407ETR has 2.6% drop in traffic, 2.5% more toll$s to $521m in 2009

407ETR in Toronto the world's first all-electronic tollroad reports revenues of C$560m in calender 2009 a 2.5% increase on 2008's $546.5m. At C$1=US$0.931 2009 revenue is US$521.4m. (All further $#s are C$s)

Traffic dropped 2.6% to 303.5k/day from 2008's 311.7k/day, average workday trips from 377.9k to 367.3k. But average trip distance was up slightly and vehicle-kms traveled were 2,214.8m down 1.7% on the 2,252.7m of 2008.

Toll revenues per-km were 25.3c in 2009 v 24.3c in 2008 thanks to a  toll increase.

The pike managed to cut costs. Operating expenses were down 12% to C$116m from C$132.1m. Depreciation and amortization was also cut so that income from operations rose from C$342m in 2008 to C$383m.

EBITDA went from C$414m to $444m in 2009.

But the company took a major financial hit writing down the value of reserve investments. The announcement says: "The decrease in net income was due to a net non-cash interest expense resulting from fair value adjustments to an inflation-linked financial instrument and long-term investments together with lower future income tax recovery in 2009."

Net income was reported at a mere $58m for 2009 v $119m in 2008.

BACKGROUND: The company 407 International Inc is owned by Spain-based Cintra, Australia-based Intoll (a new spinoff of Macquarie) and Canadian SNC-Lavalin.

They operate a 108km (67mi) tollroad ranging between 4 lanes and 10 lanes located along the western end and northern fringe of the Toronto metro area that is stretched east-west across the northern shore of Lake Ontario. It is Canada's largest metro area with over 5.5m people.

The tollroad was the first to take advantage of a transponder and camera-based tolling system devised by Raytheon that allows tolls to be assessed with overhead equipment at normal highway speeds in a normal section of highway. The system tolls by distance recording entries and exits of vehicles to assess the toll. A laser profiler classifies vehicles by volume to apply three different toll rates by vehicle class.

Designing the road around all-electronic tolling allowed the highway to be built with very close-spaced interchanges, some 43 in total - or one every 1.6 miles or 2.5km. That allows traffic to be picked up closer to point of origin and to be dispersed over the arterial grid on exit.

The tollroad company has close to a million transponders on issue that do about 80% of transactions. The remainder, about a fifth of tolls are collected by imaging of license plates, optical character recognition and billing by mail.

The road is built mostly in a flat featureless corridor of high voltage electric power lines and much of its length it has industry alongside it, so its greatest visual interest comes from the spectacular curves and scale of sweeping 3 and 4 level expressway-to-expressway interchanges. But as traffic numbers and revenue indicate, it provides a valuable road service to a lot of people and their businesses.

It now ranks in the top three or four tollroads by revenue in North America.

see http://www.407etr.com

map of the road: http://www.tollroadsnews.com/sites/default/files/map407.pdf

TOLLROADSnews 2010-02-04