Earnings Call: H2 2020

Feb 26, 2021

Good morning, everyone. I'd like to thank you all for joining Atlas Cyterea's 2020 full year results call. I'm joined today by Nadim Lenny, our CFO. I'd like to acknowledge and pay respect to the Bunurong people for the traditional custodians of the lands and waterways where I am today. I extend this acknowledgment to the traditional custodians across all the lands on which we are located. I also pay my respect to Elders past, present and emerging leaders who may be with us here today. Moving to Slide 3 and today's agenda. I'll start with the highlights and then hand over to Nadine to run through key financial matters. I will then provide an update on operations and close with an overview of our key priorities and the outlook for 'twenty one. We will then open to questions. Turning to Slide 5, I'd like to start by thanking our fantastic team members throughout our businesses. They have done and continue to do an exceptional job during these very challenging times. Our teams have maintained an unwavering focus on the safety and well-being of our employees, our customers and our communities. We are proud to announce that in 2020, Atlas Iteria was ranked 4th out of 156 peers by Sustainalytics in our ESG performance. Traffic across our businesses was impacted by COVID-nineteen related movement restrictions. However, the traffic recovery was very encouraging, particularly in Europe post the easing of restrictions during the year after the first wave. I will touch on traffic in more detail shortly. It was a year like no other. We focused our energies on building financial and operational resilience and providing capacity for growth. We ended the year with $194,000,000 of cash on our balance sheet, And I'm pleased to provide guidance of $0.13 per share for the final 2020 distribution. This brings total distributions for the 2020 year to $0.24 In September, we completed the buyback of to shareholders, which enabled us to have U. S. Institutional investors participate in future capital raising. This makes Atlas Iteria a far more attractive investment opportunity for these investors. Importantly, we progressed our strategy throughout the year. We talked at the half about the acquisition for the additional interest in APRR, which closed in March and bought our total ownership to just above 31%. This transaction was transformational to our business. It delivered significantly enhanced governance rights and direct participation at APRR. We were very pleased to announce today the capital restructure of Varnotana. With an injection of capital, drawdown of long term debt and an attractive interest rate, we placed the business in a position to pay sustainable distributions into the future and potentially a significant rerating value for the business. Turning to Slide 6, You can see that our achievements in 2020 were very much on strategy. We were able to reduce legacy complexity, increase operational efficiencies, pursue disciplined capital management, and diversify and manage our risk. Moving to Slide 7, you can see the very different impacts the COVID-nineteen that's had across our businesses. APRR is part of a major transportation corridor for Western European Trade and Tourism. It benefited from relatively strong heavy vehicle traffic and good rebounds in light vehicle traffic as restrictions eased. Over the summer, traffic returned to 2019 levels. Whanoe Tunnel saw a fairly modest impact because of lower case numbers and a business as usual approach within the local community. Dallas Greenway, on the other hand, continues to be affected by movement restrictions as it's a road primarily servicing commuter based traffic, where a significant proportion of the population are working from home. Moving to Slide 8, we've outlined the major trends we are seeing as a result of the COVID-nineteen pandemic. While the second wave continues, we are well positioned to manage ongoing business disruption. The growth of e commerce and logistics is already playing out across the APRR network. The shifting preferences from public to private travel, which we saw over the summer, will be positive to us. We have strong sustainability credentials, which are important for stakeholders. Importantly, as the French government starts think about stimulus for growth, APRR is well positioned to participate. On Slide 9, We've outlined the various lockdown restrictions that were in place across our areas of operation. I don't propose to go through this slide in detail, but the color coding shows when restrictions were more and less severe. Currently, France continues to have a curfew in place across the country between 6 pm and 6 am. Shops and services remain open during the day with restaurants, bars and gyms closed. Schools are currently open and universities continue with remote learning. It is fair to say, however, that the situation remains fluid with local and regional lockdowns possible. Nice, for example, which has had high infection rates, has just announced stricter lockdown arrangements for a couple of weekends. Germany recently extended its lockdown until mid March. Rules include a one visitor per household with a clean kilometer travel restriction in hotspots. Schools were closed, but have started to reopen depending on infection rates. In Rostock, schools are reopening this week. In Virginia, we saw more restrictions from mid December. These included a stay at home order between midnight and 5 am and further limits on social gathering. The Governor of Virginia has announced some easing of restrictions to commence on 1st March. The Virginia Department of Education is encouraging schools to reopen for in person classes. There's a very strong correlation with our traffic and school attendance. So that if it occurs, should give an uplift in traffic. In Slide 10, we break down the impact on traffic revenue and EBITDA movement restrictions across our network during the year. This gives you a good insight into how restrictions affect our traffic on our various roads. Moving to Slide 11, traffic in our European businesses has demonstrated resilience, returning to pre COVID levels in the 3rd quarter before falling with the 2nd round of restrictions in Q4. As I noted, heavy vehicle traffic on the APRR network was relatively strong, And this resulted in a 2% shift in traffic mix between light and heavy vehicles. Due to the truck Toll Multiplier, this translated to a 5% shift in revenue mix. While our traffic since the beginning of the year has been around 25% less than last year, when traffic was not affected by COVID-nineteen movement restrictions. Of note, closure of ski lifts as well as the ongoing 6 p. M. Curfew are impacting ski season traffic during the winter holiday period. Varnot Tunnel is also tracking around 25% below last year, with strict lockdown conditions in Germany into the New Year. At the Dulles Greenway, traffic remains around 50% below last year, also impacted by the recent major snow events in the region. Turning to Slide 12, We've outlined our sustainability achievements for 2020. You can see a range of initiatives on the slide, but I will call out just a few. The safety of our employees and customers is our number one priority. In addition to actions to respond to COVID-nineteen, We're implementing initiatives to reinforce the safety culture. We conducted a customer behavior study at Varnot Tunnel. This will improve customer safety at the Toll Plaza as well as customer satisfaction with better processes for toll payments. Supporting our communities, particularly during this time, is important. APRR donated masks to healthcare workers in France when they're in very tight supply and also displayed messages of support along its motorways. Both APRR and Dallas Greenway provided toll free travel to healthcare workers. And APRR also developed a new digital service keep customers better informed of payment, travel and value options. We are actively pursuing gender balance across the organization, including the Board. You may have seen today our announcement that Ariane Barco is joining the Australian Board. Our combined Australian and Bermuda boards will then have a non executive split of fifty-fifty between male and female membership. We have a fifty-fifty split across Atlas Iteria's corporate employees. We're also very pleased to report that in September, On the A48 in Grenoble, France, APRR opened the 1st dedicated lane for carpooling and low emission vehicles. ABRI was also recognized for its working environmental stewardship being awarded 2nd place in the overall motorway sector by DRES and was the most improved infrastructure company. Turning to Slide 13, and we will continue to build on our strengths and develop across all 4 sustainability pillars that are fundamental to our business. We continue to embed a safety 1st culture across our business and look for new ways to invest in, develop and support our people. At Dallas Greenway, We've worked to improve our customer and community relationships and will further invest in our stakeholder engagement program under our CEO, Rene Hamilton. In the environmental space, we expanded our coverage of GHG emission reporting across Atlas Iteria, and we plan to consider options as to how we better manage and minimize emissions going forward. With that, I would like now to hand over to Nadine, who will present our financial performance for the half. Thank you, Brian. And we'll start with Slide 6, Jane. As Brian mentioned, the second half Distribution guidance of $0.13 per security that we announced today reflects the performance of APRR over the second half of twenty 20. In terms of future guidance beyond this upcoming distribution, and I know that there's a desire to understand What we can say is that distributions from APRR and now on ottomol as well will form the basis of Atlas distribution in the near term. And perhaps a little bit more on how we think about cash and cash distribution. To create Sustainable distributions to you, our security holders, we're looking to generate sustainable operating cash flows from each of our businesses. As we've talked about previously, this is central to our current strategy. And you can see us deliver on it with the ARR transaction last year and then the restructure that we announced today at Vano Tunnel. We then want to make sure that at a corporate level, we maintain adequate liquidity to Protect against risk, while also supporting the immediate needs of the business. As Graham said, we ended the year with nearly $200,000,000 of cash, of which $70,000,000 circa is earmarked for restructure of the Varno's balance sheet. So this will leave us with around, let's say, dollars 130,000,000 or the equivalent of Cash, which is available to cover corporate costs and some extra to allow for assessment of future investment opportunity. As I've said before, We do not intend to just keep cash on the balance sheet that can't be used to create value for security holders. Sustainable distribution growth over time is one of our key objectives. In terms of gearing, we do not currently Holding company debt, so we have the flexibility to support growth, particularly at the ACI level, now that we have removed The restricted covenants, which were part of that previous facility, which would potentially have prevented leverage at the ARR level. Holding company debt though may still be a feature as we go forward, but ensuring that we have the right Markets, including debt and equity funding is also important, so we just have that flexibility to support growth as we need. Turning to Slide 16. We ended the year with substantial liquidity headroom at both the corporate and business And look, we've talked about the corporate cash balances, so I won't go through that again. At APRR though, Both S and P and Fitch reaffirms their A- credit ratings during the year and maintains their outlook as stable. Fitch We upgraded its short term rating from F2 to F1 despite COVID, which really reflects the stability and strength of that balance sheet. Further to that, ACRR holds around 3 times liquidity cover against debt maturing over the next 12 months. Dallas Greenway Had around $216,000,000 of cash available at the end of the year against $39,000,000 of debt service for the next 12 months and seventy US7 $1,000,000 was available for distribution but for those walk up there. Look, we haven't included Vano tunnel cash Position on this slide because excess cash has historically been put to lenders. We're very pleased Today to announce the capital structure at Varno Tunnel, which will provide us with better control over our cash management here. Turning to our to the company net profit and it's the APRR company net profit after tax specifically that has driven the size of our distributions historically. Importantly, this is company net profit and it's not the consolidated net profit. So when I spoke with you in August, I took you through the cash flow for the first half, which reflected the final dividend we received for 2019 and of course, we use these proceeds to repay Corporate Debt Facility. So then resetting for the second half, you would have seen that the APRR Consolidated net profit for the half year ended June 2020. So starting on the left hand side, €8,000,000 And once these are removed, ACRR company net profit is then the €72,900,000 You can see there. If you then remove the financing costs associated with the debt facility at Afari and then the math taxes, administration costs, etcetera, you're left with the €4,200,000 which Atlas Iteria received from that to in September. If you then convert this to Aussie dollars, you get The A104 $1,000,000 in distributions that we received. Then from a head office During the second half of the year, we paid final Macquarie fee of $3,800,000 corporate cost, interest income and some investment cash flows, which gets us to the $86,400,000 net operating cash flow. We had $141,000,000 Aussie dollar equivalent Cash on the balance sheet at 30 June. So if we add the net operating cash inflow to this balance and the $75,000,000 raised from the SPP Pay transaction in July, and you can see there it's the $71,000,000 which is net of all the remaining fees from the capital raise. If you then take out the distribution that we In October, we closed the year with a cash balance of A149 $1,000,000 equivalent. Moving on to Slide 18. As we've presented here our income statement for the year and our management results, which we like to think shows The more normalized earnings. And these reflect the statutory earnings removing what we call as notable items, which are not necessarily related Underlying operational performance and you would have been doing this a few times now. So again, the idea is that stripping these items out Profit essentially shows you what we believe is more reflective of just underlying business performance. The underlying operational net profit after Tax was down around 60% from 2019. The business was adversely affected obviously by COVID-nineteen as Graham has talked about, which was primary driver behind the change in performance. Toll revenue, which is the consolidated performance of the Dallas Greenway and Barnard Channel 37%. Movement in the other income line reflects primarily smaller construction cost adjustments than the prior period And lower interest revenue. In terms of costs, season of operations costs were 16% lower than 2019 as collection cost reduced with lower traffic. We saw the benefit of the cost reduction programs at Dulles Greenway. And again, there were lower Construction costs. And I hate to turn it all into accountants, but just to note that under IFRS 12, which we have noted in various documents, Where you recognize construction costs as revenue, they also recognize as costs, which is what we've just talked about. Corporate costs were in line with previous guidance of that $20,000,000 to $25,000,000 per annum. And we have noted that corporate costs are expected to increase in 20 21, due to increased insurance costs and we may also put some investment in additional capability, particularly, For example, to strengthen some capability within the organization around things such as traffic. The share of profit The performance here reflects our 25% ownership until the 2nd March and then our 31% ownership for the remainder of the This is different, of course, to the calculation of the distribution. So just pointing out that there are based on the particular ownership at that point in Moving into notable items. The Macquarie management fee relates to the final payment of the Macquarie fees to the 2nd March and the Acti RR transaction completed. And as we discussed at our half year results, given the decline in traffic at Greenway during the first half of the year and just uncertainty around the recovery of the U. S. Economy as a result of the COVID-nineteen pandemic. The Board has decided to Pair up the Dallas Greenway at 30 June by a total of US100 $1,000,000 and that translates to the 143 Quite normal you can see there. But importantly, there was no further impairment that was required at the end of the year. In addition to notable items for this year, sorry, another additional notable item for this year is the FX impact of Tax of significant transaction, which is an accounting item only. It's not cash and it provided a positive impact to that 13,800,000 Be there. This was included in our half year results as it related to the various internal arrangements that were required to support the closing of the So then just tax effecting all of those notable items, you can clearly show the links there and see the links between the operational performance and the Moving on to Slide 19 and APRR's performance for the year. And as you can see, operating revenue impacted by COVID-nineteen movement restrictions. In terms of operating costs, there was a 13% decrease in the variable tax Equivalent to around €50,000,000 and these reduced as revenue decreased and as they were less Right, which reduced the average debt cost. So you can see that the average cost of debt for APRR has come down from 1.5% to 1.2% and for 2% and for refining, it's come down from 0.9% to 0.7%. So while we're talking about We'll turn on to Slide 20 and the current capital structure at ACRR. I've already touched on the strength Credit rating. During the year, APRR and Macquarie refinanced approximately €5,500,000,000 across the EMTN, including one that was priced at the height of the pandemic in April. It was well oversubscribed and competitively priced. It is worthwhile pointing out that the APOO revolving credit facility and the SRA's bank debt facility were both set up as ESG facility, which really reflects the importance of these matters to the business. We then turn on to Slide 21 and just We're running out the performance of our European business. Traffic at Savaya Tunnel continues to perform well despite the lockdown, so the revenues for 2020 there were only down 8% compared with 2019. And look, just because of the lower small numbers, the EBITDA reduced by 12%, but the cost increase And primarily as a result of the additional maintenance that we did during the year, including a full tunnel planning. As we've talked about, we have now agreed the capital restructure at Vano Tunnel, and you can see there the The maturity profile of the new facility. This capital restructure provides flexibility over cash balances, as I mentioned before, And distribution for Atlas Iteria rather than the excess cash being put to lenders, which is what is currently the case under the existing facility. And as you can see, there is no amortization until the 30th June, 2028. So just Finally, on financial performance, we'll turn to Slide 22 and the Dulles Greenway. As was advised previously, Greenway did not pass its 1 or 3 year lockup test at the end of December, meaning cash will be locked up in that business until at least As I also mentioned earlier, we did see cost reductions with reduced traffic. There was a reduction in property And we saw the benefit of some of the cost saving measures that have been implemented during the year. But importantly, with all of this, liquidity within the business Thank you, Nadine. Turning to Slide 24, like all businesses, Atlas Iteria's financial results are delivered through providing value to our customers. Our roads offer a superior travel experience compared with congested for speed limited alternative routes. As you will see on the slides that follow, we are very focused on continually improving our businesses to enhance the experience and the benefits for our customers. Moving to Slide 25, While it was a challenging year for all transportation infrastructure businesses, APRR and ADALAC moved quickly to maintain operations, so customers were able to continue to use the network. Business continuity plans were quickly adapted and implemented and adjusted over the period. Our people worked in fixed rosters to limit the potential cross spread of the virus amongst our workforce. And operational improvements included completing the installation of Wi Fi at all service areas and rolling out additional very high performance electric vehicle charging stations. We've grown the number of active badges and transponders used on our network, and we're building additional car parks across the network to facilitate carpooling. With the acquisition of Kiwi Pass solution in May and the launch of Mango Mobilities in October last year. APRR further enhanced its mobility services. If you move to Slide 26, you can see that our APRR has continued to deliver on its various capital commitments under the concession extension agreements we hold with the French state. As we mentioned at the half, there were some delays on projects due to COVID-nineteen restrictions. However, during the 2nd wave, works continue with all of the recommended safety arrangements in place. Despite these delays, there is no significant change to our overall delivery timelines or estimates for complete committed capital spend. You can see on the slide some of the more significant projects currently underway across the network. We spent a total of 4.70 €4,000,000 on CapEx projects as compared to €522,000,000 in 2019. The RCA project is moving forward with construction commenced in mid-twenty with completion expected in 'twenty two. Moving on to Slide 27. In Whangout Tunnel, we conducted a customer survey in collaboration with Ross Stock University. It indicated that 83% of our customers are satisfied with the Varno Tunnel, which is very encouraging. We also performed a full tunnel clean during the year, which will reduce our lighting needs and therefore our energy use. We appointed a new Head of Operations who joined us earlier this month, further strengthening our technical capabilities within the business. Turning to the Greenway on Slide 28. Renee Hamilton, our CEO, has now been with the business for 8 months. She's become an important leader in our turnaround story and become very active in the local community. The Greenway has maintained seamless operations. We continue to make improvements on the road by installing additional cameras at the plaza to improve safety. We've also had new asset management software to enhance our operations and maintenance. We're building our relationships with the local community and various stakeholders. At the moment, we are focused on the outcome of the most with recent legislative session. We expect to receive the final order of the SEC rate case during Q1 'twenty one. In terms of construction work during the year, the DTR connector project was completed on schedule and on budget and fully opened for use in mid July. The West End project first phase was completed ahead of schedule and ahead on budget opening to traffic in August of last year. We've awarded the contract for Phase 2 of the West End Works and expect completion either later this year or early next. Competitive bid process we conducted led to a cost of $4,400,000 versus our usual budgeted cost of 6,000,000 We'll share the final cost fifty-fifty with Loudoun County. In the context of seeking to meet the needs of our customers, We made significant progress in working with VDOT in considering mechanisms by which we could potentially be able to introduce distance based tolling and lower tolls across the network. Alongside the introduction of distance based following an outcome which our customers have been seeking for some time. This is a concept we've been working with the local community in 2018 and again in 2019. We continue to work with our stakeholders moving forward to endeavor to to achieve a mutually beneficial outcome. As we've gone through the legislative process this year, The VDOT bill, which we an administrative bill, which would enable us to proceed on this project was effectively held over in the Transport Committee and no decision was made. But the option is there to move it forward in the future and we'll be focused on achieving that. Each year, we've worked on this. We've moved further forward in achieving our objective, and we're committed to continuing on this process as we move forward. Turning to Slide 30, we've outlined the key priorities and our outlook for 'twenty one. At the corporate level, we are focusing on sustainability, including the health and safety of our people. We're also examining opportunities create sustainable cash flows and lengthen our average concession terms across our businesses. We continue our dialogue with French state to improve the network and achieve the state's road objective developments. At Vana, traffic continues to be supported by local roadworks in the near term. We will work towards better ESG outcomes and reaching financial close on the capital structurally announced today. Finally, at Dallas Greenway, under our new CEO, we are working on developing relationships with key stakeholders and completing our capital works program. Turning now to Slide 31, Atlas Iteria offers exposure to inflation linked earnings. The majority of our debt is at fixed rates and long term, so we have limited exposure to increasing interest rates. We have a strong dividend yield relative to our peers and are very pleased to provide guidance today of $0.13 per share the final 2020 distribution. We continue to explore ways to further diversify and grow our distributions. We have a conservatively geared balance sheet, and we are able to pursue growth opportunities, particularly adjacent to our existing businesses, and we are resourcing ourselves to achieve this. We're well positioned to play a part in the economic recovery for the regions in which we operate, and we are recognized for being ESG leaders in the infrastructure space. Lastly, but most importantly, we're a team of highly experienced people with a proven track record of transaction execution. This is further demonstrated with the Varno Tunnel Capital Restructure that we've announced today. It's for all these reasons and more that Atlas Iteria is an attractive investment proposition. The team is looking forward to continuing to grow and evolve the business from the strong foundations we've built and adding value for our security holders into the future. With that, I'd like to hand to the operator Your first question comes from Simon Mitchell from UBS. Please go ahead. Good morning. Graham, just the first question regarding the A79, my understanding was that was that was being entirely Capital funded by Afaj and ABRS involvement was limited to operations and therefore probably immaterial So ABR, could you just clarify that? I think you're referring to the RCA project, Simon. Is that correct? Yes. So the project is structured in a way where Farfaj earned 99% of the bidding entity and APRR owns 1%. There are contractual arrangements that result in that business being totally transferred at an appropriate point in time to APRR as a wholly owned entity of APRR. And that is an automatic process based on certain elements which are in our control. And Is that process likely to take place following construction? We would expect it to happen during construction, But that's really up to a far satisfying various elements of their requirements. Okay. And is the pricing methodology around that transaction Already agreed? Yes. Right. Okay. So that provides some She needs to extend the overall concession length for APRR. But I guess it's been a started objective For you for a while and it seems like it's been A little bit challenging to actually get any substantive agreement on new projects to do that. Maybe if you could Give an update on what the response has been from the stage. Look, I think COVID presented an opportunity, which we expected midyear to result in significant opportunity. I think we're still in discussions with the French state on a number of projects, and we expect that there will be positive outcomes to come from that. I think in large scale context, which results in material concession extension for APRR. That's likely to be deferred given the focus of the government on other things at this point in time in their legislative program, but there's still a discussion ongoing. Okay. And maybe just a question for Nadine on the Varnot Tunnel, just in terms of how we think about that cash flowing through To the corporate level, is it just a straight pass through pretty much all the cash generation each year? And I guess what are the issues around timing delay and when do we expect it to start? So we're expecting financial to happen in March, which means that then we'll be doing the first testing as we've outlined in the document under the debt Service coverage ratios, which are really the only test required to ensure that the cash can be passed through for June and then December This year, as I highlighted in the release that we put out, if we were to apply the facility in 2020 on a pro form a basis, Then there would have been €6,000,000 or approximately AUD10 1,000,000 available for Atlas Iteria. And we should think about that as being still so I was just going to clarify that question. So do we think about Same similar timing issue to APR and that flows through in the following 6 month period? Yes, effectively, because it will be done on a profit declared basis. So it will be slightly deferred in terms of the next period. Okay. All right. Thank you. Thank you. Your next question comes from Ian Myles From Macquarie, please go ahead. Hey, just a couple of quick ones. In your investing cash flow, you had a 1,500,000 for other investments, I was just wondering, is that keeping material or what it was actually? Sure. So as a result As you expected to looking at the corporate cost base, to the extent that it's appropriate that we're spending money on investing as opposed to Operating cash flow and I'll flow through that investing line. In addition to that, there's also a number of things that, for example, the working from home arrangement, All of those types of things, also with additional staff coming on that have flowed through that particular line item. And you sort of flagged higher corporate costs. Can you give some sort of framework on how much higher? Because I think Yes, I also wanted to save a little bit of money once you convert it out of a outsourced management into internalize. Yes. Look, it's a good question, Ian. As we flagged in the presentation, the 2 primary drivers The increasing cost this year expected to be increasing insurance costs and then some additional capability that we want to put into the organization. In terms of the insurance market, as you would probably all have seen, it is becoming an expensive market for buyers. We won't actually get a good gauge on where our insurance costs are going to be for the year until we're much closer to placement for those insurances. So certainly, we'll be much better placed to have a discussion around that and update you on the outcomes in our June results. In terms of the additional capability, Again, even as Graeme outlined, making sure that we're positioning the business for the strategy and the delivery On the strategy, and I'd like to particularly point out one example of that is making sure that we've got really good technical skills around traffic forecasting and Taking advantage of new technology that's becoming available and has become available over the last couple of years. In terms of the internalization process, I think there's a whole lot of in this presentation. We saved $67,000,000 in base fees on that from a Macquarie perspective. So certainly, there's no intention to grow that base for this year up to $67,000,000 line. We're talking about incremental costs on that $20,000,000 to $25,000,000 type arrangements that we've historically Depending, of course, on what happens with insurance costs. Okay. And just one final question. Again, a little bit technical. The leakage between MAC2 and ALX, I gave you some fees which you have to you're paying effectively to map 2 and there's tax, but that amount Seems to be increasing on a from first half to second half. I was just wondering what sort of leakage Sure, we'll be expecting on a go forward. So yes. Yes, look, another good question, Ian. And there's a couple of things that have led to that in the last two periods that we've reported there. First of all, The management arrangements have now been internalized. So for the true results half to twenty nineteen and Half 1 2020, there was some reserving of costs to accommodate rather than fees being paid At the for us at the nimble level, they're now being paid out of operating cash flows at that lower level. We're also adopting a much more conservative cash management policy at those levels. So we're adopting the 2 years forward cash coverage rather than what was Previously in place. So that's also increasing from that perspective. There will come a time, I think, where those prudency arrangements aren't They only required and we might see a pullback in terms of the cash reserve in. Okay. Thank you. Your next question comes from Rob Koh from Morgan Stanley. Please go ahead. Thank you and good morning. So I guess listening into the Afage call overnight, There was discussion about the French state perhaps being more interested in smaller projects with more of a green focus. Wonder if you could share with us your thoughts on that and if there's any ideas on renewable power and wildlife crossings and those kind of things that you Yes, Rob. So as I sort of was inferring earlier that to the large scale type projects we were hoping to result in concession extensions are likely to be pushed out. And the focus at this point in time under sort of negotiated arrangements, which can be done within the existing concession arrangements without legislation that has a very strong focus on green projects. As you described, increasing The number of charging stations, we were expecting to have 50% of Service station type areas with charging stations by 'twenty two, The government's recently come out and made an announcement that they want to see that increase to 100% by the end of 'twenty two. So There are a lot of projects like that, which are sort of under discussion as we speak. Okay, great. Thank you. If I move to the Dallas Greenway and just Slide 22 with the debt service Profile, that's the same profile it's been for some time. But the step up in debt service in 2022, I know 2022 is only 1 year away. Can you just give us some thoughts on how you're managing for liquidity there and backup plans if recapitalization might be required? So as I said, The Delaware Fairway has or had $216,000,000 in cash sitting on the balance sheet, dollars 77,000,000 of which would have been available But for the lockup test, so significant cash, which in worst case scenarios could be used for funding debt service. And in fact, a lot of that cash balance is reserved funds required to adjust that circumstance by the lenders. The other thing is, Obviously, as you expected to, we know a lot of scenario analysis around traffic. But the performance of the business is very much Dependent on traffic, recovery post COVID, etcetera, etcetera in the U. S. So we'll have see how the business plays out and where it gets to, but in the things that Graham has talked about with the changes in the Virginia arrangements in responding to better COVID rate, then we remain hopeful that we will see improvement from last year. Yes, yes. I think we can all get behind that. All right. And then just one more question with the new legislation that's passed in Virginia, Which I guess comes into effect after the rate case that's currently to be decided. But That includes a condition about, I guess, traffic elasticity, so like a 3% traffic impact would be the limiting factor On toll increases. Could you perhaps put that into context a little bit for us in terms of how you guys see elasticity on that road? Yes, so the in our filings for the SEC, we have very detailed analysis on elasticity. In very simple terms, it's around 0.2. And so We are not dramatically affected by toll increases affecting demand. So in that context, the 3% isn't an onerous target. Okay, good to hear. All right, thanks Thank you. There are no further questions at this time. I'll now hand back for closing remarks. Thank you, operator. Very much appreciate you all joining us today for the call. And Obviously, we will be meeting with many of you over the coming 10 days directly with investors, And Jeanette and her team are available to answer any further questions that you may have.