Cintra selling Chilean tollroads and parking

Cintra the Spain based concessionaire with major investments in north American tollroads has put its Chilean pikes and car parks up for sale, according to European reports. Cintra's stock price has been heading steadily downward since a high of over E12 in March 2007 to under E6 recently. This probably reflects a downgrading of the company's toll revenue prospects in the next few years plus the general sell-off of stocks.

US and Chilean traffic is down substantially but Cintra's largest investment, 407ETR in Toronto continues to see traffic holding, and revenues rising though at  a much lesser rate.

Exane BNP Paribas investment researcher says the asset sales reflect an established Cintra "asset rotation" policy of selling assets when they look mature to provide funds and allow management to concentrate on new developments. The asking price Exane says is E1.7b ($2.3b, @E1=$1.35) in line with past valuations, so no bargain.

The Chilean toll concessions guarantee a rate of return via an automatic extension of the concession term to compensate for below-forecast traffic and revenues.

Cintra's total revenues are now projected by Exane at E1,042m this year (about $1400m @E1=$1.35) only rising to E1,134m ($1,530m) in 2010. EBIT is running about half revenues and forecast net profit ranges between minus E26m (loss) and plus E123m.

The sales of course would represent "deleveraging" or debt reduction unless invested in new concessions.  The company reports that only 14% of its debt needs refinancing over the next two years. Most of that is 407ETR debt of some E800m ($1080m).

EXANE are bullish about the company beyond the present financial turmoil.

Cintra's major assets in north America are 407ETR Toronto, Indiana Toll Road, and Chicago Skyway. It is also involved in Texas (TX130/TTC35) but it's unclear if these are paying projects. It also has tollroads in Spain and Greece.

The company says it has concession offers out there for I-285 toll lanes in Atlanta, and two projects in Poland and two in Portugal.

TOLLROADSnews 2008-11-21