October 20, 2011

Firm operating Ontario Highway 407 reports 38 per cent profit margin

407 International Inc., which operates Ontario Highway 407, reported third-quarter net income of $73 million on revenue of $189.1 million, or a 38.6 per cent quarterly profit margin.

Highway 407 is a toll road around the periphery of Toronto owned in part by Cintra Infraestructuras S.A of Spain.

On Wednesday, 407 International announced its financial results for the three months ending September 30.

Year-over-year, revenues increased 9.4 per cent, from $172.8 million to $189.1 million. Net earnings increased 153 per cent, from $28.9 million in the third quarter of 2010 to $73 million in the latest quarter. Total trips for the quarter were 30,204, up slightly from 30,028 in the third quarter of 2010. The total number of kilometres travelled for the quarter was up 0.8 per cent year over year, from 392,985 to 395,941. However, average revenue per trip increased nine per cent, from $5.75 to $6.26.

Designed to provide a bypass around Toronto, it goes from the Highway 403-Queen Elizabeth Way interchange in Burlington, north and east around the outskirts of Toronto to Pickering.

Infrastructure Ontario in April invited three consortia to submit bids to extend Highway 407 east. The province plans to extend it to Harmony Road in Oshawa by 2015 and to Highway 35 and 115 by 2020.

In March, in response to concerns over congestion, the Ontario government said it would have the first phase of the eastward extension of Highway 407 go to Harmony Road instead of Simcoe Street in Oshawa.

Cintra, a wholly owned subsidiary of Ferrovial S. A., owns 43.23 per cent of 407 International. Another 40 per cent is owned by indirectly-owned subsidiaries of Canada Pension Plan Investment Board while Montreal engineering firm SNC-Lavalin owns the other 16.77 per cent.

DCN DIGITAL MEDIA

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