Mac Atlas eyes dividend in 2013

In the six months to June 30, 2012 Macquarie Atlas Roads reported a net loss of $75.2 million, an improvement from a $106.4 million loss in the previous corresponding period. Its preferred performance measure, proportionate EBITDA, rose 3.5% to $244.8 million.

The net loss was driven partly by the company's share of losses from its co‑owned toll roads overseas and accounting items such as losses on interest rate swaps and higher debt-related amortisation, even though proportionate EBITDA increased.

Proportionate EBITDA is earnings before interest, tax, depreciation and amortisation adjusted to reflect the group’s beneficial ownership of each road. It matters because it shows the operational cash-earnings performance of the roads portfolio and rose to $244.8 million in the first half of 2012.

Macquarie Atlas did not declare a dividend for the first half of 2012, but the company said that based on the current outlook it anticipates being able to declare a dividend in the first quarter of 2013 — though this was framed as an expectation, not a confirmed payment.

Revenue from the roads rose by 1.4% to $330.8 million in the first half of 2012. This increase occurred despite a 1.9% fall in traffic volumes, with revenue supported by toll increases.

The company’s share of net losses increased to $33.4 million from $17.3 million a year earlier, partly reflecting losses on interest rate swaps and higher debt-related amortisation tied to its portfolio of toll roads.

Macquarie Atlas Roads has interests in six toll roads located across the US, Britain, Germany and France. The company was created from the 2010 restructure of Macquarie Infrastructure Group into two separately listed toll-road companies.

Investors should watch indicators mentioned by the company: proportionate EBITDA trends, traffic volumes and toll increases, any further impacts from interest rate swaps or debt amortisation, and announcements about the anticipated dividend in the first quarter of 2013.