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Transurban share price on watch following 1H20 results

Transurban shares

The Transurban Group (ASX: TCL) share price will be on watch this morning, following the release to the market of its 1H20 results.

What did Transurban announce?

Transurban announced that its average daily traffic (ADT) grew by 2.3%, while proportional toll revenue increased by 8.6% to $1,396 million. Proportional earnings before interest, tax, depreciation and amortisation (EBITDA) and before significant items increased by 9.5% to $1,094 million.

Transurban’s FY20 distribution guidance was reaffirmed at 62.0 cents per security (cps). The group announced a 1H20 distribution of 31.0 cps, fully covered by free cash flow of $927 million.

Statutory profit was reported as $162 million and underlying cost growth was 2.0%.

Transurban reported 381,000 hours average workday travel-time savings from July to December 2019. It also highlighted that substantial progress has been made during the half year to supply up to 80% of electricity needs for Brisbane and Sydney operations from renewable sources.

Sydney highlights

In Sydney, proportional toll revenue increased by 10.8% to $569 million, while ADT increased by 2.2% to 839,000 trips, with growth impacted by softer economic conditions and weaker housing construction activity. EBITDA excluding significant items increased by 11.0%.

Average workday traffic increased by 2.1% while average weekend/public holiday traffic increased by 2.0%. Car traffic increased by 2.8% and large vehicles decreased by 3.7%

The WestConnex acquisition is reported to remain ahead of investment case.

Transurban’s development projects are reported to be progressing in Sydney with commissioning works underway at both NorthConnex and the new M5 tunnels for expected completion in mid-2020. 

During the period, the company acquired the 34.62% minority interests in the M5 West, taking Transurban’s ownership to 100%, with the integration program on track.

Melbourne and Brisbane highlights

In Melbourne, Transurban’s proportional toll revenue increased by 3.7% to $424 million, while ADT increased by 1.1% to 867,000 transactions, with growth reported to be impacted by softer economic conditions and weaker housing construction activity. Melbourne EBITDA increased by 2.1%. Average workday traffic increased by 0.6% and average weekend/public holiday traffic increased by 2.2% and car traffic increased by 0.7% and large vehicles increased by 3.0%.

In Brisbane, Transurban reported that its proportional toll revenue increased by 6.6% to $217 million, ADT increased by 3.6% to 424,000 trips, and EBITDA increased by 12.4%. Brisbane’s average workday traffic increased by 3.0% and average weekend/public holiday traffic increased by 4.3%. Car traffic increased by 3.7% and large vehicles increased by 3.1. Construction of a network operations centre is reported to be underway to consolidate all Transurban’s traffic control rooms in Brisbane into a single facility.

North America

In Transurban’s North American business, 1HFY20 saw proportional toll revenue increase by 16.2% to $186 million, while ADT increased by 6.2% to 156,000 trips and EBITDA excluding significant items increased by 24.7%.

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Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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