Fermoy motorway operators see record profits of €152k a week

Fermoy motorway operators see record profits of €152k a week
The toll plaza at Watergrasshill

By Gordon Deegan

The operators of the €295m Rathcormac-Fermoy bypass in Co Cork last year recorded revenues of €318,418 per week.

According to accounts just filed by Directroute (Fermoy) Ltd to the Companies Office, the firm’s revenues increased marginally going from €16.4m to €16.55m in the 12 months to the end of December last.

The company’s operating profits increased going from €7.58m to €7.9m and the operating profit works out at €152,136 per week.

According to the directors’ report, “revenues increased in 2017 due to an increase in traffic volumes. It is expected that traffic levels will continue to increase as motorists continue to recognise the benefits of the motorway in terms of safety, shorter journey times, convenience and road quality”.

Pre-tax profits more than doubled going from €3.5m to €7.1m and this largely due to a fair value gain of €4m in derivative financial instruments.

The company’s revenues are made up of toll income and operational payments from Transport Infrastructure Ireland (TII).

Last year, the company’s toll income increased from €12.89m to €13.5m with operational payments from TII going down from €3.5m to €3.04m.

The company last year paid an interim dividend of €1.73m.

The directors state that they expect higher traffic volumes due to the upturn in economic activity in the region.

The road was constructed by Directroute Fermoy as part of a Public Private Partnership (PPP) and opened in October 2006 eliminating one of the country's worst bottlenecks at Fermoy.

The by-pass provides motorists with 33 km of continuous motorway/high quality dual carriageway and removed some 17,000 vehicles each day away from Fermoy town centre taking 30 minutes off journeys at peak times.

The directors’ report states that Directroute (Fermoy) Ltd project has been funded to a large extent by bank loans, which are managed in a non-speculative manner by appropriate hedging arrangements.

The report states: “After operating expenses, the interest and charges associated with these loans remain a significant expense for the project.”

The company recorded the pre-tax profits after taking into account €4.8m in interest payments and €7m in non-cash depreciation costs.

The tolled route had a book value of €116.8m at the end of December last.

Directroute is to operate the Rathcormac-Fermoy by-pass to 2034 before being handed back to TII. The consortium also operates the Limerick tunnel and has constructed the Tuam to Gort motorway.

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