Growing international presence: 80.2% of EBITDA and 70.1% of revenues were generated outside Spain.
The indicative internal valuation of the main assets, updated to June 2007, amounted to 7.180 billion euro. (13.92 euro per share).
In the first half of 2007, Cintra signed the concession contracts for the Central Greece Motorway, the M-3 in Ireland, and the SH-130 in Texas. And the number of parking spaces increased by 5.6%.
Good revenue performance, entry into service of new roads and progress in car parks were the key growth drivers.
Cintra, a company specialised in managing toll roads and car parks, increased EBITDA by 23.8% to 320.7 million euro in the first six months of 2006. Revenues totalled 481.9 million euro, 23.8% more than in the first half of 2006.
The increase in the two figures is due basically to growth in traffic on most toll roads, the addition of the Indiana Toll Road, the opening of the Ocaña-La Roda toll road in Spain, full consolidation of the Talca-Chillán toll road in Chile, acquisition of the Bosque toll road (Chile) and commencement of traffic-based billing on the Norte-Litoral toll road in Portugal, where construction work is practically completed.
These factors offset the depreciation by the main currencies against the euro. International activity is the cornerstone of Cintra's business: between January and June, 70.1% of revenues were obtained outside Spain. Canada was the main revenue source, contributing 33% of the total.
Toll roads: more traffic, new projects
Cintra's toll road area, including holding companies, increased revenues by 27.4% to 414.2 million euro. That figure is 86% of the total.
EBITDA rose by 24.8% to 294.4 million euro, and the EBITDA margin was 71.1%. The company's main asset, 407 Express Toll Route in Toronto, contributed 38.5% of toll road revenues and 40.3% of EBITDA. Traffic on 407 ETR increased by 4.6% in the first half of 2007, and the road set another traffic record on 23 June: 434,670 trips.
Traffic increased notably on the main corridors in the period:
- Canada - Traffic increased by 4.6% to 1,052,784 million vehicle-kilometres travelled (VKT). This increase was driven by the opening of an additional lane each way along 25 kilometres of the road. Traffic growth plus the 8.3% increase in peak tolls boosted revenues by 10.3% in local currency terms.
- USA - Chicago Skyway attained 47,781 vehicles per day and increased traffic by 1.4% in the second quarter. Traffic was affected by construction work on the road itself and on the Dan Ryan Expressway, as well as by partial closure of lanes on the Indiana Toll Road (ITR), where traffic averaged 29,756 vehicles. In April, the ITR increased tolls for heavy vehicles by 25%, and on 25 June it introduced electronic tolling on the barrier toll section.
- Spain - Traffic on Ausol I reached 19,855 vehicles per day (+3.8%). Ausol II averaged 20,002 vehicles per day, a 12.1% increase due to the construction work on Algeciras port. The R-4 experienced a 39.9% increase to 10,474 vehicles due to opening of the Madrid-Levante toll road, which is a continuation of the R-4.
- Ireland - Traffic on the N4/N6 road increased by 15.8% to 22,953 vehicles per day.
Key events in this area were:
- Signature of the contract to build and operate the 50-kilometre M-3 toll road in Ireland for 45 years (7 March).
- Signature of the contract to build and operate segments 5 and 6 of State Highway 130 (SH-130) in Texas (26 March).
- On 1 June, the concession contract for the 231-kilometre Central Greece Motorway (E65) was signed, after it had been provisionally awarded on 5 February. The deal is worth 1.5 billion euro and consists of building the road and operating it for 30 years. This is Cintra's second project in Greece.
- Designation as "Best Value Proposer" (28 February), and decision by the Texas Transportation Commission (28 June) to grant NTTA a preferential right to negotiate the concession contract for the 41.6-kilometre SH-121 in Texas.
- On 9 July, Italy's Council of State, that country's highest judicial authority, issued a decision annulling the provision award of the contract to design, build, finance and operate a toll road between the cities of Cremona and Mantua.
Car parks: 13,572 new parking spaces, a 5.6% increase
Cintra's car park business reported 67.6 million euro in revenues in the first half of 2007, a 5.3% increase on the same period of 2006, driven by the addition of 13,572 parking spaces. Of the new spaces, 5,278 (+8%) are off-street and 8,264 (+5.5%) are on-street. This area increased EBITDA by 13.2% to 26.3 million euro, and EBIT reached 17.9 million euro (+22.1% with respect to 2006).
Cintra currently manages 256,365 parking spaces, a 5.6% increase on the first half of 2006. The main new contracts obtained in the period are the airport car parks at Tenerife North (1,561 spaces) and Lanzarote (1,632 spaces), and on-street parking management in Baracaldo (13,373 spaces) and Vigo (2,850 spaces).
Valuation of Cintra
Every six months, Cintra performs an indicative valuation of its main assets. This valuation appraises its operational assets using discounted cash flow to the shareholder based on assumptions that are coherent with each asset's past performance, excluding any potential upsides (e.g. releveraging, risk reduction).
Projects that are under construction or have only recently become operational are valued at book value; the discounted cash flow method will be used for them once they have been operational for a sufficient period, which will very likely lead to an increase in value. The indicative valuation at June 2007 is 7.180 million euro. (13.92 euro per share).