Atlas Arteria (ASX:ALX) reported what management described as a “pleased” set of full-year 2025 results, supported by steady traffic growth, inflation-linked toll increases and favorable foreign exchange movements. Chief Executive Officer Hugh Wehby and Chief Financial Officer Vincent Portal-Barrault also reaffirmed a stable distribution outlook, while noting the impact of France’s temporary supplemental tax on free cash flow and earnings contributions from its French asset.
Traffic and earnings supported by toll increases and FX
Wehby said 2025 reflected “steady traffic growth, particularly in France and on the Dulles Greenway,” with proportional toll revenue up 9.4% and proportional EBITDA up 9.3%. Portal-Barrault said these gains were driven by traffic, inflation-linked toll increases and “favorable movements in the euro and US dollar exchange rates against the Australian dollar,” with the proportional EBITDA margin holding steady at 75%.
- APRR Group traffic rose 1.4% in 2025.
- ADELAC traffic increased 1.5%, supported by growing commuter volumes to Geneva.
- Warnow Tunnel traffic declined 3% due to roadworks.
- Chicago Skyway traffic edged down 0.3%, which management attributed to U.S. tariff-related disruptions.
- Dulles Greenway traffic increased 8.2%, despite a six-week U.S. government shutdown in the fourth quarter.
Portal-Barrault added that early 2026 traffic had been affected by events including farmer strikes and difficult weather conditions in France, along with weather-related disruptions at the U.S. roads. He said the roads “have recovered well,” with the company planning to provide the full quarterly impact in its traffic release.
French tax weighed on cash flow, but distributions held steady
While Atlas Arteria’s operational results improved, Wehby said free cash flow per security was “slightly down,” mainly due to the impact of the French government’s temporary supplemental tax (TST) applied to large businesses in 2025.
Despite the tax headwind, the company confirmed a distribution of AUD 0.40 per security for 2025, consistent with prior guidance. Management also announced the same distribution level for 2026, describing the outcome as evidence of a resilient and diversified portfolio across geography, regulation and currencies.
Portal-Barrault said cash received from the businesses totaled AUD 549 million in 2025, 2% lower than 2024, largely reflecting the TST’s impact on APRR distributions. Cash distributions paid to investors during the year totaled AUD 580 million, representing AUD 0.40 per security across the second half 2024 and first half 2025 distributions. At the corporate level, available cash was AUD 151 million at year-end 2025.
Management noted the distribution could sit above the company’s policy range of 90%–110% of free cash flow due to the TST. Portal-Barrault said the company had previously anticipated 2025 would be above the range, and with the tax extended for another year, 2026 “could fall at the top or slightly outside of that range.” Wehby told analysts the payout ratio issue was specific to 2026 based on current information, and said the company sees the ability to return within the targeted range beyond 2026.
Cost items and financing activity
On profitability and operating leverage, Portal-Barrault addressed questions about flat margins at APRR and a margin decline at Chicago Skyway. He said the TST sits above EBITDA, and a “flat EBITDA margin” at APRR meant operational costs had been decreasing but were offset by the tax increase. At the Skyway, he cited CEO transition costs, executive team changes and legal costs associated with disputes with the grantor, adding the company does not expect those costs to persist in future years.
Total revenue (which Portal-Barrault described as the roll-up of revenues from Dulles Greenway and Warnow Tunnel) increased 10% year over year, reflecting Dulles Greenway traffic improvement, toll rate increases and Australian dollar depreciation. Business operation costs rose due to a higher maintenance provision at Dulles Greenway after asphalt rehabilitation timing was brought forward, which management characterized as a timing difference. Portal-Barrault said combined corporate and business unit costs were within guidance and are expected to be “in line with 2025” in 2026.
During 2025, Atlas Arteria’s businesses priced AUD 1.4 billion of bonds and notes at APRR and Chicago Skyway, which Portal-Barrault said was supported by strong investor demand. The company said it will evaluate refinancing opportunities in 2026 and is “not anticipating regearing” this year.
Management also highlighted increased spending on assessing growth opportunities. Portal-Barrault said costs related to executing its Dulles Greenway strategy and broader growth strategy will vary, but the company expects these growth-related costs to average AUD 5 million to AUD 10 million per year over the next two to three years. He said the company intends to fund this spending from corporate cash and will capitalize growth spend where appropriate.
Strategy: partnerships, growth options, and key asset developments
Wehby said 2025 was his first full year as CEO and highlighted organizational changes, including a new executive team structure effective in November and the appointment of new CEOs at the U.S. assets. Luis Tejerina was appointed CEO of Chicago Skyway in May, and Kara Lawrence joined Dulles Greenway as CEO in October.
Wehby also outlined an updated vision statement—“Partnering to deliver world-class road experiences”—and described four value creation pillars: strategy, partnerships, development and capital management.
In France, Wehby noted that major motorway concessions begin expiring from 2031, and the government is considering the future framework. He said the “Ambition France Transports” process reaffirmed the importance of tolling frameworks to fund infrastructure. He also said the stability and clarity of concession and tax settings will be important inputs into Atlas Arteria’s bidding decisions as renewal processes approach. Portal-Barrault said emerging direction suggests the next generation of contracts could involve “smaller perimeters, shorter durations” and “slightly different or reinforced economic regulation,” though the framework is not finalized. Wehby said the company expects the structure may not be finalized until after the 2027 presidential election.
At Dulles Greenway, management discussed a rate case submitted in December seeking increases to maximum toll rates and alternative pricing options. Wehby said the company had engaged with stakeholders including the Virginia State Corporation Commission, Virginia Department of Transportation, the Virginia Attorney General’s Office and Loudoun County. In response to an analyst question, Wehby said Virginia published a timetable for the process “this week,” with a public hearing scheduled for August. He added the company expects to submit annually, while also working in the background on “legislation and litigation” that could inform the process.
On capital and growth, Wehby said smaller French opportunities such as the A412 would generally be funded within existing businesses, while larger French re-tender opportunities would “likely require new capital.” He added that the company will evaluate funding approaches based on outcomes including distribution accretion, valuation and portfolio balance.
When asked about capital management alternatives such as buybacks versus maintaining the distribution, Wehby said the company has reviewed options and, after investor consultation, decided that maintaining the AUD 0.40 distribution was very important, particularly given management’s view of a pathway back within the payout range in the short term (noting the TST extension delays that). He also said the company has buffers available, including corporate cash and capital headroom across the portfolio.
About Atlas Arteria (ASX:ALX)
Atlas Arteria Limited owns, develops, and operates toll roads. It holds a 31.14% of interest in the APRR and A79 and 31.17% interest in the ADELAC located in France; 100% interest in the Warnow Tunnel located in Rostock, Germany; 66.67% interest in the Chicago Skyway situated in Chicago and 100% interest in the Dulles Greenway located in Virginia, United States. The company was formerly known as Macquarie Atlas Roads Limited and changed its name to Atlas Arteria Limited in May 2018. Atlas Arteria Limited was incorporated in 2009 and is based in Melbourne, Australia.
