Corporacion America Airports(CAAP) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a record high adjusted EBITDA of $140.6 million, which is 20% above the first quarter of 2019, with an EBITDA margin of 40.2%, up 150 basis points from the same quarter in 2019 [8][18] - Total revenues, excluding IFRIC12, grew 43% year-on-year and surpassed pre-pandemic levels by 16% [36] - The net leverage ratio improved to 2.1x from 2.4x at the end of 2022, reflecting stable net debt and strong adjusted EBITDA growth [9][19] Business Line Data and Key Metrics Changes - Aeronautical revenues increased by 56% year-on-year, reaching pre-pandemic levels for the first time, driven by strong traffic growth in Argentina and double-digit increases in Armenia [15] - Commercial revenues, a key driver for top-line growth, were up 29% year-on-year and 40% above pre-pandemic levels, benefiting from duty-free and parking revenues in Argentina [37] - Revenue per passenger increased by 29% from $14.6 in the first quarter of 2019 to $18.8 this quarter [16] Market Data and Key Metrics Changes - Passenger traffic in Armenia was up 81% compared to the first quarter of 2019, exceeding pre-pandemic levels for four consecutive quarters [11] - In Argentina, passenger traffic reached nearly 93% of pre-pandemic levels, with domestic travel above 2019 levels by 7% [12] - Traffic in Italy reached 91% of 2019 levels, improving to 98% in April, while Brazil's traffic reached 86% of pre-pandemic levels during the quarter [13] Company Strategy and Development Direction - The company is focused on expanding its airport network, with ongoing negotiations for new concession agreements in Nigeria and analyzing additional airport concession investments [23] - The new departure terminal at Ezeiza Airport in Argentina is a significant milestone, enhancing passenger experience and operational efficiency, powered 100% by renewable energy [2][43] - The company is committed to sustainability and is in discussions for a new CapEx plan in Armenia to increase capacity [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sustained recovery in travel demand, with passenger traffic already at 95% of pre-pandemic levels in April [10][45] - The company remains cautious about the challenging macro environment but is encouraged by strong global travel demand and a solid financial position [24] - Management believes that inflation and currency devaluation in Argentina will converge over time, mitigating long-term concerns [60] Other Important Information - Total costs and expenses, excluding IFRIC12, increased by 11% compared to 2019, primarily due to higher fuel costs in Armenia and increased salaries in Argentina [17] - The company ended the quarter with a total liquidity position of $455 million, with positive cash flow from operations in all geographies except Italy [40] Q&A Session Summary Question: What measures is the company taking regarding high inflation and potential currency devaluation in Argentina? - Management noted that over 85% of revenue is linked to dollars, and they expect inflation and devaluation to converge over time, indicating no significant long-term concerns [60] Question: Can you discuss the new terminal at Ezeiza and its impact on international flight connectivity? - Management highlighted a steady growth in international connection flights since the lifting of pandemic restrictions, with positive trends in both Ezeiza and Aeropark airports [54] Question: What is the long-term CapEx outlook? - Management indicated a mandatory CapEx of $50 million per year for the next four years in Argentina, with additional CapEx dependent on economic conditions [50]