Bloomberg News

Brisa Warns Toll Revenue May Miss Target on Portugal Slowdown

July 29, 2011

July 29 (Bloomberg) -- Brisa-Auto Estradas de Portugal SA, the country’s biggest toll-road operator, said traffic and toll revenue in Portugal may miss its target this year amid a weak economy.

Toll revenue at the company’s main concession may miss the March forecast of a 2 percent to 3 percent gain, Chief Executive Officer Vasco de Mello said in a phone interview. Brisa is focusing on cash generation as toll revenue may disappoint, Mello said.

Portugal is the third country after Ireland and Greece to request external aid amid a sovereign-debt crisis in Europe. Portugal’s government expects the economy to shrink 2.3 percent this year and 1.7 percent in 2012. Brisa has been cutting costs by installing automated teller machines on Portuguese highways and raised money last year by selling a stake in a Brazilian company.

“Our expectations have to be adjusted to these new macro variables,” Mello said. “Brisa will maintain cash generation capacity under this very difficult macroeconomic environment.”

The company expects earnings before interest, taxes, depreciation and amortization minus capital spending of at least 350 million euros this year, Mello said.

In the first half, sales rose 2.2 percent to 323.7 million euros ($466 million), and toll revenue declined 1.7 percent to 261.7 million euros, the company said in a statement today. Ebitda dropped 1.2 percent to 221.8 million euros.

Brisa shares declined 0.6 percent today to 3.24 euros in Lisbon trading before the results were released. The shares have fallen about 38 percent this year, giving the company a market value of 1.94 billion euros.

‘Junk’ Status

Brisa is looking at opportunities in India and Turkey after selling its stake in Companhia de Concessoes Rodoviarias SA, Brazil’s biggest toll-road operator.

The credit rating of the company’s main concession in Portugal, Brisa Concessao Rodoviaria, is under review by Moody’s Investors Service and faces a possible downgrade to so-called junk status, after it was cut to Baa3. Moody’s cut Portugal’s sovereign debt to “junk” July 5.

Brisa’s plan to pay a 31 euro-cent-a-share dividend won’t be at risk even if Moody’s downgrades the concession, Mello said. Brisa has cash reserves of 500 million euros available to pay dividends after the sale of Brazil’s CCR, he said.

Mello said the downgrade wouldn’t affect the company’s expansion outside Portugal as investments in new projects will be “capital-light,” through ventures with local operators.

Brisa still plans to sell bonds after failing to do so in the first half, Mello said.

‘Prepared to Act’

“We are prepared to act as soon as market conditions are acceptable,” he said. In the meantime, the company has been renewing its short-term credit lines and considering medium-term credit lines, he said. BCR has a cash position of 160 million euros and generates free cash flow close to 200 million euros per year, he said.

The company expects to complete a share buyback program this year, which will raise its stake to 10 percent from about 7.2 percent now, Mello said.

--Editors: Thomas Mulier, Robert Valpuesta

To contact the reporter on this story: Anabela Reis in Lisbon at

To contact the editor responsible for this story: Angela Cullen at

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