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 the 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 purchasers and qualified institutional buyers are set out on Atlas Arteria's website under U.S. Ownership restrictions. Please refrain from asking questions in relation to our securities as we are legally restricted from answering those questions in this call. I would now like to hand the conference over to Mr. Hugh Wehby, Chief Executive Officer. Please go ahead.
Thank you, Moderator, and good morning, everyone. It's really great to connect with you again today. I'm pleased to present Atlas Arteria's 2025 half year results alongside our CFO, David Collins. First up, I'll take you through some highlights for the half, then onto our plans to help generate long term value with a particular focus on the opportunities we're pursuing in France and at Dulles Greenway. I'll then leave you in David's capable hands to talk you through our financial performance in a little more detail. As usual, we'll take your questions at the end. Before I take you through the highlights, I want to briefly talk about our vision. At Atlas Arteria o ur steer values and our strategic objectives continue to guide our decision making every day. Sitting above these is our new vision statement.
It clearly and confidently states our ambitions and long term value proposition to investors, customers, and the communities which we serve. The statement is Partnering to deliver world class road experiences. It's simple but powerful and intentional. Partnership is central to our success, whether it's with our co-investors, road management teams, government agencies, or our local communities. Our partnerships give us flexibility to structure a diversified portfolio to capture both stable income and long term growth and then further to unlock opportunities we couldn't access on our own. The word deliver speaks to our high performance and execution mindset. When we commit to do something, we do it, and we always tie it back to our strategy and investor value. We use the ambitious term world class because through our operating businesses we'll always aim for the highest standards in safety, operations, technology, and customer experience.
Road experiences keeps our focus on the people using our roads and ensuring we offer seamless, safe, efficient, and sustainable travel that importantly represents value for money. Jumping into the highlights now, we've achieved strong results against our strategic objectives as you can see on the slide. Firstly, in terms of how we optimized performance, we grew both proportional toll revenue and EBITDA by 8%, and our free cash flow per security was up by 9%. David will walk you through our financial performance in more detail soon, but first I want to share an example of how we have optimized performance at one of our assets. At Dulles Greenway, we install blade technology on our maintenance vehicles which allows for swift hands-free clearing of roadway debris and broken down vehicles.
This improves safety for our customers and team and minimizes overall traffic disruption on the Greenway, highlighting the customer experience and value proposition of our road. We've enhanced our competitive position through our strategic partnerships. For example, in France, we've partnered with Eiffage on the A412 and A154 which has strengthened our concession opportunities there. At Dulles Greenway, we're working to drive performance by continuing to pursue a new rate case application and proceeding with federal litigation which seeks a variety of forms of relief not previously available to us at the Supreme Court of Virginia. In terms of managing our capital efficiently, we've maintained our distribution guidance of $0.40 per security for 2025. This is supported by growing free cash flows and the foreign exchange hedging program that David will explain for you. Finally, but very importantly, we continue to lead effectively with some important new appointments.
In April, we welcomed Geraldine Leslie as our new Group Executive of People and Culture. She brings extensive experience in her field and will focus on embedding a strong safety culture across the corporate and each of our businesses in the U.S. Two new appointments will further bolster our operational excellence. At Chicago Skyway, Luis Terrazas took the reins as CEO and we're well progressed with the CEO search at Dulles Greenway. We look forward to working with these new leaders and seeing the positive impact they make in their businesses. Moving now to what we're doing to continue driving business performance and growth to deliver long term value for you, our investors. As you can see on the slide, we're thinking about this in three buckets. Looking at our existing portfolio, our biggest current priority is to unlock cash from Dulles Greenway.
The Greenway is well positioned in one of the fastest growing and most affluent counties in the U.S. based on median household income. Once we get Dulles Greenway out of lockup and distributing cash, we are confident the business will be a valuable growth driver for Atlas Arteria for decades to come. More on what we're doing at the Greenway shortly. Looking ahead to the upcoming French concession retenders, we'll continue to partner with Eiffage to ensure we're in the best possible position to participate. We're also expanding our focus in France beyond our existing concessions. For example, the associated growth opportunities we're pursuing with Eiffage, which I mentioned earlier. I've now been in the business for nine months and have had the time to consider additional levers for potential growth. In this context, we have included the consideration of opportunities in OECD countries separate to our network.
Importantly, we'll assess any potential investment based on yield, investor value, and portfolio composition. There is no intention to raise new equity to pursue such opportunities. While this of course may change in the future, we will make sure to keep the market well informed. Instead, we are relying on the powerful combination of our existing portfolio, debt headroom, partnerships, and capital-light options. Central to each value creation bucket on this slide is in fact consistent investment in high quality and strategic partnerships. Looking ahead now, specifically to the future opportunities in France, France's major motorway concessions are set to expire between 2031 and 2036. Ahead of this, the French government has been engaging with stakeholders to assess the future of its motorway sector. Most recently, the Transport Minister held a national conference attended by ministers, experts, public stakeholders, and concessionaires.
The report from the conference reaffirmed the importance of maintaining toll roads for France. It also recommended a refined concession-based model. These are encouraging confirmations for us. Our concessions at APRR and AREA are the last of the major concessions to expire in France, and this positions us strongly to consider the full range of opportunities. Looking at the timeline on the bottom of the slide, the SANEF concession is the first to expire in 2031, and so we expect the tendering process to start in the late 2020s. Of course, when it comes to the tendering processes, any bids we submit will be based on the regulatory and tax environment prevalent at the time. Until then, our medium-term focus is on maintaining our position in France. Our long-standing partnership with Eiffage is key to this.
We've worked very closely together over the years, combining our strengths, their local knowledge and presence, together with our external perspective and expertise creates a relationship that delivers more than the sum of its parts. We have strong conviction that continued investment in French motorway concessions is fundamentally compelling with high quality infrastructure assets in a developed and relatively stable market. While the political and regulatory environment can be complex, this is increasingly the case in most developed regions, and we are well positioned to navigate this. Regardless of how the tolling model evolves, we will continue to explore opportunities for long term growth and success. Turning now to the Dulles Greenway, where we continue to pursue our multifaceted strategy to unlock value from the business, we were of course disappointed with the Supreme Court of Virginia's decision on the rate case appeal.
However, we continue in our preparation of a new rate case application, including completing three productive stakeholder working group sessions. Importantly, these have been held with full participation from the Virginia Department of Transportation, the Attorney General's Office, Loudoun County, and staff from the State Corporation Commission. From these sessions, we have built mutual understanding around the traffic model and calibration process, and we have had open discussions about appropriate parameters and data inputs. We will use these important outcomes from the working sessions to inform our next rate case submission. Our federal litigation has also recommenced. Our complaint alleges constitutional violations distinct from those decided by the Supreme Court and therefore seeks relief unavailable to Dulles Greenway in the Supreme Court of Virginia appeal.
In terms of the Greenway's operational performance, it continues to deliver strong traffic growth with a compound average growth rate of 8.3% since the first half of 2021. This provides a stronger platform to unlock cash from the Greenway and enhance the value it delivers for our investors. I'll now hand you over to David, who will walk you through our financial performance in detail.
Thanks Hugh. I'm pleased to be here today to take you through Atlas Arteria's financial results for the first half of 2025. We are very pleased with the performance of the business over the period. Proportional toll revenue and EBITDA both increased around 8% driven by toll increases and beneficial movements in foreign exchange rates, while first half net profit after tax was 33% lower. This is due to the majority of the impact of the French Temporary Supplemental Tax or TST coming through in this half. As a reminder, this tax is currently expected to apply to the 2025 fiscal year o nly. C entralized costs of $19.7 million remain in line with guidance for 2025, which is for $37 million- $41 million excluding CEO transition costs. I will step through the costs in more detail shortly. Free cash flow per security was $0.194, up 9%.
We paid a distribution of $0.20, noting that each distribution relates to performance in the second half of 2024. To recap, while our statutory net profit has been impacted by the TST imposed in France, the underlying momentum behind our businesses remains strong, driving growth in proportional earnings and free cash flow to support stable distributions. Turning over, as Hugh mentioned earlier, we have reaffirmed distribution guidance of $0.40 for 2025. This is despite the impact of the TST and we believe is a great outcome for security holders. We expect the full year distribution for 2025 to be above our policy range of 90% to 110% given the impact of the TST.
I would also note that as I mentioned earlier there will be a timing difference in the payment of TST where free cash flow will be disproportionately impacted in the first half distribution period, so the payout ratio should be considered on a full year basis. We have also implemented an FX hedging program to protect against significant currency fluctuations on a portion of the expected Euro distributions from our businesses. This program is on a rolling 12-month basis. T o retain flexibility and efficiency of the program w e start with a lower level of coverage, which we then increase as the distribution date approaches. As we continue to focus on optimizing the performance of our businesses, we expect to be able to grow free cash flow to support distributions of at least $0.40 per security.
Turning now to our proportional results, this slide shows continued solid growth in toll revenue and EBITDA over the past five years underpinned by traffic growth and inflation-linked tolls. Overall strong traffic performance and toll increases drove revenue growth in this period. Traffic at APRR was 2.4% higher driven by light vehicles, reflecting the low unemployment levels across France. Heavy vehicle traffic was also in growth, up 0.7%, however was subdued due to slightly weaker French and Spanish trade. At the Warnow Tunnel, traffic was flat. The positive impact from the public transport workers strike in March was offset by maintenance works between April and June. At Chicago Skyway, whilst traffic decreased 2.8% for the period, toll revenue increased 3.4%. Light vehicle tolls increased 8.3% from 1 January 2025, which reduced traffic a s anticipated.
H eavy vehicle traffic saw unusual reductions in May and June, the timing of which appears to be in line with significant reductions in shipping and container volumes at the ports, particularly at the Port of Long Beach in Los Angeles, noting that West Coast container freight bound for the Midwest and East Coast is typically transported through Chicago. More recently, we have seen some improvement in the July shipping data. P ositively a s Hugh mentioned earlier, at Dulles Greenway there was strong traffic growth of 8.2% as congestion continues to build on competing routes. The continued strong and stable growth in our proportional results demonstrates the strength of our diversified portfolio. Turning now to our cash flow waterfall, we think about our cash flow in three main buckets. Starting on the left are our distributions from APRR.
Then there are our corporate cash flows including distributions from our other businesses, and then on the right is our cash coming in and what we do with that. Currently, our cash flow is dominated by distributions received from APRR and the distributions we pay to security holders. This period, our free cash flow increased 9%. On a per security basis, this was $0.194 and with minimal reliance on cash on hand for our distribution paid, we maintained a robust cash position at 30 June 2025. On the next slide, our income statement shows our financial performance compared to the first half of 2024. Total revenue, which represents the roll up of revenue from Dulles Greenway and the Warnow Tunnel businesses, was up 11% while business operations costs were up 10%. Earlier, Hugh outlined the multi-pronged strategy that we are taking at the Greenway.
The related costs, which you can see here, are an investment we are making in the future of our business with potential for significant returns. Share of profit from our equity accounted investments, which include APRR and Chicago Skyway, was down in the period impacted by the French TST i n the APRR business. T his tax was enacted earlier this year and is applicable to 2025. Excluding the impact of the TST, NPAT grew 20%, a reflection of the strength of the underlying performance of the businesses in our portfolio. Turning now to our debt maturity profile, these charts show our debt maturity up to 2036. I n our European businesses a t the top, the maturity profile at APRR highlights its strong maturity dispersion over the next 10 years. APRR's strong capital structure and balance sheet capacity enables opportunities for future refinancing.
Just recently in May, APRR issued EUR 500 million of bonds maturing in January 2031 with 73 basis points margin over mid-range swaps and a coupon of 2.875%. Issuance was met with strong support and the successful transaction reflects continued confidence in the business and strengthens APRR's liquidity position. In the U.S. at Chicago Skyway, we have $437 million of debt maturing in 2026 which we are looking to refinance. Our work stream for this process is well underway. As Hugh outlined earlier, if interesting new opportunities arise, we will take a disciplined approach to considering them in accordance with our capital allocation framework. Our businesses are performing well, representing an inherent source of value, and the majority have strong investment-grade credit ratings.
At this stage, we would not be looking to raise additional equity as we do not think this would represent good value for our security holders at the current security price. We would, of course, keep the market well informed if this position were to change in the future. Overall, we maintain balance sheet and portfolio flexibility, which, combined with our strong underlying business performance and robust free cash flow generation, provides us financial flexibility. With that, I'll now hand back to Hugh to wrap up.
Thanks, David. We have set a clear path for our people with our new vision statement, Partnering to Deliver World Class Road Experiences. This, along with our strategy, provides clear direction personnel and into the future. We're committed to continuing to deliver value for you, our investors from our diverse portfolio. This means delivering strong and stable distributions supported by enhanced free cash flow. We're also working hard to unlock inherent value in our business and leveraging the strength of our dynamic strategic partnerships to support the delivery of growth and longer term success. Thanks very much for your ongoing support and we'll now open the floor to questions. Over to you, moderator.
Thank you. If you would like to ask a question, please press Star 1 on your telephone and wait for your name to be announced. If you would like to cancel your request, please press Star 2. If you are on a speakerphone, please pick up the handset to ask your question. We kindly ask that you please ask one question at a time and then rejoin the queue to allow others to ask questions. Your first question today comes from Rob Koh from Morgan Stanley. Please go ahead.
Good morning. Thank you very much for the presentation and update. I guess I have lots of detailed questions about small OpEx items, but I think just to start with, can I ask maybe for a little bit more color on the pivot in the strategy to considering OECD opportunities without raising equity? If you could just maybe give us a bit more color on what kinds of things would be included in that consideration, and then also how you kind of view your ability to or your headroom for capital within the existing business, please.
Good morning Robyn, and thanks for the questions. We might take the specifics of the ones offline a bit later, but in reference to your question about the strategy, it's a reintroduction I think of that strategy. We have in the past at Atlas Arteria looked at the broader set of opportunities globally and we thought it's the right time to consider growth again outside of the associated growth with our portfolio. Importantly, and as you point out, we have caveated that growth by saying we have no current intention to raise equity. The sources of value are primarily asset recycling, debt headroom, excess cash, and capital-light options through partnerships or otherwise. We don't narrow down the opportunity set other than OECD countries and road-related investment. Importantly, we are not looking outside the road sector and we have narrowed it down.
We are really being driven by that vision which is partnering to deliver world-class road experiences. This is about roads, it's about stepping back into the growth phase, but it's about disciplined consideration, not about growth for growth's sake. While I won't give specific numbers in terms of our capital headroom, it is very disciplined and focused on cash flow accretion and delivering value in the long term for our investors, particularly beyond the expiry of some of our current concessions.
Alright, thank you very much.
Thank you. Your next question comes from Owen Birrell from RBC Capital Markets. Please go ahead.
Good morning guys. Let me just turn my attention to APRR. I guess I'm just keen to get a sense as to, I guess, how Eiffage is managing the concession as we g et to, a t the moment, particularly with respect to, I guess what's happening with SANEF. Obviously managing their concession to hand over, is Eiffage effectively moving to that model as well. On SANEF, if that does c ome back to market, would you be supportive of a bid for the SANEF concession?
Thanks, Owen, and good morning. In terms of how the concession is being managed by APRR and the board, it is very consistent with how SANEF and other concessionaires in France have approached it. Obviously, the last two major expiries are in APRR and AREA, so we have a little bit more time to work through those processes. The relationship between concession holders and the concession grantor and the process to determine capital and asset condition at the end of the concessions from all accounts has been a very reasonable engagement, and we have commenced ours earlier than other market participants.
We are very comfortable with how it's being approached, with the way APRR is addressing it, and how that fits in with the guidance we've given market, particularly around our CapEx to the end of the concession. In terms of the SANEF process and in fact all seven concessions and their expiry, we haven't made a determination yet about which or how many concessions we are interested in or would bid for. We very much participated through APRR and Eiffage in the conference to determine the future structure of those concessions. We are supportive of the outcome, looking at the concession model being retained and looking at private capital being utilized in the sector. We are very keen to participate in all that makes sense to our investors.
It is incredibly difficult to make a decision about what to be involved in prior to the finalization of the laws that will define how those concessions look. We don't have any principal objection to looking at each and all of those concessions, but we haven't made a decision on which ones yet.
Can I maybe just a small follow up. What is your sense of how the g overnment is looking at future concessions at this point because we have very different views around t he potential lengths of concession, you know, words like short and long a re being used, but my sense is t hat short is actually quite long. Just if you can give us a sense of timing and duration of potential future concessions, you're sort of thinking at the moment.
S ure, I won't be able to answer specifically, but I'll do my best in noting that this is not defined in law yet. The outcomes of the French Conference on the future of motorways, broadly speaking, drop into three buckets. Number one, concession models with private capital were supported on an ongoing basis. Number two would be shorter, to your point, not short, but shorter concession length, noting that the current concessions were very, very long, around 60 years. The third was looking at the regulatory regime to something that could look more like other infrastructure style arrangements, look at airports and other arrangements around the world, but not defined at this point in time.
You're right, the concession would need to still have quite a significant length to make sense for most private operators, but we don't yet have guidance other than it would be much shorter than the 60 years in terms of the regulatory model. When we look around the world at both roads and at other infrastructure regulatory models, we're comfortable that as long as it's well defined and embedded in the concession structure, we can value and bid on the basis of any concession model. We believe that it will be long enough and the regulation will be suitable at this point in time for us to be a participant. It is hard for me to give definitive answers on those yet.
Understood. That's great. Thank you.
Thank you. Your next question comes from Cameron McDonald from Evans and Partners. Please go ahead.
Hi, Hugh. Question for me, just on that bidding p rocess, what is the sort of the g ame theory that you're running through and on sort of, you know, whether or not everyone bids for everyone or whether there's an interloper that comes in. Secondly, how do we think about the costs that you are, you know, you will incur around that bidding process and the impact that will have.
Thanks, Cameron, and good morning. To answer each of those questions separately. Firstly, it's early days. We believe given the last. We are the last two concessions expiring, we have some of the most flexibility with balance sheet and with consideration of the game period. I assume that most of the major players and new players will show up to some of those tenders. The reason I say it's early days, Cameron, is it's not necessarily the exact same seven concessions that exist today either. We do need to see where things play out, the size of individual concessions on offer, and the process to actually understand the specifics of the game theory. I do believe that being at the back end of the expiries gives us significant flexibility to be involved in the full remit if that's what we chose to do at the time.
In terms of approach to bid at costs, we would see that as through our joint bidding vehicle being APRR and AREA structure, so the costs and the balance sheet would be sustainable and manageable within the APRR business as opposed to needing to have injections from Eiffage or our other partners in MAF. Self-sustaining, let's say, bidding for those opportunities if we choose to be involved.
Okay. On that, if you, let's just say you do bid for one of the earlier, to your point about being at the back end, r ight, i f, let's just say you decide to put a bid in for, you know, for SANEF as an example that comes up early, is there anything stopping you from doing that within the APRR vehicle, or would it need to be external to the APRR vehicle given that presumably at that point you've also then got to wind up APRR to either, you know, hand it back or to sell it to the, or hand it over to the new, the new ultimate owner.
Gentlemen, sorry for the technical difficulties there. We're back here on the line. Thank you
Cameron. You were having a follow-up question, so happy to hear it. Now I lost you.
Sorry, just going back to being at the front end versus the back end. Is there anything stopping you within the structure for, you know, using the APRR structure to bid for, say, SANEF early or would you need to do it in a new vehicle entity to say that APRR could be handed back? Presumably you're not going to be able to own two concessions.
There's a few lenses to that question, Cameron. Number one, we already own two concessions being APRR and AREA, and in fact we own the A79 and possibly the A412 and ADELAC going forward. We own actually five concessions at the moment. In terms of the ability to use the joint vehicle, we can. The IP, the know-how, the management, some of the systems all sit within that structure, and we are confident that we can utilize that to bid. We are obviously as a business, and APRR specifically, very disciplined about what it needs to hand back in 2035 and 2036. We're ensuring that we can both retain our corporate structure, but hand back the elements that we need to the state as and when those concessions expire.
We have started that process years ago and it is an ongoing, disciplined effort to retain that through the bids to protect against the very risk that you are talking about.
Okay, great. Thank you.
Thank you. Your next question comes from Anthony Moulder from Jefferies. Please go ahead.
Good morning all. If I could focus on the APRR AREA reserves consolidation. This EUR 533 million, I just want to understand how available that is for return to shareholders and under what conditions you would consider with shareholders the return of those funds. Is it purely linked to another tax grab by the French government, which we won't know until the draft bill in October? Is that how you think about the EUR 533 million? If not, why was that? Why was that reserve consolidation taken at this particular point? Please.
Yeah, sure, Anthony. Thanks for the question. The reserves consolidation resulted from a merger during the period of the APRR company with AREA participation. They were or are or were existing reserves that were on the AREA participation on balance sheet, which as a result of the merger are now at APRR level on the company balance sheet.
Reserves don't represent current period earnings or current period cash flows, but rather arose over a number of years through intercompany loan arrangements which were in place previously between those entities. In terms of our views on those reserves looking forward, it is technically possible to distribute those reserves if that decision was taken between ourselves and Eiffage and our other joint venture partners. However, to do so would require re-levering at APRR, so borrowing, and we would need to have a use for the funds, which at the present time we do not have or do not see an accretive use of those funds in terms of the ability or intention to use them in the future. You're right. There is the ability to use them in a shock scenario. The tax one is one potential example of that, which you raised.
These are the same reserves that we used 12 months ago in July of 2024 when we released EUR 200 million up to Financière Eiffarie, and that was in relation mostly to the TST. We do have the ability to do that. The tax, a tax shock, is one potential opportunity. What I would also say, the reserves also give us optionality. If there were projects within that structure or related that needed funding in the future, it might be possible to use those reserves also. That would be the key summary of what I would say., Anthony.
Very good. Thank you.
Thank you. Your next question comes from Andre Fromyhr from UBS. Please go ahead.
Thanks. Good morning. I was just hoping to talk about the distribution and the free cash flow coverage. At $0.194 per share for the half, you're almost there in terms of 100% coverage of what you distributed during the period. Am I right in understanding the comments around the TST half weighting would actually make that look better if it was smoother over the year. I guess the next question is how much growth does it take to then lift off the $0.40 per share? I understand you're not giving guidance for next year yet, but that 90%- 110% coverage range, do you have to be sort of maxing out on that range before you lift, or how should we think about that?
Sure. Andre, thanks for the question. Firstly, in terms of free cash flow coverage and the impact of the TST, we've given quite a bit of detail of the specific impact on our cash flows on the analyst slide at the back of the pack for our full year 2025 guidance period, which is $0.40. That $0.40 is payable in October of this year and early April of next year. It is impacted by the TST. It's disproportionately impacted in the October distribution this year and we've given the details of that in the analyst slide with 98% of the TST being payable in the first half of the year. As we disclosed at December, we do expect to be for full year 2025 above the top end of the free cash flow payout range, so above 110%.
That is temporary and if it were not for the TST, we would be well within that range. From 2026 onwards we expect to be back within the range of 90%- 110%. As you alluded to, we wouldn't at this point give guidance past 12 months, past full year 2025 other than to say we do target maintaining at least $0.40 per security going forward. The other comment I would say, Andre, is that we do target growth in our underlying free cash flows. Back at year end we did disclose targets for management of 4% free cash flow per security CAGR over the four years commencing January 1, 2025. We're certainly targeting to grow into and beyond $0.40 in the short to medium term.
Okay, thank you.
Thank you. Your next question comes from Ian Myles from Macquarie. Please go ahead.
Hey, guys. Quick one, what's the take on France and the chaos in the Parliamentary side there, and how it might influence some of these outcomes?
Morning, Ian, and thank you. For those who haven't been following too closely, the French Prime Minister announced a confidence vote for the 8th of September, and there is some press and public statements around how people will vote, which could result in another change to the makeup of the House and of the Prime Minister in the short term. Consequences for our business are somewhat indirect and uncertain, depending on who is in there. Practically speaking, what it does mean is that the finance bill, which would usually be finalized to the budget for the following year, the timing of that is under some risk. This year we saw that occur as in the end of 2024, start of 2025, and what actually rolled out was an extension of the previous year's budget while they finalized that through to February of 2025.
There is a risk around the timing of the finance bill. There is also a risk around the embedding of the outcomes of the Ambition Transport Conference into a law that they were talking about finalizing through the Transport Minister in this period of time. In a sense, it depends on who moves into power and in fact what approach Macron takes to putting a new Parliament in place. Delay seems to be the most common assumption at this point in time, both in relation to the finance bill and the bill supporting the retenders.
Do you think that plays into traffic growth? Because there's some serious austerity happening over in France. We're just intrigued in what that might actually play out to.
I'll reserve judgment at the moment because I don't exactly know what's going to happen in France. What I would say, Ian, is we have seen the reduction in freight volumes from France and Spain to the rest of Europe hit heavy vehicles for the last 12 odd months. That's played out in our numbers already. I don't necessarily see that changing again. In terms of light vehicle traffic, we've actually seen some real strength in the last couple of months. IFRS in their commentary yesterday provided some very positive updates through July and August. We're not seeing that at the moment, but we'll have to wait and see exactly how the next three weeks plays out in France, I think.
Thank you. Your next question comes from Suraj Nebhani from Citi. Please go ahead.
Thank you. Just a couple of quick ones. Firstly, on Dulles Greenway, I know the appeal was denied for the 2024 rate case, but can you talk to, I guess, what is changing for the 2025 rate case and what are the next steps there? The other question was just you mentioned OECD in the optionality set, but there's been speculation around potential road transaction in Australia as well. Is that a market that you would look at as an option?
Thanks Suraj. Starting with Dulles Greenway, you're absolutely right. Very disappointed on the appeal being rejected by Virginia Supreme Court. In terms of what changes, I can't go into specifics at this point because it's actually not submitted yet.
However, I will say to you the biggest change is the working group that was formed as a result of the SCC finding, not at all related to our appeal to the Supreme Court. The SCC, as part of the 2024 rate case, recommended for future rate cases we engage with the key stakeholders, being VDOT, Loudoun County, the SCC staff, and the Attorney General's office. We have done that and those sessions have been quality and engaging, and we've now had three of those. We'll continue to meet those stakeholders as we go through our drafting and submission process. We expect to submit the next rate case in the second half, though, in this calendar year. The good news is we feel it will be significantly more consulted, pre-consulted, and informed for other stakeholders' views.
I'm not suggesting for a second that it will have absolute support by every one of the stakeholders, but it will have every stakeholder's input that is at that table. Importantly as well, the SCC only regulate one road, which is our road. Through the engagement process with them in the working group, we have been able to really work with them to rapidly increase their understanding of the Greenway. That's been a very positive outcome. Over to your question around OECD countries, the simplest way to answer it is we're trying not to narrow it down, but Australia is part of the OECD so would be considered.
That being said, I just take you back to the fact we're talking about this as a very disciplined and focused effort where we can see accretion and value to security holders and where we can do it at least in the first instance without utilizing new equity. Yes, it would be included, but this is an opportunity set that will be very bespoke.
Thank you. O nce again i f you would like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Rob Koh from Morgan Stanley. Please go ahead.
Good day guys. Thanks for indulging me in a second one. I guess you talked about t he a bilities to fund new opportunities, and I take it that you kind of listed that in kind of your preference order, but if not let me know. I guess just on debt headroom, could you maybe just give us any update on Skyway re-gearing? You've got a refinancing coming up, which I guess you're working on, but I also presume you're kind of targeting more towards a 1.6 times DSCR debt sizing. Just wondering if there's any update on that so that we can kind of calibrate our expectations for re-gearing at the Skyway.
Sure Rob, happy to answer that and thank you for the question. The next opportunity we have as you referenced is a note of $325 million U.S. which matures in quarter one of 2026. We're well advanced on working towards refinancing that note at present. We also have a bank facility and a CapEx facility which mature later in 2026. There are two opportunities to touch the market over the next 12 months or so. We do carefully watch the debt service cover ratio. We think BBB is the right level for Skyway. The way we've talked about this previously is a range of 1.4 to 1.6 and we're currently around about the 1.4 mark at present.
Whether or not a regearing is possible will depend on the market at the time that the refinancing is undertaken and in particular where the U.S. 10 year treasury rate is at that particular point in time. You can assume that we'll consider it at each of those refinancing points. We've got two in the next 12 months but I can't give any view on what that might look like at present given it will depend on where markets are at at that particular point in time.
A nd maybe Rob, just t o respond to the first question, it wasn't a preference order. I just want to call out it would be again related to what the opportunity is. They are the four big sources of capital that I did list, but it's not a preference order. It would be tailored to the opportunity we're considering and what delivers the best value for investors.
Yeah. Okay, great. Thank you so much.
Thank you. Your next question is a follow-up from Andre Fromyhr from UBS. Please go ahead.
Thanks for the follow up. I just want to ask about costs growth at APRR, 4.8% year on year. Is there anything particularly unusual driving that number at the moment? Or how should we think about that in relation to maybe operating leverage based on revenue growth versus cost growth over t he next 12 months?
Sure, Andre. The main thing that I would call out is the labor cost line, and if you look at half versus half, you'll see a growth in labor cost. The reason for that is it's an employee share scheme that APRR runs, or share-based payments to use the accounting term. It happens in half one of each year. What happened in half one of 2025 was that these shares were issued to staff, as is normally the case, in two parts. Firstly, there's a calculation as to how much each member of staff will receive, and that's normally taken or done in February, and it's done based on the Eiffage share price at that particular point in time. What happened subsequent to that is that Eiffage's share price has increased materially, and by the time that those shares were issued, the cost to APRR was significantly higher.
That actually was the main driver of the increase in labor cost for APRR half on half. It reflects the material growth in Eiffage's share price in the half. Not really an underlying change in the cost structure of the business, but more a reflection of the share price movement at Eiffage. There isn't anything else material I would call out other than that issue. Okay, thank you.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Wehby for any closing remarks.
Thank you, moderator, and thank you to all the investors and analysts who dialed in today. We look forward to engaging with you over the next few weeks. Appreciate it. Have a great.
That does conclude our conference for today. Thank you for participating. You may now disconnect.