Corporacion America Airports SA (NYSE: CAAP) Q1 2025 Earnings: Passenger Growth | May 23, 2025

Corporación América Airports SA Reports Strong Q1 2025 Performance Amidst Traffic Recovery

Corporación América Airports SA (CAAP), a leading airport operator, announced its Q1 2025 financial results on May 23, 2025. The company reported a solid start to the year, driven by sustained recovery in travel demand, improved operational leverage, and strategic growth initiatives.

Financial and Operational Highlights (Q1 2025 vs. Q1 2024)

CAAP's performance in Q1 2025 showcased robust growth across key metrics, with figures excluding IFRS 12.

• Revenue Growth: Low double-digits year-on-year, outpacing passenger traffic growth. Total revenues (ex-IFRS 12) increased by 19.4%.
  • Aeronautical Revenues: Up 19.4%, primarily due to higher international passenger traffic in Argentina and tariff increases in Uruguay, along with strong performance in Italy, Ecuador, and Armenia.
  • Commercial Revenues: Increased 18.1%, benefiting from growth across most geographies, particularly Brazil, Uruguay, and Italy (driven by higher VIP, cargo, and advertisement revenues). This was partially offset by lower DTC revenues in Argentina (due to December 2023 devaluation) and reduced fuel-related revenues in Armenia.
• Revenue Per Passenger: Reached an all-time high of $20.6, up from $18.8 in Q1 2024, reflecting effective commercial execution.
• Adjusted EBITDA (ex-IFRS 12): Increased 16% year-on-year to $163 million, driven by strong top-line growth and operational leverage.
• Adjusted EBITDA Margin: Expanded by 1.5 percentage points to 39.7%, indicating improved efficiency.
• Costs and Expenses (ex-IFRS 12): Increased 10.5%, generally in line with business growth but remaining below revenue growth. Higher salaries in Argentina (due to inflation exceeding currency depreciation) and increased concession fees were partially offset by lower fuel costs in Armenia.
• Liquidity and Debt:
  • Total Liquidity: $545 million at quarter-end, an $87 million increase from year-end 2024, with most operating subsidiaries reporting positive cash flow.
  • Total Debt: $1.2 billion.
  • Net Debt: Decreased to $821 million from $964 million at year-end 2024.
  • Net Leverage Ratio: Reached a record low of 1.2x, down from 1.4x at December 2024, underscoring strong financial health.

Passenger and Cargo Traffic Trends

The company benefited from a sustained recovery in travel demand, with higher load factors and increased flight routes and frequencies.

• Comparable Passenger Traffic: Increased 10.3% year-on-year (excluding Natal Airport, whose concession was exited in February).
  • International Traffic: Grew in the low teens.
  • Domestic Traffic: Remained flat overall.
• Traffic by Country:
  • Argentina (Main Market): Overall traffic up 10.3%, driven by a nearly 16% increase in international traffic (due to new frequencies and routes). Domestic traffic remained flat amid a challenging macro environment. International traffic continued positive trend into April.
  • Italy: Traffic up nearly 14%, with strong international growth (17%) and single-digit domestic growth. Positive trend continued into April.
  • Uruguay: Strong traffic growth of 29% due to new routes and frequencies, continuing into April.
  • Armenia: Relatively flat traffic after strong performance in previous years; April traffic down 4%.
  • Ecuador: Traffic declined nearly 3% due to a local airline's exit, though international traffic was up 1%. April traffic down 6%.
  • Brazil: Challenging dynamics persisted due to local airline constraints and rising ticket prices, resulting in a nearly 2% comparable decline (ex-Natal). This trend continued into April.
• Cargo Volumes: Continued recovery, up in the low single digits year-on-year, primarily driven by Armenia, Ecuador, and Argentina. Cargo revenues increased 6% across all operating countries.

Strategic Developments and Outlook

CAAP continues to advance its strategic priorities, focusing on expanding its airport network and maintaining financial strength.

• Concession Extensions: Successfully obtained a 10-year extension for the Punta del Este Airport concession agreement in Uruguay, extending it from 2033 to 2043.
• Arbitration Award: Notified by the ICSID arbitral court of a final award, mandating the Republic of Peru to pay $91 million to a consortium (50% economic interest for CAAP) concerning the Chinchero International Airport in Peru.
• Negotiations for Expansion: Ongoing discussions for significant capital expenditure (CapEx) plans in Yerevan (Armenia) and Florence (Italy), including a new runway and terminal for Florence. These projects are primarily expected to be financed through local leverage rather than shareholder equity.
• Future Growth: Continuously assessing expansion projects across different geographic regions to further grow its airport network. Discussions regarding the potential acquisition of Abuja Airport in Nigeria are ongoing, awaiting government's next steps.
• Market Monitoring: Closely monitoring the macro and political environment in Argentina and geopolitical dynamics in the "Cabo Suis" (likely referring to the Caucasus region, given Armenia's presence).