Corporación América Airports (CAAP) 21 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to the Corporación América Airports' Third Quarter 2024 Conference Call. A slide presentation accompanies today's webcast and is available in the Investors section of the company's website. [Operator Instructions] At this time, I would like to turn the call over to Patricio Inaki Esnaola, Head of Investor Relations. Patricio, please go ahead.

Thank you. thank joining and today. everyone, morning, you us for Good

Eurnekian, will Executive Chief Speaking call Martin Financial our our during today's Arruda, be Chief Jorge Officer; Officer. and

harbor to we circumstances. SEC. and statements, margin or We with to earnings you statements obligation the note Before reflect release would revenues, IFRICXX. I new to call or this forward-looking Martin our refer call the revise all update like that assume figures over turn the of any forward-looking I call, CEO, events following contain throughout Eurnekian. statements no proceed, to I safe costs, changed adjusted will or excluding the Please section references statement. to to to forward-looking and now Today's will filings EBITDA will and make our refer recent

day. us Thank joining you Good today. for

some presentation quarter today's start results. me by third Let highlights sharing from our key

Jorge open And more will in-depth Following for a review. floor questions. the financial provide that, will we afterwards, your

rates. as the Duty-free and and saw new significant which costs. the sales diverse in countries of were to revenue the dynamics macroeconomic official market Our Argentina, ongoing quarter in Nevertheless, in and the specific contributions highlighting put again our our conditions. Adjusted down performances environment role critical passenger Italy weaker operational Uruguay, lower EBITDA continue solid Brazil this from disparity last again from as resilience comparisons. for results lower to the challenging traffic navigating steady resilience year's domestic our revenues in challenges quarter passenger teens a quarter other parallel In year-over-year were at benefited broadly balancing in pressure held year-over-year, due the the operations on we primarily while macroeconomic declined played our mitigated turn, in line in Argentina, this portfolio. pressure a per approximately the result results in and while portfolio positive year-over-year increase partially ex-IFRICXX geographic with X% volumes, between effect $XX, demonstrating once

Importantly, with opportunities. our stability commitment balance sheet our flexibility pursue growth leverage record strong financial cash flow while remaining and providing lows, to at solid the underscore to net

X Now touch events. recent on let me

the XXX% a forward. in X, effective tariffs in will increase local going approved domestic support Argentina passenger First, November was our which operations and

Second, our consolidates $XX.X the Argentine the And with or its government the finally, an acquisition distribution. economic million XX% an X.X% subsidiary, Argentine interest entities, affiliated additional AAXXXX, approved CAAP's we remains while from AAXXXX, dividend completed of interest which stake in in in economic $XX AAXXXX million company.

the ongoing Our will in our shortly. deployment performance of support the details Jorge to execution quarter disciplined we further continue of we on our the most be and prioritize our and during balanced to recent growth. businesses will long-term long-term as strategy provide investment with reflects capital successful financials

X traffic a when demand in soft by Page a of to agreement total government. supported bright as February the with in traffic Natal, the year-on-year, routes market Argentina, of review excluding By passenger challenging Overall, which current by exited flight for the additional part for driven primarily domestic and a determination spot, environment traffic by was X.X% declined in international trend decline This Turning we X% Brazilian or trends. frequencies. remained Argentina contrast, travel in country. reflecting passenger

see to Brazil. and in continue positive We Uruguay, also Italy momentum

passenger the its additional numbers of routes fueled was month domestic JetSMART in frequencies SKY key strong passenger with traffic single versus passenger closer region. X.X% X%, with XXXX. and at by and recovery look by by growing international introduced traffic at digits. continued In This up October X% XX%, same up the extended traffic some while by trends traffic a a year-on-year performance low by growth in grew into take Uruguay led prior new Let's Italy, quarter.

Looking by quarter, adding Chile while in year's passenger a Previaje the last strong remains Natal reflecting tough XX% which up this XXXX. domestic ex-Natal, and same Brazil, Uruguay. de Janeiro and connectivity resumption XX% of an at rose extended X.X%. In decline contrast, affected when while ongoing to Santiago its passenger was saw traffic In see with a continued a traffic and traffic and to Montevideo-Miami was aircraft Rio international further this government the the XX%, X%, traffic, by even return driven frequencies. announced total traffic of of season, positive In constraints. in LATAM trend recession comparisons route Airport, summer down to increased by but and traffic, boosted passenger impacted versus nearly domestic program, to October month recovery not year. By American excluding Airlines into Argentina, November, repeated in This domestic performance the remains flight by routes Airlines travel growing October, X% which traffic we for routes continue ahead, SKY will resume up

For example, to carriers new de added Gol, and Cana, several and Punta Copa including launched frequencies while Rio Aerolíneas Avianca on Argentinas routes Janeiro routes.

growing key year a to exit decline Bariloche, Armenia Iguazu the in last back in Ecuador X.X% mid-single-digit last entrance continued domestic by We Mendoza, the have also year-on-year. to which traffic reflecting traffic low trend continued experience effort traffic following persistently led international traffic travel October, In year and destinations local X.X% to such on weakness. In XX% October saw to declining decreased with Traffic digits, continued and October, high of same domestic prices October and in into by total a strong perform fighting solid month dampened of airline in total new This year. the traffic demand. frequencies. of very a the year-on-year. as tourist X% performance airlines contraction last in offset the declined the of compared well. single in traffic, some

Argentina, collectively Armenia which volumes, momentum revenues cargo accounting Despite volume and XX% impacted increased XX% of due volumes. goods. Now in We growth, cargo for largely imported number cargo reduction year-on-year in X.X% by of moving total contributors Argentina, saw days the X. a in year-on-year. Brazil Slide to revenues for declined storage strong on particularly to continued lower were

We call continue off maintaining closely hand revenue to Jorge, regions. I on who will go all to the and remain will our focused results. now operations efficient trends ahead. these monitor Please across review financial

Martin, you, and Thank good day, everyone.

continue per Slide due year-on-year, lower to $XX, with start the portfolio. Aeronautical year. on we last increase consistent with top diverse Let's by capitalizing where remained a offset our line compensation in the was at on a passenger onetime tariff our leverage this line positive This CAAP's decreased revenues, X.X% of traffic, ex-IFRICXX mainly down XX% Total year-on-year, as of X. revenue X.X% in passenger remarkable $X.X performance while third million geographically strong received in partially Aeronautical momentum were country. in from in Uruguay, revenues saw revenues quarter achieved to we in Italy we

new non-Aeronautical estate Ecuador. revenues. offset with strong Moreover, VIP partially higher Importantly, in advertisement stable, X real our providing effective in revenues fuel lounges, in and remained and revenues X. The revenues objective catering lower decreased Argentina, X.X% in agreements, evidence recently year-on-year, where duty-free and secured Commercial This Uruguay further by performance in lower Italy, we Aeronautical domestic from impacted for passenger mainly approval received Argentina enhance was tariffs Brazil, in fairly our Armenia. increase a of and November we parking, revenues the by XXX% to revenues cargo

Now Argentina's above Slide reflecting local increased and turning in devaluation. to costs X. inflation the mainly was ex-IFRICXX X% expenses inflationary expenses currency Total year-on-year, as pressures operating rate

rates are in costs reminder, approximately on inflation have of Argentina which retroactive the XX% a denominated by than total As been current are that greater impacted in adjustments based rate. pesos,

remain challenging dynamics. focused on we we strict cost in controls, where Importantly, Argentina, to maintaining continue navigate macro particularly

a of the stable remainder the environment However, for year. more we anticipate

to This EBITDA ex-IFRICXX XX% Adjusted $XXX profitability EBITDA the year-on-year by related not compensation, in of saw agencies. fourth on had benefit did methodology was partially double-digit COVID another in which a due decline $X.X been the of in by quarter we performance on reversal a XXXX Moving from economic the that explained we contribution provision change of occur offset in a million, with Slide regulatory where was XXXX ultimately growth in to Argentina. Uruguay a obtained million adjusted the set to the we quarter Brazil, and positive largely X.

operations previously mentioned a encouraged We previous performance despite the very by to this to years. tariff related underlying our Italy facing in compensation difficult of are onetime due comparisons quarter in

million when Turning and Furthermore, period. compared $XX challenging our expenditures in paid flow liquidity generated generation, to while subsidiaries to a evidence operations Slide following XX% X XXXX. the will our of dividend flow we excess $XXX strength reported AAXXXX, solution CAAP Argentina. a robust during the quarter, X. cash million, closed we Argentine Supported of meeting cash with our year-end subsidiaries. by our Along the the up macro operating $XX position positive providing lines, from which of healthy million, activities months our approved commitments, operating of maintaining in these of to all of subsidiary, dynamics debt of levels Argentina, end cash capital quarter Despite be the total

and to on on debt Moving maturity profile XX. Slide

in in a strong, Argentina our ratio of headwinds Wrapping profile, leverage debt amortization healthy we my remains at early positioning as growth resulted Our well faced capitalize generation. end. up sheet, principal quarter stood XXXX, redemption The some on supported a the the to reduction cash from and quarter, well in end, on leverage balance by while of quarter opportunities. net at as scheduled in net future robust the X.Xx payments, us business second Armenia

commercial and to drive will view sustainable the the we forward, call remarks year. our create hand As who the discuss provide on will Martin, our we and move to to managing strengthening back growth our operations closing now for costs remain and focused of stakeholders. I remainder value

and conclude key we Slide our remarks, XX prepared opening to for turn questions for takeaways answers. the please As call before

traffic a to opportunities We diversification on geographic our on leveraging experienced helped back international performance difficult we remain overall growth traffic environment. focused in in in expat. our Italy portfolio, driving results macro with markets. software each Notably, the Argentina, of and strong Argentina across growth Brazil of Our combined partially revenue Uruguay, in commercial mitigate

we initiatives expanding has on In to Airport introduced add to are X,XXX arrivals which Argentina, new cover we meters spaces. services the a XXX Specifically, have parking XXX. on underway in at in area construction Uruguay, commenced square pleased additional Ezeiza terminal will at parking-related is that facility work and from duty-free new report Carrasco Airport parking

estate adjusted decline for approval commercial passenger at new continues the proposed strong position net our X real and Master contracts Brazil, growth. quarter finance the further historical Brasilia on CapEx Progress leverage ratio driving Italy were further key despite year-end. Airport, a mid-teen in the the lows aim and a in in expected signed and plan Airport with offerings by with cash elevating closed ex-IFRICXX. and concessions enhancing our Florence our negotiations Additionally, is airport in government on progressing EBITDA plans projects across Armenian experience. We and

Additionally, continue in expansion in creation. other with regions line assess our to commitment projects with we value

been that domestic tariff operational we as optimistic On to coming has provides increase Argentina, inflation This, a primary revenue more and between will while the support favorable reduction devaluation see the inflation months. the to context coupled receive, in and growth in with inflation gap continues challenge are and further the resilience. recent dynamics we both FX a the

passenger Additionally, for year Argentinas. the monitor the outlook to in of our we strong while bolster Aerolineas positive remainder continue further numbers with international situation closely October the

value balance our ongoing focused continuous and sheet across Thank you delivering results a flexibility growth healthy our prepared geographies. As shareholders. to initiatives for always, remain concludes This support trust support. This us we sustainable our solid on and financial diverse remarks. your creating financial enables for maintaining

questions. Operator, open are please your questions. We for line to now the ready take

Instructions] Jefferies. first comes Alejandro [Operator And your Demichelis from at question

Yes. Three may. questions, please, if I

seeing you The of question. these mentioned impact decides Argentina. please first indication if give potential things you the close to the can is, of the and you're That's monitoring us situation Aerolineas first the one Martin, down Could some Aerolíneas government where finally you're go? how

is were you terms give you on that review the of indicated the indication of last question on you an maybe expect can at construction? some third can we quarter, about And is you give update of kind what were Florence moment, can some where Airport please? the the you contract you agreement making in us progress Maybe question from talking the of of that are in Argentina. timing CapEx, us Second

you thank questions for your your interest. and Alejandro,

-- this different beyond very the itself situation. complicated and this what Argentinas' of of To operation take answer is X% me political terms context a means CAAP situation CAAP is is order. Let in consideration economics And are to has for each of in into in and Argentina give sense you Aerolíneas operations from XX%. is coming and revenues very the of our the about Argentinas also Aerolíneas

in company that that from one sustained X in growing. the So was the to and of business day that us were different can year as happen. I stop to the and Aerolíneas that me it the will XXXX, Even we operating you example year next. demand company operation, than our kept and same was what Montevideo the there for as airline, an travel. this following national on on a of the be can comment airport, for is EBITDA big recovery planning difficult years. but our operation for exactly course, an resilience and next was more impact, but for In the in which the stopped give twice remarks And of the situation,

resiliency business. happen. think to possibilities for remarks And I at example of that's on that way that what can the this a good look So a

Although, get good rather again, news Argentina. on the and situation I regarding situation different for in into that is we scenarios the everything would that very not see

the we impact to and increase presentation, years, War. that us begin and will the able of Italy And hopefully, which process, approval Regarding the construction runway creating And the destination. an that today is a which, the destinations Florence thus we for tourism will we possibility in would by to a way, be even of will Florence, us to environmental mean finish what permit by and build first realize said to new for the of the flights allow in we to after as possibility Florence, be the number magnificent That of allow year to tourist ask for construction. the twice as expect World Second have there. potential airport end many the many, in runway for that at new the will by us, the a least growing the

whole In timing and terms construction to and the new somewhere X which a terminals. X as includes project, we well, between expect of for runway take new the years

provision we this the the last we conduct that in of As We is delayed, is happening. we time -- now. a happening far know economic expecting the of It's government Argentina, this little to concession. contract the were as but the said re-equilibrium bit

And have to results. it of difficult together what until and we But regulator for results, us the be what work We that, the to forward, on communicated once it's we see are to be we not in making terms path those the have the ahead we are we the be waiting regulator with can me for but will And finish. by finished in the results. can path progress. on for it officially comment of

Recchia Fernanda from comes question next at The BTG.

here from Inaki, side. X Jorge, Martin, our

but First, been forward. performing performing a what well, lower. a on you I little going routes We routes domestic have want have on Argentina, seen bit traffic could comment to color are trends looking for XXXX? Maybe you international if have

regarding a leaving next been anticipate Brazil also, performing regions could if year? So [ what ] strongly, of that comment next Uruguay you such goal as year. has other And we Chapter we that should have XX for

sense maybe of good per is to negotiation a but the on second, of comment first Argentina, So bit the traffic in to. be it little more a would one. And just hear the my review trends the on tariff region

got XXXX? year? Just And was to now any next in agreement if that you still tariff to for is the wondering I domestic adjustment be further you clear, just expect related

much very Fernanda, Jorge here. Thank your for question. you

traffic with starting trends. So

on think has there positive routes sidelines. your Asia as that the you question. given in forward domestics new growth the been we dynamics the We several that Italy. chance going very not on is Uruguay some dynamics sidelines That past have international months. in first in Ecuador we to see on We Argentina, seeing was positive in in positive Brazil, see to continue see the as know. to a And been continue we past quarters, and dynamics Armenia in

than second question that? specific, Your anything was different

Yes.

tariff Regarding the expect market for understand the in wanted next you year? if for further to domestic second any revision one, I just Argentina

adjusted has about $X.X that's just not Yes, -- expect right. do tariff now, the domestic we the Sorry, tariff been Right any further to currently. adjustments.

Singh next Jay Citi. question from comes at The

dialing Stephen Singh on for Jay here. Trent

opportunities increase want thing to assets first see the I ask the AAXXXX The to region? you of is, do your the or else concession what anything on even duration maybe across

travel would mind hearing the you. Jay, question? repeating I'm having you

Yes, sure.

duration of concession another see the So to assets? across Maybe you the increase AAXXXX what regions? anywhere do or your else opportunities

for you Jay. thank questions, Well, Okay. your

major to the proposal the will Armenia demand in on presentation, in size future to us we the adjust the And for to see we that investments. demand. and investment are and environment airports said, of for right of the That the we current the is CapEx working enable talking a size we the capacity a as are to government create the concession. As such

expect we we an there investment. much close such make into main that how the that with a course, able difficult with and for the pull take levers us that is that investment one of will to to contract. to to to closing to barriers say one government, with of But government a main until of -- in And is exactly negotiation but have to the allow duration not negotiation positive So account the do how when Armenia. enable the the of such we it be have

to we asked and making in rebalance move of of terms with I as contracts the the But outcome the that will seen also the of that of guess we the the the that as possibilities will sure we concession depending what regulated from we of there to will us from be law is that different give action we conversations possible and is will we terms will And regulator. different that that Argentina, today, take result the have of subject revision ahead have. But to the having the are extensions in IRR ways commit be in regarding say the in have the can the of contract. the on results for in regulators options construction that case to the And needed. be will of that the the you case as in that the

Marina Securities. from The next at Latin [Operator comes question Instructions] Mertens

questions. X have I

one first Argentina. The is regarding

So domestic were say a as shown the are the boosted FX results will then more to that time traffic traffic program. that expect positive -- has than And second to rather in could you lower figures year's Do or recent year? traffic the eventually could by you commercial favorable levels year-over-year quarters, weaker domestic Do you last you declines last this and revenues and one, as that PreViaje eventually normalized compared could sustained performance? be mentioned over revenues offset results trend and negative improved continue. international from Argentina the the commercial international the this think

Thank you for questions. much so Hello, your Jorge here.

-- several few been tariffs, months the to ago. adjusted the been pointed in also you revenues, that out negatively -- related have The reasons. Argentina, of... X the of out, adjusted the X cargo in due we impacted the has has in last tariff few first few I'm a the domestic fact revenues, because been And to weeks domestic has -- inflation as just decline sorry, the the last in quarters, decline passengers the been So decline in in duty-free

to We back further at turn remarks. over closing time. I this questions the have will Eurnekian no for Martin call

your good Airports. take in you much, to that Thank please everybody is from Thank that América questions us I for And available anything interest and team to or thank a your company. remember today. very have our day. our might you want need Corporación for you joining always

we and and gentlemen, conference concludes you We today. for Ladies thank ask you disconnect this that your please for lines. participating, your