Morning, and welcome to the Corporacion America Airports 4th Quarter Fiscal Year 2020 Earnings Conference Call. A slide presentation accompanies today's webcast is available in the Investors section of the Corporacion America Airports Investor Relations website at http:investors. Corporacionamericaairports .com. As a reminder, all participants are in a listen only mode. There will be an opportunity to ask questions at the end of the presentation.
And as a reminder, this conference 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 Martin Ormeccan, our Chief Executive Officer. Also with us today are Raul Franco, our Chief Financial Officer and Jorge Aruba, Federal Finance and M and A. All will be available for the Q and A session.
Before we proceed, I would like to make the following Safe Harbor statement. Today's call will contain forward looking statements and are entitled to the forward looking statements section of for earnings release and reconciling 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 Phase 3 inflation accounting in Argentina, which became effective in July 2018. Additional information in connection with the application of RULIAS 29 can be found in our earnings report.
Now let me turn the call over to our CEO, Martin Hermetcan.
Thank you, Gimena. Hello, everyone, and welcome to today's call. I hope you and your loved ones remain safe. 2020 has undoubtedly for the dedication and commitment to rapidly establishing and executing our strategic plan to protect the company's financial position, all while continuing to ensure the highest health and safety standards for our passengers and employees. During the year, we made significant strides in re profiling and in strengthening our balance sheet, while succeeding in making substantially favorable progress in extending or enhancing our concessions in Argentina and Brazil.
Despite experiencing a 70% decline in passenger traffic in 2020 as a result of the severe impact of the pandemic on travel demand, our decisive actions focused on cost containment and economic compensations allowed us to achieve comparable adjusted EBITDA of $78,000,000 in 2020 compared to R147 $1,000,000 posted in 2019 prior to the pandemic. This mainly excludes non cash impairment losses in Brazil in both years and the bad debt charge in Argentina in 2019. 4th quarter comparable adjusted EBITDA was $43,000,000 nearly regarding the losses of 19,000,000 and $33,000,000 posted in the 2nd and third quarters of last year respectively. Note that the 4th 3rd quarter figures benefited from economic compensations of nearly $37,000,000 in Brazil and $12,000,000 in Italy applicable for the full year. During 2020, we also successfully refinanced a significant part of our principal and interest payments in key countries, and we remain focused on making further progress on this front in Argentina.
We also have been negotiating with regulatory bodies and governments across our concessions to obtain compensation for the impact of this health crisis. The 10 year extension of the AA2000 concession in Argentina obtained in the 4th quarter was a significant milestone for our company, reinforcing the subsidiaries long term sustainability. I will discuss this in more detail shortly. In Brazil and other of our key markets, during the quarter, we obtained an economic compensation as I just mentioned. Finally, cash and equivalents at year end increased to $281,000,000 from $180,000,000 in the 3rd quarter, supported by a strict focus on cost reductions and additional financing obtained during the quarter.
More details on our 4th quarter and fiscal year 2020. Results can be found in our earnings report filed yesterday and the exhibit of this presentation, both of which are available on our website. Please turn to slide 4. We have been seeing varying levels of travel restrictions as countries adapt to the evolution of the spread of the COVID-nineteen and the changing health conditions. This includes requirements of negative PCR tests upon arrival together with some level of quarantine at most of our countries of operations.
In Argentina, passenger traffic posted a significant sequential recovery Certain governments' restrictions on air travel were relaxed, although still negative year on year. Bans on domestic travel were lifted by the end of October and international travel remained open under special flight regimen. Starting November, foreigners from neighboring countries were allowed to enter the country. However, in late December, in light of the new COVID-nineteen variant, The government reenacted the ban on entry for oil owners until April 9, 2021. Given the recent spike in COVID cases earlier this month, the government added additional travel requirements for our nationals upon arrival and last week slides from Brazil, Chile and Mexico were banned.
Passenger traffic in Italy declined sequentially following the end of the summer season. Commercial operations remain open with Friction for certain travelers coming from or that transited certain countries. Lockdowns and travel bans in several countries in Europe also impacted traffic in the 4th quarter. In Uruguay, while air travel restarted the 1st week of July, Borders remain closed for non resident foreigners with certain exemptions and requirements upon entry. In Brazil, Passenger traffic doubled sequentially, continuing the positive trend observed since mid-twenty 20 through January.
In February, however, We saw a drop in demand given concerns arising from a spike in the virus spread throughout the country. In Armenia, traffic has been increasing sequentially since the elimination of restrictions on air travel last September and more recently the opening of Russian borders to foreigners, although some requirements apply upon entry. Finally, traffic in Ecuador more than doubled sequentially with commercial operations remaining open subject to certain requirements. Page 5 shows preliminary monthly passenger traffic and cargo trends since last April 2020. The gradual monthly recovery trend that started last June continued into early this year.
Traffic was down nearly 69% year on year in December and improved further to a drop of 64% last January. This was mainly driven by Argentina and Brazil, while traffic in Italy deteriorated sequentially as I just explained. Passenger demand remained at low levels in Uruguay, Ecuador and Armenia. Traffic deteriorated again in February, impacted by lower activity mainly driven by Brazil and to a lesser extent other countries of operations given the concerns over a spike in COVID-nineteen cases and new strains of the virus. In terms of cargo, we experienced a sustained recovery throughout the year, declining year on year by only 30% in December compared to 41% in November.
Performance in January was weaker mainly due to lower activity in Argentina, Ecuador and Uruguay, recovering again in February with a decrease of only 25% from the lows of 59% posted in May. Cargo operations are playing a key role in the vaccination program for Argentina, Uruguay and Brazil. Turning to Slide 6, we rapidly adapted our airport network to ensure the maximum health and safety standards for employees and passengers. Montavillejo Airport in Uruguay and Arequipa in Peru joined Estesa Airport in Argentina along with our airports in Brasilia, Guayaquil and Galapagos obtaining ACI's airport health accreditation. Our airports in Pisa and Turin were the 1st in Italy to receive independent health protocol certification.
Now moving to Slide 7, we reported positive comparable adjusted EBITDA of $78,000,000 in 2020. We exceeded our cost reduction targets posting 3 consecutive quarters of cash operating costs and expenses, excluding concession fees declining by 46% or more. For the full year, we achieved savings of over $240,000,000 primarily in maintenance expenses, SG and A, other operating costs and labor costs, including nearly $12,000,000,000 in government assistance in Argentina to cover a portion of salaries. Currency depreciation in the main markets also contributed to the savings. In addition, in Brazil and Italy, we obtained government Economic compensations to mitigate the impact of the crisis, which benefited 2020.
Adjusted EBITDA by nearly $47,000,000 As the year progresses, we will maintain a strict focus on cost control, but we expect to see some increases in labor, maintenance and other operating costs as traffic continues to recover over time and government support declines. As shown on Slide 8, Since the onset of this health crisis, we have made significant strides in the negotiation with the regulators and governments. Since our last earnings call, we continued to make progress on this front in Brazil and Argentina. In Brazil, Last November, we obtained a refinancing of 50% of the annual concession fee payment that was due in December with payment deferred to the 6 final years of the concession. In Argentina, last February, we signed an agreement with a local airline to recover $38,000,000 of past due amounts.
Now moving on to the longer term review of the concession agreements on slide 9. Most importantly, the 10 year extension for the A2000 concession in Argentina along with an increase in international tariffs was a key milestone for the company. In Brazil, last December, we obtained a significant economic compensation for the impact of COVID-nineteen in 2020 on our Brasilia and Natal airports as I discussed earlier. We are also moving ahead in the request for long term compensation. In Ecuador, we continue in negotiations to obtain economic compensation for the Guayaquil airport concession.
Finally, in Uruguay, we are moving forward in conversations with the authorities to review the Carraco and Punta Electric concession agreements to compensate for the impact of the pandemic. Moving on to page 10, take a deeper look at the 10 year extension of the AA2000 concession until 2,038. Importantly, the agreement reserves the economic equilibrium of 16.35% internal rate of return in real terms and levered until 2038. It also established a CapEx program of approximately $500,000,000 to be undertaken in 2 phases. The first phase includes investments of around $340,000,000 to take place preferably during 20222023.
The second page consists of a total CapEx of nearly $165,000,000 broken down into annual investments of $41,000,000 between 20242027. We believe these additional investments are manageable and will allow us to continue enhancing airport infrastructure and the overall passenger experience in Argentina as we have been doing during the past 20 years. Last January, within the framework of this agreement, the artisan regulator also approved of $6 adjustment in the AA2000 international passenger fee, increasing the fee to $57 effective this month. Finally, while domestic passenger fees will remain unchanged this year, we are in conversations with Orsla to obtain adjustments next year. Turning to Slide 11.
Protecting Our liquidity and strengthening our financial position has been a key priority since the beginning of this exceptionally challenging crisis. I am very proud of the remarkable achievements we made on this front. First, We successfully refinanced our debt in Argentina and Uruguay through 2 exchange offers with very high levels of participation from our bondholders. That together with the refinancing of bank debt in Argentina and local bonds in Uruguay allow us to defer $126,000,000 in principal and interest. We also renegotiated debt maintenance coherence in both countries until November 2021.
In addition, we obtained a 12 month payment deferral of interest and principal from our debt in Brazil for a total of $27,000,000 And in the Q4 of 2020, We extended our syndicated facility in Armenia by 18 months from December 2022 to June 2024, referring $36,000,000 in principal amount. Covenants in Armenia were waived until December 2021 and renegotiated to 2023. Subsequent to year end, we renegotiated debt maturing in Q1 of 2021 in Argentina, deferring a total of $13,000,000 for an average of a year and a half. In Italy, we obtained a waiver for the debt leverage ratio covenant in connection with the €60,000,000 notes due 2024 for the periods ending June December 2020. 2nd, we secured an additional financing in Argentina, Italy and Ecuador amounting to nearly $156,000,000 in new credit facilities.
3rd, Thanks to our ongoing negotiations with the regulators, we negotiated the deferral concession fee and mandatory payments in Argentina, Brazil, Uruguay and Italy for a total amount of $106,000,000 of which $31,000,000 have already been paid. 4th, we renegotiated payment terms with our suppliers across all countries of operations to limit additional cash outflows. Finally, we canceled all non mandatory capital investments and deferred non priority projects achieving a 62% year on year on year CapEx reduction in 2020. For 2021, we will limit capital investments, maintenance of security standards and airport safety as well as to comply with regulatory requirements. Next, moving on to our balance sheet and liquidity on slide 12.
We closed the year with $281,000,000 in cash and equivalents and $74,000,000 in cash renewals and time deposits. Total liquidity increased to $355,000,000 at the end of December compared to $253,000,000 at the end of last September, mainly due to additional financing obtained in the quarter as well as our strict cost control. This financial discipline allowed us to achieve operating cash flow breakeven in Argentina and Uruguay since the Q2 of 2020 and in Ecuador and Armenia since the Q3 of 2020. In addition, during the Q4 of 2020, CAF achieved positive operating cash flow across most of our countries of operation. As a result of new financing obtained in the quarter, total debt increased by 12 percent sequentially or $148,000,000 to $1,300,000,000 while net debt remained relatively stable at $1,100,000,000 So while net debt levels remain flat, lower profitability since the start of the COVID-nineteen significantly impacted our net debt to last 12 months adjusted EBITDA ratio.
As a result, the ratio, which excludes the impact of non cash impairments, increased to 14 times from 7.4 times in the 3rd quarter. As a reminder, community in Argentina to renegotiate the principal payments of bank loans that mature during the rest of 2021. Turning to Slide 13. This month, we resumed operations at Aeroparque Airport in Buenos Aires. This included the renovation and expansion of the runway to improve performance for regional flights and enhanced operational safety.
We also expanded and modernized the international arrivals and departure halls ahead of the reinstatement of international air traffic at Aeroballga Airport. This resulted in a total investment of approximately $60,000,000 funded by the Argentine Government and AA 2000 Development Trusts with no impacts on this subsidiary's cash flow. Now to wrap up, turn to Slide 14. Since the start of the pandemic, we have demonstrated our capacity and flexibility to rapidly respond to the new environment and changing market conditions. We remain fully focused on further executing against the strategic action plan put in place at the start of the crisis, protecting liquidity, keeping a strong focus on cost controls, advancing negotiations to obtain long term re equilibrium of our concessions, while refinancing bank debt in Argentina.
Looking at travel demand for the year. During the Q1, passenger traffic trends have been choppy reflecting lower demands in Brazil given concerns over the new strain of the virus and the spike in cases. Travel restrictions in Europe also impacted demand in most countries of operations. As the Northern Hemisphere continues to make headway with the vaccination programs, We expect this to lead to some improvements in traffic towards the second half of the year. In the medium term, while visibility in Latin America remains so, higher availability of vaccines and the progressive lifting of government travel restrictions anticipated to help drive better passenger dynamics.
Before opening the call for questions, As recently announced, Jorge Aruga, Head of Finance and M and A will assume the role of CFO effective May 1 succeeding Raul Francos, who will stay on through that date to ensure an order latency of the Board of AA2000. I wish to take this opportunity to thank Raul Francos for his many contributions in heading the financial growth of AA2000 since 2003 and since 2017 in leading CAF's IPO and the development of our strategic financial initiatives during this pandemic. I also wish to congratulate Jorge for this appointment. His 20 years experience in Investment Banking and Capital Markets have been essential in the implementation of our strategic initiatives to successfully navigate the pandemic. Jorge has been instrumental in our recent successful debt negotiations as well as in negotiating concession agreements with Collision.
We are now ready to take questions. Operator, please open the line for questions.
Thank you. And we will now begin the question and answer session. We kindly ask that you please limit yourself to one question and one follow-up. And our first question today will come from Ian Zaffino with Oppenheimer. Please go ahead.
Hey, great. Thanks. Good morning, everyone. This is Mark on for Ian. Thanks for taking our questions.
So I guess like our question is on the $500,000,000 CapEx spending with 2,000.
Can you just give
a sense of what type of investments we can expect from the spend? I guess specifically with the $36,000,000 over the next 2 years, Is that expansionary investment to add runways or terminals at certain airports? Or how should we think about that? Thanks.
Hello, Mark. This is Martin. Thank you for your question. The CapEx that we are expected to undertake in Argentina The first one to the agreement with the government is still in phases of of programming and decision making. And although we have we will put a strong input into the program, The regulator is the one that finally decides where is the CapEx, but it will basically allow us to continue the required CapEx program to expand safety, runways, maintenance and terminals that was started previously in Argentina.
So You should expect maintenance CapEx for runways, terminals and the continuing of many of the works that were started before the pandemic.
Okay, got it. That's very helpful. And then just a follow-up, given the volatility you guys are seeing in the Q1, Can you maybe just give a sense of what trends are you what trends you're seeing in traffic activity for March? How does that trend or compare sequentially with February. Thanks.
So we have different realities in our different countries of operations. Most of these realities are totally linked with the health conditions and the sanitary conditions and the number of cases and hospitalizations in each country regarding the COVID-nineteen crisis. So As you saw before, we had a most of the recovery is linked to the easing or the strengthening of the restrictions put by different countries. So we do not have a unique trend There has been downward trend in Brazil due to weaker cases. Europe is expected to have a better summer because of the vaccination plan, the same as traffic towards the U.
S. But we are seeing mixed results and they are totally linked with the restrictions put in place in each of the different countries of operation.
Okay. Thank you very much, Martin.
And this will conclude the question and answer session. I'd like to turn the conference back over to Martin for any closing remarks.
Thank you. I'd like to thank everybody for joining us today. We really appreciate your interest in our company and look forward to providing updates on our business initiatives as they become available.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.