S&P/ASX 200 Index (ASX: XJO) transport stock Atlas Arteria Ltd (ASX: ALX) is catching some headwinds today.
Atlas Arteria shares closed yesterday at $5.09. In late afternoon trade on Thursday, they are changing hands for $4.98 apiece, down 2.2%.
For some context, the ASX 200 is down 0.4% at this same time.
This underperformance follows the release of Atlas Arteria's half-year financial results for the six months ending June 30 (H1 2024).
Here are the highlights.
Atlas Arteria shares slip on declining profits
- Revenue of 1.61 billion euros, up 4.4% from H1 2023
- Total half-year traffic of 12.29 billion, down 0.7% year on year
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) of 1.08 billion euros, down 2.9% from H1 2023
- Net profit after tax of 114.2 million euros, down 16% year on year
What else happened with the ASX 200 transport stock over the year?
The ASX 200 transport stock is popular among passive income investors for its juicy dividends, and it didn't disappoint on that front.
Management reaffirmed full-year dividend guidance of 40 cents per share.
Although profits were down 6.7%, net corporate free cash flow was up 12.7% compared to H1 2023.
The company reported 3.8% year-on-year growth in its proportionate toll revenue, noting that CPI-linked toll increases offset the weighted average traffic reduction, which was down 0.4% year on year. That dip was said to be primarily due to farmers' strikes impacting its APRR motorway network in France.
Speaking of France, the company reported that its legal challenge to the new French long-distance transportation infrastructure tax was ongoing.
The half-year also saw Hugh Wehby appointed as incoming CEO and managing director. Wehby will take over the reins in late 2024.
What did management say?
Commenting on the results pressuring the ASX 200 transport stock today, outgoing Atlas Arteria CEO Graeme Bevans said:
Atlas Arteria delivered strong revenue growth, driven by CPI-linked toll increases, and implemented capital management initiatives that will enhance Atlas Arteria's free cash flow.
We reaffirm 2024 distribution guidance of 40.0 cps and expect a reduction in the use of cash on hand for distribution funding to 4-5 cps compared to previous guidance of 7-8 cps.
Bevans added:
In March, APRR along with the other toll road companies filed a constitutional challenge to the new long-distance transportation infrastructure tax. A decision is expected on 12 September. If we are not successful, APRR will pursue litigation to seek compensation.
In North America, the Chicago Skyway business plan is on track, and we strengthened Atlas Arteria's executive team by hiring Amanda Baxter as group executive for North America and corporate development.
At Dulles Greenway, our objective remains to lower tolls for customers by implementing distance-based tolling, while ensuring the business is on a sustainable financial path.
How has the ASX 200 transport stock been tracking?
With today's slip in the Atlas Arteria share price factored in, the ASX 200 transport stock is down 18% in 12 months.
