Good morning, and welcome to the Corporación América Airports' First Quarter 2018 Earnings Conference Call. A slide presentation accompanies today's webcast and is available in the Investors section of Corporación América Airports Investor Relations website, http://investors.corporacionamericaairports.com. [Operator Instructions] As a reminder, today's conference is being recorded. At this time, I would like to turn the call over to Gimena Albanesi, 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 Raúl Francos, our Chief Financial Officer. Also with us today is Jorge Arruda, Finance and M&A Manager. All will be available for the Q&A session. 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 reconcilings with the SEC. We assume no obligation to update or revise any forward-looking statement to reflect new or changed events or circumstances. With that being said, I would now like to turn the call over to our CEO, Martin Eurnekian.

Thank you, Gimena. Hello, everyone, and thank you for joining us today. It's a pleasure to welcome you to Corporación América Airports' First Quarter 2018 Earnings Conference Call. I will begin my presentation with a discussion of the highlights of the quarter, and then Raul will take you through our financial results. Afterwards, I will provide an update on our key business segments and our view for the remainder of the year. We will then open the call to your questions. Starting with Slide #3. We had a strong start to the year with revenues up 10.5% and adjusted EBITDA growth of 12.5% year-on-year, driven by positive dynamics in our key operating metrics. More importantly, this is the result of successful execution across the organization. Total passenger traffic was up 7.6% in the first quarter with almost 20 million passengers traveling through our 52 airports globally. Cargo volume was up 14%. Overall, positive economic conditions in the majority of the countries where our airports are located, along with our focus on adding new routes, frequencies and airlines, were the key factors driving traffic growth. To further strengthen our platform for long-term success, we made capital investments of $50 million in Q1. These investments were mainly focused on Argentina and, to a lesser degree, in Brazil and Italy, keeping up with our strategy of enhancing the infrastructure of our airports. Moving on to our regional performance on Slide 4, we reported robust traffic growth across the majority of our countries of operations. Argentina, our core business segment, with over 10 million passengers in the quarter, posts strong traffic growth, up over 11% year-on-year. We continue to be encouraged with a 4% growth in traffic at Brasilia Airport in the first quarter of 2018, contributing to total traffic of 5 million passengers…

Thank you, Raul. I will now provide more details on our main business segments, starting with Argentina on Slide 9. Revenues ex construction were up almost 6%, mainly driven by 9% increase in aeronautical revenues. We added new routes and airlines over the past 12 months, supporting increased connectivity through the country as well as internationally. Some of the airlines driving international traffic include the daily flight to New York operated by United Airlines and several regional flights by Avianca. Let me also highlight low-cost carrier Norwegians direct route to London and the 4 weekly flights to Barcelona launched by Level, among others. Servicing the domestic market, Aerolíneas Argentinas and LATAM added more frequencies to existing routes in Argentina. And Flybondi, a low-cost carrier, started flying to several domestic destinations beginning in February this year. Now moving to profitability, higher traffic and cost dilution from the Argentine peso depreciation resulted in adjusted segment EBITDA growth of almost 10% to $93 million in the quarter. We adjusted EBITDA margin ex IFRIC expanding 170 basis points. We were also busy in the quarter making improvements to our airports in Argentina. We invested almost $45 million in Argentina mainly for the construction of a new terminal building and improvements to the runway and boarding area at Ezeiza airport, and the remodeling of the terminal at Aeroparque Airport. The construction of a new terminal building and the expansion of the parking at Comodoro Rivadavia airport as well as runway improvements and parking expansion at Iguazú Airport and the remodeling of the terminal at El Palomar Airport. Moving forward, despite recent macroeconomic events in Argentina, we remain committed to investing in our airports to observe expected traffic growth. While the depreciation of the Argentine peso will likely impact domestic traffic, we expect international traffic demand…

[Operator Instructions] And the first question comes from Stephen Trent from Citi.

I actually was curious, just wanted to follow up on what you guys are seeing on the M&A side. So you had recently mentioned the airport auction in Jamaica as well as some potential to acquire some assets in Italy. And I know you've done one of the two, I believe taken an additional stake in your Italian concession. Just wondering if these are the 2 geographic spots we should continue to watch or if you are seeing opportunities in other parts of the world.

Thank you, Stephen. This is Martin on again. Well, as we discussed before, we are in a public process in Jamaica, and we continue to analyze the situation. And we will make a decision whether or not to make a deal closer to the bid submission date. Other geographies in Italy, we remain with our opportunistic focus in looking at different geographies, but mainly focused in the areas where we feel more comfortable in the Americas and Southern and Eastern Europe. We still see some opportunities upcoming in [indiscernible], but none that we see materializing in the near future, but we will continue to work on it and keep everyone posted as [indiscernible].

And the next question comes from Bruno Amorim from Goldman Sachs.

So I have 3 questions, if I may. The first one relates to your comments on the depreciation of the peso and the potential positive impacts on EBITDA going forward, which make all the sense. My question is just if as of the next tariff revision, this could imply that tariffs in dollar terms would be reduced so that your returns are not much higher than the previously agreed return on your investments. The second question relates to margins in Brazil. EBITDA margin was 13% in the first quarter. I like just to understand what's your expectation going forward. Should it increase only through operational leverage as traffic grows, or is that -- is there any other factor that could boost profitability in Brazil? And the third question you have mentioned a potential increase in traffic related to foreigners traveling to Argentina as a result of the currency depreciation. Is it possible to share with us the breakdown of inbound versus outbound traffic in your international operations in the country?

Well, thank you for your questions. On the depreciation side, yes, that creates an instant [indiscernible] increase for our operations in Argentina. Regarding tariff review, we cannot comment on what the government [indiscernible] in the way they take all the calculations to arrive to the tariff revision. But I wouldn't expect increase in the context where we are in where we are deploying CapEx in Argentina the way we are today. So yes, we expect a margin increase, but although [indiscernible] of the process for the tariff revision, that wouldn't be expected. Regarding margins in Brazil, the main game-changer for our scenario added projects, we are taking on regarding a boost in commercial [indiscernible] will have an effect in commercial revenues. We are constantly working on that, the major developments will come with the projects that are expected to be completed in about 2 years' time. Regarding traffic in Argentina, we usually give traffic -- monthly traffic reports for all our operations. We have the overall traffic data coming from reliable sources. The breakdown [indiscernible] international versus domestically generated traffic comes from different sources that are out of our control and surveys that we make. So we do not [ disclose ] publicly.

And the next question comes from Ian Zaffino from Oppenheimer.

This is Mark Zhang on for Ian. Just a quick one, in terms of your balance sheet strength and your sound financial flexibility [indiscernible] what are some...

I'm sorry, can you speak louder or away from the microphone? It's -- I get a blurry sound that I cannot understand, sorry.

Oh yes, sorry. Yes, I was just wondering in terms of your balance sheet, financial flexibility, is there any additional sort of capital allocation strategy that you could share in terms of maybe like additional M&A or deleveraging? Anything around there would be much appreciated.

Thank you. The sound was not good, but as far as I understand, you're asking about capital allocation and how that profile is going to look and deleveraging or those sort of strategies. What I can tell you is that most of our debt is at the OpCo levels and is amortized in that. So what we expect is to keep the amortizing schedule that we have today, and we do not foresee major [indiscernible] debt profile in the near term. To comment something else on that, what we might do is take additional debt required by the CapEx programs that we have discussed previously in the 3 operations or business [indiscernible] plans for CapEx expansions such as Argentina, Brasília and Italy, where we have clear CapEx programs that we are currently executing.

[Operator Instructions] And the next question comes from Gabriela Benjamin from NFL.

Yes, my question is in regards to the negotiations with the Argentine government on twofold. Will there be a tariff revision this year in both the domestic and the dollar-denominated international tariff? And if so, when will that be? And second question is regards to the CapEx for the extension of the contract, if there is a date of when those negotiations are going to conclude.

Can you repeat the first part of the question, please?

Sure, the first part of the question is if there will be a tariff adjustment this year, and if so, when? For the domestic international tariff, the domestic to repass inflation and the international to adjust for the FX.

Okay, so regarding tariff revisions, we expect that to happen, but we cannot say when. It's up to the regulatory body to finish the work and come up with the result of the revision with a possible tariff increase. The tariff will reflect the framework of the contract we have in Argentina. [indiscernible] some relationship with inflation and currency exchange, but it's not directly linked to that. So we would expect the government to finish the work and publish the results.

Okay, great. And what's...

The final question, the CapEx?

Yes, the CapEx.

Okay. Can you repeat it, please? The sound is [indiscernible] speak slowly.

Yes, the line on your line is also breaking up occasionally. It's regards to the CapEx that you are negotiating with the Argentinian government to possibly have an extension of the contract, if there's any timing on that.

Well, the timing that it is available to discuss is [indiscernible] taken by hiring a consultant to do work for them regarding our concession. That work is expected to end in critical months as far as we know. And after that, we hope we can create a -- or the negotiation table will be created to begin this process. But as far as we can see through the process, it will not begin for the next 3 to 4 [ months ].

[Operator Instructions] And the next question is a follow-up from Stephen Trent.

Just one other from me. With the dislocation we've seen in markets recently, I know there's several airlines that are still launching operations within the region. And I'm aware of only maybe Latin America Wings, which is maybe shut down in its operations. And I'm wondering what you're seeing in the ebb and flow of new airlines. Are they generally sticking to their plans or do you sense any of these folks taking a more conservative view on their growth trajectories?

Well, as far as the contacts we have with airlines, most of the airlines that have expressed interest to set up operation in Argentina are continuing with their work. The only one that has expressed the need for some delay in the beginning of operations is Norwegian that has kept their workforce in Argentina and continues to do work towards establishing a domestic airline in Argentina. But has said that [indiscernible] delayed regarding issues or for their programming at the headquarter level. The rest of the companies that have set up or are setting up, we still see movement in the activity that's not signaled a stop or a change in that sense.

[Operator Instructions] And this concludes our question-and-answer session. I would like to turn the call back to Martin Eurnekian for any closing remarks.

Then thank you everybody for joining us today, and thank you all for your questions. And we remain available as a team, and we will keep our work focused mainly on execution of our business plans in the current business segments [indiscernible] if we have some more news to share with you. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.