ENAV Q1 2025 slides: Strong traffic growth and cash generation amid seasonal loss

Introduction & Market Context

ENAV SpA (BIT:ENAV), Italy’s air navigation service provider, presented its first quarter 2025 financial results on May 14, revealing a seasonal loss despite strong traffic growth. The company’s stock closed at €3.984 on the presentation day, with a slight decline of 2.56% during the trading session.

The air navigation services provider reported a net loss of €29.3 million for Q1 2025, widening from the €13.8 million loss recorded in the same period last year. However, management emphasized that these results align with typical business seasonality, with the first quarter historically representing only about 18-19% of annual traffic.

Quarterly Performance Highlights

ENAV reported strong traffic growth in Q1 2025, with en-route service units (SUs) increasing by 7.4% compared to Q1 2024, exceeding the company’s plan by 1.2 percentage points. Terminal service units also showed solid growth, rising by 5.6% year-over-year.

As shown in the following traffic breakdown chart, international and overflight traffic dominated both en-route and terminal segments:

Despite the positive traffic trends, ENAV’s revenues decreased from €194 million in Q1 2024 to €181 million in Q1 2025. This decline was primarily due to balance dynamics, including negative contributions from balance N-2 (attributable to reversal mainly from 2020-21 traffic COVID recovery) and negative inflation balance of €10.6 million driven by regulatory reset.

The following chart illustrates the revenue evolution from Q1 2024 to Q1 2025:

Operating costs increased moderately, with personnel costs rising by 2.4% to €148.5 million and other costs growing by 4.3% to €33.5 million. The increase in personnel costs was mainly attributed to labor contract adjustments for inflation, while higher utilities costs of €1.2 million drove the increase in other expenses.

The breakdown of operating costs is illustrated in the following chart:

Detailed Financial Analysis

ENAV’s EBITDA turned negative in Q1 2025, declining to -€0.9 million from €16.5 million in Q1 2024. This decrease was primarily due to the absence of balance generation in Q1 2025, which offset the contribution from regulated activities.

The EBITDA evolution is detailed in the following waterfall chart:

The company’s profit and loss statement showed a net loss of €29.3 million for Q1 2025, compared to a €13.8 million loss in Q1 2024. Depreciation, amortization, and provisions decreased by 5.5% to €25.3 million, while financial expenses increased slightly to €2.2 million.

The complete profit and loss comparison is presented in the following table:

Despite the operational loss, ENAV demonstrated strong cash flow generation, which drove a reduction in net debt from €258 million at the end of 2024 to €223 million in Q1 2025. Cash capex for the quarter amounted to €25.1 million.

The following chart illustrates the positive cash flow dynamics and net debt evolution:

Forward-Looking Statements

ENAV maintains an optimistic outlook for 2025, stating that its targets are "comfortably at reach" despite the seasonal Q1 loss. The company expects free cash flow for 2025 to reach approximately €240 million, representing a 25.5% increase year-over-year.

Management also highlighted its commitment to shareholder remuneration, with a dividend of €0.27 per share for 2024 to be approved by the Annual General Meeting in May. This aligns with the company’s reported dividend yield of 6.78%.

As summarized in the company’s closing remarks, ENAV’s operational and financial evolution is progressing according to plan, with traffic ahead of forecast already in the first quarter:

The company’s presentation emphasized that its visible cash generation underpins its commitment to shareholder remuneration, while the reduction in net debt demonstrates effective financial management despite seasonal operational challenges.

While Q1 results show a widening loss compared to the previous year, ENAV’s management remains confident in the company’s ability to meet its full-year targets, supported by strong traffic growth and improved cash flow generation. Investors will be watching closely to see if the positive traffic trends continue to translate into improved financial performance in the coming quarters.

Full presentation:

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