Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Atlas Arteria Ltd (MAQAF) reported solid financial performance for 2024, with proportional revenue up across all businesses and traffic growth of 0.6%.
• The company successfully signed a 55-year concession for the A412 in France, ensuring a long-term presence in the market.
• Atlas Arteria Ltd (MAQAF) achieved its scope one and two emissions targets a year early, setting a strong foundation for future sustainability goals.
• The company exceeded its gender diversity target of 40% female representation across all employees and independent directors at the board level.
• The refinancing of Finance Safari reduced amortization payments significantly, enhancing cash flow management.

Negative Points

• Atlas Arteria Ltd (MAQAF) missed its large business safety target, with a rise in manual handling and slip and fall incidents at APRR.
• The Virginia State Corporation Commission denied the rate case application for toll increases at Dallas Greenway, impacting cash flow potential.
• The company faced challenges with the new French tax imposed on long-distance transport infrastructure, affecting financial performance.
• Atlas Arteria Ltd (MAQAF) did not meet its gender diversity target at the senior executive level due to recent changes in the executive committee.
• Depreciation costs are expected to rise due to the expiring concession for APRR and ARIA, impacting future financials.

Q & A Highlights

• Warning! GuruFocus has detected 7 Warning Signs with MAQAF.

Q: Can you explain the new free cash flow definition and its impact on guidance? How does it relate to capital releases from Skyway? A: The new free cash flow definition backs out amortization from Finance Safari covered by existing cash proceeds. It focuses on amortization affecting distributions to Atlas. Capital releases from Skyway will be used to offset amortization, particularly from Finance Safari and Vanno Tunnel. These releases will be separated from operating distributions. (CEO and CFO)

Q: What is the strategy for addressing the challenges at Dallas Greenway, and what is the expected timeline for outcomes? A: The strategy includes legal actions, developing a new rate case with stakeholder engagement, and improving the underlying business. Legal processes are ongoing, and the new rate case is being prepared for submission in the near term. The timeline for outcomes is uncertain, but efforts are more comprehensive than before. (CEO)

Q: Why did labor charges at APRR drop sharply in the second half, and why did depreciation increase? A: The drop in labor charges is due to the timing of profit-sharing bonuses at APRR. Depreciation increased due to the shortening useful life of assets as the concession period decreases. This trend is expected to continue as the concession approaches expiration. (CFO)

Q: How will the temporary French tax impact dividends if it extends beyond one year? A: The current policy and cash flow scenarios account for a one-year impact of the temporary tax. If it extends, cash balances will be assessed to determine the impact on dividends. The policy provides guidance, but decisions will be made based on the situation at the time. (CEO)

Q: What are the new revenue streams being considered for Dallas Greenway? A: New revenue streams include capitalizing on increased traffic due to congestion on competing routes and exploring opportunities related to the area's high internet traffic, such as data transfer using the land area. These initiatives are in the early stages. (CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.