BOARD APPROVES NINE-MONTH REPORT FOR 2010 GROUP S INVESTMENTS UP 10%

Transcription

1 Press Release BOARD APPROVES NINE-MONTH REPORT FOR 2010 GROUP S INVESTMENTS UP 10% Operating performance Consolidated revenue of 2,838m up 9.1% on 9M 2009, of which 5.0% due to the rise in the concession fee payable to ANAS (on like-for-like basis 1 total revenue up 5.1%) Gross operating profit (EBITDA) of 1,788m up 6.9% on 9M 2009 (up 8.6% on like-forlike basis 1 ) Profit for the period ended 30 September 2010 totals 576m (up 15.1% on same period of previous year, after taking account of write-downs of investments in comparative periods) Traffic Traffic on Italian network up 0.36% in 9M 2010 (down 0.2% in 3Q) Recovery in heavy vehicles with 3 or more axles (up 3.8% on 9M 2009 on Autostrade per l Italia s network) continues, further benefitting toll revenues by estimated 0.5% Group s overseas operators and investee companies recorded total traffic growth of 6.6% in 9M 2010, compared with same period of 2009 Investment and financial strength Group s investments in 9M 2010 total 994m, up 10% on 9M Component regarding major works up 16% 1 Based on a like-for-like period of contribution to the Group s results from the companies acquired in 2009, and after stripping out the toll increases designed to match the rise in the concession fee payable to ANAS, pursuant to Law 102/09 and Law 122/2010, and non-recurring income in both comparative periods. Investor Relations investor.relations@atlantia.it Media Relations media.relations@atlantia.it

2 Operating cash flow of 1,141m for 9M 2010 up 14.5% on same period of 2009 Group s net debt at 30 September 2010 amounts to 9,176m, down 578m on 31 December 2009 At 30 September 2010 Group has cash, escrow accounts and undrawn committed lines of credit totalling 6,369m ( 4,590m at 31 December 2009), primarily earmarked to finance its investment plans 1.5 bn bond issue successfully completed on 9 September 2010 Rome, 11 November 2010 Today s meeting of the Board of Directors of Atlantia SpA, chaired by Fabio Cerchiai, has approved the Group s report for the nine months ended 30 September The consolidated accounts presented in the interim report have been prepared in accordance with IFRS and, in particular, with IFRIC 12 Service Concession Arrangements issued by the International Accounting Standards Board and endorsed by the European Commission in March This interpretation regards the recognition and measurement of public-to-private service concession agreements. The Group has, therefore, reassessed the impact of adoption of the new interpretation with effect from the beginning of the comparative financial year (1 January 2009) and in respect of all comparative amounts included in the report for the nine months ended 30 September The nine-month report referred to in this release has not been audited. Following a manifestation of interest in the company and the subsequent start-up of talks with a view to selling the Group s 60% interest in the operator, Strada dei Parchi (a company that is, in any event, not subject to management and coordination by the Group), this company s contribution is no longer included in continuing operations in the consolidated income statement as of the interim report for the six months ended 30 June As a result, Strada dei Parchi s contribution to the comparative consolidated income statement for the first nine months of 2009 has also been reclassified with respect to the statement published in the report for the nine months ended 30 September The results for the first nine months of 2010 include the contribution of the companies acquired from the Itinere group at the end of June The investment in Triangulo do Sol, in which the Group holds a 50% interest, has not been consolidated on a line-by-line basis in the report for the nine months ended 30 September 2010 as, despite the fact that the Group agreed to acquire a 2 With regard to amounts in the reclassified consolidated statement of financial position at 30 September 2010, the non-current components attributable to Strada dei Parchi have been reclassified, based on their nature (financial or non-financial), to current assets and liabilities, in accordance with IFRS. 2

3 further 10% of the company on 11 June 2010, not all the suspensive conditions included in the agreement have been met. Operating review for the principal Group companies Network upgrade and modernisation During the first nine months of 2010 Group companies invested a total of 994.0m, marking an increase of 86.3m (10%) on the same period of Investments by the Atlantia Group m 9M M 2009 % inc./(dec.) Autostrade per l'italia -projects in Agreement of ,6 469,3-18% Autostrade per l'italia - projects in IV Addendum of ,7 111,2 137% Investments in major works by other subsidiaries 80,0 48,6 65% Other investments in the network and capitalised costs (staff, maintenance, other) 212,5 227,0-6% Total investments in motorway assets 940,8 856,1 10% Investments in other intangible assets 15,7 16,0-2% Investments in property, plant and equipment 37,4 35,6 5% Total investments by Group (*) 994,0 907,7 10% (*) The figures for the first six months of 2009 and 2010 do not take account of 33.2m and 4.6m, respectively, in service area assets handed over free of charge. Compared with previously published amounts, figures in the consolidated statement of financial position and income statement at and for the nine months ended 30 September 2009 have been restated to take account of the impact of application of IFRIC 12. Investments relating to Autostrade per l Italia s Agreement of 1997 are down 84.7m on the first nine months of 2009, primarily reflecting the progress of work on the Variante di Valico and on the Casalecchio-Sasso Marconi section, only in part offset by increased work on the Florence interchange. Investments envisaged under Autostrade per l Italia s IV Addendum of 2002 are up 152.5m on the first nine months of 2009, primarily due to increased work on the addition of a third lane for the A14, on the A9 between Lainate and Como, on the A1 between Fiano and Settebagni (the relevant contracts were awarded to Pavimental in 2009) and on the Guidonia and Ferentino junctions, and continuation of the Tunnel Safety Plan. Other investments in major works by the Group s other motorway operators are up 31.4m on the first nine months of 2009, primarily reflecting increased work carried out by Autostrade Meridionali on widening of the section operated under concession, and the start-up of work on the first 4 km of the A 12 between Rosignano and San Pietro in Palazzi. Traffic In the first nine months of 2010, traffic using the network operated by Autostrade per l Italia and its Italian motorway operators recorded growth of 0.36% compared with the same period of The figure reflects the tough comparative from the same period of the previous year which, in the second and third quarter, recorded strong growth in light traffic (up 3.7%). Light vehicles are up 3

4 0.39%, whilst heavy traffic as a whole is up 0.25%. Within this last category, the component relating to heavy vehicles with 3 or more axles continues to see strong growth (up 3.8% on the same period of 2009 on Autostrade per l Italia s network). Overseas, the Polish operator, Stalexport Autostrada Malopolska, recorded a 4.3% rise in traffic compared with the same period of 2009 (light vehicles up 3.1% and heavy vehicles up 8.6%). The Chilean operator, Los Lagos, saw a 0.9% decline in the number of kilometres travelled on the network it operates compared with the same period of 2009, due to a 2.6% reduction in light vehicles, partially offset by a 4.1% increase in heavy traffic. Traffic figures were affected by damage to the network to the north of the section operated by Los Lagos (which instead escaped damage) as a result of the earthquake that hit Chile on 27 February Among the main unconsolidated operators in which the Group holds interests, Costanera Norte reports a 6.1% increase in traffic using its network in the first nine months of 2010, compared with the same period of the previous year, whilst Triangulo do Sol reports 9.4% growth in traffic using the sections of motorway it operates. Safety The death rate 3 on the network operated by Autostrade per l Italia in the first nine months of 2010 was 0.32 (0.31 in the same period of 2009 and 0.32 for 2009 as a whole). Rollout of the new system for measuring the average speeds of vehicles using a particular section of motorway ( Tutor ) continues. At 30 September 2010 the system is in operation on 2,500 km of carriageway, representing 37% of the network operated under concession by Autostrade per l'italia and its Italian motorway operators. Toll collection and payment systems Transactions handled by automated toll-collection systems on the network operated by Autostrade per l Italia and its Italian subsidiaries accounted for 75.7% of the total number of transactions in the first nine months of 2010 (74.1% in the same period of 2009). Payments using Telepass accounted for 55.3% of total transactions, compared with 54.1% in the same period of At 30 September 2010 approximately 7.4m Telepass devices were in use on the Italian motorway network. 3 Calculated as the number of deaths per 100 km travelled 4

5 Other information Autostrade Sud America The merger of Autostrade per il Cile (50% owned by the Group) with and into Autostrade Sud America (45% owned by the Group) was completed on 30 August The companies directly and indirectly hold controlling interests and investments in companies that operate sections of motorway under concession in the metropolitan area of Santiago. As a result of the merger, the Group now owns 45.76% of Autostrade Sud America. Sale of investments During 2010 Autostrade Portugal SA (formerly Somague Itinere SA, a wholly owned subsidiary of the Group acquired in June 2009 as part of the acquisition, from the Itinere group, of a number of investments in motorway operators in Chile and Brazil) has completed the sale of its 25% stake in Autoestradas do Oeste SA, its 12% interest in Vialitoral and its 19% stake in SMLN for a total price of 43.0m. Autostrade Portugal currently owns 17.21% of Lusoponte - Concessionaria para a Travessia do Tejo SA, the company that operates two toll bridges that cross the river Tagus in Lisbon. Treasury shares At 30 September 2010 Atlantia holds 12,050,446 treasury shares (post bonus issue), representing approximately 2.0% of its issued capital. No treasury shares have been purchased or sold during Bond issue On 9 September 2010 Atlantia SpA issued bonds in two tranches, one with a value of 1,000m and a term to maturity of 7 years, the other with a value of 500m and a term to maturity of 15 years. The issue forms part of the 10bn Medium Term Note Programme launched on 7 May 2004 and subsequently updated, which has resulted in issues worth 9,650m. Moody's, Standard & Poor's and Fitch have assigned the note programme credit ratings of A3, A- and A-, respectively. 5

6 Single concession agreements for Italian operators During 2009 the Italian operators controlled by Autostrade per l Italia (with the exception of Società Traforo del Monte Bianco, which operates under a different concession regime, and Autostrade per l Italia, whose Single Concession Agreement came into effect in 2008) and the grantor, ANAS, entered into the new single concession agreements provided for by Law Decree 262/2006 and subsequent amendments. Following the entry into effect of art. 2.c.202 of Law 191 of 23 December 2009, which amended art. 8-duodecies of Law Decree 59/2008, all the concession agreements entered into with ANAS as of 31 December 2009 subsequently extended to 31 July 2010 by Law Decree 78/2010, converted into Law 122/ were approved on condition that the above agreements comply with the requirements contained in the CIPE (Interministerial Economic Planning Committee) resolutions approving the agreements, in order to ensure that there is no change in impact on the public finances, without prejudice to the concession agreements already approved. On 13 May 2010 the CIPE gave clearance, subject to certain requirements, for the single concession agreements entered into in 2009 by ANAS and a number of motorway operators, including Autostrada Tirrenica, Strada dei Parchi, Autostrada Torino-Savona and Raccordo Autostradale Valle d Aosta, and revised its opinion, again subject to certain requirements, on the single concession agreements of Autostrade Meridionali and Tangenziale di Napoli. The CIPE resolutions containing the requirements applicable to the Group s single concession agreements were published in the Official Gazette in October The Group s motorway operators are awaiting ANAS s proposals for implementing the CIPE s requirements, before taking the relevant decisions. Toll increases applied from 1 July 2010 Art. 15.c.4 of Law Decree 78 of 31 May 2010, converted into Law 122/2010, introduced increases to the concession fee payable by motorway operators to ANAS. The increases amount to: (i) 1 thousandth of a euro per kilometre for toll classes A and B and 3 thousandths of a euro per kilometre for classes 3, 4 and 5 with effect from 1 July 2010; and (ii) 2 thousandths of a euro per kilometre for toll classes A and B and 6 thousandths of a euro per kilometre for classes 3, 4 and 5 with effect from 1 January Art. 15.c.2 of Law Decree 78/2010 also authorised ANAS, from 1 July 2010, to provisionally apply lump-sum toll increases at toll stations interconnecting with motorways and orbital motorways operated directly by ANAS. These lump-sum increases amount to 1.00 for toll classes A and B and 2.00 for classes 3, 4 and 5. The Prime Ministerial Decree of 25 June 2010 specified the stations at which to apply the toll increases. 6

7 Consequently, Autostrade per l'italia and the other motorway operators have, from 1 July 2010, applied the increases introduced by the above legislation, alongside the above increases in the concession fee. As a result of the injunctions granted by the Lazio and Piedmont regional administrative courts subsequently confirmed by the Council of State suspending application of the above toll increases introduced by art. 15.c.2 of Law Decree 78/2010, ANAS issued instructions on 4 August 2010 requesting motorway operators to suspend, as soon as technically feasible, application of the toll increases referred to above. Autostrade per l Italia has thus proceeded to suspend application of the toll increases introduced by art. 15.c.2 of Law Decree 78/2010. Consolidated financial review for the nine months ended 30 September 2010 Introduction As noted above, the assets and liabilities of Strada dei Parchi at 30 September 2010 have been accounted for in the statement of financial position in assets and liabilities included in disposal groups, in accordance with IFRS 5. The comparative presentation at 31 December 2009 remains unchanged. The basis of consolidation at 30 September 2010 is the same as the one used in preparing the consolidated financial statements for the nine months ended 30 September 2009 and for the year ended 31 December However, the contributions to the income statement and statement of cash flows for the comparative periods of the companies acquired from the Itinere group at the end of June 2009 are limited to just the third quarter of 2009, as opposed to the full nine-month period in In order to aid the reader s understanding of certain changes in the operating results, it should be noted that, following the entry into effect of Law Decree 78/2009, converted into Law 102/2009, from 5 August 2009 an increase in the concession fee payable to ANAS is included in operating costs (equal to 3 thousandths of a euro per km for classes A and B and to 9 thousandths of a euro per km for classes 3, 4 and 5), whilst a matching toll increase is recognised in toll revenues, without having any impact on the Group s results. In implementation of Law Decree 78/2010, converted into Law 122/2010, from 1 July 2010 a further toll increase has been introduced to match the rise in the concession fee payable by Italian motorway operators to ANAS (1 thousandth of a euro per kilometre for toll classes A and B and 3 thousandths of a euro per kilometre for classes 3, 4 and 5). 7

8 Results Total revenue for the first nine months of 2010 amounts to 2,837.9m, marking an increase of 237.6m (9.1%) on the same period of 2009 ( 2,600.3m). The total amount for the toll increases recognised in revenues for the first nine months of 2010, following the entry into effect of the above Law 102/2009 and Law 122/2010, stands at 166.0m, compared with the 36.2m recognised in revenues for the period 5 August 30 September Revenues for the first nine months of 2010 also include non-recurring income of 4.4m generated by the handover, free of charge, of buildings located at a number of service areas. This compares with income of 33.2m from the same source recognised in the first nine months of Based on a like-for-like period of contribution (only the third quarter in each period) to the Group s results from the companies acquired from the Itinere group at the end of June 2009, and after stripping out the toll increases matching the rises in the concession fee payable to ANAS, introduced by the above Law 102/2009 and Law 122/2010, and non-recurring income for the two comparative periods, total like-for-like revenue is up 129.7m (5.1%). Net toll revenues of 2,370.5m are up 241.2m (11.3%) on the figure for the first nine months of 2009 ( 2,129.3m). This performance primarily reflects: the 0.4% increase in traffic using the network operated by Italian operators (excluding Strada dei Parchi) compared with the same period of 2009, in addition to the impact of the significant recovery in heavy traffic with 3 or more axles using Autostrade per l Italia s network (up 3.8%), further benefitting toll revenues by an estimated 0.5%; the application of annual toll charge increases by the Group s Italian operators from 1 January in 2010, rather than from 1 May, as in 2009; the above-mentioned inclusion in toll revenues, from 5 August 2009, of the toll increase matching the rise in the concession fee introduced by the above Law 102/2009, and the increase introduced from 1 July 2010 in implementation of Law 122/2010. Contract revenue of 48.3m is up 20.0m (70.7%) on the same period of 2009 ( 28.3m). The increase is substantially due to an increase in work carried out by Pavimental and Spea for external customers. Other operating income of 419.1m is down 23.6m (5.3%) on the first nine months of 2009 ( 442.7m), primarily reflecting: a reduction in non-recurring income (down 28.8m) deriving from the handover, free of charge, of buildings located at service areas by sub-operators; 8

9 an increase in income from service areas and payment systems (amounting to 15.9m), essentially reflecting increases in service area royalties and in customers; a reduction in other income (down 10.7m). Total net operating costs of 1,049.5m are up 122.2m (13.2%) on the same period of 2009 ( 927.3m). On a like-for-like basis, net operating costs are down 11.4m (1.3%). The change in net operating costs essentially reflects: a reduction of 9.3m (2.3%) in the cost of materials and external services, after deducting capitalised expenses, compared with the same period of This reflects the greater contribution from activities linked to construction work carried out by the Group s own technical units, which exceeded the increase in the external costs incurred on contract work; a 132.1m increase in concession fees compared with the first nine months of 2009, essentially due to payment of the above increase in concession fees payable by Italian operators after the related legislation came into effect; an increase in staff costs which, before deducting capitalised expenses, are up 17.0m (3.8%) on the first nine months of 2009 ( 452.6m). This change reflects: the increase in the average unit cost (up 3.0%), primarily due to salary increases deriving from renewal of the contract applied by operators (up 1.7%) and the presence of an additional two Sundays (up 0.4%); an increase of 68 in the average workforce (up 0.7%), resulting from the greater volume of construction work carried out by staff employed by Spea and Pavimental on behalf of the Group s operators; an increase of 17.6m in capitalised staff costs, primarily due to an increase in construction work carried out by Pavimental and Spea staff. Gross operating profit (EBITDA) of 1,788.4m is up 115.4m (6.9%) on the same period of 2009 ( 1,673.0m). On a like-for-like basis, the increase in gross operating profit is 141.1m (up 8.6%). Operating profit (EBIT) of 1,396.1m is up 112.6m (8.8%) on the same period of 2009 ( 1,283.5m). The increase is in line with the improvement in gross operating profit. Increased charges for depreciation and amortisation (up 31.1m) and greater provisions and impairments (up 14.0m) during the first nine months of 2010 are offset by the write-down of the concession right held by 9

10 the Polish operator, Stalexport Autostrada Malopolska, recognised in the first nine months of 2009 ( 44.8m). Financial expenses, after deducting financial income, total 362.8m and are up 19.3m (5.6%) on the first nine months of 2009 ( 343.5m). Financial expenses from discounting to present value of provisions total 118.3m, marking a decline of 25.5m compared with the first nine months of 2009 (down 17.7%). This primarily reflects favourable interest rate trends and the stage of completion of construction services for which the Group does not receive additional economic benefits. Capitalised financial expenses, amounting to 9.7 million, are up 8.0 million on the first nine months of the previous year, reflecting the progressive increase in accumulated payments made for investments in the Group s network for which it will receive additional economic benefits. The share of the profit/(loss) of associates and joint ventures accounted for using the equity method has resulted in a net loss of 10.5 million for the period, compared with a net loss of 44.3 million for the first nine months of This item includes the following: the write-down of the investment in IGLI by 30.8m ( 54.6m in the first nine months of 2009), based on a comparison between the carrying amount of the Impregilo shares held by IGLI and their market value (stock market price of the Impregilo shares held); recognition of the Group s share of the profits reported by the Autostrade Sud America group, totalling 14.3m ( 8.1m in the same period of 2009), by Triangulo do-sol, amounting to 4.1m ( 2.1m in the same period of 2009) and the overall profit reported by other associates, amounting to 2.1m ( 0.1m in the first nine months of 2009). Income tax expense of 331.2m is up 27.5m (9.1%) on the first nine months of 2009 ( 303.7m), substantially in line with the increase in profit/(loss) before tax from continuing operations. Profit from continuing operations amounts to 583.0m, marking an increase of 133.1m (29.6%) on the same period of 2009 ( 449.9m). Profit/(Loss) from discontinued operations/assets held for sale essentially regards the operating results for the period of Strada dei Parchi which, as noted above, are recognised in this item, instead of being included in each component of the consolidated income statement. The improvement of 7.7m reflects the cessation of depreciation and amortisation of Strada dei 10

11 Parchi s non-current assets, after the related taxation, from 30 June 2010, the date on which the investment was reclassified in accordance with IFRS 5. Profit for the period for the first nine months of 2010, amounting to 576.3m, is up 140.8m (32.3%) on the same period of 2009 ( 435.5m). After adjusting for the impact on net profit of the write-down of the concession right held by Stalexport Autostrada Malopolska (recognised in the first nine months of 2009) and write-downs of the investment in IGLI (in both comparative periods), profit for the period is up 15.1%. Operating cash flow for the first nine months of 2010 amounts to 1,141.1m, up 144.8m (14.5%) on the same period of Equity attributable to owners of the parent amounts to 3,193.4m, representing an increase of 382.6m compared with 31 December 2009 ( 2,810.8m), primarily in relation to profit for the period, after the payment of dividends. The Group s net debt at 30 September 2010 amounts to 9,176.1m, having been reduced by 578.4m compared with the 9,754.5m of 31 December At 30 September 2010 the Group has cash, escrow accounts and undrawn committed lines of credit totalling 6,369m. Events after 30 September 2010 Interim dividend for 2010 At a meeting on 21 October 2010, Atlantia SpA s Board of Directors approved payment of an interim dividend for 2010 of per share. Based on the number of shares currently outstanding, the interim dividend for 2010 amounts to a total of approximately 208.8m. The interim dividend will be paid, after deducting any withholding taxes required by law, from 25 November 2010, whilst the ex dividend date for coupon no. 15 is 22 November Approval of the Procedure for Related Party Transactions Pursuant to CONSOB Regulation of 2010, Atlantia s Board of Directors, following the favourable opinion issued by the independent Directors on the Related Party Transactions Committee on 8 November 2010, has approved the procedure designed to ensure the transparency and fairness of related party transactions. The new procedure, which received a favourable opinion from the Internal Control and Corporate Governance Committee on 10 November 2010 and, on the same date, confirmation 11

12 from the Board of Statutory Auditors that the Procedure complies with the standards set out in the CONSOB Regulation, will, from 1 January 2011, replace the previously adopted guidelines for the conduct of Atlantia s related party transactions. The new Procedure for Related Party Transactions is in the process of being published on the Company s website at Outlook Figures for traffic on the network operated by the Group s operators during the early months of 2010 (which benefit from the fact that comparatives for the previous year, above all in the early months, were significantly affected by the economic crisis), together with toll charge increases and the development of related activities, lead us to expect an improvement in the Group s operating performance in 2010 with respect to the previous year. The results will also benefit from the line-by-line consolidation of the companies acquired in 2009 over the full year. * * * The manager responsible for financial reporting, Giancarlo Guenzi, declares, pursuant to section 2 of article 154 bis o f the Consolidated Finance Act, that the accounting information contained in this release is consistent with the underlying accounting records. In addition to the conventional financial indicators required by IFRS contained in this press release, certain alternative performance indi cators have been included (e.g., EBITDA) in order to permit a better appraisal of the company's results and financial position. These indicators have been calculated in accordance with market practice. The Group s net debt, as defined in CESR Recommendation of 10 February 2005 (which does not entail the deduction of non-current financial assets from debt), amounts to 10,084.1m at 30 September 2010, compared with the 10,604.6m o f 31 December The financial statements for the nine months ended 30 September 2010 are attached hereinafter. In addition, the consolidated income statement and statement of cash flows for the third quarter of 2010, together with comparative amounts for the same period of the previous year, are also provided below. These statements have not been audited by the independent auditors. 12

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