Corporacion America Airports SA

Good morning and welcome to the Corporación América Airport's second quarter 2023 earnings conference call. A slide presentation accompanies today's webcast and is available in the investor section of the Corporación América Airport's website. As a reminder, all participants will be 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 Iñaki Esmaola, Head of Investor Relations. Patricio, please go ahead.

Thank you. Good morning, everyone, and thank you for joining us today. Speaking during today's call will be Martina Ornacan, 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 findings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. Now, let me turn the call over to our CEO, Martin Ernagyan.

Thank you, Iñaki. Hello, everyone, and welcome to our second quarter 2023 earnings call. I will kick off today's call by providing a summary of our financial highlights, followed by a quick review of traffic and cargo trends. I will then turn the call to Jorge to go through our second quarter financial results. We reported an outstanding quarter with robust performance across the board. Adjusted EBITDA reached yet another record of $151 million, up 27% when compared to second quarter of 2019, with the adjusted EBITDA margin XI-12 expanding 3.2 percentage points. This was achieved with passenger traffic approaching pre-pandemic levels. Again this quarter, all territories contributed with positive adjusted EBITDA, fueled by a strong rebound in travel demand and solid execution across operations. Revenues ex-IFIC-12 climbed 17% when compared to second quarter 2019, reflecting the good performance in both aeronautical and commercial revenues. Costs, in turn, increased below revenue growth, reflecting the operating leverage we have built into the company. The increase in profitability, along with a slight reduction in net debt, contributed to further lowering our leverage ratio to an all-time low of 1.8 times, reflecting the amazing work we have undertaken during and after the pandemic in connection with our commercial activities. On the CapEx front, We remain well on track with the execution of our fully funded CAPEX programs in Argentina and Uruguay and are actively and selectively looking to other airport concessions to continue expanding our airport network and delivering long-term value to our stakeholders. Next, turn to slide four for a deeper dive into passenger traffic patterns. The line chart tracks the sustained recovery we have been seeing in travel demand. We were just 1% below second quarter of 2019 levels. As a point of reference, in the first quarter, traffic was about 10% below the 2019 level. Importantly, by June, passenger traffic has exceeded pre-pandemic by 3%. Now, let's look at the second quarter performance across each of our countries of operations. Armenia, Argentina, and Ecuador posted volumes above pre-pandemic levels, while Uruguay, Italy, and Brazil continued their recovery trend. Armenia continues to lead the recovery, with traffic climbing 73% year-on-year and exceeding pre-pandemic levels for the fifth straight quarters by 82%. This strong performance was aided by the entrance of new carriers and increased flight frequencies. And it continued into July with traffic surpassing pre-pandemic levels by 62%. Passenger traffic in Argentina surpassed pre-pandemic levels by low single digits for the first time since the onset of the pandemic. Domestic traffic, which accounted for over 70% of total traffic, exceeded pre-pandemic levels by 11%, while international passengers continued to recover, reaching 82% of second quarter of 2019 levels. This good performance continued into July, with total traffic at 98% of July 2019 levels, driven by domestic traffic above pre-pandemic levels and international traffic improving to 88% of July 2019. Ecuador continues to post a healthy traffic trend, 11% above pre-pandemic levels, supported by double-digit growth in both domestic and international traffic. Growth continued into July, outperforming 2019 volumes by 10.1%, as robust traffic with the US, Europe, and Panama supported international performance. while Ecuador's entry energized the competitive environment in domestic traffic. Uruguay, where traffic is 100% international, saw the number of passengers increase to 87% of second quarter of 2019 levels, following a weaker first quarter of the year. This performance continued into July, with passenger traffic increasing to 94.6% of July 2019 volumes. In Italy, passenger traffic continued to recover, reaching 98% of pre-pandemic levels, reflecting similar recovery levels for both domestic and international traffic. Notably, Florence Airport was operating 8% above second quarter of 2019 levels, while some pre-pandemic destinations have not yet resumed at Pisa Airport. In July, total traffic improved further, surpassing 2019 volumes by 6.2%. Finally, traffic in Brazil increased to 96% of pre-pandemic levels, up from 86% in the prior quarter. While traffic was impacted by financial and aircraft constraints at some local airlines, domestic traffic, which accounts for the vast majority of traffic in Brazil, surpassed pre-pandemic levels for the first time, up in the low single digits. Delay traffic was 12.1% below 2019 levels, still impacted by the aforementioned financial and aircraft constraints. Next cargo on slide five. Cargo volumes were up low single digit year on year, reaching 86% of pre-pandemic levels, up from 81% in the prior quarter. Noteworthy, cargo revenues were 29% above pre-pandemic levels, reflecting a sustained strong contribution from Argentina. Cargo volumes in Armenia and Uruguay remain above pre-pandemic levels. In turn, Argentina and Ecuador improved to 86% and 82% of second quarter of 2019 levels respectively, while Italy and Brazil are still in recovery phase. In sum, we are encouraged by the positive recovery trends we are seeing in our cargo business and we are confident in this sustained recovery going forward. Importantly, our customers can rely on us to provide dependable and exceptional service. I will now hand off the call to Jorge, who will review our financial results. Please, Jorge, go ahead.