Q1 2025 Corporación América Airports SA Earnings Call
Operator: Good morning and welcome to the Corporacion America Airports first quarter 2025 conference call. A slide presentation accompanies today's webcast and is available in the investor section of the company's website. As a reminder, all participants are in a listen-only mode.
Good morning, and welcome to the Corporacion America airports first quarter 2025 conference call.
Presentation accompanies today's webcast and is available in the investors section of the company's website.
As a reminder, all participants are in a listen only mode. There will be an opportunity to ask questions.
Operator: There will be an opportunity to ask questions at the end of the presentation.
The end of the presentation.
Patricio Esnaola: At this time, I would like to turn the call over to Patricio Iñaki Esnaola, Head of Investor Relations.
Speaker Change: At this time I would like to turn the call over to Patricio and Yucky, It's NOLA head of Investor Relations. Please go ahead.
Operator: Please go ahead. Thank you.
Martin Bonnarens: Good morning, everyone, and thank you for joining us today.
Speaker Change: Thank you good morning, everyone and thank you for joining us today speaking.
Martin Bonnarens: Speaking during today's call will be Martina Unakyan, our Chief Executive Officer, and Jorge Arruga, our Chief Financial Officer.
Speaker Change: He came to me todays call would be about a female Mccann, our chief Executive Officer and qualified all of our Chief Financial Officer.
Martin Bonnarens: 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 earliest release and recent filings with the FCC. 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.
Speaker Change: Before we built <unk> I would like to make the following safe Harbor statement today's call will contain forward looking statements and I refer you to the full extent in section will follow earnings when you are making filings with the SEC.
Speaker Change: We assume no obligation to update or revise any forward looking statements reflect new or changed events or circumstances.
Speaker Change: Note that throughout this call all references to readiness costs adjusted EBITDA on margin than we thought.
Speaker Change: He goes excluding I think swaps.
Martin Bonnarens: I will now turn the call over to our CEO, Martino Recchia. Thank you, Iñaki. Good day, everyone, and thank you for joining us today. Let me begin by walking you through the main highlights of our first quarter 2025. After that, Jorge will take you through the financials in more detail, and we will then move on to Q&A. I am pleased to report that we had a strong start to the year, with total passenger traffic growing by over 7% year-over-year. Growth was driven by strong performance in Argentina and Italy, with Argentina reaching record traffic levels in January.
Speaker Change: Now I'll turn the call over two hours he all Latinos.
Nikki: Thank you Nikki.
Nikki: And thank you for joining us today.
Let me begin by walking you through the main highlights of our first quarter is going to identify performance.
Nikki: Hopefully it will take you through the financials in more detail.
Nikki: That is one.
Nikki: I am pleased to report that we had a strong start to the year.
Nikki: Total passenger traffic growing by over 7% year over year with more than 9% when excluding the discontinued methyl transition.
Nikki: Growth was driven by strong performance in Argentina, and Italy.
Nikki: Eugene record traffic levels in January.
Martin Bonnarens: We also reached a record high in January at Caracas airport in Uruguay. International traffic increased nearly 13 percent, led by Argentina and Italy, while domestic traffic rose 4 percent, or close to 8 percent, when excluding Natal. Revenues rose 6% year over year, however, on an ex-IAS 29 basis, we delivered an increase of nearly 12% surpassing passenger growth despite the impact of local currency devaluations in Brazil and to a lesser extent in Italy on reported revenues in U.S. dollars. Revenue per passenger remains relatively stable at $20.5. or increased by 3.9% excluding IAS 2018. Adjusted EBITDA came in at $156 million.
Nikki: We also reached a record high in January got off to a yearly.
Nikki: International traffic increased nearly 15% led by Argentina, and Italy was domestic traffic rose, 4% close to 8% when excluding that.
Nikki: Revenues rose, 6% year over year, however, on an ex Ias 29 basis.
It is an increase of nearly 12% so busing passenger growth. Despite the bulk of local currency devaluations in Brazil and to a lesser extent in Italy on reported revenues in U S dollars.
Nikki: Revenue per passenger remain relatively stable at $25 40.
Nikki: Or increased by <unk>, 9%, excluding I asked them benign.
Nikki: Adjusted EBITDA came in at $156 million.
Martin Bonnarens: It was up 4% and the margin stood at 38.2%. Inflationary pressures in Argentina, where PESA-denominated operating costs rose at a significantly higher pace than the valuation, had an impact on ARIBID. From a financial standpoint, we sustain the solid performance supported by healthy gas generation and the solid liquidity portfolio. Our leverage remains at low levels, providing capacity to advance our strategic growth agenda with this.
Excuse me I asked and benign it was up 4% on the margin stood at 38, 2%.
Nikki: Inflationary pressures in Argentina, where vessels, eliminating operating cost rose a significantly higher base than do valuation had an impact on our EBITDA.
Nikki: From a financial standpoint, we sustained a solid performance supported by healthy cash generation and the solid degree and you can see.
Nikki: <unk>.
Nikki: Our leverage remained at low levels, providing capacity to advance our strategic growth agenda with discipline.
Martin Bonnarens: On the expansion front, we remain active in pursuing opportunities and continue to make progress across multiple geographies, analyzing several projects.
Nikki: On the expansion front, we remain active in pursuing opportunities and continue to make progress across multiple geographies analyzing several of the projects.
Martin Bonnarens: Let's turn to passenger traffic on page 4, which showed a strong performance across most of our operations during the first quarter of 2020. Total passenger traffic increased by 7% year-over-year to over 20.4 million.
Yes.
Nikki: Bussinger graphic on page four which shows our strong performance across most of our operations. During the first quarter of course, we don't divide.
Nikki: Total passenger traffic increased by 7% year over year.
Over $24 million.
Martin Bonnarens: And finally, I would like to thank all of you for participating in this event, including, for comparison purposes, the Natal Airport Session, which we exited in February last year. Traffic was up over 9% in the period and highlights the underlying strength of demand across key markets, as well as the quality of our portfolio. Growth was broad-based, with both international and domestic traffic performing well. Domestic traffic increased by 4% year-over-year, or nearly by 8% when excluding Natal. This was primarily driven by recovery in Argentina and strong performances in Italy and Brazil. International traffic was up by close to 13% the other year with a positive contribution from all markets except Armenia.
Excluding for comparison purposes.
Nikki: Apolitical session, which we exited in February last year.
It was up over 9% in the video and highlights the underlying strength of demand across key markets as well as the quality of our portfolio.
Nikki: Growth was broad based with both international and domestic traffic performing with domestic.
Nikki: Domestic traffic increased by 4% year over year or nearly by 8% when excluding.
Nikki: This was primarily driven by a recovery in Argentina, and strong performances in Italy and Brazil.
International traffic was up by close to 13% year over year with a positive contribution from all markets except immediate.
Martin Bonnarens: Let's go now into ear-on-ear performance by... Beginning with Argentina, our largest market, passenger traffic rose over 12 percent, recovering strongly from the moderate decline seen in the prior quarter and achieving an all-time high in January. Growth was supported by a recovery in domestic demand and continued strong momentum in international trade. Domestic traffic grew by 9% surrounding from the contraction in the prior quarter, as year-over-year comparisons are no longer affected by the Previace Travel Incentive Program discontinued under the new administration in December 2020. We've also seen positive growth developments in Argentina's domestic market, with low-cost carriers expanding capacity and connectivity.
Let's go now into it.
Their performance by country, beginning with Argentina, our largest market passenger traffic rose, 12% recovering strongly from the most of the decline seen in the prior quarter and achieving an all time high in January.
Nikki: Growth was supported by a recovery in domestic demand and continued strong momentum in international Plaza.
Nikki: Domestic traffic grew by 9% rebounding from the contraction in the prior quarter as year over year comparisons are no longer affected by the travel incentive program is continued under the new administration in December 23.
Nikki: We've also seen positive ROE development, and venous domestic market with local carriers expanding capacity and connectivity.
Martin Bonnarens: On the international side, traffic increased by 21% year over year, further accelerating from the pace seen in the prior. Aerolíneas Argentinas resumed operations to Puerto Alegre and confirmed plans to continue operating the Córdoba-Rio de Janeiro route year-round. Guayrabianca upgraded its service to Buenos Aires, using wide-body aircraft to accommodate rising demand. And LATAM increased frequencies on its Córdoba-Santiago and Mendoza-Santiago routes. This strong performance in Argentina continued into April with domestic and international passenger traffic growing by 14% and 21% year-over-year respectively.
Nikki: On the international side traffic increased by 21% year over year further accelerating from the phase <unk> in the prior quarter.
Nikki: For convenience, we assumed operations supported by a negative unconfirmed license to continue operating the causal about he doesn't need a route.
Nikki: What have you and upgraded the service to our societies using widebody aircraft to accommodate rising demand and let them use frequencies when it's going to go in the Muslim Terawatt hours.
Nikki: This strong performance.
Nikki: Continued into April with domestic and international passenger traffic going into a 14th and 21% year over year respectively.
Martin Bonnarens: Turning now to Italy. Traffic was up over 10%, reflecting steady growth across both Florence and Pisa Airports. This good performance was mainly fueled by Ryanair's increased frequencies and road expansion initiatives. International traffic, which accounted for roughly three quarters of total volume, grew just over 8% with both airports contributing plus.
Nikki: Turning Yogi, Italy.
Nikki: Traffic was up over 10%.
Nikki: Steady growth across both Florence and PCI airports.
Speaker Change: This good performance was mainly fueled by Ryan actually.
Speaker Change: Brooklyn.
Speaker Change: And those expansion initiatives.
Speaker Change: I'm not sure exactly which accounted for roughly three quarters of total volume.
Speaker Change: Just over 8% with both airports contributing positively domestic.
Martin Bonnarens: Domestic traffic grew at an even faster pace, rising over 17% year-over-year, underscoring the strength of local demand. This solid performance continued into April, with domestic and international passenger traffic increasing by 15 and 10 percent respectively.
Speaker Change: Domestic traffic grew at an even faster pace rising over 17% year over year underscoring the strength of local demand.
Speaker Change: This solid performance continued into April with domestic and international passenger traffic, increasing by 15 and 30% respectively.
Martin Bonnarens: In Brazil, we continue to see traffic growth, with volumes up in the mid-single digits year over year when excluding Natal Airport, which we ceased to operate in February of last year. While the sector still faces headwinds related to aircraft supply, underlying demands show encouraging signs of improvement across the quarter. However, international traffic grew 28% year-over-year, underscoring the great momentum in international demand. In April, overall traffic increased by 17% against April last year.
Speaker Change: In Brazil, we continue to see traffic growth.
Speaker Change: Volumes up in the mid single digits year over year, when excluding the <unk> Airport, which we seek to operate in February of last year.
Speaker Change: While the sector still faces headwinds related to aircraft right.
Speaker Change: Demand is showing encouraging signs of improvement across the quarter.
Speaker Change: However, international traffic grew 28% year over year.
Speaker Change: The scoring and the great momentum in international demand.
Speaker Change: April overall traffic increased by 17% against April last year.
Martin Bonnarens: In Uruguay, total traffic was stopped, no signal needed. As international routes continue to expand, the summer season saw new services from Sky and LATAM connecting Montevideo to Rio de Janeiro and Punta del Este to Santiago, Vespucci. Azul also began operations between Montevideo and Florianópolis and announced a new route to Campiñas, aimed at improving regional connectivity and tourism flows. Traffic in April performed well and increased by 17%, benefiting from additional demand generated by the Easter holiday. In Armenia, where we are operating at capacity during various hours of the day, following strong post-COVID performance, passenger traffic increased slightly by over 1%.
Speaker Change: Your line total traffic was up low single digits as international routes continue to expand the summer season, So new services from Sky and let them connect them on video to reorder NATO and Boonville initiative is on deck with respect to <unk>.
Speaker Change: <unk> also began operations within one dividend for you hopefully and announced a new route to convenience in it including video and connectivity Division pills.
Speaker Change: Yeah, I think in April performed well and increased by 17% benefiting from additional demand generated by the Easter holiday.
Speaker Change: Dominion, where we are operating at capacity during various hours of the day following strong Bosco performance passenger traffic increased slightly by over 1%.
Martin Bonnarens: Notably, we announced that we will establish a base at Yerevan airport along with a broad range of new European routes scheduled to start operating later in the year. In addition, China Southern, Air Cairo, Calam Air, and Sky Express began operating at the Elevante. These developments are boosting connectivity and positioning Armenia as a regional leader. We expect these operations to contribute possibly to traffic growth in the Bahamas. Traffic in April rose by 8% against April last year. Finally, in Ecuador, total traffic increased by over 2% year-over-year, driven by a mid-single-digit increase in international demand, combined with modest growth in domestic traffic.
Speaker Change: Notably we saw announced that it will establish a base ideally one airport.
Speaker Change: With a broad range of new European routes scheduled to start operating later in the year.
Speaker Change: In addition, China Southern Eddy Pedro the Lion Air and Sky Express began operating at the other one airports.
Speaker Change: Developments are boosting connectivity and positioning Armenia, so immediately.
Speaker Change: We expect these operations to continue possibly to traffic growth in the country.
Speaker Change: But I think in April rose by 8% against April last year.
Speaker Change: Finally, Nicola total traffic increased by over 2% year over year, driven by a mid single digit increase in international demand combined with a modest growth in domestic traffic.
Martin Bonnarens: High airfare levels and the challenging security factor in the country continue to weigh on growth. But overall activity remained positive. Traffic in April decreased by 1.8% compared to April 2020. The quarter delivered a strong performance, led by Argentina's solid rebound and steady growth across Italy, Uruguay, and Brazil, which showed improving trends, excluding NATO. Overall, these great results highlight the quality of our network of airports.
Speaker Change: I hope at the levels and the judge indicated bundled in the country continued to weigh on growth, but overall activity remains positive, but I think in April decreased by one 8% compared to April 'twenty than before.
Speaker Change: The quarter delivered a strong performance led by Argentina, solid rebound and steady growth across Italy.
Speaker Change: Late in the season, which showed improving trends excluding ADESA.
Speaker Change: Overall this wave yourselves highlighted the quality of our network of airports.
Martin Bonnarens: Turning now to cargo on slide 5. We saw a strong start of the year, with volumes up 9% year-over-year in the first quarter, reflecting solid performance in most geographies. Growth was particularly strong in Uruguay, up nearly 30%, reflecting higher activity in both imports and exports. Followed by growth in the loadings in Argentina, which continues to benefit from more flexible import regulations and improved macro-conditions. Armenia and Italy also posted solid gains, while Brazil and Ecuador showed modest decline. Notably, Argentina, Brazil, and Armenia continue to represent the bulk of activity, together accounting for nearly 80% of total cargo volume in the region.
Speaker Change: And I'm now on slide five.
Speaker Change: We saw a strong start of the year with volumes up 9% year over year in the first quarter, reflecting solid performance in most geographies.
Speaker Change: Growth was particularly strong in Europe up nearly 30%, reflecting higher activity in both imports and exports.
Speaker Change: Followed by growth in the low teens, which continues to benefit from more flexible input regulations and improved macro conditions.
Speaker Change: Amelia and Italy also posted solid gains, while Brazil, and Ecuador showed modest declines.
Speaker Change: Not only is indeed.
Speaker Change: Yeah.
Speaker Change: <unk> continues to represent the bulk of activity together accounting for nearly 80% of total cargo volume in the quarter.
Martin Bonnarens: Cargo revenues declined 7 percent year-over-year, primarily reflecting fewer storage days for imported goods in Argentina. However, on an ex-IAS 29 basis, cargo revenues were up slightly, supported by better pricing and volume trends in Europe.
Speaker Change: Cargo revenues declined 7% year over year.
Speaker Change: Moderately reflecting fewer still have space for imported goods in Argentina.
Speaker Change: On an ex IAA has been benign basis revenues were up slightly supported by better pricing and volume gains in Uruguay.
Martin Bonnarens: A new cargo business model was implemented mid-March. which has already started to contribute to revenue growth in the second quarter on year-over-year basis. Looking ahead, we will continue working to enhance our cargo performance across the nation. Leveraging local opportunities and enduring, we maintain a competitive and efficient custom.
Speaker Change: A new cargo business one of them was implemented mid March and have Indiana.
Speaker Change: Which has already started to contribute to revenue growth in the second quarter on year over year basis.
Speaker Change: Looking ahead, we will continue working to enhance our global performance across the network leveraging local opportunities and ensuring we maintain a competitive and efficient cost base.
Jorge Filho: I will now turn the call to Jorge, who will review our financial results. Please go ahead.
Speaker Change: I will now turn the call quite a big who will review our financial results. Please go ahead.
Jorge Filho: Thank you, Martin, and good day, everyone. Let's start with our top line on slide. Total revenues exceed 6.4% year-on-year or 11.5% on an XES-29 basis, well above passenger traffic growth despite the impact of local currency devaluations in Brazil and to a lesser extent in Italy on reported revenues in the U.S. Our revenue per passenger remains stable at $20.5 or increased by 3.9% when excluding ES-29. Aeronautical revenues were up 6.8% during the same period, or 12.7% when excluding ES-29, mainly supported by the strong performance we saw in Argentina, coupled with positive contributions from Uruguay and Ecuador.
Speaker Change: Thank you Martin and good day, everyone, let's start with our top line on slide six.
Speaker Change: Total revenues ex <unk> 12 increased six 4% year on year or 11, 5% on an ex U S 29 basis, well above passenger traffic growth. Despite the impact of local currency devaluation in Brazil and to a lesser extent in Italy on reported revenues.
Speaker Change: <unk> West our revenue per passenger remained stable at $25 four increased by three 9% when excluding E F 'twenty nine.
Speaker Change: I don't know electrical revenues were six.
Speaker Change: Six 8% during the same period or 12, 7% when excluding 29, mainly supported by the strong performance we saw in Argentina, coupled with positive contributions from Uruguay and Ecuador.
Jorge Filho: In local currency, aeronautical revenues at Brazilian airports increased by 11%. Most notably, in Argentina, ex-ES-29 aeronautical revenues grew by over 23%, supported by a 21% year-on-year increase in international traffic, and to a lesser extent, by higher domestic passenger fees, due to the tariff increase that took effect in November last year. In contrast, aeronautical revenues in Italy declined despite traffic growth, due to an increase in marketing support provided to low-cost airlines at Pisa airport, which is accounted as a deduction from revenue. However, the increased marketing support is generating additional growth in traffic and, consequently, in commercial revenues.
Speaker Change: Local currency aeronautical revenues at Brasilia Airport increased by 11%, most notably in Argentina X years 29, I will not go revenues grew by over 23% supported by a 21% year on year increase international traffic and to a lesser extent by higher domestic.
Speaker Change: Passenger fees due to the tariff increase.
Speaker Change: In November last year in politics, aeronautical Robbins uniquely decline despite traffic growth due to an increasing marketing support provided to low cost airlines at Pisa Airport, which is accounted as a deduction from gradually however, the team's marketing support to generating additional growth in traffic and consequently in <unk>.
Speaker Change: Commercial readiness.
Jorge Filho: Commercial revenues increased by 6.1% year-over-year or 10.2% excluding the impact of ES-29, primarily driven by higher contributions from parking facilities, VIP lounges, duty-free stores, and other passenger-related revenues Growth was particularly robust in Argentina, which delivered double-digit gains, further underpinned by solid performance in Italy, Uruguay, and Ecuador. In local currency, commercial revenues at Brasília airport increased by 12%. These positive trends were partially offset by lower fuel-related revenues in Armenia, which has lower margins.
Speaker Change: Promotional revenues increased by six 1% year over year or 10, 2%, excluding the impact of CX 2009, primarily driven by higher contributions from parking facilities VIP lounges duty free stores in August passenger related revenue streams grow.
Speaker Change: <unk> was particularly robust in Argentina, which delivered double digit gains further underpinned by solid performance in Italy with a Y in that corridor in.
Speaker Change: In local currency commercial revenues at Brasilia airport increased by 12%.
Speaker Change: Positive trends were partially offset by lower fuel related revenues in Armenia, which has lower margins.
Jorge Filho: Thank you. Slide seven. Total costs and expenses, excluding Flic 12, were up 17.7% year-over-year. Cost of service rose approximately 16 percent, primarily driven by higher maintenance expenses in Argentina and increased concession fees in line with higher activity. To note, cost of service in Argentina were significantly impacted by accumulated inflation, outpacing currency depreciation, and tough comparisons against the first quarter of 2024, which did not fully reflect the inflationary impact following the sharp devaluation of the peso at the end of 2024. SG&A expenses grew 23 percent, mainly reflecting higher salaries in Argentina, primarily driven by the aforementioned effect of higher inflation and evaluation.
Sean: Thank you Sean.
Speaker Change: Total costs and expenses, excluding six wells were up 77% year over year.
Speaker Change: Postal service was approximately 16% primarily driven by higher maintenance expenses in Argentina and increased concession fees in line with higher activity.
Sean: To note also sourcing Argentina were significantly impacted by accumulated inflation outpacing depreciation and tough comparisons against the first quarter of 'twenty 'twenty, four which did not fully reflect the inflationary impact following the sharp devaluation of the peso at the end of <unk>.
Sean: <unk>.
Sean: SG&A expenses grew 23% mainly on strike the highest probably gene Argentina, primarily driven by the aforementioned effect of falling station in evaluation.
Jorge Filho: Looking ahead, we remain firmly committed to maintaining strict cross-discipline across our operations with a particular focus on Argentina. Furthermore, going forward, we currently do not expect material cost increases on a quarter over quarter basis.
Sean: Oh, Yeah Hawk, we remain firmly committed to maintaining strict cost discipline across our operations with a particular focus on Argentina.
Sean: Furthermore, going forward. We currently do not expect material cost increase on a quarter over quarter basis.
Jorge Filho: Moving to profitability on drive aids. Adjusted BTDA excess rate 12 reached $156 million, down 4.6% year-over-year or up 4% when excluding the impact of ES-29, driven by a 10.5% increase in Argentina. Uruguay reported another consecutive quarter of adjusted EBTDA growth of 3.8 percent, fueled by steady traffic increases and strong commercial performance, particularly in carbon VIP launches. Ecuador delivered solid results underpinned by robust retail and duty-free revenues, contributing to the positive momentum across our key markets. Importantly, Adjacente de Ita, a Brazilian airport, increased 12% in localities. Adjusted EBTDA margin XEFRIC-12 was down 4.3 percentage points year over year, or 2.7 percentage points on an XES-29 basis, to 38.2%, mainly impacted by margin contractions in Argentina and Italy.
Sean: Moving to profitability on slide eight.
Sean: Adjusted EBITDA ex <unk> 12 reached $166 million.
Sean: Down one 6% year over year or.
Sean: 4% when excluding the impact of <unk> 29.
Sean: By year, 10, and a 5% increase in Argentina.
Sean: Worldwide reported another consecutive quarter of adjusted EBITDA growth of three 8% fueled by steady traffic increases and strong commercial performance, particularly in carbon EAP launch services delivered solid results underpinned by robust retail and duty free revenues.
Sean: The beauty to the positive momentum across our key markets importantly, adjusted EBIDTA at Brasilia Airport increased 12% in local currency.
Sean: Adjusted EBITDA margin ex <unk> 12 was down four three percentage points year over year or 2.7 percentage points on an ex CX 2009 days to 38, 2% maybe impacted by margin contraction in Argentina and Italy.
Jorge Filho: In Argentina, while margin headwinds persisted in the first quarter, we expect improved trends in the coming quarter supported by strong passenger performance and continual growth in commercial revenues combined with normalized cost levels, even the much lower gap between inflation and devaluation and easier comparison. In Italy, results in the quarter were affected by higher maintenance and energy costs. However, both of them are embedded in the regulatory IRR pursuant to the dual-tier concession regime and therefore will be compensated through tariff increases.
Sean: In Argentina, while margin headwinds persisted in the first quarter, we expect improved trends in the quarter supported by strong passenger performance and continued growth in commercial revenues combined with normalized cost levels, even with much lower gap between inflation and devaluation in Egypt comparisons.
Sean: Uniquely results in the quarter were affected by how you maintain this in Utah.
Sean: Both of them are embedded in the regulatory I ought to swim to the due to concession regime, and therefore will be compensated through tariff increases.
Jorge Filho: Any Tuesday night, 9 p.m. We close the quarter with a solid total liquidity position of $524 million, slightly down from $526 million recorded at year-end 2024. Notably, all of our operating subsidiaries reported positive cash flow from operating activities, except for Italy due to the capex problem at Pisa Airport, and Ecuador due to the one-time annual concession fee payment, which is due and paid every January. The CAPEX in Italy was financed with local bonds pursuant to the existing syndicated credit for Issues in financing activities reflected debt reductions in Argentina and Ecuador. In Ecuador, we have now fully repaid our outstanding debt.
Sean: Turning to slide nine.
Sean: We closed the quarter with a solid total liquidity position of $524 million slightly down from 526 million recorded at year end 2024, notably all four of our operating <unk> reported positive cash flow from operating activities.
Sean: For Italy due to the Capex program at Pisa Airport in Ecuador, due to the one time annual concession fee payment, which is due in gate every January.
Sean: The topics uniquely was financed with local borrowings to swing to the existing syndicated credit facility.
Sean: Cash using financing activities affected debt reductions in Argentina and Ecuador.
Sean: <unk> corridor, we have now fully repaid all outstanding debt.
Jorge Filho: Moving on to that immaturity profile on flight. Total debt at the end of the quarter stood at $1.1 billion, while net debt declined to $690 million from $780 million in December 2024. Our net leverage ratio remained steady at $1.1 billion. In summary, we close the quarter with a robust balance sheet and healthy debt profile. As we continue to strengthen our liquidity position, our capital allocation strategy remains unchanged. We remain focused on pursuing both organic and inorganic growth opportunities to extend our airport portfolio and deliver value creation to our shareholders.
Sean: Moving to debt and maturity profile on slide 10.
Sean: Total debt at the end of the quarter stood at $1 $1 billion, while net debt declined to extend to the $19 million from $780 million in December 2024, our net leverage ratio remained steady at one one times.
Sean: In summary, we closed the quarter with a robust balance sheet and healthy that profile as we continue to strengthen our liquidity position our capital allocation strategy remains unchanged. We remain focused on pursuing both organic and inorganic growth opportunity to extend our airport portfolio and deliver value creation to our shareholders.
Martin Bonnarens: I will now hand the call back to Martin, who will provide closing remarks and discuss our view for the future. Thank you, Jorge.
Sean: I will now turn the call back to my team, who will provide closing remarks and discuss our view for this year.
Jorge: Thank you Jorge.
Martin Bonnarens: To wrap up, please turn to slide 12. We delivered a solid first quarter, with all countries posting traffic growth and particularly strong dynamics in Argentina, Italy, and Brazil, excluding Nicaragua. Notably, both Argentina and Uruguay reached record-high traffic in January, underscoring the positive momentum in such... The strong momentum continues into April, with consolidated traffic growing 14% year-on-year, as previously reported. Adjusted to be not excluding IAS 29, rose 4% year-over-year, supported by strong contributions from Argentina, Uruguay, and...
Speaker Change: Please turn to slide 12.
Speaker Change: We delivered a solid first quarter with all countries posting traffic growth and particularly a strong dynamics in Argentina, Italy, and Brazil, excluding Nevada.
Speaker Change: Notably, both Argentina, and Uruguay reached record high traffic in January underscoring the positive momentum in such markets.
Speaker Change: Strong momentum continued into April we consolidated traffic growing 14% year on year as previously reported.
Speaker Change: Financially, we maintained a healthy position with liquidity at $574 million and our net leverage steady at one one times.
Speaker Change: Adjusted EBITDA, excluding <unk> and benign rose, 4% year over year supported by strong contributions from Argentina, Uruguay and Ecuador.
Martin Bonnarens: On the commercial front, we remain focused on enhancing non-analytical revenue. At Ezeiza Airport in Argentina, we inaugurated the most modern VIP lounge in Latin America and are finalizing the expansion of the duty-free area at the airport's arrival terminal. More than 1,000 in space. In Uruguay, we inaugurated a new covered parking facility at Montevideo Airport. Further enhancing the passenger experience and non-aeronautical revenue growth.
Speaker Change: On the commercial front, we remain focused on enhancing none of optical revenues.
Speaker Change: At the face airport in Argentina, we inaugurated the most modern VIP lounge in Latin America and are finalizing the expansion of the duty free area at the airports arrival terminated more than doubling its space.
Speaker Change: And you're right, we inaugurated a new covered parking facility at once a year.
Speaker Change: Further enhancing the passenger experience and another notable revenue growth.
Martin Bonnarens: We are also making progress on strategic fronts. In Argentina, we are advancing negotiations with the government in connection with the revision of the economic equilibrium of the AA2000 concession agreement. In Italy, our province master plan received a positive environmental review, while in Armenia, we continue to move forward with the $425 million CAPEX program.
Speaker Change: We are also making progress on.
Speaker Change: Strategic pumps in Argentina, we are advancing negotiations with the government in connection with the addition of the economic lithium.
Speaker Change: 2000 concession agreement.
Speaker Change: In Italy, our friends Master plan received a positive environmental review why in a minute.
Speaker Change: We continue to move forward with the $425 million Capex program.
Martin Bonnarens: At the same time, we remain focused on expanding our portfolio. Having submitted a proposal in Montenegro and a revised plan in Angola, we are evaluating new opportunities across regions. We also strengthen our new business management team to further enhance our business development capabilities and reinforce our ability to pursue value-added growth opportunities.
Speaker Change: At the same bank, we remain focused on expanding our portfolio having submitted a proposal in Montenegro and the revised plan in Angola, you gotta evaluating new opportunities across regions.
Speaker Change: We also strengthened our new business management team to further enhance our business development capabilities and reinforced our ability to pursue value accretive growth opportunities.
Martin Bonnarens: Looking ahead, we expect positive traffic trends to continue in Argentina, supported by strong demand and several new operations recently announced. and we anticipate a strong summer season both in Italy and Armenia.
Speaker Change: Looking ahead, we expect positive traffic trends to continue in Argentina supported by strong demand in several new operations recently announced.
Speaker Change: We anticipate a strong summer season, both in Italy and Armenia.
Martin Bonnarens: Before closing, I'd like to highlight several recent decommissions that underscore the strength of our network and commitment to operational excellence. In Uruguay, Carrasco International Airport was named the best airport in Latin America and the Caribbean in the Under 2 Million Passengers category by ACI's Airport Service Quality Awards, based on global passenger tickets. This is the second time Carrasco received this honor.
Speaker Change: Before closing I'd like to highlight several weeks in the commissions that underscores the strength of our network and commitment to operational excellence.
Speaker Change: In Uruguay Garlasco International Airport was named the best effort in Latin America, and nickel even in.
Speaker Change: 2 million passengers category by ACI Airport service quality awards based on global passenger feedback.
Speaker Change: This is the second Banco Roscoe acute disorder, reflecting our focus on delivering a seamless and passenger centric experience.
Martin Bonnarens: Thank you very much for joining us today and for reflecting our focus on delivering a seamless and passenger-centric experience. In Brazil, Brasilia Airport was recognized by Citium as the most punctual airport in the country and ran second globally among medium-sized airports, with over 88 percent of flights departing on time. The Acidia Airport also ranks number one in passenger satisfaction among the Acidian airports according to the latest survey from the Ministry of Ports and Airports for the first quarter of 2021. And in Ecuador, Al Guayaquil Airport received a prestigious five-star rating from the European Foundation for Quality Management.
Speaker Change: In Brazil <unk>.
Speaker Change: <unk> was recognized by <unk> as the most punctual airports in the country and ranked second globally among medium sized airports with over 88% of flights departing on time.
Speaker Change: <unk> was also ranked number one in passengers are respected.
Speaker Change: One <unk> airports. According to the latest survey from the Ministry of ports and airports for the first quarter of <unk>.
Speaker Change: And in Ecuador Awards, <unk> received a prestigious five star rating from.
Speaker Change: European Foundation for quality management, recognizing the excellence in service quality and organization of our performance.
Martin Bonnarens: Recognizing the excellence in service quality and organizational performance. This award reflects the dedication of our local teams and reinforces our strategy of delivering best-in-class operations across Georgia.
Speaker Change: These awards reflect the dedication of our local teams and reinforced our strategy of delivering best in class operations across geographies.
Martin Bonnarens: Wrapping up, we remain confident in the strength of our portfolio, the discipline of our strategy, and our ability to continue creating value across our network. Thank you, sir.
Speaker Change: Wrapping up we remain confident in the strength of our portfolio the discipline of our strategy and our ability to continue creating value across our network.
Speaker Change: Operator, please open the line for questions.
Speaker Change: Thank you Sir.
Operator: Ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two.
Speaker Change: Ladies and gentlemen, if you do have any questions. Please press star followed by one on you touched on something.
Speaker Change: We'll then hear a prompt that your hand has been raised should you wish to decline from the polling process. Please press star followed by two if you're using a speaker phone. Please lift the handset first before pressing any key. Please go ahead and press star one now if you have any questions.
Operator: And if you're using a speakerphone, please lift the handset first before pressing any key. Please go ahead and press star 1 now if you have any questions.
Fernanda Recchia: First question will be from Fernanda Recchia at BTIG. Please go ahead, Fernanda. Hello, Jorge and Martin, thank you for taking my question. Two points from our side.
Speaker Change: First question will be from <unk> BPI. Please go ahead fernanda.
Fernanda: Hello, George and let John Thank you for taking my question two points from our side. The first could you. Please provide more information regarding the Walter <expletive> are.
Fernanda Recchia: The first, could you please provide more information regarding the Montenegro proposal that you submitted in May? Maybe if you could comment on the capacity of this airport, the regulatory regime, the amount of capex that you're planning to do so.
Speaker Change: Proposal that just isn't there.
Speaker Change: In May maybe if you could comment on the capacity of the airport there.
Speaker Change: We're doing that target range and yeah, a lot of capex that you're planning to do so.
Fernanda Recchia: And also, you also mentioned that you presented our revised proposal for Angola. If you could give us the updated terms of the proposal, that would be great. This is the first topic.
Speaker Change: And also you also mentioned that you presented.
Speaker Change: Proposal for Angola, if you could give us a lift when you have the data.
Speaker Change: Proposal would be great.
Speaker Change: The first topic.
Fernanda Recchia: And second, on traffic, if you could comment on Argentina. As you mentioned, it has been performing strongly at the beginning of this year. So, if you could provide us with your outlook for the upcoming months. We have seen April that continued this performance, but looking forward if you think this is sustainable level. Thank you. Okay, can you hear me? Hello? Yes. Okay, good.
Speaker Change: Satcom on traffic.
Speaker Change: A quick comment on us and peanuts.
Speaker Change: You mentioned it has been performing strongly.
Speaker Change: And the Virginian Alethia.
Speaker Change: Provide us with your outlook.
Speaker Change: Outlook for the upcoming months.
Speaker Change: You have seen in April that continue this.
Speaker Change: Looking forward to it if you think this is sustainable level. Thank you.
Speaker Change: Okay can you hear me.
Speaker Change: Yes.
Speaker Change: Hello, Yes.
Speaker Change: Okay.
Jorge Filho: Hi Fernanda, this is Jorge. Thanks for your questions. So, first on Montenegro, we submitted a proposal pursuant to the public tender offering, public tender process that they are carrying out on May 9th. We expect, according to the rules of the tender, they should be announcing within 30 days. Let's see if that will be accomplished or there's going to be any delay, but it's imminent. It's a 3 million passenger. In total, there are two airports, the airport of the capital, Port Gorica, and Tivat, which is based in the Cotor Bay, which is a beautiful area in Montenegro and in the Mediterranean and the Adriatic Sea.
Speaker Change: I should note that this is George.
Speaker Change: Thanks for your questions.
Speaker Change: So first of all Montenegro, we submitted the proposal pursuant to a public tender offering.
Speaker Change: Public tender process that they are cutting out on may nine.
Speaker Change: We expect according to the rules of the tender they should be announcing within 30 days, let's see.
Speaker Change: That will be a complex or theres going to be any delay, but it's imminent.
Speaker Change: It's a 3 million passenger.
Speaker Change: Uh huh.
Speaker Change: In total the two airports at the airports of.
Speaker Change: The capital Port guarded Cup and to go up which is based in the cohort B, which is a beautiful area in multi <expletive> and they've made it their honeymoon India drastic T.
Jorge Filho: We are very excited. It's what we view as a low-hanging fruit because tourism is not very well developed over there, so we see strong potential there. In terms of IRR, we are targeting mid-teens. It's an inflation-based regime, so tariffs are going to be adjusted by inflation every year. The other reason we are quite optimistic that in the midterm we see Montenegro being part of the European Community.
Speaker Change:
Speaker Change: We are very excited it's a what we view as the low hanging fruit because that tourism is not very well developed over there. So we see strong potential there in terms of IRR.
Speaker Change: We are targeting mid teens, it's an inflation basically team so.
Speaker Change: So I'm gonna be adjusted by inflation every year.
Speaker Change: The other reason we are.
Speaker Change: I'm quite optimistic that in the midterm, we see Montenegro being part of the European community.
Jorge Filho: In Angola, that you also requested, we submitted a proposal a while back. We have passed, let's say, to the second phase and have been requested to make some clarifications and adjustments in the proposal. We are in the process of preparing this revised proposal. There was a session with the government in Rwanda about a month or a month and a half ago, and we expect in the next few weeks to submit a revised and updated proposal to them.
Speaker Change: In umbrella that you'll also requested we submitted a proposal a while back we have pass, let's say to the second phase and have been requested to make some clarifications and adjustments in the proposal. We are in the process of preparing this revised proposal there was.
Speaker Change: Our obsession with the government are in Rwanda about tomorrow for a month and a half ago.
Speaker Change: And we expect in the next few weeks to submit a revised an updated proposal to them.
Speaker Change: The regarding traffic.
Jorge Filho: Regarding traffic, we obviously have seen the numbers for the quarter and for our main markets and also into April the trend continued or improved. We see very healthy demand going ahead of us in our main markets, most notably in Argentina and most notably within Argentina and international. As Martin said in the script, there are several new routes that are going to start operations in the coming months and quarters. So we see very healthy demand ahead of us. In Italy, the same in Argentina, with their lines established or decided to establish a base and have announced several new routes.
Speaker Change: We remain I mean, all but you will have seen the numbers for the quarter and for all the main markets and also into April the trend continued or improved.
Speaker Change: It's very healthy demand going ahead of us in our main markets.
Speaker Change: Most notably in Argentina, and most notably within Argentina and international.
Martin: As Martin said in the in here in the script.
Martin: You know there are several new routes that are going to start operations in the coming months and quarters.
Martin: So we're seeing very very again healthy demand ahead of us in in Italy, the same in Argentina with airlines or established or decided to establish a base.
Martin: And have announced several new route in Brazil.
Fernanda Recchia: In Brazil, traffic finally started to pick up. We believe that the goal coming out of Chapter 11 is good news with a healthy balance sheet. So we are excited basically across our portfolio from a traffic perspective. Anything else that you wanted me to address? Now that's very clear. Jorge, thank you very much for your answers. Thank you.
Martin: Traffic finally started to pickup we believe that our goal coming out of chapter 11 is good news.
Speaker Change: With a healthy balance sheet. So we are excited basically across our portfolio from a traffic perspective.
Speaker Change: Anything else that you wanted me to address.
Unidentified Speaker: No that's not very clear George I. Thank you very much for your answers.
Speaker Change: Thank you.
Alejandro DeMichelis: Thank you next question will be from Alejandro Demichelis at Jefferies. Please go ahead.
Alejandro DeMichelis: Next question will be from Alejandro Demichelis at Jeffreys. Please go ahead. Yes, good morning, gentlemen. Thank you very much for taking my questions. A couple of questions, please. Jorge, you mentioned about your cost controls that you're trying to implement. Now, could you please give us a bit more color on what initiatives are there? Should we expect kind of costs to continue to grow, say, in line with inflation in Argentina or at a different pace? That's the first question. And then the second question is, you mentioned your active discussions with the government in Argentina for the rebalancing of the concession.
Alejandro DeMichelis: Yes, good morning, gentlemen, thank you for taking my questions a couple of questions. Please.
George: George you mentioned about your cost controls.
Alejandro DeMichelis: That you're trying to implement though could you. Please give us a bit more color on what do you need to be thought there should we expect kind of costs to continue to grow say in line with inflation in Argentina or at a different pace.
Speaker Change: That's the first question and then the second question is you mentioned, you're active discussions with the government in Argentina for the rebalancing of the of the concession.
Jorge Filho: How are you thinking about the potential changes or the merger between ORSNA and ANAC, the changes that we have seen at the Secretary of Transport, so could those things delay the process at your embark, or can we see a further review of that? Regarding cost, Iíd like to remind you that the gap between inflation and devaluation comparing this quarter with the first quarter of 2024 was very significant. Inflation in the period was about 53% while devaluation 25%. The other thing that I wanted to highlight, if we exclude amortization which has a lot to do with CAPEX and with the continual CAPEX programs that we have been doing, the number instead of 17% is 13%.
Speaker Change: How are you thinking about the potential changes or the merger between all the.
Speaker Change: <unk> said, we have seen at the secretary of transport, So could do things delay the process that youre embark or can we see a further review of the process.
Speaker Change: Okay. Thank you very much for your questions.
Speaker Change: Regarding cost I'd like to remind you that.
Speaker Change: The gap between inflation and devaluation comparing this quarter with 20 point with the first quarter of 'twenty 'twenty four.
Speaker Change: It was very significant so inflation in the period was about 53% while devaluation of 25%.
Speaker Change: The other thing that I wanted to highlight.
Speaker Change: If we exclude amortization, which has a lot to do with with.
Speaker Change: Capex in the way of political upheaval Cup Assortments that we have been Blair.
Speaker Change: The number instead of 17% at 14% so.
Jorge Filho: What you see in terms of as reported and in our earnest presentation is a 17.7% increase and if we exclude amortization is 13% increase, much more aligned with overall passenger growth of about 9.5% and below international traffic in Argentina, for instance, of 21%. Going ahead, we expect much more normalized numbers. We do not see any material increases on a quarter-over-quarter basis in Argentina. In terms of cost controls, this is a normal course of business for us to continue to be very focused on costs, but we are confident that we can maintain costs despite the significant growth that we have been seeing, particularly in international traffic.
Speaker Change: What you see.
Speaker Change: In terms of Us report that Oh.
Speaker Change: And you know we are in this presentation is a 17, 7%.
Speaker Change: Increase and if we exclude amortization is 14% increase much more aligned with overall.
Speaker Change: Passenger growth of about nine 5% and below international traffic in Argentina for instance of 21% going ahead.
Speaker Change: We expect a much more.
Speaker Change: Normalized numbers, we do not see any material increase on a quarter over quarter basis in Argentina.
Speaker Change: In terms of cost controls I mean this is.
Speaker Change: Ultimately, it's the normal course of business for us to be.
Speaker Change: Continue to be very focused on costs, but we are confident that we can maintain costs. Despite.
Speaker Change: The significant growth that we have been seeing particular international traffic.
Jorge Filho: I also wanted to highlight that the second impact that we had on cost was in Italy, although a lot less material, it's marginal, but I'd like to highlight that this is part of the dual-pill regime and it's going to be compensated through tariffs increase going forward.
Speaker Change: I also wanted to highlight that.
Speaker Change: The second impact that we had of course was in Italy, Although I love.
Speaker Change: A less material it's marginal.
Speaker Change: But I would like to highlight that this is part of the tour through regime, and it's gonna be compensated to tariff increases going forward.
Speaker Change: Okay.
Speaker Change: Yeah.
Martin Bonnarens: Now, I will turn to Martin to talk about, if you like to talk more about cost, I can continue, otherwise I will turn to Martin to talk about the second question on Argentina economic equilibrium. No, I think the cost is clear. Thank you, Jorge, and thank you, Alejandro, for your questions. I think it's a difficult one, as you know. Goal in bureaucracy is sometimes difficult to predict and usually takes more time than is initially expected. So, we are happy with the process that is being made. I cannot tell you what to expect from the change in the Secretary of Transport.
Speaker Change: Now I will turn to marketing to talk about it if you like to talk more about the class I can't continue otherwise I'll turn to my team to talk about the second.
Speaker Change: Second question on <unk>.
Speaker Change: A kilometer.
Speaker Change: No I'd say I think the cost piece.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Thank you Jorge I think you'll really hungry for your questions.
Speaker Change:
Speaker Change: I think I said it was one.
Speaker Change: No.
Speaker Change: Gordon do they'll go CE.
Speaker Change: It's difficult to predict.
Speaker Change: And usually it takes more time than we.
Speaker Change: We initially expected. So we are happy with the process that is being made.
Speaker Change: I cannot tell you what to expect from the change in the secretary of transport I would assume that it might impact.
Martin Bonnarens: I would assume that it might impact, not significantly, but have an impact in the speed of the work. But still, being the same government and not being any material change in the environment overall, I don't expect it to be really material. So, we need to see and understand. What on the chart? I think in the last update that came from AA2000, there was this discussion about what the actual number could be. So the question is, is there now an agreement on what the actual number could be? different or the actual imbalance of the contract. This is a work in progress and obviously led by the regulator, not by us, and it also has a confidential character.
Speaker Change: Not significantly, but not have an impact in <unk>.
Speaker Change: The speed of the work.
Speaker Change: But see that being the same government and not being any material change in our.
Speaker Change: And environment overall, I wouldn't expect it to we do we really might be together, so we need to see and understand them.
Speaker Change: What is so good that he wants to do it how it was always going to be part of the changes are.
Speaker Change: In other authorities.
Speaker Change: I will later and so on.
Speaker Change: But.
Speaker Change: We're not afraid that any of these changes we are in yen.
Speaker Change: The change the the aim or the or the or the fine that they.
Speaker Change: The addition of our work on our concession.
Speaker Change: But as you said it might impact on how fast it gets done so as soon as we have updates we will keep.
Speaker Change: You our investors posted but for now we do not see any significant change and we see the teams are working as before.
Speaker Change: Okay.
Speaker Change: So I can kind of squeeze a follow up that I think in the last update that came from a 2000 and there was this discussion about what the number could be so so so the question is if there are now an agreement on what the article.
Speaker Change: Difference.
Speaker Change: Or the actual on balance of the contract.
Speaker Change: This is a work in progress.
Speaker Change: And obviously led by the regulator not by US and it also has a.
Speaker Change: Got it got it so.
Operator: So, in the end, until there is no official documents on this review, it would be probably unwise for us to really comment and give a sense that, in the end, may not be exactly what comes out or might differ. So, I'd rather wait a little bit, have the regulator work on it, and once we have official news, we can share it with everybody. Thank you. Ladies and gentlemen, a reminder to please press star 1 should you have any questions.
Speaker Change: So in the end until there is no official.
Speaker Change: The documents on this review.
Speaker Change: It would be probably unwise for us to really comment and U S.
Speaker Change: I sense that in yen.
Speaker Change: Maybe it'll be exactly where it comes out or it might be correct. So I'd, rather wait a little bit have the government.
Speaker Change: I would like to work on it and once we have official news, we can share it with everybody.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you, ladies and gentlemen, a reminder to please press star one should you have any questions.
Stephen Trent: Next we will hear from Stephen Trent at Citi. Please go ahead. Good morning, gentlemen, and thanks very much for taking my questions.
Speaker Change: Next we will hear from Stephen Trent Citi. Please go ahead.
Speaker Change: Good morning, gentlemen.
Speaker Change: Thanks, very much for taking my questions.
Stephen Trent: A couple of them were already answered, but if I could circle back a little bit on M&A, I definitely heard some interesting stuff in Montenegro, Angola, et cetera, but maybe I missed it. I did not hear you say much about the Americas and wondering, for example, if the Motiva, the former CCR airports, are of any interest to you. Thank you.
Speaker Change: A couple of them were already answered, but if I can circle back a little bit.
Speaker Change: M&A I definitely heard some interesting Stephanie market <expletive> Angola et cetera.
Speaker Change: Maybe I missed it I did not hear you say much about the Americas and wondering for example.
Speaker Change: Motiva formulary CCR.
Speaker Change: Parts are.
Speaker Change: Any interest to you. Thank you.
Speaker Change: Yeah.
Jorge Filho: Hi Steve, how are you doing? Yeah, I would... Go ahead, Jorge. There is a process going on, it's a confidential process, we have an appetite to evaluate, it's a large portfolio, as such there are challenges, there are good things and there are also challenges and we'll keep you posted on the market in general as we make progress and as we can make disclosures about the process. Appreciate that, Jorge. That's very clear.
Speaker Change: Hi, Steve.
Speaker Change: That's.
Speaker Change: Okay.
Speaker Change: Yeah go.
Speaker Change: Okay.
Speaker Change: So.
Speaker Change: Thanks for the question.
Speaker Change: There is a process going on it's it's a it's a confidential process.
Speaker Change: We are.
Speaker Change: We have an appetite to evaluate its a large portfolio.
Speaker Change: As such there are challenges there are good things.
Speaker Change: There are also challenges.
Speaker Change: We will keep you posted in the market in general as we make progress and as we can make disclosures about the process.
Speaker Change: I appreciate that alright, that's very clear.
Jorge Filho: And just kind of a quick follow-up also on the M&A side. I recall some time ago that CAP was possibly going to look at some investments along with an investment fund in the Middle East, I believe in the UAE. Is that something that could still be a conduit for you guys? Or, you know, are you thinking for mainly to invest directly in places like, you know, Montenegro and elsewhere? Thank you. Generally speaking, we have been very active in looking for new opportunities. As we have mentioned, we actually boosted our new business team. We allocated more people to this team and are looking at more opportunities for us, including but not limited to Middle East, so yes, Middle East is included in our target.
Speaker Change: Just kind of a quick follow up also on the M&A side IRA.
Speaker Change: I recall, some time ago that.
Speaker Change: Capitalized, possibly going to.
Speaker Change: Look at some investments a long ways and investment fund in the Middle East.
Speaker Change: In the UAE.
Speaker Change: Is that some something that.
Speaker Change: It.
Speaker Change: So it'd still be a conduit for you guys or how are you.
Speaker Change: You were taking for mainly to invest directly in places like Montenegro and elsewhere. Thank you.
Steve: Thanks, Steve.
Speaker Change: Generally speaking we.
Speaker Change: We have been very active in looking for new opportunities as we have mentioned, we actually boosted our new business team. We are located more people to the team and are looking at more.
Speaker Change: The opportunities for us.
Speaker Change: Including but not limited to middle East So yes middle East is included in our targets.
Jorge Filho: Great, thanks Jorge and Martin, appreciate it. Thank you.
Speaker Change: Great. Thanks, I appreciate it.
Daniel Rojas: Next question will be from Daniel Rojas at Bank of America. Please go ahead.
Daniel Rojas: Thank you next question will be from Daniel Rojas of Bank of America. Please go ahead.
Daniel Rojas: Good morning, gentlemen. Thank you for taking my questions. I just wanted to ask you one question regarding the expansions in Italy. Can you give us an update on how that stands and on the outlook for commencing the expansions? Thank you.
Daniel Rojas: Good morning, gentlemen, thank you for taking my questions I just wanted to ask you. One question regarding the expansion in Italy can you give us an update on how that Samsung and on the outlook for four for commencing in the expansions. Thank you.
Daniel Rojas: Yeah.
Martin Bonnarens: Hello, thank you very much for your question. Regarding Italy, as you know, it's a very young and bureaucratic process to get what is called the VIA, which is the Environmental Impact Approval. We are, of course, the team in Italy is extremely focused on delivering all the required documents and observations by the regulatory body on this. The feedback from the team is that the process is moving ahead as supposed to. We have had good news on interim parts of the process that have been successfully finished with, let's say, with no major observations that might impact on any delays.
Daniel Rojas: Hello, Hello, Thank you very much for your question.
Daniel Rojas: Regarding Italy as you don't want at a very young and break out the process to get them.
Daniel Rojas: While it is called the <unk>, which is the.
Daniel Rojas: Environmental impact globally.
Daniel Rojas:
Daniel Rojas: Oh of course.
Daniel Rojas: It's extremely focused on.
Daniel Rojas: Delivering all the required documents and observations by them.
Amit: Yeah Amit.
Daniel Rojas: The feedback from the team is that the process is moving ahead as a supposed.
Daniel Rojas: We have had a good news on interim parts of the process that.
Daniel Rojas: That had been successfully finished we let's say with no major observations that night.
Daniel Rojas: Impact on any delays.
Martin Bonnarens: But given that, even with all this, having said this, The real timing is difficult to assess. We really expect to have news by the third quarter, but as with any bureaucratic process, it's really difficult to put an exact finish date. But again, so far, there are no, let's say, red or yellow flags in the process, and things are moving ahead. Hopefully, as soon as we have official news, we can share it with our investors. And hopefully, by third quarter, we have the finalization of the process, and afterwards, the immediate commencement of the work. But again, subject to a graphic process, and as soon as we have information, we will share it with everybody.
Daniel Rojas: But given even still even with all this having said this.
Daniel Rojas: The real timing is difficult to assess.
Daniel Rojas: We would expect to have news by the third quarter.
Daniel Rojas: But as with any have you looked at the process.
Daniel Rojas: It's really difficult to put an exact.
Daniel Rojas: Finish date.
Daniel Rojas: But again, so far there are no, let's say you'd red or yellow flags in the process.
Daniel Rojas: And things are moving ahead hopefully soon.
Daniel Rojas: As soon as we have obviously the news we can share it with our investors and.
Daniel Rojas: Hopefully.
Daniel Rojas: Third quarter, we have.
Daniel Rojas: The finalization of the process and the awards are the mean.
Daniel Rojas: Yet the commencement of the works.
Daniel Rojas: But again are subject to.
Daniel Rojas: A graphic process and as soon as we have information we will share it with everybody.
Daniel Rojas: Yeah.
Operator: Thank you. Thank you for the call. Thank you. And at this time, it appears we have no further questions.
Speaker Change: Great. Thank you for the color.
Daniel Rojas: Thank you.
Daniel Rojas: And at this time it appears we have no further questions I will turn the call back to Martin.
Operator: I will turn the call back to Martin. I just wanted to thank everybody for your interest in our company and your participation in the call. I wish you all a great rest of your day, and remind you that our team is available at any time to engage with you, respond to any questions that you might have. Have a really good rest of your day, bye-bye. Thank you, sir.
Daniel Rojas: Okay.
Daniel Rojas: Yeah.
Daniel Rojas: I just wanted to thank everybody for your interest.
Daniel Rojas: And your participation in the call I wish you all a great rest of your day.
Daniel Rojas: Remind you that our team is available.
Daniel Rojas: Time to engage with you respond to any questions that you might have.
Speaker Change: Really good rest of your labor rates.
Operator: Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.
Speaker Change: Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.
Daniel Rojas: Okay.