French motorway tax could affect Abertis dividend, around €300m for ACS

ACS novisimo

Banc Sabadell| The new motorway tax in France, whose impact would be ~-€85m on Abertis (~2% of its EBITDA 2023e; ACS’ 45% stake in Abertis net of minority interests), could have an impact on a future review of Abertis’ rating unless corrective measures such as a dividend cut are taken, following comments by S&P in a recent report, according to press reports.

In this regard, Abertis plans to pay out €600m in dividends this year (~€300m for ACS; ~20% of ACS’ operating cash flow before working capital and CAPEX) which, in the event of a cut of the same magnitude as the tax, would be reduced by -14% (-2.8% of ACS’ lower operating cash flow before working capital and CAPEX).

Assessment: Negative news but with a limited impact insofar as the impact of the tax was already known and does not necessarily imply a cut in the dividend, especially when there is the possibility of a strong cash inflow as a result of the decision to be taken by the Supreme Court on the settlement of the AP-7 (up to €3,200 M net of taxes) in the near future.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.