Transurban Group (TCL) H1 2025 earnings summary

Executive summary

• Proportional toll revenue increased 6.2% to $1,872M, with traffic growth in all markets and free cash up 10.1% to $1,060M, supporting a 32cps distribution covered 107% by free cash.

• Proportional Operating EBITDA grew 9.4% to $1,452M, with margin expanding to 76.2%.

• Statutory loss after tax of $15M, impacted by $143M ConnectEast litigation liability and higher finance costs.

• Advanced toll reform in New South Wales, progressing to stage two of the direct dealing process and signing an in-principle agreement.

• Continued investment in technology, customer experience, and new operating model delivering efficiencies.

Financial highlights

• Proportional operating costs declined 3% to $453M, reflecting efficiency gains and technology improvements.

• Operating EBITDA margin expanded 220bps year-over-year to 76.2%.

• Weighted average cost of AUD debt increased 10bps to 4.4%, with 98.2% of debt hedged.

• Corporate liquidity at $2.8B, with $1.7B available after project commitments and distributions.

• Gearing reduced to 37.5% from 39.9% at June 2024; FFO/Debt at 11.2%.

Outlook and guidance

• Full-year distribution guidance maintained at 65cps per security, with expected free cash coverage within 95%-105%.

• Cost growth for FY25 expected to remain below inflation, with maintenance and finance costs weighted to H2.

• Major project completions expected: West Gate Tunnel (end 2025), M7-M12 Integration (2026), 495 Express Lanes extension (late 2025).

• Board considers distribution policy on a multi-year glide path, factoring in project ramp-ups and macroeconomic risks.

• $0.6B of Capital Releases expected in FY25, supporting growth pipeline.