Corporacion America Airports’ Earnings Call Highlights Growth

Corporacion America Airports ((CAAP)) has held its Q1 earnings call. Read on for the main highlights of the call.

Corporacion America Airports recently held its earnings call, showcasing a robust performance marked by significant passenger traffic growth, financial stability, and strategic expansion efforts. The sentiment was largely positive, bolstered by recognition through awards and strategic initiatives in new markets. However, challenges such as cost management issues and the impact of currency devaluation were notable concerns.

Strong Passenger Traffic Growth

The company reported a remarkable increase in total passenger traffic, which grew by over 7% year-over-year, or more than 9% when excluding the discontinued Natal concession. International traffic saw a nearly 13% rise, primarily driven by strong performances in Argentina and Italy.

Record Traffic Levels in Argentina and Uruguay

Argentina and Uruguay both achieved record traffic levels, with Argentina reaching new heights in January and Carrasco airport in Uruguay also hitting a record high during the same month.

Revenue and Adjusted EBITDA Growth

Corporacion America Airports experienced a 6% increase in revenues year-over-year, and nearly 12% on an ex-IAS29 basis. Adjusted EBITDA reached $156 million, marking a 4% increase when excluding IAS29.

Solid Financial Position

The company maintained a strong liquidity position with $524 million available and a stable net leverage ratio of 1.1 times, underscoring its financial resilience.

Positive Developments in Cargo

Cargo volumes increased by 9% year-over-year, with Uruguay and Argentina leading the charge. A new cargo business model in Argentina is anticipated to further boost revenue growth.

Expansion and Strategic Growth

Corporacion America Airports is actively pursuing expansion opportunities, with proposals submitted in Montenegro and Angola, reflecting its strategic growth ambitions across multiple geographies.

Recognition and Awards

Several airports under the company’s management received prestigious awards, including Carrasco International Airport in Uruguay, which was named the best airport in Latin America and the Caribbean in its category.

Challenges in Cost Management

The company faced a 17.7% year-over-year increase in total costs and expenses, excluding IFRIC12, driven by inflationary pressures in Argentina and higher maintenance costs in Italy.

Currency Devaluation Impact

Local currency devaluations in Brazil and Italy negatively impacted the reported revenues in US dollars, posing a challenge to the financial results.

Concession Agreement Uncertainty

Negotiations with the Argentine government regarding the AA2000 concession agreement’s economic equilibrium are ongoing, with potential delays due to changes in government and regulatory bodies.

Forward-Looking Guidance

Looking ahead, Corporacion America Airports anticipates a strong start to the year, with passenger traffic and revenue growth expected to continue. Despite challenges from currency devaluations, the company maintains a stable revenue per passenger and a strong financial position, enabling ongoing strategic growth and expansion opportunities.

In conclusion, Corporacion America Airports’ earnings call highlighted a positive outlook, driven by strong passenger traffic growth, strategic expansion, and financial stability. While challenges such as cost management and currency devaluation persist, the company’s proactive strategies and recognition in the industry position it well for future success.