This Is Why Atlas Arteria’s Share Price Is Tumbling Today

  • Sep 21, 2018 AEST
  • Team Kalkine
This Is Why Atlas Arteria’s Share Price Is Tumbling Today

On September 21, 2018, Atlas Arteria (ASX: ALX) came up with the press release in which the company stated that the acquisition of Warnow Tunnel has been done. The remaining half of the acquisition was completed on September 20, 2018 for the total consideration amounting to €3.7 million. With this completion, the company now owns 100% of Warnow Tunnel. Moreover, the company managed to finance the acquisition with the help of corporate cash.

However, it seems that Australian stock market didn’t welcome the news as the group also traded ex-dividend on September 21, 2018. The stock price of ALX at the time of writing, was A$6.85, down 1.72%.

Atlas Arteria’s 2H FY 2018 results saw impacts from higher operating expenses In 2H FY 2018, Atlas Arteria (ASX: ALX) recorded a net loss amounting to A$15.5 million which reflects the substantial decline on the YoY (year-over-year) basis. During the same period of the prior year, the company’s net profit amounted to A$437.5 million. The primary reason behind the substantial fall in the company’s bottom line number was higher operating costs as well as the performance fees. In 2H 2018, the company’s aggregate portfolio traffic witnessed an increase of 3.4% on the YoY basis thanks to the traffic growth witnessed with respect to the company’s European assets. However, this favorable momentum got partially offset by the lower-than-expected growth with respect to the Dulles Greenway.

The top management of ALX reflected positive views on the performance for 2H 2018. According to them, the company’s portfolio witnessed favorable impacts when understood from the financial numbers point of view. The positive impacts from the traffic with respect to European toll roads was fueled by the supportive economic conditions coupled with the temporary factors which adversely affected other travel alternatives.

However, the management of ALX believes that traffic with respect to Dulles Greenway was somewhat not up to the mark and the impact of the same was felt. The negative impact was witnessed because of the improvements which have been initiated in the other competing routes.

Despite these challenges, the stock of the group has been up 26% in last one year and has been inching towards the 52-week high level. ALX trades at a market capitalization of $ 4.76 billion and has a dividend yield of 3.44% with a price to earnings ratio of 100.14.

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