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01/11 04:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with increased revenues and EBITDA, despite some uncertainties. Passenger traffic and aeronautical revenues have grown, and net debt has decreased, indicating financial health. Although there are delays in Nigeria and unclear responses on tariff provisions, the company remains optimistic about international traffic and expansion plans. No dividends or buybacks were announced, but the focus on portfolio growth is positive. Given the market cap, the stock is likely to react positively in the short term.
Total Revenues $545 million, up 12.4% year-on-year, benefiting from consistent positive momentum in both the aeronautical and commercial business.
Aeronautical Revenues Increased 19.4% year-on-year, mainly driven by higher international passenger traffic in Argentina and tariff increases in Uruguay.
Commercial Revenues Increased 5.1% year-on-year, supported by growth in the majority of geographies and the impact of IAS29 in Argentina.
Revenue per Passenger $20.6, up 10% from $18.8 in Q1 2023, reflecting strong performance across various regions.
Adjusted EBITDA $163 million, up 16.4% year-on-year, with a margin expansion of 1.5 percentage points to 41.7%.
Total Costs and Expenses Increased 8.5% year-on-year, but remained below revenue growth, mainly due to higher salaries in Argentina and local inflation.
Total Debt $1.2 billion at quarter end, with net debt decreasing to $821 million from $964 million at year-end 2023.
Net Leverage Ratio Reduced to 1.2 times from 1.4 times at December 2023, reflecting sustained growth in adjusted EBITDA and reduced debt levels.
Total Liquidity Position $545 million, up $87 million compared to year-end 2023, primarily from positive cash flow from operating activities.
Punta del Este Airport Concession Agreement: Obtained a 10-year extension of the concession agreement for Punta del Este Airport in Uruguay, extending the term from 2023 to 2043.
Chinchero International Airport Arbitration: Received a final award from the ICSID Arbitral Court for the arbitration concerning Chinchero International Airport in Peru, requiring the Republic of Peru to pay $91 million to the consortium.
Adjusted EBITDA Growth: Adjusted EBITDA increased 16% year-on-year, reaching $163 million, with a margin expansion of 1.5 percentage points to 41.7%.
Revenue per Passenger: Revenue per passenger reached an all-time high of $20.6, up from $18.8 in Q1 2023.
Cost Management: Total costs increased 8.5% year-on-year, below revenue growth of 12.4%, indicating effective cost management.
Airport Expansion Negotiations: Continuing negotiations related to the expansion of airports in Uruguay and Florence, while assessing new expansion projects across different regions.
Ecuador's Security Contribution: Ecuador incurred a mandatory one-time contribution to the security of the country, impacting financial performance.
Brazilian Market Challenges: Traffic dynamics in Brazil were heavily impacted by financial and aircraft constraints at local airlines, along with rising ticket prices affecting travel demand.
Domestic Traffic in Argentina: Domestic passenger traffic in Argentina remained flat due to a challenging macro backdrop, despite international traffic growth.
Geopolitical Dynamics: The company is closely monitoring the macro and political environment in Argentina and geopolitical dynamics in the Caucasus region.
Chinchero International Airport Arbitration: The company is involved in an arbitration procedure concerning Chinchero International Airport in Peru, with a final award of $91 million pending from the Republic of Peru.
Concession Agreement Extension: Obtained a 10-year extension of the concession agreement for Punta del Este Airport in Uruguay, extending the term from 2023 to 2043.
ICSID Arbitration Award: Received a final award from the ICSID Arbitral Court for Chinchero International Airport in Peru, requiring the Republic of Peru to pay $91 million to the consortium.
Airport Expansion Negotiations: Continuing negotiations related to the expansion of airports in Uruguay and Florence, while selectively assessing expansion projects across different regions.
Revenue Growth: Expect continued positive dynamics in Uruguay and Italy contributing to overall growth.
Market Monitoring: Closely monitoring macro and political environment in Argentina and geopolitical dynamics in the Caucasus region.
Financial Commitment: Committed to maintaining a healthy balance sheet and delivering strong results for shareholders.
Shareholder Return Plan: The company has not explicitly mentioned a shareholder return plan, such as a share buyback program or dividend program, during the earnings call.
The earnings call reveals a mixed picture: strong revenue growth in Argentina and Italy despite currency challenges, but significant cost increases and margin contractions. The Q&A section indicates potential growth opportunities in Montenegro and Angola, yet concerns remain over regulatory issues and unclear management responses. The steady net leverage ratio and shareholder focus on growth are positive, but inflationary pressures and supply chain challenges weigh negatively. Given the market cap, the stock price is likely to remain stable, resulting in a neutral sentiment.
The earnings call summary indicates several challenges, including declining passenger and cargo revenues, inflationary pressures, and competitive issues in Argentina. Although there is a positive outlook in other regions and a strong liquidity position, the Q&A section reveals uncertainty about key factors like Aerolineas Argentinas' potential closure and the CapEx proposal. The lack of clear guidance and declining financial metrics contribute to a negative sentiment, despite some positive elements like dividend distribution and liquidity improvement.
The earnings call presents a mixed picture. Positive aspects include stable revenues, a strong liquidity position, and growth in Italy and Uruguay. However, challenges in Argentina due to recession and inflation, along with a decline in adjusted EBITDA, weigh negatively. The Q&A reveals optimism about deregulation in Argentina but lacks clarity on tariff adjustments. The market cap indicates moderate sensitivity to news. Overall, the sentiment is neutral, with positive elements balanced by significant regional challenges.
The earnings call reveals strong financial performance with increased revenues and EBITDA, despite some uncertainties. Passenger traffic and aeronautical revenues have grown, and net debt has decreased, indicating financial health. Although there are delays in Nigeria and unclear responses on tariff provisions, the company remains optimistic about international traffic and expansion plans. No dividends or buybacks were announced, but the focus on portfolio growth is positive. Given the market cap, the stock is likely to react positively in the short term.
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