Why the Atlas Arteria (ASX:ALX) share price is dropping today

The Atlas Arteria Group (ASX: ALX) share price is down today, after the toll road company shared its quarterly traffic and revenue update.

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A single car on a normally busy highway exchange, indicating a falling share price in ASX road toll and car companies

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The Atlas Arteria Group (ASX: ALX) share price is down today after the toll road company shared its quarterly traffic and revenue update. The company has built and now operates toll roads in Germany, France and the US.

The Atlas Arteria share price is currently trading at $5.92, down from yesterday’s closing price of $5.97.

Let’s take a closer look at today’s news from Atlas Arteria.

Lockdowns = traffic down = revenue down

The company’s report for the quarter ending 31 March 2021 showed a decrease in the number of cars using the company’s toll roads.

On average, the number of cars using Atlas Arteria’s tollways decreased by 12.4% this quarter compared to the first quarter of last year.

Atlas Arteria advised this was because of ongoing COVID-19 related lockdowns in Europe and the United States during the quarter. It claimed that, while COVID-19 lockdowns impacted the prior corresponding period, it was for only 1 month during an otherwise strong quarterly performance.

Performance in France

Atlas Arteria essentially has a stake of around 31% in both the APRR tollway and the ADELAC tollway through different investments.

While the APRR tollway experienced a 12.8% drop in the number of vehicles using it, its revenue wasn’t so hard hit. Due to an increase in the number of heavy vehicles using the tollway, Atlas Arteria’s income from APRR was only 6% less than the first quarter of last year. It brought in around EU€515.5 million this quarter.

The ADELAC wasn’t so fortunate. Border restrictions meant the freeway’s bread and butter – commuters from Switzerland were unable to cross into France. The number of travellers using the freeway dropped by 25.3%, while its revenue dropped 25.7%. Income for the quarter was around EU€8.9 million.

Germany

Atlas Arteria owns the Warnow Tunnel in Germany. Germany spent the entire quarter in a strict lockdown. As a result, the number of travellers using the Warnow Tunnel was the lowest it’s been since the pandemic began.

18.7% fewer vehicles passed through the Warnow Tunnel compared to the first quarter of last year, which was minimally impacted by COVID-19 restrictions. Compared to the previous corresponding quarter, Atlas Arteria’s income from the tunnel was also down by 17.2%, raking in around EU€2.4 million.

The United States

In the US, Atlas Arteria owns the Dulles Greenway in Virginia. According to the company’s release, Virginian’s preference to work from home, government-imposed lockdowns and heavy snowfall all added to a decrease in vehicles using the freeway.

Traffic on the Dulles Freeway was the hardest hit out of all the company’s tollways. It was down 36.4% compared to the previous corresponding quarter and 46.5% lower than the first quarter of 2019. Revenue from the freeway was also down by 37% this quarter. It only brought in around US$11 million in the first quarter of 2021. That’s compared to around US$20 million in that of 2019.

Atlas Arteria share price snapshot

The Atlas Arteria share price is having a bad run on the ASX lately.

Currently, the Atlas Arteria share price is down 8% year to date, although it’s up by 7% over the last 12 months.

The company has a market capitalisation of around $5.7 billion, with approximately 959 million shares outstanding.

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The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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