Good morning, and welcome to the Corporación América Airports Second Quarter 2023 Earnings Conference Call. A slide presentation accompanies today's webcast and is available in the Investor section of the Corporación América Airports website. As a reminder, all participants will be in a listen-only mode. There will an opportunity to ask questions at the end of the presentation. 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. Now, let me turn the call over to our CEO, Martin Eurnekian.

Thank you, Inaki. Hello, everyone, and welcome to our second quarter 2023 earnings call. I will kick off today's call by providing a summary of our financial highlights followed by a quick review of traffic and cargo trends. I will then turn the call to Jorge to go through our second quarter financial results. We reported an outstanding quarter with robust performance across the board. Adjusted EBITDA reached yet another record of $151 million, up 27% when compared to second quarter 2019 with the adjusted EBITDA margin ex-IFRIC12 expanding 3.2 percentage points. This was achieved with passenger traffic approaching pre-pandemic levels. Again, this quarter, all territories contributed with positive adjusted EBITDA, fueled by a strong rebound in travel demand and solid execution across operations. Revenues ex-IFRIC12 climbed 17% when compared to second quarter 2019, reflecting the good performance in both Aeronautical and Commercial revenues. Costs in turn increased below revenue growth, reflecting the operating leverage we have built into the company. The increase in profitability, along with a slight reduction in net debt contributed to further lowering our leverage ratio to an all-time low of 1.8 times, reflecting the amazing work we have undertaken during and after the pandemic in connection with our commercial activities. On the CapEx front, we remain well on track with the execution of our fully funded CapEx programs in Argentina and Uruguay, and are actively and selectively looking to other airport concessions to continue expanding our airport network and delivering long-term value to our stakeholders. Next, turn to Slide 4 for a deeper dive into passenger traffic patterns. The line chart tracks the sustained recovery we have been seeing in travel demand. We were just 1% below second quarter of 2019 levels. As a point of reference, in the first quarter, traffic was about 10%…

Thank you, Martin, and good day, everyone. Starting with our top line on Slide 6. Total revenues ex-IFRIC12 increased 20% year-on-year and surpassed pre-pandemic levels by 17%. We are pleased with the continuation of the robust growth we have been able to deliver driven by solid revenue growth from both Commercial and Aeronautical. Aeronautical revenues increased 24% year-on-year, surpassing pre-pandemic levels for the second consecutive quarter. This was mainly driven by tariff increases, and a continued recovery in passenger traffic across our geographies, reaching 99% of second quarter 2019 levels. Argentina maintained strong momentum, while Aeronautical revenues in Armenia increased double digit year-on-year and were up 80% compared to second quarter 2019. Commercial revenues, which accounted for nearly 50% of our total ex-IFRIC revenues, were up 16% year-on-year and 39% above pre-pandemic levels. This was mainly supported by a solid performance of cargo and duty-free revenues in Argentina and higher fuel-related revenues in Armenia. As a reflection of these strong results, our revenues per passenger increased 19% from $15.6 in the second quarter 2019 to $18.5 this quarter. Now turning to our cost structure on Slide 7. Total costs and expenses for the quarter increased 12% year-on-year ex-IFRIC12 following the sustained growth of our business, but still below our 20% revenue growth. Compared to 2019, total costs and expenses ex-IFRIC12 for the quarter grew by 10%. This is mainly explained by higher fuel costs in Armenia due to increased fuel sales in the quarter. Higher concession fees in Argentina also tied to higher activity and higher salaries in Argentina as the local inflation rate was above currency depreciation. SG&A expenses were up 40% year-on-year mainly reflecting a benefit of a onetime bad debt recovery of $10 million in Argentina, which occurred in the second quarter of last year. Compared to…

Now to wrap up, please turn to Slide 11. We are pleased to have delivered a solid second quarter performance, setting a new record high adjusted EBITDA, 27% above pre-pandemic levels despite traffic volumes at practically pre-pandemic levels. Also noteworthy is the considerable increase in revenues per passenger, which expanded to $18.5, up from $15.6 in the same period of 2019. As we look ahead, our primary focus continues to be on the negotiations with the government of Armenia regarding a much needed $400 million CapEx program. The approval process for the new master plan at Florence Airport, which remains on track and then receiving the indemnification payment in connection with the return of Natal Airport in the fourth quarter of this year. Additionally, we also remain focused on expanding our portfolio and we continue working with the government of Nigeria in connection with the Abuja and Kano concession agreements. Separately, we are also pleased to report that we have just published our second sustainability report and invite you to read it. We are just starting this journey. We are committed to driving continuous improvement and awareness across the company and look forward to share with you more updates as we advance on this ESG journey. This ends our prepared remarks. We are ready to take your questions. Operator, please open the line for questions.

Thank you, sir. [Operator Instructions] Your first question will be from Jay Singh at Citi. Please go ahead.

Good morning, everybody. Thank you for taking my questions. What are your plans for expanding into new markets right now? Can you talk to us a little bit more about the Nigerian market plan?

Sure. Thank you, Jay. We -- as we always said, we -- once we started the recovery out of the pandemic, we started again looking for opportunities to grow our markets. We participated in the Nigeria process and we were selected preferred bidder for two airports, Abuja, the capital, and Kano airport in North. And we continue discussing with the government the terms to be able to finalize and sign and start that process. This has opened the door for us to start looking for opportunities in Africa as continent, which we are -- which we have the team working now on different opportunities that may arise there. But we also keep our eyes open and working in the different geographies where we are already present, understanding if there are opportunities that can be accretive for our portfolio. And we will keep with that attitude looking for good opportunities, but always being very disciplined with our cash and our investment criteria.

Awesome. And as a follow-up, I'd like to know how should we think about your normalized long-run CapEx rate? Thank you very much.

Thank you, Jay. In terms of CapEx, what we have is a CapEx agreement with the government of Argentina related to the 10-year extension signed in 2020, which we are currently executing that had a requirement of $406 million, which are perfectly underway and some extra CapEx for the following years, which will probably be decided later on. The same thing happens in Uruguay, where we agreed with the government, the addition of six regional airports in the country, which require us to do CapEx in all of them, and we have a CapEx agreement as well there, which is also underway with the first airport opened at the end of last year and other investments in the rest of the airports underway and on track in terms of timing and budget as well. For the rest, in terms of material CapEx for the rest of the subsidiaries -- beyond maintenance CapEx, it will have to do with what we mentioned just now on Florence and Pisa regarding the agreement with the government for the investments there. And the discussions we're having in Armenia regarding also an important CapEx development because of the high traffic that we're seeing there and the requirement to feed this growing traffic. But beyond this required CapEx that we have because of the agreements with the governments, the rest would be only maintenance CapEx going ahead. Thank you very much.

Thank you. Super helpful.

[Operator Instructions] Thank you. And at this time, it appears we have no further questions. I will turn the call back to Martin for any additional closing remarks.

I just wanted to thank you all for joining us today and remind you that our team remains available to discuss any further information that you may require. And please 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. At this time, we ask that you please disconnect your lines. Have a good weekend.