Transurban profit skids but dividend rises
Toll road operator Transurban's first-half profit has fallen by 16 per cent but the company has increased its payout to securityholders.
Transurban owns Melbourne's CityLink and the M2 and Lane Cove Tunnel in Sydney. It also holds a major stake in Sydney's Eastern Distributor and a 50 per cent interest in Sydney's M7 and M5.
The company made a net profit of $81.1 million in the six months to December 31, down from $96.6 million in the previous corresponding period.
Its shares were up as much as 0.49 per cent, or 3 cents, to $6.12 in early trade.
In a statement to the Australian Securities Exchange (ASX), Transurban offered no reasons for the fall in profit.
Its toll revenue in the six months to December was $397.7 million, up 3.1 per cent on the same period in the previous corresponding period.
Revenue increased due to a rise in the toll for CityLink, which was partially offset by the impact of upgrade work on Sydney's M2.
Upgrading work on the M2 was 84 per cent complete and was due to be finished in mid-2013, Transurban said.
"We have made good progress on key development projects during the period and are now focused on completing the Hills M2 upgrade so that we can see the full benefit of that project flow through all of our northern Sydney assets," chief executive Scott Charlton said in a statement.
Mr Charlton said in a media conference call that while revenue from CityLink was showing "great resilience", traffic levels were subdued compared to those before the global financial crisis.
"We opened Southern Link ... a year ago, so I think you’re seeing the benefit of that Southern Link upgrade still coming through in the traffic," he said.
"These assets are great assets and they are resilient in the downtimes, but I’m still not quite as bullish as the rest of the market.
"I think there’s still some softness around the economy. We’re quite comfortable with our position, but we’re still not seeing the traffic growth [at] where it was pre-GFC days."
Mr Charlton added that traffic from its 495 Express Lanes in Virginia in the United States, which opened in November 2012, had ‘‘disappointed with some of the early ... numbers’’.
‘‘It is in that situation because it’s been under construction for five years and it’s the biggest change to the network since 1960s, [so] it’s going to take some time for some adjustment,’’ he said.
‘‘To be honest, we are a bit disappointed with how it’s started, but it’s a 75-year concession period and we expect a significant ramp-up period so hopefully by the time we get to the full-year results, we have some trends that we can analyse.’’
Transurban declared an interim distribution of 15.5 cents per stapled security, up from 14.5 cents at the same time in the previous year, due to a rise in its cash flow.
The company expects to pay 31 cents per security, partially franked, for the full 2012/13 financial year.
AAP with Glenda Kwek