Corporacion America Airports Reports Second Quarter 2022 Results

Commercial revenues above pre-pandemic levels, with traffic at 75.5%

Adjusted EBITDA ex-IFRIC at 93.4% of 2Q19 levels; positive in all countries of operations

Corporación América Airports S.A. (NYSE: CAAP), (“CAAP” or the “Company”) a leading private airport operator in the world reported today its unaudited, consolidated results for the three and six-month periods ended June 30, 2022. Financial results are expressed in millions of U.S. dollars and are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (“IASB”).

Commencing 3Q18, the Company began reporting results of its Argentinean subsidiaries applying Hyperinflation Accounting, in accordance to IFRS rule IAS 29 (“IAS 29”), as detailed on Section “Hyperinflation Accounting in Argentina” on page 22.

Second Quarter 2022 Highlights

• Consolidated Revenues of $332.7 million, a 145.9% YoY increase, or 19.4% below 2Q19. Excluding the impact of IFRS rule IAS 29, revenues increased 149.3% YoY, to $334.8 million, reflecting increases of $105.9 million in Aeronautical revenues, $76.5 million in Commercial revenues, and $16.6 million in Construction service revenue. Revenues ex-IAS 29 reached 84.7% of pre-pandemic levels, up from 69.0% in the first quarter.
• Key operating metrics improved YoY:
  • Passenger traffic increased 177.0% YoY to 15.1 million, reaching 75.5% of 2Q19 levels.
  • Cargo volume increased 5.6% YoY to 87.9 thousand tons, to 83.3% of 2Q19 levels.
  • Aircraft movements totaled 181.2 thousand, an 89.1% YoY increase, at 87.6% of 2Q19 levels.
• Operating Income of $72.1 million up from an operating loss of $27.2 million in 2Q21, mainly reflecting the YoY recovery in passenger traffic.
• Adjusted EBITDA on an “As Reported” basis increased to $110.6 million, from $8.5 million in the year-ago period, improving to 93.3% of 2Q19 levels. Adjusted EBITDA margin expanded to 33.2% from 6.3% in 2Q21 and 28.7% in 2Q19.
• Ex-IAS 29, Adjusted EBITDA totaled $110.7 million, compared with $7.9 million in 2Q21 and $113.2 million in 2Q19. Adjusted EBITDA margin Ex-IFRIC12 increased to 36.2% from 6.0% in 2Q21, but decreased slightly from 37.4% in 2Q19.

CEO Message

Commenting on the results for the quarter Mr. Martín Eurnekian, CEO of Corporación América Airports, noted: “We delivered another strong quarter, achieving Adjusted EBITDA of $111 million underpinned by enhanced performance across operations, and up from $9 million in the second quarter of last year. Adjusted EBITDA margin ex-IFRIC12 expanded to 36% from 7% in 2Q21, reflecting the continued recovery in passenger traffic, robust commercial revenues above pre-pandemic levels, and a continued focus on cost management.”

“On the balance sheet front, the successful liability management transactions concluded last year, together with the significant increase in Adjusted EBITDA over the last quarters, allowed for a sharp reduction in our Net Debt to LTM Adjusted EBITDA ratio to 3.5x this quarter, down from 5.1x in the first quarter, while we face no major debt maturities until late 2024. Moreover, we are on track to continue reducing our Net Debt to LTM Adjusted EBITDA ratio.”

“Looking ahead, we anticipate passenger traffic across our airports to continue recovering driven by pent-up demand and the elimination of travel restrictions. In the near-term, our operations in Europe are expected to continue benefitting from a strong summer holiday travel season, although we are mindful of the overall macro and geopolitical context. With a long-term view on value creation, we remain focused on advancing the economic re-equilibrium processes in Brazil and Armenia, while selectively looking for additional value creation opportunities and progressing on our sustainability initiatives.”

Operating & Financial Highlights

(In millions of U.S. dollars, unless otherwise noted)

Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.

Operating & Financial Highlights

(In millions of U.S. dollars, unless otherwise noted)

Note: Figures in historical dollars (excluding IAS29) are included for comparison purposes.

2Q22 Operating Performance

Passenger Traffic

Total passenger traffic increased 177.0% YoY to 15.1 million reaching 75.5% of pre-pandemic levels, up from 65.5% in the previous quarter. Performance was supported by a continued recovery in travel demand following the gradual lifting of travel restrictions across all countries of operations. Notably, in 2Q22 Armenia surpassed pre-pandemic traffic levels by 5.7%, while Ecuador stood at 93.9% and Italy at 84.5%. Meanwhile, traffic in Argentina and Uruguay stood at 75.8% and 65.1% of 2Q19 levels, respectively, continuing the recovery trend. Finally, traffic in Brazil reached 76.4% of pre-pandemic levels, slightly below the 77.3% recorded in the past quarter. International traffic increased to 74.4% of pre-pandemic levels, up from the 52.4% in 1Q22, with domestic traffic reaching 78.8% of 2Q19 levels. Traffic in April, May and June improved sequentially, reaching 73.5%, 75.5% and 77.5% of traffic levels for the same months in 2019, respectively.

Passenger Traffic in Argentina increased 3.6x YoY and improved to 75.8% of pre-pandemic levels, up from the 63.6% posted in the prior quarter. International passenger traffic, which continued to benefit from the full re-opening of borders on November 1, 2021 and the lifting of travel requirements, increased 5.9x YoY in 2Q22 and reached 60.7% of 2Q19 traffic levels, up from 42.6% in 1Q22, showing a continued sequential improvement. Domestic passenger traffic, which accounted for 72% of total traffic in the quarter, increased 3.2x YoY to 83.0% of 2Q19 levels, up from 75.9% posted in 1Q22. Effective April 7, 2022, Covid tests are no longer required, and travelers must complete an affidavit form.

In Italy, passenger traffic increased 5.1x YoY and improved to 84.5% of pre-pandemic levels, up from 56.5% in 1Q22, with continued recovery at both, Florence and Pisa airports. Domestic and international traffic increased by 1.7x and 8.4x YoY, respectively, and stood at 91.7% and 82.7% of 2Q19 levels. Traffic in June benefited from the start of the summer season and from the full lifting of travel restrictions effective June 1, 2022.

In Brazil, total passenger traffic rose 62.3% YoY, reaching 76.4% of 2Q19 pre-pandemic levels, slightly below the 77.3% posted in the prior quarter. Domestic passenger traffic was up 94.7% YoY and reached nearly 90% of 2Q19 levels, while transit passengers increased 2.6% YoY to 54.8% of 2Q19 traffic. Traffic in the quarter was impacted by weaker travel demand as a result of rising fuel prices adding pressure on airfares.

In Uruguay, where traffic is largely international, passenger traffic increased 5.3x YoY, reaching 65.1% of 2Q19 levels, up from 50.3% recorded in 1Q22, reflecting an ongoing recovery after the re-opening of borders on November 1, 2021, and the gradual relaxation of travel requirements.

In Armenia, where traffic is 100% international, passenger traffic improved 56.6% YoY, exceeding pre-pandemic levels by 5.7% for the first time since the inception of the pandemic. During the quarter, the government announced the lifting of all Covid-related entry requirements for all travelers, effective May 1, 2022.

In Ecuador, total passenger traffic grew 1.1x YoY, to 93.9% of 2Q19 levels, up from the 78.9% in 1Q22. Both, domestic and international passenger traffic continued to improve reaching 91.3% and 96.9% of pre-pandemic levels, respectively. International passenger traffic remained supported by routes to Europe, the US and Panama operating at higher levels than 2019, while domestic passenger traffic was impacted by some flight cancelations in June due to protests and social unrest.

Cargo Volume

Cargo volume increased 5.6% YoY in 2Q22, to 83.3% of pre-pandemic levels of 2Q19, with strong contributions from Argentina, Brazil and Uruguay, which together accounted for more than 80% of total volume in the quarter. Notably, cargo volume in Uruguay and Italy was above 2Q19 levels, while in Argentina it was above 85% of pre-pandemic levels.

Aircraft Movements

Total aircraft movements increased 89.1% YoY in 2Q22 and reached 87.6% of 2Q19 levels, up from 73.5% in the first quarter. Above 90% of aircraft movements in the quarter came from Argentina (51%), Brazil (18%), Italy (11%) and Ecuador (11%), which reached 87.3%, 89.0%, 90.6% and 100.2% of pre-pandemic levels, respectively. Notably, aircraft movements in Armenia surpassed 2Q19 levels by 35%.

Tables with detailed passenger traffic, cargo volume and aircraft movement information for each airport can be found on page 35 of this report.

Operational Statistics: Passenger Traffic, Cargo Volume and Aircraft Movements

Review of Consolidated Results

Results for ECOGAL, which operates the Galapagos Airport in Ecuador, are accounted for under the equity method. In December 2021, CAAP signed an agreement to transfer its 50% ownership interest in Aeropuertos Andinos del Perú S.A. to Andino Investment Holding S.A. and, consequently, stopped operating the five airports that were under concession.

Commencing 3Q18, the Company began reporting results of its Argentinean subsidiaries applying Hyperinflation Accounting, in accordance to IFRS rule IAS 29, as detailed on Section “Hyperinflation Accounting in Argentina” on page 22.

Revenues

Consolidated Revenues increased 145.9% YoY to $332.7 million in 2Q22, or 152.0% YoY to $304.9 million, when excluding Construction Services and the impact of IAS 29, reflecting higher activity following the gradual lifting of travel restrictions. When compared to 2Q19 and also excluding IAS 29, Revenues excluding Construction Services grew by 1.3%, even with traffic at 75.5% of pre-pandemic levels, reflecting tariff increases and Commercial Revenues 24.5% above 2Q19 levels. Compared to 1Q22, revenues ex IFRIC 12 improved 24.7% sequentially, with strong performances in Italy (+105.3%), Armenia (+87.9%) and Argentina (+15.3%), reflecting higher passenger traffic following the gradual lifting of travel requirements.

The following table shows revenue performance by country. More detail on the performance of CAAP´s key countries of operations can be found on page 13.

Revenues by Segment (in US$ million)

Revenue Breakdown (in US$ million)

Revenue Breakdown (in US$ million)

Aeronautical Revenues accounted for 45.3% of total revenues and increased 230.0% YoY, to $150.8 million. When compared to 2Q19, aeronautical revenues excluding IAS 29 declined 15.3% to $151.3 million, as passenger traffic has not fully recovered, partially offset by tariff increases. During the quarter and excluding IAS 29, aeronautical revenue declined 14.3%, or $13.5 million, in Argentina, 19.1%, or $5.1 million, in Italy, and 29.7%, or $4.3 million, in Uruguay, compared to the same quarter of 2019. Moreover, aeronautical revenues declined 36.3%, or $4.7 million in Brazil, and 5.7%, or $1.0 million in Ecuador, while Armenia reported a 10.5% increase from pre-pandemic levels of 2Q19.

Non-Aeronautical Revenues accounted for 54.7% of total revenues and increased 103.0% YoY, to $181.8 million. When compared to 2Q19 and excluding the impact of IAS 29, non-aeronautical revenues declined 15.4%, or $33.3 million, to $183.5 million, driven by a decline of 68.4%, or $64.6 million, in Construction Service Revenue, mainly as a result of lower capex in Argentina. Notably, this was partially offset by an increase of 24.5%, or $29.9 million, in Commercial Revenues, principally driven by higher Cargo and Duty free revenues in Argentina, as well as higher Fueling services in Armenia.

Excluding both Construction Service Revenue and the impact of IAS 29, non-aeronautical revenues increased 25.5% against 2Q19, to $153.6 million.

Operating Costs and Expenses

During 2Q22, Operating Costs and Expenses, excluding Construction Service Cost, increased 57.5% YoY to $236.7 million, mainly driven by higher Concession fees and Salaries and Social Security Contributions, in line with higher activity, along with higher Cost of fuel in Armenia. When compared to 2Q19, Operating Costs and Expenses, excluding Construction Service Cost and IAS 29, increased 0.7% to $219.6 million, mainly due to higher Cost of fuel in Armenia tied to higher fuel sales and, to a lesser extent, higher Salaries and social security contributions, which were impacted by higher inflation rates than currency depreciation, in Argentina. On a comparable basis, excluding Cost of fuel, Operating Costs and Expenses excluding Construction Service Cost and IAS 29, would have declined 7.3% against pre-pandemic levels.

Cost of Services increased 71.0% YoY, to $234.9 million reflecting increased traffic and cargo activity. When compared to 2Q19 and excluding IAS29, Cost of Services declined 20.1%, to $220.4 million, mainly as a result of the following declines:

• 68.5%, or $64.3 million, in Construction Service Cost, reflecting lower capex,
• 14.4%, or $4.4 million, in Maintenance Expenses, mainly driven by the renegotiation of supplier agreements to adapt services to lower activity, coupled with FX depreciation against the US dollar, and
• 16.3%, or $3.9 million, in Amortization and depreciation.

This was partially offset by an increase of 162.8%, or $16.8 million, in Cost of fuel, primarily in Armenia.

Excluding Construction Service cost, Cost of Services increased 65.4% YoY, to $207.4 million. On a comparable basis against 2Q19 and excluding the impact of IAS29, Cost of Services increased 4.8%, or $8.7 million, to $190.9 million, mainly as a result of the aforementioned increase in Cost of fuel.

Selling, General and Administrative Expenses (“SG&A”) increased 22.2% YoY, to $28.6 million in 2Q22 on an ‘As reported’ basis. When compared to 2Q19 and excluding the impact of IAS 29, SG&A declined 21.8%, to $28.0 million, mainly as a result of a $10.1 million bad debt recovery in 2Q22 related to outstanding amounts owed by a national carrier, in Argentina.

Other Operating Expenses were $0.7 million in 2Q22, down 51.2% from $1.5 million recorded in 2Q21 and relatively in line with $0.1 million posted in 2Q19.

Costs and Expenses (in US$ million)

Costs and Expenses (in US$ million)

Adjusted EBITDA and Adjusted EBITDA excluding Construction Service

During 2Q22, CAAP reported Adjusted EBITDA of $110.6 million, up from an Adjusted EBITDA of $8.5 million in the year-ago period, and 6.7% lower than the $118.6 million reported in 2Q19. All countries of operations reported positive Adjusted EBITDA in the quarter. Adjusted EBITDA margin ex-IFRIC12, expanded to 36.2% from 6.5% in 2Q21 and was 1.5 percentage points below the 37.7% reported in 2Q19. Adjusted EBITDA included the recognition of $14.9 million related to outstanding amounts owed by a national carrier, in Argentina.

Excluding the impact from IAS 29, Adjusted EBITDA was $110.7 million, increasing from $7.9 million in the year ago period, but below the $113.2 million reported in 2Q19. The Adjusted EBITDA margin excluding construction service expanded to 36.2%, from 6.0% in 2Q21 and was down 1.2 percentage points from 37.4% in 2Q19. To note, 2Q19 Adjusted EBITDA included a $2.2 million one-time gain from the positive outcome of a claim against the Ministry of Transport, regarding the Fire Brigade Protection Fund dispute, in Italy.

Adjusted EBITDA by Segment (in US$ million)

Adjusted EBITDA Reconciliation to Income from Continuing Operations (in US$ million)

Financial Income and Loss

CAAP reported a Net financial loss of $14.0 million in 2Q22 compared to a loss of $5.2 million in 2Q21. Had IAS 29 not been applied, and compared to 2Q19, Net financial loss would have increased 338.5%, or $98.2 million, to $127.3 million, mainly driven by lower Foreign exchange net results, higher net interest expenses resulting from higher outstanding debt, as well as higher Changes in liability for concessions in Brazil, and higher interests related to the redemption of preferred shares, in Argentina.

See “Use of Non-IFRS Financial Measures” on page 22.

Income Tax Expense

During 2Q22, the Company reported an income tax benefit of $13.8 million versus an expense of $22.1 million in 2Q21. Excluding the impact of IAS 29, CAAP reported an income tax benefit of $71.0 million compared to income tax benefits of $83.3 million in the year ago quarter and an expense of $12.1 million in 2Q19. Income tax benefit during the quarter was mainly related to the inflation adjustment on certain deferred tax assets, in Argentina.

Net Income and Net Income Attributable to Owners of the Parent

During 2Q22, CAAP reported a Net Income of $71.6 million compared to a Net Loss of $55.4 million in 2Q21, mainly explained by: (i) operating income of $72.1 million in 2Q22 versus a loss of $27.2 million in 2Q21, and (ii) an income tax benefit of $13.8 million versus an expense of $22.1 million in 2Q21, partially offset by (iii) higher net financial losses.

During 2Q22, the Company reported a Net Income Attributed to Owners of the Parent of $69.9 million and earnings per common share of $0.43, compared with a Net Loss Attributable to Owners of the Parent of $34.0 million in 2Q21 equivalent to a loss per common share of $0.21. Net Income Attributed to Owners of the Parent was 42.2% higher than the $49.1 million, equivalent to earnings per common share of $0.31, reported in 2Q19.

Consolidated Financial Position

As of June 30, 2022, cash and cash equivalents amounted to $334.9 million, decreasing 30.0% and 10.9% from the $478.5 million and $375.8 million reported as of March 31, 2022, and December 31, 2021, respectively. Total liquidity position at June 30, 2022, which included cash and cash equivalents as well as other financial assets, totaled $448.3 million, compared with $646.0 million and $451.1 million as March 31, 2022, and December 31, 2021, respectively.

Total Debt at the close of the second quarter increased 5.6%, or $80.0 million, to $1,519.6 million, from $1,439.6 million as of December 31, 2021. An amount of $1,039.3 million, or 68.4% of total debt is denominated in U.S. dollars, while $228.5 million, or 15.0%, is denominated in Euros, $231.3 million, or 15.2%, is in Brazilian Reals, and $20.5 million, or 1.3%, is in Argentine Pesos.

The Net Debt to LTM Adjusted EBITDA (excluding impairment of intangible assets) ratio stood at 3.53x as of June 2022, down from 7.11x and 5.08x as of December 2021 and March 2022, respectively, reflecting Adjusted EBITDA growth, supported by traffic recovery and tight cost control measures. As of June 30, 2022, all of CAAP’s subsidiaries were in compliance with their covenants.

Consolidated Debt Indicators (in US$ million)

Maturity of borrowings:

Maturity of borrowings - Breakdown by segment (in USD) as of June 30, 2022:

CAPEX

During 2Q22, CAAP made capital expenditures of $34.0 million on an ‘As reported’ basis, a 94.4% YoY increase from $17.5 million in 2Q21 and 69.9% lower than pre-pandemic levels of 2Q19. Around 75% of total CAPEX was allocated to Argentina and 14% to Uruguay.

Review of Segment Results

Argentina

Starting in 3Q18, reported numbers are presented applying Hyperinflation accounting for the Company’s Argentinean subsidiaries, in accordance with IAS 29, as explained above. The following table presents the impact from Hyperinflation accounting under the column ‘IAS 29’, while the columns indicated with “ex IAS 29” present results calculated without the impact from Hyperinflation accounting. The impact of IAS 29 is presented only for AA2000, the Company’s largest subsidiary in Argentina, which accounted for over 95% of passenger traffic, revenues and Adjusted EBITDA of the Argentina segment in 2Q22.

Passenger Traffic increased 3.6x YoY and improved to 75.8% of pre-pandemic levels, up from the 63.6% posted in the prior quarter. International passenger traffic, which continued to benefit from the full re-opening of borders on November 1, 2021 and the lifting of travel requirements, increased 5.9x YoY in 2Q22 and reached 60.7% of 2Q19 traffic levels, up from 42.6% in 1Q22, showing a continued sequential improvement. Domestic passenger traffic, which accounted for 72% of total traffic in the quarter, increased 3.2x YoY to 83.0% of 2Q19 levels, up from 75.9% posted in 1Q22. Effective April 7, 2022, Covid tests are no longer required, and travelers must complete an affidavit form.

Revenues increased 181.2% YoY to $181.4 million in 2Q22 on an ‘As reported’ basis or 189.0% to $183.5 million when excluding the impact of rule IAS29, primarily due to a 473.4% increase in Aeronautical revenues as well as a 72.0% increase in Commercial revenues, reflecting higher year-over-year activity and easier passenger traffic comparisons, as 2Q21 was still heavily impacted by the Covid-19 pandemic. In addition, Construction service revenue increased 405.3% YoY as a result of higher Capex in the quarter. When compared to 2Q19 and excluding both Construction Service and the impact of IAS 29, revenues grew by 0.2%, or $0.3 million to $156.9 million, mainly driven by a 22.4% increase in Commercial revenues, which was almost fully offset by a 14.3% decline in Aeronautical revenues.

• Aeronautical Revenues ex-IAS29 declined 14.3% against 2Q19, or $13.5 million, primarily reflecting the decline in passenger traffic as a result of the Covid-19 pandemic, partially offset by a higher international passenger fee introduced on March 15, 2021.
• Commercial Revenues ex-IAS29 increased 22.4% compared to 2Q19, or $13.9 million, mainly driven by an increase of 14.8%, or $5.2 million in Cargo revenues, primarily reflecting 10% tariff increases on import activities applied in January and October 2020, along with a further 5% tariff increase in April 2022. Duty free and parking related revenues also supported the performance, growing 51.5% and 31.7%, respectively, against pre-pandemic levels.

Total Costs and Expenses increased 76.2% YoY to $133.7 million in 2Q22 on an ‘As reported’ basis, mainly reflecting increases of 86.7% in Cost of Services, in line with higher year-over-year activity, partially offset by a decline of 5.2% in SG&A. Excluding Construction Service and the impact of IAS 29, Total Cost and Expenses increased 56.5% YoY, due to the rise in operating costs following traffic recovery from the minimum levels posted in the same period of last year. When compared to 2Q19, however, Total Cost and Expenses excluding the impact of rule IAS 29 and Construction Services declined 10.0%, or $10.2 million, primarily due to lower SG&A coupled with a reduction in Cost of Services.

• Cost of Services ex-IAS29 and excluding Construction Service Costs would have declined 2.9% compared to 2Q19, or $2.6 million, driven mainly by the following declines:
  • 25%, or $6.3 million, in Maintenance expenses due to the renegotiation of agreements with suppliers to adapt services to lower activity, coupled with lower maintenance of infrastructure and the depreciation of the local currency against the US dollar,
  • 7%, or $1.7 million, in Concession Fees,
  • 41%, or $1.6 million, in Office Expenses, due to a decrease in mobility and office expenses along with lower overall expenses, and
  • 21%, or $1.0 million, in Services and Fees, mainly driven by suspension of all non-essential services due to the Covid-19 pandemic.
    
    The above was partially offset by a 23% increase, or $5.5 million, in Salaries and social security contributions, mainly as a result of inflation rates significantly above currency depreciation.
• SG&A ex-IAS29 decreased by 50.7% against 2Q19, or $7.5 million, to $7.3 million in 2Q22, mainly due to a bad debt recovery of $10.1 million related to outstanding amounts owed by a national carrier.

Adjusted Segment EBITDA, which included the accounting of $14.9 million related to outstanding amounts owed by a national carrier, increased 7.3x YoY to $74.0 million in 2Q22 on an ‘As reported basis’. When excluding the impact of IAS 29, Adjusted Segment EBITDA was $74.1 million with Adjusted EBITDA margin EX-IFRIC12 of 47.2% in the quarter, compared to 14.1% in 2Q21. Compared to pre-pandemic levels of 2Q19, Adjusted EBITDA excluding IAS 29 increased 10.6%, or $7.1 million from $67.0 million, while Adjusted EBITDA margin EX-IFRIC12 expanded 4.5 percentage points from 42.7%.

During 2Q22, CAAP made Capital Expenditures ex-IAS29 of $25.1 million, compared to $5.3 million in 2Q21 and $86.8 million in 2Q19, mainly related to expansion works at Aeroparque and Ezeiza airports, as well as initial runway works in Posadas and Santa Rosa airports.

Italy

Passenger Traffic in Italy increased 5.1x YoY and improved to 84.5% of pre-pandemic levels, up from 56.5% in 1Q22, with continued recovery at both, Florence and Pisa airports. Domestic and international traffic increased by 1.7x and 8.4x YoY, respectively, and stood at 91.7% and 82.7% of 2Q19 levels. Traffic in June benefited from the start of the summer season and from the full lifting of travel restrictions effective June 1, 2022.

Revenues increased 118.2% YoY to $33.6 million in 2Q22, mainly driven by higher Aeronautical revenues, reflecting greater year-over-year activity and easier comparisons against 2Q21, which was significantly impacted by the Covid-19 pandemic. Commercial revenues grew 122.2% YoY, mainly driven by passenger-related services such as Parking facilities, Duty free shops, VIP lounges, and F&B services, following the strong year-over-year traffic recovery. When compared to 2Q19, revenues excluding Construction service declined 13.9%, or $5.1 million, to $31.7 million, principally due to lower passenger traffic impacted by the Covid-19 pandemic.

• Aeronautical Revenues dropped 19.1% versus 2Q19, or $5.1 million, as a result of lower passenger traffic, partially offset by increases in passenger fees at Florence airport in November 2019 and February 2020, and at both Florence and Pisa airports in February 2021. In addition, passenger with reduced mobility fees (PRM) at Florence airport increased in March 2020 and at Pisa airport in February 2020, and again at both airports in February 2021.
• Commercial Revenues declined 15.0% versus 2Q19, or $1.5 million, mainly due to reductions in Parking Facilities, Retail stores, VIP Lounges, and F&B services, partially offset by higher Duty free-related revenues.

Total Costs and Expenses increased 28.1% YoY, or $6.7 million, in 2Q22 driven by higher Cost of Services and slightly higher SG&A expenses. Excluding Construction Service, Total Cost and Expenses rose 53.9% YoY to $28.7 million, due to an increase in operating costs following higher airport activity when compared to 2Q21. Compared to the same quarter of 2019, Total Cost and Expenses increased 7.2%, or 8.3% when excluding Construction Services.

• Cost of Services excluding Construction service increased 6.6%, or $1.5 million, against 2Q19 on a comparable basis, mainly due to the following increases:
  • $2.0 million in Concession Fees, which in 2Q19 included a one-time benefit of $2.2 million, reflecting the positive outcome of a claim against the Ministry of Transport regarding the Fire Brigade Protection Fund dispute, and
  • $0.7 million, in Provision for risks and repair.
    
    The above was partially offset by lower Salaries and Social Contribution expenses and, to a lesser extent, lower Services and fees.
• SG&A increased 20.1% to $4.1 million against 2Q19 mainly reflecting higher Services and Fees, partially offset by lower Salaries and Social Contribution expenses.

Adjusted Segment EBITDA improved to $5.5 million from negative $4.4 million in 2Q21, supported by traffic growth and cost reductions, but contracted from the $13.9 million posted in 2Q19.

During 2Q22, CAAP made Capital Expenditures of $1.9 million, compared to $9.0 million in 2Q21 and $4.7 million in 2Q19.

Brazil