Brazil's CCR sees profit fall on higher maintenance, construction costs

Brazilian tollroad operator CCR saw its profits drop last year, mainly due to increased maintenance and construction costs.

In 4Q16, the firm's net profit plunged 30.8% to 170mn reais (US$54.7mn). Net revenue was flat year-on-year at 1.69mn reais and adjusted Ebitda dipped 0.4% to 988mn reais, according to CCR's latest earning release.

The drop in profits was mostly due to a 27.9% increase in the cost of services to 1.89bn reais. Much of that was attributed to a 100% jump in maintenance provisions to 110mn reais and a 45.9% increase in construction costs to 980mn reais.

Despite the company facing a 7% fall in consolidated tollbooth traffic last quarter, its toll revenue remained at 1.58bn reais, with the average toll charged per vehicle increasing 5.7% to 6.48 reais, according to the report.

FULL-YEAR RESULTS

For 2016, the company's net profit reached 1.71bn reais, up 96% from 2015. Net revenue was up 9.8% to 6.70bn reais and adjusted Ebitda surged 46.9% to 5.37bn reais.

The lower profit for the year was affected by a 25.1% increase in the cost of services to 6.57bn reais. Much of that was due to a 38.3% increase in construction costs to 3.29bn reais and a 35.4% hike in maintenance provisions to 271mn reais, the release read.

During the 12-month period, consolidated tollbooth traffic was down 3.6%. However, toll revenues were up 4.1% to 6.11bn reais as the average toll charged per vehicle increased 6.5% to 6.22 reais, the company said.

CCR is Brazil's largest tollroad concessionaire in terms of revenue and it is responsible for 3,265km of the concession highway system.

The company's highways are located in the states of São Paulo, Rio de Janeiro Paraná and Mato Grosso do Sul, under the management of concessionaires NovaDutra, AutoBAn, ViaOeste, RodoAnel, ViaLagos, RodoNorte, Renovias, and SPVias.