Corporación América Airports' Q3 2025 Earnings Call: Contradictions Emerge in Argentina Rebalance, Commercial Revenues, Italy Expansion, and Contract Strategy

Date of Call: November 24, 2025

Financials Results

• Revenue: Total revenues ex-IFRIC 12 increased 16.6% year-over-year
• Operating Margin: Adjusted EBITDA margin ex-IFRIC 12 41.2%, expanded 5.2 percentage points YOY; Adjusted EBITDA up 34% to $194 million

Guidance:

• Expect positive traffic trends to continue into Q4, with a more moderate pace of domestic growth in Argentina.
• Anticipate solid Q4 results, though not benefiting from the easier Argentina comparisons that supported Q3.
• Italy: Environmental Impact Assessment approved; government forum expected end of Q1 with ~3 months process before works.
• Brasilia shopping mall on track to open in 2Q26.
• CapEx approvals progressing in Armenia and Italy; inorganic pipeline advancing (Baghdad Award Agreement, Angola tender).

Business Commentary:

* Strong Passenger Traffic Growth: - Corporación América Airports (CAAP) reported that passenger traffic was up over 9% for Q3 2025, reaching 23.3 million passengers. - The growth was driven by solid domestic and international trends, particularly in Argentina, Italy, and Brazil.

• Revenue and Profitability Expansion:
• Revenue growth outpaced traffic, rising 17%, while adjusted EBITDA increased 34% to $194 million.

• The performance was particularly strong in Argentina, Armenia, Brazil, and Italy, driven by higher aeronautical revenues and strong execution across the network.

• Cargo Revenue and Business Model Success:

• Cargo revenues rose 20% year-over-year, with Argentina showing a 23% increase.

• The growth was attributed to improved pricing dynamics and the successful implementation of a new cargo business model in Argentina.

• Argentina's Exceptional Performance:

• Argentina's total passenger traffic increased nearly 13%, with domestic and international traffic growing by nearly 11% and 16%, respectively.
• This performance was supported by sustained demand, incremental capacity, and strong connectivity gains from new and resumed routes.
  

Sentiment Analysis:

Overall Tone: Positive

• Management: "We delivered another very strong quarter" with passenger traffic up >9%; revenue growth outpaced traffic (+16.6% reported) and adjusted EBITDA rose 34% to $194M, while adjusted EBITDA margin expanded 5.2 p.p. to 41.2%, and net debt fell to $579M, supporting a bullish operational and financial narrative.

Q&A:

• Question from Guilherme Mendes (JPMorgan Chase & Co, Research Division): What are the main near-term milestones and timing for the Argentina concession rebalance? And on commercial revenues, is the current level normalized or can we expect further improvement in commercial revenues per pax?
  Response: Rebalance: discussions progressing technically and politically but management cannot provide a timetable; Commercial revenues: strong quarter (management noted continued trend), likely to continue but not necessarily accelerating.

• Question from Andres Cardona (Citigroup Inc., Research Division): Any update on Armenia investment opportunities and visibility on timelines for projects?
  Response: Italy: EIA approval obtained; next government forum expected end of Q1 then ~3 months before works can start; Armenia: discussions with government are progressing but no firm timeline to report.

• Question from Daniel Vielman (BofA Securities, Research Division): Regarding the Baghdad Airport, what is the size of the opportunity and expected traffic outlook?
  Response: Signed a nonbinding Award Agreement; awaiting government call to finalize and sign concession; management is constructive and optimistic on potential traffic growth but will disclose financial and traffic details after concession signing.

Contradiction Point 1

Argentina's Concession Rebalance Timeline and Progress

It involves the timeline and progress of the concession rebalance in Argentina, which impacts the company's strategic and financial planning in the region.

What are the key milestones and expected timeline for rebalancing the concession agreement in Argentina? - Guilherme Mendes (JPMorgan Chase & Co, Research Division)

2025Q3: We continue to make good progress on the rebalance of the concession agreement in Argentina on both technical and political levels. However, we cannot provide a precise timetable as it depends on the government's process. - Jorge Arruda(CFO)

What cost control measures are in place, and how will they impact Argentina's rebalancing concession discussions with the government? - Alejandro Demichelis (Jefferies)

2025Q1: Jorge Arruda: Concession rebalancing discussions ongoing with government. Bureaucracy may impact speed, not substance. Martin Eurnekian: No significant changes expected despite bureaucratic delays due to government continuity. - Jorge Arruda(CFO), Martin Eurnekian(CEO)

Contradiction Point 2

Commercial Revenue Outlook

It involves differing expectations regarding the acceleration of commercial revenues, which directly impacts corporate financial performance and investor expectations.

What are the expectations for commercial revenues ahead? - Guilherme Mendes (JPMorgan Chase & Co, Research Division)

2025Q3: Commercial revenues in Q3 were up 8% year-on-year, with strong performances in areas like VIP lounges, car rental, fueling, and cargo. We expect this trend to continue, although it may not accelerate significantly. - Jorge Arruda(CFO)

Can you clarify the guidance for 15%-20% commercial revenue growth? How does this guidance compare to historical trends? - Andres Cardona (Citigroup Inc., Research Division)

2025Q2: At the investigated level, the impact is deemed to be contained, and, consequently, our guidance remains unchanged. As a reminder, our guidance is for commercial revenue growth in the range of 15% to 20% for the year. - Jorge Arruda Filho(CFO)

Contradiction Point 3

Italy's Expansion Timeline and Progress

It involves the timeline and progress of Italy's expansion, which affects the company's growth strategy and operational planning in the region.

Are there any updates on Armenia and its investment opportunities? - Andres Cardona (Citigroup Inc., Research Division)

2025Q3: We have recently obtained approval for the environmental assessment of the project in Italy, with the next step being a confidential forum. The process should take about 3 months. - Jorge Arruda(CFO)

What is the status of your Italy expansions and the timeline to begin them? - Unidentified Analyst (Bank of America)

2025Q1: Italy's expansion is progressing smoothly, with no major issues. Environmental impact assessment expected to conclude by third quarter. Timing remains uncertain due to bureaucratic process. - Martin Eurnekian(CEO)

Contradiction Point 4

Contract Extension and Value Creation

It involves the company's position on contract extensions and creating shareholder value, which are critical strategic considerations.

Update on the concession review process in Argentina, its progress, and next steps? What are your views on inorganic growth opportunities in Latin America and beyond? - Alejandro Anibal Demichelis (Jefferies)

2025Q3: Our focus is on creating value for all stakeholders. While not committing to specific extensions, we are open to pursuing options like contract extensions to enhance shareholder value and create a sustainable business. - Martin Francisco Eurnekian(CEO)

Will there be more contract extensions in the coming years? - Stephen Trent (Citigroup)

2024Q4: We are open to diverse opportunities across various geographies, having strengthened our M&A team. We are actively pursuing opportunities in the Middle East, Africa, Latin America, and Europe. - Martin Francisco Eurnekian(CEO)