Atlas Arteria (ASX: ALX) had been in a bearish phase, but has recently shown signs of reversal, embarking on an upward trajectory after bottoming out at $4.68 in June 2024.
The company has many things going in its favour, the foremost being the Finance and Transport Ministers' recent endorsement of the private concession model for the French toll road network, which marks a significant positive development for ALX. This endorsement ensures operational continuity and stability in the toll road sector, fostering a conducive environment for the company.
Atlas Arteria, considered as a High Dividend Stock has also witnessed significant financial growth from December 2020 to December 2023. The company experienced a notable surge in net margins, escalating from 50.6% to an impressive 214.9%, indicative of heightened operational efficiency. Return on equity (ROE) rebounded from -2.8% to a positive 5.2%, highlighting improved profitability.
Atlas Arteria (ASX: ALX)
Atlas Arteria (ASX: ALX) has reached an agreement with its APRR Group co-investors to achieve significant financial benefits. This includes refinancing the Financiere Eiffarie (FE) debt facility by mid-2025, aiming to lower annual repayments to about €55 million over the first five years. Additionally, approximately €200 million will be released from APRR Group in late 2024 to cover FE debt payments. Eiffage will inject €55.5 million into MAF2, increasing its stake in APRR Group from 52.0% to 52.5%, resulting in a slight 0.32% dilution of Atlas Arteria's ownership to 30.82%
Atlas Arteria announced its financial results for the year ended 31 December 2023, highlighting robust traffic performance across its key assets.
The weighted average traffic increased by 3.3% compared to 2022, exceeding 2019 levels by 2.9%. Significant toll increases at APRR, Chicago Skyway, and Warnow Tunnel translated into strong proportionate toll revenue growth, up 6.9% from 2022 and 11.9% from 2019. APRR Group saw a 5.0% increase in traffic, driven by commuter traffic between southeastern France and Geneva. Similarly, Warnow Tunnel experienced a 3.1% traffic increase as motorists opted for time-saving routes. Despite major roadworks affecting Chicago Skyway, toll revenue increased to US$123.3 million ($185.8 million), with EBITDA reaching US$104.9 million ($158.1 million). Dulles Greenway witnessed a traffic increase of 6.4%, reflecting a gradual return to office-based work in Northern Virginia, resulting in a toll revenue rise to US$72.8 million ($109.7 million). Overall group traffic grew by 3.9% from 2022, and statutory net profit after tax amounted to $256.3 million, showcasing Atlas Arteria's resilience and positive financial performance amidst varying market conditions.
The distribution guidance for H2 2023 stands at 20.0 cents per security, reflecting the strong performance of APRR, Warnow Tunnel, and Chicago Skyway during the period.
Looking ahead to 2024, the Atlas Arteria distribution is projected to increase to 40.0 cents per security, including distributions from APRR, Warnow Tunnel, and Chicago Skyway. It is expected that the 2024 distribution will include 7 - 8 cents per security of cash on hand, reflecting another portion of the capital releases from Chicago Skyway.
Source: Company's Report
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