-- Transurban 1H Ebitda up 7% to A$416.9M; meets
expectations
-- Earnings boosted by Australian tollroad revenue
-- 495 Express Lanes in US off to a disappointing start
(Recasts to add U.S. asset performance throughout)
By Ross Kelly
SYDNEY--Transurban Group (TCL.AU) Tuesday booked a 7% rise in
first-half earnings as a robust performance from its Australian
tollroads offset a disappointing start for new express lanes
surrounding the U.S. capital Washington D.C.
Steady population growth in Sydney and Melbourne and low
unemployment levels are helping Australia's biggest tollroad
company enjoy sustained traffic. The CityLink in Melbourne, which
accounts for half of its revenue, saw toll collections rise 5.3% in
the July-to-December period.
Transurban has been investing millions of dollars to carve out a
footprint in the U.S. to reduce its reliance on Australian assets
for revenue and earnings growth.
Investors were hoping its 495 Express Lanes project in Virginia
state, which opened in November, would get off to a flying start
after the company in mid-June wrote down the value of its nearby
Pocahontas tollroad due to poor traffic volumes.
The 495 Express Lanes, also known as hot lanes, operate
alongside existing free access highway lanes on the Capital
Beltway, a notoriously congested ring road that surrounds
Washington D.C.
The hot lanes give users the option of paying a toll in exchange
for a faster travel option. Toll prices vary based on real-time
traffic conditions, rising and falling to manage the number of
paying customers to prevent congestion.
"Initial traffic is below expectations, however the required
adjustments to local traffic patterns are expected to take time to
occur," Transurban said in a statement.
A more complete picture of the hot lanes' performance will take
at least six months, it said.
Transurban, which owns or has stakes in six Australian tollroads
in addition to the two U.S. assets, said its earnings before
interest, tax, depreciation and amortization for the six months to
Dec. 31 increased to 416.9 million Australian dollars (US$435.1
million) from A$390 million a year earlier. That was broadly in
line with A$412 million average of five analysts' forecasts
compiled by Dow Jones Newswires.
Transurban's first-half net profit of A$80.9 million was lower
than A$93.2 million a year before. Analysts say Ebitda is a more
relevant measure of financial performance for tollroad operators,
as large acquisition or development costs attract high rates of
depreciation in early years, while toll revenues ramp up over
concessions that often run for several decades.
The company declared a first-half distribution of 15.5
Australian cents per security, up 1 cent on a year earlier. It said
an upgrade to the M2 tollroad in Sydney is 84% complete in due for
completion in mid-2013.
Write to Ross Kelly at ross.kelly@wsj.com
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