Corporacion America Airports SA Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Q4 Performance: Strong performances in most markets; Argentina's domestic traffic rebounded in December, with January and February showing positive momentum. Cargo volumes saw a 16% Y/Y increase.
• Financials: Revenues down 0.6% Y/Y, adjusted EBITDA down 6.7% Y/Y, but other markets contributed positively. Liquidity remained robust, and debt profile was healthy.
• Strategic Initiatives: Advancing projects in Argentina (expanding duty-free area at Ezeiza Airport), Brazil (logistics center, lifestyle center), Uruguay (private aviation terminal), Italy (EUR425 million master plan for Florence Airport), and Armenia (progressing on $425 million CapEx program).

Segment Performance

• Passenger Traffic: Total passengers in 2024 reached nearly 80 million, with ~20 million in the fourth quarter. Argentina's domestic traffic softened but international traffic rose 11.3%. Italy, Uruguay, and Brazil showed positive trends. Cargo volumes accelerated 16% year-over-year in Q4.
• Revenues: Total revenues excluding IFRIC12 were slightly down 0.6% year-over-year. Aeronautical revenues increased 1.7% Y/Y, while commercial revenues declined 2.9% Y/Y.
• Adjusted EBITDA: Adjusted EBITDA excluding IFRIC12 was $151 million, a 6.7% year-over-year decline, impacted by Argentina's soft performance but offset by strong contributions from other markets like Uruguay and Italy.
• Liquidity and Debt: Total liquidity closed the year at $526 million, up 15% from year-end 2023. Net debt decreased to $718 million, with a net leverage ratio of 1.1 times.

Guidance

• 2025 Outlook: Cautiously optimistic about Argentina, expecting domestic traffic recovery. Traffic trends in early 2025 are promising, with consolidated mid-single-digit growth anticipated.
• Inorganic Growth: Looking at diverse growth opportunities in regions including the Middle East, Africa, Europe, and Latin America, with a strengthened M&A team.

Risks

• Argentina Market Dynamics: Challenging market conditions impacting costs and revenues.
• Brazil Aviation Sector: Ongoing challenges in aircraft availability affecting traffic.
• Regulatory Uncertainty: Uncertainty around the timeline for Argentina's concession review process.

Question and Answer Q: Alejandro Demichelis asked about the concession review process in Argentina and inorganic growth opportunities.

A: Martin Eurnekian stated Argentina's concession review is expected during 2025, and inorganic growth is being pursued in diverse regions including the Middle East, Africa, Europe, and Latin America.

Q: Fernanda Recchia inquired about 2025 traffic trends and progress on projects in Armenia and Italy.

A: Martin Eurnekian noted Argentina's traffic trends are positive, Brazil's traffic (excluding Natal) is growing, and Armenia/Italy projects are progressing with approvals awaited and technical advancements made.

Q: Stephen Trent asked about weighing growth opportunities and contract extensions.

A: Martin Eurnekian said opportunities are evaluated on a case-by-case basis, and contract extensions are explored to create value for all stakeholders.