Atlas Arteria reported an 11.4% rise in revenue for the half year ended June 2025, driven by toll growth across its global portfolio. However, net profit fell 32.9% due to a one-off French tax and ongoing challenges in the US.
- Revenue increased 11.4% to A$77.5 million
- Net profit after tax declined 32.9% to A$73.3 million
- Temporary Supplemental Tax in France reduced APRR profits by €33.5 million
- Traffic growth in most toll road assets, including Dulles Greenway and Chicago Skyway
- Distribution guidance reaffirmed at 40.0 cents per stapled security for 2025
Financial Overview
Atlas Arteria Limited (ASX – ALX) released its half-year financial results for the period ending 30 June 2025, revealing a mixed performance. The company recorded an 11.4% increase in revenue to A$77.5 million, underpinned by solid toll revenue growth across its key assets in France, Germany, and the United States. Despite this top-line growth, net profit after tax fell sharply by 32.9% to A$73.3 million, primarily due to the imposition of a Temporary Supplemental Tax (TST) in France and ongoing losses at the Chicago Skyway.
Operational Highlights and Challenges
The APRR Group, which represents Atlas Arteria’s 30.8% stake in the extensive French motorway network, saw toll revenues increase by 3.7% to €1.48 billion, supported by a 2.4% rise in traffic. However, the TST, a one-year tax introduced in 2025, reduced APRR’s profits by €33.5 million (A$57.8 million), significantly impacting the group’s earnings. Meanwhile, the Chicago Skyway experienced a 3.4% increase in toll revenue despite a 2.8% decline in traffic, reflecting the resilience of its tolling model amid softer heavy vehicle volumes.
In the United States, the Dulles Greenway posted an 8.2% traffic increase and a 7.4% rise in toll revenue to US$40.1 million, driven by growing congestion on alternative routes. However, the asset remains embroiled in regulatory challenges, with the Virginia State Corporation Commission denying its latest toll rate application and ongoing federal litigation alleging constitutional violations. These legal proceedings add uncertainty to future cash flows.
Strategic and Financial Position
APRR also successfully issued €500 million in bonds maturing in 2031, reflecting confidence in its credit profile despite the tax headwinds. The company continues to pursue growth projects in partnership with Eiffage, including the A412 and A154 motorway expansions, with environmental approvals and tender outcomes expected by year-end.
Atlas Arteria reaffirmed its distribution guidance of 40.0 cents per stapled security for 2025, signaling management’s confidence in underlying cash flows despite the profit decline. The group maintains a robust balance sheet with cash reserves of A$253.5 million at Dulles Greenway and manageable debt levels, including a $50 million undrawn working capital facility.
Sustainability and Governance
The company continues to embed sustainability into its operations, focusing on safety, environmental stewardship, and governance. Its 2024 Sustainability Report, independently assured by Deloitte, highlights progress on greenhouse gas emissions and employee diversity targets. Safety remains a priority, with mixed results across assets but no lost time injuries recorded at corporate offices.
Looking ahead, Atlas Arteria faces regulatory uncertainty in France, where motorway concessions expire between 2031 and 2036. The French government has indicated support for a refined concession model, with a draft framework law expected in late 2025. In the US, the outcome of ongoing toll rate litigation at Dulles Greenway will be critical for future earnings.
Bottom Line?
Atlas Arteria’s H1 results underscore resilience amid tax and regulatory headwinds, but upcoming French reforms and US toll disputes warrant close investor attention.
Questions in the middle?
- How will the French government’s proposed motorway concession reforms impact APRR’s long-term profitability?
- What are the potential financial implications of the ongoing federal litigation over toll rates at Dulles Greenway?
- Can traffic growth trends at Chicago Skyway and Dulles Greenway sustain revenue momentum despite regulatory challenges?