022 | 131,216,883 | 111,522,075 | 11,870,270 | | Total Assets | 139,458,046 | 151,990,593 | 154,636,404 | 134,754,199 | 15,448,673 | | Current liabilities | 31,179,326 | 28,698,841 | 25,701,617 | 13,115,177 | 2,553,145 | | Non-Current Liabilities | 48,407,716 | 59,949,961 | 61,270,304 | 63,344,077 | 7,181,924 | | Total Liabilities | 79,587,042 | 88,648,802 | 86,971,921 | 76,459,254 | 9,735,069 | | Net equity attributable to majority shareholders | 59,869,890 | 63,340,857 | 67,617,185 | 58,229,722 | 5,705,164 | | Non-controlling interest | 1,114 | 934 | 47,298 | 65,223 | 8,440 | | Net Equity | 59,871,004 | 63,341,791 | 67,664,483 | 58,294,945 | 5,713,604 | - Total Assets decreased by 8.2% from $151.99 billion in 2020 to $139.46 billion in 2021[199] - Net Equity attributable to majority shareholders decreased by 5.5% from $63.34 billion in 2020 to $59.87 billion in 2021[199] 3. Results Structure This section provides a summary of the consolidated statements of comprehensive income for the nine-month periods from 2017 to 2021, highlighting the significant improvement in operating profit and net income in 2021 compared to 2020 Results Structure (in Thousands $) | Metric | 09.30.2021 (Thousands $) | 09.30.2020 (Thousands $) | 09.30.2019 (Thousands $) | 09.30.2018 (Thousands $) | 09.30.2017 (Thousands $) | | :------------------------------------------ | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Gross Profit | 1,298,245 | (2,430,489) | 20,011,217 | 21,799,093 | 4,284,545 | | Operating profit | (1,832,293) | (5,148,346) | 13,575,592 | 17,353,927 | 3,391,844 | | Income before tax | 2,220,274 | (11,904,659) | 4,020,376 | (2,949,119) | 2,813,633 | | Result of the period | (754,846) | (7,510,233) | 7,777,986 | (3,662,247) | 1,959,790 | | Result attributable to majority shareholders | (755,030) | (7,455,768) | 7,775,060 | (3,687,179) | 1,959,682 | - Operating profit improved significantly from a loss of ($5.15 billion) in 2020 to a loss of ($1.83 billion) in 2021[202] - Net income for the period improved from a loss of ($7.51 billion) in 2020 to a loss of ($754.8 million) in 2021[202] 4. Cash Flow Structure This section summarizes the cash flow activities for the nine-month periods from 2017 to 2021, showing a decrease in cash generated by operating activities and a significant shift to cash used in financing activities in 2021 Cash Flow Activity (in Thousands $) | Cash Flow Activity | 09.30.2021 (Thousands $) | 09.30.2020 (Thousands $) | 09.30.2019 (Thousands $) | 09.30.2018 (Thousands $) | 09.30.2017 (Thousands $) | | :------------------------------------------------ | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Cash Flow generated by / (used in) operating activities | 1,670,300 | 3,724,752 | (10,436,114) | 4,730,839 | (850,800) | | Cash Flow generated by / (used in) investing activities | 1,066,709 | 122,962 | 664,934 | (773,197) | (3,008) | | Cash Flow (used in) / generated by financing activities | (6,173,454) | 524,813 | 7,368,331 | (2,520,370) | 2,400,882 | | Net Cash Flow generated by / (used in) the period | (3,436,445) | 4,372,527 | (2,402,849) | 1,437,272 | 1,547,074 | - Cash flow generated by operating activities decreased by 55.1% from $3.72 billion in 2020 to $1.67 billion in 2021[203] - Cash flow from financing activities shifted from generating $524.8 million in 2020 to using ($6.17 billion) in 2021[203] 5. Analysis of Operations (Nine Months Ended Sep 30, 2021 and 2020) Income This sub-section analyzes the composition of consolidated revenues, showing a decrease in total revenues for the nine-month period ended September 30, 2021, compared to 2020, with a notable shift in the proportion of aeronautical vs. non-aeronautical revenues Revenues Composition (in Thousands $) | Revenues | 09.30.2021 (Thousands $) | % revenues | 09.30.2020 (Thousands $) | % revenues | | :-------------------------- | :----------------------- | :--------- | :----------------------- | :--------- | | Aeronautical revenues | 5,342,467 | 27.36% | 10,663,873 | 45.95% | | Non-aeronautical revenues | 14,180,790 | 72.64% | 12,544,774 | 54.05% | | Total | 19,523,257 | 100.00%| 23,208,647 | 100.00%| Aeronautical Revenues (in Thousands $) | Aeronautical revenues | 09.30.2021 (Thousands $) | % revenues | 09.30.2020 (Thousands $) | % revenues | | :-------------------------- | :----------------------- | :--------- | :----------------------- | :--------- | | Landing fee | 813,030 | 15.22% | 1,058,479 | 9.93% | | Parking fee | 472,945 | 8.85% | 462,157 | 4.33% | | Air station use rate | 4,056,492 | 75.93% | 9,143,237 | 85.74% | | Total | 5,342,467 | 100.00%| 10,663,873 | 100.00%| - Total revenues decreased by 15.9% from $23.21 billion in 2020 to $19.52 billion in 2021[204] - Aeronautical revenues decreased significantly, shifting from 45.95% of total revenues in 2020 to 27.36% in 2021, while non-aeronautical revenues increased their share[204] Costs of Sale This sub-section reports a substantial decrease in costs of sales for the nine-month period ended September 30, 2021, compared to the same period in 2020 Costs of Sale (in Thousands $) | Costs of Sale | Thousands $ |\ | :------------------------------------------ | :---------- |\ | Costs of sales for the period ended at 09.30.2021 | 18,233,102 |\ | Costs of sales for the period ended at 09.30.2020 | 25,651,089 |\ | Variation | (7,417,987) | - Costs of sales decreased by 28.9% ($7.42 billion) for the nine-month period ended September 30, 2021, compared to 2020[205] Administrative Expenses This sub-section shows a decrease in administrative expenses for the nine-month period ended September 30, 2021, compared to the prior year Administrative Expenses (in Thousands $) | Administrative Expenses | Thousands $ |\ | :------------------------------------------------------- | :---------- |\ | Administrative expenses for the period ended at 09.30.2021 | 1,025,935 |\ | Administrative expenses for the period ended at 09.30.2020 | 1,294,456 |\ | Variation | (268,521) | - Administrative expenses decreased by 20.7% ($268.5 million) for the nine-month period ended September 30, 2021, compared to 2020[207] Distribution and Marketing Expenses This sub-section indicates a reduction in distribution and marketing expenses for the nine-month period ended September 30, 2021, compared to the same period in 2020 Distribution and Commercial Expenses (in Thousands $) | Distribution and Commercial Expenses | Thousands $ |\ | :---------------------------------------------------------------------- | :---------- |\ | Distribution and commercial expenses for the period ended at 09.30.2021 | 1,275,603 |\ | Distribution and commercial expenses for the period ended at 09.30.2020 | 1,743,334 |\ | Variation | (467,731) | - Distribution and marketing expenses decreased by 26.8% ($467.7 million) for the nine-month period ended September 30, 2021, compared to 2020[208] Income and Financial Costs This sub-section reports a significant positive shift in net financial income and costs, moving from losses in 2020 to profits in 2021, primarily due to changes in exposure to foreign currency - Net financial income and costs shifted from losses of $4.88 billion in the nine-month period ended September 30, 2020, to profits of $3.86 billion in the same period of 2021[209] - This positive variation is mainly attributed to changes in losses arising from exposure to foreign currency[210] Other Incomes and Expenditures This sub-section notes a change in other net income and expenses, moving from income in 2020 to losses in 2021 for the nine-month period - Other net income and expense item recorded losses of approximately $829 million during the nine-month period ended September 30, 2021, compared to an income of $560.5 million in the same period of the previous year[211] Liquidity and Capital Resources This sub-section discusses the company's capitalization and debt as a percentage of total capitalization, showing a decrease in total capitalization and a lower debt percentage in 2021 compared to 2020 - The total capitalization of the Group at September 30, 2021, amounted to $110.19 billion, comprising $50.31 billion of financial debt and $59.87 billion of net equity[213] - Debt as a percentage of total capitalization decreased from 48.85% at September 30, 2020, to 45.66% at September 30, 2021[214] Financing This sub-section refers to Note 6 for detailed information on financing activities - Detailed information regarding financing activities is provided in Note 6 to the Condensed Consolidated Interim Financial Statements[215] 6. Key Financial Ratios This sub-section presents key financial ratios including liquidity, solvency, immobilization of capital, and cost effectiveness for the periods from 2017 to 2021, indicating changes in the company's financial health Key Financial Ratios | Ratio | 09.30.2021 | 09.30.2020 | 09.30.2019 | 09.30.2018 | 09.30.2017 | | :------------------------ | :--------- | :--------- | :--------- | :--------- | :--------- | | Liquidity () | 0.327 | 0.620 | 0.920 | 1.800 | 1.430 | | Solvency (**) | 0.782 | 0.730 | 0.780 | 0.770 | 0.590 | | Immobilization of capital | 0.929 | 0.890 | 0.850 | 0.830 | 0.770 | | Cost effectiveness | (0.013) | (0.120) | 0.110 | 0.060 | 0.340 | - The liquidity ratio decreased from 0.620 in 2020 to 0.327 in 2021, indicating a reduction in short-term liquidity[216] - The solvency ratio increased from 0.730 in 2020 to 0.782 in 2021, suggesting an improvement in long-term financial stability[216] - Cost effectiveness improved from (0.120) in 2020 to (0.013) in 2021, indicating a reduced negative impact on profitability[216] 7. Statistical Data This section provides statistical data on passenger movement and aircraft movement for key airports from 2017 to 2021, showing a continued negative impact from the pandemic in 2021 compared to pre-pandemic levels, though with some recovery from 2020 lows in aircraft movement Passenger Movement by Airport (in thousands) | Airport | 09.30.2021 (In thousands) | 09.30.2020 (In thousands) | 09.30.2019 (In thousands) | 09.30.2018 (In thousands) | 09.30.2017 (In thousands) | | :-------------- | :------------------------ | :------------------------ | :------------------------ | :------------------------ | :------------------------ | | Aeroparque | 2,246 | 2,293 | 9,444 | 7,719 | 7,373 | | Ezeiza | 2,215 | 2,936 | 9,332 | 10,172 | 10,226 | | Bariloche | 697 | 434 | 1,425 | 1,209 | 995 | | Córdoba | 406 | 698 | 2,697 | 2,541 | 2,091 | | Mendoza | 370 | 433 | 1,755 | 1,471 | 1,311 | | Salta | 316 | 327 | 1,096 | 820 | 830 | | Iguazú | 210 | 352 | 1,158 | 764 | 717 | | Tucumán | 184 | 178 | 745 | 728 | 352 | | Jujuy | 118 | 83 | 301 | 307 | 195 | | C. Rivadavia | 108 | 124 | 492 | 498 | 453 | | Total | 6,870 | 7,858 | 28,445 | 26,229 | 24,543 | | Overall total | 7,414 | 8,840 | 31,575 | 28,530 | 26,494 | | Variation | (16.1%) | (72.0%) | 10.7% | 7.7% | 14.6% | Aircraft Movement by Airport | Airport | 09.30.2021 | 09.30.2020 | 09.30.2019 | 09.30.2018 | 09.30.2017 | | :---------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | San Fernando | 35,364 | 18,930 | 31,719 | 29,815 | 27,403 | | Ezeiza | 23,972 | 24,735 | 63,658 | 55,435 | 49,517 | | Aeroparque | 23,163 | 22,443 | 85,242 | 98,378 | 99,764 | | Bariloche | 6,744 | 3,623 | 11,095 | 11,767 | 9,482 | | Córdoba | 6,190 | 7,066 | 24,216 | 25,113 | 21,003 | | Mendoza | 4,769 | 5,058 | 17,034 | 15,348 | 14,341 | | Salta | 3,798 | 3,660 | 10,555 | 8,264 | 10,397 | | C. Rivadavia | 3,407 | 3,310 | 7,422 | 7,576 | 6,656 | | San Rafael | 3,255 | 1,521 | 3,919 | 3,881 | 3,337 | | Mar del Plata | 2,800 | 2,310 | 6,321 | 7,358 | 4,744 | | Iguazú | 2,305 | 3,401 | 9,531 | 6,891 | 6,480 | | Total | 115,767 | 96,057 | 270,712 | 269,826 | 253,124 | | Overall total | 144,468| 118,941| 323,656| 319,121| 297,930| | Variation | 21.5% | (63.3%) | 1.4% | 7.1% | 8.2% | - Overall total passenger movement decreased by 16.1% in 2021 compared to 2020, reflecting the continued impact of the pandemic[218] - Overall total aircraft movement increased by 21.5% in 2021 compared to 2020, indicating some operational recovery despite passenger declines[220] Outlook for 2021 This section discusses the continued negative impact of the COVID-19 pandemic on operations during the first nine months of 2021, with restrictions on air travel gradually easing. The company anticipates a recovery in traffic and income in the remainder of the year due to vaccination progress and border openings, alongside ongoing efforts to rationalize costs and strengthen its financial position - The epidemiological situation continued to negatively impact operations in the first nine months of 2021, with air travel restrictions (e.g., passenger caps) slowing recovery[222][223] - Restrictions were gradually lifted in Q3 2021, with complete elimination of international passenger quotas by October 19 and border opening for non-resident foreigners by November 1[223] - The company expects a recovery in traffic and income in the remainder of the year due to vaccination progress and border openings[224] - Ongoing efforts include rationalizing operating costs and implementing financial measures to maintain cash position and meet commitments[225] Review Report of the Condensed Consolidated Interim Financial Statements Introduction This section introduces the independent auditor's review of Aeropuertos Argentina 2000 S.A.'s condensed consolidated interim financial statements for the period ended September 30, 2021, noting that prior year balances are an integral part of this review - The report reviews the condensed consolidated interim financial statements of Aeropuertos Argentina 2000 S.A. and its subsidiaries for the nine and three-month periods ended September 30, 2021[228] - Balances and other information for 2020 and its interim periods are considered an integral part of these financial statements[229] Board Responsibility This section clarifies that the Company's Board of Directors is responsible for the preparation and presentation of the financial statements in accordance with IFRS and IAS 34 - The Company's Board of Directors is responsible for the preparation and presentation of these financial statements in accordance with IFRS, adopted by FACPCE and CNV, and specifically IAS 34 'Interim Financial Reporting'[230] Scope of Review This section defines the scope of the review, which was limited to procedures established in International Standard on Review Engagements 2410, indicating it is substantially less extensive than an audit and thus does not express an audit opinion - The review was limited to procedures established in International Standard on Review Engagements 2410, adopted as a review standard in Argentina[231] - The scope of a review is substantially less than an audit, and consequently, an audit opinion is not expressed on the consolidated financial statements[231] Conclusion Based on the review, the auditor found no material issues suggesting the condensed consolidated interim financial statements were not prepared in accordance with IAS 34. The report also emphasizes the impact of COVID-19 on the company's operations - Based on the review, nothing came to the auditor's attention that causes them to believe the financial statements were not prepared, in all material respects, in accordance with IAS 34[234] - The report emphasizes the information in Note 18 regarding the impact of COVID-19 on the Company's business and management's mitigation measures[235] Report on Compliance with Current Regulations This section reports on the company's compliance with current regulations, noting that the financial statements are pending transcription to the 'Inventory and Balance Sheet' book and that accounting records are formally compliant. It also states the accrued debt with the Argentine Social Security System - The condensed consolidated interim financial statements are pending transcription to the 'Inventory and Balance Sheet' book[236] - The condensed individual interim financial statements stem from accounting records kept, in all formal aspects, in conformity with legal regulations[236] - As of September 30, 2021, Aeropuertos Argentina 2000's accrued debt with the Argentine Social Security System amounted to $52.97 million, which was not yet due[236] Report of the Supervisory Committee Report of the Supervisory Committee The Supervisory Committee conducted its review in accordance with existing standards, verifying consistency with corporate decisions and legal compliance. Based on their review and the external auditor's report, they found no observations regarding the financial statements, which are pending transcription to the 'Inventories and Balances' book, and noted the impact of COVID-19 - The Supervisory Committee's review was conducted in accordance with supervisory existing standards, verifying consistency of documents with corporate decisions and adequacy of decisions to law and bylaws[242] - The Committee considered the limited review report of the external auditor, Miguel A. Urus of Price Waterhouse & Co. SRL[243] - The condensed consolidated interim financial statements are pending transcription in the 'Inventories and Balances' book, arise from formally compliant accounting records, and the Committee has no observations to make regarding them[248] - The report highlights the uncertainties related to the impact of the COVID-19 virus on the company's business, as described in Note 18 of the financial statements[247]