Toll road giant Transurban’s statutory half-year profit might have jumped 46% to $189 million off the back of higher road revenue, even as softening economic environment slowed the growth of traffic on its highways, but in reality, it was a bog-standard interim result, except for the softening in traffic volumes which could be linked to the weak state of the economy.
Transurban told the ASX yesterday that toll revenue for the six months to December 31 grew 8.6% to $1.4 billion, however average daily traffic on its Sydney and Melbourne roads grew at a relatively low rate of 2.2% and 1.1% respectively.
Growth was constrained by “softer economic conditions and weaker housing construction activity”, Transurban said.
Net profit attributable to security holders of the stapled group rose from $129 million to $189 million and the company set distribution at 31 cents security including a fully franked dividend of 2.0 cents, up from 29 cents a year ago.
Transurban’s profit from ordinary activities after tax increased 11.1% to $162 million for the period, even as the average daily traffic on a number of its Sydney and Melbourne roads was hurt by “softer economic conditions and weaker housing activity”.
That’s because of the 4% a year inflation-beating price rises built into many of its agreements.
Transurban has confirmed a higher first-half payout on a toll revenue boost, though traffic growth on several Sydney and Melbourne roads softened in the six months to December.
Sydney average traffic growth for the first half was 2.2%, with car traffic up 2.8% and large vehicle traffic falling 3.7%.
The average total daily trips on the Hills M2 fell by 3.1% for the half.
Traffic volume also fell 4.2% for the Lane Cove Tunnel, which the company attributed partly to the redistribution of traffic since opening of New M4 tunnels in July 2019 and Metro-North West rail last May.
Nonetheless, proportional toll revenue growth in Sydney was 10.8% to $569 million.
In Melbourne, daily traffic growth increased by 1.1% with proportional toll revenue up 3.7% at $424 million.
In North America, proportional toll revenue was up 16.2% with the Washington area’s 395 Express Lanes traffic and revenue performing in line with expectations since tolling commenced in November.
Transurban reaffirmed its guidance for 2019-20 for a 62 cent a security payout.
