Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aeroports de Paris SA (AEOXF, Financial) reported a strong EBITDA of EUR943 million, which is 9% above last year, driven notably by an outstanding performance at TAV Airports.
- Traffic is developing in line with expectations, both in Paris and in international assets, with international traffic growing by 8.5%.
- The company successfully finalized preparations for the Paris Olympic Games, ensuring smooth operations and welcoming delegations in good conditions.
- The new international terminal at Almaty Airport in Kazakhstan, part of TAV Airports portfolio, opened in June, increasing capacity to 14 million passengers.
- Aeroports de Paris SA (AEOXF) confirmed its EBITDA growth guidance of at least 4% for the year, reflecting confidence in continued strong performance.
Negative Points
- Domestic traffic in Paris showed a decline of 6%, reflecting the impact of the 4-flight air traffic management system in January and February.
- The company expects the over-performance in the first half to soften in the second half due to increased operational expenses.
- Higher operational expenses in Paris driven by staff costs, electricity costs, and subcontracting costs are expected to continue impacting EBITDA in the second half.
- The reopening of Terminal 2A and 2C at Charles de Gaulle Airport is expected to create a downward pressure on sales per passenger (SPP) due to less powerful retail offerings.
- The geopolitical conflict in the Middle East has negatively impacted traffic with the region, which is down 3.1%.
Q & A Highlights
Q: What are you seeing in terms of spend per passenger (SPP) after the reopening of the terminals? Are there any signs of weakness due to consumer behavior or traffic mix?
A: We have seen strong performance in SPP, in line with our guidance. However, we are cautious about potential negative impacts. The reopening of Terminal 2A and 2C is expected to create a downward effect on SPP due to less powerful retail offerings compared to Terminal 1. Despite this, the continued rollout of Extime is expected to drive performance and offset these negative effects.
Q: What is the outlook for traffic, especially considering recent comments from Ryanair about pricing in Europe?
A: We expect a neutral effect from the Olympic Games on traffic, with a substitution effect between Olympic-related traffic and seasonal tourism. Our guidance for Paris traffic growth remains between 3.5% and 5% for the year. We are monitoring potential impacts, including airlines' strategies to improve load factors through pricing.
Q: Can you comment on the load factor deterioration in June and its implications?
A: The slight decline in load factor usually indicates a demand slowdown. However, airlines are working to improve load factors through pricing strategies. For us, the key element is the mix of international versus domestic passengers, and we do not expect a significant impact from this decline.
Q: Could you elaborate on the expected increase in OpEx in the second half of the year?
A: We expect continued OpEx increases driven by staff costs, electricity costs, and subcontracting costs. The infra tax also contributes significantly to OpEx. We are in line with our expectations and confirm our EBITDA growth guidance.
Q: What is the potential impact of the French constitutional court's decision on the infrastructure tax?
A: The constitutional court's decision will address the tax itself, not our ability to pass it on to airlines. The tax is a regulated OpEx, and we have mechanisms to offset its impact through tariff increases.
Q: What is the status of dividend payments from TAV and GMR?
A: We expect dividend payments from TAV to resume in 2026 and from GMR towards the end of this decade.
Q: Can you provide details on the financial impact of the recent global IT outage?
A: The outage affected around 30,000 passengers, which is not material for us. We did not experience significant financial impact.
Q: What are your views on the current M&A environment, particularly in Europe and Latin America?
A: We are cautious about international development and focus on regions with strong traffic dynamics, such as India, the Middle East, and Central Asia. Our M&A strategy aims to support the rollout of Extime and other growth initiatives.
Q: How does the reopening of Terminal 2A and 2C impact capacity and traffic at Charles de Gaulle?
A: Terminal 2A and 2C add capacity for around 10 million international passengers, which is significant for Charles de Gaulle. However, the retail offering in these terminals is less powerful compared to Terminal 1, impacting SPP.
Q: Who is responsible for appointing the new CEO, and when do you expect this decision to be made?
A: The President of the Republic proposes the CEO to the Parliament. We expect the decision to be made by the beginning of 2025, ensuring stable governance for the company.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
