Transurban Reports Strong Interim Results with Increased Traffic on Toll Roads
Transurban, the global toll road operator, has announced a significant rise in its interim profit, highlighting an increase in traffic volume across its network of roads. The company posted a net profit of AUD 204 million in the six months leading up to December, a substantial improvement compared to AUD 41 million during the same period in fiscal year 2023.
Proportional toll revenue, which is considered the company's preferred measure of road performance, rose by 6.3% to AUD 1.76 billion in the six-month period. Similarly, earnings before interest, tax, depreciation, and amortization (EBITDA) increased by 7.5% to AUD 1.33 billion.
Despite these positive results, Transurban maintains its distribution guidance for the full year at 62 Australian cents per security. The first-half payout amounted to AUD 0.30 per share.
Transurban's success can be attributed to the expansion of its toll roads in Australia, which coincides with a surge in population growth due to the lifting of border controls after Covid-19 regulations were implemented. The recent opening of the Rozelle interchange in Sydney's WestConnex toll road has further contributed to the company's performance, aligning with its expectations.
As Transurban continues to flourish amidst these favorable conditions, it remains poised for ongoing success in the toll road industry.
Transurban Continues to Experience Traffic Growth
Transurban, a leading toll-road operator, has reported strong traffic growth across all its market sectors. Michelle Jablko, the company's new chief executive, announced that overall group traffic has reached an average of 2.5 million trips per day.
As an indication of its resilience, Transurban has weathered inflationary pressures following the pandemic. With around two-thirds of its toll escalations tied to the Consumer Price Index, the company has managed to keep its toll rates relatively stable. Despite higher interest rates in 2023, Transurban's weighted average cost of Australian dollar-denominated debt remains at 4.3%.
Jablko highlighted the company's financial strength, with a corporate liquidity headroom of A$2.6 billion, providing flexibility for funding future opportunities.
However, Transurban does face challenges in its growth trajectory. The acquisition of a majority stake in Horizon Roads, the owner of the EastLink toll road in Melbourne, has encountered opposition from the Australian Competition and Consumer Commission. The regulatory body argues that this move would significantly reduce competition for future toll road concessions in Victoria.
Transurban is currently assessing its options regarding the EastLink acquisition.
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