MIG sees no mandate for new investments

Due to its depressed share price, the Macquarie Infrastructure Group will not seek to invest in any new toll roads. The firm also marked down the value of its existing assets by 18%, or 6% less than its indicative guidance issued in December.

Listed toll road developer Macquarie Infrastructure Group (MIG) is not going to invest in any new toll road opportunities until its share price recovers, John Hughes, the firm’s chief executive officer, told investors.

“At the current security price, MIG does not have a mandate to invest in any new toll road opportunities,” Hughes said in an investor presentation announcing the firm’s interim results for the six months ended 31 December 2008.

MIG's toll roads:
weaker traffic

The firm valued its assets as of 31 December 2008 at approximately A$4.9 billion (€2.5 billion; $3.1 billion), or A$3.3 per share, versus A$5.9 billion, or A$3.84 per share, at 30 June 2008. The mark-down of approximately A$1 billion, or 18 percent, was less than the 24 percent mark-down the company announced in its December 2008 indicative guidance.

MIG said that the change was predominantly driven by a detailed traffic network review of its 407 ETR toll road in Ontario, Canada. Its valuation was increased 8.4 percent from approximately A$3.3 billion to A$3.6 billion, or about half the value of MIG’s investment portfolio.

Like Transurban, another Sydney Stock Exchange-listed toll road developer, MIG said that operating revenue and EBITDA from its road assets increased in the six months ended 31 December 2008. MIG reported operating revenues of A$641.3 million, a 1.5 percent increase over the same period in 2007, and EBITDA of A$459.1 million, a 1.4 percent increase over the same period in 2007.

“This solid result was achieved in an environment where extremely difficult economic conditions have lead to a reduction in traffic volumes on MIG’s European and North American roads,” Hughes said in a statement.

Average traffic on MIG’s portfolio of 11 toll roads decreased 2.6 percent during the period.

MIG shares ended the day unchanged at A$1.36 per share.