Transurban's profits up thanks to busier roads
Australia's largest toll road operator said some motorway ramps - which it termed its canary in the coalmine - that led into the cities' CBDs had experienced a significant rise in traffic in the past six months.
"You can see certain ramps where all the lawyers and investment bankers get off into the city start to pick up," Transurban chief executive Scott Charlton said.
The company announced a more than tripling in net profit to $175 million for the year to June. The size of the increase to its bottom-line performance was magnified because it had been hit in the previous year by a $138 million write-down on a US toll road.
Using its preferred metric, proportional pre-tax earnings rose almost 6 per cent to $991 million.
Transurban, which owns nine toll roads in Sydney, Melbourne and the US, will pay a final dividend of 15.5¢ a share on August 14. It will take its total payout for the year to 31¢.
The toll-road operator delivered on market expectations of a forecast distribution for the new financial year of 34¢. It will be fully paid out of cash received from its toll-road assets.
Shares in Transurban closed up 3 per cent at $6.96 following the better-than-expected earnings.
Mr Charlton said the company's confidence in the outlook for this financial year was based on increased traffic and toll revenue from roadways in Sydney's north-west.
He also revealed that Transurban would not make an expression of interest for the east-west link in inner Melbourne because the proposed structure - known as an availability-payment model - "just doesn't make sense for us".
"We prefer to take revenue and patronage risk," he said.
However, it is interested in talking to the Victorian government about connections to the company's largest toll road, CityLink. Transurban gains half its earnings from CityLink, which delivered a 6.5 per cent rise in toll revenues last financial year.
Frequently Asked Questions about this Article…
Transurban raised its dividend guidance because more motorists are using its toll roads as economic activity improves in Sydney and Melbourne. The company reported significant traffic rises on certain motorway ramps into central business districts over the past six months, which boosted toll revenue and confidence in payouts.
Transurban reported a net profit of $175 million for the year to June, more than tripling from the prior year. The size of the increase was magnified because the previous year included a $138 million write-down on a US toll road.
Transurban will pay a final dividend of 15.5¢ per share on August 14, taking total payouts for the year to 31¢ per share. The company also delivered market-expected guidance of a 34¢ per share distribution for the new financial year, which it says will be fully paid from cash received from its toll-road assets.
Following the better-than-expected earnings, Transurban shares closed up 3% at $6.96.
Transurban highlighted stronger traffic on motorway ramps that lead into the cities' CBDs and specifically noted increased traffic and toll revenue from roadways in Sydney's north-west. CityLink in Melbourne also delivered higher toll revenues.
No. Transurban said it will not make an expression of interest for the inner Melbourne east–west link because the proposed availability-payment model 'just doesn't make sense for us.' The company prefers to take revenue and patronage risk rather than an availability-payment structure.
CityLink is Transurban's largest toll road, accounting for about half of the company's earnings. CityLink also delivered a 6.5% rise in toll revenues in the last financial year, and Transurban said it is open to discussions with the Victorian government about connections to CityLink.
Transurban uses proportional pre-tax earnings as a preferred metric; that measure rose almost 6% to $991 million. In addition to proportional earnings growth, the company reported a more than threefold rise in net profit to $175 million, helped by recovery in traffic and the absence of last year's US toll-road write-down.
Call 1300 880 160
Start a chat
Schedule a call
