CAAP Q4 2025 Earnings Call Transcript

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DATE

Tuesday, March 17, 2026 at 9 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Martin Eurnekian
• Chief Financial Officer — Jorge Arruda

TAKEAWAYS

• Total Passenger Traffic -- 22.3 million, increasing over 9%, with record levels in Argentina, Armenia, Italy, and Uruguay.
• International Traffic -- Up 12%, with Argentina contributing more than half of the total increase.
• Domestic Traffic -- Rose nearly 7%, led by Argentina and Brazil.
• Total Revenues ex IFRIC 12 -- Increased 17%, almost double the 9% traffic growth rate.
• Revenue per Passenger -- Up nearly 8% to $20.8 from $19.4.
• Aeronautical Revenues -- Grew 17%, with Argentina up 21% and other geographies delivering double-digit gains.
• Commercial Revenues -- Increased 60%, predominantly driven by cargo, fuel, VIP lounges, parking, and duty free; all countries except Ecuador posted double-digit growth.
• Cargo Revenues -- Increased 22%; volume growth in Argentina and Uruguay offset by declines in Brazil, Italy, Armenia, and Ecuador.
• Total Cost and Expenses ex IFRIC 12 -- Up nearly 11%, well below revenue growth, indicating positive operating leverage.
• Adjusted EBITDA ex IFRIC 12 -- Increased nearly 40% to $211 million, including a $32.5 million benefit from a Peru arbitration award; excluding this and a prior year Brazil item, adjusted EBITDA was up 33.3% to $178 million, with margin expanding 4.6 percentage points to 38.3%.
• Argentina Segment Adjusted EBITDA -- Grew 43%, with margin improving 7.5 percentage points.
• Armenia Segment Adjusted EBITDA -- Increased 15%; margin contraction reflects higher operating expenses and increased fueling activity.
• Brazil Segment Adjusted EBITDA -- Up 44% year over year (excluding a prior $110 million COVID item) with 6.4 percentage point margin expansion.
• Italy Segment Adjusted EBITDA -- Down 11%, or up 4% when excluding construction at Toscana Aeroporti Costruzioni.
• Uruguay Adjusted EBITDA -- Down 2%, reflecting higher salary, maintenance, and currency effects.
• Ecuador Adjusted EBITDA -- Declined 12% due to increased maintenance cost in the period.
• Total Liquidity -- $750 million, up 36% from $526 million at prior year end.
• Net Debt -- $502 million, reduced from $780 million at December 2024.
• Net Leverage Ratio -- Improved to 0.7 times at year end.
• Armenia Concession Extension -- Secured for 35 years (through 2067), requiring a $425 million investment and major infrastructure expansion.
• Galapagos (Ecuador) Concession -- Extended by six years.
• New Concession Awards -- Company named as preferred bidder for Baghdad (Iraq) and Luanda (Angola); contract execution still pending.
• Operating Subsidiary Cash Generation -- Every operating subsidiary delivered positive full-year operating cash flow.
• Capital Allocation -- Current growth targets to be funded primarily with existing cash; focus remains on portfolio expansion via organic and inorganic means.
• Impacts from Regional Conflict -- CFO Arruda stated, "approximately 10% to 15% of the traffic in Armenia has been affected by the war." Since onset, regional traffic growth has been flat rather than shrinking or growing.

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RISKS

• CFO Arruda stated, "approximately 10% to 15% of the traffic in Armenia has been affected by the war," with growth flat since the conflict started, indicating continued risk for international passenger flows in the region.
• Updated timing for the Argentina concession rebalance and Italy investment opportunities remains uncertain, with management unable to provide public timelines due to regulatory and political factors.
• Ecuador's environment "remains challenging," despite slight traffic improvement.
• Margin contraction in Armenia's segment driven by "higher operating expenses and a greater contribution from the fueling business, which structurally carries lower margins than the core airport operations."

SUMMARY

Corporación América Airports S.A. (NYSE:CAAP) reported record-high passenger volumes and revenue gains materially outpacing traffic increases, with commercial revenue showing exceptional strength relative to the aeronautical segment. Strategic advances included long-term contract extensions in Armenia and Ecuador, and selection as preferred bidder for new concessions in Iraq and Angola, although completion of these awards is not guaranteed. Cash generation was positive across all subsidiaries, liquidity rose sharply, and net leverage dropped to a multiyear low, providing substantial financial flexibility for future expansion.

• Management confirmed operating cash flow coverage across all major geographies, highlighting portfolio resilience and geographic diversification.
• Full-year Argentina traffic, international segment uplift, and key carrier additions underpinned outperformance, with international growth in Argentina and Armenia notably strong through early 2026.
• "This disciplined approach remains central to how we allocate capital and expand our portfolio." capital allocation remains central in all expansion initiatives, with existing cash reserves expected to fund immediate new concession opportunities.
• Tariff rebalancing negotiations in Argentina and delayed approval processes in Italy may limit near-term visibility on contract or project upgrades.
• Ongoing war in the region directly stalls international growth in Armenia; management attributes flat segment results to conflict disruptions but states normalization will depend on geopolitical developments.

INDUSTRY GLOSSARY

• IFRIC 12: An international accounting interpretation that governs how companies account for service concession arrangements, impacting the way revenues, costs, and assets are reported for infrastructure operators such as airport concessions.

Full Conference Call Transcript

Martin Eurnekian: Thank you, Yaki, and good morning to everyone joining us today. We finished 2025 with a very solid performance. Across the business, we saw continued revenue momentum, strong profitability, and important progress on the strategic front. Passenger traffic remained robust in the fourth quarter, rising just over 9% year over year and reaching new heights for both the quarter and the full year, with Argentina, Armenia, Italy, and Uruguay setting annual traffic records. Equally important, this performance was broad-based, with positive trends across our main markets, in particular strong international growth in Argentina. Revenue growth once again outpaced traffic, supported by solid performance in both our aeronautical and commercial businesses, along with further improvement in revenue per passenger.

Commercial revenues remained especially strong, with good contributions from cargo, fuel, and passenger-related services across the portfolio. This positive momentum also translated into strong profitability. We delivered strong adjusted EBITDA growth in the quarter together with meaningful margin expansion, as operating leverage and commercial execution continued to support results. At the same time, we ended the year with a healthy balance sheet, low leverage, and strong liquidity, providing significant financial capability. We also made meaningful strategic progress. In Armenia, we secured a 35-year extension of the concession, and in Galapagos, we obtained a six-year extension, both of which enhance the long-term visibility of our portfolio.

We also have received concession awards and been declared preferred bidders on two new airport concessions, which I will discuss shortly.

Moving on to passenger traffic on Slide 4, we ended the year with another quarter of solid growth across our operations. Total passenger traffic reached a record 22,300,000, supported by both domestic and international travel, with particularly strong momentum in the international segment. International traffic grew 12%, with every country in our portfolio posting year-over-year growth. Argentina was once again the main contributor, accounting for more than half of the total increase in traffic during the quarter, with solid contributions from Italy, Brazil, and Armenia. Domestic traffic increased nearly 7%, mainly driven by Argentina and Brazil, with Ecuador also contributing positively.

Let me briefly go through the main markets. In Argentina, passenger traffic increased nearly 9%, a record for both the quarter and the full year. Domestic traffic was up 6%, supported by a strong load factor and additional capacity across several routes. International traffic was up 15%, reflecting continued route reactivations and frequency increases. During the quarter, we saw positive contributions from airlines such as LATAM, Air Canada, Emirates, Delta, China Eastern, and ITA Airways, among others, which continue to strengthen connectivity and support demand. This strong performance continued into January and February, with passenger traffic growing 7.9% and 5.8% year over year, respectively.

In Italy, traffic grew 8%, also reaching new heights for both the quarter and the full year. Growth was mainly driven by the international segment, which increased 11%, with solid performance across both Florence and Pisa. Domestic traffic declined modestly during the quarter, mainly reflecting some operational disruptions at certain airlines. This positive trend continued into January and February, with passenger traffic increasing 4% and 7.4% year over year, respectively.

The Brazil operation posted a strong quarter, with total traffic up 12%. Domestic traffic remained solid, while international traffic also grew at a healthy pace. The improvement reflects a better environment among the main airlines operating in the country and stronger activity during the summer season, including additional frequencies on routes to the United States. This trend extended into January and February, when overall traffic increased by 16% and 8.2% year over year, respectively.

Uruguay returned to growth in the quarter, with traffic up 5% and reaching new heights for both the quarter and the full year. This performance reflects a recovery from the temporary disruption we saw in the third quarter related to a planned runway closure. Traffic also benefited from stronger seasonal operations, new routes, and added frequencies, particularly ahead of the summer season. Traffic in the first two months of the year performed well, with year-over-year increases of 12% and 4% in January and February, respectively.

In Armenia, we saw a pickup in passenger traffic, up nearly 14%, breaking another record for both the quarter and the full year. Growth was supported by sustained international demand and expanded connectivity. During the quarter, Wizz Air established a new base and launched 10 new routes to Europe, which further strengthens the airport's position as an important regional hub. This strong performance continued into January and February, with passenger traffic increasing by 10% and 11.6% year over year, respectively.

Finally, Ecuador returned to growth, with traffic up 1%. While the environment remains challenging, performance improved versus the prior quarter, supported by a recovery following the runway works completed earlier in the year and modest growth in both domestic and international traffic. Traffic in the first two months of the year performed well, with year-over-year increases of 5% and 8.6% in January and February, respectively. Overall, the fourth quarter contributed to a very strong year for passenger traffic, with healthy momentum across the portfolio and record levels in several of our key markets.

Turning to cargo on Slide 5, we also delivered a strong quarter, with cargo revenues up 22% year over year, supported by solid contributions from Argentina, Uruguay, and Brazil. On the volume side, results were mixed across the portfolio. Total cargo volume was slightly below last year, with growth in Argentina and Uruguay offset by softer trends in Brazil, Italy, Armenia, and Ecuador. Even so, the strong overall revenue performance highlights our ability to capture value from the cargo business. Looking ahead, we remain focused on strengthening our cargo platform, improving our commercial capabilities, and continuing to capture growth opportunities across the network. I will now turn the call to Jorge, who will review our financial results. Please go ahead.

Jorge Arruda: Thank you, Martin, and good day, everyone. Let's begin with our top line on Slide 6. Total revenues ex IFRIC 12 increased 17%, nearly doubling passenger traffic growth of 9%. This strong performance was driven by double-digit growth in both aeronautical and commercial revenues, supported by positive contributions across all countries of operation, with all countries but Ecuador delivering double-digit revenue growth. Revenue per passenger was up nearly 8%, reaching $20.8 compared to $19.4 in the same quarter last year.

Aeronautical revenues increased 17%, mainly driven by strong results in Argentina and further supported by broad-based growth across the portfolio. Argentina remained the main contributor, with aeronautical revenues up 21%, largely reflecting a 15% increase in international traffic volumes. Strong momentum continued in Brazil, Armenia, and Italy, each delivering double-digit growth, all in line with passenger traffic trends.

Commercial revenues were up 60%, well above the 9% increase in traffic. This was supported by higher contributions from cargo and fuel revenues and solid growth across VIP lounges, parking facilities, and duty free. Overall performance was consistent across the portfolio, with all countries except Ecuador achieving double-digit growth.

Turning to Slide 7, total cost and expenses excluding IFRIC 12 increased nearly 11%, broadly in line with higher operating activity and well below revenue growth of 17%, resulting in positive operating leverage during the quarter. Cost of services were up 11%, largely due to higher concession fees in line with revenue growth, as well as higher fuel costs in Armenia, consistent with the expansion in fuel revenues, and higher D&A expenses. SG&A expenses increased 6%, mainly reflecting higher maintenance and payroll expenses, particularly in Argentina. In Argentina, total cost and expenses increased just over 7% year over year, well below revenue growth of 18%, reflecting strong operating leverage, continued cost discipline, and favorable currency fluctuation.

Moving on to profitability on Slide 8, adjusted EBITDA ex IFRIC 12 was up nearly 40% to $211,000,000, reflecting strong performance in Argentina and Armenia, as well as a $32,500,000 positive impact on EBITDA related to the arbitration award payment received from the government of Peru. Argentina delivered another outstanding quarter, with adjusted EBITDA up 43%, with margin expansion of 7.5 percentage points, supported by strong passenger trends, continued momentum in our commercial activities, as well as effective cost controls. Armenia also performed very well, with adjusted EBITDA up 15%, driven by record passenger levels.

Margin contraction during the quarter primarily reflected higher operating expenses and a greater contribution from the fueling business, which structurally carries lower margins than the core airport operations. At Brazil Airports, adjusted EBITDA year-on-year comparisons were impacted by the $110,000,000 COVID-related economic breakeven received in fourth quarter 2024. Excluding this item, adjusted EBITDA increased 44% year on year, with a margin expansion of 6.4 percentage points, reflecting healthy traffic growth and strong performance across VIP lounges and other passenger-related revenues. Italy posted an 11% decrease, or a 4% increase when excluding construction services at Toscana Aeroporti Costruzioni.

In Uruguay, adjusted EBITDA was slightly down 2%, reflecting higher salaries and maintenance expenses, along with year-on-year appreciation of the Uruguayan peso, which also impacted margins. Finally, in Ecuador, adjusted EBITDA declined 12%, mainly due to higher maintenance expenses concentrated in the fourth quarter 2025. Overall, excluding the $110,000,000 COVID-related economic breakeven in Brazil in the fourth quarter 2024 and the $32,500,000 arbitration award recognized in 2025, adjusted EBITDA ex IFRIC 12 increased 33.3% year over year to $178,000,000, with a margin expansion of 4.6 percentage points to 38.3%.

Now turning to Slide 9, we closed the quarter with total liquidity of $750,000,000, representing a 36% increase versus the $526,000,000 reported at year-end 2024. Notably, each of our operating subsidiaries delivered positive full-year operating cash flow, highlighting the resilience and diversification of our cash generation profile across geographies. Cash used in financing activities mainly reflected debt repayment in Argentina as well as dividends paid to noncontrolling interests in our subsidiaries. Moving on to the debt and maturity profile on Slide 10, total debt at year-end was $1,100,000,000, while our net debt decreased further, down to $502,000,000 from $780,000,000 in December 2024.

As a result of lower net debt and continued strong financial performance, our net leverage ratio continued to improve, reaching 0.7 times at year-end. To wrap up, our results reflect the great momentum for our portfolio and the quality of our management team. We closed the year with the strongest balance sheet in our history, giving us financial flexibility to advance our growth strategy through both organic initiatives and inorganic opportunities. I will now hand the call back to Martin, who will provide closing remarks and discuss our view for the year.

Martin Eurnekian: Thank you, Jorge. Turning now to Slide 12, I will briefly summarize the key takeaways from the last quarter and from 2025. 2025 was a record year for Corporación América Airports S.A. We delivered record passenger traffic, strong revenue growth, meaningful EBITDA margin expansion, and closed the year with a very solid balance sheet. These results reflect the resilience and quality of our portfolio, the disciplined execution of our teams, and the benefits of our diversified geographic footprint. Beyond the strong operating and financial performance, we also made important progress in strengthening long-term visibility of our portfolio and advancing our expansion pipeline.

In Armenia, we secured a 35-year extension of the concession through 2067, which includes a $425,000,000 investment program and the significant expansion of our infrastructure. In Ecuador, we achieved a six-year extension of the Galapagos concession. On the inorganic growth front, we have received concession awards and have been selected as preferred bidders for both Baghdad in Iraq and Luanda in Angola, while continuing to evaluate additional bidding processes and M&A opportunities across multiple regions. While these projects remain subject to the execution of the definitive concession agreements, both opportunities offer attractive long-term growth potential. At the same time, we remain disciplined in our capital allocation. This disciplined approach remains central to how we allocate capital and expand our portfolio.

Our operating performance was also matched by strong industry recognition. During the year, Aeropuertos Argentina was named Best Airport Operator in South America, Brasilia was ranked number two worldwide in punctuality among medium airports, Carrasco was recognized as Best Airport in Latin America and the Caribbean in its category, and Varna was named Best Airport in Europe and Most Dedicated Staff in the segment. These recognitions reflect our continuous focus on operational excellence and customer experience. Looking ahead, we remain focused on execution and value creation. We expect continued positive momentum in passenger traffic across our key markets, supported in particular by strong international traffic trends in Argentina.

At the same time, we will continue to prioritize commercial optimization and revenue per passenger growth across the portfolio. We are also closely monitoring the evolving geopolitical situation in the Middle East and remain attentive to any potential implications for international travel. I will now turn the call over for questions. Thank you.

Operator: Ladies and gentlemen, if you do have any questions, please press star followed by 1. Should you wish to withdraw from the polling process, please press star followed by 2. If you are using a speakerphone, you will need to lift the handset first before pressing any keys. Out of consideration to other callers on the line today, we ask that you please limit yourself to one question and one follow-up, and requeue should you have additional. Thank you. Your first question will be from Alejandro Demichelis at Jefferies. Please go ahead.

Alejandro Demichelis: Good morning, gentlemen. Thank you very much for taking my questions. Martin, you mentioned the strong traffic growth that you expect for the rest of the year. We have seen an increase in profitability across the business, so should we assume that what we have seen in terms of margins and profitability is the new base for Corporación América Airports S.A. going forward? That is the first question. And then the follow-up is, have you actually seen any kind of impact from the war in terms of your operations in Armenia, please?

Jorge Arruda: Hi, it is Jorge here. Thank you very much for your question. Regarding margins and profitability, what we saw in the first two months of the year—you probably have seen our traffic numbers—we increased by approximately 8.7% overall, with international 14.5% and domestic 1.5%. We remain constructive for the next few months, and we expect our business to continue growing according to passengers and a bit over passengers, in fact. Margins in terms of EBITDA margins are stable for the time being. In terms of your second question, approximately 10% to 15% of the traffic in Armenia has been affected by the war.

The first few months of the year were very positive—around 11% growth for the first two months—and what we have observed since the war is flat: no growth, no decline. I think it is totally tied to the war, and when this war ends, the traffic would resume very quickly. It is very difficult to say at this point in time, but also part of this traffic is connecting traffic in the Middle East that probably, at least some of it, should be going through other routes that are available in Armenia. But again, the impact that we saw in the first few days of the war is flat growth. That is very clear. Thank you.

Operator: Thank you. The next question will be from Andres Cardona at Citigroup. Please go ahead. Please go ahead, Andres. Can you unmute your line, please? No response? Please go ahead, Andres.

Andres Cardona: I am trying to ask. Can you hear me?

Operator: Yes. Go ahead. We can hear you.

Andres Cardona: Good morning. My two questions are about any update of the Argentina concession rebalance—anything you could share in terms of timing or expectations? And second, if you have also an update of the Italy investment opportunity. I also understand it has not been approved, but what are you expecting in terms of timing?

Jorge Arruda: Thank you for your questions. On Argentina, we are on the right track. However, it is very difficult for us to provide publicly a timing for the outcome of the rebalance, given the political and bureaucracy dynamics associated with a process like this one. But again, we are on the right track. We are in very frequent discussions with the government, and we will keep the market updated as we receive concrete news from the government. In connection with Italy, it is also very difficult for us to provide a timetable as to when this will be finalized and we will be able to begin constructions, but we are making progress.

I think the approval that we got was the environmental approval. There are a few more processes to go before we are fully approved to begin construction. But again, we are on the right track, and again, we will keep the market posted as we receive concrete news.

Operator: Thank you. Once again, ladies and gentlemen, if you do have any questions, please press star followed by 1 on your touchtone phone. To remove yourself, press star followed by 2. Our next question will be from Julia Orsi at JPMorgan. Please go ahead.

Julia Orsi: Yes, hello, everyone. Good morning. Thanks for taking the time. Can you comment a bit on your capital allocation strategy going forward? I know you mentioned this disciplined strategy, but can you comment a bit on what you are expecting in terms of new regions and concessions that you might be willing to invest? And second, what should we think of the commercial revenues growth going forward and the main drivers behind it? Thank you.

Jorge Arruda: Thank you for your questions. In connection with capital allocation, we—as Martin has mentioned in the call—have been awarded in Iraq and Angola. We are pursuing those opportunities. Obviously, with the situation in Iran and the war, etc., this process we expect to be delayed. In Angola, we are in frequent discussions with the government to try to move ahead and finalize this process. Besides that, we are looking at other opportunities in the Middle East, in Central Asia, in Africa, and in the Americas.

As I reported in previous conference calls, we have significantly boosted our new business team and are actively looking at various opportunities, and we believe that the best use of our liquidity is to grow the portfolio. That is what we are working 24/7 to achieve. In connection with commercial revenues, we indeed saw a very good year in 2025, with growth across the board, particularly in VIP lounges, in parking, in fueling as well, and in some markets in cargo. What we are seeing in the first few months of the year is a bit more of the same, perhaps not as intense as we saw in 2025, but the portfolio is performing very well.

Julia Orsi: Perfect. Thank you.

Operator: Thank you. The next question will be from Pablo Ricaldi at Itaú. Please go ahead, Pablo.

Pablo Ricaldi: Hi. Good morning. Maybe thinking a follow-up on the capital allocation: are you thinking, in terms of funding, to do all these acquisitions outside Argentina? Are you good?

Jorge Arruda: I think the targets that we are currently looking at, the funding would come primarily from cash at hand, given the size of the opportunities that we are looking at.

Pablo Ricaldi: Perfect. Thanks a lot.

Operator: Thank you. At this time, we have no other questions registered, so I would like to turn the conference back over to Martin.

Martin Eurnekian: I wanted to thank everybody for joining us today and remind you that our Investor Relations team is available for any further questions. Have a very good rest of your day.

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