Strong YoY traffic performance as the recovery continues, though still impacted by Covid-19 and below 2019 levels

Corporación América Airports S.A. (NYSE: CAAP), (“CAAP” or the “Company”) the largest private sector airport operator based on the number of airports under management reported today its unaudited, consolidated results for the three-month and six-month periods ended June 30, 2021. 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 24.

Second Quarter 2021 Highlights

• Consolidated Revenues of $135.3 million, an increase of 65.6% YoY, or 67.2% below pre-pandemic levels of 2Q19. Excluding the impact of IFRS rule IAS 29, revenues increased 60.8% YoY, to $134.3 million, mainly reflecting increases of $37.2 million in Aeronautical revenues and $31.2 million in Commercial revenues, partially offset by a $17.9 million decline in construction service revenue. When compared to 2Q19, revenues ex-IAS 29 decreased 66.1%.
• Key operating metrics improved YoY benefitting from easier comparisons against 2Q20, but were still below the levels reported in the same period of 2019:
  • Passenger traffic increased 11.2x to 5.5 million YoY, but declined 72.8% versus 2Q19
  • Cargo volume increased 77.3% YoY to 83.2 thousand tons, but decreased 21.2% compared with 2Q19
  • Aircraft movements reached 95.8 thousand, a 236.2% YoY increase, but declined 53.7% when compared to 2Q19
• Operating Loss of $27.2 million, improving 64.2% from the $76.1 million loss reported in 2Q20, mainly reflecting YoY easier comparisons, and the gradual recovery in revenues, combined with effective cost control measures implemented since the beginning of the pandemic.
• Adjusted EBITDA on an “As Reported” basis was $7.7 million, versus a loss of $33.0 million in the year ago period, and declined 93.5% when compared to 2Q19.
• Ex-IAS 29, Adjusted EBITDA totaled $7.1 million, compared with a loss of $33.2 million in 2Q20 and Adjusted EBITDA of $113.1 million in 2Q19.
• In May 2021, AA2000 renegotiated a total of $40.0 million in principal payments under the syndicated bank loan, maturing in May, August and November 2021 for an amount of $13.3 million each, deferring those payments to May, August and November 2022.

CEO Message

Commenting on the results for the quarter Mr. Martín Eurnekian, CEO of Corporación América Airports, noted, “Over a year and a half into the pandemic, we have demonstrated our ability to rapidly respond to the challenging market conditions. The cost control and cash preservation initiatives executed since day one have enabled us to deliver three consecutive quarters of positive operating cash flow across most of our operations.

While we are experiencing different dynamics across operations, total passenger traffic started to recover in May following the contraction experienced early in the year as the second Covid-19 wave hit our operations in LatAm. This positive trend continued through July driven mainly by Armenia, Brazil, Ecuador and Italy, while Argentina remains heavily impacted by severe government restrictions on international travel. Cargo activity posted a stronger recovery with volumes at just 20% below pre-pandemic levels.

As a result, revenues ex-IFRIC more than doubled year-on-year, although were still 60% below 2Q19 levels. Higher revenues along with our sustained focus on cost controls contributed to an Adjusted EBITDA of $ 7 million, an improvement of $40 million from the Adjusted EBITDA loss posted in the year-ago quarter.

We also remain fully focused on executing our strategy on three key fronts: i) pursuing our goal of restoring value to our business by concluding the economic re-equilibrium processes in Brazil, Armenia and Uruguay, ii) preserving liquidity and strengthening our balance sheet, and keeping a close sight on costs as passenger traffic continues to gradually recover.

Looking ahead, we expect the positive momentum in passenger traffic to strengthen towards the second half of the year in our main LatAm markets, as the summer season approaches, the vaccination rollout progresses and governments relax travel bans. While we remain vigilant of the new virus strains, we are confident that local and global travel is a firm part of the future and we continue to work towards our goal of further strengthening our business to deliver profitable growth.”

Operating & Financial Highlights

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

Operating & Financial Highlights

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

Update on Action Plan to Mitigate Impact of Covid-19

Governmental Flight Restrictions

The 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. Since March 2020, governments around the world implemented measures to contain the spread, including the closing of borders and prohibition of travel, domestic lockdowns, mobility restrictions and quarantine measures. The overall situation remains volatile, as governments worldwide adjust travel bans or implement requirements to enter or leave their countries, including quarantines or negative Covid-19 PCR tests, based on the evolution of the sanitary situation.

• In Argentina, borders remain closed to foreigners and the government has been implementing a basket for international arriving passengers, which is currently limited to 1,700 a day. Passengers arriving in Argentina are required to present a negative PCR test taken within 72 hours prior to the flight, take an additional test at Ezeiza airport on arrival, and self-isolate for seven days. Bans on domestic travel were lifted by the end of October 2020.
• In Italy, certain restrictions apply for travelers coming from, or that visited or transited certain countries, and international passengers are required to present a negative PCR test upon arrival. In addition, travelers coming from outside the European Union are required to self-quarantine for 10-days upon arrival.
• In Brazil, no restrictions apply for domestic travel. International passengers are required to present a negative PCR test upon arrival or a Covid-19 recovery certificate and there are no restrictions on entry, with the exception of passengers coming from or that transited through UK, South Africa and India in 14 days prior to entering Brazil.
• In Uruguay, borders remain closed to non-resident foreigners, with certain exemptions, and requirements upon entry, including a negative PCR test upon arrival and a self-isolation period, except for fully vaccinated nationals.
• In Armenia, there are no restrictions on air travel although some requirements apply upon entry including a negative PCR test upon arrival or a Covid-19 full vaccination certificate.
• In Ecuador, there are no restrictions to domestic or international travel. International passengers are required to present a negative PCR test upon arrival, a Covid-19 full vaccination certificate.

Impact of Covid-19 on CAAP’s Passenger Traffic and Cargo activity

The Company’s operations have been severely impacted by the prolonged flight restrictions in most countries of operations, as well as flight bans in many other countries worldwide. Compared to the 2019 pre-pandemic corresponding months, total passenger traffic showed a monthly improvement within the quarter, despite ongoing restrictions declining 75.7% in April 2021, 73.6% in May, and 68.7% in June. During 2Q21, commercial flights were operated across all CAAP’s countries of operations, although still restricted by government bans to locals and foreigners, and certain requirements applied. Cargo activity declined 21.2% versus 2Q19.

Implementation of Mitigation Initiatives Focused on Preserving Financial Position

Since the onset of the pandemic, CAAP has consistently made progress on the implementation of its action plan to mitigate the impact of the crisis as follows:

Cost controls and cash preservation measures: The Company achieved a 34% reduction in cash operating costs and expenses in the quarter against 2Q19, compared with YoY reductions of 43%, 46%, 48% and 51% in 1Q21, 4Q20, 3Q20 and 2Q20, respectively. Note this excludes concession fees and construction costs. While CAAP expects to benefit from these reductions in the coming quarters, it also expects to see some increases in payroll and maintenance and other operating costs as traffic recovers.

Financial position and liquidity: As cash preservation is a critical focus, since the beginning of the pandemic the Company has renegotiated a significant portion of its debt maturing in 2020 and 2021 in key markets, renegotiated debt covenants, and secured additional debt financing.

In April 2021, Puerta del Sur, CAAP’s Uruguayan subsidiary, obtained a $10.0 million facility from a local commercial bank, and in May 2021, the Company’s Argentine subsidiary, AA2000, renegotiated a total of $40.0 million in principal payments under a syndicated bank loan, maturing in May, August and November 2021 for an amount of $13.3 million each, deferring those payments to May, August and November 2022. In addition, in July 2021, AA2000 renegotiated $10.0 million in principal payments under a bilateral bank loan originally due in July 2021, now maturing under a new schedule in July, October and December 2022.

CAAP also suspended dividends to third parties in the concessions in Italy and Ecuador for 2019. Moreover, CAAP currently does not pay corporate dividends and the Company does not have in place a share repurchase program, either.

Re-equilibrium of the concession agreements:

• In Brazil, in December 2020 the Company obtained $36.6 million in economic compensation in connection with the impact of Covid-19 at the Brasilia and Natal concessions during 2020. Moreover, in May 2021 CAAP filed a request for a long-term compensation for the Brasilia Airport concession.
• In Ecuador, the Company and the authorities agreed on a mechanism to compensate for the impact of Covid-19 for the Guayaquil concession, which includes a 2-year concession extension and a reduction in the concession fee.
• In Uruguay, CAAP is moving forward in conversations with the authorities to review the concession agreements to compensate for the impact of the pandemic, while in Armenia CAAP is in active discussions with the authorities to rebalance the economic equilibrium of the concession.
• In Italy, a total of Eur. 10 million were approved by the European Commission in March 2021, to compensate for the Covid-19 impact in 2020, which was collected during August. Moreover, the Italian Budget Law, that became effective on January 1, 2021, contains provisions to allocate a Eur. 800 million fund in support of the airport sector in the country. CAAP’s subsidiary, Toscana Aeroporti, expects to benefit from these provisions, as they become available during this year.

To obtain the full text of this earnings release and the earnings presentation, please click on the following link: http://investors.corporacionamericaairports.com/Results-Center

2Q21 EARNINGS CONFERENCE CALL

Use of Non-IFRS Financial Measures

This announcement includes certain references to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA excluding Construction Service and Adjusted EBITDA Margin excluding Construction service, as well as Net Debt:

Adjusted EBITDA is defined as income for the period before financial income, financial loss, income tax expense, depreciation and amortization.

Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues.

Adjusted EBITDA excluding Construction Service (“Adjusted EBITDA ex-IFRIC”) is defined as income for the period before construction services revenue and cost, financial income, financial loss, income tax expense, depreciation and amortization.

Adjusted EBITDA Margin excluding Construction Service (“Adjusted EBITDA Margin ex-IFRIC12”) excludes the effect of IFRIC 12 with respect to the construction or improvements to assets under the concession and is calculated by dividing Adjusted EBITDA excluding Construction Service revenue and cost, by total revenues less Construction service revenue.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA excluding Construction Service and Adjusted EBITDA Margin excluding Construction Service are not measures recognized under IFRS and should not be considered as an alternative to, or more meaningful than, consolidated net income for the year as determined in accordance with IFRS or as indicators of our operating performance from continuing operations. Accordingly, readers are cautioned not to place undue reliance on this information and should note that these measures as calculated by the Company, may differ materially from similarly titled measures reported by other companies. We believe that the presentation of Adjusted EBITDA and Adjusted EBITDA excluding Construction Service enhances an investor’s understanding of our performance and are useful for investors to assess our operating performance by excluding certain items that we believe are not representative of our core business. In addition, Adjusted EBITDA and Adjusted EBITDA excluding Construction Service are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods, capital structure or income taxes and construction services (when applicable).

Net debt is calculated by deducting “Cash and cash equivalents” from total financial debt.

Figures ex-IAS 29 result from dividing nominal Argentine pesos for the Argentine Segment, by the average foreign exchange rate of the Argentine Peso against the US dollar in the period. Percentage variations ex-IAS 29 figures compare results as presented in the prior year quarter before IAS 29 came into effect, against ex-IAS 29 results for this quarter as described above. For comparison purposes, the impact of adopting IAS 29 in Aeropuertos Argentina 2000, the Company’s largest subsidiary in Argentina, is presented separately in each of the applicable sections of this earnings release, in a column denominated “IAS 29”. The impact from “Hyperinflation Accounting in Argentina” is described in more detail page 24 of this report.

Definitions and Concepts

Commercial Revenues: CAAP derives commercial revenue principally from fees resulting from warehouse usage (which includes cargo storage, stowage and warehouse services and related international cargo services), services and retail stores, duty free shops, car parking facilities, catering, hangar services, food and beverage services, retail stores, including royalties collected from retailers’ revenue, and rent of space, advertising, fuel, airport counters, VIP lounges and fees collected from other miscellaneous sources, such as telecommunications, car rentals and passenger services.

Construction Service revenue and cost: Investments related to improvements and upgrades to be performed in connection with concession agreements are treated under the intangible asset model established by IFRIC 12. As a result, all expenditures associated with investments required by the concession agreements are treated as revenue generating activities given that they ultimately provide future benefits, and subsequent improvements and upgrades made to the concession are recognized as intangible assets based on the principles of IFRIC 12. The revenue and expense are recognized as profit or loss when the expenditures are performed. The cost for such additions and improvements to concession assets is based on actual costs incurred by CAAP in the execution of the additions or improvements, considering the investment requirements in the concession agreements. Through bidding processes, the Company contracts third parties to carry out such construction or improvement services. The amount of revenues for these services is equal to the amount of costs incurred plus a reasonable margin, which is estimated at an average of 3.0% to 5.0%.

About Corporación América Airports

Corporación América Airports acquires, develops and operates airport concessions. The Company is the largest private airport operator in the world based on the number of airports and the tenth largest based on passenger traffic. Currently, the Company operates 52 airports in 7 countries across Latin America and Europe (Argentina, Brazil, Uruguay, Peru, Ecuador, Armenia and Italy). In 2019, Corporación América Airports served 84.2 million passengers. The Company is listed on the New York Stock Exchange where it trades under the ticker “CAAP”. For more information, visit http://investors.corporacionamericaairports.com

Forward Looking Statements

Statements relating to our future plans, projections, events or prospects are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “believes,” “continue,” “could,” “potential,” “remain,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to: the Covid-19 impact, delays or unexpected casualties related to construction under our investment plan and master plans, our ability to generate or obtain the requisite capital to fully develop and operate our airports, general economic, political, demographic and business conditions in the geographic markets we serve, decreases in passenger traffic, changes in the fees we may charge under our concession agreements, inflation, depreciation and devaluation of the AR$, EUR, BRL, UYU, AMD or the PEN against the U.S. dollar, the early termination, revocation or failure to renew or extend any of our concession agreements, the right of the Argentine Government to buy out the AA2000 Concession Agreement, changes in our investment commitments or our ability to meet our obligations thereunder, existing and future governmental regulations, natural disaster-related losses which may not be fully insurable, terrorism in the international markets we serve, epidemics, pandemics and other public health crises and changes in interest rates or foreign exchange rates. The Company encourages you to review the ‘Cautionary Statement’ and the ‘Risk Factor’ sections of our annual report on Form 20-F for the year ended December 31, 2019 and any of CAAP’s other applicable filings with the Securities and Exchange Commission for additional information concerning factors that could cause those differences.

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