• Revenue ex-IFRIC12: Decreased 4.2% year over year.
• Revenue per Passenger: Consistent at $19.
• Adjusted EBITDA ex-IFRIC12: $145 million, a 16% year-on-year decline.
• Net Leverage Ratio: 0.9 times at quarter end.
• Total Liquidity Position: $605 million, up 32% compared to year-end 2023.
• Passenger Traffic: Declined 4% year on year, or 1.5% excluding Natal.
• Domestic Passenger Tariffs in Argentina: Increased by 124%, effective November 1.
• Dividend Distribution by AA2000: $80 million approved, with $68 million to CAAP subsidiaries.
• Cargo Volumes: Increased 4.4% year on year.
• Cargo Revenues: Declined 12% year on year.

• Warning! GuruFocus has detected 4 Warning Signs with CAAP.

Release Date: November 21, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Corporacion America Airports SA (NYSE:CAAP) maintained a strong cash flow and solid balance sheet, with net leverage at record lows, providing financial stability and flexibility for growth opportunities.
• The company received approval for a 124% increase in domestic passenger tariffs in Argentina, effective November 1, which will support local operations.
• International traffic in Argentina showed strong performance, supported by additional routes and flight frequencies.
• Operations in Uruguay, Brazil, and Italy contributed positively, highlighting the resilience of CAAP's diverse geographic portfolio.
• The company secured three new real estate agreements in Brazil, enhancing non-aeronautical revenues and commercial offerings.

Negative Points

• Revenues excluding IFRIC12 decreased by approximately 4% year over year, in line with lower passenger volumes.
• Adjusted EBITDA declined in the mid-teens year over year, primarily due to macroeconomic challenges in Argentina.
• Duty-free sales were lower compared to the previous year, impacted by the disparity between official and parallel exchange rates.
• Total passenger traffic declined by 4% year on year, driven by soft demand for domestic travel in Argentina.
• Cargo revenues declined by 12% year on year, largely due to lower revenues in Argentina.

Q & A Highlights

Q: Can you provide insights on the potential impact if the government decides to close down Aerolineas Argentinas? A: Martin Eurnekian, CEO, explained that Aerolineas Argentinas contributes about 6% of CAAP's revenues and 15% of its operations in Argentina. He highlighted the resilience of the business, citing a past example where a national airline ceased operations, yet the company continued to grow. The situation is complex and politically sensitive, making it difficult to predict exact outcomes.

Q: What can we expect from the Florence Airport agreement in terms of CapEx and construction timing? A: Martin Eurnekian, CEO, stated that they expect to complete the approval process by year-end, allowing for the construction of a new runway and terminals. This project aims to double the airport's capacity, with construction anticipated to take two to three years.

Q: Could you provide an update on the review of the contract in Argentina? A: Martin Eurnekian, CEO, mentioned that the government is currently conducting an economic re-equilibrium review of the concession. Although delayed, progress is being made, and they await official results to determine the next steps.

Q: What are the traffic trends expected for 2025, particularly in Argentina and other regions? A: Jorge Arruda, CFO, noted positive dynamics in Uruguay, Brazil, and Italy, with potential growth in Armenia. In Argentina, international traffic is performing well, but domestic routes are weaker. No further domestic tariff adjustments are expected for next year.

Q: Are there opportunities to extend the duration of your concession assets, such as AA2000? A: Martin Eurnekian, CEO, indicated that they are negotiating with the Armenian government for a CapEx proposal, which may involve extending the contract duration. In Argentina, potential extensions depend on the outcome of regulatory reviews and economic re-equilibrium assessments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.