Mac Atlas report gains from European pikes offsetting US declines

Macquarie Atlas Roads (Mac Atlas) report a slightly improved financial result in the first half of the year despite poor performance on the Indiana Toll Road, Chicago Skyway and Dulles Greenway. Strong growth in the APRR toll network in France and the M6 Toll in England more than offset the poor American results - 4% to 5% declines in traffic

Toll revenue was A$382m in the first half of 2010 (2010H1) compared to A$365.5m in the first half of 2009 (2009H1). Operating expenses were up 5.2% to A$110.5m. Sharply higher taxes in France (A$31m v A$11m) lowered earnings to A$67m from A$75m. Before taxes earnings were A$98m this year v A$86m has year.

(The A$ is 90c US.)

Mac Atlas' CEO Peter Trent is quoted in a press statement:

"Notwithstanding tough winter conditions in the northern hemisphere, the MQA road portfolio has delivered a solid performance in the six months to 30 June 2010, with an increase in traffic, revenue and EBITDA. We expect that portfolio revenue will continue to grow as a result of improving traffic trends and the positive impact of the changes to tolling structures implemented during the year."

Strong growth in France, Britain

On the Autoroutes Paris Rhin-Rhone (APRR) network in which Mac Atlas have a 19.4% interest, heavy truck traffic is up nearly 6% 2010H1/2009H1. Revenue is 5.2% higher than a  year ago.

In England M6 revenue (100% owned) is up 6.3% with traffic up 4%.

Chicago Skyway (22.5% owned) revenue is down 6.6% (2010H1/2009H1) on a 4.5% decline in traffic.

Dulles Greenway (50% owned) revenue is down 3.7% on a 4% decline in traffic.

Indiana Toll Road (25% owned) is not so bad with revenue up 3.8% on higher toll rates and a 2.2% increase in ticket system traffic, but a decline in the western barrier system traffic of 7.4%.  Overall Indiana TR traffic is down nearly 5%.

Macquarie Atlas' assets are now split France 44%, US 30%, UK 26%. A tunnel in east Germany is virtually written off.

Mac Atlas has no interest in tollroads in Australia.

Dismal US results

Earnings relative to debt are by far the best on Mac Atlas APRR investment in France. Net debt is some 8 times EBITDA v 36x on the Skyway, 30x on the ITR, 22x on M6 and 18x on the Dulles Greenway.  Earnings, a measure of profit for 2010H1 were A$66.7m of which $55.5m came from APRR, A$6.8m from the Dulles Greenway and A$11.5m from M6.

The Indiana Toll Road showed a loss of A$6.6m for Mac Atlas and the Skyway A$0.5m.

Those results have not changed markedly from H1 2009.

One presentation lays out the damage to Dulles Greenway from  upgrades to competing free roads, but suggests these improvements are finished and the northern Virginia pike is "well placed to capture excess demand" once the free facilities congest.

Dulles Greenway is down to 47.8k average daily traffic 2010H1 from 49.8k daily in 2009H1. In 2006 the number was around 60k.

Chicago Skyway traffic is 42.1k 2010H1 v 44.1k 2009H1.

Indiana Toll Road traffic presents a mixed picture because commuter and recreational barrier system traffic on the western portion continues to decline - to 46.9k from 50.6k/day. Ticket system traffic however with a higher percentage of trucks was 22k/day v 21.5k a 2.2% increase - all numbers expressed as full length equivalent trips.

Total full length equivalent trips on the Indiana TR in H1 this year were 68.84k v 72.1k last year, a 4.5% decline.

Split, now sale of Intoll

Macquarie Atlas and a sister company Intoll were formed out of Macquarie infrastructure Group. Intoll whose major assets are the 407ETR in Toronto and the M7 in Sydney is being sold to a Canadian Pension fund.

for 2010H1 results:

http://www.macquarie.com.au/au/mqa/news.htm?20100830_0

see recent report on Intoll

http://www.tollroadsnews.com/node/4877

TOLLROADSnews 2010-08-29