Annual & Sustainability Report 2017 slide image

Annual & Sustainability Report 2017

MESSAGES ABOUT THE REPORT THE CCR GROUP STRATEGY AND OPPORTUNITIES BUSINESS MODEL SERVICES 骨 TOLL ROADS URBAN MOBILITY AIRPORTS OUTLOOK 10 Strategy and opportunities CCR Group's business model and the creation of value within the units are directly linked to Brazil's economic growth and dynamism. Between 2015 and 2016, there was a cumulative decrease of 7.2% in the country's Gross Domestic Product (GDP), which resulted in higher unemployment, lower household consumption, less traffic on the roads, and other factors. These conditions were compounded by rising inflation which led to continuously high interest rates. Starting in the second half of 2017, this scenario began to change and to indicate the recovery of Brazilian economic activity. The Selic rate dropped to 7%, the lowest level since 2013. The country recorded, for example, an increase in exports of agricultural products and mineral commodities, as well as an increase in the production and sale of vehicles. The level of unemployment, although still at high levels (above 12%) at year-end closing, also began to drop. The more favorable conditions allowed CCR Group to present more positive financial and operating performance results at the close of 2017. While the interest rate downslide favored the reduction of the net debt, the volume of traffic on the roads grew in the last two quarters of the year. The number of urban mobility equipment users and airport departures also increased in the period, another sign of economic recovery. Toll roads Urban mobility Airports Growth of traffic (millions of equivalent vehicles)* 1,005 969 981 2015 2016 2017 *Information only on the controlled concessions, disregarding Renovias and ViaRio. Passengers transported (millions)* 272 239 219 2017 *Consolidated information on the concessions, regardless of the ownership percentage of CCR Group. 10.5 ४ In the political scenario, important structural reform projects were resumed by the government, aimed at reducing indebtedness and adjusting government accounts. However, the government's capacity to make the infrastructure investments needed for the country's growth continues to be negatively affected by the recent recession and the slump in tax revenues. The partnership between private sector and grantor authorities is an important lever to enable the country to overcome the various challenges it currently faces, such as improving the logistics of goods and services and mobility in urban centers. In this respect, the Investment Partnership Program (PPI), launched in 2016 by the federal government, caters to the interests of society, having enabled approximately R$ 142 billion in investments in the last 18 months, according to data released by the Federal Government Avançar Parcerias (Advance Partnerships) program. Last year another 57 projects were included in the PPI; among these were new airport and toll road concessions expected to be awarded by the end of 2018. At the state level, local governments have also shown signs to willingness to form partnerships in the area of infrastructure. The urban mobility segment, with special emphasis on rail transport, will require significant investments in the construction and modernization of assets, opening up new business opportunities for CCR Group. 2015 2016 Boarding passengers (millions)* 11.1 10.2 Annual & Sustainability Report 2017 • CCR Group 2015 2016 2017 *Consolidated information on the concessions in Brazil and abroad, regardless of the ownership percentage of CCR Group.
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