Aena Returns to Net Profit as Traffic Recovers Sharply; Shares Offer 25% Upside

Narrow-moat AENA returned to profitability after eight quarters of losses, generating net profit of EUR 164 million in the first half of 2022 compared with a loss of EUR 346 million in the prior year. This was driven by passenger traffic of 105 million passengers reaching 82% of pre-COVID-19 levels in the first half. Revenue and EBITDA increased across all divisions. The group generated positive operating cash flows of EUR 785 million in the first half compared with an outflow of EUR 220 million in the previous year and reduced net debt/EBITDA to 5.2 times from 11.5 times. We maintain our EUR 150 fair value estimate. With the recent price declines, the shares are starting to offer some decent upside. We believe traffic over the second half of the year will recover to close to prepandemic levels, further boosting sales and profits.