Q1 2024 Corporación América Airports SA Earnings Call
Operator: Good morning, and welcome to the Corporacion America Airports first quarter 2024 conference call. A slide presentation accompanies today's webcast and is available in the investor section of the Corporacion America Airports website. As a reminder, all participants are in a listen-only mode. There will be an opportunity to ask questions at the end of the presentation. At this time, I would like to turn the call over to Patricio Iaki Esnaola, Head of Investor Relations. Patricio, please go ahead.
Good morning, and welcome to the corporate US Young America airports first quarter 2024 conference call.
The slide presentation accompanies today's webcast and is available in the investors section of the Corporacion America airports website. As a reminder, all participants are in a listen only mode. There will be an opportunity to ask questions at the end of the presentation.
Speaker Change: At this time I would like to turn the call over to Patricio and Yucky NOLA head of Investor Relations.
Speaker Change: Chris you. Please go ahead.
Patricio Iaki Esnaola: Thank you. Good morning, everyone, and thank you for joining us today.
Speaker Change: Thank you.
Speaker Change: Everyone. Thank you for joining us today.
Speaker Change: Speaking during today's call will be Martin email them again, our chief Executive Officer and.
Speaker Change: Our Chief Financial Officer.
Patricio Iaki Esnaola: Speaking during today's call will be Martn Arnequn, our Chief Executive Officer, and Jorge Arruda, our Chief Financial Officer. Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, and I refer you to the forward-looking statement section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. Please note that throughout this call, all references to revenues, costs, adjusted EBITDA, and margin will refer to figures excluding IFRIC 12. I will now turn the call over to our CEO, Martin Ornekian.
Before we proceed I would like to make the following safe Harbor statement today's call will contain forward looking statements and I refer you to the forward looking statements section of our earnings release, and we can filings with U S. C C.
Speaker Change: We assume no obligation to update or revise any forward looking statements to reflect new or can't events or circumstances.
Speaker Change: Please note that throughout this call all references to revenues cost adjusted EBITDA unlocking we refer to figures, excluding I think 12 I will.
Speaker Change: Now I'll turn the call over to our CEO Martine I wouldn't again.
Martin Francisco Antranik Eurnekian Bonnarens: Thank you again. Hello everyone, and welcome to our first quarter 2024 earnings call. I will start today's presentation with some overall highlights on our first quarter performance. I will then hand it off to Jorge, who will provide additional details in his financial review before we open the call for questions.
Speaker Change: Thank you Hello, everyone and welcome to our first quarter before where he's going.
Speaker Change: I will start today's presentation with some highlights.
Speaker Change: First quarter's performance.
Speaker Change: I will then have you don't quote a game we provide additional detail.
Speaker Change: And then she'll give you before we open the call for questions.
Martin Francisco Antranik Eurnekian Bonnarens: I am pleased with the good start to the new year. We delivered a positive quarter with revenues up in the low double digits against the same quarter last year and meeting passenger traffic growth. Our continued focus on commercial execution is posting good results, with revenues per passenger continuing to expand, reaching $20.6 this quarter, an all-time high since our IPO in 2018 in a normalized environment. As a reminder, there were a few quarters in 2020 where passenger figures were significantly reduced due to the pandemic, resulting in artificial revenues per passenger figure, reflecting our consistent focus on execution and healthy travel demand, adjusted for that, increased further by 16% year-on-year reaching $163 million, while the margin expanded 1.5 percentage points as we continue to gain operational leverage.
Speaker Change: I am pleased with the good start to the new year.
Speaker Change: Deliver a positive quarter with revenue up.
Speaker Change: In the low double digits I guess, the things like the last year.
Speaker Change: I think they've got big growth.
Speaker Change: Our continued focus on commercial execution is posting good results with revenues per passenger continues to expand reaching $6 this quarter.
Speaker Change: All time high since the IPO is going to be even ignore my vitamin I should remind you that of what people want but it seems like it wouldn't be worth passenger figures will significantly reduce the deal dynamics, resulting in additional revenues per passenger figures.
It's been a consistent focus on execution and healthy demand but.
Speaker Change: Adjusted EBITDA increased up 16% year on year to $163 million, while the margin expanded one five percentage points as we continued to gain operational leverage.
Martin Francisco Antranik Eurnekian Bonnarens: This performance was supported by all geographies, with the exception of Ecuador, which incurred a mandatory one-time contribution to the security of the country. Moreover, a robust balance sheet with a leverage ratio at an all-time low underscores our commitment to ensuring financial strength while providing flexibility to support growth initiatives.
Speaker Change: <unk> performance was supported by all geographies with the exception of bad weather, which incurred in the mandatory onetime confusion.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Moreover, our robust balance sheet with a level that's great deal I've been all they know underscores our commitment to ensuring financial strength, while providing flexibility to support growth initiatives.
Speaker Change: Noteworthy.
Martin Francisco Antranik Eurnekian Bonnarens: We recently signed an amendment to our Punta electric concession agreement that includes, among other things, the extension of the term of the concession agreement for a 10-year period from 2033 to 2043. Please turn to page 4 for a review of passenger traffic trends. Our airports benefited from a sustained recovery in travel demand underpinned by higher load factors and the gradual return of flight routes and frequencies across our operations. On a comparable basis, and excluding Natal Airport, for which we exited the concession this February as previously disclosed, passenger traffic increased 4.3% year-on-year.
Speaker Change: We recently signed an amendment to our wound dialectical insertion agreements that include among other things the extension of the concession agreement for a 10 year period from 233.
Speaker Change: Reporting to me.
Speaker Change: Please turn to page four for a review of passenger traffic trends.
All airports benefitted from a sustained recovery, but I wouldn't be money underpinned by higher load factors and the gradual return of flight routes and frequencies across all operations.
Speaker Change: When it comes but only basis and.
Speaker Change: And excluding that that airport in which we actually bid on search and display already experienced.
Speaker Change: East Coast passenger traffic increased one 3% year on year.
Martin Francisco Antranik Eurnekian Bonnarens: The road was mainly driven by international passengers, which increased in the low teens while domestic traffic remained flat. Moving on to some color by country, starting with Argentina, our main market, which delivered a 5.3% year-on-year increase in passenger traffic. The growth of the road transport sector was underpinned by international traffic, up nearly 16 percent, reflecting increased weekly frequencies from ETA Airways, Aeromexico, and Emirates, while JetSmart and Paranair announced the launch of new routes. However, domestic passenger traffic remains flat in the context of a challenging macro backdrop.
Speaker Change: It was mainly driven by international passengers, which increased in the low teens when domestic traffic remained flat.
Speaker Change: Moving on to some color by country dumping we'd have been seen in our main market, which delivered a 543% year on year increase in passenger traffic.
Speaker Change: Both was underpinned by international traffic up nearly 16%.
Speaker Change: Collecting.
Speaker Change: We keep rigorous discipline, either anyway out of Mexico, and Ann Rhoads.
Speaker Change: Get smart and plan and announced.
Speaker Change: The launch of new routes.
Domestic passenger traffic remained flat in the context of a challenging.
Speaker Change: The macro backdrop.
Martin Francisco Antranik Eurnekian Bonnarens: Recall that while domestic traffic comprises 65% of total traffic in the country, over 90% of passenger use fees are generated by international traffic and are publicly linked to U.S. dollars. The positive trend continued into April when international passenger traffic grew by 9.3% against the same month last year. Next, Italy, where passenger traffic was up nearly 14% year-on-year. This good performance was mainly driven by a 17% increase in international traffic and mid-single-digit growth in domestic traffic.
Speaker Change: Recall that while domestic traffic comprises up 65% dropping in the country over 90% of passenger use suites generated by international traffic and then leave the U S dollar.
Speaker Change: But mostly the Brent convenient and great Bruce when international passenger traffic.
Speaker Change: By nine 3% against the same month last year.
Speaker Change: Next Italy.
Speaker Change: Where passenger traffic was up nearly 14% year on year. This good performance was mainly driven by a 17% increase in international traffic and mid single digit growth in domestic traffic.
Martin Francisco Antranik Eurnekian Bonnarens: Both Florence and Pisa Airport delivered solid traffic growth, while some domestic destinations have yet to resume at Pisa Airport. This positive trend continued in greater when passenger traffic grew by 12% yearly. Uruguay also posted strong traffic growth, up 29% benefiting from the addition of new routes and frequencies. This positive trend continues into April, while JetSmart and Sky have both announced new routes starting in May. By contrast, traffic was quicker in Armenia, Ecuador, and Brazil.
Speaker Change: Laurence and Pisa Airport delivered solid traffic growth was some domestic destinations have yet to resume besides though.
Speaker Change: This positive trend continued into April when passenger traffic grew by 12% year on year.
Speaker Change: You're right only posted strong traffic growth.
Speaker Change: 9% benefiting from the addition of new routes and frequencies.
Speaker Change: Supposed to be trend continued into April where you get smart and Sky have both announced new routes starting in May.
My last topic was weaker in Armenia and risky.
Martin Francisco Antranik Eurnekian Bonnarens: Armenia posted relatively flat traffic, following its significantly strong performance over the past couple of years. In April, total traffic was down 4% versus the same month of last year. In Ecuador, traffic declined by nearly 3% driven by weaker domestic traffic following the exit of a local airline in October last year, while international traffic was up 1%. Traffic in April was down 6% year-on-year, as weaker domestic traffic more than offset a 2% increase in international traffic.
Armenia posted.
Speaker Change: Topic following a significantly strong performance over the past couple of years in April total traffic was down 4% versus the same month of last year.
Speaker Change: In April the topic.
Speaker Change: Traffic declined 3% driven by weaker domestic traffic following the exit of a local airline yolked over last year.
Speaker Change: Nothing like that I think was up 1%.
Speaker Change: So I think in April it was down 6% D&O, New York actually weaker domestic traffic more than offset a 2% increase in international.
Martin Francisco Antranik Eurnekian Bonnarens: Lastly, in Brazil, traffic dynamics remain heavily impacted by financial and aircraft constraints at some local airlines, which together with the rising ticket prices affect travel demand, resulting in a comparable year-on-year decline of nearly 2% when excluding other. This challenging industry environment continues into April. Moving on to slide five. Tiger Volumes continue to recover and were up in the low single digits year on year. Armenia, Ecuador, and Argentina were the main drivers behind cargo volume growth this quarter, while the other geographies posted a slight decline. Cargo revenues, in turn, increased 6% in the quarter, with year-on-year improvements in all countries of operation.
Speaker Change: Gasoline indebtedness.
Speaker Change: But I think dynamics remained heavily impacted by if I mentioned and I've got the train.
Speaker Change: Look at airlines, which together with the rising gas prices affect the mine, resulting in a comparable year on year decline.
Speaker Change: <unk> of nearly 2% when excluding not identical.
Speaker Change: These challenging industry environment continued into April.
Speaker Change: Moving on to slide five.
Speaker Change: David Williams continues to recover.
Speaker Change: And more up in the low single digits year on year and linear like weather in Argentina, what are the main drivers behind cargo volume growth this quarter.
Speaker Change: The other geographies posted slight declines.
Speaker Change: Our revenues have increased.
Speaker Change: Increased 6% in the quarter.
Speaker Change: Year on year improvements in all countries of operations.
Speaker Change: I will now hand off the call to Cook it.
Speaker Change: Our financial results. Please go ahead.
Martin Francisco Antranik Eurnekian Bonnarens: I will now hand off the call to call again. We'll review our financial results. Please, go ahead.
Jorge Arruda Filho: Thank you, Martino, and good day, everyone. Let's start with our top line on slide 6. Total revenues per extra week increased 12.4% year-on-year. This was well above the 4.3% passenger traffic growth ex-Natal for the quarter, benefiting from consistent positive momentum in both the aeronautical and commercial business. Aeronautical revenues were up 19.4% year-on-year, mainly driven by higher international passenger traffic in Argentina and tariffs included in Uruguay. However, importantly, aeronautical revenue growth remained robust across the board, also supported by strong performance in Italy, Ecuador, and Armenia, which delivered double-digit year-on-year growth in the first quarter of 2024. Commercial revenues increased by 5.1%.
Speaker Change: Thank you Martina and good day, everyone, let's start with our top line on slide six total revenue increased 12, 4% year on year.
Cook: This was well above the four 3% passenger traffic growth external power for the quarter.
Cook: Benefiting from consistent positive momentum in both <unk>.
Cook: Political and commercial.
Cook: There are multiple variables.
Well up 19, 4% year on year, mainly driven by higher international passenger traffic nursing, Tina and tariffs, including Mcguire.
Cook: I will now optical revenue growth remained robust across the board also supported by a strong performance in Neuquen, Ecuador, and Armenia, which delivered double digit year on year growth in the fourth quarter of 2024.
Cook: Commercial revenues increased five 1%.
Jorge Arruda Filho: Year-on-year benefits from growth in the majority of our geographies and the impact of ES-29 in Argentina. We saw a strong performance in Brazil, while in Italy, mainly driven by higher VIP carbon advertisement revenues. This was partially offset by lower duty fuel revenues in Argentina impacted by the December 2023 PESA devaluation and by lower fuel-related revenues in Armenia.
Cook: Year on year benefit from growth in the majority of our geography.
Speaker Change: And the impact of ESOP 90 in Argentina, we saw a strong performance in Brazil, Uruguay, and depending mainly driven by higher V. A P. Probably women's wear ties ratings. This was partially offset by lower DTC revenues margin impacted by the December 'twenty 'twenty further devaluation and by lower fuel.
Speaker Change: Related revenues.
Jorge Arruda Filho: Combined, these factors contributed to a 10% increase in revenue per passenger to $20.6 this quarter, up from $18.8 in the first quarter of 2023. Turning to slide seven, total cost and expenses for week 12 increased 8.5% year-on-year, generally following the growth of our business, but nonetheless remained below the 12.4% revenue growth. This was mainly explained by higher salaries in Argentina, and the local inflation rate was above average currency depreciation, coupled with higher concession fees in line with increased year-on-year activity. However, this was partially offset by a decrease in fuel costs in Armenia due to lower fuel sales in the quarter.
Speaker Change: Combined.
Speaker Change: These factors contributed to a 10% increase in revenue per passenger to $26. This quarter up from 18.8 dollars in the first quarter of 2019.
Speaker Change: Turning to slide seven total cost and expenses ex <unk> 12 increased eight 5% year on year generally follow.
Speaker Change: For our business, but nonetheless remain below the 12, 4% revenue growth. This was mainly explained by higher salaries in Argentina, and the local inflation rate was above average currency depreciation coupled with higher concession clothing line, which increased year on year activity.
Speaker Change: This was partially offset by a decrease in Q crossing more anemia due to lower sales in the course.
Jorge Arruda Filho: Notably, As a statement to our streamlined cost structure, we experienced material reductions in office with passing in Argentina, Italy, and Uruguay. Moving on to profitability on slide 8. Our top-line growth continued to drive operating leverage, and we resulted in solid adjusted EBITDA growth and margin expansions in the quarter. I just released the Ex-Fleet 12 totaled $163 million, up 16.4% year-on-year, well above the 4.3% growth in passenger traffic ex-Natal. This contributed to a 1.5% percentage point expansion in adjusted data margin to 41.7% in the quarter.
Speaker Change: Normally.
Speaker Change: As a statement to our streamline cost structure, we experienced material reductions in August passenger Argentina, Italy in little rock.
Speaker Change: Moving on to profitability on slide eight our top line growth continued to drive operating leverage resulted in a solid adjusted EBITDA growth and margin expansion in the quarter.
Speaker Change: Adjusted EBITDA ex <unk> 12 totaled $163 million.
Speaker Change: 16, 4% year on year, well above the four 3% growth in passenger traffic X months.
Speaker Change: This contributed to a one 5% percentage points expansion in adjusted EBITDA margin to 41, 7% in the court.
Jorge Arruda Filho: Moreover, except for Ecuador, we maintain strong momentum across all countries achieving adjusted EBITDA growth that exceeds the increasing traffic and margin expansion. I would like to highlight the exceptional performance of our business in Uruguay, where adjusted EBITDA increased 36% primarily driven by solid passenger traffic growth, combined with higher tariffs, VIP lounges, and Turn to slider Supported by our strong cash flow generation, we closed the quarter with a total liquidity position of $545 million, up $87 million when compared to year-end 2023, with most of our operating subsidiaries reporting positive cash flow from operating activities.
Speaker Change: Moreover, except for Ecuador, we maintained strong momentum across all countries, achieving adjusted EBITDA growth that exceeded the increasing traffic and margin explanation I would like to highlight the exceptional performance of our business model right, where adjusted EBITDA increased 36%, primarily driven by solid.
Speaker Change: Passenger traffic growth combined with higher targets, VIP lounges, and gluten free ratings.
Speaker Change: Turning to slide nine.
Speaker Change: Portal by our strong cash flow generation, we closed the quarter with a total liquidity position of $545 million.
Speaker Change: $87 million, one compared to year end 2023, with most of our or even for the teachers reporting positive cash flow from operating activities.
Jorge Arruda Filho: Moving to the Debt and Maturity Profile on Slide 10, total debt at quarter end was $1.3 billion, while our net debt decreased to $821 million from $964 million at year-end 2023. We remain committed to maintaining a robust balance sheet and a healthy debt profile. Sustained growth in adjusted debt and a reduction in debt levels have contributed to further reducing our net leverage ratio. Bring it down to 1.2 times from 1.4 times in December 2023.
Speaker Change: Moving to the debt and maturity profile on slide 10.
Speaker Change: Total debt at quarter end was $1 $2 billion, while our net debt decreased to $821 million from $964 million at year end 2019, we remain committed to maintaining a robust balance sheet and healthy debt profile.
Speaker Change: Same growth in that Jacob you can net reduction in debt levels and contribute to further reducing our net leverage ratio.
Speaker Change: We didn't get down to one two times from one four times at December 20th Fantasy wrapping up from my side.
Jorge Arruda Filho: Wrap me up from my side. I also would like to highlight that despite certain headwinds mentioned herein, we believe in growth in revenues, revenues per passenger, EBITDA, and EBITDA margin without any real expansion in our costs. And please look at the performance of our portfolio. I will now hand the call back to Martin, who will provide closing remarks and discuss our views for the evening.
Speaker Change: I also would like to highlight that despite certain headwinds nation.
Speaker Change: We delivered growth on revenues revenues per passenger.
Speaker Change: And the EBITDA margin without any real expansion our cost I'm pleased with the performance of our portfolio.
Speaker Change: Yeah.
Speaker Change: I will now hand, the call back to Martin, who will provide closing remarks and discuss how all of you for being here.
Martin Francisco Antranik Eurnekian Bonnarens: Now, to wrap up, please turn to Slide 12. We started the year on a positive footing, delivering solid performance across key operational and financial metrics; higher operating leverage contributed to drive sustained background and margin expansion and a record low net leverage rate. Advancing on our strategic priorities. We met two milestones this quarter. First, we obtained a ten-year extension of the concession agreement of our Punta del Este airport in Uruguay. Second, we have recently been notified by the ICSID Arbitral Court of the final award pertaining to the arbitration procedure concerning the Chinchero International Airport in Peru.
Martin: Now to wrap up.
Martin: Turn to slide 12.
Martin: We started the year on the books of the pudding delivering solid performance across key operational and financial metrics.
Martin: Higher operating leverage contributed.
Martin: But I have to sustain that growth and margin expansion and a record low net leverage ratio.
Martin: And dancing on ice <unk> priorities.
Speaker Change: Two milestones this quarter.
Speaker Change: We obtained a 10 year extension.
Speaker Change: The concession agreement of the airports in Uruguay.
Speaker Change: Second we have recently been notified by the <unk>.
Speaker Change: C S I D I b.
Speaker Change: Out of the final award pertaining to the arbitration procedure concerning that in kidney International Airport in Peru.
Martin Francisco Antranik Eurnekian Bonnarens: Demonstrating the Republic of Peru to pay a gross amount of $91 million to the consortium, in which we hold a 50% economic interest. We continue to advance in connection with the negotiations related to the expansion of our airports in Geneva and Florence. At the same time, we continue to selectively assess expansion projects across different geographic regions to further expand our airport network.
Speaker Change: Definitely the.
Speaker Change: Good day, and rough amount of $91 million to the consortium in which we own a 50% economic interest.
Speaker Change: We continued to advance in connection with the negotiations related to the expansion of what airports.
Speaker Change: At the same time, we continued to selectively access expansion projects across different geographic regions.
Speaker Change: Expanding our airport network.
Martin Francisco Antranik Eurnekian Bonnarens: We continue to witness positive dynamics in Uruguay and Italy, which have been contributing to our overall growth. Despite facing challenges in the Brazilian market, we have successfully managed our business throughout this challenging cycle of EBITDA growth. We are closely monitoring the macro and political environment in Argentina, a concession we have successfully managed for over 25 years, as well as the geopolitical dynamics in the Galapagos region. We remain committed to delivering strong results, maintaining a healthy balance sheet, and creating value for our shareholders. Thank you for your continued support and confidence in our company. These ants are preparing marks. We are ready to take your questions. Operator, please open the lines for questions.
Speaker Change: We continue to witness positive dynamics in your way in Italy.
Speaker Change: Which had been contributing to our overall growth.
Speaker Change: Despite facing challenges in the gasoline market, we have successfully managed our business through this challenging cycle boasting EBITDA growth.
Speaker Change: We are closely monitoring the macro and political environment in Argentina, a concession we have successfully manage well over 25 years.
Speaker Change: What else would deal with it because of that mix in the Gulf Coast region.
Speaker Change: We remain committed to delivering strong results, maintaining a healthy balance sheet and creating value for our shareholders.
Speaker Change: Thank you for your continued support and confidence in our company.
Speaker Change: This ends our prepared remarks, we are ready to take your questions.
Speaker Change: Please open the lines for questions.
Speaker Change: Thank you ladies.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to withdraw from the polling process, please press star followed by 2. And if you're using a speakerphone, you will need to lift the handset before pressing any key.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on you touched on the phone.
Speaker Change: You will hear a prompt that your hand has been raised should you wish to withdraw from the polling process. Please press star followed by two and if you're using a speaker phone you'll need to lift the handset before pressing entities and out of consideration to other callers on the line today, we ask that you. Please limit yourself to one question and one follow up.
Operator: And out of consideration to other callers on the line today, we ask that you please limit yourself to one question and one follow-up. Please go ahead and press star 1 now if you have any questions. And your first question will be from Alejandro Demichelis at Jeffrey's. Please go ahead.
Speaker Change: Please go ahead and press Star one now if you have any questions.
Speaker Change: And your first question will be from Alejandro Dmitry is at Jefferies. Please go ahead.
Alejandro Demichelis: Yes, good morning. Thank you very much for taking the time to answer my questions. One question and one follow-up. The first question is going to be how you see the evolution of international traffic into Argentina through the end of the year, given the discussions you're having with the airlines, given the slots that you're kind of being reserved for, and so on. That's the first one. And then the second is, I think both Martn and Jorge you mentioned this record low gearing level.
Alejandro Demichelis: Yes. Good morning. Thank you very much for taking my questions. One question and one follow up.
Alejandro Demichelis: The first question is going to be how you're seeing the evolution of international traffic in Georgia Peanuts through the end of the given the discussions you're having with the with the airlines even D. B the slots that you're kind of being reserved. So that's the first one and then the circle East Eh.
Speaker Change: I think both Martina Jorge you mentioned these record low gearing level.
Alejandro Demichelis: How should we think or how are you thinking about balancing growth, investment, those M&A opportunities, and cash returns to shareholders? Can we think about some dividends coming at some point?
Speaker Change: Should we think or how are you thinking about balancing growth investment.
Speaker Change: M&A opportunity on cash returns to shareholders, how do we think about some dividends coming at some point.
Jorge Arruda Filho: Hi Alejandro. It's Jorge here.
Alejandro: Hi, Alejandro with drugs here how are you.
Alejandro Demichelis: How are you? Well, thank you. Good, good.
Speaker Change: Well thank you.
Jorge Arruda Filho: Thank you very much for your question. We remain positive in connection with international traffic, generally speaking, across our portfolio, especially Argentina, Uruguay, and Italy. I think these are markets that are performing, that have performed well, and we are positive. In Argentina, we are seeing traffic in several directions, notably, I think, going forward within Latin America, given the Open Sky Agreements that are being put in place.
Alejandro: <unk>.
Speaker Change: Good good. Thank you very much for the question. So we remain.
Speaker Change: The positives in connection with international traffic.
Alejandro: Generally speaking across all of our portfolio, most notably Argentina Oh.
Worldwide.
Alejandro: Hum.
In Italy.
Speaker Change: I think these are markets that are performing are there has performed well and we are positive.
Speaker Change: Routine and we are seeing traffic in several directions.
Speaker Change: Notably I think going forward within Latin America, given the open skies agreements that are being put in place.
Speaker Change: So yeah remain positive regarding your second question.
Jorge Arruda Filho: So, yes, remain positive. Regarding your second question. First of all, as we have been saying, our main focus for the next couple of years will be to grow our portfolio. We also remind you that, as we previously reported, we are in discussions in Italy and in Armenia in connection with FACATEX. And those topics will require leverage, not equity from the shareholders, in principle, but primarily at the local level, so yeah, our objectives are, as I mentioned.
Alejandro Demichelis: That's very clear. Thank you very much.
Speaker Change: So first of all I think up as we have been changed you know all our main focus are for for the next couple of years is to grow our portfolio. So.
Our main objective will continue to be back to being to grow our portfolio. We also remind you that as we previously reported we are in discussion in Italy, and Armenia in connection with our Capex.
Speaker Change: And those capex will require a leverage.
Speaker Change: Not not equity from the shareholders in principle.
Speaker Change: But primarily back at the local level. So yeah. So all of our objectives are as a nation.
Speaker Change: Okay, that's very clear thank you very much.
Speaker Change: Yeah.
Operator: Thank you. The next question will be from Pedro Malthart at Alatin Securities. Please go ahead.
Speaker Change: Thank you.
Next question will be from kind of a ballpark.
Speaker Change: <unk>. Please go ahead.
Pedro Malthart: Javi Martn, Jorge, and Patricio, congratulations on the quarter results. I want to know when you expect any adjustments or tariff provisions for Aeropuertos Argentina or middle concession throughout this year? What are the key events for the rest of the year concerning your three main projects, which are the master plan in Florence, in Armenia, and also the potential acquisition of Abuja in Nigeria?
Probably not being as high quality I'm pretty sure.
Speaker Change: And where it leaves us in the quarter results.
Speaker Change: I want to leave you know when do you expect any adjustments or tariff revisions, Florida.
Speaker Change: Vertical separately metered conversation throughout this year.
Speaker Change:
Speaker Change: Which are the key events for the rest of the year concerning.
Speaker Change: There are three main projects Nowadays, we charted the myself Laurence.
Speaker Change: And also the potential acquisition of <unk>.
Speaker Change: I was shot in Nigeria.
Speaker Change: Airport.
Speaker Change: Yes.
Speaker Change: Yeah.
Martin Francisco Antranik Eurnekian Bonnarens: Regarding tariff revisions in Argentina, as you probably know, we are doing a revision. The control agency has just been filled in terms of the board that makes the decisions. They were just named only a few weeks ago, so we expect the new leadership to come in and start engaging with us in terms of having...
Speaker Change: Hello, Pedro Thank you for your question might have been here.
Speaker Change: Regarding tariff revisions.
Speaker Change: Yeah.
Pedro: As you probably know we are do a revision.
Speaker Change: The control agency has just.
Speaker Change: I've just been feeling in terms of.
Speaker Change: The board that makes the decision that they were just named are only a few weeks ago.
Speaker Change: So we expect the new leadership to come in and start engaging with us in terms of.
Speaker Change: Having better visibility on that conversion dates do Cds.
Speaker Change: We are actually.
Speaker Change: And also on the on the.
Speaker Change: But that gap that we need to do in terms of the domestic.
Martin Francisco Antranik Eurnekian Bonnarens: on the domestic tariff that is denominated in pesos and needs to have a catch up.
Speaker Change: When domestic study that are denominated in pesos and niche tool and to have a catch up.
Martin Francisco Antranik Eurnekian Bonnarens: We are positive about this engagement, but we are still at a very early stage to have a clear idea in terms of timing and results. I will pass on your follow-up question to Jorge.
Speaker Change: So we are positive on this engagement, but we're still.
Speaker Change: A very early stage to have a clear idea and that's the timing and results.
Speaker Change: I will I will pass on to Jorge for your follow up question.
Jorge Arruda Filho: Hi Pedro. Jorge here.
Jorge: Hi, Pedro George here. So we continue very active discussions with respect to government between Italy, and Armenia and connection with.
Jorge Arruda Filho: So, we continue to have very active discussions with the respective governments in Italy and Armenia in connection with the respective CAPEX plans. In Italy, to remind everyone, this is in connection with a new runway and a new terminal in Florence, which is much needed. And the airport is a premium airport in a fantastic location in the heart of Tuscany, et cetera. So we are really looking forward to obtaining that approval. And in connection with Armenia, you know, following the significant growth we have enjoyed in the past 18-24 months, there is a need for an expansion in many aspects of the airport.
Jorge: Irrespective Capex plans.
Jorge: In Italy to remind everyone is.
Jorge: In connection with a new runway in a new terminal insurance.
George: And which is much needed.
George: Uh huh.
George: And the airports as a premium airport in a fantastic location in the heart of Tuscany et cetera. So we are really looking forward to obtain that approval.
George: And in connection with Romania. Following the significant growth we have enjoyed in the past the 18.
George: 18 24 months.
George: There is a need of an expansion.
Speaker Change: In many aspects of the airport and again, we are in advanced discussions with the government with a view to close assess possible oddly.
Jorge Arruda Filho: And again, we are in advance discussions with the government with a view to closing as soon as possible. Obviously, you know, it's difficult for us to precisely determine the timing, but we are working around the clock to make that happen as soon as possible.
Speaker Change: Difficult for us to precisely tiny, but we are working around the clock to make that happen as soon as possible.
Speaker Change: Yeah.
Martin Francisco Antranik Eurnekian Bonnarens: And Martin, here, jumping in on your comment on Nigeria, we are still waiting for the government to...
And I have been here jumping in on on your comment on Nigeria.
We're still waiting for the government to.
Speaker Change: To take the next steps towards deciding of the gold index.
Speaker Change: It's been delayed and we still don't have a good indication on timing.
Speaker Change: It has not gone the other way either so we are waiting.
Speaker Change: Okay.
Operator: [inaudible]
Speaker Change: Well, thank you very much for your answers.
Pedro Malthart: Well, thank you very much for your answers.
Speaker Change: Thank you once again, ladies and gentlemen, please press star one on your telephone keypad should you have any questions.
Operator: Thank you. Once again, ladies and gentlemen, please press star one on your telephone keypad should you have any questions. Next is Jay Singh at Citi. Please go ahead.
Speaker Change: Next is Jason you're at Citi. Please go ahead.
Jay Singh: Oh, they just called. Hi, good morning. This is actually Steve Trent.
Speaker Change: Oh, they just called <unk> com.
Speaker Change: Yeah.
Stephen Trent: Hi. Good morning. This is actually Steve Trent.
Stephen Trent: Sorry, having trouble with my phone. I have just kind of two questions on my side. The first is, as I saw, you're in the process of negotiating something with, I believe, Armenia, with some higher CAPEX to come. You know, assuming that goes through, do you have any color on what should be your annual maintenance CAPEX for the next couple of years? Thank you.
Speaker Change: Hi, Good morning, this is actually Steve Trent.
Stephen Trent: Sorry, having trouble with my phone.
Speaker Change: Just kind of two questions on my side the.
Speaker Change #100: The first is I saw.
Speaker Change #101: During the process of negotiating something.
Speaker Change #102: With I believe Armenia beat some higher capex to come you know.
Speaker Change #102: Assuming that goes through.
Speaker Change #103: Do you have any color on what should be your annual maintenance capex.
Speaker Change #104: The next couple of years. Thank you.
Yeah.
Speaker Change #104: Hello.
Speaker Change #105: Yeah, Hi.
Operator: Hello Steve, I think we have a problem with the line, and it's muted, but give us one second.
Speaker Change #105: So Steve I think we have a problem with a liner and it's weird that but give us one second.
Speaker Change #105: Yeah.
Speaker Change #106: No problem.
Speaker Change #106: Yeah.
Speaker Change #106: Okay.
Inaki: Hi Steve, this is Iaki. I think we are having some trouble with Jorge's line.
area: Hi, Steve. This is an area I think we are having some trouble we the darts airlines.
Stephen Trent: In terms of maintenance Capex. The number that you should have in mind is a wrong study.
Stephen Trent: $30 million more or less for their.
Speaker Change #108: While the company aggregate.
Speaker Change #108: Elevated basis.
Yoki: Okay, great. Thank you very much and Yoki.
Speaker Change #110: And just one other quick one for me I know you have that.
Speaker Change #110: Guaranteed return.
Speaker Change #111: And for you our Argentine operations.
Speaker Change #112: High level going forward.
Speaker Change #113: To what degree is it possible to consider.
Speaker Change #113: Another extension of AA, two thousands now rather than.
Speaker Change #114: Tariff increases.
Inaki: In terms of maintenance capex, the number that you should kind of have in mind is around $30 million dollars, more or less for the company aggregate on a consolidated basis.
Speaker Change #114: Hello, Steve Martin here. Thanks for your question.
Stephen Trent: Okay, great. Thank you very much, Inaki. And just one other quick one for me. I know you have that guaranteed return for your Argentine operations. But, at a high level, going forward, to what degree is it possible to consider another extension of AA2000s, you know, rather than tariff increases?
Steve Martin: Got you.
Stephen Trent: Uh huh.
Martin Francisco Antranik Eurnekian Bonnarens: Hello Steve, Martin here, thanks for your question. As you know, genetically, the points of adjustment for these contracts are CAPEX studies and duration. It's still too early to say how these variables are going to kick in and if this is going to turn into a full renegotiation or not. Remember that the IRR has to be achieved.
Speaker Change #116: As you know genetically a bunch of adjustments of these contracts are our capex studies in duration.
Speaker Change #117: It's still too early to say.
Speaker Change #117: Whether how are these <unk> go into kicking in in any of this is going to turn into a full renegotiation or not.
Speaker Change #118: Remember that the IATA has do we.
Speaker Change #118: <unk> at the end of the concession. So so that'd be also depends on the.
Speaker Change #119: On the forecasts.
Speaker Change #119: Looking forward into the into the end of the conversation. So I think it's too early to say, whether a which.
Martin Francisco Antranik Eurnekian Bonnarens: I think it's too early to say which levy is going to be pulled in order to reach the economic equilibrium of this concession. But, as you probably imagine, we are permanently engaging with the government and the control agency towards the economic equilibrium of this concession. I think it's too early to say which levy is going to be pulled in order to reach the economic targets. Thank you.
Speaker Change #119: Larry is going to be boiled in order to.
Reach the economic equilibrium of these concessions.
Speaker Change #119: But you have to borrow any money and we are.
Speaker Change #120: But I'm, indicating.
Speaker Change #120: With the government towards.
Speaker Change #121: And the control agency towards.
Speaker Change #122: How can that be achieved and what is the the.
Speaker Change #122: Easiest and most direct way that.
Speaker Change #122: Also impact positively on the industry overall.
Stephen Trent: Okay, I appreciate that, Martina. Thanks very much.
Speaker Change #122: Okay, I appreciate that and Martinez and thanks very much.
Operator: Thank you, and at this time, it appears that we have no further questions. I would like to turn the call back over to Martin.
Speaker Change #122: Okay.
Speaker Change #123: Thank you and at this time it appears that we have no further questions I would like to turn the call back over to Martin.
Speaker Change #123: Okay.
Martin Francisco Antranik Eurnekian Bonnarens: Thank you. I wanted to thank everybody for taking the time to be with us today and remind you that our team is available to engage with any of you if you have any further doubts or inquiries about our
Martin: Thank you I wanted to.
Martin: Thank you everybody for taking the time to be with US today and remind you that our team is available to engage with any of you.
Speaker Change #124: If you have any any further doubts or inquiries on our company. Thank you very much enjoy the rest of your day.
Martin Francisco Antranik Eurnekian Bonnarens: Thank you very much. Enjoy the rest of your day.
Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude today's conference call. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.
Speaker Change #125: Thank you, Sir ladies and gentlemen, this does indeed conclude today's conference call. Once again, thank you for attending and at this time, we do ask could you. Please disconnect your lines.
Speaker Change #125: Okay.
Speaker Change #125: Yeah.
Speaker Change #125: [music].
Speaker Change #125: Yes.
Speaker Change #125: [music].
Speaker Change #125: Yeah.
Speaker Change #125: No.
Speaker Change #125: Yes.
[music].