Macquarie and Transurban report traffic numbers - US concessions weak
Posted Thu, 2008-01-10 20:17
Releases to the Australian Stock Exchanges coincidentally both on Jan 10 by Macquarie and Transurban show generally strong
traffic numbers for 2007, but a few laggards mainly in the US. 407ETR the all electronic tollroad in Toronto Canada continues a star performer for Macquarie (which owns 30%). In its eleventh year it showed a 6.1% growth in vehicle kms to 2.25b 2007/2006. Average daily trips are up 5.4% to 308.1k. This along with toll increases of about 8% in Feb 2007 suggest revenue may have grown 13 to 14% for the year. (Their full annual report for 2007 is usually published mid-January.)
A European analyst, Robert Crimes of the London office of JP Morgan who follows international tollroad stocks is now valuing Cintra's 53% share of 407ETR at E4.6b ($6.8b) implying a total valuation of 407ETR at E8.68b ($12.8b). This is nearly three times the $4.5b that investors have put into the Toronto tollroad. It is by far the strongest toll property of both Cintra and Macquarie. (E@$1.47)
For Cintra Grimes says: "Our valuation of Cintra's 53% share of 407ETR of €4.6bn is now within 8% of Cintra’s market cap of €5.1bn implying investors can pay for 407ETR and receive the rest of Cintra for free."
Toronto drivers diverse lot not very resistant to higher tolls
Crimes thinks one secret of 407ETR's success lies in the fact that the Toronto pike has a very large base of occasional users who don't mind paying top dollar for its convenience. 850k transponders are on issue, 2.75x average daily traffic. Average usage of the road is 9 trips/month. He thinks this makes users of the road relatively insensitive to major annual toll increases from already substantial levels by north American standards.
Transurban similarly has a very strong business in Melbourne CityLink an inner urban toll system with revenues up 9% to $316m in 2007 on 687k average daily transactions. (A$@US$0.88) They increased toll rates 4.5%.
US concessions soft - D Greenway, ITR, Skyway all down, Pockers anemic
The US concessions look a bit weak by comparison. All three of Macquarie's - Dulles Greenway, Chicago Skyway and Indiana Toll Road have traffic that's slightly down on a year earlier. The Greenway's lower traffic is explained in an end note as due to roadworks on the Greenway itself and improvements to competing VA28.
The Skyway's lack of growth is likewise explained by construction on the Dan Ryan slowing traffic to and from the Skyway plus the added attraction of the competing Borman and Kingery Expressways and on the Tristate Tollway, where extra lanes have been opened. Likewise the Indiana Toll Road has suffered from the same improvements to competing free routes undertaken by Indiana DOT, Illinois DOT and Illinois Tollway. Also the introduction of electronic tolling on the Indiana Toll Road caused "some disruptions" the report says.
Transurban's small tollroad in Richmond VA, the Pocahontas Parkway (The Pockers in Oz slang) shows slower growth than the company had hoped for - a mere 4% to 17k tolls/day and $15m revenue. An airport spur being constructed could help traffic, but major development nearby will have to await a recovery from the present developing US recession. The company is putting its major hopes into two huge northern Virginia concession projects - on the Capital Beltway and I-95/395.
Macquarie's M6Toll in Birmingham UK saw a small drop in traffic in 2007 - attributed to 2006 traffic having been artificially boosted by lane
closures from construction work on the competing free M6 motorway. The M6 has substantially hiked tolls too. They are now 4.50pd ($8.90) for the 43km or 20.6c/km or 33c/mile for cars. There's a nighttime discount of 1pd ($1.95). Trucks pay double those rates.
All the Australian concessions saw solid increases 2007/2006.
M2 a northwest radial in Sydney was up 6.4% in traffic and grossing around $106m/yr.
Westlink M7 a newer peripheral tollroad owned jointly by Macquarie and Transurban is ahead of forecast with traffic having grown over the year by 12%. Tolls are 28c/km (45c/mile) and revenue is running at $148m/yr, traffic at 110k. That's a very healthy project.
M1 Eastern Distributor 75% owned by Transurban is the downtown to Sydney airport connection. Traffic is up 5.6% to average daily tolls of 48.7k (northbound only) for revenues of $66m. Only truck tolls were increased last year.
M5 an established southwestern Sydney radial 50% owned by Transurban collects 117k tolls/day, 3.6% up on 2006, tolls frozen, and grossing $139m in 2007.
M4 the oldest tollroad in Sydney is the western radial. No toll increases there but traffic up 3.4% to 112k/day and revenues $79m.
TOLLROADSnews 2008-01-11
Releases to the Australian Stock Exchanges coincidentally both on Jan 10 by Macquarie and Transurban show generally strong traffic numbers for 2007, but a few laggards mainly in the US. 407ETR the all electronic tollroad in Toronto Canada continues a star performer for Macquarie (which owns 30%). In its eleventh year it showed a 6.1% growth in vehicle kms to 2.25b 2007/2006. Average daily trips are up 5.4% to 308.1k. This along with toll increases of about 8% in Feb 2007 suggest revenue may have grown 13 to 14% for the year. (Their full annual report for 2007 is usually published mid-January.)A European analyst, Robert Crimes of the London office of JP Morgan who follows international tollroad stocks is now valuing Cintra's 53% share of 407ETR at E4.6b ($6.8b) implying a total valuation of 407ETR at E8.68b ($12.8b). This is nearly three times the $4.5b that investors have put into the Toronto tollroad. It is by far the strongest toll property of both Cintra and Macquarie. (E@$1.47)
For Cintra Grimes says: "Our valuation of Cintra's 53% share of 407ETR of €4.6bn is now within 8% of Cintra’s market cap of €5.1bn implying investors can pay for 407ETR and receive the rest of Cintra for free."
Toronto drivers diverse lot not very resistant to higher tollsCrimes thinks one secret of 407ETR's success lies in the fact that the Toronto pike has a very large base of occasional users who don't mind paying top dollar for its convenience. 850k transponders are on issue, 2.75x average daily traffic. Average usage of the road is 9 trips/month. He thinks this makes users of the road relatively insensitive to major annual toll increases from already substantial levels by north American standards.
Transurban similarly has a very strong business in Melbourne CityLink an inner urban toll system with revenues up 9% to $316m in 2007 on 687k average daily transactions. (A$@US$0.88) They increased toll rates 4.5%.
US concessions soft - D Greenway, ITR, Skyway all down, Pockers anemic
The US concessions look a bit weak by comparison. All three of Macquarie's - Dulles Greenway, Chicago Skyway and Indiana Toll Road have traffic that's slightly down on a year earlier. The Greenway's lower traffic is explained in an end note as due to roadworks on the Greenway itself and improvements to competing VA28.
The Skyway's lack of growth is likewise explained by construction on the Dan Ryan slowing traffic to and from the Skyway plus the added attraction of the competing Borman and Kingery Expressways and on the Tristate Tollway, where extra lanes have been opened. Likewise the Indiana Toll Road has suffered from the same improvements to competing free routes undertaken by Indiana DOT, Illinois DOT and Illinois Tollway. Also the introduction of electronic tolling on the Indiana Toll Road caused "some disruptions" the report says.
Transurban's small tollroad in Richmond VA, the Pocahontas Parkway (The Pockers in Oz slang) shows slower growth than the company had hoped for - a mere 4% to 17k tolls/day and $15m revenue. An airport spur being constructed could help traffic, but major development nearby will have to await a recovery from the present developing US recession. The company is putting its major hopes into two huge northern Virginia concession projects - on the Capital Beltway and I-95/395.
Macquarie's M6Toll in Birmingham UK saw a small drop in traffic in 2007 - attributed to 2006 traffic having been artificially boosted by lane
closures from construction work on the competing free M6 motorway. The M6 has substantially hiked tolls too. They are now 4.50pd ($8.90) for the 43km or 20.6c/km or 33c/mile for cars. There's a nighttime discount of 1pd ($1.95). Trucks pay double those rates. All the Australian concessions saw solid increases 2007/2006.
M2 a northwest radial in Sydney was up 6.4% in traffic and grossing around $106m/yr.
Westlink M7 a newer peripheral tollroad owned jointly by Macquarie and Transurban is ahead of forecast with traffic having grown over the year by 12%. Tolls are 28c/km (45c/mile) and revenue is running at $148m/yr, traffic at 110k. That's a very healthy project.
M1 Eastern Distributor 75% owned by Transurban is the downtown to Sydney airport connection. Traffic is up 5.6% to average daily tolls of 48.7k (northbound only) for revenues of $66m. Only truck tolls were increased last year.
M5 an established southwestern Sydney radial 50% owned by Transurban collects 117k tolls/day, 3.6% up on 2006, tolls frozen, and grossing $139m in 2007.
M4 the oldest tollroad in Sydney is the western radial. No toll increases there but traffic up 3.4% to 112k/day and revenues $79m.
TOLLROADSnews 2008-01-11