Corporacion America Airports S.A. Stock

Thank you for joining us, and welcome to Corporación América Airports' Second Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Inaki Esnaola, Head of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us today. Speaking during today's call will be Martin Eurnekian, our Chief Executive Officer; and Jorge Arruda, our Chief Financial Officer.

Before we proceed, I would like to make the following safe harbor statements. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. Please note that throughout this call, all references to revenues, cost, adjusted EBITDA and margin will refer to figures excluding IFRIC 12. Also, all comparisons discussed are year-over-year unless otherwise noted.

I will now turn the call over to our CEO, Martin Eurnekian.

Thank you, Inaki, and good morning to everyone joining us today. Our second quarter adjusted EBITDA ex IFRIC 12 was down 4.5%, primarily driven by our Cargo business in Argentina, lower seat capacity in the domestic market in Argentina and non-recurring costs and expenses in Uruguay. Our Cargo business in Argentina was primarily affected by an extraordinary bad year-over-year comparison base. Labor disruptions at customs in April 2025 resulted in longer cargo storage periods and consequently, exceptionally high storage revenues. Seat capacity in Argentina was largely affected by Flybondi's significantly reduced operating fleet and higher fuel prices.

Non-recurring costs and expenses in Uruguay, including costs associated with the implementation of the new ILS system as well as maintenance and other expenses also weighted on adjusted EBITDA during the quarter. Despite these headwinds, our business remains strong and the diversification and quality of our portfolio continue to support our overall performance with 4 of our 6 segments delivering double-digit EBITDA growth. We observed healthy international demand and passenger growth across most of our markets in the second quarter.

We also continued to deliver strong revenue performance. Growth in both our Aeronautical and Commercial businesses enabled revenues to increase faster than passenger volumes. We were particularly pleased with the continued improvement in the revenue per passenger throughout the portfolio, including Argentina.

Our financial position remains strong, supported by healthy liquidity, continued cash generation and low leverage. This gives us the capacity to invest in our existing operations, pursue our acquisition strategy and return capital to shareholders while preserving financial flexibility. In that context, our Board approved a cash dividend distribution for 2026. This represents an important milestone in our capital allocation strategy, and I would like to discuss the dividend and its underlying principles in greater detail in my closing remarks. I would also like to highlight that our first half revenue and EBITDA remained ahead of the prior year period.

With that, let me turn to the traffic trends across our markets. Moving on to traffic on Slide 4. Approximately 21 million passengers traveled through our airports during the quarter, leaving total traffic broadly stable year-over-year. International traffic remained positive, increasing nearly 6% with double-digit growth in Armenia and positive contributions across the board, including Argentina. Domestic traffic declined approximately 8%, primarily due to lower seat capacity in Argentina. Excluding Argentina, total passenger traffic increased across all of our markets.

Looking at the main markets. In Argentina, international traffic was up 4%, supported by strong seat capacity growth during April and May, while overall passenger traffic declined approximately 6% as growth in international travel was more than offset by weaker domestic volumes. In fact, Argentina recorded the strongest increase in international seat capacity among South American markets during the first half of the year, driven by several airlines announcing new routes and additional frequencies.

Domestic traffic declined close to 12%, mainly reflecting lower airline capacity, while underlying demand remained resilient. Seat offer was largely affected by Flybondi's significantly reduced operating fleet and higher fuel prices. July traffic showed a sequential improvement from June with domestic traffic declining 10% and international traffic growing 5% year-over-year. In Italy, traffic increased just over 5%, driven mainly by international passengers, which represented more than 80% of total traffic and grew 6.4%. Both Pisa and Florence Airports contributed positively with domestic traffic also modestly higher. This positive trend continued into July with international passenger traffic increasing by more than 6%, while domestic traffic remained relatively stable.

In Brazil, traffic increased approximately 4%, reflecting continued year-over-year growth. Domestic traffic was slightly lower but this was more than offset by a 14% increase in transit passengers. Brasilia continued to benefit from its position as an important connecting hub within Brazil's domestic network. Traffic in July remained solid, up 8% year-over-year. Passenger traffic in Uruguay increased 2% despite the calendar shift of the Easter holidays, supported by additional connectivity, including Azul's new service between Montevideo and Belo Horizonte. In July, traffic increased by 3% compared to the same month last year.

Armenia reported the strongest traffic growth of our -- in our portfolio, up 13%. This strong performance was achieved despite flight cancellations and regional airspace restrictions related to the conflict in the Middle East. Strong demand from all other regions together with the Wizz Air base launch at Zvartnots late last year more than offset the disruptions caused by the conflict in the Middle East. This positive momentum continued into July with traffic growing 17% year-over-year.

In Ecuador, traffic increased approximately 2% despite continued security concerns. International traffic grew more than 8%, supported by strong demand on routes to the United States, new services from Avianca, JetBlue and LATAM and additional frequencies from American Airlines. Domestic traffic remains softer as elevated airfares continue to constrain demand. In July, traffic declined 1% year-over-year as strong international traffic growth was more than offset by a decline in domestic traffic.

In summary, international demand remained healthy and broad-based during the quarter, helping to mitigate the concentrated pressure on domestic traffic in Argentina.

Moving on to Cargo on Slide 5. Cargo revenues declined primarily driven by Argentina. Such decline was caused by an extraordinary bad year-over-year comparison base. As I explained earlier, labor disruptions and customs in the second quarter of last year extended cargo dwell times and resulted in exceptionally high storage revenues. In addition, normalized customs operations and more efficient clearance processes this year reduce dwell times and consequently, storage revenues. Various initiatives are already being implemented to enhance profitability in our cargo business in Argentina.

Let me now turn over to Jorge, who will review our financial results. Please, go ahead.

Thank you, Martin, and good day, everyone. Starting with the top line on Slide 6. Total revenues, excluding IFRIC 12, grew 8% year-over-year, once again outpacing traffic figures. Armenia and Brazil delivered another quarter of double-digit growth. Consolidated revenue per passenger rose nearly 9% to $22.9 from $21 in the same quarter last year, reflecting stronger commercial performance with increases across every country, including Argentina.

Aeronautical revenues increased 4%, supported by broad-based growth across the portfolio. Brazil, Italy, Armenia, Uruguay and Ecuador delivered strong results, more than offsetting a decline in Argentina. Tariff increases in Brazil, Uruguay and Ecuador provided further support. In Argentina, the increase in aeronautical revenues from higher international traffic was more than offset by lower domestic traffic and lower domestic passenger fees in U.S. dollar terms following the depreciation of the Argentine peso during the period.

Commercial revenues were up 13%, well ahead of traffic performance, driven by growth across all countries of operation, except Argentina. Performance was led by a fuel-related revenues in Armenia, together with broad-based growth in passenger treatment revenue streams, including VIP lounges, space rentals, food and beverage and duty free. In Argentina, lower cargo, parking and duty-free revenues more than offset growth across all other commercial revenue streams.

Turning to Slide 7. Total cost and expenses, excluding IFRIC 12, increased 16% year-over-year, primarily driven by higher fuel costs in Armenia, non-recurring costs and expenses in Uruguay and the re-appreciation of local currency in Argentina and Uruguay against the U.S. dollars.

In Armenia, fuel cost increased, reflecting both higher costs and volumes associated with the growth of fuel-related revenues. Excluding the fuel business, total cost and expenses increased 9%.

In Argentina, cost and expenses increased only 6% despite a material increase in amortization, representing a contained increase given the prevailing macro environment.

Moving on to profitability on Slide 8. Adjusted EBITDA, excluding IFRIC 12 was $160 million, down 4.5% with the decline concentrated in Argentina and Uruguay. Every other country of operation delivered double-digit growth. Starting with Argentina, adjusted EBITDA declined 21% with the margin contracting 6.2 percentage points, primarily reflecting lower domestic passenger traffic and the extraordinary bad comparison base for cargo revenues I mentioned earlier.

Italy posted a 19% increase or 11% when excluding construction service at Toscana Aeroporti. And margin expanding 3.1 percentage points on passenger growth and higher duty free and VIP lounge revenues.

Brasilia Airport delivered another strong quarter with adjusted EBITDA up 32% and the margin expanding 2.3 percentage points, driven by strong passenger growth together with higher VIP lounge, space rental and food and beverage revenues. This was further supported by the appreciation of the Brazilian real.

In Uruguay, adjusted EBITDA declined 16% and the margin contracted 8.4 percentage points, primarily reflecting costs associated with the implementation of the new ILS system ahead of the related revenue, which began only in August and the impact of non-recurring events I mentioned earlier. These were partially offset by passenger growth and stronger VIP lounge and duty-free revenues.

Armenia also delivered a strong quarter with adjusted EBITDA up 21%. As in recent quarters, margin contraction reflected the continued expansion of the fuel business, which structurally carries lower margin than core airport operations.

Ecuador delivered another solid quarter with adjusted EBITDA increasing 17% and margin expanding 2 percentage points supported by passenger growth and higher duty-free revenues.

Turning to Slide 9. Strong cash flow generation allowed us to continue building our cash position, and we ended the quarter with total liquidity of $861 million, up 20% from $715 million at the close of 2025. Importantly, nearly all operating subsidiaries generated positive operating cash flow during the first half of the year. The exceptions were Italy and Ecuador, where capital expenditure and concession-fee payments, respectively, weighted on free cash flow generation.

Finally, cash used in financing activities primarily reflected $55 million in loan repayments, mainly in Argentina.

Moving on to the debt and maturity profile on Slide 10. Total debt at the quarter end stood at $1.1 billion, while net debt declined to $381 million from $502 million at year-end 2025. Our net leverage ratio stood at 0.5x, reflecting stable debt levels and continued cash generation.

I will now hand the call back to Martin, who will provide closing remarks and discuss our view for the remainder of the year.

Thank you, Jorge. On Slide 12, I would like to leave you with a few key messages. Despite the headwinds mentioned earlier by both Jorge and myself, some related to bad year-over-year comparisons and others to non-recurring items, our business remains strong, and the diversification of our portfolio continues to support our overall performance. We are particularly pleased with the broad-based growth in international traffic.

The increase in revenue per passenger across every country in which we operate, including Argentina and the double-digit EBITDA growth delivered by other four markets. Our robust liquidity and low leverage provide a strong foundation to continue focusing on our strategic objectives, pursue growth opportunity and return capital to shareholders while maintaining financial strength.

We also continue to make progress on our key strategic initiatives across the portfolio, including advancing the concession rebalancing process in Argentina, efforts to obtain final approval of the Florence Airport Master Plan, commercial expansion in Montevideo through a new VIP lounge and a larger duty-free area and actions to improve the profitability of our Cargo business in Argentina. In parallel, we continue to work on potential new concession opportunities across the Americas, Africa and the Middle East.

Turning to the second half, new routes, additional frequencies and growing inbound demand should support international traffic in Argentina. At the same time, limited domestic airline capacity, planned runway maintenance and additional challenging comparison base for cargo revenues may continue to affect the country's near-term results. However, we expect Flybondi's reduced operating capacity in Argentina to be gradually replaced by other airlines over time as we have observed in previous airline disruptions.

In Uruguay, the new instrument landing system began generating revenues in August. And together with the opening of the new VIP lounge, additional cargo initiatives and the healthy traffic trends are expected to support revenue growth.

Finally, as announced in today's earnings release, our Board approved cash dividends totaling $150 million payable this year, which is equivalent to approximately $0.91 per share. This approval was based primarily on the following key principles: Enhancing shareholder returns, maintaining our financial strength, preserving adequate cash balances at each operating company to support their strategic objectives and maintaining sufficient liquidity at CAAP to pursue further growth opportunities.

With that, we are ready to take your questions. Operator, please open the line for Q&A.

[Operator Instructions] Your first question comes from the line of Gui Mendes with JPMorgan.

My first question is on the contract renegotiations in Argentina and Italy, if you could provide an update on the latest discussions or an expectation in terms of timing for project conclusion. And the second is a follow-up on the commercial passengers. It was a pretty strong performance, I think, on a per passenger basis. Just wondering if this level of revenues per passenger should be assumed to be recurring going forward?

Hello, Gui. Martin here. Thank you for your questions. I'll start on Argentina, and then pass it on to Jorge for the rest of your question. Regarding negotiation in Argentina, we -- the rebalancing in Argentina, as we have said before, we keep working with the regulator to move ahead on the rebalancing of the economic equilibrium of the concession. Many of you probably have seen a leak in the press regarding that negotiation. It should be taken as a leak. And I would only say that it indicates that we are working and moving ahead. But once we have something that is binding, we will come to you with the relevant information. As of today, none of that is actually valid or binding. So hopefully, soon enough, we'll come back with relevant and binding news regarding the Argentina contract. So thank you, and I'll pass it on to Jorge for the rest of the -- your question.

Hi, Guilherme, thank you very much for your question and for all the report. So in connection with Toscana Aeroporti, the process is moving ahead as well. We continue to work with the relevant government authorities, in particular with the Ministry of Infrastructure and the regulator, ANAC, that expect -- that we expect that they will issue a statement in the very near future declaring this strategic project. It's part of the process. Thereafter, there's going to be a so-called Conferencia de Servicio. So in summary, as of today, we continue to make progress, and there are no red flags. And again, we will continue to keep the market fully updated on concrete developments.

In connection with your second question, in our commercial revenues, the quarter posted very solid commercial revenues while the headline number is about 14%. If we exclude cargo in Argentina, which has an extremely bad comparison, commercial revenues actually increased 26%, so well ahead of passengers. This is driven by many reasons across the board. But what I would like to highlight is perhaps the VIP lounge business continued to perform very well, duty-free in most of the markets, parking, rental space, for instance, in Brazil was phenomenal. So generally speaking, commercial revenues had a very good performance.

And going ahead, we have projects in different countries that will continue to support the number. For instance, there's going to be a totally new VIP lounge in Montevideo Airport, an expansion of the duty-free business in Montevideo. And moreover, when we do a double click in our numbers for the second quarter, for instance, again, if we exclude cargo in Argentina and certain non-recurring expenses that we had in Uruguay, our EBITDA would have grown 5% instead of the drop of 4.5%. Revenues in Argentina, for instance, has grown 13% without cargo. Cost and expenses without amortization have, in Argentina, grew only 3.5%, 3.4% more precisely. So again, the headline number may not be the best one, but when we do a double click, we see very strong numbers in many business lines and therefore, makes us very comfortable that the portfolio is performing very well.

Your next question comes from the line of [ Zhao Lin Sigar ] with Jefferies.

This is [ Zhao Lin ] on behalf of Alejandro Demichelis with Jefferies. I have one question, please. So how do you see the evolution of domestic traffic in Argentina through the end of 2026, please.

Hi, Zhao. This is Jorge again. Thank you for your question and for the reports as well. So domestic traffic was primarily affected by the reduction in the fleet of Flybondi, which we believe that sooner or later, are going to be replaced by other players in the market. As we've actually seen already, I mean, in July, for instance, both Aerolíneas Argentinas and JetSMART had its second best month in history in Argentina on domestic market. Flybondi is planned to increase in the next few months from 16 aircraft to 19 aircraft. And as I briefly mentioned, we've seen that over and over again in other markets like PLUNA in Uruguay, Avianca in Brazil, among a few other cases that in a matter of several months, this offer, if I can put it like that, is replaced because it's not a matter of demand, it's a matter of offer. It's a seat offer, seat capacity. So obviously, this will take some time, a couple of months. But over the short to medium term, we are positive.

Your next question comes from the line of Pablo Ricalde with Itaú.

I have two questions. The first one on the dividend you just announced, how should we think of dividends going forward? And should we think about like maybe this is a more normalized level, or this is more on the extraordinary side given how strong your balance sheet look? And the other one is if you have quantified the effect of the closure or the runway like maintenance in Ezeiza and Aeroparque in the third quarter results.

Thank you for your questions. So in connection with dividends, our decision-making process to propose and ultimately approve this dividend was a balance of a couple of points, primarily shareholders return, providing the proper return to shareholders, maintaining financial strength of our group and its subsidiaries. And by that, I mean, no impact in covenants, no impact in existing credit ratings among other things. Preserving an adequate cash balance at each of the operating companies to pursue their strategic objectives. So for instance, in Armenia, we are about to start a major CapEx program as we previously announced, together with the extension of the concession agreement there. And obviously, the company will require some additional or increased working capital facility. So as we want to preserve that financial strength at the OpCo level as well. And finally, keep an adequate liquidity in CAAP to pursue its new business activities. So we've been very, very active pursuing new business. So obviously, we want to keep firepower to make that possible. So we will take those things into consideration -- we took those things into consideration to define the amount and the actual payment. And we will take those things into consideration in the future whenever deciding whether or not to pay a dividend. Regarding maintenance of the runways in Aeroparque and Ezeiza, which are planned for about two days. In Aeroparque and just more than 15 days in Ezeiza. There will be an impact some of the traffic from Ezeiza will migrate to Aeroparque, some will be kept in Ezeiza, some will not happen. But this is planned. This is obviously absolutely required for the security. And we -- on a consolidated basis, we do not see a major impact in our numbers.

Your next question comes from the line of Daniel Rojas with Bank of America.

I just wanted to drill down on Armenia. We saw July traffic figures that they were very good. Armenia was up 17%. I just wanted to get some color from you on what's happening with Iran -- the conflict in the Middle East, and what we should look for in terms of potential traffic growth in the next few months? Anything you can give us.

I'm sorry, your first question was traffic in Armenia. Your second question was?

What to expect in the second half of the year in terms of [indiscernible] traffic and with everything that's happening.

Okay. Good. Thank you. So yes, Armenia has been performing extremely well. And you probably saw July figures of 17%. We are very pleased with these numbers. This is primarily driven by healthy traffic with Europe. New routes, generally speaking, in particular with Wizz airline, and obviously, the establishment of the base of Wizz airlines in Yerevan. This more than offset the impact of traffic to Middle East, which was -- which accounts for about 20-plus percent of the traffic of the overall traffic and was impacted for obvious reasons. But again, more than offset by this -- the traffic with Europe on legacy carriers and Wizz that are creating traffic. I mean they establish a base, they establish several new routes, targeting primarily diaspora, but obviously, the whole market. So we -- for now, we continue to see a healthy trend in Armenia. And generally speaking, we will also see a healthy trend in the rest of our portfolio. In Uruguay, particularly that the quarter was not great, but we see better trends going forward. And in Argentina, we continue to see growth on the international and the domestic, as I mentioned earlier, for the next few months is going to continue to be impacted by domestic seat offer -- seat capacity. Obviously, the runway maintenance of Ezeiza will have an impact in October to November, but again, not materially in the context of our portfolio.

[Operator Instructions] With no further questions, we have reached the end of the Q&A session. Forgive me, I see Gui Mendes is asking a follow-up question from JPMorgan.

Martin, you mentioned about opportunities in the Americas, Africa and the Middle East. If you don't mind exploring which are those -- which are these opportunities in which stage each of them are currently?

Thank you for your question, Guilherme. As we usually do, we do not talk about opportunities when they are not mature enough. You obviously heard years back, on Nigeria once we were named the winner of the bid. Same thing with Angola. We were named -- were awarded winners of the bid, and we announced it. We are pursuing several new opportunities in the region in Africa, also Middle East. There is a public tender that was announced for Hurghada Airport, where we were also publicly announced as one of the shortlisted bidders alongside a local partner for, again, Hurghada Airport in Egypt. And same thing for different opportunities we're looking in the Middle East and the Americas. Ideally, we would come to the market when those processes become public or when our participation becomes public as we are pursuing many different initiatives that have very different stages of maturity.

We have now reached the end of the Q&A session. I will now turn the call back to Martin for closing remarks.

I want to thank everybody for taking your time to participate today. I wish you a very nice week and remind you that our team is always available for any further questions or information regarding our company. Have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.

Good morning, and welcome to Corporación América Airports' First Quarter 2026 Conference Call. A slide presentation accompanies today's webcast and is available in the Investor section of the company's website. [Operator Instructions]

At this time, I would like to turn the call over to Patricio Inaki Esnaola, 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 Martin Eurnekian, 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 statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Please note that throughout this call, all references to revenues, cost, adjusted EBITDA and margin will refer to figures excluding IFRIC 12. Also, all comparisons discussed are year-over-year unless otherwise noted.

I will now turn the call over to our CEO, Martin Eurnekian.

Thank you, Inaki, and good morning to everyone joining us today. We started 2026 with a strong first quarter performance. Across the business, we saw solid traffic growth, continued revenue momentum, strong profitability and further strengthening of our balance sheet.

Passenger traffic increased 7% year-over-year, supported by positive trends across all our countries of operations. International traffic remained the main driver of growth, with particularly strong performance in Argentina where additional routes, higher frequencies and solid summer demand continued to support the recovery in international travel.

Revenue performance was particularly encouraging, with top line growth well ahead of passenger traffic. This was supported by healthy growth in international passengers and our ability to continue increasing revenue per passenger in our Commercial activities.

Profitability showed strong progress in the quarter. Adjusted EBITDA increased at a faster pace than traffic, and margins expanded as higher revenues flowed through the cost base, evidencing our disciplined management. Argentina and Armenia were the largest contributors to EBITDA growth, while other countries also posted positive year-over-year performance.

We closed the quarter with a strong balance sheet. Leverage declined further, providing significant flexibility to invest in our operations, pursue disciplined growth opportunities and consider the implementation of a dividend policy.

Finally, it is important to highlight the resilience of Armenia. Despite the regional geopolitical situation, the business continued to perform well, supported by increased connectivity and the lower-than-anticipated impact from the Middle East conflict.

Overall this was a strong start of the year and reinforces the resilience of our portfolio and the benefits of our diversified platform.

Moving on to passenger traffic on Slide 4. We posted a strong performance across our operations, with nearly 22 million passengers traveling across our airports. Growth was mainly driven by international travel, which increased nearly 14%, with positive contributions from every country in the portfolio and double-digit growth in Argentina, Italy and Ecuador.

Domestic traffic was broadly stable in the quarter. Growth in Brazil and Ecuador offset softer domestic volumes in Argentina and Italy where performance was affected by capacity constraints, operational disruptions and, in Argentina, the 24-hour nationwide strike in February.

Looking at the main markets. In Argentina, passenger traffic increased close to 6% year-over-year. International traffic growth remained very strong, up 19%, driven by traffic with Brazil and the Caribbean and solid demand during the summer and carnival periods. Domestic traffic was slightly lower, mainly reflecting temporary fleet constraints at some of the airlines, together with the 1-day nationwide labor strike in February that disrupted operations. Even with these headwinds, key leisure destinations such as Bariloche, Cordoba, Iguazu and Mendoza performed well during the quarter.

In Italy, traffic grew just over 7%, driven by international passengers, which accounted for close to 80% of total traffic and increased more than 10% year-over-year. Both Florence and Pisa contributed to this performance. Domestic traffic was modestly lower, mainly due to reduced activity at Florence, while adverse weather in January also led to some cancellations and diversions.

In Brazil, traffic increased by 12%, reflecting a better environment after the constraints seen in the aviation sector in prior periods. Domestic traffic grew by nearly 6%. Transit passengers increased by more than 20%. And international traffic also contributed positively. Brasilia continued to benefit from its geographic location and large infrastructure, allowing it to maintain its role as an important domestic hub in the country.

Passenger traffic in Uruguay increased by nearly 4%, supported by the summer season and additional frequencies. Both new and resumed routes connecting Montevideo and Punta del Este with destinations in Brazil and Argentina, including services from GOL, Aerolineas Argentinas and Azul, helped support demand during the quarter.

In Armenia, traffic was up 8.5%, supported by expanded airline activities, additional routes and higher frequencies. The new Wizz Air base at Zvartnots, launched in late 2025, continued to support connectivity with Europe. March was affected by regional disruptions related to the conflict in the Middle East, including flight cancellations due to airspace restrictions. However, the impact was more limited than initially expected.

Lastly, traffic in Ecuador increased 7%, despite ongoing security concerns. International traffic was up more than 10%, supported mainly by higher frequencies to the U.S. and continued activity on European routes. Domestic traffic also improved, although high airfares remained a constraint on demand.

In sum, traffic growth in the quarter was healthy and broad-based, with international demand continuing to be the key driver across the portfolio.

Turning to cargo on Slide 5. We also delivered a strong quarter in our cargo business, with cargo-related revenues up 16% year-over-year, supported by solid contributions from Argentina and Uruguay. On the volume side, results were mixed across the portfolio. Total cargo volume was up 1.7% versus last year, with growth in Armenia and Argentina offset by softer trends in Brazil, Italy, Uruguay and Ecuador.

Looking ahead, we remain focused on strengthening our cargo platform, improving our commercial capabilities and continuing to capture growth opportunities across the network.

Let me now turn the call over to Jorge, who will review our financial results. Please go ahead.

Thank you, Martin, and good day, everyone. Starting with the top line on Slide 6. Total revenues, excluding IFRIC 12 increased 19%, nearly 3x the 7% growth in passenger traffic. Most notably, total revenues grew by 16% in Argentina, 39% in Armenia and 31% in Brazil, with all other countries also posting double-digit growth. The 11% appreciation of the euro and the 10% of the Brazilian real supported our U.S. dollar results. Revenue per passenger was up 11% to $22.7, compared with $20.5 in the same quarter last year.

Aeronautical revenues increased 17%, led by Argentina and supported by broad-based growth across the portfolio. Argentina remained the largest contributor with revenues up 18%, reflecting a strong 19% increase in international traffic volumes. Brazil, Armenia, Uruguay and Italy also delivered double-digit growth, driven by solid passenger traffic trends across all 4 markets. Tariff increases in Brazil, Uruguay and Ecuador also contributed to Aeronautical revenue growth.

Commercial revenues were up 21%, well ahead of traffic growth. Higher contributions from fuel revenues and cargo, combined with solid growth across VIP lounges, food and beverage, duty-free and parking facility supported these results. Notably, performance was consistent across the portfolio with every country achieving double-digit growth.

Turning to Slide 7. Total cost and expenses excluding IFRIC 12 increased 13%, well below revenue growth of 19%, supporting EBITDA margin expansion. Cost of services were up 14%, largely due to higher fuel costs in Armenia, consistent with the expansion in fuel revenues as well as higher concession fees in line with revenue growth and increased salaries and social contributions, mainly in Argentina.

SG&A expenses increased 19%, mainly reflecting higher salaries and social contributions and increased service fees associated with our new business activities.

In Argentina, total costs and expenses increased just over 9% year-over-year, well below revenue growth of 16%. This reflects strong operating leverage supported by sustained cost discipline and our continued focus on mitigating Argentina peso denominated cost pressures, with inflation outpacing the peso depreciation by 14 percentage points.

Moving on to profitability on Slide 8. Adjusted EBITDA ex IFRIC 12 was up 26% to $196 million, with margin expanding 2.3 percentage points, supported by positive contributions from every country of operation and double-digit growth across the portfolio except in Italy.

Strong momentum continued in Argentina with adjusted EBITDA up 28% and margin expanding 4.1 percentage points, driven by strong international passenger trends and disciplined management of Argentine peso denominated cost pressures. Armenia also delivered a strong quarter with adjusted EBITDA up 34%, driven by robust revenue growth. Margin contraction during the quarter primarily reflected a higher contribution from the fuel business, which structurally carries lower margins than the core airport operations.

At Brazil airports, adjusted EBITDA increased 44% year-over-year, with margin expanding 3.7 percentage points, supported by strong traffic growth. Italy posted a 4% increase or 10% when excluding construction services at Toscana Aeroporti Costruzioni.

In Uruguay, adjusted EBITDA increased 16%, while the margin remained relatively stable as the strong passenger trends were partially offset by higher salaries and maintenance expenses as well as the appreciation of the Uruguayan peso, which also weighed on margins. Finally, Ecuador delivered a strong recovery with adjusted EBITDA increasing 16% and margin expanding 1.8 percentage points, supported by solid traffic trends and higher duty-free revenues.

The appreciation of the euro and the Brazilian real, as discussed above, also supported our U.S. dollar results.

Turning to Slide 9. Supported by strong cash flow generation, we closed the quarter with total liquidity of $772 million, up 8% and from $750 million at year-end of 2025. Importantly, all operating subsidiaries generated positive cash flow during the quarter, with the exception of Italy and Ecuador where capital expenditure and concession fee payments, respectively, weighed on free cash flow generation. Investing activities contributed with $10 million to our total liquidity position. Finally, cash used in financing activities primarily reflected $27 million in loan repayment, mainly in Argentina.

Moving on to the debt and maturity profile on Slide 10. Total debt at quarter-end stood at $1.1 billion, while net debt declined to $490 million from $502 million at year-end 2025. Supported by stable debt levels and cash generation, our net leverage ratio stood at 0.5x.

I will now hand the call back to Martin, who will provide closing remarks and discuss our view for the remainder of the year.

Thank you, Jorge. On Slide 12, I would like to leave you with a few key messages.

Our first quarter results reinforced the positive start to the year. Performance was broad-based, supported by international traffic growth, commercial execution and the operating leverage across the portfolio. At the same time, our balance sheet remains strong, giving us flexibility to continue advancing on our growth strategy and enhancing shareholder return.

On the strategic front, we achieved an important milestone in Armenia, extending the concession by 35 years to 2067, and leading to a new $425 million investment program. This plan will allow us to significantly expand our infrastructure, paving the way for sustainable growth in both passenger traffic and commercial activities while further developing Zvartnots Airport as an important regional hub.

In Ecuador, the Galapagos extension and economics rebalancing further enhanced our presence in the country. We also continue to advance discussions in Iraq and Angola following the Baghdad and Luanda awards, while selectively evaluating new tender processes and M&A opportunities. Across our existing operations, we remain focused on infrastructure upgrades and commercial initiatives that support better connectivity and improved passenger experience and higher revenue per passenger.

Looking ahead, demand trends remain strong, particularly in international markets. Supported by our solid balance sheet, we are considering the introduction of a dividend policy as part of a broader framework to enhance shareholder returns while preserving the flexibility to invest in our operations and pursue growth opportunities that create value. At the same time, we will continue to monitor geopolitical developments in the Middle East and any potential implications for traffic and airline capacity.

With that, we are ready to take your questions. Operator, please open the line for questions.

Hello, everyone, and thank you for joining us today. This is Inaki Esnaola. Before we move to Q&A, I would like to note that Martin Eurnekian was unfortunately unable to join us live today due to travel delays impacting his return flight schedule. But fortunately, he was able to participate in the prerecorded portion of the call, and Jorge will now take over for the live Q&A session.

Operator?

[Operator Instructions] Our first question comes from Alejandro Demichelis from Jefferies.

A couple of questions, if I may. The first one is, I think in the prepared remarks you were talking about kind of demand growth and so on. So are you seeing any kind of changes in demand across your portfolio because of the higher kind of fuel prices or kind of high airfare tickets. So any kind of insight that you can give us on that, that will be kind of very helpful.

And then the second one is you just announced kind of a potential framework for dividend. Could you please give us some indication of how we should be thinking about the dividend in terms of the distribution, what kind of payout ratio we should be thinking about and so on?

So on fuel prices and how that impacts our portfolio, according to the information we have in connection -- which is based on seat offer, we do not see so far an impact. There was an impact in Armenia in connection with the traffic with the Middle East that in the first few months of the year is down. However, more than compensating with significant growth with all other markets for Armenia. So the overall number for Armenia is positive, despite the fact that the traffic, particularly in the Middle East, was down.

Overall in the portfolio, again, we haven't seen an impact. We note that the majority of the airlines are hedged for several months, if not a full year, on oil prices. Obviously, we have been monitoring the situation. But again, so far, we haven't seen an impact.

In connection with dividend policy, as you can see in the numbers, we have been accumulating cash. Our portfolio of companies are performing well, are generating cash, and some of that being upstream to the holding company. So we are in the process of discussing internally and with our Board and at our Executive Committee a dividend policy, and we will get back to the market in the near term with our views on how we should -- how and when we should implement a dividend policy.

Our next question comes from Julia Orsi from JPMorgan.

So 2 points on our side. The first one, can you provide more details on how the negotiations with Argentina and Italy are trending in the context of the renegotiation process?

And the second one, thinking about capital allocation, there's still the Iraq and Angola process that's going on. But how should we think of your participation on the coming auctions? Is there anything on the pipeline in the short to medium term that is worth flagging to us?

In connection with Argentina, as we have noted in previous calls and interaction with investors and analysts, discussion [Technical Difficulty]...

Ladies and gentlemen, we have lost connection with the speaker line. [Operator Instructions]

Hi, everyone. I think we have problems with Jorge's line. If we can hold on just a second, please.

Apologies, the technical connection. So as I was saying, discussions with the technical teams are largely concluded, and the key aspects have basically been agreed. The process requires a national decree. And as a consequence, it involves several parts of the government, several public administration bodies. The process overall is confidential, but we will continue to keep the market posted.

In connection with your second question, which is capital allocation, as we have reported in the past, we have recently been awarded on 2 concessions: for the Luanda Airport in Angola and for the Baghdad Airport in Iraq. In both cases, the processes are moving. We've been having several interactions with the government. The amount of equity required in these projects are marginal.

Other than that, we are looking at a handful of other opportunities that we consider are executable in the next 6 to 12 months. In none of them we believe that there's going to be a large equity contribution. But however, all of them will bring a lot of value to our portfolio, both in terms of monetary and strategic and growth perspective.

Obviously, we will continue to keep the market posted. But in terms of capital allocation and new business, this is what is in our pipeline.

Got it. And just to clarify, what is the latest on the Italy discussion as well?

The latest on what? Italy.

Yes, Italy. On the renegotiation process as well.

Yes. We continue to make progress. There has -- baby steps in terms of progress, but in the right direction. And currently, our local management believes that we should have authorizations by year-end, and therefore, be able to begin construction.

We have no further questions. I would like to turn the call back over to Jorge Arruda for closing remarks.

On behalf of Corporación América, I'd like to thank you for your participation in the call and for your questions. Myself, Inaki and Martin remain fully available if you have any further questions or doubts that you'd like to discuss with us. Thank you very much, and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, and welcome to Corporacion America Airports Fourth Quarter 2025 Conference Call. A slide presentation accompanies today's webcast and is available in the Investors section of the company's website. [Operator Instructions]

At this time, I would like to turn the call over to Patricio Inaki Esnaola, Head of Investor Relations. Patricio, you may go ahead.

Thank you. Good morning, everyone, and thank you for joining us today. Speaking during today's call will be Martin Eurnekian, 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 statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking payments to reflect new or changed events or circumstances.

Please note that through this call, all references to revenues, cost, adjusted EBITDA margin, we refer to figures excluding IFRIC 12. Also, all comparisons discussed are year-over-year unless otherwise noted.

I will now turn the call over to our CEO, Martin Eurnekian.

Thank you, Inaki, 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 raising 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 flexibility.

We also made meaningful strategic progress. In Armenia, we secured a 35-year extension of the concession and in Galapagos, we obtained a 6-year extension, both of which enhance the long-term visibility of our portfolio. We also have received construction awards and being declared 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 to $22.3 million, 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 to the main markets. The Argentina passenger traffic increased nearly 9%, a record for both the quarter and the full year. Domestic traffic was up 6% supported by strong load factors 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 continued 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 highs 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.

Brazil also 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 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 1% and 2.4% 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 at Zvartnots 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 contributing to capture growth opportunities across the network.

I will now turn the call to Jorge, who will review our financial results. Please go ahead.

Thank you, Martin, and good day, everyone. Let's begin with our top line on Slide 6. Total revenues ex IFRIC 12 increased 17% mainly 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. Aeronautic 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. The strong momentum continued in Brazil, Armenia and Italy each delivering double-digit growth, all in line with passenger traffic. trends. Commercial revenues were up 16%, 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 service 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 fluctuations.

Moving on to profitability on Slide 8. Adjusted EBITDA ex IFRIC 12 was up nearly 40% to $211 million reflecting strong performance in Argentina and Armenia as well as the $32.5 million 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 42% 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 margin than the core airport operations.

At Brasilia Airport, adjusted EBITDA year-on-year comparisons were impacted by the BRL 110 million 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 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 appreciations of the Uruguayan peso, which also impacted margins.

Finally, in Ecuador, adjusted EBITDA declined 12%, mainly due to the higher maintenance expenses concentrated in the fourth quarter 2025. Overall, excluding the BRL 110 million COVID-related economic [ breakeven ] in Brazil in the fourth quarter 2024 and the $32.5 million arbitration award recognized in the fourth quarter of 2025, adjusted EBITDA ex IFRIC 12 increased 33.3% year over year to $178 million 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 million, representing a 36% increase versus the $526 million 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 repayments in Argentina as well as dividends paid to noncontrolling interest in CAAP subsidiaries.

Moving on to the debt and maturity profile on Slide 10. Total debt at year-end was $1.1 billion while our net debt decreased further down to $502 million from $718 million in December 2024. As a result of lower net debt and continued strong financial performance, our net leverage ratio continued to improve, reaching 0.7x at year-end.

To wrap up our results reflect the great momentum of 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.

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 CAAP. 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 the 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 million investment program and the significant expansion of our infrastructure. In Ecuador, we achieved a 6-year extension of the Galapagos concession. On the inorganic growth front, we have received concession awards and have been selected as preferred leaders 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 rank number 2 worldwide in punctuality among medium airports, Carrasco was recognized as best airport in Latin America and the Caribbean in this category, and Zvartnots was the best airport in Europe and the 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.

[Operator Instructions] Your first question will be from Alessandro Demichelis at Jefferies.

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, profitability is like the new base for CAAP going forward? That's 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?

It's Jorge here. Thank you very much for your question. So regarding margins, profitability, what we saw in the first two months of the year, you probably have seen our traffic numbers. We increased by approximately 8%, 7.8% more precisely. Overall, with international, 14.5% and domestic, 1.5%. So we expect -- 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 margin is 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 it's flat. It's no growth, no decline. But I think it's totally tied to the war and when this war ends, traffic would resume very quickly. It's 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 them, 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 a flat growth.

The next question will be from Andres Cardona at Citi Group.

So my two questions are about any update about the Argentina concession rebalance. Anything you could share in terms of timing or expectations? And second, if you have also an update in the Italy Pro -- Italy investment opportunity, I also understand it hasn't been approved, but what are you expecting in terms of timing?

Okay. So thank you for your questions. This is Jorge again here. On Argentina, we are in the right track. However, it's 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 in 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's also very difficult for us to provide a timetable as to when this will be finalized, and we will be able to begin construction. But we are making progress. I think the approval that we got was the environmental approval, there is a few more presses to go before we are fully approved to begin construction. But again, we are in the right track. And again, we will keep the market posted as we receive concrete news. Thank you.

[Operator Instructions] Our next question will be from Julia Orsi at JPMorgan.

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 a disciplined strategy, but can you comment a bit on what you're expecting in terms of new regions and concessions that you might be willing to invest. And second, what should we think of the commercial revenue growth going forward and the main drivers behind it?

Thank you for your questions. In connection with capital allocation, we -- as Martin has mentioned in the call, we have been awarded in Iraq and Angola. We are pursuing those opportunities. Obviously, with the situation in Iran and the war, et cetera, this process, we expect to be delayed and 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. And that's 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, in some markets on the cargo. And 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.

The next question will be from Pablo Ricalde at Itau.

Maybe you can give follow-up on the capital allocation. What are you thinking in terms of funding to do all these acquisitions outside of Argentina?

So sorry, I think the targets that we are currently looking at, the funding would come primarily from cash at hand given the size of the opportunity that we are looking at.

Thank you. And at this time, we have no other questions registered. So I would like to turn the conference back over to Martin.

I wanted to thank everybody for joining us today and remind you that our investor durations team is available for any further questions and have a very good rest of your day.

Good morning, and welcome to the Corporación América Airports' Third Quarter 2025 Conference Call. A slide presentation accompanies today's webcast and is available in the Investors section of the company's website.

[Operator Instructions]

At this time, I would like to turn the call over to Patricio Inaki Esnaola, Head of Investor Relations. Please go ahead, Patricio.

Thank you. Good morning, everyone, and thank you for joining us today. Speaking during today's call will be Martin Eurnekian, 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 statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Please note that throughout this call, all references to revenues, costs, adjusted EBITDA and margin will refer to figures excluding IFRIC 12. Also, all comparisons discussed are year-over-year unless otherwise noted.

I will now turn the call over to our CEO, Martin Eurnekian.

Thank you, Inaki. Good day, everyone, and thank you for joining us today. We delivered another very strong quarter at CAAP with solid execution across the board. Passenger traffic was up more than 9%, supported by good momentum in all our markets. Italy and Armenia reached historical records, and Argentina continued to perform exceptionally well with double-digit growth in both international and domestic travel. Revenue growth once again outpaced traffic, rising 17% in the quarter.

Aeronautical revenues posted solid double-digit gains and commercial revenues were up 18%, driven by continued strength in cargo, fuel, VIP lounges and other passenger-related services. We also continue to see healthy traction in revenue per passenger, which increased nearly 7%, reflecting the ongoing success of our commercial initiatives. This strong operating performance carried into profitability metrics. Adjusted EBITDA increased 34% to $194 million, marking a new record for the company, driven mainly by Argentina, Armenia, Brazil and Italy. The margin expanded over 5 percentage points with easier comparisons also contributing to the strong results in Argentina. We also maintained a solid financial position, providing us flexibility to continue moving forward with our investment plans and long-term growth strategy.

On the investment side, the CapEx program approvals are underway in Armenia and Italy. Last week, the Italian government issued the Environmental Impact Assessment Decree, representing an important milestone in connection with the approval process of the Florence Airport master plan. We also continue advancing our inorganic expansion projects as we evaluate opportunities across our key target markets. All in all, it was another quarter of strong performance and disciplined execution. We are very proud of our team of executives.

Turning to passenger traffic on Slide 4. We delivered another quarter of healthy traffic growth across most markets. A total of 23.3 million passengers traveled across our airport network this quarter, up over 9%, supported by solid domestic and international trends. Domestic volumes increased just over 10%, driven primarily by Argentina and Brazil with additional contributions from Italy. International traffic rose 8% with growth in nearly all countries, led by strong performances in Argentina, Italy and Brazil.

Let me walk you through performance by country. Argentina continued to stand out with total passenger traffic up nearly 13%, marking a third quarter record. Domestic traffic grew nearly 11%, supported by sustained demand and incremental capacity, particularly from JetSmart and [indiscernible]. International traffic increased 16%, reflecting strong connectivity gains, including new and resumed routes from LATAM, GOL, Copa and JetSmart, among others. Operations were briefly disrupted by ATEPSA union strikes and adverse weather, but the overall momentum remained very solid. This strong performance continued into October with domestic and international passenger traffic increasing by 10% and 15%, respectively.

In Italy, traffic was up nearly 10%, reaching a record high. International traffic, which represents over 80% of the total, increased almost 7%, driven by strong results at [indiscernible] and Pisa. Pisa also supported domestic traffic, which rose nearly 6%. This positive trend continued into October with domestic and international passenger traffic increasing by 2% and 8%, respectively. Brazil delivered a growth of over 8% in total traffic with both domestic and international segments growing at double-digit rates, reflecting improved trends. Traffic in October remained solid, up 10% year-on-year.

Uruguay saw a 5.3% decline in traffic, affected by several days of adverse weather as well as a 6-day planned closure of the main runway to complete the installation of a new precision instrument landing system. During the quarter, Azul launched a new route between Montevideo and Campinas, which should support traffic going forward. In October, however, traffic recovered, rising 6.9% versus the same month last year. Armenia continued to perform well with traffic up just over 6%, reaching a record high. Traffic increase was supported by strong international demand and expanded connectivity from new airline entrants.

Wizz Air also established a new base at Zvartnots, adding 8 new European routes in October, further strengthening Armenia's positioning as a growing regional hub. As a result, traffic in October rose by a strong 15% against the same period last year. Lastly, Ecuador posted a slight 1% decline in total traffic, reflecting a still challenging security environment and a softer international demand. JetBlue and Avianca increased frequencies on several international routes, while domestic traffic was stable, although operations were temporarily affected by a 2-day planned runway closure in September. In October, traffic increased by 1.2% compared to the same month last year.

In summary, it was another quarter of broad-based traffic growth across most of our markets, underscoring the strength of our network and the depth of demand across our operations.

Moving on to cargo on Slide 5. We delivered another strong quarter with cargo revenues up 20% year-over-year, driven by a 23% increase in Argentina and a double-digit growth in both Brazil and Uruguay. This performance reflected improved pricing dynamics, including the new cargo business model implemented in mid-March in Argentina, which is performing as planned. Looking ahead, we will continue to build this momentum by enhancing our cargo capabilities and leveraging growth opportunities across our airports while maintaining a competitive and efficient cost structure.

I will now turn the call over to Jorge, who will review our financial results. Please go ahead.

Thank you, Martin, and good day, everyone. Let's begin with our top line on Slide 6. Total revenues ex-IFRIC 12 increased 16.6%, nearly doubling passenger traffic growth of 9.3%. This strong performance was driven by double-digit growth in both aeronautical and commercial revenues, supported by positive contributions across all countries of operations with Argentina, Armenia, Brazil and Italy, each delivering double-digit revenue growth.

Our revenue per passenger was up 6.7%, reaching $20.2 compared with $19 in the same quarter last year. Aeronautical revenues increased 15.2%, mainly driven by a strong performance in Argentina, complemented by broad-based increases across most countries with the exceptions of Ecuador and Uruguay. Argentina was once again the key driver with aeronautical revenues up 22.1%, mainly reflecting a 15.9% increase in international traffic volumes. Strong momentum continued in Brazil and Armenia, each delivering double-digit growth, while Italy posted a 9.8% revenue increase, all consistent with passenger traffic trends.

In contrast, Uruguay and Ecuador reported slight declines in aeronautical revenues due to a lower passenger traffic resulting from scheduled runway closures related to the installation of a new install landing system in Uruguay and runway repaving works in Ecuador. Commercial revenues were up 18%, well above 9.3% increase in traffic, supported by higher contributions from cargo revenues and solid growth across VIP lounges, parking facilities, food and beverage services as well as other passenger-related services. Food-related revenues, primarily in Armenia also supported the increase. Overall, we saw solid performance across all markets.

Armenia and Argentina stood out with commercial revenues up 22% and 19%, respectively, while Italy and Brazil also delivered double-digit growth, highlighting the continued strength of our commercial portfolio and our ability to drive value beyond the core aeronautical business.

Turning to Slide 7. Total cost and expenses, excluding IFRIC 12, increased 7.9%, aligned with higher activity, but remained well below revenue growth of nearly 17%. Cost of services were up 5%, largely due to a higher concession fee aligned with revenue growth as well as higher fuel costs in Armenia, consistent with the growth in fuel revenues. This was partially offset by lower services and fees and maintenance expenses. SG&A increased 20%, mainly reflected taxes and salaries in Argentina.

In Argentina, total cost and expenses were up 3.3%, benefits from favorable comparisons as the same quarter last year had absorbed significant inflation-driven cost increases along with continued focus on cost efficiency. The comparison was further supported by the faster pace of currency devaluation relative to inflation during the quarter, which diluted peso-denominated costs when translated into U.S. dollars.

Moving on to profitability on Slide 8. Adjusted EBITDA ex-IFRIC 12 was up 34%, reaching a record of $194 million, reflecting strong performance across all countries except Uruguay with double-digit growth in Argentina, Armenia and Brazil. Argentina delivered another outstanding quarter with adjusted EBITDA up 68%, supported by the aforementioned easier comparisons, solid top line growth, strong passenger trends and continued momentum in our commercial activities. Armenia also performed very well with adjusted EBITDA up 25%, driven by higher passenger traffic and improved fuel margins.

At Brasilia Airport, adjusted EBITDA increased 19%, reflecting healthy traffic growth and strong performance across VIP lounges and cargo operations. Italy posted a 10% increase or 18% when excluding construction service at Toscana Aeroporti Costruzioni. This increase was driven by higher passenger traffic and solid growth in duty-free, VIP lounges, parking revenues. In Uruguay, results reflected temporary operational impacts with adjusted EBITDA down 11% following a 6-day planned runway closure to stall a new install landing system. Finally, Ecuador delivered a 4% increase in adjusted EBITDA, supported by stronger duty-free and retail revenues.

Overall, adjusted EBITDA margin ex-IFRIC 12 expanded 5.2 percentage points to 41.2%, driven by significant improvements in Argentina and continued operational efficiency across most markets. Notably, in Argentina, we delivered a 12% point margin expansion driven by easier comparison, strong revenue growth and effective cost controls.

Turning to Slide 9. Supported by continued strong operating and financial performance, we ended the quarter with a total liquidity position of $661 million, up 26% from the $526 million recorded at year-end 2024. Importantly, all of our operating subsidiaries generated positive year-to-date cash flow from operating activities, underscoring the strength and consistency of our cash generation across markets. Cash used in financing activities mainly reflected debt repayment in Argentina and Ecuador as well as dividends paid to noncontrolling interest in subsidiaries.

Moving on to the debt and maturity profile on Slide 10. Total debt at quarter end was $1.1 billion, while our net debt further decreased to $579 million from $718 million in December 2024. Our net leverage ratio also improved, reaching 0.9x. To wrap up, we delivered another quarter of strong results marked by strong execution and financial discipline. Our balance sheet remains robust, providing the capacity to pursue new growth opportunities, both organic and inorganic to continue creating value across our portfolio.

I will now hand the call back to Martin, who will provide closing remarks and discuss our view for the remainder of the year.

Thank you, Jorge. Let's turn to Slide 12 to wrap up our presentation. This was another very strong quarter for CAAP, marked by solid performance across our portfolio. We delivered high profitability with further margin expansion, all while preserving a strong financial position. Overall, the quarter highlights the strength of our portfolio and the quality of our management team. We're also making good progress on initiatives that enhance the passenger experience and expand our commercial offering.

In Argentina, we inaugurated a new centralized car rental hub and the new digital mobility platform. In Brazil, the Brasilia shopping mall is on track to open in the second quarter of 2026. Armenia opened a fully redesigned duty-free store and Uruguay is moving ahead with expanding its duty-free and VIP lounge areas. Strategic priorities across our concessions continue to advance. We continue to make progress in both the AA2000 concession rebalance in Argentina as well as the approval of the CapEx program in Armenia.

In Italy, the government issued the Environmental Impact Assessment Decree last week, marking an important milestone in connection with the approval process of the Florence Airport master plan.

Turning to our inorganic expansion pipeline. We recently signed an Award Agreement for the Baghdad Airport project in Iraq, and the government process continue for the Angola tender. In Montenegro, the government's Standard Commission announced the result and ranked CAAP in second place. We continue evaluating additional opportunities across other countries. Looking ahead, we anticipate positive traffic trends to continue into the fourth quarter, though with a more moderate pace of domestic traffic growth in Argentina.

Overall, we anticipate solid results in the fourth quarter, although not benefiting from the easier comparisons that support the third quarter performance in Argentina. In summary, our third quarter performance reinforces the resilience of our business model, the quality of our assets and the strong execution by our teams across all markets.

Operator, please open the line for questions.

[Operator Instructions]

And your first question will be from Guilherme Mendes at JPMorgan.

My first question is on the rebalance in Argentina. Martin, you mentioned that discussions are progressing well. But can you share what are the main milestones that we could expect for the near term and the potential timing -- and the timing for the potential approval?

And a follow-up on the commercial revenues. First of all, congrats on the strong performance. And what can we expect going forward? So is this a more normalized level? Or can we still expect some kind of improvement on the commercial revenues per PAX?

This is Jorge. Thanks for your question. So in connection with Argentina, we continue to make progress both on a technical and political level. It's difficult for us in management to provide a timetable. But the message again is that we continue to make good progress in connection with the rebalance of the concession agreement.

In connection with your second question, commercial revenues. Commercial revenues in the quarter was up 8% versus last year. It's a very good performance. And as we reported, there are a number of reasons, including VIP lounges, car rental, fueling, cargo, et cetera. We continue to see the same trend. I'm not sure that it is accelerating, but definitely, we continue to see the trend to continue.

Next question will be from Andres Cardona at Citigroup.

My question is about any update you could share with us about the Armenia and vis-a-vis investment opportunities, if you have any update or visibility of the time line to provide more details on the projects.

Andres, it's Jorge again here, and thanks for your questions. So let me start with the second one. In Italy, as Martin has mentioned, we have recently obtained the approval for the environmental assessment of the project. The next step formally is the so-called confidential [indiscernible] issue to take place, which is a kind of forum of various government entities led by the Ministry of Infrastructure. We expect that to commence towards the end of the first quarter, and it's a process that should take approximately 3 months, after which then we would basically be ready to start the works. So that's the current time line that we have been told.

Again, when we are dealing with the government, it's difficult for us to -- in management to set up a precise timetable, but that's our best guess as of today, and we will continue to keep the market updated. In connection with Armenia, we continue to make good progress in terms of discussions and in connection with discussions with the government and government officials in general. And again, it's difficult for us to provide a precise timetable. But again, we will keep the market posted.

[Operator Instructions]

And next question will be from Daniel Rojas at Bank of America.

My question was regarding the Baghdad Airport. Could you give us an idea of the size of the opportunity? And what else can you share with us in terms of potential traffic in that airport?

Daniel, it's Jorge again. Thank you very much. As we have announced, we signed an Award Agreement, which is a document that is nonbinding from -- in connection with the process. We are expecting to be called by the government to finalize the process and sign the concession agreement. Once that happens, we will inform the market and provide more details about our financial plan in many aspects, including debt, equity, CapEx, et cetera. But what I wanted to anticipate is that we have a very constructive view in connection with the potential growth of traffic in that country and in that region in general.

And at this time, we have no other questions registered. I would like to turn the call back over to Martin.

I would just like to thank everybody for your time and participation and remind you that our team is always available to take any additional questions. Enjoy the rest of your day. Thank you very much.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect.

Good morning, and welcome to the Corporacion America Airports' Second Quarter 2025 Conference Call. A slide presentation accompanies today's webcast is available in the investors section of the company's website. [Operator Instructions]

At this time, I would like to turn the call over to Patricio Inaki Esnaola, 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 Martin Eurnekian, 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 statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. Please note that throughout the call, all references to revenues, costs, adjusted EBITDA margin will refer to figures excluding IFRIC 12.

I will now turn the call over to our CEO, Martin Eurnekian.

Thank you, Inaki. Good day, everyone, and thank you for joining us today. I am pleased to report an excellent quarter for CAAP. Customer traffic was up almost 14% from last year, with strong growth in the great majority of our markets. Argentina had a standalone performance, keeping a new second quarter historical record with double-digit increases in both international and domestic drivers. We also saw solid gains in Brazil, Italy, Uruguay and Armenia, while Ecuador remained largely flat. Italy, Uruguay and Armenia also hit new second quarter historical records.

On the top line, revenues grew nearly 19%, outpacing passenger growth and demonstrating a strong execution of our management team in increasing revenues per passenger as well as the quality of our portfolio. Revenue per passenger hedged up to $21 driven by steady contributions for cargo parking, VIP lounges and duty free. This led to a 23% year-over-year increase in adjusted EBITDA, supported by notable contributions from Argentina, Uruguay and Armenia, with the margin up 1.4 percentage points to 38.6%. We closed the quarter with a very strong financial position that gives us flexibility to keep moving on our growth plans.

We also wanted to highlight that we obtained [indiscernible] approval from [indiscernible] region of Pascal for the Florence Airport [indiscernible]. Lastly, our Argentine subsidiary, AA2000 has recently approved a $150 million distribution.

Moving on to Slide 4. We saw a very strong traffic performance across operations, except a quarter where traffic was flat. Total passenger traffic increased 13.7% year-over-year to nearly 21 million passengers, accelerating from the 7% growth or 9% ex Natal reported in the first quarter. Domestic traffic rose just under 15%, driven primarily by a recovery in demand in Argentina and Brazil and to a lesser extent, in Italy.

International traffic increased 12% with positive contributions from all markets, except Equator and particularly strong results in Argentina and Italy which together accounted for more than 80% of the year-over-year increase in the quarter. Brazil, Uruguay and Armenia also posted strong growth in international traffic.

Let's look at performance by country. In Argentina, our largest market, overall traffic growth accelerated to 17% from nearly 13% in the first quarter. Domestic traffic was up 16% supported by sustained demand recovery and multiple drought resumptions. On international front, traffic increased close to 19% reflecting new and expanded services from carriers such as JetSmart, Gold, Sky, Azul, LATAM, Avianca and Air Europa. This strong performance continued into July with domestic and international passenger traffic increasing by 10% and 13%, respectively.

Italy delivered a 9% increase in traffic reaching a second quarter record driven by both domestic and international travel. International traffic, representing 81% of the total was up 9%, supported by strong growth at Florence and Pisa Airports. Domestic volumes grew 11%, led by nearly 20% growth at Pisa, mainly reflecting [indiscernible] frequency increases. This solid performance continued into July with domestic and international passenger traffic increasing by 8% and 6%, respectively. Brazil recorded a 15% year-over-year increase in traffic. Domestic traffic up nearly 14% and transit passengers up 15%.

International traffic, though a smaller share of the mix, grew over 41% with growth to the U.S. reaching record highs. In July, overall traffic increased by 6% against July last year. In Uruguay, traffic was up nearly 9% marking also a second quarter record. The performance in the quarter benefited from the strong activity during Easter holiday.

Azul announced the introduction of a new route between Montevideo and [indiscernible] which began operating last month. In July, overall traffic in Uruguay declined 6% year-over-year, mainly impacted by the removal of the Montevideo [indiscernible] route by JetSmart as well as several days of adverse weather conditions that led to flight cancellations.

In Armenia, traffic was up 8%, fueled by the arrival of several new carriers, including China Southern, [indiscernible], [indiscernible] Air and Sky Express and the announcement of a [indiscernible] airbase launching 8 new European routes. These developments are strengthening connectivity and supporting our role in positioning in Armenia as a regional hub. Traffic in July rose by 7% against the same period last year.

Lastly, traffic in Ecuador was broadly flat, with a 0.5% decline in total passengers. Domestic traffic rose slightly, while international volumes declined impacted by reduced U.S. operations. High [indiscernible] levels and still challenging security environment in the country continue to affect travel. In July, traffic remained broadly flat compared to July 2024. In summary, this was a record second quarter for Argentina, Italy, Uruguay and Armenia, highlighting the strength and resilience of our network and our ability to capture growth across diverse geographies.

Turning now to Cargo on Slide 5. We delivered another strong quarter with cargo revenues up 30% year-over-year, led by Argentina, Brazil and Uruguay. The increase reflected not only higher volumes in key markets, but also improved pricing dynamics and new revenue streams. In Argentina, cargo revenues were boosted by the new cargo business model implemented in mid-March, which is delivered as planned. Uruguay also saw a solid [indiscernible] from tariff increases in the courier segment while Brazil benefited from increased higher pharma imported volumes as well as higher average ticket on domestic cargo. Armenia maintained its positive trend, contributing meaningfully to overall volumes.

Looking ahead, we will continue to build on this momentum, enhancing our current capabilities and leveraging growth opportunities across our airports while maintaining a competitive and efficient cost structure.

I will now turn the call over to Jorge, who will review our financial results. Please, go ahead.

Thank you, Martin, and good day, everyone. Let's start with our top line on Slide 6. Total revenues ex-IFRIC12 increased 18.9% year-over-year, outpacing passenger traffic growth of 13.7%. This strong performance was driven by double-digit growth in Argentina, Armenia, Italy and Uruguay. Excluding the onetime litigation benefit reported in the second quarter of 2024, Brazil also delivered double-digit revenue growth, further supporting our solid results. Our revenue per passenger was up 4% to $21 from $20.1 last year.

Aeronautical revenues were up 15.1% mainly supported by the strong performance we saw in Argentina, coupled with positive contributions from all countries except Ecuador. In Argentina, revenues were up more than 20% supported by an 18.5% year-on-year increase in international traffic and to a lesser extent, higher domestic passenger fees following the tariff adjustment implemented in November last year.

Strong momentum continued in Argentina, Uruguay and Italy, each delivering double-digit growth, while Brazil posted a 9.5% increase in line with passenger traffic trends. In contrast, Ecuador reported a 2.2% revenue decline, reflecting a modest drop in traffic during the quarter. Commercial revenues were up year-on-year, well above the 13.7% increase in traffic, driven by higher cargo revenues and solid performance across parking facilities, VIP lounges, duty-free stores and other passenger-related services.

Fuel related revenues, primarily in Armenia, also contributed to the increase. Growth was particularly strong in Argentina and Armenia, up 27% and 26%, respectively, with additional double-digit gains in Italy and Uruguay further highlighting the strength of our commercial portfolio.

Turning to Slide 7. Total cost and expenses, excluding ex-IFRIC12 were up 16.8% year-over-year in line with higher activity but below revenue growth of nearly 19%. Cost of services rose by 15.4%, primarily reflecting higher concession fees and maintenance expenses tied to increased activity in Argentina as well as higher fuel costs in Armenia, consistent with the growth in fuel revenues.

SG&A expenses increased 22%, largely due to higher sales in Argentina, driven primarily by inflation outpacing currency devaluation and tough comparisons with second quarter 2024. We note, however, the total cost and expenses in Argentina excluding ex-IFRIC12 declined 5.5% in the second quarter compared to the prior quarter, confirming the improved trend we signaled in our first quarter earnings call.

Moving on to profitability on Slide 8. Adjusted EBITDA ex-IFRIC12 reached $169 million, up 23% year-over-year mainly driven by a 34% increase in Argentina and positive contributions from all countries except Ecuador. Uruguay delivered another consecutive quarter of strong growth with adjusted EBITDA up 27%, supported by a steady traffic gains and robust commercial performance, particularly in cargo and other passenger-related revenues, such as duty-free and VIP lounges.

Armenia delivered double-digit growth underpinned by traffic growth and robust fuel revenues contributing to the positive momentum across our key markets. Adjusted EBITDA at Brasilia Airport was up 16%, excluding the onetime benefit of $1.7 million from the resolution of a litigation process which was recorded in second quarter 2024. In Italy, adjusted EBITDA increased 2% or 14% when excluding other construction service-related costs at [indiscernible], a subsidiary of [indiscernible].

Adjusted EBITDA in Ecuador declined 3%, reflecting weaker passenger traffic during the period. Adjusted EBITDA margin ex-IFRIC12 expanded 1.4 percentage points year-over-year to 38.6%, mainly driven by margin improvements in Argentina and Uruguay. Notably, in Argentina, we achieved a 3.2 percentage point margin expansion supported by strong traffic growth and robust commercial revenues despite continued pressure on Argentine peso costs from inflation running ahead of currency depreciation and tough year-over-year comparisons.

Turning to Slide 9. On the back of our strong cash flow generation, we closed the quarter with a total liquidity position of $595 million, up 13% from the $526 million recorded at year-end 2024. Notably, all of our operating subsidiaries reported positive year-to-date cash flow from operating activities, except for Ecuador due to the onetime annual concession fee payment, which is due and paid every January.

Cash used in financing activities reflected debt repayments in Argentina and Ecuador as well as dividends paid to noncontrolling interest in subsidiaries. As Martin noted at the beginning of the call, driven by strong cash generation, our Argentine subsidiary has recently approved a digital distribution of $150 million, of which $127.5 million will be paid to CAAP. We are very pleased with the performance of our operations in Argentina, which enables us to meet our CapEx commitments, pay our debt service and distribute excess cash to strengthen our consolidated cash position.

Moving on to the debt and maturity profile on Slide 10. Total debt at quarter end was $1.1 billion, while our net debt decreased to $643 million from $718 million in December 2024. Our net leverage ratio improved to a record low of 1x, driven by lower net debt and stronger adjusted EBITDA levels.

To wrap up, we delivered strong operating and financial results, ending the quarter with a solid balance sheet and healthy debt position. We remain focused on pursuing both organic and inorganic growth opportunities to enhance our airport portfolio and create value.

I will now hand the call back to Martin, who will provide closing remarks and discuss our view for the remainder of the year.

To close, let's turn to Slide 12. This was a very strong second quarter with broad-based passenger growth across our network that underscores the resilience and quality of our diversified portfolio. We continue to perform well in driving revenue growth and EBITDA margin expansion while keeping a solid financial position.

On the commercial front, we remain focused on enhancing [indiscernible]. In Argentina, we inaugurated the new [indiscernible], expanding it from 700 to 1,100 square meters to improve the passenger experience and capture additional commercial opportunities. In Brazil, construction of the shopping mall at Brasilia Airport is progressing with opening planned for April 2026 alongside other initiatives to grow food and beverage, retail and service offerings across the portfolio. Strategically, we are moving forward across our concessions.

In Argentina, we are progressing with the AA2000 concession [indiscernible] process. In Italy, we secured [indiscernible] approval from the region of Tuscany for the Florence Airport master plan in April. While in Armenia, we continue to make progress on the CapEx [indiscernible] approvals to expand [indiscernible]. On the new business front, we are awaiting official resolution from the government of Montenegro and actively pursuing opportunities in Latin America, Iraq and [indiscernible] and other M&A initiatives, among others. Looking ahead, we expect positive traffic momentum to continue in Argentina with strong summer seasons anticipated in both Italy and Romania.

In sum, our second quarter performance underscores the strength of our geographic diversification, the quality of our portfolio, the effectiveness of our strategy and the dedication of our teams across markets.

Operations, please open the lines for questions.

[Operator Instructions] Your first question is from Guilherme Mendes from JPMorgan.

Yes. The first one is on Argentina. If you can provide some details on what is the next steps for the [indiscernible] discussion? I know you can -- you don't have a lot of visibility on timing, but if you can share what should we expect on the next milestones that would be useful?

And the second one is on Motiva's former CCR airport sales. If you are still interested in this asset, if it is something that you probably would [indiscernible] alone or you consider doing so with our partner probably dividing the Brazilian assets to the non-Brazilian assets?

Thank you for your question. Let me start with the second one. We are looking at the asset. As you may know, it's a typical M&A process subject to NDA confidentiality, et cetera. But what we can say at this point in time is that we are looking at the asset. It's an interest opportunity for CAAP, and we will keep the market updated as we make progress in the process.

Regarding Argentina, your first question, conversations with the technical teams are ongoing, have never been interrupted. The conversations includes the rebalancing of the economic equilibrium, investment requirements in system, among other aspects. There is a new Secretary of Transport since mid-May, we are very engaged with all the authorities. We believe that we are making good progress, and we will keep the market updated as we make concrete steps into this process.

[Operator Instructions] There are no further questions at this time. I will now hand the call back over to Martin Eurnekian for the closing remarks. Please proceed.

I would like to thank everyone for your participation and interest in our call. I remind you that our team remains available for any questions that you might have in the future. Thank you very much, and please have a very good rest of your day. Bye-bye.

Thank you, ladies and gentlemen. The conference has now ended. Thank you all for joining. You may all disconnect your lines.