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

The Atlas Arteria Group (ASX: ALX) share price is down 3% today after a disappointing decision in the US and its annual general meeting.

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The Atlas Arteria Group (ASX: ALX) share price is down today after the company gave a pricing update on one of its American operations and held its AGM.

Shares in the toll road operator are down 3.1% at the time of writing, trading at $5.93. In comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.42% lower.

Let’s take a closer look at today’s updates and what they mean for the Atlas share price.

What’s driving the Atlas share price today?

Toll road update

In today’s first announcement, Atlas Arteria updated investors on the recent decision by the Virginia State Corporation Commission (SCC) regarding the Dulles Greenway – a toll road in the United States owned and operated by Atlas.

The company sought to increase tolls on the road from $5.80 in 2020 to $6.15 for 2021 for peak travel (6.0% rise) and to $6.55 for 2022 (6.55% rise) for peak travel. The SCC rejected this proposal and opted to leave the toll at $5.80 for the next two years.

The off-peak toll increased by 5.3% for 2021 and a further 5.0% for 2022, as Atlas requested. The 2021 increase will take immediate effect.

According to the release, Atlas did meet certain criteria to increase the peak toll, but “exercised [its] discretion to allow off-peak toll increases only for 2021 and 2022, due to the changes and uncertainty brought about by the COVID-19 pandemic”.

Atlas CEO Graeme Bevans said:

The current COVID-19 environment has clearly impacted the outcome. The shorter period for toll increases is understandable given the circumstances, and it is important to keep our customers front of mind.

Despite the shorter term, the SCC decision demonstrates that the Dulles Greenway continues to provide value for its customers in Northern Virginia and Loudoun County.

Mr Bevans also said the company was working to “improve mobility and traffic flow” for westbound traffic during peak hours.

Annual General Meeting

Also material to the Atlas share price, the company held its annual general meeting (AGM) today.

Atlas chair Debbie Goodin told the AGM that the company was still affected by COVID impacts. She called the situation “a challenge”.

Highlights of her speech included:

  • Safety metrics have improved in Atlas’ French operations, with long-term injury dropping from a 5 in 2019 to 2.7 in 2020. However, the company reported an incident in France where an employee was struck by a loose wheel from a heavy vehicle and is in critical condition.
  • Atlas’ stake in APRR (the French motorway network company) increased from 25% to 31%.
  • The company expects to continue its dividend payments in the near term.

Mr Bevans also addressed investors in the AGM.

In his speech, he noted how lockdowns in Europe and the US were negatively impacting the business. As well, he noted the Dulles Greenway traffic was more “subdued” than it otherwise would be but believes the outlook is optimistic as vaccinations continue and lockdowns ease, especially in Virginia.

Atlas share price snapshot

Over the past 12 months, the Atlas share price has increased a modest 4.2%. However, since the beginning of the year, shares in the company have dropped 8.4%.

Atlas Arteria has a market capitalisation of $5.7 billion.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. 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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