A small thumbs down from investors yesterday for the news from toll road giant Transurban of a near 50% slashing in the size of its final distribution for the 2019-20 financial year which ends next Tuesday.
Transurban blamed the drop in toll road use due to the lockdowns triggered by the COVID-19 pandemic.
The final distribution to security holders will be 16 cents, down from 30 cents a security.
That cut brings the firm’s full-year distribution to 47 cents, which is well below the guidance given in August last year of 62 cents and the 59 cents a security paid in 2018-19.
Transurban securities fell 4% to $14.54.
The COVID-19 pandemic caused Transurban’s roads to empty out during the depth of the lockdown in April but have recovered significantly as people return to work and travel restrictions are eased.
Transurban says its toll roads in Australia and the US saw subdued traffic volumes in the lockdowns but are now starting to see improvements in volumes as those restrictions are eased and business starts returning to normality.
Management said the performance of these assets would remain sensitive to government responses to the virus and economic conditions – the latest upsurge in Victorian COVID-19 numbers if a case in point as the government seeks to restrict travel by all types of transport in a major area of Melbourne.
In Australia, average daily traffic on Transurban toll roads for the week of June 14 was down on regular levels by 9% in Sydney, 14% in Brisbane and 31% in Melbourne.
On the group’s roads in the US, which has fared much worse during the pandemic, traffic was down 43% for the same week.
The opening of the NorthConnex tunnel in Sydney’s northwest, and the M8 in the city’s south, will help revenue next quarter, Transurban said.
Transurban says it is still pursuing court action against its West Gate Tunnel builders in Melbourne, CPB Contractors and John Holland.
The builders say contaminated soil was an unforeseen circumstance that meant their contract could not be fulfilled.
