Tollroad giant Transurban (TCL) plans to boost 2015’s payout to securityholders to 39c a share after yesterday reporting a solid 13% rise in net profit for the year to June 30.
If achieved the rise will be an 11% lift on the 35c a security to be paid for the 2013-14 year.
The company said yesterday an 18c distribution per stapled security will be paid for the six months ended 30 June 2014. The distribution includes a 3.5c fully franked component.
This takes the full year distribution to 35c per security, which is 97% cash covered (meaning 3% will be covered by borrowings by the company).
The Board also reaffirmed distribution guidance for the year ended 30 June 2015 of 39c per security. This is expected to be 100% cash covered.
Transurban said its proportionate earnings before interest taxation depreciation and amortisation (EBITDA), which measure earnings relative to its ownership levels in its tollroad assets here and offshore, rose 13% to $934.1 million, in line with analysts’ expectations.
Proportional toll revenues rose 12.6% to $1.1 billion.
Statutory net profits after tax rose 44.5% to $252.2 million, while group revenues fell 3.8% to $1.15 billion.
The company said traffic volumes on most of Transurban’s roads, which include Sydney’s Hills M2 and Melbourne’s CityLink, have been increasing despite a weaker economy underscoring the resilience of the company’s business, which benefits from rising toll fares.
Transurban CEO Scott Charlton said the Group had delivered a strong operating performance again in financial year 2014, with margin improvement achieved on six of its seven operating assets.
“The 2014 financial year was a very active period for the Group. While we made headway on our network enhancing projects and expanded our footprint in Australia through the acquisition of Queensland Motorways and Sydney’s Cross City Tunnel (CCT), our core focus was the efficient operation of our existing networks, which is reflected by our strong EBITDA results,” Mr Charlton said.
“The business is well positioned for the year ahead and we will continue to focus on driving operational improvements across our networks as well as delivering on our pipeline of enhancement projects.”
Transurban said it is progressing network enhancing projects in each of its core markets. In March, it announced that a preferred tenderer had been selected for the contract to design and construct NorthConnex, the link between Hills M2 and the M1 Pacific Motorway.
"In April, Transurban reached in-principle agreement with the Victorian Government for a major upgrade to the western section of CityLink, the Bolte Bridge-West Gate Freeway interchange and the Tullamarine Freeway," the CEO said.
Mr Charlton said significant traffic growth on the north-western corridor of the Sydney orbital network following the completion of the Hills M2 upgrade demonstrated the value that could be delivered for customers and security holders alike through Transurban’s network development activities.
