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Good morning. And welcome to the Corporación América Airports First Quarter 2020 Earnings Conference Call. A slide presentation accompanies today's webcast and is available in the Investors section of Corporación América Airports Investor Relations Web site at http://investors.corporacionamericaairports.com. As a reminder, all participants will be listen only mode [Operator Instructions]. As a reminder, this call is being recorded.
At this time, I would like to turn the call over to Gimena Albanesi of Investor Relations. Please go ahead.
Thank you. Good morning, everyone and thank you for joining us today. Speaking during today's call will be Martín Eurnekian, our Chief Executive Officer. Also with us today are Raúl Francos, our Chief Financial Officer and Jorge Arruda, Head of Finance and M&A. All will be available for the Q&A session.
Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. Note that for comparison purposes and for a better understanding of the underlying performance in our presentation today, we will be discussing results, excluding hyperinflation accounting in Argentina, which became effective July 2018. Additional information in connection with the application of rule IAS 29 can found in our earnings report.
Now let me turn the call over to our CEO, Martín Eurnekian.
Thank you, Gimena. Hello, everyone, and welcome to today’s call. I wish you and your families are safe. Trends and dynamics we have seen since the second half of March are not comparable to anything we have seen before. The COVID-19 outbreak has severally impacted the travel industry worldwide, leading to an situation in which air traffic has dropped to minimum levels in a matter of weeks.
On today’s call, I will discuss briefly our key operating and financial highlights for the first quarter and the most recent trends across our airport network. I will then provide an update of the strategic initiatives we shared with you in our previous call to mitigate the impact of this crisis on our business.
Before I begin, I would like to highlight the significant progress we have achieved over the past few weeks on the balance sheet front to strengthen liquidity. We successfully refined nearly 50% of our principle and interest payments for the next 12 months through a series of transactions that I will cover in more detail later in the presentation.
Now, turning to a brief overview of our first quarter results. Passenger traffic fell almost 17%, mainly due to the 45% drop we saw in March when most of our operations began to see the impact of government shutdown measures. Our top line was significantly impacted by the COVID-19 pandemic. This coupled with difficult macro conditions in Argentina and FX depreciation, both in Argentina and Brazil, resulted in a year-on-year decline of nearly 17% in revenues ex-IFRIC 12 in the first quarter.
In terms of profitability as most of our cost and expense reduction initiatives were implemented in late March and early April benefit from these measures did not flow through first quarter results. Therefore, comparable adjusted EBITDA declined 30% to $86 million with the margin ex-IFRIC contracting to 33% from 39% in the first quarter of 2019. Note that comparable adjusted EBITDA in 2020 excludes $4.5 million noncash impairment loss in Brazil. We invested $52 million in CapEx in the quarter, mostly deployed before the outbreak of the COVID-19 pandemic, mainly in works at Ezeiza and Aeroparque Airports in Argentina, as well as in Uruguay, Italy and Ecuador. Since then, we have suspended nonessential CapEx to preserve cash and I will discuss that more in depth shortly. More detail in terms of our first quarter 2020 results can be found in our earnings report and the exhibit of this presentation.
Please turn to Slide 4. Beginning in March, governments across our countries of operations established a series of travel bans and restrictions to contain the spread of the virus. On this slide, you can see the status of each of our operations as of today. At the moment in Argentina, Ecuador, and Peru borders are still close with ban on domestic and international flights, and our airports are only operating cargo and repatriation flights. Similarly, in Uruguay, borders are closed to commercial passenger traffic. In Argentina, the regulator recently issued a resolution prohibiting airlines to sell air tickets for travel before September 1st. In the rest of the countries borders have not been closed, but we are only operating cargo and domestic flights, except for Armenia where we also are operating international flights.
Moving on to Slide 5. You can see on the chart on the left side of the page, preliminary weekly passenger traffic trends for April and May 2020. The full impact of the travel ban introduced mid-March drove year-on-year declines of approximately 98% in each of those weeks. As a reminder, while we usually do not disclose preliminary weekly figures, we are providing with figures on this call to share with you how the COVID-19 pandemic has impacted our business.
On the right side of the slide, we provide an update on the most recent monthly cargo trend. While we continue to see some cargo activity as we are facilitating transportation of medical and essential items to support the continuity of the supply chain, cargo was down 56% year-on-year last April. This was driven by all countries except Uruguay, which benefited from some extraordinary cargo movements that month.
Please turn to Slide 6. In our year-end call, we shared with you our action plan to mitigate the impact of this health crisis. We have been working hard focusing on four key areas. Starting with the wellbeing of our employees and passengers. This is our top priority and we have been working since day one to protect them. We have enhanced safety and hygiene protocols across our operations, established remote working and only essential staff has been working on premise with the adequate protective gear. As restrictions that were put in place as part of the coronavirus response are being reviewed across our countries of operations, we have begun to prepare safety policies to ensure a successful transition back to office premise when restrictions are lifted.
A second area of focus is cost control and cash preservation. We already made significantly reductions in personnel expenses in Brazil, Uruguay, Italy and Armenia. We lay-off salary reductions, furloughs and reductions of working hours. In Uruguay, Italy and Armenia, some of our employees under furloughs are already receiving government and employment subsidies. In Argentina, we are receiving government assistance to cover a portion of April salaries, representing a monthly release of $1.2 million. We have applied to receive this relief in May, and are awaiting government approval. The government could eventually further extend this assistance.
We also reviewed maintain contracts across all of our countries of operations, driving significant savings that we expect to see in the second quarter. For instance, in Australia we halted the use of one of the two runaways and we closed one of the two peers to reduce maintenance expense. To further protect our liquidity, we successfully negotiated with our suppliers the extension of payment terms across the region. Importantly, starting in April, all capital investments were suspended. Note that $52 million invested in the first quarter are to cover most of the minimum maintenance CapEx plan for the year. So we do not expect to incur an additional significant CapEx in the year.
With these cost reduction measures, we expect to obtain a year on year reduction of approximately 43% in total cash operating cost and expenses, excluding transaction with most of the benefits from the full impact of the majority of these initiatives beginning in the second quarter. This estimated reduction is based on our second quarter 2019 total cash operating cost and expenses.
Please turn to Slide 7. As we anticipated in our previous call, as we navigate these unprecedented crisis, we started discussions with regulatory agencies to renegotiate concession pre-payments. To date we have made progress on this front in Brazil and Italy, and are moving forward with conversations with regulators in Uruguay and Ecuador. . As disclosed before in Brazil, we obtained regulatory approval to defer to December 2020, the variable and fixed concession fee payment that were due in May and July. More recently, we received the regulatory approval in Italy to defer and to generate 2021, the semiannual concession fee payment originally due July 2020.
Importantly, the calculation of the amount due will be made based on the actual number of passengers in 2020. Without this insight of the mid and long-term, we continue to work on the review of the equilibrium of the concession agreements across our airport network. As a reminder, our concession contract in Argentina, Italy and Armenia have guaranteed returns. In Brazil and Ecuador, we have concession contracts that contemplate force majeure clauses.
In Brazil, we have initiated conversations to begin the process of requesting economic equilibrium for the Brazil and Natal airport concessions. While in Ecuador, we have filed a request to begin an economic re-equilibrium process of the Guayaquil concession. Finally, in Uruguay, we will soon begin the process to request the economic equilibrium of the concession as well. As we mentioned in our last call, we are in the initial phases of this process, which requires going through administrative regulatory channels. We will be providing updates overtime as they become available.
Turning to Slide 8, we have also made significant progress on the strengthening of our debt profile. Over the past weeks, we have entered into a series of negotiations with our debt holders and banks, and I'm very proud to announce that we have successfully extended almost half of our maturities due over the next 12 months. We defer a total of $126 million in principal and interest payments.
In Argentina, we have concluded two transaction. First, last Wednesday, we completed an exchange offer for our $400 million international notes due 2027 with 86.73% of the principal amount tender for the exchange. This transaction allowed us to defer $60 million in principal and interest payments. We also obtained the waiver of certain debt covenants until November 2021. Second, we deferred a total of $36.6 million in principal due 2020 in connection with our $120 million credit facility and $10 million bilateral loan. As a result, in Argentina, we only have a total of $21 million in financial debt due this year.
Please turn to Slide 9. In Uruguay, we also launched an exchange offer for our $200 million notes due to 2032, and we have to obtained approximately 92% of the principal amount tendered for the exchange at the early participation deadline. With this, we have the option to defer up to $20.5 million in principal and interest payments originally due over the next 18 months. In addition, we deferred a total of $8.7 million in principal payments due 2020 under our local notes. More detail on the terms and conditions of this transactions can be found in this slide, our earnings report and recent 6-K filings.
Please turn to Slide 10. We are pleased with our efforts to strengthen liquidity and extend our debt maturity profile. As you can see on the left chart, we have $278 million in principal and interest payments due over the next 12 months. As a result of this debt refinancing initiatives, we reduced significantly our debt maturities with a total of $149 million now due during this period.
Moving on to our balance sheet and liquidity on Slide 11. We closed the first quarter of 2020 with $173 million in cash and equivalents, and the net debt to EBITDA ratio of 2.9 times. We also had approximately $99 million in treasury bills and time deposits not included in cash and equivalents that provide additional liquidity if needed. We have several initiatives underway to preserve our cash and strengthen our liquidity, which I have been sharing with you over this presentation.
I am very pleased with the significant progress we made so far. We successfully deferred a $129 million in interest and principal payments originally due over the next 12-months, and cancelled all non-essential capital investments. We also implemented significant cost and expense reductions and suspended dividends to third parties in Italy and Ecuador. Moreover, we obtain additional funding in the first quarter for an amount of $37 million.
Now, please turn to Slide 12. As we adapt to the new normal, we are developing customized protocols across our countries of operations to ensure maximum health, safety and comfort for our passengers and employees across our airports. We have established a dedicated team that is working together with the aviation industry and the regulators to set and redefine new safety and health protocols. Protocols are also being monitored and will be approved by infectious disease experts.
Our airports are being adapted to this new environment, implementing measures to minimize the risk of infections of our passengers and employees, while ensuring uninterrupted operations. These include sanitization and social distance measures, screening and biosecurity control procedures for all passengers entering our airports and the implementations of digital solutions to reduce contact with airport equipment while limiting the crowds. We believe the path to recovery will depend on how fast we regain customer confidence to travel by making our passengers feel safe.
Now to wrap up, turn to Slide 13. These unprecedented crisis has severely disrupted the travel industry worldwide, resulting in significant decline in passenger traffic over the last month. The path to recovery still remains uncertain and is dependent on a number of factors, including the successful development of medical treatment or vaccines, government assistance, customer confidence to travel and the evolution of the global economies.
Over the past month, we have rapidly introduced measures to strengthen our financial position. We have refinanced our debt in Argentina and Uruguay, extending maturity and enhancing flexibility. We've made significant progress on protecting our liquidity by reducing costs, limiting CapEx, while we continue to work on obtaining additional funding. At the same time, we started negotiations with regulators to review economic equilibrium of concession agreements. Despite the overall uncertainty surrounding COVID-19, the situation is very fluid.
For example in Europe, which was hit earlier by the virus countries are starting to discuss lifting bans on domestic travel and on opening borders for regional flights in the near term, as well as considering lifting quarantines. This could indicate that we’re starting to see the initial signs of a gradual recovery process. With this in mind, we have process of buildings our recovery plan, preparing for new world and developing the new standards of travel that will be critical to reactivate the travel industry in the near future.
I wish to thank our teams and partners worldwide for all their hard work in this difficult time as we move together in overcoming in these unprecedented challenge and renewed travel again. We’re now ready to take questions. Operator, please open the line for questions.
We will now begin the question-and-answer session [Operator Instruction]. Our first question is from Ian Zaffino from Oppenheimer. Go ahead.
Good morning guys. This is Mark on for Ian. Thanks for taking our questions. Just quickly on your CapEx spend. Can you guys flush out how much of the $52 million of CapEx in the quarter is maintenance versus expansionary? And then can you just give a sense of what's normal CapEx required for operations going forward, and how much can you potentially take that down by? Thank you.
We have maintenance CapEx in a minimum that now in fact most of our maintenance is initially recorded under operating expenses. So usually the maintenance CapEx is minimum for us. Although, we don't have the breakdown right now of the $62 million that we did in the first quarter. Just to give an idea most of the $62 million were in Argentina where you know we are developing and have been developing Ezeiza and Aeroparque works and also some work in [indiscernible] as well that are mainly expansion CapEx. So although, we don't have the breakdown, this is mainly for expansion not so much for maintenance.
And then just another quick one, I believe you guys have mentioned that you started to see signs of recovery. Can you guys share any metrics? Maybe better passenger traffic in certain regions, or what sort of signs of recovery are you guys seeing? Thanks.
As you know the situation is very uncertain, still you know that the covid-19 pandemic has hit our industry, and we have started to see signs, initial signs of recovery, mainly in Europe, the countries gradually starting to lift restrictions, including some potential European borders. So this could indicate that we are starting to see to some recovery. Although, as I said restrictions remain uncertain. And as of today, we are not able to provide an estimation of how long the situation will remain as it is today or an estimation of recovery in the next few months.
[Operator Instructions]. Our next question is from Chris Vicari from Maritime Asset Management. Go ahead.
I guess just two things. Is it possible to give us an idea of sort of what monthly cash burn you have given the current situation where 98% reduction in passengers? Just sort of how, if we can just sort of get a general sense of what the monthly cash burn is now? I expect it to obviously be reducing as travel comes back, but that would be helpful if you can, number one. And then number two, although don't expect there has been much progress on this, given the sovereign restructuring and the coronavirus issues and everything else. Just curious if there's any progress made on talks about extending the concession in Argentina? Thanks.
So let me take the first question regarding cash burn. And as you know, April for us was the first month where we had a full impact in all of countries for 2019. So as we discussed during the call, we actually rapidly we started doing several initiative on cost reductions and mainly on maintenance salaries and so on. So for -- an estimated cash burn for April is around roughly $14 million according to our monthly estimates. And so as I said before the first month the full impact of the decline in activity, as well as measures for past preservation. And I will hand over to Martín for the second question.
Well, regarding the extension, as we've been saying before, this contract has every reason to be ready to have that discussion with the government. We had it before this huge crisis. And we believe that given what is going on now, it becomes even more obvious the need for the extension of the contract. Having said that, we hope to begin negotiations with the government as soon as possible. But given the quarantines and the priorities that have shifted towards crisis that has not happened yet, but we hope to begin as soon as possible.
[Operator Instructions] At this time, we have no questions, so we will conclude our questoin-and-answer session. I would now like to turn the conference back over to Martín Eurnekian for closing remarks. Go ahead. I’m sorry, there is a question. I’m sorry it just came up. There is a question from Roberta Versiani from Citibank. Go ahead.
Just a quick question, are there any governments suggesting some level of financial support beyond the deferral of the concession payment? And just double checking, you said $14 million for cash burn in April. Just double checking. Thanks.
So yes, the cash burn for April $14 million, this is largely estimating cash burn. So regarding the support from government. I would say that what we have and already in play in the referral of consistencies in both Brazil and Italy. We are in discussions also for the deferral concession fees in Uruguay and also Ecuador. And that is where we have so far already implemented in final payment. We are also requesting some financial relief in Argentina through these plans for the government implemented for companies and to support wages. And in Italy, we are moving forward also with specific relief method for the industry. Although, that is not in place yet. We will let you know as soon as we have something on that front.
At this time, we have no question. So we will conclude our question-and-answer session. I would like to turn the conference back over to Martín Eurnekian for closing remarks. Go ahead.
I'd like to thank everybody for joining us today. We really appreciate your interest in our company. We look forward to providing updates on our business initiatives as they become available. In the meantime, the team remains available to answer any question that you may have. Thank you everybody. Bye, bye.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.