The reporting season for February 2026 concluded for us today with the toll road owner Atlas Arteria.
Atlas Arteria (ALX) This morning, the Transurban of Eastern France, Atlas Arteria, released their 2025 results. Similar to Transurban, ALX provides few surprises on results day given they provided us with traffic and revenue numbers in January, but the result showed the resilience of ALX’s business. The HNW Portfolio holds a 3% weight to ALX.
Key Points:
- Profits Up: Profits up +9% to $1,509M, with a new “temporary” tax on French toll road assets offset by CPI-linked toll increases and solid traffic. Assets in France and the USA both saw solid increases in traffic, with Warnow Tunnel weaker due to construction activity.
- French Temporary Supplemental Tax: This has weighed on ALX’s share price, but the company seems to be navigating this well, with higher taxes offset by large increases in inflation-linked earnings. Similar to Transurban, ALX has benefited from a regulatory assumption that interest costs for a utility automatically increase in line with inflation, much like a floating-rate mortgage. However, ALX took advantage of very low rates in 2019-22 to lock in low-rate long-term debt, which saw earnings accelerate with higher inflation in 2023-25.
- Dividends: We were very pleased to see ALX’s guide to maintaining “at least” 40c in the coming years with higher free cash flows offsetting increased taxes.
Portfolio Strategy: ALX exposes the Portfolio to desirable monopoly assets and enjoys mandated price increases. We remain surprised that IFM has not launched a bid for ALX. IFM currently owns 35.03% and can buy another 3% in May 2026.
In the meantime, ALX is an under-researched stock that offers an attractive valuation, trading on a healthy 8.13% dividend yield.
ALX finished up +1.7% to $4.92
