MAQAF (MAQAF) Q2 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to Atlas Arteria First Half 2026 Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded. Due to legal restrictions, we are only able to communicate directly with eligible security holders and investors with respect to the eligibility to invest in Atlas Arteria securities. Details in relation to the ownership restrictions that apply to persons in the United States and other U.S. persons that are not qualified purchases and qualify institutional buyers are set out on Atlas Arteria's website under U.S. ownership restrictions. If you are not a qualified purchaser and qualified institutional buyer, please refrain from asking questions in relation to our securities as we are legally restricted from answering those questions on this call. I'd now like to hand the conference over to Mr. Hugh Wehby, Chief Executive Officer. Please go ahead.

Thank you, Amber, and good morning, everyone. Thanks so much for joining us today. It's great to be touching base with the market again. I'm pleased to present Atlas Arteria's 2026 half year results alongside our CFO, Vincent Portal-Barrault. This is, of course, our first results presentation since the IFM takeover offer closed. While it was a significant moment in our company's history and it resulted in material changes to the investor base, rest assured that our relentless focus on performance and value has not changed. Today, I'll take you through the progress achieved across our business during the half, give you an update on the transition to the next phase in our relationship with IFM and share how we are thinking about our strategic priorities. Vincent will then take you through our first half performance in a bit more detail. And as always, we'll leave plenty of time for questions at the end. So turning now to today's highlights. I'm pleased to say the underlying performance of our business was stable in the first half. Our operating free cash flow per security was $0.191, down 1.5% on the first half of last year. That result was mainly driven by unfavorable foreign exchange movements. And on a current -- constant currency basis, our proportional toll revenue was up 0.6% and EBITDA was up 0.9%. We have reaffirmed our distribution guidance of $0.40 per security for 2026. And expect to pay $0.20 of that to investors in October. We made significant steps forward in our strategy to unlock cash flows at Dulles Greenway with some important developments on the 2025 rate case, and a positive piece of tolling legislation passed in Virginia. In June, we were pleased to agree to the extinguishment of the put option held by our Chicago Skyway partner, Ontario Teachers since the original acquisition in 2022. I can confirm that payment was finalized on schedule earlier in August. That provided investors with much needed certainty that Atlas Arteria would not be compelled to acquire our partner share of this asset at a premium to fair market value. On the sustainability front, we continue to make good progress. That's reflected in our MSCI ESG rating being lifted to AAA, marking us as a leader in the transportation industry. It's recognition of the work being undertaken every day by our people in the corporate team and on the ground. So turning now to focus on the IFM takeover offer. On 27 April, Atlas Arteria received an unsolicited takeover offer from IFM, which at the time owns just under 35% of Atlas Arteria securities. Throughout the offer period, the focus of our independent directors, management and employees did not waver to maximize value for all security holders. During the bid, the independent directors recommendation was that security holders reject the offer on the basis that it was undervalued the company and did not reflect an appropriate premium for control. This was supported by the independent experts conclusion. The offer period subsequently closed on 7th of July, with IFM acquiring around half of the securities it did not already own. That takes its interest in Atlas Arteria to about 67%. IFM is now prevented from increasing its ownership of the company via the creep mechanism until early 2027. Today, Atlas Arteria has approximately 15,000 investors on its register, including IFM and a number of other significant holders. So while we are still working on the specifics of what our new security holder mix and IFM's increased ownership means for Atlas Arteria, our focus remains where it has always been creating value for the company as a whole, ultimately for the benefit of all security holders. I wouldn't normally comment on board composition at a results presentation, but there were some significant changes in the period. At this year's AGM in May, Debbie Goodin flagged that she would not be standing for reelection beyond this term. This meant that ATLAX would begin a progress to appoint a new independent chair in due course. The completion of the IFM takeover offer was a natural point for that transition to occur. So those succession plans were accelerated. Debbie retired from the Board on 7 July upon completion of the bid. I want to thank Debbie for her immense contribution to Atlas Arteria. She joined the Board in 2017. And over that time, she brought enormous energy and commitment to the role for the benefit of all stakeholders and especially for our investors. On behalf of the Board and the whole team, thank you, Debbie. John Wigglesworth, who some of you have met recently, has stepped in as Interim Chair, and the search for a permanent independent Chair is now well underway. This process is being undertaken by our boards and led by Fiona Beck and will consider both internal and external candidates. So that leads me to our strategic priorities. The headline here is an important one. Whilst there are some areas where we have refocused our efforts, our strategy remains largely unchanged. Following the close of the IFM takeover offer, there are, of course, some new and immediate priorities we are working through. The first of these is team and stakeholder engagement. Having come through an extended period of uncertainty, we know that stability and continuity across the business is important for our team and our partners. My job and that of the leadership team is to regroup, recommit to our vision and motivate our team to deliver upon it. We are also ensuring that our partners know that our cooperative approach, priorities and values are unchanged. On governance, we are engaging with IFM to discuss opportunities to work together for the benefit of Atlas Arteria to deepen understanding and share thinking and priorities. While these discussions are ongoing, the principles guiding them are clear. The Boards of Atlas Arteria supported by an independent Chair of each Board and the majority of independent directors on each board, will continue to make decisions for the business with the interest of all security holders front of mind. The third immediate priority is a strategic and operational review. This makes sense given the change in the investor mix. In the coming months, we will spend time with both IFM and other large investors, taking them through our strategy, gathering input and feedback and incorporating this into our regular strategic review cycle that we undertake with our boards. So moving to the core business. There are a couple of areas where our thinking has evolved, and I want to address them directly. We have paused our exploration of brownfield opportunities and are focusing on attractive value creation opportunities within and around our existing portfolio. We are not pursuing a sale of either Chicago Skyway or Warnow Tunnel. Instead, we're laser-focused on how we help these businesses contribute additional value to the portfolio. In terms of business and portfolio optimization, the majority of our French assets now have around 10 years of concession life remaining. Cash flow optimization across that period includes everything from operational performance and cost management, capital structuring, management of the debt amortization profile and CapEx requirements right through to how we prepare for retenders. This work is significant in terms of value impact and is core to our capability. On associated growth, we continue to see opportunities in France, including the A412 option. At Dulles Greenway, we are progressing of projects to upgrade our existing tolling infrastructure with corridor-wide fiber optics. This will enhance resilience of the network and give a surplus capacity that may be commercialized over time. We are currently working on obtaining consents and I look forward to keeping the market updated as we progress towards approvals and then construction. At Chicago Skyway, we recently completed a refinancing of the bank debt and working with our partner, Ontario Teachers, on options for future gearings. We'll also continue to explore the potential to collaborate with surrounding networks to create win-win outcomes. Today, we have reaffirmed our $0.40 per share distribution guidance for 2026. And beyond that, we will focus on optimizing free cash flow and paying it to our investors in line with our distribution policy. While we will no longer provide a quantified distribution target beyond the 1-year period, in practice, we will continue to distribute the substantial majority of the cash generated to our investors. So turning now to the Dulles Greenway, where we continue to make progress on our multifaceted strategy to unlock cash flow. We've had a couple of positive developments this year. In April, the Commonwealth of Virginia adopted legislation that gives us and the regulator greater visibility and certainty over the rate case process. The change allows us to request rate increases for up to 2 years at a time rather than 1 and requires the SCC, our regulator, to issue a decision within either a 9- or 12-month period. Previously, there was no deadline at all for decisions. On the 2025 rate case application, specifically the SCC staff report released in July acknowledge that our primary and secondary toll proposals meet the 3 regulatory hurdles required. Further reports have also been released from TRIP II, VDOT and Loudoun County. We anticipate that an evidentiary hearing will be held in the coming months, following which the hearing examiner will make a recommendation before the SCC makes its ultimate determination. On the litigation side, we are appealing the grant of the defendant's motion to dismiss TRIP II's claims with respect to their alleged violations of the Virginia and United States constitutions. As I mentioned a moment ago, we're also progressing the fiber project, which will add further optionality if progressed to construction. Overall, it's clearly going to be a big few months for the Dulles Greenway teams as we make progress on our strategies to improve the business' contribution to security holder value. I look forward to sharing the outcomes of their hard work. Turning now to France, where the major motorway concessions begin expiring from 2031. The regulatory and tax environment continues to evolve, but APRR is well positioned to navigate this. We think about our French portfolio in 3 ways: firstly, our current portfolio; secondly, associated additions, including the A412 opportunity, over which APRR holds an option; and finally, over the long term, our ambition for an ongoing substantial presence in France. The framework law supporting the continuation of a motorway concession model was adopted by the French Senate in April and is progressing through the National Assembly. We continue to expect more clarity on the new concession regime after the 2027 presidential election. Of the major concessions that are set to expire, SANEF is the first in 2031 and would expect tendering to begin in the late 2020s. As our own concessions at APRR and AREA are among the last to expire, the APRR group is strongly positioned to consider the full range of opportunities as they emerge. And importantly, we believe we have a very supportive investor base behind us to pursue growth in this market. With that, I'll hand over to Vincent to take you through our financial performance.

Thanks, Hugh. This has been an eventful half for Atlas Arteria, and you will see that reflected in the way we have presented our results today. Putting aside the significant corporate activity, the underlying performance of our portfolio has been resilient with underlying net profit after tax of $94.3 million, up 29% on the first half of 2025. The statutory result was a net loss after tax of $73.3 million, which was driven by nonoperating costs relating to the settlement of the OTPP put option and the IFM takeover offer. I will step through each of these when we get to the income statement. Our proportional results were lower than the comparative period, the prior comparative period and the primary driver was foreign exchange. I will also cover that impact in more detail shortly. As Hugh mentioned, we have reaffirmed our distribution guidance of $0.40 per security for 2026 and expect to pay $0.20 of that to investors in October. As sign posted at the 2025 full year results, we expect the full year distribution for 2026 to be above our policy range of 90% to 110% of free cash flows. This reflects the impact of the French temporary supplemental tax, the TST, and now also the one-off costs related to the put option settlement payment and the response to the IFM takeover offer. Looking beyond 2026, what has not changed is our drive for strong distributions. And while we no longer provide a quantified distribution target beyond the 1-year period, the building blocks of our distributions are clear: first, optimize free cash flows; and second, our distribution policy, under which we will continue to pay out 90% to 110% of free cash flow. Finally, in keeping our -- with our regular practice, we continue to expect to provide 2027 guidance at our full 2025 -- 2026, sorry, full year results in February next year. Turning now to capital management. We continue to focus on optimizing capital management at each individual business and have had some positive outcomes this period. In January, EUR 500 million of bonds were priced at APRR, strengthening its liquidity position. At Chicago Skyway, bank debt facilities were refinanced in August on improved terms. This is an encouraging sign as we plan for future regearings with the next opportunity in 2027. At the corporate level, in July, we established a new $150 million corporate debt facility to fund the USD 100 million settlement payment to extinguish the put option. The facility has a term of 3 years and we have options in our approach to its repayment, which could include refinancing. And finally, we also retain our flexible $50 million working capital facility, which is undrawn. Now as you can see on the right of this slide, there have been some large payments made since the end of the half. This relates to the settlement of the put option and costs relating to the IFM takeover offer. Taking those payments, together with the funds available from the new $150 million corporate debt facility, we have a pro forma corporate cash position of $100 million at the end of the first half. In the coming weeks, we will receive distributions from our businesses, and we'll use these funds to pay our first half 2026 distributions. Moving to traffic and toll revenue performance. Total revenue remained resilient. Excluding the impact of FX movements, total revenues was up 0.6%, supported by inflation in tolls and despite a mixed traffic performance across our portfolio. In France, higher fuel prices, particularly for diesel, impacted light vehicle traffic. The APRR group traffic was down 2.4%, although strong momentum in French and Spanish manufacturing supported a positive growth of heavy vehicle traffic. And traffic at ADELAC was down 1.4%, reflecting the same fuel price impact, together with disruptions from the G7 Summit in Evian. In the second half to date, light vehicle traffic and APRR continues to be impacted by higher fuel prices, with performance in line with the trend since March, and heavy vehicle traffic remains robust. In Germany, extremely cold weather in January and February negatively impacted traffic at the Warnow Tunnel. This was partly offset by favorable traffic flows from roadworks on a key arterial routes across the Warnow River, but these roadworks have since completed. In the United States, Chicago Skyway traffic rose 2.7%, benefiting from roadworks on 2 sections of the main alternative route. Heavy vehicle traffic was down over the half, although the second quarter improved on the first and macroeconomic indicators are showing signs of recovery. Dulles Greenway traffic continued to grow strongly, up 6.3%, as congestion continues to build on the alternative routes. In the second half to date, traffic growth in the U.S. remains positive. Growth continues at Dulles Greenway, while traffic has slightly moderated at Chicago Skyway as some of the road works on the alternative route completes. Now let's look at how traffic performance has translated into our proportional results. As I said earlier, this half our proportional results were significantly impacted by FX movements. On a constant currency basis, proportional toll revenue was up 0.6%. This reflects the impact of inflation-linked toll increases, partly offset by the mixed traffic performance. And still on a constant currency basis, proportional EBITDA was up 0.9%. However, the Australian dollar strengthened against the euro and the U.S. dollar during the period, and it resulted in proportional toll revenue and proportional EBITDA being down 3.9% and 3.6%, respectively. Moving to our cash flow for the half. Let's start with the cash we received from our businesses. Positive performance at APRR and Chicago Skyway drove an increase in underlying distributions. Unfortunately, because of the adverse FX changes, what we received in Australian dollars, which was $296 million, was 1% lower than the prior comparative period. This does not include the benefit of the FX hedge program, which we implemented in 2025 that is captured in corporate cash flows, which includes $5.8 million of net proceeds received from the hedging program. But corporate cash flows are primarily corporate costs, and these were stable versus the prior comparative period. In March, we paid the second half 2025 distribution of $0.20 per security to investors, representing a total of $290 million. To conclude on cash flows, note that the significant nonoperating costs related to the put option extinguishment and the IFM takeover offer will come through in the second half of this year. Moving to our income statement. First, it shows the performance of our underlying results, which you would be familiar with. And below that, we have presented separately the nonoperating costs, which are applicable to 2026. As I said earlier, our underlying net profit after tax was up 29%. Total revenue, which is the roll-up of revenues from the Dulles Greenway and Warnow Tunnel businesses was down 4%, reflecting unfavorable FX as we have discussed. Business operation costs were flat on the prior comparative period and corporate and business unit costs were broadly stable. The growth-related activities in the period, mostly related to the work we are doing at Dulles Greenway, which Hugh stepped through earlier, and as we continue to progress work on the federal litigation and the fiber project, we expect full year growth related costs to be around $5 million. Separately, we do not anticipate incurring other project costs while we have posed consideration of the new brownfield opportunities. And as a consequence, we have withdrawn our cost guidance of $5 million to $10 million per year on average over the next 2 to 3 years. Moving down the income statement. Finance costs were lower which includes the benefit of a $10 million mark-to-market gain related to the FX hedge program. Now in addition to what I just described, this half included significant nonoperating costs. Firstly, cost of $24.1 million were incurred in relation to the IFM takeover offer, which ran from the end of April through to July. Most of these costs were incurred during the first half, and we expect approximately $1 million of further costs in the second half. Secondly, there was $16.9 million of employee change of control costs. These arrangements were triggered by the change of control in Atlas Arteria and included cash payments and the vesting of short- and long-term incentives, a significant portion of which are equity incentives. No further costs are expected in relation to this matter. Lastly, you can see costs relating to the put option settlement which are across 2 line items. The first item of $89.1 million is a change in the fair value of the financial liability. This corresponds to the movement in the carrying value of the put option between 31st December 2025 and 30 June 2026. The second item is a financial liability settlement expense of $37.5 million. It is the difference between the USD 100 million settlement and the fair value of the option. These costs are nonoperating in nature and do not change the underlying cash generation and earnings capability of our portfolio. In conclusion, we are pleased with the underlying performance of our businesses this half which has been resilient through a period of significant corporate activity. And with that, I'll hand back to Hugh to wrap up.

Thanks, Vincent. I recognize that we haven't got all the answers yet. As we work through this period of transition, there remains some uncertainty for our investors, our partners and of course, our team. Importantly, our vision, which we refreshed in 2025, partnering to deliver world-class road experiences remains unchanged. Delivering on that vision and living our values every day provides an excellent foundation for how we want to operate. Overall, there's 1 key message I want to leave you with. What matters to us is investor value. So as we work through the optimization of our portfolio, capital allocation, governance arrangements and everything else you've seen on our agenda, you can be assured this is the lens through which they are being considered. We have a high-quality portfolio of assets with significant value still to be realized. And the team and I are committed to working closely with our partners to convert those opportunities into strong distributions and value for our investors. Thanks for your time today, and we'll now open the floor to questions. Back to you, Amber.

[Operator Instructions] And we will now take our first question from the line of [ Tom Peyton ] from RBC Capital Markets.

Just a couple of questions for me on APRR. I think there's been some traffic over the summer period. Do you guys have a view of when that trend might start to turn around?

Tom. So traffic over the summer, as we've said, has continued to be in line with the traffic that we have observed in Q2, which means that on the LV front, it's been impacted by the high fuel prices, but we haven't seen such an impact on HV and HV has been positive and continues to be. It's hard to predict how it will behave by the end of the year, but there has certainly been a very clear impact from the fuel prices, and so that will heavily depend on how fuel prices evolve between now and the end of the year.

Yes. I appreciate that. And just 1 more for me, a question on the Dulles Greenway. I saw that there was a downgrade on the trip bonds from B+ to B. I guess, the key drivers around that and do that indicate how far you are from falling any further? And then I guess if the latest rate case gets up, does that sort of dramatically reverse?

So the rating agencies has flagged that the reason for the downgrade was the uncertainty around the toll increases. So yes, I suppose that any positive outcome on the rate case, the current rate case would help. However, I think rating agencies need to see a sustained perspective of rate increases to consider an upgrade. I will also remind you that the bonds at Dulles Greenway are wrapped and so do not impact -- the downgrade does not impact the company or the cost of the debt.

And our next question comes from the line of Andre Fromyhr from here from UBS.

I just had a question about the distribution guidance. And I understand the context that you haven't provided distribution guidance for FY '27 in today's presentation. But I did interpret the messaging as, let's say, a return to paying out within the targeted range relative to your free cash flow. And so I guess, pose a question as a scenario. If we were to see the TST extended beyond this year, does that put downward pressure on what has been a pretty steady run rate of $0.40 per security for some time now? And I guess an extension to that question is, do you -- can you confirm whether or not you consider distributions from Skyway derived from regearing activity as part of your underlying cash flow?

Thanks, Andre. A couple of parts to that. So we haven't changed our guidance, which is the 2026 guidance of $0.40. But you correctly point out that in terms of our longer-term target guidance of $0.40, we have reverted to not providing an absolute target and instead focusing on our ambition to maximize cash flow from our businesses, and then to pay that out, as you pointed out, in the range of 90% to 110% of that total. In terms of what can impact underlying free cash flows, you're absolutely right. Your extended taxes can do that, traffic outperformance or underperformance. So it's the full range of cash flow impacts that will, therefore, feed into that calculation. In terms of the second part of your question, which relates to the Chicago Skyway regearing proceeds. We've kept our calculation of free cash flow exactly the same as we've reverted to policy. And so that says that regearing proceeds can be used in free cash flow calculation, only to the extent they are used to offset amortization across the portfolio, debt amortization. So as an example, if we were to regear Skyway and those proceeds were used to repay part of the Financiere Eiffarie or APRR amortizations, that portion of the proceeds would be included in free cash flow only.

Yes. Perfect. And then I just had another question. I guess with reference to your Slide 7, the evolved strategy post the IFM offer. I'm curious to understand a bit more color around what new opportunities on the right-hand side means in the current context. And does that include potentially partnering and finding synergies in working with IFM? I guess it's no secret they've got an appetite to invest in infrastructure around the world. Are there -- have you talked yet about synergies of working together with them?

Yes, thanks. I think just to clarify what we mean on Slide 7, those right-hand side new opportunities and the brownfield opportunities are in a dotted box because we've actually paused those for the moment. So apologies if that was unclear. But the sort of solid boxes are continued priorities from previous periods. The dotted boxes are ones that we were pursuing quite openly and publicly, but we have paused for the time being. I think -- I still think your question is completely valid in a sense that they're paused. We need to engage with our investors, including IFM, absolutely, as you say, to establish appetite and opportunities that would be of interest. But what we're really focused on at the moment is within and adjacent to our existing portfolio. So the biggest opportunities we see are clearly in France, both incremental concessions like the A412 but the very significant retender process that we're excited and about and we have investor support for that. I can confirm that. In terms of -- when I look across to the U.S., networks around Chicago Skyway. Obviously, part of that is owned by IFM. So we would obviously consider any opportunities there. We haven't delved into those opportunities in detail. We are going to be conducting strategic and operational review, which will include consultation with investors, including IFM. And it's important that we take that feedback into account as we consider what to pursue going forward. But just back on the slide, focused at and around our existing assets with brownfield opportunities in new regions to be tested as part of that longer-term strategy.

And our next question comes from the line of Ian Myles from Macquarie.

A couple of quick questions. When is the actual strategic review going to be completed?

So I thought there might be a second part of the question, Ian, that's why I was pausing in my response. So we have really commenced engagement with the investor base. I hesitate to put a firm finish date on it, but there will be very significant engagement over the next month, both IFM and other investors. And it will form part of our overall annual board cycle where we have a major strategy day and a strategic review day. So I don't think it's really useful to put an end date on it, but the very significant engagement will be in the next month.

Okay. So would you have an update for the market in the sort of like quarterlies? Or is that something we're going to wait to the first half or full year results?

I guess, like all our engagement with the market, it will be determined by materiality. I think when we look at Slide 7, obviously, our strategy is heavily unchanged in a lot of the areas, and that is facilitated by investor feedback to date from IFM and others. Where we have changed, including the asset sales in the brownfield pausing has been in response to investor feedback, including IFM. So I would be -- while I don't think nothing will change, I would be surprised if there was a very material pivot in our strategy post engagement with our major shareholder and others. If there was, we would obviously return to the market. But I think the confirmation wouldn't need to be reiterated to market. So my current assumption is we will give an update at full year results. If anything changes before that, we obviously commit to reverting to you.

Okay. Can you maybe just sort of run through the thought process about keeping the dividend flat this year, given you've actually had quite a few extra costs out there and you've exercised an option. You're actually now borrowing at holdco. Why not make that move to reflect cash flows going forward with the change of control and then implement that in FY -- calendar year '27?

So when we looked at our guidance and our target, we can absolutely afford to pay the $0.40 this year, and we decided given we have provided that guidance to the market consistently from February and through the takeover, it was very important given our balance sheet supports it to pay that out. In terms of the target, so 2027 and beyond, we thought it was a really appropriate time to immediately revert to the distribution policy. And so that was the thought process, nothing more sinister or complex than that. It was purely -- we can deliver in line with our guidance, and we decided to, but we decided the target could be reviewed.

And the desire to hold -- holdco debt, is there some sort of -- it's a 3-year period, but I presume you can roll it over. Is there a desire to amortize that over a period? Or is it happy to have now a structural level of holdco debt?

Right now, we're completely comfortable with the structural level of debt with no intent to amortize before the maturity. What we'll do, and Vincent and I will we'll look at it, but -- is consider that at the time, but I would absolutely say there's no discomfort in having that debt there. It will just be determined by the market conditions and the balance sheet at the time.

Okay. And just 1 final one. On the French tax, is there -- do you have any sort of view about what might be happening over there? My French -- reading French is not particularly good in the politics of the continuation of that tax?

Yes. I think your analysis is as good as ours. We don't know. The government has indicated that they may have to extend the TST given the budgetary constraints, the level of debt and the additional cost this year. But obviously, that will have to be debated at the parliament as part of the budgetary process that is expected to happen before the end of the year. So we don't know and we expect more clarity on that in the next few months or in the beginning of next year.

Our next question comes from the line of Rob Koh from Morgan Stanley.

Can I ask in relation to the fiber project at the Dulles Greenway and you've given us some indicative budget there, which is not huge. But how will that be funded? Will that be funded at the Greenway level? And then assuming it goes ahead and generates a return, do those returns then add a little bit of support to the cover ratios and the ultimate release of cash there? Is that the right way to think about it?

Rob, thanks for that. Fiber project will likely sit outside the current ring fence of the debt at Dulles Greenway. So we are currently funding the growth costs through the line item that Vincent mentioned in terms of corporate growth costs and we assume that will continue, and the cash flows will therefore be available as opposed to within the ring fence and the lockup.

Okay. And then just thinking a little bit more strategically about that Northern Virginia area. I guess a number of the other toll roads in that area have put through quite material price increases. How does that impact on Greenway rate cases? Does that give you cover for increases? Or does it hurt? Or is it too far away?

Look, it's a really good question, Rob, because when you look across the 66 to 495 and the 95, they've all shown the ability to drive significant growth from variable pricing. Now the difference -- there's 2 main differences. Number one, they're express lanes, where you've got a choice between a free lane and a paid lane that is different to our toll road, which is just a straight toll road. And secondly, they are regulated by the Virginia Department of Transport. We are regulated by the State Corporation Commission under a very different regime. I think it's helpful context to show there's limited elasticity and high demand for tolls in Northern Virginia. So that is helpful. But we still need to meet the hurdles that sit within our regulatory framework. As I mentioned, good news is the SCC staff have determined our primary and secondary proposals do meet the 3 hurdles. But I think the surrounding toll roads are a helpful tailwind without being specific to our rate case.

Okay. That's good. And then just, I guess, a question perhaps for Monsieur Portal-Barrault. Could you walk us through what kind of options you have to repay or refinance the $150 million holdco facility? I take on board to comment that you're comfortable with it and you've got plenty of time. But how should we think about options to repay and refinance?

Well, I think the options are the typical ones that you would expect. We could refinance it and push the maturity forward. We could amortize it over a period, and we could relate bullet, although wouldn't favor that solution right now. But as Hugh mentioned, there is no urgency to make that call. We're comfortable with it, sitting at the corporate level right now. We have a 3-year maturity. And so when we get closer to this maturity, we will assess our options, the state of the debt market and the underlying business requirements, and we will make a determination.

Okay. Should we be thinking that maybe there's Skyway regearing proceeds that maybe that's earmark for FE, but is there potential there to repay [ CVAE ] or?

Yes, that's an option as well.

That's an option. Okay. Great. Well, all the best with those options.

We will now take our next question from the line of Suraj Nebhani from Citi.

Just a couple of quick ones for me. Firstly, just review the comment on distribution going into FY '27, just to double check the intention still is to stick to the payout ratio range of 90% to 110%, but without necessarily committing to the [ 47 ] level of distribution. Is that the right way to interpret that?

Yes, it's absolutely correct, Suraj.

Okay. Perfect. Perfect. And then I guess the other 1 was just for Vincent on the hedging. Vincent, previously, we've discussed, I think it was like a cap and quarter arrangement in place for '26 on the French distribution. Can you give us an update on what you're expecting and how does that -- for the second half rather? And how does that look heading into next year, the hedging position?

Sure. And we have provided some more detail in the analyst notes on Page 36 of our presentation, but I can walk you through that. At the moment, our distribution for September is covered about 80%, 83%, and covers a range that is indicated in the slide. The March '27 distribution that we expect from APRR is covered about half, a bit more than half in a slightly broader range. The way those hedges work is we have exposure for large movement. We have protection against large movement in the FX, but we retain exposure for small movements.

Understood. I guess the question was more that if FX continues to be unfavorable on the -- I guess, on the free cash line, you're not hedging the free cash, just heading the distribution. Is that right?

That is correct, yes.

I am showing no further questions. I would now like to turn the conference back to Mr. Hugh Wehby for his closing comments.

Thank you, Amber, and thanks to the investors, the analysts and the interested parties you dialed in today, and we look forward to seeing you on our road show. Thank you.