Promotora y Operadora de Infraestructura: Flash PINFRA: Obtains highway concession in Hidalgo
- Pinfra has been granted the concession for the Real del Monte highway – Entronque Huasca, in Hidalgo, for 30 years–
- Total investment amount is MXN2.6 billion and construction time is 16 months, starting operations in September 2022
- On a preliminary basis the concession could contribute around 4% more to the annual EBITDA when it begins operations
Pinfra announced it has been granted the concession for the Real del Monte highway – Entronque Huasca in the State of Hidalgo, for a period of 30 years–. The company will be responsible for the construction, operation, exploitation, conservation and maintenance of the highway, which will have a length of 10.31 km.
The total investment amount is MXN2.6 billion and the construction time is expected to be 16 months, with operations expected to begin in September 2022.
Positive Implication: As we have previously mentioned, Pinfra actively searches for new projects/assets that add value to its portfolio and we highlight that one of its main strengths is its solid financial balance (-1.7x ND/EBITDA in 4Q20), which allows it to take advantage of this type of opportunities. It should be recalled that the company targets a 10% to 12% real, unleveraged investment return on the projects in which it invests. Subject to further details, we believe that on a preliminary basis the concession could contribute around 4% more to the company's annual EBITDA when it begins operations. In our view, Pinfra remains well positioned and has a favorable outlook due to the expected improved performance in the segments it operates, mainly due to the recovery of vehicle traffic on the concessioned highways, which would support higher cash flow generation.
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