August 10, 2022
TORONTO, ONTARIO – The Greater Toronto Airports Authority (“GTAA”) today reported its financial and operating results for the three- and six-months ended June 30, 2022. Passenger activity increased by 8.3 million or 780.4 per cent and by 12.5 million or 584.1 per cent during the second quarter of 2022 and the first six months of 2022, respectively, when compared to the same periods of 2021. Passenger activity increased given the easing of pandemic-related travel restrictions and pent-up travel demand compared to the same period of 2021. Nevertheless, all measures of operating activity continue to be well below 2019 levels due to the impact of the pandemic on the GTAA and the global aviation industry in general.
The second quarter of 2022 saw the continued easing of the pandemic and associated travel restrictions, and the resultant increase in travel volume. However, ongoing staffing challenges, health measures (vaccination mandates, airport testing, which were in place until mid-June 2022) and other changes to procedures had broad impacts on the whole aviation sector, including: the airlines and their service providers in the provision of timely departures and baggage return; the government agencies providing border security and customs services; and NavCanada, the country's air navigation operator. Airports, the Government of Canada and the airline industry have been working to address these various transitory challenges collectively.
“Our second quarter results reflect a growing desire on the part of the public to travel by air and connect with the people and places they love after a very long two years,” said Deborah Flint, President and CEO, GTAA. “Wait times continue to improve, but we’re not where we need to be yet. It is imperative that industry and government continue to collaborate to solve the acute issues the aviation system is facing. We must also seize the opportunity in these challenges to make changes that will benefit our valued passengers in the longer term by continuing to digitize our border and the country’s airports for a smoother and more predictable travel experience."
Key Financial and Passenger Information
Passenger activity through Toronto Pearson and resultant revenues increased during the second quarter of 2022 and the first six months of 2022, when compared to the same periods of 2021, due to the easing of the pandemic and travel restrictions, and pent-up travel demand, although the number of passenger and flight activity remains significantly lower, when compared to the same periods in 2019.
Earnings before interest and financing costs and amortization (“EBITDA”) increased significantly during the second quarter of 2022 and the first six months of 2022, when compared to the same periods of 2021, due to a large increase in operating activity and revenues and the prudent management of operating costs. Net income during the second quarter of 2022 and the first six months of 2022 increased by $252.0 million to $51.5 million, as compared to the net losses of the same periods of 2021, due to the same reasons above.
Free cash flow increased during the second quarter of 2022 and the first six months of 2022 by $188.5 million to $77.1 million and by $259.6 million to $110.6 million, respectively, when compared to the same periods of 2021, primarily driven by the significant increase in revenues over the increase in costs.
As a result of COVID-19, potential new variants and changing travel restrictions in place in Canada and around the world, together with the staffing and other challenges faced by the global aviation industry, there remains limited accurate visibility on the future of travel demand. The GTAA cannot accurately predict the timing of a full recovery. Management continues to analyze the extent of the financial impact of the COVID-19 pandemic, which has diminished. While the full duration and scope of the COVID-19 pandemic cannot be known at this time, in the long-term the GTAA believes that full recovery will be achieved, and the pandemic will not have a material impact on the long-term financial sustainability of the Airport.
The GTAA’s June 30, 2022 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 six-months ended June 30, 2022, 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.
Free Cash Flow
Free Cash Flow (“FCF”) is cash flow from operating activities per the consolidated statements of cash flows less capital expenditures (property and equipment, and investment property) and interest and financing costs paid, net of interest income (excluding non-cash items). FCF is used to assess funds available for debt reduction or future investments within Toronto Pearson.
About the Greater Toronto Airports Authority
The GTAA is the operator of Toronto Pearson International Airport.
Contact: GTAA Media Office (416) 776-3709