Toll road operator, Atlas Arteria, today said it will suspend indefinitely its 2019 second half-year dividend payments as traffic on its toll roads in Europe and the US plummets.
The ASX-listed company last said its dividend would be AUD 18c and forecast the same for 1H 2020 at its 27 February half-year results briefing.
The 1H 2020 guidance has also been suspended. The group will now use the funds to either repay debt or to pay the 2H 2019 dividend at a later time.
The company operates toll roads in France, Germany and the US, which have all recently implemented tough travel restrictions in light of the coronavirus outbreak.
Traffic on its main asset – the extensive Autoroutes Paris-Rhin-Rhône (APRR) motorway network – was holding up well until early March, but since then it has fallen sharply.
“Initial indications for the first days since the lockdown measures [in France] took effect are that total traffic has reduced severely,” the company said in a stock exchange release.
“The reduction [is] expected to disproportionately be weighted to [light vehicle] traffic as opposed to [heavy vehicle] traffic, some of which continues to move essential supplies around the country and through Europe.”
In the US, its Dulles Greenway toll road in Virginia had seen a 13.8% reduction in traffic from 1-15 March compared to the same period in 2019 and had crashed 56.2% from 16-19 March.
In Germany, Atlas’ Warnow Tunnel traffic was up 9.8% from 1-15 March, but then fell 12.2% from 16-19 March compared to the same time last year.
Atlas said the head company had good liquidity with about AUD 340m (USD 194m) in cash available.
APRR had EUR 1.2bn (USD 1.3bn) in debt due for “rollover or repayment progressively” in 2020. It also has a EUR 2bn revolving credit facility which matures in 2025 and had EUR 1.7bn in cash as of 31 December 2019.
Dulles Greenway had USD 215m of cash. But it is now expected that it will not pass the one-year or three-year “lock up test”, which means it cannot payout dividends to Atlas.
At 2:30pm AEDT, Atlas’ stock had fallen 19% to AUD 4.26 a share. The benchmark S&P / ASX 200 index fell 5.99%.