Brazil's TPI takes break from new concessions, focuses on cutting debt

Despite being a frequent player in Brazil's infrastructure concessions and seeing a recent return to profit, local infrastructure firm Triunfo Participações e Investimentos (TPI) is reportedly taking a break from targeting new concessions, at least in the short term.

Although the infrastructure group has submitted an expression of interest for this year's tender for the concession of federal highway groups BR 476-153-282-480, known as the poultry highway (Paraná, Santa Catarina states), it is unlikely that it will compete, local paper Valor Econômico reported.

"At the time of project studies, traffic growth was 1.5 times GDP and today we are experiencing negative GDP. Losing traffic early on massacres the concession and, if the [current] model goes to market, it can't support itself," CEO Carlo Bottarelli was quoted as saying in the report. .

The company's next attempt will likely be in 2018, for the concession of the "New BR-290" highway. It currently involves a 121km stretch of federal highway BR-290 in the state of Rio Grande do Sul, which is presently controlled by TPI subsidiary Triunfo Concepa.

Falling under the federal government's national logistics investment program PIL, the "New BR-290" concession is expected to entail other highway stretches that will total 581km. "This is something we envision for 2018," says Bottarelli

According to the paper, the group has proposed studies for the project and consideration of partners at the moment is unlikely.

Meanwhile, leading up to this project, TPI aims to focus more on reducing its 607mn-real (US$168mn) gross debt over the next three years. The company's goal is to come close to paying it down with incoming cash. At the beginning of this year, it had 117mn reais, the report said.

In 4Q15, the company reported 89.0mn reais in net profit, compared to a loss of 567mn reais in 4Q14. Net operating revenue during the quarter was down 11.5% year-on-year to 699mn reais.

For full-year 2015, the company reported a net profit of 97.0mn reais, compared to a loss of 430mn reais in 2014. Net operating revenue was up 17.3% to 2.89bn reais.

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