Transurban share price flounders despite record full-year revenues

The toll road developer and operator reported its 2023 financial year results this morning.

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The Transurban Group (ASX: TCL) share price is down 1.86% in early trade.

Shares in the S&P/ASX 200 Index (ASX: XJO) toll road developer and operator closed yesterday trading for $13.96. In morning trade on Wednesday, shares are swapping hands for $13.70 apiece.

For some context, the ASX 200 is down 1.47% at this same time.

The slide follows the release of the company's 2023 financial year results (FY23).

Read on for the highlights.

Transurban share price slides despite record traffic

What else happened during the year?

The Transurban share price isn't getting a boost today despite the company reporting Average Daily Traffic (ADT) reached new record volumes, in excess of 2.4 million trips.

Transurban said strong traffic volumes were supported by year-on-year growth in all of its markets. The ASX 200 toll road developer noted that "resilient large vehicle and weekend travel" increased 20% from FY22 levels.

The company's record proportional toll revenue was fuelled by inflation-linked escalations worked into its business model.

Traffic growth supported the record EBITDA for FY23. And the EBITDA margin improved from 69% in FY22 to 71% in FY23.

As for the balance sheet, Transurban had approximately $4 billion in corporate liquidity as at 30 June.

The company also continued delivery of its existing growth projects, while maintaining a strong opportunity pipeline.

Among other projects, FY23 saw Transurban deliver the M4-M8 link in Sydney on budget and ahead of schedule.

And in a shakeup at the top, Michelle Jablko has been appointed as Transurban's new CEO, commencing on 19 October.

What did management say?

Commenting on the results that have yet to lift the Transurban share price, outgoing CEO Scott Charlton said:

We've seen strong traffic growth in all markets, resulting in a Transurban Group record of 2.4 million average trips a day for the year. Traffic performance underpinned the record EBITDA result of $2.4 billion, an increase of almost 30% on the prior year…

We have a strong liquidity position that supports our growth ambition and our long-term approach to managing the balance sheet has paid off with our weighted average cost of debt broadly stable for the year. Going forward, we have a weighted average debt maturity of approximately seven years, with 96% of our debt fully hedged for interest rates.

What's next?

Looking to what could impact the Transurban share price in the months ahead, investors may be pleased with the forecast of 62 cents per share in FY24 full-year dividends. That would be up 7% from the record dividend payout delivered this year.

With an eye on the FY24, Charlton said:

With positive traffic growth across our key markets, embedded escalation at or above inflation on the majority of revenue and the continued progress on key growth projects, we are well-placed to grow distributions and deliver long term value.

Transurban share price snapshot

The Transurban share price has been a strong performer in 2023.

With today's intraday fall factored in, shares in the ASX 200 toll road company are up 8% year to date.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has no position in any of the stocks mentioned. 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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