Cintra increased EBITDA by 8% to 346.4 million euro in the first half of 2008


– Revenues increased by 7% to 515.7 million euro

International revenues accounted for 70.8% of the total. Canada is the main source of revenues, providing 32.5% of the total.

– The EBITDA margin increased by 0.6 percentage points to 67.2%.

– EBIT rose 11% to 252.8 million euro. ” The number of managed parking spaces increased by 6.1% (15,583) in the last year.

– The indicative valuation as of June 2008 rose to 9,186 euro, an increase of 2% on that of 6 months ago.

Cintra, a company specialised in managing toll roads and car parks, increased EBITDA by 8% to 346.4 million euro in 1H08. Sales in the first half of 2008 rose 7% to 515.7 million euro. Excluding the effects of the euro’s appreciation, revenue would have increased by 10.1%.

The EBITDA margin was 67.2% in 1H08, up 0.6 percentage points with respect to 1H07. EBIT amounted to 252.8 million euro in 1H08, an 11% increase.

Revenues from other countries accounted for 70.8% of the total in 1H08. Canada was the main source of revenues in 1H08 with 167.4 million euro (32.5% of the total), followed by Spain with 150.8 million euro (29.2%), and Chile, which increased its contribution to 99.6 million euro (19.3%).

Every six months, Cintra performs an indicative valuation of its main assets. Assets in operation are valued by discounting future cash flow to the shareholder using assumptions that are coherent with the asset’s past performance, and without factoring in potential upsides (e.g. releveraging, risk mitigation, etc.). The other assets are projects under construction or which have a short track record of operation and are included at book value; once they have a sufficient track record, they will be valued using discounted cash flow, which will very likely lead to an increase in their value. The indicative valuation at June 2008 is 9.371 billion euro, 2% more than at the end of 2007.

Toll roads

Despite the economic slowdown affecting some countries, the toll road business including holding companies, expanded revenue by 7.3% in 1H08 to 444.6 million euro. Canada’s 407 ETR, which accounts for 37.7% of the division’s revenue, increased its revenue by 5.4% to 167.4 million euro. Revenue also increased on Ocaña-La Roda (16.1%), Ireland’s M4-M6 (13.5%), and the Chilean toll roads (13.3%). Greece’s Ionian Roads contributed 8 million euro. On 10 January, the Greek government transferred this toll road to a company in which Cintra owns a 33.34% stake.

EBITDA of the toll road division rose 8.7% (320.1 million euro) due largely to the good performance of the 407 ETR and the Chilean toll roads. Excluding the effect of the euro’s appreciation, EBITDA would have grown 11.5%.

During the first half of the year, traffic performance on Cintra’s concessions was varied. Traffic on the 407 ETR increased 2.5%, and the Chilean toll roads also performed well. Various factors affected traffic, such as the truckers’ strike in Spain during the first half of June. The most important interruptions took place during the week of the 9th-15th June, when roads and connecting roads were closed the whole day.

  • Canada – In 1H08, 407 ETR had one working day less and two holidays more. This had a negative impact, as traffic is heavier on working days. However, the road was positively affected by the completion of widening work, which expanded the central sections of the road with 100 kilometres of new lane.
  • US – Traffic on the Chicago Skyway was affected by increased capacity on an alternative route. In regards to The Indiana Toll Road, traffic on the barrier section (closest to Chicago) reflects the effects of the temporary closure of the I-65 south of the Gary East toll plaza, which is diverting traffic towards the Borman Expressway in Indiana and the Bishop Ford/Dan Ryan Expressway in Illinois.
  • Spain – Traffic on Ausol I and Ausol II (particularly the latter) was affected by the completion in September of construction work at Algeciras Port, which had increased heavy vehicle traffic. In the last two years, traffic has risen by an average of 2.1% per year. Traffic on the M-45 was affected by the opening of the section of the M-50 between the A-3 and A-2 highways and the completion of the tunnelling work on the M-30. Nevertheless, this shadow toll road’s revenues depend on contractually-established traffic levels. As a result, Cintra collects the maximum revenues.
  • Chile – In 2008, Chilean toll roads are performing well. Of special note is the 4.3% growth on the most important section: Santiago-Talca.
  • Ireland – Traffic on the M4-M6 increased 8.6% in 1H08.

Car parks

In 1H08, Cintra’s car park business registered 71.1 million euro in revenues, 5.2% more than in 1H07. EBITDA was 26.3 million euro, similar to the same period last year.

In the last year, the company added 15,583 parking spaces to its portfolio, a 6.1% increase. At the end of June, Cintra managed a total of 271,948 parking spaces, of which 83,216 were off-street, 161,724 were on-street and 27,008 were private.

The most important contracts obtained in the period were the operation of the car park at Palma de Mallorca Airport (2,017 spaces) and the Marques de Valdecilla University Hospital in Santander (482 spaces); on-street parking management in Pozuelo de Alarcón, Madrid (3,354 spaces, 10 years + 2-year extension), Peñiscola, Castellón (1,343 spaces, 6 years), and Vitoria (3,921 spaces); and supply, installation and maintenance of parking meters in Prat de Llobregat (Barcelona) for 2 years, with a possible 2-year extension.

Significant events in 1H08:

407 ETR announced that it has refinanced the debt maturing in 2008 through two bond issues. Since October 2007, 407 ETR has issued 1.175 billion Canadian dollars in bonds, reflecting the toll road’s ability to refinance its debt despite financial market turbulence.

  • Ten banks, both Greek and international, joined forces with four MLAs to close syndication of the Ionian Roads’ senior debt, amounting to 400.9 million euro. The syndication was 1.64 times oversubscribed, indicating the financial markets’ interest in high-quality assets.
  • SH-130 Concession Company, owned 65% by Cintra, completed financing for the construction and operation of segments 5 & 6 of SH 130 in Texas. Total investment in the construction phase is projected to be 1,358.3 million dollars.
  • Cintra closed the refinancing of all of Autema’s existing short-term debt, replacing it with a long-term 292 million euro loan that is matched to the concession term. The deal also structures Cintra’s stake in Autema financially, enabling an extraordinary distribution of 316 million euro.

The new 618 million euro loan will last 27 years, thereby eliminating the concession company’s future refinancing risk as the debt is matched to the concession term. The margin on the new debt varies between 140 and 160 basis points, as 90% of the interest rate and inflation risk has been hedged (a fixed rate of inflation is received in exchange for a variable rate). Additionally, the company has been given a credit line of 92 million euro. This deal has enabled Cintra to improve the IRR on its investment by 2.36%.


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