Italian crisis hits Atlantia's Q1 results

Traffic declined by 8.5% across Atlantia's Italian concessions network impacting on EBITDA and profit, although Atlantia's revenues managed to remain flat. In contrast, Atlantia's overseas concessions posted a healthy 6.1% traffic growth.

Atlantia, Italy's premier toll road operator, is feeling the heat from Italy's economic crisis, with traffic across its Italian concessions network falling by 8.5 percent during the first quarter of the year, the company announced last Friday.
 
The traffic slump hit both light and heavy vehicles which saw declines of 8.6 percent and 7.7 percent respectively compared with the first quarter of 2011. Atlantia blamed the traffic decrease mostly on Italy's macro-economic situation, but pointed out there were other non-recurring events – including a lorry strike and exceptionally bad weather – that also impacted on its figures.
 
With its Italian concessions accounting for most of the group's business, Atlantia duly recorded a 6.4 percent fall in earnings before interest, tax, depreciation and amortisation (EBITDA) to €482 million compared with the first quarter of last year; a 9.8 percent drop in profits to €125 million; and a close to 16 percent reduction in operating cash flows, which stood at €275 million at the end of the first quarter of 2012.
 
Revenue remained stable at €857 million, mostly due to the recent consolidation of a Brazilian toll road concession. In fact, while Atlantia's domestic concessions fared badly during the first quarter of the year, its international business is thriving, with its overseas concessions recording a healthy 6.1 percent growth in traffic.
 
Earlier in February, Atlantia announced a partnership with Brazilian infrastructure developer the Bertin Group to create a motorway powerhouse managing 1,538 kilometres of highways, mostly in the São Paulo area.
 
At the time, Atlantia chief executive Giovanni Castellucci said in a statement: “Brazil has a key role to play in Atlantia’s growth strategy in Latin America. The country offers enormous growth potential thanks to major infrastructure development projects over the short and medium term and its long-term growth prospects.”
 
But for the short-to-medium term, it's Italy that will determine Atlantia's overall health.
 
“Unless [there is] further deterioration of the macroeconomic backdrop in Italy, the current situation leads us to expect the group’s consolidated operating performance for the current year to be substantially stable,” Atlantia concluded in its first-quarter statement.