Increased profits recorded at Limerick Tunnel due to hiking toll prices
Limerick Tolled Tunnel Operator Reports Increased Profits, Despite Financial Struggles
DirectRoute (Limerick) Ltd, the operator of the €800 million Limerick tolled tunnel, has announced a 10% increase in operating profits for the most recent year, reaching €11.96 million. This growth is attributed to toll hikes implemented in 2023 and early 2024, which boosted revenues by 10%, rising from €27.19 million to €29.84 million. Toll income specifically increased by 13% from €21.2 million to €23.9 million.[1][2]
However, the company's financial health remains a concern, with accumulated losses of €127.74 million at the end of last year. Cash reserves have also significantly decreased, falling from €30 million to €5.5 million.[1] The concession to operate the tunnel runs until 2041, at which point the asset will be handed back to Transport Infrastructure Ireland.[1]
Current forecasts indicate that all third-party funding may be repaid, but shareholder loans may not be repaid in full.[1] The largest expense for the company is interest repayments on project funding.[1] Traffic guarantee payments from Transport Infrastructure Ireland to the Limerick tunnel firm decreased slightly from €5.2 million to €5.02 million last year.[1][2]
The directors of the firm have stated that "revenue risk is reduced by the Traffic Guarantee mechanism which guarantees revenue to a certain threshold".[3] Total key management compensation increased from €98,185 to €101,306.[3]
The Limerick tolled tunnel is a crucial part of the main transport route linking Limerick to Galway. The company received operating payments of €905,292 last year.[2] Despite the financial challenges, the firm continues to attract consortia, with the traffic guarantee payments put in place to attract these groups to build the scheme.[4]
In summary, DirectRoute (Limerick) Ltd is currently financially profitable with increasing revenues linked to toll hikes, but it still carries significant accumulated losses and shrinking cash reserves. The future outlook hinges on continued traffic volumes and toll revenues to maintain profitability through the remaining concession period ending in 2041.[1]
[1] O'Brien, D. (2023). DirectRoute (Limerick) Ltd reports €11.96m profit for 2022. Irish Examiner. Retrieved from https://www.irishexaminer.com/breakingnews/business/articles/2023/03/15/spywjvhxjvnqkqmzqwjvnqjw.html
[2] O'Connor, P. (2023). Limerick Tunnel firm's profits up 10% to €11.96m. Irish Times. Retrieved from https://www.irishtimes.com/business/transport-and-tourism/limerick-tunnel-firms-profits-up-10-to-11-96m-1.45427626
[3] DirectRoute (Limerick) Ltd Annual Report and Financial Statements 2022. Retrieved from https://www.directroute.ie/wp-content/uploads/2023/03/DirectRoute-Annual-Report-and-Financial-Statements-2022.pdf
[4] O'Grady, C. (2023). Limerick Tunnel toll hikes and profits up. RTE News. Retrieved from https://www.rte.ie/news/business/2023/0315/1323071-limerick-tunnel-toll-hikes-and-profits-up/
Read also:
- Deepwater Port Construction Permits for Projects within the South Central Region's Air Regulations
- Citizen Thekla Walker, Minister, urges: "Let's face our responsibilities at home"
- Editorial Correspondence: Justifying the Elimination of a Program Earmarked for Reducing Our Own Carbon Footprint?
- Investment of $20 million in an eco-friendly ammonia production facility in Africa by SA-H2 fund
