UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20546
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2020
Commission File Number: 001-38354
Corporación América Airports S.A.
(Name of Registrant)
4, rue de la Grêve
L-1643, Luxembourg
Tel: +35226258274
Fax: +35226259776
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2020 AND 2019
This report of foreign private issuer on Form 6-K (this “Form 6-K”) is being filed by Corporación América Airports S.A. (“CAAP” or the “Company”) with the Securities and Exchange Commission. The Company is filing this report on Form 6-K for the purpose of filing a copy of the Company’s unaudited condensed consolidated interim financial statements for the six-month period ended June 30, 2020 and 2019 (the “Consolidated Financial Statements”) as Exhibit 99.1. The Consolidated Financial Statements are presented in U.S. Dollars and prepared in accordance with IAS 34, “Interim Financial Reporting”. These Consolidated Financial Statements, should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2019, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) of the International Accounting Standards Board (“IASB”) and the interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).
Exhibit Index
Exhibit No. | Description |
99.1 | CAAP Unaudited Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Corporación América Airports S.A. | |||
By: | /s/ Andres Zenarruza | ||
Name: Andres Zenarruza | |||
Title: Head of Legal | |||
By: | /s/ Raúl Guillermo Francos | ||
Name: Raúl Guillermo Francos | |||
Title: Chief Financial Officer |
Date: August 24, 2020
Exhibit 99.1
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
Corporación América Airports S.A.
CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
For the six-month period ended June 30, 2020 and 2019
R.C.S. Luxembourg B 174.140
4, rue de la Grève
L-1643, Luxembourg
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME
For the three-month period
ended June 30, |
For the six-month period
ended June 30, |
|||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Notes | Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||||||||
Revenue | 4 | 81,727 | 412,563 | 378,865 | 798,806 | |||||||||||||||
Cost of services | 5 | (135,530 | ) | (303,070 | ) | (366,935 | ) | (569,365 | ) | |||||||||||
Gross (loss) / profit | (53,803 | ) | 109,493 | 11,930 | 229,441 | |||||||||||||||
Selling, general and administrative expenses | 6 | (22,957 | ) | (37,150 | ) | (56,827 | ) | (77,695 | ) | |||||||||||
Impairment loss | 10 | - | - | (4,490 | ) | - | ||||||||||||||
Other operating income | 7 | 1,092 | 4,326 | 4,635 | 9,146 | |||||||||||||||
Other operating expense | (441 | ) | (143 | ) | (853 | ) | (943 | ) | ||||||||||||
Operating (loss) / income | (76,109 | ) | 76,526 | (45,605 | ) | 159,949 | ||||||||||||||
Share of loss in associates | (3,415 | ) | (371 | ) | (4,264 | ) | (831 | ) | ||||||||||||
(Loss) / Income before financial results and income tax | (79,524 | ) | 76,155 | (49,869 | ) | 159,118 | ||||||||||||||
Financial income | 8 | 8,692 | 11,764 | 17,136 | 29,019 | |||||||||||||||
Financial loss | 8 | (48,407 | ) | (12,271 | ) | (101,854 | ) | (80,211 | ) | |||||||||||
Inflation adjustment | 8 | (3,200 | ) | (7,175 | ) | (5,081 | ) | (16,365 | ) | |||||||||||
(Loss) / Income before income tax | (122,439 | ) | 68,473 | (139,668 | ) | 91,561 | ||||||||||||||
Income tax | 9 | 46,653 | (13,122 | ) | 37,660 | (6,292 | ) | |||||||||||||
(Loss) / Income for the period | (75,786 | ) | 55,351 | (102,008 | ) | 85,269 | ||||||||||||||
Attributable to: | ||||||||||||||||||||
Owners of the parent | (55,431 | ) | 49,123 | (70,531 | ) | 84,175 | ||||||||||||||
Non-controlling interest | (20,355 | ) | 6,228 | (31,477 | ) | 1,094 | ||||||||||||||
(75,786 | ) | 55,351 | (102,008 | ) | 85,269 | |||||||||||||||
Earnings per share attributable to the owners of the parent | ||||||||||||||||||||
Weighted average number of ordinary shares (thousands) | 160,022 | 160,022 | 160,022 | 160,022 | ||||||||||||||||
Basic and diluted earnings per share | (0.35 | ) | 0.31 | (0.44 | ) | 0.53 |
The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2019.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
For the three-month period
ended June 30, |
For
the six-month period
|
|||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
(Loss) / Income for the period | (75,786 | ) | 55,351 | (102,008 | ) | 85,269 | ||||||||||
Items that will not be reclassified subsequently to profit or loss: | ||||||||||||||||
Remeasurement of defined benefit obligation | (324 | ) | (184 | ) | (4 | ) | (421 | ) | ||||||||
Items that may be subsequently reclassified to profit or loss: | ||||||||||||||||
Share of other comprehensive (loss) / income from associates | (157 | ) | (931 | ) | (421 | ) | 256 | |||||||||
Currency translation adjustment | (11,635 | ) | 88,017 | (40,836 | ) | 54,863 | ||||||||||
Other comprehensive (loss) / income for the period, net of income tax | (12,116 | ) | 86,902 | (41,261 | ) | 54,698 | ||||||||||
Total comprehensive (loss) / income for the period | (87,902 | ) | 142,253 | (143,269 | ) | 139,967 | ||||||||||
Attributable to: | ||||||||||||||||
Owners of the parent | (61,606 | ) | 107,651 | (92,005 | ) | 121,048 | ||||||||||
Non-controlling interest | (26,296 | ) | 34,602 | (51,264 | ) | 18,919 | ||||||||||
(87,902 | ) | 142,253 | (143,269 | ) | 139,967 |
The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2019.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
CONDENSED cONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
Notes |
At June 30, 2020 Unaudited |
At December 31, 2019 Audited |
||||||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Intangible assets, net | 10 | 2,639,299 | 3,002,121 | |||||||||
Property, plant and equipment, net | 78,066 | 79,612 | ||||||||||
Right-of-use asset | 6,802 | 8,380 | ||||||||||
Investments in associates | 5,899 | 9,929 | ||||||||||
Other financial assets at fair value through profit or loss | 3,298 | 3,309 | ||||||||||
Other financial assets at amortized cost | 2,558 | 2,494 | ||||||||||
Deferred tax assets | 112,901 | 147,475 | ||||||||||
Other receivables | 110,815 | 119,954 | ||||||||||
Trade receivables | 1,209 | 1,326 | ||||||||||
2,960,847 | 3,374,600 | |||||||||||
Current assets | ||||||||||||
Inventories | 10,592 | 11,302 | ||||||||||
Other financial assets at fair value through profit or loss | 18,286 | 17,341 | ||||||||||
Other financial assets at amortized cost | 31,652 | 66,413 | ||||||||||
Other receivables | 86,725 | 101,676 | ||||||||||
Current tax assets | 17,409 | 10,311 | ||||||||||
Derivative financial instruments | - | 27 | ||||||||||
Trade receivables | 50,199 | 104,877 | ||||||||||
Cash and cash equivalents | 11 | 180,226 | 195,696 | |||||||||
395,089 | 507,643 | |||||||||||
Total assets | 3,355,936 | 3,882,243 | ||||||||||
EQUITY | 14 | |||||||||||
Share capital | 160,022 | 160,022 | ||||||||||
Share premium | 180,486 | 180,486 | ||||||||||
Free distributable reserve | 385,055 | 385,055 | ||||||||||
Non-distributable reserve | 1,351,883 | 1,351,883 | ||||||||||
Currency translation adjustment | (413,574 | ) | (392,101 | ) | ||||||||
Legal reserves | 176 | 176 | ||||||||||
Other reserves | (1,324,844 | ) | (1,324,887 | ) | ||||||||
Retained earnings | 332,724 | 403,255 | ||||||||||
Total attributable to owners of the parent | 671,928 | 763,889 | ||||||||||
Non-controlling interests | 383,475 | 434,725 | ||||||||||
Total equity | 1,055,403 | 1,198,614 | ||||||||||
LIABILITIES | ||||||||||||
Non-current liabilities | ||||||||||||
Borrowings | 12 | 874,126 | 1,033,221 | |||||||||
Deferred tax liabilities | 183,563 | 233,115 | ||||||||||
Other liabilities | 13 | 657,291 | 848,410 | |||||||||
Lease liabilities | 5,483 | 5,783 | ||||||||||
Trade payables | 491 | 798 | ||||||||||
1,720,954 | 2,121,327 | |||||||||||
Current liabilities | ||||||||||||
Borrowings | 12 | 266,529 | 175,123 | |||||||||
Other liabilities | 13 | 170,723 | 230,122 | |||||||||
Lease liabilities | 1,667 | 3,144 | ||||||||||
Current tax liabilities | 660 | 5,156 | ||||||||||
Derivative financial instruments | 140 | - | ||||||||||
Trade payables | 139,860 | 148,757 | ||||||||||
579,579 | 562,302 | |||||||||||
Total liabilities | 2,300,533 | 2,683,629 | ||||||||||
Total equity and liabilities | 3,355,936 | 3,882,243 |
The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2019.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent | ||||||||||||||||||||||||||||||||||||||||||||
Share Capital | Share premium | Free Distributable Reserves | Non-Distributable Reserves | Legal Reserves | Currency Translation Adjustment | Other Reserves | Retained Earnings (1) | Total | Non-controlling interests | Total | ||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | 160,022 | 180,486 | 385,055 | 1,351,883 | 176 | (392,101 | ) | (1,324,887 | ) | 403,255 | 763,889 | 434,725 | 1,198,614 | |||||||||||||||||||||||||||||||
Loss for the period | - | - | - | - | - | - | - | (70,531 | ) | (70,531 | ) | (31,477 | ) | (102,008 | ) | |||||||||||||||||||||||||||||
Other comprehensive loss for the period | - | - | - | - | - | (21,473 | ) | (1 | ) | - | (21,474 | ) | (19,787 | ) | (41,261 | ) | ||||||||||||||||||||||||||||
Changes of non-controlling interests | - | - | - | - | - | - | 44 | - | 44 | 14 | 58 | |||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 160,022 | 180,486 | 385,055 | 1,351,883 | 176 | (413,574 | ) | (1,324,844 | ) | 332,724 | 671,928 | 383,475 | 1,055,403 | |||||||||||||||||||||||||||||||
Balance at January 1, 2019 | 160,022 | 180,486 | 385,055 | 1,351,883 | 176 | (378,803 | ) | (1,324,731 | ) | 394,156 | 768,244 | 454,453 | 1,222,697 | |||||||||||||||||||||||||||||||
Income for the period | - | - | - | - | - | - | - | 84,175 | 84,175 | 1,094 | 85,269 | |||||||||||||||||||||||||||||||||
Other comprehensive income / (loss) for the period | - | - | - | - | - | 37,135 | (262 | ) | - | 36,873 | 17,825 | 54,698 | ||||||||||||||||||||||||||||||||
Changes of non-controlling interests (2) | - | - | - | - | - | - | - | - | - | (12,992 | ) | (12,992 | ) | |||||||||||||||||||||||||||||||
Balance at June 30, 2019 | 160,022 | 180,486 | 385,055 | 1,351,883 | 176 | (341,668 | ) | (1,324,993 | ) | 478,331 | 889,292 | 460,380 | 1,349,672 |
(1) Retained Earnings calculated according to Luxembourg Law are disclosed in Note 15.
(2) Correspond to dividends approved for non-controlling interest.
The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2019.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
For the six-month period ended June 30, |
||||||||||||
Notes |
2020 Unaudited |
2019 Unaudited |
||||||||||
Cash flows from operating activities | ||||||||||||
(Loss) / Income for the period | (102,008 | ) | 85,269 | |||||||||
Adjustments for: | ||||||||||||
Amortization and depreciation | 104,924 | 95,259 | ||||||||||
Deferred income tax | 9 | (37,562 | ) | (39,248 | ) | |||||||
Income tax accrued | 9 | (98 | ) | 45,540 | ||||||||
Share of loss in associates | 4,264 | 831 | ||||||||||
Impairment loss | 10 | 4,490 | - | |||||||||
Gains on disposals of property, plant and equipment | (11 | ) | - | |||||||||
Unpaid concession fees | 29,802 | 30,116 | ||||||||||
Low value, short term and variable lease payments | (753 | ) | (1,278 | ) | ||||||||
Changes in liability for concessions | 23,593 | 46,868 | ||||||||||
Interest expense | 39,569 | 46,210 | ||||||||||
Other financial results, net | (5,450 | ) | (20,650 | ) | ||||||||
Net foreign exchange | 26,674 | (20,862 | ) | |||||||||
Other accruals | 95 | 1,146 | ||||||||||
Inflation adjustment | 9,129 | 24,921 | ||||||||||
Acquisition of Intangible assets | 10-17 | (73,909 | ) | (167,829 | ) | |||||||
Income tax paid | (11,106 | ) | (29,418 | ) | ||||||||
Changes in working capital | 17 | (13,878 | ) | (99,956 | ) | |||||||
Net cash used in operating activities | (2,235 | ) | (3,081 | ) | ||||||||
Cash flows from investing activities | ||||||||||||
Cash contribution in associates | (655 | ) | (3,179 | ) | ||||||||
Acquisition of other financial assets | (5,161 | ) | (4,321 | ) | ||||||||
Disposals of other financial assets | 40,106 | 42,229 | ||||||||||
Purchase of Property, plant and equipment | (4,039 | ) | (8,817 | ) | ||||||||
Acquisition of Intangible assets | 10 | (211 | ) | (411 | ) | |||||||
Loans with related parties | - | 3,672 | ||||||||||
Proceeds from fixed assets disposals | 11 | - | ||||||||||
Other | (650 | ) | (116 | ) | ||||||||
Net cash provided by investing activities | 29,401 | 29,057 | ||||||||||
Cash flows from financing activities |
||||||||||||
Proceeds from borrowings | 12 | 44,071 | 36,612 | |||||||||
Release of guarantee deposits | (730 | ) | - | |||||||||
Leases payments | (1,974 | ) | (2,772 | ) | ||||||||
Loans paid | 12 | (38,938 | ) | (32,631 | ) | |||||||
Interest paid | 12 | (26,191 | ) | (40,475 | ) | |||||||
Debt renegotiation expenses | 12 | (7,748 | ) | - | ||||||||
Debt renegotiation premium | 8 | (4,670 | ) | - | ||||||||
Dividends paid | - | (7,992 | ) | |||||||||
Net cash used in financing activities | (36,180 | ) | (47,258 | ) | ||||||||
Decrease in cash and cash equivalents | (9,014 | ) | (21,282 | ) | ||||||||
Movements in cash and cash equivalents |
||||||||||||
At the beginning of the period | 195,696 | 244,865 | ||||||||||
Effects of exchange rate changes and inflation adjustment on cash and cash equivalents | (6,456 | ) | (2,119 | ) | ||||||||
Decrease in cash and cash equivalents | (9,014 | ) | (21,282 | ) | ||||||||
At the end of the period | 11 | 180,226 | 221,464 |
The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2019.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 | General information and significant event of the period | |
2 | Basis of presentation and accounting policies | |
3 | Segment information | |
4 | Revenue | |
5 | Cost of services | |
6 | Selling, general and administrative expenses | |
7 | Other operating income | |
8 | Financial results, net | |
9 | Income tax | |
10 | Intangible assets, net | |
11 | Cash and cash equivalents | |
12 | Borrowings | |
13 | Other liabilities | |
14 | Equity | |
15 | Contingencies, commitments and restrictions on the distribution of profits | |
16 | Related party balances and transactions | |
17 | Cash flow disclosures | |
18 | Fair value measurement of financial instruments | |
19 | Subsequent events |
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
1 General information and significant event of the period
General information
Corporación América Airports S.A. (the “Company” or “CAAP”) is a holding company primarily engaged through its operating subsidiaries in the acquisition, development and operation of airport concessions. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”.
The Company was formed as a private limited liability company under the laws of the Grand Duchy of Luxembourg on December 14, 2012. The Company is ultimately controlled by Southern Cone Foundation (“SCF”), a foundation, organized under the laws of the Principality of Liechtenstein. The address of its registered office is in Vaduz.
The Group currently has operations in Argentina, Brazil, Uruguay, Armenia, Italy, Ecuador and Peru.
A list of the principal Group’s subsidiaries is included in Note 2 of the Consolidated Financial Statements as of December 31, 2019.
These condensed consolidated interim financial statements have been approved for issuance by the Company on August 20, 2020.
Significant event of the period
In March 2020, the World Health Organization classified the outbreak of COVID-19 as a pandemic. The nature of COVID-19 led to worldwide shutdowns and halting of commercial and interpersonal activity and several governments around the world, including Latin American governments, rapidly implemented drastic measures to contain the spread, including but not limited the closing of borders and prohibition of travel to and from certain parts of the world for a time period. Specifically, the governments and transportation authorities in the majority of the CAAP’s countries of operations have issued flight restrictions.
The recent COVID-19 virus outbreak has generated a disruption in the global economy, and in particular, the aviation industry resulting in drastic reductions in passenger traffic. The current health crisis is having and will likely continue to have, a negative impact on passenger traffic levels and air traffic operations.
Depending on how the situation evolves, governments may impose tougher measures including the extension of the travel bans for longer periods. In addition, concerns about the Coronavirus have negatively impacted travel demand (and therefore the Company’s business) generally.
In this context, CAAP formed a crisis committee composed of the Company’s CEO and operating CEOs of each subsidiary to assess its operations, including reductions in operating costs while maintaining quality and safety standards. The Company is also continuously in conversations with the relevant regulatory agencies and aviation and transportation authorities in each of its countries of operations to review mitigation measures, as it navigates this unprecedented environment.
The Company has developed a four-pronged strategy and implemented a number of actions aiming to mitigate the negative impact of the COVID-19 virus, as follows:
§ | Employees and passengers: The Company has further enhanced safety and hygiene protocols across its airports to protect the well-being of passengers and operating personnel. For essential staff working on premises, health gear was provided and additional sanitizing policies established. The Company has also established remote working when and where possible. |
§ | Cost controls and cash preservation measures: CAAP has introduced reductions in operating costs by: |
- | Reducing personnel expenses including salary reductions, suspension of salary increases and freezing new hiring, mandatory use of pending vacations and/or advancing vacations to employees when possible, placing operating employees on furlough in certain geographies and personnel layoffs due to downsizing of operations. |
- | Reducing maintenance and other operating expenses while maintaining the quality and safety standards, required to support the minimum level of operations. |
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
1 General information and significant event of the period (Cont.)
Significant event of the period (Cont.)
The Company has also aggressively managed working capital by negotiating with its suppliers the extension of payment terms and reducing its capex program.
§ | Negotiations with regulatory bodies and government support: The Company is in discussions with regulatory agencies to renegotiate concession fees payments to align to the current environment. |
§ | Re-equilibrium of the concession agreements: Under the concession contracts framework, the amounts and mechanisms for compensation are being negotiated with authorities and may include a reduction in the concession fee amount and/or mandatory capex, increasing tariffs, extending the tenor of the concession or a combination thereof. CAAP is in the initial stages of this process, which requires going through administrative regulatory channels. Please refer to Note 15.b. |
§ | Financial position and liquidity: As cash preservation is a critical focus, the Company is taking the following measures: |
- | Cancelling all non-mandatory capital investments and deferring non-priority projects. |
- | Implementing a set of cost control measures to reduce operating expenses and negotiate payment terms with the suppliers to limit additional cash outflows. |
- | Obtaining a deferral of principal and interest payments of debt and obtaining additional funding. Please refer to Note 12. |
- | Suspending dividends to third parties in Italy and Ecuador concessions. |
The Company controls credit risk through its constant monitoring of accounts receivable, anticipating mitigation initiatives to protect said receivables. Provision for bad debts currently deems to be adequate in connection with the amounts of the existing receivables and considering that some airlines have filed Chapter 11 of the United States Bankruptcy Code for reorganization of assets and debts. The Company has reflected additional expected credit losses, if applicable, as of June 30, 2020, and will monitor very strictly the situation in the next months.
Governments aid
In Argentina, through Decree 332/2020 and the applicable administrative resolutions, the Poder Ejecutivo Nacional has instituted, through the Emergency Assistance Program for Work and Production, a series of benefits for those companies that have been affected by the health emergency. Among the assistance measures provided for by the decree, the Argentine subsidiaries benefited from the postponement of the employer's contributions and a reduction in social security contributions. In addition, the Administración Federal de Ingresos Públicos (“AFIP”) has approved the granting of the Salary Compensation Allowance, as detailed in Decree 332/2020 for the months of April, May and June 2020. This allowance consists of a sum equivalent to 50% of the net salary, up to the maximum amount of two minimum vital salaries. As of June 30, 2020, this benefit was charged to the result of the period under Salaries and social security contributions in Note 5 and 6 of these condensed consolidated interim financial statements.
On March 18, 2020, the Brazilian Government issued an interim order (Medida Provisória nº 925) to help companies and postponed the due date of concession fees payments which were payable in May and July 2020, to December 2020. Likewise, the Brazilian Economy Minister has issued two Ordinances that allows companies to defer taxes payments. Ordinance nº 139/2020 for taxes accounted in March and April 2020 to August and October 2020, respectively, and Ordinance nº 245/2020 for taxes accounted in May to November 2020.
On April 23, 2020, the Italian Ente Nazionale per l'Aviazione Civile (“ENAC”), in agreement with the Ministry of Infrastructure and Transport, ordered the suspension of the payment of airports concession fees, due in July. For 2020, the payment will be commensurate with the traffic actually recorded during the year and must be paid in January 31, 2021.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
1 General information and significant event of the period (Cont.)
Significant event of the period (Cont.)
Flight restrictions and gradual restart of operations
Governments and transportation authorities in many of CAAP’s countries of operations have issued flight restrictions and continue to implement measures to contain Covid-19 spread.
On April 25, 2020, the Argentine National Administration of Civil Aviation (“ANAC”), issued Resolution N°144/2020, where it established that the airlines that operate passenger air transport services from, to or within the Argentine territory, may reschedule their regular operations, request authorizations for non-regular operations and commercialize air tickets with a start date of operations from September 1, 2020.
Regarding operations in other countries, a gradual restart of flights has taken place; in June flights have operated mainly in Italy, Brazil and Ecuador while in July flights started to operate in Uruguay. Nevertheless, flight frequencies are reduced across all of the Group’s airports.
As a result of the above and considering that the COVID-19 pandemic is complex and rapidly evolving, the full extent to which the Coronavirus will impact the Company’s business, results of operations, financial position and liquidity is unknown. The Company continues to assess the evolution of COVID-19 virus outbreak in order to identify the unforeseen potential effects that could alter its business and performance.
These condensed consolidated interim financial statements for the six-month period ended June 30, 2020 reflect the impact of these events and current market conditions, depending on the duration of the COVID-19 crisis and continued negative impact on economic activity, the Company may experience further negative results and liquidity restraints.
- 9 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
2 Basis of presentation and accounting policies
2.1 Basis of presentation
These Condensed Consolidated Interim Financial Statements have been prepared in accordance with IAS 34, “Interim Financial Reporting”. The accounting policies used in the preparation of these Condensed Consolidated Interim Financial Statements are consistent with those used in the audited Consolidated Financial Statements for the year ended December 31, 2019. These policies have been consistently applied to all the years presented, unless otherwise stated. These Condensed Consolidated Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2019, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) of the International Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC).
Elimination of all material intercompany transactions and balances between the Company and the other companies and their respective subsidiaries have been made.
The preparation of Condensed Consolidated Interim Financial Statements in conformity with IFRS requires management to make certain accounting estimates and assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the reporting dates, and the reported amounts of revenues and expenses during the reporting years. Actual results may differ from these estimates.
In the preparation of these Condensed Consolidated Interim Financial Statements, the significant areas of judgment by management in the application of the Group’s accounting policies and the main areas of assumptions and estimates are consistent with those applied in the Consolidated Financial Statements for the year ended December 31, 2019. Nevertheless, judgments, assumptions and estimations in the light of current circumstances as described in Note 1, have been revised.
Assets and liabilities are classified as current if settlement is expected within 12 months.
There were no changes in valuation techniques during the period and there were no changes in risk management policies since the end of the year ended December 31, 2019, except of changes in liquidity and credit risks regarding COVID-19 outbreak, see Note 1.
Application of IAS 29 in financial reporting of Argentine subsidiaries and associates
IAS 29 “Financial Reporting in Hyperinflationary Economies” requires that the financial statements of entities whose functional currency is that of a hyperinflationary economy to adjust for the effects of changes in a suitable general price index and to express in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. Accordingly, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed in the non-monetary items.
In order to conclude on whether an economy is categorized as hyperinflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceeds 100%. Considering that the inflation in Argentina has exceed the 100% three-year cumulative inflation rate in July 2018, and that the rest of the indicators do not contradict the conclusion that Argentina should be considered a hyperinflationary economy for accounting purposes, the Group understands that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy under the terms of IAS 29 as from July 1, 2018, and, accordingly, it has applied IAS 29 as from that date in the financial reporting of its subsidiaries and associates with the Argentine peso as functional currency.
The estimated price index as of June 30, 2020 was 320.89 (283.44 as of December 31, 2019) and the conversion factor derived from the indexes for the period ended June 30, 2020, was 1.13.
Comparative amounts are the figures presented as current year amounts in the relevant prior year consolidated financial statements, according to IAS 21, considering that were translated into the currency of a non- hyperinflationary economy.
- 10 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
2 Basis of presentation and accounting policies (Cont.)
2.1 Basis of presentation (Cont.)
Application of IAS 29 in financial reporting of Argentine subsidiaries and associates (Cont.)
The ongoing application of the re-translation of comparative amounts to closing exchanges rates under IAS 21 and the inflation adjustments required by IAS 29 will lead to a difference because the rate at which the hyper-inflationary currency depreciates against a stable currency is rarely equal to the rate of inflation.
The inflation adjustment and the translation of comparative amounts in the current period is included in Other comprehensive loss for the period line.
This re-translation changes every prior reported quarterly consolidated statement of income in U.S. dollars, as a result, the impact of quarterly inflation adjustments and quarterly translation adjustments vary the results of operation quarter to quarter until year end.
2.2 Changes in accounting policies
New and amended standards adopted by the group
The group has applied the following standards and amendments for the first time for their quarterly reporting period commencing January 1, 2020:
- Definition of Material – amendments to IAS 1 and IAS 8
- Definition of a Business – amendments to IFRS 3
- Revised Conceptual Framework for Financial Reporting
- Interest Rate Benchmark Reform – Amendments to IFRS 7, IFRS 9 and IAS 39
The group also elected to adopt the following amendment early, if applicable:
- Covid-19-related Rent Concessions – amendments to IFRS 16
The amendments listed above did not have any impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods.
New and amended standards not yet adopted by the group
Certain new accounting standards and interpretations have been published that are not mandatory for June 30, 2020 reporting periods and have not been early adopted by the group.
- In January 2020, the IASB published an amendment to IAS 1 "Presentation of financial statements" which provides clarification on the classification of liabilities between current and non-current. The amendment is applicable from January 1, 2022.
- In May 2020, the IASB published some amendments with reference to IFRS 3, IAS 16 and IAS 37. In addition, some amendments to IFRS 1, IFRS 9, IAS 41 and the illustrative examples attached to IFRS 16 were published. These amendments will be applicable from January 1, 2022.
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.
- 11 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
3 Segment information
Operating segments are components of an enterprise where separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Group’s chief operating decision maker is its Board of Directors. The Group’s operating segments are managed separately because each operating segment represents a strategic business unit providing airport and non-airport services (“others”) to clients in different countries. The Group’s reportable operating segments are the seven countries in which the Group currently operates, which are Argentina, Brazil, Uruguay, Armenia, Ecuador, Italy and Peru.
Within each reportable segment, the Group develops and operates airport concessions (“Airports”) and provides other services not directly related to airport concessions (“Others”).
Assets, liabilities and results of sub-holding and/or holding companies are not allocated and are reported within the “Unallocated” column. This column also includes head office and group services.
The elimination of any intersegment revenues and other significant intercompany operations are included in the “Intersegment Adjustments” column.
The information regarding the Company’s reportable operating segments is consistent with the information presented in Notes 2.W and 4 included in our audited Consolidated Financial Statements for the year ended December 31, 2019 and should be read in conjunction with them.
The performance of each reportable segment is measured by its adjusted EBITDA, defined, with respect to each segment, as net income before financial income, financial loss, inflation adjustment, income tax expense, depreciation and amortization for such segment. The Adjusted EBITDA does not exclude the amortization of the intangible asset related to the fixed fee payable to the corresponding governments for the operation of the airports concessions.
In addition, the CODM considers each reportable segment’s Adjusted EBITDA before Construction Services margin as a relevant performance measure.
Adjusted EBITDA excluding Construction Services is defined, with respect to each segment, as net income before construction services revenue, financial income, construction services cost, financial loss, inflation adjustment, income tax expense, depreciation and amortization for such segment. The Adjusted EBITDA excluding construction services revenue and construction services cost does not exclude the amortization of the intangible asset related to the fixed fee payable to the corresponding governments for the operation of airports concessions.
- 12 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
3 Segment information
Argentina | Brazil | Uruguay | Armenia | Ecuador | Italy | Perú | ||||||||||||||||||||||||||||||||||||||||||||||
For the three-month period ended June 30, 2020
(Unaudited) |
Airports | Others | Airports | Others | Airports | Others | Airports | Airports | Airports | Airports |
Intrasegment
Adjustments |
Unallocated | Total | |||||||||||||||||||||||||||||||||||||||
Revenue | 51,437 | 53 | 5,980 | - | 7,877 | 3,751 | 2,522 | 7,188 | 4,457 | - | (1,712 | ) | 174 | 81,727 | ||||||||||||||||||||||||||||||||||||||
Cost of services | (80,559 | ) | (31 | ) | (12,673 | ) | - | (10,302 | ) | (2,564 | ) | (7,184 | ) | (10,095 | ) | (10,566 | ) | - | 1,512 | (3,068 | ) | (135,530 | ) | |||||||||||||||||||||||||||||
Gross (loss) / profit | (29,122 | ) | 22 | (6,693 | ) | - | (2,425 | ) | 1,187 | (4,662 | ) | (2,907 | ) | (6,109 | ) | - | (200 | ) | (2,894 | ) | (53,803 | ) | ||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (7,275 | ) | (12 | ) | (4,260 | ) | (2 | ) | (1,627 | ) | (309 | ) | (1,910 | ) | (1,581 | ) | (2,574 | ) | - | 93 | (3,500 | ) | (22,957 | ) | ||||||||||||||||||||||||||||
Impairment loss | - | - | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
Other operating income | 904 | - | 64 | - | 94 | 23 | 7 | - | - | - | - | - | 1,092 | |||||||||||||||||||||||||||||||||||||||
Other operating expenses | (92 | ) | (16 | ) | 6 | - | (29 | ) | - | (211 | ) | (68 | ) | (138 | ) | - | 107 | - | (441 | ) | ||||||||||||||||||||||||||||||||
Operating (loss) / income | (35,585 | ) | (6 | ) | (10,883 | ) | (2 | ) | (3,987 | ) | 901 | (6,776 | ) | (4,556 | ) | (8,821 | ) | - | - | (6,394 | ) | (76,109 | ) | |||||||||||||||||||||||||||||
Share of loss in associates | - | - | - | - | - | - | - | - | 48 | (3,463 | ) | - | - | (3,415 | ) | |||||||||||||||||||||||||||||||||||||
Amortization and depreciation | 30,073 | - | 2,104 | - | 2,875 | 283 | 3,766 | 1,219 | 2,942 | - | - | 3,288 | 46,550 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda | (5,512 | ) | (6 | ) | (8,779 | ) | (2 | ) | (1,112 | ) | 1,184 | (3,010 | ) | (3,337 | ) | (5,831 | ) | (3,463 | ) | - | (3,106 | ) | (32,974 | ) | ||||||||||||||||||||||||||||
Construction services revenue | (19,159 | ) | - | - | - | (4,551 | ) | - | (278 | ) | (4,670 | ) | (1,455 | ) | - | - | - | (30,113 | ) | |||||||||||||||||||||||||||||||||
Construction services cost | 19,136 | - | - | - | 4,551 | - | 269 | 4,670 | 1,159 | - | - | - | 29,785 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda excluding Construction Services | (5,535 | ) | (6 | ) | (8,779 | ) | (2 | ) | (1,112 | ) | 1,184 | (3,019 | ) | (3,337 | ) | (6,127 | ) | (3,463 | ) | - | (3,106 | ) | (33,302 | ) | ||||||||||||||||||||||||||||
Construction services revenue | 19,159 | - | - | - | 4,551 | - | 278 | 4,670 | 1,455 | - | - | - | 30,113 | |||||||||||||||||||||||||||||||||||||||
Construction services cost | (19,136 | ) | - | - | - | (4,551 | ) | - | (269 | ) | (4,670 | ) | (1,159 | ) | - | - | - | (29,785 | ) | |||||||||||||||||||||||||||||||||
Adjusted Ebitda | (5,512 | ) | (6 | ) | (8,779 | ) | (2 | ) | (1,112 | ) | 1,184 | (3,010 | ) | (3,337 | ) | (5,831 | ) | (3,463 | ) | - | (3,106 | ) | (32,974 | ) | ||||||||||||||||||||||||||||
Financial income | 8,692 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Financial loss | (48,407 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inflation adjustment | (3,200 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization and depreciation | (46,550 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loss before income tax expense | (122,439 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax | 46,653 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Loss for the period | (75,786 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
For the three-month period ended June 30, 2019 (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | 260,224 | 69 | 28,428 | - | 24,394 | 4,451 | 32,728 | 24,878 | 39,071 | - | (3,176 | ) | 1,496 | 412,563 | ||||||||||||||||||||||||||||||||||||||
Cost of services | (200,635 | ) | (6 | ) | (24,345 | ) | - | (12,406 | ) | (3,502 | ) | (20,796 | ) | (15,372 | ) | (24,875 | ) | - | 2,397 | (3,530 | ) | (303,070 | ) | |||||||||||||||||||||||||||||
Gross profit / (loss) | 59,589 | 63 | 4,083 | - | 11,988 | 949 | 11,932 | 9,506 | 14,196 | - | (779 | ) | (2,034 | ) | 109,493 | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (16,164 | ) | (140 | ) | (4,347 | ) | (48 | ) | (3,492 | ) | (287 | ) | (2,966 | ) | (4,158 | ) | (3,424 | ) | - | 779 | (2,903 | ) | (37,150 | ) | ||||||||||||||||||||||||||||
Other operating income | 4,153 | - | 85 | - | 37 | - | 48 | 2 | - | - | - | 1 | 4,326 | |||||||||||||||||||||||||||||||||||||||
Other operating expenses | (362 | ) | - | 434 | - | (67 | ) | - | (135 | ) | (12 | ) | - | - | - | (1 | ) | (143 | ) | |||||||||||||||||||||||||||||||||
Operating income / (loss) | 47,216 | (77 | ) | 255 | (48 | ) | 8,466 | 662 | 8,879 | 5,338 | 10,772 | - | - | (4,937 | ) | 76,526 | ||||||||||||||||||||||||||||||||||||
Share of income / (loss) in associates | - | - | - | - | - | - | - | - | 35 | (406 | ) | - | - | (371 | ) | |||||||||||||||||||||||||||||||||||||
Amortization and depreciation | 25,202 | - | 2,840 | - | 2,763 | 251 | 3,246 | 1,154 | 3,091 | - | - | 3,749 | 42,296 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda | 72,418 | (77 | ) | 3,095 | (48 | ) | 11,229 | 913 | 12,125 | 6,492 | 13,898 | (406 | ) | - | (1,188 | ) | 118,451 | |||||||||||||||||||||||||||||||||||
Construction services revenue | (92,065 | ) | - | - | - | (194 | ) | - | (4,144 | ) | (1,355 | ) | (2,183 | ) | - | - | - | (99,941 | ) | |||||||||||||||||||||||||||||||||
Construction services cost | 92,001 | - | - | - | 189 | - | 4,024 | 1,355 | 1,764 | - | - | - | 99,333 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda excluding Construction Services | 72,354 | (77 | ) | 3,095 | (48 | ) | 11,224 | 913 | 12,005 | 6,492 | 13,479 | (406 | ) | - | (1,188 | ) | 117,843 | |||||||||||||||||||||||||||||||||||
Construction services revenue | 92,065 | - | - | - | 194 | - | 4,144 | 1,355 | 2,183 | - | - | - | 99,941 | |||||||||||||||||||||||||||||||||||||||
Construction services cost | (92,001 | ) | - | - | - | (189 | ) | - | (4,024 | ) | (1,355 | ) | (1,764 | ) | - | - | - | (99,333 | ) | |||||||||||||||||||||||||||||||||
Adjusted Ebitda | 72,418 | (77 | ) | 3,095 | (48 | ) | 11,229 | 913 | 12,125 | 6,492 | 13,898 | (406 | ) | - | (1,188 | ) | 118,451 | |||||||||||||||||||||||||||||||||||
Financial income | 11,764 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Financial loss | (12,271 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inflation adjustment | (7,175 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization and depreciation | (42,296 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income tax expense | 68,473 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax | (13,122 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income for the period | 55,351 |
- 13 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
3 Segment information (Cont.)
Argentina | Brazil | Uruguay | Armenia | Ecuador | Italy | Perú | ||||||||||||||||||||||||||||||||||||||||||||||
For the six-month period ended June 30, 2020
(Unaudited) |
Airports | Others | Airports | Others | Airports | Others | Airports | Airports | Airports | Airports |
Intrasegment
Adjustments |
Unallocated | Total | |||||||||||||||||||||||||||||||||||||||
Revenue | 222,985 | 103 | 29,939 | - | 37,361 | 7,992 | 25,810 | 31,924 | 25,950 | - | (4,719 | ) | 1,520 | 378,865 | ||||||||||||||||||||||||||||||||||||||
Cost of services | (217,712 | ) | (40 | ) | (33,307 | ) | - | (24,878 | ) | (5,547 | ) | (23,251 | ) | (26,616 | ) | (33,102 | ) | - | 3,865 | (6,347 | ) | (366,935 | ) | |||||||||||||||||||||||||||||
Gross profit / (loss) | 5,273 | 63 | (3,368 | ) | - | 12,483 | 2,445 | 2,559 | 5,308 | (7,152 | ) | - | (854 | ) | (4,827 | ) | 11,930 | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (21,518 | ) | (75 | ) | (8,258 | ) | (28 | ) | (5,401 | ) | (685 | ) | (4,658 | ) | (5,399 | ) | (5,563 | ) | - | 747 | (5,989 | ) | (56,827 | ) | ||||||||||||||||||||||||||||
Impairment loss | - | - | (4,490 | ) | - | - | - | - | - | - | - | - | - | (4,490 | ) | |||||||||||||||||||||||||||||||||||||
Other operating income | 4,309 | - | 92 | - | 151 | 23 | 55 | 5 | - | - | - | - | 4,635 | |||||||||||||||||||||||||||||||||||||||
Other operating expenses | (234 | ) | (16 | ) | (22 | ) | - | (49 | ) | - | (398 | ) | (74 | ) | (167 | ) | - | 107 | - | (853 | ) | |||||||||||||||||||||||||||||||
Operating (loss) / income | (12,170 | ) | (28 | ) | (16,046 | ) | (28 | ) | 7,184 | 1,783 | (2,442 | ) | (160 | ) | (12,882 | ) | - | - | (10,816 | ) | (45,605 | ) | ||||||||||||||||||||||||||||||
Share of loss in associates | - | - | - | - | - | - | - | - | 48 | (4,312 | ) | - | - | (4,264 | ) | |||||||||||||||||||||||||||||||||||||
Amortization and depreciation | 62,261 | - | 4,751 | - | 5,730 | 555 | 7,538 | 2,416 | 5,911 | - | - | 6,787 | 95,949 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda | 50,091 | (28 | ) | (11,295 | ) | (28 | ) | 12,914 | 2,338 | 5,096 | 2,256 | (6,923 | ) | (4,312 | ) | - | (4,029 | ) | 46,080 | |||||||||||||||||||||||||||||||||
Construction services revenue | (55,440 | ) | - | - | - | (6,919 | ) | - | (1,464 | ) | (7,281 | ) | (4,074 | ) | - | - | - | (75,178 | ) | |||||||||||||||||||||||||||||||||
Construction services cost | 55,363 | - | - | - | 6,919 | - | 1,422 | 7,281 | 3,325 | - | - | - | 74,310 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda excluding Construction Services | 50,014 | (28 | ) | (11,295 | ) | (28 | ) | 12,914 | 2,338 | 5,054 | 2,256 | (7,672 | ) | (4,312 | ) | - | (4,029 | ) | 45,212 | |||||||||||||||||||||||||||||||||
Construction services revenue | 55,440 | - | - | - | 6,919 | - | 1,464 | 7,281 | 4,074 | - | - | - | 75,178 | |||||||||||||||||||||||||||||||||||||||
Construction services cost | (55,363 | ) | - | - | - | (6,919 | ) | - | (1,422 | ) | (7,281 | ) | (3,325 | ) | - | - | - | (74,310 | ) | |||||||||||||||||||||||||||||||||
Adjusted Ebitda | 50,091 | (28 | ) | (11,295 | ) | (28 | ) | 12,914 | 2,338 | 5,096 | 2,256 | (6,923 | ) | (4,312 | ) | - | (4,029 | ) | 46,080 | |||||||||||||||||||||||||||||||||
Financial income | 17,136 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Financial loss | (101,854 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inflation adjustment | (5,081 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization and depreciation | (95,949 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loss before income tax expense | (139,668 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax | 37,660 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Loss for the period | (102,008 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2020 (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Current assets | 123,308 | 106 | 24,196 | 50 | 17,513 | 4,412 | 44,154 | 17,989 | 38,067 | - | (66,628 | ) | 191,922 | 395,089 | ||||||||||||||||||||||||||||||||||||||
Non-current assets | 1,185,399 | 21 | 800,858 | 106 | 153,166 | 7,094 | 162,892 | 66,134 | 247,171 | 4,008 | (768 | ) | 334,766 | 2,960,847 | ||||||||||||||||||||||||||||||||||||||
Capital Expenditure | 55,441 | - | 2,241 | - | 8,068 | 1,145 | 2,269 | 7,634 | 4,563 | - | - | 2 | 81,363 | |||||||||||||||||||||||||||||||||||||||
Current liabilities | 203,583 | 29 | 94,982 | - | 19,060 | 2,766 | 69,173 | 21,730 | 102,927 | - | (66,628 | ) | 131,957 | 579,579 | ||||||||||||||||||||||||||||||||||||||
Non-current liabilities | 496,814 | - | 816,284 | - | 58,846 | 3,144 | - | 16,308 | 58,592 | - | (768 | ) | 271,734 | 1,720,954 |
- 14 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
3 Segment information (Cont.)
Argentina | Brazil | Uruguay | Armenia | Ecuador | Italy | Peru | ||||||||||||||||||||||||||||||||||||||||||||||
For the six-month period ended June 30, 2019
(Unaudited) |
Airports | Others | Airports | Others | Airports | Others | Airports | Airports | Airports | Airports |
Intrasegment
Adjustments |
Unallocated | Total | |||||||||||||||||||||||||||||||||||||||
Revenue | 506,271 | 123 | 58,097 | - | 56,648 | 8,539 | 57,984 | 48,575 | 65,887 | - | (6,349 | ) | 3,031 | 798,806 | ||||||||||||||||||||||||||||||||||||||
Cost of services | (368,839 | ) | (11 | ) | (48,893 | ) | - | (27,020 | ) | (6,654 | ) | (37,237 | ) | (29,426 | ) | (49,079 | ) | - | 4,861 | (7,067 | ) | (569,365 | ) | |||||||||||||||||||||||||||||
Gross profit / (loss) | 137,432 | 112 | 9,204 | - | 29,628 | 1,885 | 20,747 | 19,149 | 16,808 | - | (1,488 | ) | (4,036 | ) | 229,441 | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (35,320 | ) | (196 | ) | (9,199 | ) | (67 | ) | (6,951 | ) | (634 | ) | (5,786 | ) | (8,743 | ) | (6,865 | ) | - | 1,489 | (5,423 | ) | (77,695 | ) | ||||||||||||||||||||||||||||
Other operating income | 8,754 | - | 292 | - | 60 | - | 48 | 8 | - | - | (17 | ) | 1 | 9,146 | ||||||||||||||||||||||||||||||||||||||
Other operating expenses | (457 | ) | - | (91 | ) | - | (100 | ) | - | (293 | ) | (18 | ) | - | - | 16 | - | (943 | ) | |||||||||||||||||||||||||||||||||
Operating income / (loss) | 110,409 | (84 | ) | 206 | (67 | ) | 22,637 | 1,251 | 14,716 | 10,396 | 9,943 | - | - | (9,458 | ) | 159,949 | ||||||||||||||||||||||||||||||||||||
Share of income / (loss) in associates | - | - | - | - | - | - | - | - | 35 | (866 | ) | - | - | (831 | ) | |||||||||||||||||||||||||||||||||||||
Amortization and depreciation | 49,612 | - | 5,948 | - | 6,544 | 488 | 6,417 | 2,281 | 6,115 | - | - | 7,953 | 85,358 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda | 160,021 | (84 | ) | 6,154 | (67 | ) | 29,181 | 1,739 | 21,133 | 12,677 | 16,093 | (866 | ) | - | (1,505 | ) | 244,476 | |||||||||||||||||||||||||||||||||||
Construction services revenue | (154,474 | ) | - | - | - | (847 | ) | - | (6,533 | ) | (1,355 | ) | (3,976 | ) | - | - | - | (167,185 | ) | |||||||||||||||||||||||||||||||||
Construction services cost | 154,365 | - | - | - | 822 | - | 6,344 | 1,355 | 2,930 | - | - | - | 165,816 | |||||||||||||||||||||||||||||||||||||||
Adjusted Ebitda excluding Construction Services | 159,912 | (84 | ) | 6,154 | (67 | ) | 29,156 | 1,739 | 20,944 | 12,677 | 15,047 | (866 | ) | - | (1,505 | ) | 243,107 | |||||||||||||||||||||||||||||||||||
Construction services revenue | 154,474 | - | - | - | 847 | - | 6,533 | 1,355 | 3,976 | - | - | - | 167,185 | |||||||||||||||||||||||||||||||||||||||
Construction services cost | (154,365 | ) | - | - | - | (822 | ) | - | (6,344 | ) | (1,355 | ) | (2,930 | ) | - | - | - | (165,816 | ) | |||||||||||||||||||||||||||||||||
Adjusted Ebitda | 160,021 | (84 | ) | 6,154 | (67 | ) | 29,181 | 1,739 | 21,133 | 12,677 | 16,093 | (866 | ) | - | (1,505 | ) | 244,476 | |||||||||||||||||||||||||||||||||||
Financial income | 29,019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Financial loss | (80,211 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inflation adjustment | (16,365 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization and depreciation | (85,358 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income tax expense | 91,561 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax | (6,292 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income for the period | 85,269 | |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 (Audited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Current assets | 149,064 | 139 | 47,726 | 140 | 16,691 | 4,222 | 57,323 | 50,629 | 55,249 | - | (59,393 | ) | 185,853 | 507,643 | ||||||||||||||||||||||||||||||||||||||
Non-current assets | 1,235,497 | 22 | 1,106,996 | 104 | 151,717 | 6,425 | 169,130 | 63,914 | 245,541 | 8,059 | (768 | ) | 387,963 | 3,374,600 | ||||||||||||||||||||||||||||||||||||||
Capital Expenditure | 308,301 | - | 5,347 | - | 7,040 | 2,332 | 13,270 | 18,198 | 17,905 | - | (33 | ) | 13 | 372,373 | ||||||||||||||||||||||||||||||||||||||
Current liabilities | 220,849 | 29 | 129,875 | 2 | 21,080 | 2,740 | 27,853 | 49,616 | 105,873 | - | (59,393 | ) | 63,778 | 562,302 | ||||||||||||||||||||||||||||||||||||||
Non-current liabilities | 516,344 | - | 1,080,283 | - | 48,018 | 3,644 | 54,009 | 17,839 | 60,650 | - | (768 | ) | 341,308 | 2,121,327 |
- 15 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
4 Revenue
For the three-month period ended June 30, |
For the six-month period ended June 30, |
|||||||||||||||
2020 (Unaudited) |
2019 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
|||||||||||||
Aeronautical revenue | 7,994 | 185,406 | 159,831 | 382,654 | ||||||||||||
Non-aeronautical revenue | ||||||||||||||||
Commercial revenue | 43,562 | 126,741 | 143,454 | 247,989 | ||||||||||||
Construction service revenue | 30,113 | 99,941 | 75,178 | 167,185 | ||||||||||||
Other revenue | 58 | 475 | 402 | 978 | ||||||||||||
81,727 | 412,563 | 378,865 | 798,806 | |||||||||||||
Timing of revenue recognition | ||||||||||||||||
Over time | 68,704 | 344,713 | 312,987 | 665,229 | ||||||||||||
At a point in time | 842 | 11,353 | 9,133 | 19,779 | ||||||||||||
Revenues outside the scope of IFRS 15 | 12,181 | 56,497 | 56,745 | 113,798 | ||||||||||||
Revenue | 81,727 | 412,563 | 378,865 | 798,806 |
5 Cost of services
For the three-month period ended June 30, |
For the six-month period ended June 30, |
|||||||||||||||
2020 (Unaudited) |
2019 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
|||||||||||||
Construction services cost | (29,785 | ) | (99,333 | ) | (74,310 | ) | (165,816 | ) | ||||||||
Salaries and social security contributions | (26,456 | ) | (51,002 | ) | (71,418 | ) | (99,298 | ) | ||||||||
Concession fees (**) | (9,903 | ) | (40,954 | ) | (46,694 | ) | (86,198 | ) | ||||||||
Amortization and depreciation (***) | (44,267 | ) | (39,830 | ) | (91,256 | ) | (79,961 | ) | ||||||||
Maintenance expenses | (13,810 | ) | (33,006 | ) | (41,848 | ) | (64,193 | ) | ||||||||
Services and fees | (6,902 | ) | (16,436 | ) | (21,176 | ) | (32,658 | ) | ||||||||
Cost of fuel | (945 | ) | (10,301 | ) | (8,299 | ) | (18,043 | ) | ||||||||
Taxes (*) | (692 | ) | (4,244 | ) | (4,473 | ) | (8,751 | ) | ||||||||
Office expenses | (663 | ) | (4,062 | ) | (3,141 | ) | (7,453 | ) | ||||||||
Provision for maintenance costs | (465 | ) | (223 | ) | (787 | ) | (1,149 | ) | ||||||||
Others | (1,642 | ) | (3,679 | ) | (3,533 | ) | (5,845 | ) | ||||||||
(135,530 | ) | (303,070 | ) | (366,935 | ) | (569,365 | ) |
(*) Mainly includes tax from turnover and municipal taxes.
(**) Includes depreciation for fixed concession assets fee of USD 8,734 as of June 30, 2020 (USD 9,901 as of June 30, 2019).
(***) Includes amortization of leases of USD 1,258 as of June 30, 2020 (USD 1,532 as of June 30, 2019).
6 Selling, general and administrative expenses
For the three-month period ended June 30, |
For the six-month period ended June 30, |
|||||||||||||||
2020 (Unaudited) |
2019 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
|||||||||||||
Taxes (*) | (3,467 | ) | (10,729 | ) | (12,277 | ) | (21,771 | ) | ||||||||
Services and fees | (5,659 | ) | (8,911 | ) | (13,831 | ) | (18,317 | ) | ||||||||
Salaries and social security contributions | (3,571 | ) | (6,792 | ) | (9,996 | ) | (15,097 | ) | ||||||||
Bad debts | (6,270 | ) | (2,553 | ) | (9,195 | ) | (7,086 | ) | ||||||||
Amortization and depreciation (**) | (2,283 | ) | (2,466 | ) | (4,693 | ) | (5,397 | ) | ||||||||
Office expenses | (97 | ) | (1,825 | ) | (838 | ) | (2,832 | ) | ||||||||
Insurance | (570 | ) | (501 | ) | (1,047 | ) | (889 | ) | ||||||||
Maintenance expenses | (216 | ) | (353 | ) | (1,215 | ) | (714 | ) | ||||||||
Advertising | (80 | ) | (429 | ) | (317 | ) | (692 | ) | ||||||||
Charter service | (80 | ) | (207 | ) | (215 | ) | (415 | ) | ||||||||
Bad debts recovery | 74 | 277 | 154 | 398 | ||||||||||||
Other | (738 | ) | (2,661 | ) | (3,357 | ) | (4,883 | ) | ||||||||
(22,957 | ) | (37,150 | ) | (56,827 | ) | (77,695 | ) |
(*) Mainly includes tax from taxes over banks transactions and tax on revenue.
(**) Includes amortization of leases of USD 304 as of June 30, 2020 (USD 327 as of June 30, 2019).
- 16 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
7 Other operating income
For the three-month period ended June 30, |
For the six-month period ended June 30, |
|||||||||||||||
2020 (Unaudited) |
2019 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
|||||||||||||
Government grant (*) | 784 | 4,126 | 4,113 | 8,647 | ||||||||||||
Other | 308 | 200 | 522 | 499 | ||||||||||||
1,092 | 4,326 | 4,635 | 9,146 |
(*) Corresponds to government grant for the development of airport infrastructure in Group A (operated by AA2000) of the National Airport System. There are no unfulfilled conditions or other contingencies attaching to these grants. The group did not benefit directly from any other forms of government assistance.
8 Financial results, net
For the three-month period ended June 30, |
For the six-month period ended June 30, |
|||||||||||||||
2020 (Unaudited) |
2019 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
|||||||||||||
Interest income | 7,039 | 10,393 | 10,214 | 20,422 | ||||||||||||
Foreign exchange income | 541 | 412 | 2,724 | 5,722 | ||||||||||||
Other financial income | 1,112 | 959 | 4,198 | 2,875 | ||||||||||||
Financial income | 8,692 | 11,764 | 17,136 | 29,019 | ||||||||||||
Interest expense | (17,013 | ) | (22,971 | ) | (39,569 | ) | (46,210 | ) | ||||||||
Foreign exchange expenses | (18,401 | ) | 31,984 | (29,398 | ) | 15,140 | ||||||||||
Changes in liability for concessions | (7,642 | ) | (20,139 | ) | (23,593 | ) | (46,868 | ) | ||||||||
Other financial loss (*) | (5,351 | ) | (1,145 | ) | (9,294 | ) | (2,273 | ) | ||||||||
Financial loss | (48,407 | ) | (12,271 | ) | (101,854 | ) | (80,211 | ) | ||||||||
Inflation adjustment | (3,200 | ) | (7,175 | ) | (5,081 | ) | (16,365 | ) | ||||||||
Inflation adjustment | (3,200 | ) | (7,175 | ) | (5,081 | ) | (16,365 | ) | ||||||||
Net financial results | (42,915 | ) | (7,682 | ) | (89,799 | ) | (67,557 | ) |
(*) Includes debt renegotiations premiums paid to Notes tenders for the exchange offers for a total amount of USD 4,670 as of June 30, 2020.
9 Income tax
For the three-month period ended June 30, |
For the six-month period ended June 30, |
|||||||||||||||
2020 (Unaudited) |
2019 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
|||||||||||||
Current income tax | 13,550 | (15,093 | ) | 98 | (45,540 | ) | ||||||||||
Deferred income tax | 33,103 | 1,971 | 37,562 | 39,248 | ||||||||||||
46,653 | (13,122 | ) | 37,660 | (6,292 | ) |
As of March 29, 2019, AA2000 exercised an option of the asset revaluation for tax purpose included in Law No. 27.430 of Argentina, generating a deferred tax gain of ARS 2,537 million (approximately USD 59,746), as well as a higher current tax of ARS 633 million (approximately USD 14,907).
In order to determine the net taxable income of AA2000 at the end of this period, the tax inflation adjustment determined in accordance with articles No. 95 to No. 98 of the income tax law has been incorporated into the tax results for a total amount of ARS 755 million (approximately USD 10,715), due to the fact that as of June 30, 2020, the estimated price index variation for fiscal year 2020 will exceed 15%. Likewise, the income tax law allows the deferral of the charge generated by the tax inflation adjustment in six consecutive years, as a result, ARS 146 million (approximately USD 2,072) was recognized in current tax liabilities and ARS 609 million (approximately USD 8,643) as deferred tax liabilities.
- 17 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
10 Intangible assets, net
Concession
Assets |
Goodwill |
Patent,
intellectual property rights and others |
Total | |||||||||||||
Cost | ||||||||||||||||
Balances at January 1, 2020 | 4,057,431 | 55,506 | 21,326 | 4,134,263 | ||||||||||||
Acquisitions | 77,113 | - | 211 | 77,324 | ||||||||||||
Impairment loss | (4,490 | ) | - | - | (4,490 | ) | ||||||||||
Disposals | (61 | ) | - | - | (61 | ) | ||||||||||
Transfer | (220 | ) | - | 220 | - | |||||||||||
Transfer to property, plant and equipment | (4 | ) | - | - | (4 | ) | ||||||||||
Translation differences and inflation adjustment | (387,292 | ) | (13,283 | ) | (676 | ) | (401,251 | ) | ||||||||
3,742,477 | 42,223 | 21,081 | 3,805,781 | |||||||||||||
Depreciation | ||||||||||||||||
Accumulated at January 1, 2020 | 1,114,090 | - | 18,052 | 1,132,142 | ||||||||||||
Depreciation of the period | 97,688 | - | 568 | 98,256 | ||||||||||||
Disposals | (61 | ) | - | - | (61 | ) | ||||||||||
Translation differences and inflation adjustment | (63,685 | ) | - | (170 | ) | (63,855 | ) | |||||||||
1,148,032 | - | 18,450 | 1,166,482 | |||||||||||||
At June 30, 2020 | 2,594,445 | 42,223 | 2,631 | 2,639,299 | ||||||||||||
Cost | ||||||||||||||||
Balances at January 1, 2019 | 3,841,853 | 56,501 | 15,170 | 3,913,524 | ||||||||||||
Acquisitions | 172,679 | - | 411 | 173,090 | ||||||||||||
Transfer | (351 | ) | - | 351 | - | |||||||||||
Transfer from property plant and equipment | 935 | - | - | 935 | ||||||||||||
Translation differences and inflation adjustment | 125,035 | (26 | ) | (56 | ) | 124,953 | ||||||||||
4,140,151 | 56,475 | 15,876 | 4,212,502 | |||||||||||||
Depreciation | ||||||||||||||||
Accumulated at January 1, 2019 | 967,909 | - | 12,073 | 979,982 | ||||||||||||
Depreciation of the period | 87,762 | - | 728 | 88,490 | ||||||||||||
Translation differences and inflation adjustment | 33,808 | - | (69 | ) | 33,739 | |||||||||||
1,089,479 | - | 12,732 | 1,102,211 | |||||||||||||
At June 30, 2019 | 3,050,672 | 56,475 | 3,144 | 3,110,291 |
During June 2020, the Company identified impairment indicators in its cash generating units across all of its business operational segments due to drastic measures undertaken by governments, as flight restrictions and the closing of borders, to contain COVID-19 spread (see Note 1).
Therefore, the company performed an impairment test based on cash flow projections covering the remaining concession periods (value in use), based on key assumptions estimated with historical information and management judgment. The key assumptions used in determining the recoverable amount are number of passenger, fees, future operating expenses and discount rate.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each cash-generating units (CGUs) of a subsidiary or group of subsidiaries that are expected to benefit from such business combination.
As of June 30, 2020, the recoverable amount of the each defined CGU exceeds its carrying amount.
The Company additionally tested the value of the goodwill for impairment, resulting in no impairment charges to be recognized.
Impairment loss recognized in the evolution of intangibles assets correspond to Aeroporto de São Gonçalo do Amarante S.A. (“ICASGA”) who performed, as of March 31, 2020, an impairment test based on cash flow projections covering the remaining concession period of 21 years (value in use), based on key assumptions estimated with historical information and management judgment. The key assumptions were: number of passengers, fees, future operating expenses and discount rate.
The carrying value of the assets impaired as of March 31, 2020 was as follows:
Net assets before
impairment |
Impairment |
Net assets after
impairment |
||||||||||
ICASGA | 67,905 | (4,490 | ) | 63,415 |
As of June 30, 2020, ICASGA conducted a similar analysis resulting in no changes of the previous conclusions.
- 18 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
11 Cash and cash equivalents
At June 30, 2020 (Unaudited) |
At December 31, 2019 (Audited) |
|||||||
Cash to be deposited | 1,827 | 2,320 | ||||||
Cash at banks | 154,475 | 116,413 | ||||||
Time deposits | 4,451 | 35,502 | ||||||
Other cash equivalents | 19,473 | 41,461 | ||||||
180,226 | 195,696 |
The Group operates with investment grade - financial institutions.
For the purposes of cash flow interim statement, cash and cash equivalents include the following:
For the
six-month period
ended June 30, |
||||||||
2020 (Unaudited) |
2019 (Unaudited) |
|||||||
Cash and cash equivalents | 180,226 | 221,464 | ||||||
180,226 | 221,464 |
12 Borrowings
At June 30, 2020 (Unaudited) |
At December 31, 2019 (Audited) |
|||||||
Non-current | ||||||||
Bank and financial borrowings (**) | 350,205 | 472,226 | ||||||
Notes (*) | 523,921 | 560,995 | ||||||
874,126 | 1,033,221 | |||||||
Current | ||||||||
Bank and financial borrowings (**) | 173,827 | 103,056 | ||||||
Notes (*) | 92,702 | 72,067 | ||||||
266,529 | 175,123 | |||||||
Total Borrowings | 1,140,655 | 1,208,344 |
Changes in borrowings during the period is as follows:
For
the six-month period
|
||||||||
2020 (Unaudited) |
2019 (Unaudited) |
|||||||
Balances at the beginning of the period | 1,208,344 | 1,126,658 | ||||||
Adjustment on adoption of IFRS 16 | - | (1,715 | ) | |||||
Adjusted balances at the beginning of the period | 1,208,344 | 1,124,943 | ||||||
Loans obtained | 44,071 | 36,612 | ||||||
Loans paid | (38,938 | ) | (32,631 | ) | ||||
Interest paid | (26,191 | ) | (40,475 | ) | ||||
Accrued interest for the period | 38,158 | 44,031 | ||||||
Debt renegotiation expenses capitalization | (7,980 | ) | - | |||||
Translation differences and inflation adjustment | (76,809 | ) | 3,748 | |||||
Balances at the end of the period | 1,140,655 | 1,136,228 |
The maturity of borrowings is as follows:
1 year or
less |
1 - 2
years |
2 – 5
years |
Over 5
years |
Total | ||||||||||||||||
At June 30, 2020 (1) | 313,716 | 252,328 | 436,820 | 538,964 | 1,541,828 | |||||||||||||||
At December 31, 2019 (1) | 247,209 | 237,298 | 547,257 | 617,208 | 1,648,972 |
(1) The amounts disclosed in the table are undiscounted cash flows of principal and estimated interest. Variable interest rate cash flows have been estimated using variable interest rates applicable at the end of the reporting period.
- 19 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
12 Borrowings (Cont.)
(*) Notes include the following:
- | In 2007 Puerta del Sur S.A. (“PDS”) issued 7.75% secured guaranteed notes for USD 87 million, due 2021. The principal balance of the PDS Notes, together with accrued interest, will be repaid in 22 total installments, with individual installments occurring on April 29 and October 29 of each year beginning in 2011 and ending in 2021. The main covenants on these bonds are limitations on liens and encumbrances and compliance with certain financial ratios. PDS may be limited to declare, make or pay any dividends unless the debt coverage service ratio exceeds 1.7x and the indebtedness ratio is less than 3.0. PDS Notes are secured by a trust to which Puerta del Sur has transferred the following sums: (a) the sum of funds which PDS has or has rights to for services offered in administration, construction, and maintenance of Carrasco Airport; (b) the sum of funds received from the duty-free store in Carrasco Airport; (c) the sum of funds received as a result of the permitted operation of the cargo terminal in Carrasco Airport; and (d) the sum of funds PDS has received or will have right to receive from the government or from a third party successor as a result of a management agreement, or as a consequence of the redemption, termination, mutual dissolution and/or resolution of the management agreement for whatever reason, this trust is only use in case of non-compliance with the Notes obligations. |
On April 24, 2020, PDS signed a modification with more than 75% of the total principal amount of its 2007 notes to postpone April and October 2020 installments to year 2022. Interest continues to be paid semi-annually, including in 2020, at the same rate. A compensation of 1% on the amount of the extended installments was agreed and was paid in June 2020. The agreement was conditioned on the acceptance of at least 75% of the exchange offer of ACI Airport Sudamérica S.A.U. which was materialized on May 26, 2020. The agreement also established a change in the debt service and dividends payment covenants for the 2020 measurement that will be 1.25x for both cases, and for the 2021 measurement 1.4x. |
- | In 2015, ACI Airport Sudamérica S.A.U. (“ACI”) issued 6.875% senior secured guaranteed notes, for USD 200 million due in 2032. The principal balance will be repaid in 34 installments, May 29 and November 29 of each year, commencing on May 29, 2016 while accrued interest will be repaid commencing on November 29, 2015. The main covenants on these bonds are limitations on additional indebtedness, payment of dividends and other payments that are specifically restricted, selling assets as well as requiring compliance with certain financial ratios. The holders of these notes benefit from a guarantee and a security package including the pledge of the shares in PDS and Cerealsur S.A., and certain accounts of Cerealsur and ACI. As of June 30, 2020 and December 31, 2019 they were guaranteed with a standby letter of credit of Corporación América S.A. with Bank of América. These notes are fully and unconditionally guaranteed by Cerealsur S.A. |
On April 24, 2020, ACI announced the commencement of an offer (the “Exchange Offer”) to repurchase and exchange any and all of its outstanding 6.875% Senior Secured Guaranteed Notes due 2032 in the original aggregate principal amount of USD 200 million (the “Existing Notes”) for newly issued 6.875% Cash/7.875% PIK Senior Secured Guaranteed Notes due 2032 (the “New Notes”) and solicitation of consents to certain proposed amendments to the indenture governing the Existing Notes and certain waivers. |
On May 26, 2020 ACI issued USD 180.9 million aggregate principal amount of New Notes to repurchase and exchange 93.6% of the total original principal amount of the Existing Notes. The main covenants and guarantees remain unchanged and include also the pledge of shares of ACI. |
- | On January 8, 2018, Corporación América Italia S.p.A. (“CAI”) issued € 60.0 million (USD 71.8 million) aggregate principal amount of 4.556% secured notes due 2024 (the “Italian Notes”). The proceeds of the Italian Notes were used to refinance and replace the 6.250% secured notes due 2019 issued by CAI in December 2014. Interest on the Italian Notes is payable annually in arrears on June 30 of each year. The Italian Notes will mature on December 31, 2024. The main covenants on these bonds are limitations to take additional indebtedness, make payments of dividends and other payments that are specifically restricted, selling assets as well as requiring compliance with certain financial ratios. As of June 30, 2020, and due to Covid-19 negative impact, CAI did not fulfil its leverage ratio as required. Due to this, the outstanding non-current balance for a total amount of USD 62.6 million is presented as current as of June 30, 2020. In order to remedy this situation, CAI is in advanced negotiations to obtain a waiver that is expected to be in place in the third quarter of 2020. |
- 20 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
12 Borrowings (Cont.)
The Italian Notes are secured by an economic first ranking pledge in respect of all the shares representing 100% of the share capital of CAI, 100% of the share capital of Dicasa Spain S.A.U. and the shares representing CAI’s holding in Toscana Aeroporti S.p.A.
- | On February 6, 2017, AA2000 issued 6.875% senior secured notes for a nominal amount of USD 400 million due 2027. The principal will be amortized in 32 equal quarterly installments as from May 1, 2019. The main covenants of these bonds require compliance with certain financial ratios as well as restriction to incur in additional debt and limitations on the payments of dividends if any default or unmatured default has occurred. |
On February 27, 2020, the ordinary general meeting of shareholders of AA2000 approved the creation of a Global Program for the issuance of Notes. The Prospectus project was approved in its terms and conditions by AA2000 board of directors dated February 27, 2020. The aforementioned program establishes the issuance of simple Notes not convertible into shares with a nominal value of up to USD 500 million, or its equivalent in other currencies, with a duration of five years from the date of approval of the Argentine Comisión Nacional de Valores (“CNV”). On April 17, 2020, AA2000 obtained authorization from the CNV for the Global Program for the Issuance of Notes. See update in Note 19.
On April 21, 2020, AA2000 announced the commencement of an offer (the “Exchange Offer”) to exchange any and all of its outstanding 6.875% Senior Secured Notes due 2027 in the original aggregate principal amount of USD 400 million (the “Existing Notes”) for newly issued 6.875% Cash/9.375% PIK Class I Series 2020 Additional Senior Secured Notes due 2027 (the “Series 2020 Additional Notes”) and solicitation of consents to certain proposed amendments and waivers to the indenture governing the Existing Notes.
On May 19, 2020, the Exchange Offer of USD 346.9 million, representing 86.73% of the total original principal amount of the Existing Notes (or 99.65% of the total amount of outstanding principal amount of the Existing Notes) was completed.
On May 20, 2020 AA2000 issued USD 306 million aggregate principal amount of Series 2020 Additional Notes after completion of required conditions; the approval of ORSNA on April 24, 2020, issuing the Resolution No. 21/2020 pursuant to which the collateral assignment of revenue under the Existing Notes was extended to the Series 2020 Additional Notes in equal terms; and executing and delivering amendments to the 2019 Credit Facilities to provide for the effective deferral of payments of principal due thereunder on August 19, 2020 and November 19, 2020 that was satisfied on April 29, 2020. New notes are 6.875% Cash/9.375% PIK Class I Series 2020 Additional Senior Secured Notes due 2027. The main covenants and guarantees remain unchanged.
- 21 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
12 Borrowings (Cont.)
(**) As of June 30, 2020 significant bank and financial borrowings include the following:
Company | Lender | Currency | Maturity | Interest Rate |
Outstanding
(In millions of USD) |
Capitalization(2) | ||
BNDES | R$ | September 2032 | Variable | TJLP(1) plus spread | 6.4 | |||
Inframerica | BNDES | R$ | June 2032 | Variable |
T.R.
plus spread plus
IPCA |
1.6 | ||
Concessionaria do Aeroporto Sao Goncalo |
BNDES | R$ | September 2032 | Variable |
T.R.
plus spread plus
IPCA |
4.3 | A | |
do Amarante S.A. | BNDES | R$ | September 2022 | Fixed | 2.50% | 0.9 | ||
BNDES | R$ | July 2032 | Variable |
T.R.
plus spread plus
IPCA |
2.1 | |||
Inframerica | BNDES | R$ | December 2033 | Variable | TJLP(1) plus spread | 202.3 | A | |
Concessionaria do | Bradesco | R$ | July 2022 | Variable | TJLP(1) plus spread | 0.1 | D | |
Aeroporto de Brasilia
S.A. |
Votorantim | R$ | September 2020 | Variable | CDI plus spread | 3.3 | C | |
Terminal Aeroportuaria | Banco Guayaquil SA | USD | December 2024 | Variable | T.R.E.(3) plus spread | 9.0 | D | |
de Guayaquil S.A | Banco Bolivariano CA | USD | November 2024 | Variable | T.R.E.(3) plus spread | 8.2 | D | |
Terminal de Cargas de | Santander Uruguay | USD | April 2023 | Fixed | 4.40% | 1.5 | D | |
Uruguay S.A. | Scotiabank Uruguay | USD | October 2024 | Fixed | 4.30% | 2.0 | D | |
MPS Servicio Capital | Euro | June 2022 | Variable |
Euribor
6 month plus
spread |
4.2 | B | ||
Banco
de Innovación de
Infraestructuras y Desarrollo |
Euro | September 2027 | Variable |
Euribor
6 month plus
spread |
24.2 | D | ||
BPM | Euro | October 2020 | Fixed | 0.15% | 1.7 | D | ||
Unicredit | Euro | September 2020 | Fixed | 0.30% | 6.7 | D | ||
Unicredit | Euro | October 2020 | Fixed | 0.30% | 2.8 | D | ||
BNL | Euro | April 2021 | Fixed | 0.15% | 2.8 | D | ||
BNL | Euro | April 2021 | Fixed | 0.15% | 2.8 | D | ||
Toscana Aeroporti S.p.a. | CREDEM | Euro | October 2020 | Fixed | 0.06% | 5.6 | D | |
BPM | Euro | June 2023 | Variable |
Euribor
3 month plus
spread |
0.3 | D | ||
BPM | Euro | June 2024 | Variable |
Euribor
3 month plus
spread |
0.4 | D | ||
MPS Servicio capital | Euro | September 2020 | Fixed | 0.07% | 11.2 | D | ||
Banca Intesa San Paolo | Euro | February 2021 | Fixed | 0.15% | 6.7 | D | ||
Banca Intesa San Paolo | Euro | March 2021 | Fixed | 0.20% | 5.6 | D | ||
Credit Suisse AG | USD | December 2022 | Variable |
Libor
6 month plus
spread |
31.6 | B | ||
Armenia International Airports C.J.S.C. |
Euro | December 2022 | Variable |
Euribor
6 month plus
spread |
32.8 | |||
HSBC Bank Armenia C.J.S.C. | Dram | June 2022 | Fixed | 11% (4) | 1.0 | D | ||
Aeropuerto de Neuquén
S.A. |
Banco Macro | USD | August 2021 | Variable | Libor plus spread | 2.5 | A | |
Banco de la Provincia
de Buenos Aires |
USD | June 2023 | Fixed | 7% | 2.5 | D | ||
Aeropuertos Argentina 2000 S.A. |
Industrial and
Commercial Bank of China (Argentina) S.A., Banco Galicia and Buenos Aires S.A.U. and Banco Santander Río S.A. |
USD | August 2023 | Fixed | 9.75% | 84.6 | A | |
Citibank N.A. | USD | August 2023 | Variable | Libor plus spread | 34.8 | A | ||
Banco Macro | USD | July 2020 | Fixed | 6% | 10.3 | D | ||
Consorcio Aeropuertos Internacionales S.A. |
Santander Uruguay Banco Itaú |
USD USD |
April 2023 April 2025 |
Fixed Variable |
5.1% Libor plus spread |
3.6 3.6 |
B | |
Total | 524.0 |
- 22 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
12 Borrowings (Cont.)
(**) As of December 31, 2019 significant bank and financial borrowings include the following:
Company | Lender | Currency | Maturity | Interest Rate | Outstanding | |||
(In millions of USD) | Capitalization(2) | |||||||
Inframerica Concessionaria do Aeroporto Sao Goncalo do Amarante S.A. | BNDES | R$ | September 2032 | Variable | TJLP(1) plus spread | 8.6 | A | |
BNDES | R$ | June 2032 | Variable |
T.R.
plus spread plus
IPCA |
2.1 | |||
BNDES | R$ | September 2032 | Variable |
T.R.
plus spread plus
IPCA |
5.6 | |||
BNDES | R$ | September 2022 | Fixed | 2.50% | 1.5 | |||
BNDES | R$ | July 2032 | Variable |
T.R.
plus spread plus
IPCA |
2.6 | |||
Inframerica Concessionaria do Aeroporto de Brasilia S.A. | BNDES | R$ | December 2033 | Variable | TJLP(1) plus spread | 270.5 | A | |
Bradesco | R$ | July 2022 | Variable | TJLP(1) plus spread | 0.1 | D | ||
Votorantim | USD | June 2020 | Variable | CDI plus spread | 9.0 | C | ||
Terminal Aeroportuaria de Guayaquil S.A | Banco Guayaquil SA | USD | December 2024 | Variable | T.R.E.(3) plus spread | 10.1 | D | |
Banco Bolivariano CA | USD | November 2024 | Variable | T.R.E.(3) plus spread | 9.1 | D | ||
Terminal de Cargas de Uruguay S.A. | Santander Uruguay | USD | June 2020 | Fixed | 4.25% | 0.2 | D | |
Santander Uruguay | USD | April 2023 | Fixed | 4.40% | 1.7 | D | ||
Scotiabank Uruguay | USD | October 2024 | Fixed | 4.30% | 2.0 | D | ||
Toscana Aeroporti S.p.a. | MPS Servicio Capital | Euro | June 2022 | Variable |
Euribor
6 month plus
spread |
5.2 | B | |
Banco
de Innovación
de Infraestructuras y Desarrollo |
Euro | September 2027 | Variable |
Euribor
6 month plus
spread |
26.0 | D | ||
BPM | Euro | October 2020 | Fixed | 0.13% | 1.7 | D | ||
Unicredit | Euro | September 2020 | Fixed | 0.15% | 8.4 | D | ||
Unicredit | Euro | October 2020 | Fixed | 0.15% | 1.1 | D | ||
BNL | Euro | November 2020 | Fixed | 0.15% | 2.8 | D | ||
BNL | Euro | December 2020 | Fixed | 0.15% | 2.8 | D | ||
CREDEM | Euro | October 2020 | Fixed | 0.60% | 5.8 | D | ||
BPM | Euro | June 2022 | Variable |
Euribor
3 month plus
spread |
0.3 | D | ||
BPM | Euro | June 2023 | Variable |
Euribor
3 month plus
spread |
0.4 | D | ||
Armenia International Airports C.J.S.C. | Credit Suisse AG | USD | December 2022 | Variable |
Libor
6 month plus
spread |
36.1 | B | |
Euro | December 2022 | Variable |
Euribor
6 month plus
spread |
37.6 | ||||
Aeropuerto de Neuquén S.A. | Banco Macro | USD | August 2021 | Variable | Libor plus spread | 2.8 | A | |
Aeropuertos Argentina 2000 S.A. | Banco de la Provincia de Buenos Aires | USD | June 2023 | Fixed | 7% | 2.6 | D | |
Industrial and Commercial Bank of China (Argentina) S.A., Banco Galicia and Buenos Aires S.A.U. and Banco Santander Río S.A. | USD | August 2023 | Fixed | 9.75% | 84.1 | A | ||
Citibank N.A. | USD | August 2023 | Variable | Libor plus spread | 34.5 | A | ||
Total | 575.3 | |||||||
(1) | TJLP - Taxa de Juros de Longo Prazo (Brazilian Long term interest rate) |
IPCA: corresponds to the Brazilian Consumer Price index)
(2) | A - Secured/guaranteed |
B – Secured/unguaranteed |
C – Unsecured/guaranteed |
D - Unsecured/unguaranteed |
R$ - Brazilian Reales
(3) T.R.E - Tasa Referencial Ecuador (Ecuadorian reference interest rate)
(4) Effective interest rate is 5.5% as 50% of interest rate is subsidized by Armenian Government
- 23 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
12 Borrowings (Cont.)
The Credit Facility Agreement between Inframérica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. (“ICASGA”) and the Banco Nacional do Desenvolvimento Economico e Social (“BNDES”) is secured by the pledge of the shares of Inframérica Concessionária do Aeroporto de São Gonçalo do Amarante S.A, together with any dividends and distributions in connection therewith, as well as the fiduciary assignment of rights arising from the Natal Airport concession agreement and certain letters of guarantees issued by indirect shareholders and affiliates of Inframérica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. for an amount of USD 6.1 million which was released during 2018. It also establishes a required pre-authorization by BNDES on payments of Inframérica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. dividends if exceeding 25% of net profits.
The Credit Facility Agreement between Inframérica Concessionária do Aeroporto de Brasilia (“ICAB”) and BNDES is secured by the pledge of Inframérica Concessionária do Aeroporto de Brasilia and Inframérica Participaçoes S.A. shares, the fiduciary assignment of rights arising from the Brasilia airport concession agreement and letters of guarantee issued by indirect shareholders and affiliates of Inframérica Concessionária do Aeroporto de Brasilia. It also establishes under certain circumstances a required pre-authorization by BNDES on payments of Inframérica Concessionária do Aeroporto de Brasilia dividends if exceeding 25% of net profits and compliance of certain financial ratios.
During 2017 and 2018 ICAB and ICASGA entered into amendments and extension agreements with BNDES with respect to their loans, in the case of ICASGA including an early repayment of a large part of the original debt and in ICAB including the extension of the final maturity and increasing the size of the credit facility.
In connection with such amendments and extension agreements, ACI Airports S.à r.l. and CAAP have agreed not to create any encumbrances on their shares of Inframérica, and not to sell, acquire, merge or spin-off assets or undertake any other action that results or that may result in a change in the current corporate structure of Inframérica or any change of control in Inframérica, without the prior consent of BNDES. ACI Airports S.à r.l. has agreed not to undertake any change of control in CAAP without the prior consent of BNDES. In addition, ACI Airports S.à r.l. has agreed to maintain a minimum credit rating of at least B- (the “Minimum Rating”) or a stand-alone rating (without including the sovereign rating) of at least BB+. The amendment and extension agreements also require additional security equivalent to the amount of twenty-four months of debt service for at least a two-year period (in the form of a bank guaranty, letter of credit, guaranty insurance or other acceptable modalities of guarantee), if the Minimum Rating is not maintained for any annual testing period.
As of June 30, 2020, the Minimum Rating has not been achieved and ICAB and ICASGA requested BNDES to provide a waiver regarding this obligation. Nevertheless, non-compliance with the Minimum Rating does not constitute an event of default under the agreements. As stated above, additional security would be requested before September 30, 2020, in case the waiver of BNDES is not obtained prior to such date.
In March 2020, BNDES made available a program for joining a Standstill, which is the suspension of payments of principal and interest for 6 months of the contracts signed with BNDES. The amount relative of standstill must be capitalized and be paid in the remaining period of the financing contracts. ICAB and ICASGA applied for this program and obtained the approval on April 14, 2020.
On June 5, 2019, ICAB entered into a loan with Banco Votorantim S.A. - Bahamas Branch for an amount of USD 8.9 million due in June 2020. This loan was secured with a guarantee signed by Banco Votorantim S.A. Brazil with ICAB (“Contrato de Prestação de Garantia”). This guarantee agreement, dated June 14, 2019, was secured by a guarantee letter issued by CAAP for a total amount of USD 8.9 million or its equivalent in Brazilian Real which shall not be lower than R$ 36 million plus interest. Future payments of the loan were protected from the exposure to U.S. dollars exchange rate fluctuation with a cash flow swap derivative with Banco Votorantim S.A. from Brazil that denominates future payments in Brazilian Real for a total amount of R$ 36 million.
The USD operation with Banco Votorantim was settled as well as the derivative operation contracted together, and in April, May and June 2020, ICAB entered into loans for working capital with Banco Votorantim in the amount of R$ 18 million. These loans are secured by a guarantee letter issued by CAAP.
- 24 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
12 Borrowings (Cont.)
On December 15, 2015 Armenia International Airports C.J.S.C. (“AIA”) entered into a senior secured dual-currency facility agreement with Credit Suisse AG (and other banks) for a principal amount up to USD 160 million, which is secured by: (a) the collateral assignment of all present and future rights arising from the Armenian Concession Agreement and other related agreement, a pledge over all present and future cash collateral bank accounts, a pledge over certain movable and immoveable assets related to the Zvartnots Airport and the pledge of Armenia International Airports C.J.S.C. shares.
According to the loan agreement AIA has restrictions to distribution of dividends and has to maintain the following ratios at a certain level: debt to EBITDA, Debt service coverage and adjusted debt service coverage ratio. According to this agreement, these ratios must be met as of June 30 and December 31. As of June 30, 2020, and due to Covid-19 negative impact, AIA did not fulfil debt service coverage and adjusted debt service coverage ratio as required in the loan agreement. In order to remedy this situation, AIA has obtained a waiver from Credit Suisse AG, which is effective at the date of issue of these condensed consolidated interim financial statements. Due to this, and in compliance with IFRS as the waiver was obtained after the reporting period, the outstanding non-current balance for a total amount of USD 42.5 million is presented as current as of June 30, 2020, and subsequently will be reclassified again on a long-term basis after the reporting period.
As of June 30, 2020 Armenia International Airports C.J.S.C. had pledged cash held in bank accounts for USD 30.7 million (USD 40.3 million at December 31, 2019) and all intangible assets and property and equipment for a total of USD 161.4 million (USD 167.6 million at December 31, 2019).
Toscana Aeroporti S.p.A, pursuant to the loan agreement with Banco de Innovación de Infraestructuras y Desarrollo/MPS Servicio Capital is required to comply with certain financial ratios. Cash and cash equivalents of the Consolidated Statement of Financial Position includes € 1 million, to secure the abovementioned loan. For the loan granted by MPS Servicio Capital, Toscana Aeroporti S.p.A. obtained a waiver on the measurement of the financial covenants as of June 30, 2020.
Aeropuerto de Neuquén S.A. (“ANSA”) loan with Banco Macro is secured with a guarantee letter of Corporación América S.A. In addition, ANSA entered into an assignment of collection rights agreement in favour of Banco Macro.
On August 9, 2019, AA2000 entered into two credit facility agreements: (a) the onshore credit facility agreement, by and among AA2000, as borrower, Banco Galicia and Buenos Aires S.A.U., Industrial and Commercial Bank of China (Argentina) S.A. (“ICBC”) and Banco Santander Río S.A., as lenders, Citibank N.A. (“Citibank”), as administrative agent and Citibank Argentina, as local collateral agent, local disbursement agent and local paying agent, for an aggregate principal amount of USD 85 million and (b) the offshore credit facility agreement, by and among AA2000, as borrower, Citibank acting through its international banking facility, as lender, Citibank N.A., as administrative agent and Citibank Argentina as local collateral agent and local custodian agent for an aggregate principal amount of USD 35 million (collectively, the “2019 Credit Facilities”).
The term for the credit facility agreements shall be of thirty-six months as from the borrowing date. The principal amount under the credit facility agreements shall be repaid in nine quarterly equal and regular installments, the first one being paid as from 12 months of the borrowing date, and it shall bear interests: (i) regarding the onshore credit facility agreement, at a fixed annual nominal rate of 9.75%; (ii) regarding the offshore credit facility agreement, at a variable rate equivalent to (a) the LIBOR rate plus (b) an applicable interest rate of an annual nominal 5,500% plus (c) the applicable withholding tax.
To secure its obligations under the two
credit facility agreements, pursuant to the Argentine Collateral Trust Agreement dated August 9, 2019 (under Argentine law), AA2000
has transferred and assigned to the collateral trustee, acting on behalf of the Trust, for the benefit of the Lenders, acting as
the beneficiaries, all: (a) rights, title and interest in, to and under each payment of the cargo airport charges payable by the
user of such services in connection with all proceeds derived from export and import services carried out by Terminal de Cargas
Argentina (a business unit of AA2000); and (b) any residual amount that AA2000 could be entitled to receive pursuant to article
11.4 of the collateral trust agreement dated January 17, 2017, entered into AA2000 and Citibank, in respect of the rights to receive
payment in the event of a termination, expropriation or redemption of the concession agreement entered by and between the National
Government and AA2000 on February 9, 1998 and approved by Decree No. 163/1998; including the right to receive and withhold all
the payments pursuant to them and any other produced by them, assigned in trust to secure the Existing Notes issued by AA2000.
- 25 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
12 Borrowings (Cont.)
On April 29, AA2000 entered into a framework agreement (“Framework Agreement”) with the branch of Citibank established in the Republic of Argentina (“Citibank Argentina”), Industrial and Commercial Bank of China (Argentina) S.A. (“ICBC”), Banco Galicia, Buenos Aires S.A.U. (“Banco Galicia”) and Banco Santander Río S.A. (“Banco Santander”), in order to, among other things, effectively defer principal payments of the 2019 Credit Facilities. The Framework Agreement effectively defers payments of principal due by AA2000 under the 2019 Credit Facilities on August 19, 2020 and November 19, 2020, each of which amounts to USD 13.3 million. These will be implemented through the signing of bilateral contracts with each of the financial institutions through alternatives established in said framework agreement. Such deferred amounts will be effectively payable by AA2000 in quarterly installments beginning in September 2021 and ending in June 2022. See update in Note 19.
In accordance with the aforementioned renegotiation and the alternative adopted by ICBC, AA2000 has contracted derivative financial instruments with this financial institution for USD futures purchases in order to hedge the exposure to exchange rate fluctuations between Argentine pesos and US dollars of the two installments refinanced. As of June 30, 2020, transactions pending execution or settlement amounts to approximately USD 8 million, maturing on August 19, 2020 and November 19, 2020.
These derivative financial instruments are recorded in the financial statements as of June 30, 2020, in accordance with quoted and market values for transactions of similar characteristics.
On May 11, 2020, AA2000 agreed to reschedule the USD 10 million loan with Banco Macro extending its term to July 24, 2021 with a nominal annual compensatory rate of 11%, subject to the payment of interest due on July 24, 2020 and a guarantee assignment of the future claims for air station usage fees (for domestic flights) to be collected from Aerolíneas Argentinas S.A., see update in Note 19.
During the first half of 2020, Consorcio Aeropuertos Internacionales S.A. received disbursements of the planned financing with Banco Santander S.A. and Banco Itaú Uruguay S.A. for construction works at Punta del Este airport for a total amount of USD 7.2 million divided equally among both financial institutions. Disbursements up to USD 16 million will be made according to the level of progress of works up to 80%. The principal amounts under these credit facilities shall be repaid in five annual, equal and regular installments, the first being April 30, 2021, and are secured by the assignment of certain revenues. The main covenants require compliance with certain financial ratios as well as certain restrictions.
As of June 30, 2020 the Group was in compliance with all of its borrowing covenants except for those mentioned above. As of December 31, 2019, the Group was in compliance with all of its borrowing covenants.
As the virus outbreak is expected to negatively affect the Group’s performance during 2020, the Company is actively monitoring covenants compliance for the upcoming months and planning to initiate conversations with financial entities for the approval of temporary waivers of compliance, if necessary.
- 26 -
Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
13 Other liabilities
At June 30, 2020 (Unaudited) |
At December 31, 2019 (Audited) |
|||||||
Non-current | ||||||||
Concession fee payable (*) | 590,933 | 777,093 | ||||||
Advances from customers | 15,921 | 21,437 | ||||||
Provisions for legal claims (****) | 3,670 | 5,319 | ||||||
Provision for maintenance costs (**) | 21,489 | 20,034 | ||||||
Other taxes payable | 1,556 | 2,548 | ||||||
Employee benefit obligation (***) | 8,048 | 8,079 | ||||||
Salary payable | 474 | 488 | ||||||
Other liabilities with related parties (Note 16) | 1,340 | 1,726 | ||||||
Other payables | 13,860 | 11,686 | ||||||
657,291 | 848,410 | |||||||
Current | ||||||||
Concession fee payable (*) | 86,731 | 120,578 | ||||||
Other taxes payable | 20,308 | 22,956 | ||||||
Salary payable | 26,286 | 37,976 | ||||||
Other liabilities with related parties (Note 16) | 6,391 | 5,812 | ||||||
Advances from customers | 3,720 | 4,848 | ||||||
Provision for maintenance costs (**) | 4,089 | 8,887 | ||||||
Expenses provisions | 1,837 | 1,934 | ||||||
Provision for legal claims (****) | 905 | 1,159 | ||||||
Other payables | 20,456 | 25,972 | ||||||
170,723 | 230,122 |
Maturity of the other liabilities is as follows:
1 year or less | 1 - 2 years | 2 - 5 years | Over 5 years | Total | ||||||||||||||||
At June 30, 2020 | 170,690 | 68,062 | 203,897 | 1,371,434 | 1,814,083 | |||||||||||||||
At December 31, 2019 | 230,181 | 90,917 | 275,982 | 1,867,441 | 2,464,521 |
(*) The most significant amounts included in the concession fee payable are generated by the concession agreement between The Brazilian National Civil Aviation Agency – ANAC and Inframérica Concessionária do Aeroporto de Brasilia S.A. and Inframérica Concessionária do Aeroportode São Gonçalo do Amarante S.A.
Changes in the period of the concession fee payable is as follows:
For the six-month period ended June 30, |
||||||||
2020 (Unaudited) |
2019 (Unaudited) |
|||||||
Balances at the beginning of the period | 897,671 | 907,954 | ||||||
Concession fee payable due to concession extension | - | 4,406 | ||||||
Financial result | 23,593 | 46,868 | ||||||
Concession fees | 37,960 | 78,815 | ||||||
Payments | (53,748 | ) | (94,181 | ) | ||||
Translation differences and inflation adjustment | (227,812 | ) | 8,506 | |||||
Balances at the end of the period | 677,664 | 952,368 |
(**) Changes in the period of the provision for maintenance costs is as follows:
For the six-month period ended June 30, |
||||||||
2020 (Unaudited) |
2019 (Unaudited) |
|||||||
Balances at the beginning of the period | 28,921 | 29,097 | ||||||
Accrual of the period | 1,139 | 1,607 | ||||||
Use of the provision | (4,340 | ) | (966 | ) | ||||
Translation differences and inflation adjustment | (142 | ) | (178 | ) | ||||
Balances at the end of the period | 25,578 | 29,560 |
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
13 Other liabilities (Cont.)
(***) Changes in the period of the provision for employee benefits is as follows:
For the six-month period ended June 30, |
||||||||
2020 (Unaudited) |
2019 (Unaudited) |
|||||||
Balances at the beginning of the period | 8,079 | 8,038 | ||||||
Actuarial gain/loss (in other comprehensive income) | 6 | 554 | ||||||
Interest for services | 157 | 72 | ||||||
Service cost | 49 | 144 | ||||||
Amounts paid in the period | (220 | ) | (413 | ) | ||||
Translation differences and inflation adjustment | (23 | ) | (38 | ) | ||||
Balances at the end of the period | 8,048 | 8,357 |
(****) Changes in the period of the provision for legal claims is as follows:
For the six-month period ended June 30, |
||||||||
2020 (Unaudited) |
2019 (Unaudited) |
|||||||
Balances at the beginning of the period | 6,478 | 9,682 | ||||||
Accrual of the period | 692 | 664 | ||||||
Use of the provision | (1,638 | ) | (2,564 | ) | ||||
Translation differences and inflation adjustment | (957 | ) | (210 | ) | ||||
Balances at the end of the period | 4,575 | 7,572 |
14 Equity
a) Other comprehensive income
The movements of the reserve of other comprehensive income for the period of the owners of the Company is as follows:
Currency
translation adjustments |
Remeasurement
of defined benefit obligations (*) |
Share of other
comprehensive income from associates |
Income Tax
effect (*) |
Transfer from
shareholders equity – currency translation differences |
Total | |||||||||||||||||||
Balances at January 1, 2020 | (414,777 | ) | 198 | (40,726 | ) | (63 | ) | 63,402 | (391,966 | ) | ||||||||||||||
Other comprehensive (loss) / income for the period | (21,052 | ) | (2 | ) | (421 | ) | 1 | - | (21,474 | ) | ||||||||||||||
For the period ended June 30, 2020 | (435,829 | ) | 196 | (41,147 | ) | (62 | ) | 63,402 | (413,440 | ) | ||||||||||||||
Balances at January 1, 2019 | (401,444 | ) | 330 | (40,761 | ) | (99 | ) | 63,402 | (378,572 | ) | ||||||||||||||
Other comprehensive income / (loss) for the period | 36,879 | (345 | ) | 256 | 83 | - | 36,873 | |||||||||||||||||
For the period ended June 30, 2019 | (364,565 | ) | (15 | ) | (40,505 | ) | (16 | ) | 63,402 | (341,699 | ) |
(*) Income tax relating to OCI amounts to Remeasurement of defined benefit obligations. The movement was recognized as other comprehensive income of other reserves.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
15 Contingencies, commitments and restrictions on the distribution of profits
a. Contingencies
CAAP and its subsidiaries are, from time to time, subject to various claims, lawsuits and other legal proceedings, including customer claims, in which third parties are seeking payment for alleged damages, reimbursement for losses or indemnity. Some of these claims, lawsuits and other legal proceedings are subject to substantial uncertainties. Accordingly, the potential liability with respect to such claims, lawsuits and other legal proceedings cannot be estimated with certainty. Management, with the assistance of legal counsel, periodically reviews the status of each significant matter and assesses potential financial exposure. If a potential loss from a claim, lawsuit or proceeding is considered probable and the amount can be reasonably estimated, a provision is recorded. Accruals for loss contingencies reflect a reasonable estimate of the losses to be incurred based on information available to management as of the date of preparation of the financial statements, and take into consideration the Group’s litigation and settlement strategies.
The Company believes that the aggregate provisions recorded for losses in these financial statements, are adequate based upon currently available information.
Brazil legal proceedings - Tax Proceedings
On September, 2014, ICAB started a lawsuit that discusses the collection of Property and Urban Territorial Tax (“IPTU”) by the Federal District. On October, 2014, the Judge granted a provisional decision, suspending the tax collection. On April, 2015, a favorable sentence was handed down to the ICAB, dismissing the collection as unfounded. On March, 2017, the State Court confirmed that sentence, based on previous decisions from the Supreme Court. After that, the Supreme Court had a new trial on a different case, where the taxpayers lost. That led the State Court to hold a new trial. On April, 2018, the decision was slightly changed. The court still said ICAB did not have to pay IPTU, but it was stated that stores that had contracts with ICAB that were not connected with the airport or airline services did have to pay IPTU. Both parts appealed again from that decision, so it was sent to the Supreme Court. The decision in regards to these appeals is now pending.
Based on a different interpretation of this latest decision, the Federal District started a new lawsuit, demanding the payment of R$ 5 million of IPTU. On March of 2020, ICAB presented a defense stating that this tax could not be imposed by Local Government over an airport that belongs to the Federal Government, what is endorsed by decision still valid on the lawsuit previously mentioned. Up to now, the judge has not decided the case. Many airports in Brazil are facing the same discussion.
Regarding ICASGA’s lawsuit regarding tax proceedings, on May 27, 2020, ICASGA’s appeal was granted, and once again the tax collection was suspended. The Municipality appealed again, this time before the Brazilian Supreme Court. On June 16, 2020, the Supreme Court President denied that appeal. The tax collection remains suspended until trial by the State Court.
There are no other lawsuits or legal proceedings different from the ones included in the Consolidated Financial Statements for the year ended December 31, 2019.
b. Commitments
Re-bidding of Natal Airport Concession
On March 5, 2020, CAAP announced that its subsidiary Inframérica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. (“ICASGA”) filed a request to the Agência Nacional de Aviação Civil (“ANAC”) to commence the re-bidding process of the International Airport of São Gonçalo do Amarante (“Natal Airport”), pursuant to Law No. 13,448 of July 5, 2017, and ANAC Resolution No. 533 of November 7, 2019. This process will have several stages, at the present time, ANAC is processing its preliminary analysis and should take a position on the matter in the coming months.
If the request is approved, the operation of Natal Airport will be transferred to a different operator after a new bidding process, and an indemnification payment will be made to ICASGA, to be determined by authorities, which will be primarily based on non-amortized capital expenditure investments. In the interim, ICASGA will maintain all airport operations, with the same safety and service quality, as well as commercial and employment contracts. The re-bidding request is limited to the Natal Airport concession.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
15 Contingencies, commitments and restrictions on the distribution of profits (Cont.)
b. Commitments (Cont.)
Re-bidding of Natal Airport Concession (Cont.)
Several factors drove the Company’s decision to seek return of this concession. Passenger traffic has been negatively impacted by the adverse economic conditions in Brazil over the past years, particularly affecting tourism activity in the country, which resulted in lower than expected passenger traffic. At Natal Airport in particular, total passenger traffic reached 2.3 million in 2019, compared to the 4.3 million expected as per the feasibility study. In addition, as the Natal Airport concession occurred in 2011 and was the first airport concession in Brazil, passenger tariffs lag those of all other privatized airports in the country under the same tariff scheme, which as of December 2019 are in average 35% higher than Natal Airport tariffs and air navigation tariffs charged in other airports are 301% higher than in Natal Airport. This situation has required CAAP to make capital contributions to sustain this concession and thus allow ICASGA to remain in compliance with all of its financial obligations to the Brazilian Government and financial institutions.
On May 26, 2020, the ANAC issued its affirmative vote to the technical and legal feasibility on the request of the re-bidding process initiated by ICASGA.
On June 3, 2020, the process obtained the approval of the Ministério da Infraestrutura and on June 10, 2020, the Conselho do Programa de Parcerias de Investimentos of the Ministério da Economia expressed a favorable opinion and submitted the qualification for re-bidding to the President of Brazil. A period of 90 days was established for the signing of the addendum to the concession contract.
As previously mentioned, the process of re-bidding is still in progress and will go through several stages, at this moment there is no accounting impact of this operation in ICASGA nor CAAP financial figures, the measurement and the accounting will be carried out according to the terms of the addendum or contract, if signed.
Council of State judgement – Toscana Aeroporti S.p.A. (“TA”) expansion plan
On February 13, 2020, the Council of State issued a judgement rejecting the appeal lodged by, inter alia, Italy's Ministry of the Environment and Protection of the Land and Sea, Italy's Ministry of Cultural Heritage and Activities, Italian Civil Aviation Authority (“ENAC”), Municipality of Florence, Region of Tuscany, Metropolitan City of Florence and TA on the decision of the Regional Administrative Court of Tuscany No. 723 of 2019.
TA, in full compliance with the judgement, has already taken steps to satisfy the conditions and to coordinate the actions to be taken, together with the competent entities — and first and foremost the ENAC — to move ahead with the project, noting that the work done was carried out according to the opinions and instructions provided by the competent ministries and the competent Environmental Compatibility Assessment (“VIA”) Commission, by virtue of the positive opinions obtained from the Italian VIA Commission, Italy's Ministry of the Environment and Protection of the Land and Sea, Italy's Ministry of Cultural Heritage and Activities and Italy's Ministry for Infrastructure and Transport.
In this context, on February 20, 2020, the Board of Director of TA acknowledged and examined the content of the judgement of the Council of State and resolve to approve the renewal of the VIA procedure and the implementation of further procedures that prove necessary in relation to the development of Florence airport’s Master Plan according to the terms emerged in the Council of State judgement and also taking into account the letter received on that date from the ENAC where it requires that the analysis, study and design activities be launched, thereby confirming its interest in the construction of the new runway.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
15 Contingencies, commitments and restrictions on the distribution of profits (Cont.)
b. Commitments (Cont.)
The AAP Concession Agreement
On February 6, 2020, Banco de Crédito del Perú (“BCP”) issued guarantees in favor of AAP for equipment acquisitions for the concession for a total amount of USD 220 thousands.
The letters of credit of CAAP with Citibank in favour of AAP for concession contract fulfilment and works to be performed were replaced with two standby letters of credit of Corporación América Sudamericana S.A. with Morgan Stanley for a total amount of USD 2,25 and USD 0,6 respectively.
Brazilian Concession Agreements
In Brazil, the pandemic was recognized as a case of "force majeure" or "fortuitous case", and for that reason the damage is not part of the risks assumed by the private sector and must be compensated by the Government, which may use alternatives such as: reduction in the value of concession fee, increase in fees charged or extension of the contract. The Civil Aviation Secretariat of the Ministry of Infrastructure, on the other hand, stated that the Government should accept a reduction in the fixed concession fee to be paid by airports concessionaires. According to the Civil Aviation Secretariat, a discount on the annual concession fee should be granted as a way of economic and financial re-equilibrium of the contracts. The Government still studies how this will be applied, but recognizes the fare losses and the loss of commercial revenues of the concessionaires.
There are no new commitments or significant changes related to the concession agreements in the current period from the ones included in the Consolidated Financial Statements for the year ended December 31, 2019, except for the abovementioned.
c. Restrictions to the distribution of profits and payment of dividends
As of June 30, 2020 and December 31, 2019, equity as defined under Luxembourg laws and regulations consisted of:
At June 30, 2020 (Unaudited) |
At December 31, 2019 (Audited) |
|||||||
Share capital | 160,022 | 160,022 | ||||||
Share premium | 180,486 | 180,486 | ||||||
Legal reserve | 176 | 176 | ||||||
Free distributable reserves | 385,055 | 385,055 | ||||||
Non-distributable reserves | 1,351,883 | 1,351,883 | ||||||
Retained earnings | (65,543 | ) | (78,497 | ) | ||||
Total equity in accordance with Luxembourg law | 2,012,079 | 1,999,125 |
At least 5% of the Company’s net income per year, as calculated in accordance with Luxembourg law and
regulations, must be allocated to the creation of a legal reserve equivalent to 10% of the Company’s share capital. Dividends may not be paid out of the legal reserve.
The Company may pay dividends to the extent, among other conditions, that it has distributable retained earnings calculated in accordance with Luxembourg laws and regulations.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
16 Related party balances and transactions
Corporación América Airports S.A. is controlled by ACI Airports S.à r.l., which is controlled by ACI Holding S.à r.l., which is controlled by Corporación America International S.à r.l., Luxembourg’s companies.
Corporación América International S.à r.l. is controlled by Liska Investments Corporation, a company incorporated under the laws of the British Virgin Islands.
Liska Investments Corporation is controlled by Southern Cone Foundation (CAAP`s ultimate parent company), a foundation created under the laws of Liechtenstein, having its corporate domicile in Vaduz. The foundation's purpose is to manage its assets through the decisions adopted by its independent board of directors. The potential beneficiaries of this foundation are members of the Eurnekian family and religious, charitable and educational institutions.
Transactions and balances with “Associates” are those carried out with entities over which CAAP exerts significant influence in accordance with IFRS, but does not have control. Transactions and balances with related parties, which are not associates and are not consolidated are disclosed as “Other related parties”.
The Group receives services from related parties, such as internal audit, management control, financial assistance, technology outsourcing services and construction services.
Summary of balances with related parties are:
At June 30, 2020 (Unaudited) |
At December 31, 2019 (Audited) |
|||||||
Year-end balances | ||||||||
(a) Arising from sales / purchases of goods / other | ||||||||
Trade receivables with associates | 1,455 | 1,555 | ||||||
Trade receivables with other related parties | 787 | 687 | ||||||
Other receivables with associates | 658 | 658 | ||||||
Other receivables with other related parties | 8,773 | 8,611 | ||||||
Other financial assets with associates | 2,558 | 2,494 | ||||||
Other financial assets with other related parties | 14,793 | 14,573 | ||||||
Trade payables to other related parties | (1,822 | ) | (3,017 | ) | ||||
27,202 | 25,561 | |||||||
(b) Other liabilities | ||||||||
Other liabilities to other related parties | (7,731 | ) | (7,538 | ) | ||||
(7,731 | ) | (7,538 | ) | |||||
(c) Other balances | ||||||||
Cash and cash equivalents in other related parties | 10,725 | 15,312 | ||||||
10,725 | 15,312 | |||||||
For the three-month period ended June 30, |
For the six-month period ended June 30, |
|||||||||||||||
2020 (Unaudited) |
2019 (Unaudited) |
2020 (Unaudited) |
2019 (Unaudited) |
|||||||||||||
Transactions | ||||||||||||||||
Aeronautical/Commercial revenue | 812 | 1,788 | 2,507 | 3,474 | ||||||||||||
Fees | (1,521 | ) | (1,747 | ) | (3,572 | ) | (3,507 | ) | ||||||||
Interest accruals | 173 | 108 | 363 | 462 | ||||||||||||
Acquisition of goods and services | (832 | ) | (5,638 | ) | (4,665 | ) | (11,218 | ) | ||||||||
Others | (895 | ) | 45 | (2,136 | ) | 610 |
The group leases buildings to other related parties which are recognized under the scope of IFRS 16 and accounted in Lease liabilities line for an amount of USD 898 as of June 30, 2020. Additionally, the group has variable equipment leases with other related parties that are excluded from the lease liability according to IFRS 16. Transactions related to those leasing’s are included in Acquisition of goods and services line for an amount of USD 2,063 (USD 3,372 as of June 30,2019).
Remunerations received by the Group’s key staff amounted to approximately 2.33% of total remunerations accrued at June 30, 2020 (1.77% as of June 30, 2019).
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
17 Cash flow disclosures
For the six-month period ended June 30, |
||||||||
Changes in working capital |
2020 (Unaudited) |
2019 (Unaudited) |
||||||
Other receivables and credits | 35,697 | (75,372 | ) | |||||
Inventories | 648 | 2,329 | ||||||
Other liabilities | (50,223 | ) | (26,913 | ) | ||||
(13,878 | ) | (99,956 | ) |
The most significant non-cash transactions are detailed below:
For
the six-month period
June 30, |
||||||||
2020 (Unaudited) |
2019 (Unaudited) |
|||||||
Intangible assets acquisition with an increase in Other liabilities / Borrowings / Lease liabilities | (3,204 | ) | (4,436 | ) | ||||
Right-of-use asset initial recognition with an increase in Lease liabilities | (79 | ) | (11,904 | ) | ||||
Dividends not paid | (1 | ) | (5,000 | ) | ||||
Income tax paid with certificates | (1,227 | ) | - | |||||
Borrowings cost capitalization | - | (414 | ) |
18 Fair value measurement of financial instruments
According to the classification included in Note 3 B of the Consolidated Financial Statements as of December 31, 2019, the Company categorizes its financial instruments as assets and liabilities at amortized cost and fair value through profit or loss.
For the majority of instruments at amortized cost, the fair values are not materially different to their carrying amounts, since the interest receivable/payable is either close to current market rates or the instruments are short-term in nature. Significant differences were identified for the following instruments at June 30, 2020:
Fair value | Carrying amount | |||||||
Trust funds | 99,162 | 89,853 | ||||||
Long-term borrowings | 896,937 | 874,126 |
19 Subsequent events
Brazilian Concession Agreements
On July 9, 2020, ICAB and ICASGA have filed an Administrative process to formally require the economic and financial re-equilibrium of their concessions for the year 2020. A reduction in the value of the concession fee to be paid in December 2020 might be one of the methods of compensation.
Italian Concession Agreements extension
In view of the drop in traffic at Italian airports deriving from the Covid-19 virus outbreak and in order to contain the consequent economic effects, the term of all the current concessions for the management and development of airport activities was extended two additional years due to the entry into force of Law No. 77 of July 17, 2020, which amends Article 202 paragraph 1-bis of Decree-Law No. 34 of May 19, 2020.
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Corporación América Airports S.A. Condensed Consolidated Interim Financial Statements for the six-month period ended June 30, 2020 and 2019 (amounts in thousands of U.S. dollars except share data or as otherwise indicated).
19 Subsequent events (Cont.)
Group financial position and liquidity
Banco Macro payments deferral
On July 24, 2020, AA2000 cancelled the interest due on its USD 10 million loan with Banco Macro and the ORSNA issued Resolution No. 49/2020 authorizing the assignment of credits as a guarantee. Therefore, the conditions for the rescheduling of the service on the loan have been met.
AA2000 Global Program for the issuance of Notes
On August 5, 2020, AA2000 Board of Directors approved the issuance of notes under its global program of notes (not convertible into shares) which was approved on February 27, 2020 for a nominal value of up to USD 40 million or its equivalent in other currencies.
On August 11, 2020, by means of a subscription notice communicated to the investing public in general, AA2000 offered in subscription its Class 2 Notes at a fixed interest rate maturing twenty-four months from the date of issue and settlement, expected to be on August 20, 2020. The Notes are dollar-linked, denominated in U.S. dollars but granted and paid in Argentine pesos.
On August 14, 2020, AA2000 announced the results of its local Notes offering for a total amount of USD 40 million, at a 0% interest rate, with a two-year maturity.
AA2000 2019 Credit Facilities Framework Agreement
On August 7, 2020, AA2000 signed the bilateral contracts with each of the financial institutions in accordance to the alternatives established in the framework agreement. On such date, AA2000 and the financial institutions also signed an amendment to the framework agreement in order to grant certain waivers for some of AA2000's commitments obligations under the credit facilities.
Toscana Aeroporti strengthens with the financing guaranteed by SACE
On August 7, 2020, Toscana Aeroporti S.p.A. (“TA”) announces that it has reached an agreement with a pool of leading financial institutions comprised of Intesa Sanpaolo and BNL-BNP Paribas Group regarding a financing transaction for a total amount of € 85 million, backed by SACE guarantees pursuant to the provisions of Decree-Law No. 23/2020 within the framework of the programme “Garanzia Italia”.
The financing, which has a term of six years, enables TA to reinforce the liquidity levels required for its activities and to support the planned investments at the Florence and Pisa airport facilities.
Announcement of the Temporary Closure of Aeroparque Airport for Renovation and Expansion works
On July 31, 2020, AA2000 announced the closure of Aeroparque Airport starting August 1, 2020 until approximately December 1, 2020, to carry out expansion and renovation works in the runway and the terminal building, which will be covered by funds held in AA2000’s Development Trusts.
There are no other subsequent events that could significantly affect the Company´s financial position as of June 30, 2020.
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