French infrastructure stocks are under scrutiny following the government's proposal to increase taxes on motorway and airport operators by €800 million for the 2027 budget. This new tax, which could potentially raise the tax from 4.6% to 12.2% for large operators, is intended to boost state revenue without impacting motorway users, according to the executive. This development is part of a broader government effort to address the national deficit, with Prime Minister Sebastien Lecornu proposing a €54 billion spending curb for the 2027 budget.
Companies like Atlas Arteria, an owner of toll roads in France (including a significant stake in APRR) and the US, are particularly sensitive to such policy changes. Atlas Arteria's revenue relies on traffic and inflation-linked toll increases, and its main asset's concessions expire in the 2030s. The company has already faced pressure from new French taxes on motorway operators and a political review of toll concessions. The sustainability of its distributions is now under question, especially considering recent unfranked distributions above its policy, which drew attention to its balance between payouts, debt, and tax risks.
The broader financial landscape in France also adds to the concerns. The government is reportedly considering a change to payroll tax deductions in its 2027 budget bill, which could bring in an extra €3 billion to €3.5 billion from firms. While there's also discussion of trimming an "exceptional" tax on large companies introduced in 2025, the overall trend points towards increased fiscal pressure on businesses, especially those in sectors perceived to have stable revenues like infrastructure. These measures are being considered as France struggles with weak growth and rising interest costs, aiming to bring the deficit to 5%.
