Atlas Arteria (ALX) Q2 2024 earnings summary

Executive summary

• Proportionate toll revenue grew strongly, up 10% overall and 3.8% on a proportionate basis, driven by inflation-linked toll increases, despite minor traffic declines from events like farmer strikes in France.

• Net profit after tax was $114.2 million, down 16% year-over-year, mainly due to the new French TEILD tax impacting APRR and higher centralised costs.

• Distribution guidance for 2024 reaffirmed at 40 cps (AUD 0.40 per security), with improved free cash flow and reduced reliance on cash on hand or prior capital releases.

• Hugh Wehby appointed as incoming CEO, joining late 2024, ensuring leadership continuity and strategic focus.

• On track to achieve 2025 emissions reduction target and advanced ESG initiatives, including gender balance and modern slavery commitments.

Financial highlights

• Total revenue grew 10% year-over-year to $69.6 million, mainly from higher tolls and favorable FX movements.

• Net corporate cash flow increased 13% to AUD 258 million in H1 2024.

• APRR operating revenue increased 3.2% despite a 0.7% traffic decline, with tolls up ~3% from February.

• Group EBITDA and APRR EBITDA margin were impacted by the new French TEILD tax, with APRR EBITDA down 2.9% and margin at 72.3%.

• Net profit after tax fell to $114.2 million from $136.5 million in H1 2023.

Outlook and guidance

• Distribution guidance for 2024 reaffirmed at 40 cps, with future distributions targeted at the same level, supported by growing free cash flow and capital management initiatives.

• CapEx at APRR expected to remain below EUR 350 million per annum for the remainder of the concession.

• Dulles Greenway SCC rate case outcome expected in H2 2024.

• Chicago Skyway and APRR expected to have stronger H2 performance due to seasonal traffic patterns.

• Strategic priorities include operational efficiency, targeted growth near existing assets, and capital structure optimisation.