Transurban Group (TCL) H2 2024 earnings summary

Executive summary

• Achieved strong free cash generation, supporting a 7% increase in distributions and nearly 7% revenue growth year-over-year, with traffic growth in all markets and disciplined cost management leading to improved margins.

• Proportional toll revenue rose 6.7% to $3,535m and proportional EBITDA increased 7.5% to $2,631m year-over-year, with margin expansion to 73.1%.

• Free Cash (excluding Capital Releases) grew 15.0% to $1,954m, supporting a 7% increase in distributions to 62.0 cps, 102% covered by Free Cash.

• Strategic focus on stakeholder value, disciplined growth, and efficiency, with a new operating structure and executive appointments to drive business performance.

• Major projects such as West Gate Tunnel, Northern Extension, and M7-M12 are set to open in the next 1-2 years, with 85% of assets having potential for further enhancements.

Financial highlights

• Proportional toll revenue increased 6.7% year-over-year to $3,535m; EBITDA grew 7.5% to $2,631m with a 70 bps margin improvement to 73.1%.

• Free cash rose 15% to AUD 1.95 billion, with full-year distribution of AUD 0.62 per security, 102% covered by free cash.

• Statutory profit after tax was $376m, up from $92m in FY23, driven by higher toll revenue and lower net finance costs.

• Weighted average cost of AUD debt increased 40 bps to 4.5%; liquidity remains strong with AUD 4.2 billion available, including AUD 1.9 billion post-distributions and debt repayments.

• Cost growth was contained at 3.6%, below inflation and prior guidance.

Outlook and guidance

• FY 2025 distribution guidance set at AUD 0.65 per security, representing 5% growth, with coverage expected in the 95%-105% free cash range.

• Underlying cost growth for FY 2025 expected to be similar to FY 2024, around 4%.

• Capital releases of approximately AUD 900 million expected in FY 2025, with future releases to be managed based on market conditions.

• $1.4bn committed project spend for FY25-26, with ongoing impact from major construction projects on traffic and Free Cash.