Transurban doubles profit as toll revenue soars to $2.34b
Tollroad giant Transurban has more than doubled its annual net profit to $468 million as higher road-user fees saw its revenue growth outstrip traffic growth fourfold.
The company on Tuesday revealed that its revenue grew 8.7 per cent last financial year to $2.34 billion, off the back of traffic growth of 2.2 per cent across its network of tollroads across Australia and North America.
Growth was most significant in Melbourne, where revenue from CityLink jumped 13.4 per cent to $780 million.
Traffic grew 1.4 per cent in total on that road, with some disruption due to works on the Tullamarine freeway, but the number of trucks using the road grew almost 9 per cent.
That, along with higher truck fees, resulted in the jump in revenue, Transurban said.
In Sydney, revenue grew 8.3 per cent, with average daily traffic growth of 3.1 per cent, which Transurban said was also due to more heavy vehicle traffic.
Earnings before interest, taxation, depreciation and amortisation grew 9.1 per cent in Sydney and 15.7 per cent in Melbourne.
Transurban said revenue growth in Brisbane was constrained by "improved fee arrangements for customers", increasing only 2.1 per cent on traffic growth of 2.6 per cent.
The company was able to grow it earnings margin in each city, with a high of 88.2 per cent in Melbourne, followed by 81 per cent in Sydney.
In North America, where Transurban earns 9.5 per cent of its revenue from roads in the Greater Washington Area, revenue grew 7.1 per cent on traffic growth of 1.9 per cent.
The company also received a $105 million boost in the form of a deferred tax asset courtesy of US President Donald Trump's corporate tax rate cuts.
Net profit increased 102.5 per cent, from $209 million to $468 million. Transurban announced a full-year dividend of 56¢ a share, up from 51.5¢ last year, payable on August 11. Transurban gave guidance for a dividend payment of 59¢ for 2019, provided it is successful in its bid for Sydney's WestConnex project.
On a call with analysts, chief executive Scott Charlton would not comment on what the distribution would be if it were not successful.
The competition watchdog is deciding whether to allow Transurban to buy a 51 per cent stake in the road.