LUXEMBOURG - Corporación América Airports S.A. (NYSE: CAAP), a prominent private airport operator, disclosed a mixed performance in its June 2024 traffic report, with a notable 8.9% year-over-year (YoY) decline in total passenger traffic. Excluding the impact from the discontinuation of operations at Natal airport, the decrease stood at 6.7% YoY.
The company, which manages 52 airports across Latin America and Europe, experienced a disparate performance across its network. Domestic passenger traffic suffered a significant drop of 20.3% YoY, influenced mainly by weaker results in Argentina and Ecuador. Still, international traffic presented a brighter spot with a 9.4% increase, primarily driven by Argentina, Italy, and Uruguay.
Argentina's total traffic fell by 14.1% YoY, with domestic traffic down by 22.3% YoY. This was partly attributed to flight cancellations by local airlines and the country's ongoing recession. Nonetheless, international passenger numbers rose by 12.1% YoY, buoyed by new routes and increased frequencies, such as Avianca's new service from Ezeiza to Medellin and ITA's augmented flights from Ezeiza to Rome.
Italy showcased a robust growth of 15.2% in passenger traffic compared to June 2023, with international traffic up by 17.4% YoY. Pisa and Florence airports were the main contributors to this growth.
Conversely, Brazil's passenger numbers dropped by 14.9% YoY, or 4.4% when adjusted for the Natal airport's discontinuation. The country's traffic was notably affected by local airlines' financial and aircraft limitations, leading to a reduced supply of flights.
Uruguay's passenger traffic surged by 21.1% YoY, thanks to the introduction of new routes such as JetSMART Airlines' service between Montevideo and Buenos Aires.
The company also reported a 4.3% YoY increase in cargo volume, with positive contributions from Argentina, Ecuador, and Brazil. However, total aircraft movements across the network decreased by 10.5% YoY, with declines in all countries except Italy, which saw a 6.1% increase.
Corporación América Airports served 81.1 million passengers in 2023, marking a 23.7% increase from 2022 but still 3.6% below the 84.2 million passengers in 2019. The company's shares are traded under the ticker CAAP on the New York Stock Exchange.
This report is based on a press release statement from Corporación América Airports.
In other recent news, Corporacion American Airports SA has made notable strides despite challenging conditions. The company's resilience was highlighted when Citi increased its price target to $21.50 from the previous $21.00, maintaining a Buy rating on the stock.
Citi's endorsement reflects confidence in the airport operator's diversified approach to its business, which has helped buffer the company against region-specific challenges.
In addition to this, Corporacion American Airports recently disclosed a strong performance in the first quarter of 2024. The firm's revenues per passenger hit a record of $20.6, and adjusted EBITDA climbed by 16% year-on-year to $163 million. Growth in passenger traffic was particularly strong in Argentina, Italy, and Uruguay, and the company secured a 10-year extension for the Punta del Este Airport concession in Uruguay.
These are the latest developments for Corporacion American Airports, which continues to navigate a complex global environment. The company's broad geographic footprint and diversified exposure to different political and regulatory environments have been beneficial.
These factors, coupled with a solid balance sheet and a record low net leverage ratio of 1.2 times, underscore the firm's strategic positioning and its ability to sustain its growth trajectory.
InvestingPro Insights
As Corporación América Airports S.A. (NYSE: CAAP) navigates through a challenging landscape marked by fluctuations in passenger traffic, the company's financial metrics and market performance offer a multi-faceted view of its potential.
According to the latest data from InvestingPro, CAAP's market capitalization stands at approximately $2.75 billion, with a Price/Earnings (P/E) ratio of 7.66, which suggests that the stock is trading at a low earnings multiple compared to its peers. This could indicate a potentially undervalued stock, especially when considering the company's strong free cash flow yield, an InvestingPro Tip that highlights the firm's ability to generate cash after capital expenditures.
Despite recent traffic declines, analysts remain optimistic about CAAP's profitability, predicting that the company will be profitable this year. This outlook is supported by the fact that CAAP has been profitable over the last twelve months.
Furthermore, the company has demonstrated a strong return over the last five years, reinforcing its resilience and long-term performance in a volatile industry. It's important to note, however, that CAAP does not pay a dividend to shareholders, which might be a consideration for income-focused investors.
InvestingPro data also shows a Price to Book (P/B) ratio of 2.51 as of the last twelve months leading up to Q1 2024, and a notable EBITDA growth of 15.85% during the same period. These metrics, coupled with a PEG Ratio of 0.07, may appeal to value investors looking for growth potential at a reasonable price. Moreover, CAAP's share price is currently at 90.47% of its 52-week high, which may suggest a window of opportunity for investors believing in the company's recovery and growth prospects.
For those interested in a deeper dive into Corporación América Airports' performance and potential, InvestingPro offers additional insights and tips. Readers can take advantage of a special offer using coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes access to a total of 8 InvestingPro Tips for CAAP, providing a more comprehensive investment analysis.
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