Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ENAV SpA (FRA:ENV, Financial) reported a solid performance in the first half of 2024, with total revenues reaching EUR 461.3 million, up 5.7% compared to the first half of 2023.
- The company saw a significant increase in traffic, with en-route traffic service units up 10.9% year-on-year and terminal traffic service units up 11.5%.
- EBITDA increased by 5.5% to EUR 99.9 million, maintaining a strong margin of 21.6%.
- Net result improved by 25% year-on-year, standing at EUR 23 million compared to EUR 18.4 million in the first half of 2023.
- ENAV SpA (FRA:ENV) confirmed double-digit growth in non-regulated revenues, driven by significant contracts in various countries including Kosovo, Cambodia, and Kenya.
Negative Points
- Net debt increased to EUR 424 million, primarily due to the dividend payment in May.
- Personnel costs rose by 6.1%, driven by increased variable remuneration and the renewal of the labor contract.
- The balance for the first half of 2024 was negative EUR 25.3 million, slightly below the previous year.
- Non-regulated revenues were EUR 3 million below the first half of 2023, mainly due to the absence of contributions from activities performed in Qatar.
- The company faces ongoing negotiations with the regulator for the next regulatory period, which could impact future performance targets and tariffs.
Q & A Highlights
Highlights of ENAV SpA (FRA:ENV) Earnings Call
Q: Considering that H1 revenues from non-regulated activities were EUR3 million below 2023's level, where would you expect to close the year without any further M&A or new contracts?
A: We are working hard on the non-regulated business and have been awarded several contracts globally. We expect double-digit growth in non-regulated revenues for 2024, as previously disclosed.
Q: Can you give us your expectations for traffic in the second half of the year and for 2025?
A: We are currently managing a high level of traffic, around 8% in July. We expect to confirm or update our 2024 traffic levels after the summer season, based on the final data.
Q: Why has the tax expense almost doubled year on year?
A: The increase is due to higher taxable income and the impact of deferred taxation, including the reversal of provisions and balance actualization.
Q: How much of the increase in variable employee remuneration is due to higher traffic volumes versus pay increases?
A: The increase is due to both higher traffic volumes and pay increases to enhance productivity and flexibility.
Q: Will you release a new guidance on traffic and EBITDA after the summer season?
A: We will wait until the next quarter to decide on updating our guidance, based on the summer period's performance.
Q: How do you see the impact of potential geopolitical escalation in the Middle East on your overall flight traffic?
A: We do not foresee a significant impact as we have limited exposure in the Middle East.
Q: Can you explain the accounting of the balance reversal from the pandemic period?
A: The balance reversal is mainly related to the inflation impact and the reversal of provisions from 2020 and 2021.
Q: Are there any new incentives at the European level to improve operational efficiencies and reduce disruptions?
A: The European Commission has set capacity targets along with cost efficiency targets to improve overall performance.
Q: Should we expect a similar trend in cash flow generation in the second half of the year?
A: We expect cash flow generation to increase, driven by higher traffic volumes and billing cycles.
Q: Will the traffic forecast for the next regulatory period be decided by the end of this year or the beginning of next year?
A: The traffic forecast will be decided by the end of this year or early next year, based on Eurocontrol's latest data and our internal analysis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
