Earnings Call Contradictions: Unpacking Investment Strategies and Regulatory Challenges in Argentina's Airport Sector

Expansion and investment strategy, regulatory environment and concession review process, airport infrastructure development, Argentina's domestic tariff adjustment are the key contradictions discussed in the company's latest 2025Q1 earnings call.



Strong Passenger Traffic Growth:
- CAAP reported an overall 7% year-over-year increase in total passenger traffic for Q1 2025, reaching over 20.4 million passengers, excluding the Natal Airport concession.
- Traffic growth was broad-based, with both international and domestic traffic performing well, driven by strong performances in Argentina, Italy, and Brazil. Argentina in particular achieved record traffic levels in January.

Revenue and Revenue per Passenger:
- Total revenues excluding IFRIC12 increased by 6.4% year-on-year for Q1 2025, notably surpassing passenger growth with a 11.5% increase on an ex-IAS29 basis.
- Revenue per passenger remained relatively stable at $20.5, with a 3.9% increase excluding IAS29.
- The revenue growth was supported by Argentina's strong traffic performance, particularly in international traffic, and Italy's increased frequencies and load expansion initiatives.

Adjusted EBITDA Performance:
- Adjusted EBITDA excluding IFRIC12 reached $156 million for Q1 2025, up 4% when excluding the impact of IAS29.
- The improvement was attributed to strong contributions from Argentina, Uruguay, and Ecuador, despite margin contractions in Argentina and Italy due to inflationary pressures and cost increases.

Cargo Volume and Revenue Trends:
- Cargo volumes increased by 9% year-over-year in Q1 2025, with notable growth in Uruguay and Argentina.
- However, cargo revenues declined by 7% year-over-year primarily due to lower storage days in Argentina, but showed slight improvement on an ex-IAS29 basis with better pricing and volume trends in Uruguay.

Liquidity and Debt Position:
- CAAP maintained a solid liquidity position of $524 million at the end of Q1 2025, with a net leverage ratio of 1.1x.
- The company sustained a healthy financial position, supported by cash generation and debt reductions in Argentina and Ecuador, enabling continued pursuit of growth opportunities.