August 6, 2021
TORONTO, ONTARIO – The Greater Toronto Airports Authority ("GTAA") today reported its financial and operating results for the three- and six-months ended June 30, 2021. Passenger activity decreased 79.1 per cent during the first six months of 2021 as compared to the same period of 2020. This decrease is due to the impact of the COVID-19 pandemic (also as "COVID-19" or "pandemic") on the GTAA and the global aviation industry generally.
"The impact of the COVID-19 pandemic on Toronto Pearson's business has been significant over the first six months of 2021," said Deborah Flint, President and CEO, GTAA. "While a full recovery of aviation is still a long way off, a measured and health-focused easing of restrictions by the Government of Canada beginning on July 5, 2021 is a positive indicator of things to come. We continue to work in close collaboration with government agencies, airlines and other aviation partners so that as more passengers are ready to travel, we'll be here to help them do it safely."
With continued global intermittent lockdowns, travel restrictions and mandatory emergency order safety precautions, 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 experienced material declines in passengers and flight activity during the first six months of 2021, as compared to the same period in 2020. Due to the pandemic and the resultant travel restrictions including border closures, severe financial impacts and economic contraction, there have been multiple flight and route cancellations by air carriers. 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.
Key Financial and Passenger Information
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During the second quarter of 2021, although passenger activity increased when compared to the same period of 2020, the number of passenger and flight activity remains significantly low, when compared to the same period in 2019. During the first six months of 2021, passenger activity through Toronto Pearson and resultant revenues were materially lower as a direct result of the impact of COVID-19, as compared to the same period of 2020.
Earnings before interest and financing costs and amortization ("EBITDA") during the second quarter of 2021 and the first six months of 2021 were materially lower, as compared to the same periods of 2020, due to significant revenue reductions caused by the impacts of COVID-19 partially offset by cost savings. Net losses during the second quarter of 2021 and the first six months of 2021 increased to $118.1 million and $245.1 million as compared to the same periods of 2020 due to the same reasons above.
As a result of COVID-19, there is very limited visibility on travel demand given changing government restrictions in place 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, Management believes that 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 June 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 six-months ended June 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 press 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
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 GTAA is the operator of Toronto Pearson International Airport.
Twitter: @TorontoPearson
GTAA Media Office (416) 776-3709