Transurban revenue rises amid ‘resilient’ traffic

The listed toll road developer reported a 9.7% increase in its interim revenue to A$416m as traffic increased on all but two of its Australian toll roads. Net profit of A$3.2m was sharply lower compared with the six months ended 31 December 2007.

Sydney Stock Exchange-listed toll road developer Transurban reported higher revenue and EBITDA for the six months ended 31 December 2008 than for the same period in 2007, but net profit fell 83 percent to A$3.2 million (€1.6 million; $2 million).

Toll and fee revenue for the six months ended 31 December 2008 increased 9.7 percent to A$415.8 million over the same six months in 2007. Underlying EBITDA before one-off adjustments rose 11.6 percent to A$297.3 million.

The firm credited the increases to “resilient” traffic numbers on its toll roads. Traffic on all but two of its six Australian toll roads increased over the same period in 2007, while Transurban’s only operational North American toll road, the Pocahontas Parkway in Virginia, declined 10 percent amid weaker economic conditions in the US.

“Despite the uncertain economic climate, our quality assets continue to deliver strong revenue and EBITDA growth. There is a greater cost consciousness being embedded in Transurban and we are seeing this flow through in our results,” Transurban chief executive officer Chris Lynch said in a statement.

Transurban said that its results for the six months ended 31 December 2008 showed cost decreases of A$9.6 million over the same period in 2007. It credited the reduction to various overhead costs such as rental fees and travel expenses and hopes to reach an annualised cost reduction target of A$21.4 million.

The results also reflected sharply lower net profit of A$3.2 million. The firm reported profit of A$18.7 million in the last six months of 2007, which included adjustments for success fees associated with the financial close of the Capital Beltway and a gain on its sale of a stake in the Pocahontas Parkway. Profit for the last six months of 2008 also reflected mark-to-market losses on Transurban’s approximately 3 percent stake in ConnectEast, another Australian Stock Exchange-listed toll road company.

Transurban owns equity interests in seven operational roads in Australia and the US. They are CityLink in Melbourne, Hills M2, Westlink M7, Eastern Distributor, M4 and M5 in Sydney and the Pocahontas 895 in Virginia. The firm is headquartered in Melbourne.

Transurban shares ended the day up one penny, closing at A$4.82.