Release Date: November 14, 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 strong traffic performance with a double-digit growth in service units, particularly in the summer months.
- The company achieved a 4.1% increase in total revenues for the first nine months of 2024, driven by robust traffic growth.
- ENAV SpA (FRA:ENV) maintained a solid EBITDA margin of 28.9%, reflecting strong profitability.
- The company successfully reduced the altitude limit for free route airspace, enhancing fuel savings and reducing CO2 emissions for airlines.
- ENAV SpA (FRA:ENV) confirmed a strong cash flow generation of EUR130.6 million in the first nine months of 2024, significantly higher than the previous year.
Negative Points
- Operating costs increased by 5.3%, primarily due to higher personnel costs and contractual salary increases.
- The balance for the first nine months of 2024 was negative EUR59.5 million, impacted by various regulatory and financial adjustments.
- Nonregulated revenues slightly decreased year-on-year, affected by the absence of contributions from previous projects like Qatar.
- Net debt increased by EUR10 million compared to the end of 2023, reflecting dividend payments.
- The company faces ongoing discussions with regulators regarding the impact of increased traffic on punctuality targets, which could affect bonus calculations.
Q & A Highlights
Q: Could you provide some color on the terminal service unit expectations and possibly by charging zone for 2024? Also, what are your 2025 traffic expectations?
A: For 2024, we expect terminal service units to increase similarly to the 10.7% growth seen in the first three quarters. For 2025, Eurocontrol forecasts a 4.8% increase in traffic for Italy compared to 2024 figures, which aligns with our expectations.
Q: What is your outlook for operating expenses in 2025, and can you provide more granularity on nonregulated revenue expectations?
A: We are currently negotiating RP4, so we haven't disclosed 2025 cost details yet. Regarding nonregulated revenue, we confirm a double-digit growth year-on-year, with strong progress expected in the last quarter of 2024.
Q: Can you explain how you account for the inflation balance and how it will look in 2025 once RP4 begins?
A: The inflation balance for 2024 is based on the actual inflation rate, expected to be around EUR50-55 million. For 2025, the inflation is already included in the cost base presented to the regulator, so no initial balance is calculated. Adjustments will be made if actual inflation differs from planned figures.
Q: Despite upgrading the en-route service unit guidance, why does the revenue guidance remain unchanged?
A: The traffic increase benefits are limited due to the traffic risk-sharing mechanism, reduced inflation balance impact, and additional staff costs to manage higher traffic levels. These factors offset the potential revenue increase from higher service units.
Q: What is the status of the bonus models incentives and the applied tariff for 2025?
A: Discussions with the regulator are ongoing regarding the impact of high traffic on punctuality targets, affecting bonus calculations. For 2025, the proposed en-route tariff is around EUR74, pending final approval. The balance included in this proposal will be disclosed after the regulatory process concludes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
