November 10, 2021
TORONTO, CANADA - The Greater Toronto Airports Authority (“GTAA”) today reported its financial and operating results for the three- and nine-months ended September 30, 2021. Passenger activity increased 190.0 per cent for the third quarter of 2021 and decreased 41.8 per cent during the first nine months of 2021 as compared to the same periods of 2020, respectively. These changes are due to the impact of the COVID-19 pandemic (also as "COVID-19" or "pandemic") on the GTAA and the global aviation industry generally, regular operating activity in the first quarter of 2020 and the most recent easing of government restrictions.
“The impacts of the COVID-19 pandemic on Toronto Pearson’s business have been dramatic and continue to have a significant impact on our operations,” said Deborah Flint, President and CEO. “Nonetheless, we are experiencing a return of passengers and therefore continue to focus resources on measures designed to cultivate a healthy airport experience for passengers and employees alike. Toronto Pearson will maintain its industry-leading role through the ongoing evolution of its globally recognized Healthy Airport program, and in doing so reinforce a pathway for recovery and return the Airport to its place as a strong economic driver for our local community, our province and our country.”
With continued global intermittent lockdowns, travel restrictions and government-imposed health requirements, the COVID-19 pandemic and resulting economic contraction has had, and is expected to continue to have, a material negative impact on demand for air travel globally. Toronto Pearson has continued to experience material declines in passengers and flight activity during the first nine months of 2021, as compared to the same period in 2020. The reduced activity is having a material negative impact on the GTAA’s business and results of operations, including aeronautical and commercial revenues and airport improvement fees. However, during the second and third quarters of 2021, operating activity at the Airport has grown significantly from the same periods of 2020, due in part to a domestic vaccination rollout and the easing of government travel restrictions. Nevertheless, all measures of operating activity continue to be well below the 2019 levels.
Key Financial and Passenger Information
During the third quarter of 2021, passenger activity increased when compared to the same period of 2020, although the number of passenger and flight activity remains significantly lower, when compared to the same period in 2019. During the first nine months of 2021, passenger activity through Toronto Pearson and resultant revenues were materially lower, as compared to the same period of 2020, as a direct result from the impact of COVID-19 and due to regular operations in the first quarter of 2020 not being materially impacted by the pandemic
Earnings before interest and financing costs and amortization (“EBITDA”) during the third quarter of 2021 increased significantly due to significant increase in operating activity and revenues and continued costs savings. In contrast, EBITDA during the first nine months of 2021 was materially lower, as compared to the same period of 2020, due to significant revenue reductions caused by the impacts of COVID-19 partially offset by cost savings. Net loss during the third quarter of 2021 decreased to $57.7 million due higher revenues and continued cost savings as compared to the same period of 2020. Net loss during the first nine months of 2021 increased to $302.8 million as compared to the same period of 2020 due to material reductions in revenues and due to the net income of the first quarter of 2020 not being materially impacted by the COVID-19 pandemic.
On October 5, 2021, the GTAA issued $400.0 million Series 2021-1 Medium Term Notes due October 5, 2051 at a coupon rate of 3.15 per cent for net proceeds of $397.3 million. The net proceeds were primarily used to repay commercial paper.
As a result of COVID-19, there continues to be very limited visibility on travel demand given changing government restrictions in place in Canada and around the world. These restrictions and concerns about travel due to COVID-19 are severely inhibiting demand. Management continues to analyze the extent of the financial impact of the COVID-19 pandemic, which is and continues to be adverse and material. While the full duration and scope of the COVID-19 pandemic cannot be known at this time, the GTAA believes that recovery will happen and the pandemic will not have a material impact on the long-term financial sustainability of the Airport.
Apart from the impact of the pandemic on GTAA revenues and operations, there may also be disruptions, including to air carriers, supply chains and third-party service providers. The pandemic may also impact the cost of capital and the ability to access the capital markets in the future which may arise from disrupted credit markets, and possible credit ratings watch or downgrade of GTAA debt.
The GTAA’s September 30, 2021 financial results are discussed in more detail in the GTAA’s Condensed Interim Consolidated Financial Statements and Management’s Discussion and Analysis, each for the three- and nine-months ended September 30, 2021, which are available at www.torontopearson.com and on SEDAR at www.sedar.com.
Caution Regarding Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable securities laws. This forward-looking information is based on a variety of assumptions and is subject to risks and uncertainties. These statements reflect GTAA Management’s current beliefs and are based on information currently available to GTAA Management. There is a risk that predictions, forecasts, conclusions and projections that constitute forward-looking information will not prove to be accurate, that the GTAA’s assumptions may not be correct and that actual results may differ materially from such forward-looking information. Additional detailed information about these assumptions, risks and uncertainties is included in the GTAA’s securities regulatory filings, including its most recent Annual Information Form and Management’s Discussion and Analysis, which can be found on SEDAR at www.sedar.com.
NON-GAAP FINANCIAL MEASURES
Throughout this news release, there are references to the following performance measure which in Management’s view is valuable in assessing the economic performance of the GTAA. While this financial measure is not defined by the International Accounting Standards Board (“IFRS”), and is referred to as non-GAAP measure which may not have any standardized meaning, it is a common benchmark in the industry, and is used by the GTAA in assessing its operating results, including operating profitability, cash flow and investment program.
EBITDA is earnings before interest and financing costs and amortization. EBITDA is a commonly used measure of a company's operating performance. This is used to evaluate the GTAA’s performance without having to factor in financing and accounting decisions.
About the Greater Toronto Airports Authority
The Greater Toronto Airports Authority is the operator of Toronto – Lester B. Pearson International Airport, Canada’s largest airport and a vital connector of people, businesses and goods. Toronto Pearson has been named “Best Large Airport in North America serving more than 40 million passengers” for four years in a row by Airports Council International (ACI), the global trade representative of the world’s airports. In recognition of its Healthy Airport program, ACI also awarded Toronto Pearson the “Best hygiene measures in North America” award, and Toronto Pearson was the first Canadian airport to receive ACI’s global health accreditation for its response to COVID-19.
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