Limerick Tunnel Sees 10% Profit Increase Due to Toll Hikes

Operating profits at the €800 million Limerick Tunnel increased by 10 percent to €11.96 million last year, driven primarily by a hike in toll charges. According to recently released accounts from DirectRoute (Limerick) Ltd, revenues rose from €27.19 million to €29.84 million, reflecting a significant boost attributed to the toll increase implemented in early 2024.

The toll for cars was raised by 20 percent to €2.30 in January 2024, a move linked to inflationary pressures. This followed a previous increase of 10 cents to €2.10, which took effect on July 1, 2023. The overall rise in toll charges directly contributed to toll income climbing by 13 percent, from €21.2 million to €23.9 million.

Financial Overview and Revenue Streams

In addition to toll revenues, DirectRoute’s financial performance included traffic guarantee payments from Transport Infrastructure Ireland (TII), which experienced a slight decline from €5.2 million to €5.02 million last year. These payments are designed to ensure revenue stability by compensating the consortium when daily traffic volumes fall below a specified threshold. The directors noted that this mechanism effectively mitigates revenue risk, thus attracting investment for the project.

The consortium also benefited from operating payments amounting to €905,292. Despite these positive indicators, the company reported a pre-tax loss of €11.45 million, primarily due to significant loan interest payments totaling €23.54 million. The directors acknowledged that the largest expense continues to be interest repayments on the project’s funding, which largely consists of bank loans and bonds. The contract is currently in its 18th year, set to expire in 2041.

Future Considerations and Financial Health

On the topic of the company’s going concern status, the directors indicated that, under the common terms agreement governing the project’s funding, the company is currently not making repayments on mezzanine and shareholder loans. They also highlighted that forecasts suggest while third-party funding could be repaid, there may not be enough resources to fully repay shareholder loans by the end of the project. The directors confirmed that shareholders are aware of this situation.

The reported loss also included a non-cash depreciation of €13.5 million, which contributed to the firm’s accumulated losses rising to €127.74 million by the end of the fiscal year. Furthermore, the company’s available cash reserves decreased sharply from €30 million to €5.5 million.

The Limerick Tunnel, which opened to traffic in July 2010, is expected to be handed back to TII at the end of the concession period in 2041. As the project continues, stakeholders will be keenly observing the financial trajectory and operational performance of DirectRoute (Limerick) Ltd in the coming years.