Transurban reports strong annual result, tolls up 8%, EBITDA up 18%

Australia's leading toll concessionaire Transurban reports toll revenues up a solid 7.6% to A$779m in the financial year ended 30 June, and a stronger increase of 17.8% to A$480m in net earnings before interest taxes depreciation and amortization (EBITDA). Adjusting for one-off items EBITDA of A$583m was an 11.5% increase on the previous financial year. Cost reductions of A$27m were reported achieved. An overall loss of A$25m was reported for FY2009, a solid improvement on FY2008. ($A1.00=84cUS)

CityLink major asset

Traffic on Transurban's prime pike Melbourne CityLink was down 2.7% in FY2009 to 241.1m transactions or 660k/day. However with higher toll rates and higher revenue capture toll revenue was up 6.8% to A$368m.

Transurban is engaged in major upgrades to a portion of CityLink called M1 and to freeways on either side.

see http://www.mcwupgrade.com.au/

CityLink provides for radial travel to the central business district from the southeast and northwest/airport as well as an inner city connections. (see map at bottom of this report)

It is mostly six lanes, but sections are being widened by Transurban.

Melbourne CityLink is all-electronic tolling, no cash.

Sydney pikes

Hills M2 in Sydney saw a small 1% increase in traffic to 34m or 93k/day and toll revenues of A$125m, up 3.5%. Transurban is negotiating amendments to their toll concession with the New South Wales government to allow it to widen the Hills M2 and build additional interchange ramps.

M1 Eastern Distributor to Sydney Airport from the downtown (TU has 75% interest) saw traffic off 0.6% to 47k/day but toll revenues were up nearly 7% to A$79m from the full year effects of an Apr 2008 toll increase. Traffic fell at the downtown entries and exits of the M1ED but grew at the Harbour Bridge end, suggesting a shift to catering to northern suburbs traffic.

The oldest and long the biggest Sydney tollroad M4 to the west (TU has 51% interest) saw a tiny increase in traffic (0.6% more) to 112k/day but revenue was up 20% to A$106m from toll increases.

M5 to the southwest (TU has 50% interest) and now the second highest volume Sydney pike saw a 1.6% increase in traffic to  118k/day and toll revenue up 1.3% to A$157m. The operator is negotiating to widen the road.

Westlink M7 the north-south pike on Sydney's western end (TU has 50% interest) was up 4.5% to 120k transactions/day, the largest outside the Harbour Bridge/Tunnel toll complex run by the state. Toll revenue was up 9.2% to A$160m.

Unlike Macquarie Transurban doesn't publish market valuations on its various toll properties.

Summary claims

Transurban CEO Chris Lynch is quoted: "The strength of Transurban’s asset portfolio has been emphasised in these difficult economic times. Transurban roads have beenn among the best performing toll roads globally in the past 12 months reflecting the quality of our urban toll road portfolio.”

"It has been an important year of consolidation for Transurban and we have made progress in key areas. The business is well positioned with a more appropriate cost structure and strong capital discipline. Every dollar we spend must add value for security holders.”

Transurban-US

In the US Transurban has the Pocahontas Parkway in Richmond Virginia and is building four toll express lanes on the Capital Beltway (I-495) between the Springfield Interchange and Tysons Corner.

An I-95/395 HOT Lanes project from the Pentagon to Fredericksburg VA has been delayed.

Pocahontas Parkway continues to do poorly. Traffic was down nearly 12% to 14.5k/day. Revenue was up just 0.6% to US$13.8m for the year. It is described coyly in a presentation as the "most discretionary asset in the portfolio." (Translates: "We'd love to be rid of it.") Nevertheless the company continues work on construction of a Richmond Airport connector spur, due to open in 2011.

NOTE: A Transurban official tells us: "To be clear, our intent was to communicate that Pocahontas customers tend to use the toll road for discretionary travel more than customers on our other assets.  We remain committed to Pocahontas 895 - demonstrated by the significant upgrades we have made to improve driver information and safety, as well as the expansion currently underway to connect Pocahontas directly to the Richmond International Airport." end quote ADDED 2009-08-27

The company reports savings in operating costs of A$12m (6%), business development $2m (8%) and corporate costs nearly $5m (11%).

see http://www.transurban.com.au

TOLLROADSnews 2009-08-25

ADDITION 2009-08-27 17:20