Transurban CEO to depart as record traffic boosts results

Toll road operator Transurban’s chief executive Andrew Charlton will depart this year as the company reported record results for the December half year, with bumper traffic and inflation bumping up toll prices.

The group, which owns Melbourne’s CityLink and Sydney’s WestConnex, reported record proportional toll revenue of $1.66 billion while total revenue topped $2 billion. Earnings before interest, tax depreciation and amortisation (EBITDA) topped the billion dollar mark at $1.07 billion and net profit for the half came in at $55 million.

Transurban reported record results thanks to toll road costs accelerating with rising inflation. Credit:Louie Douvis

Transurban said the result was boosted by record traffic in Sydney and Brisbane as well as freight and weekend travel.

“Our roads have benefitted from freight volumes which achieved an all-time high, ongoing traffic growth in our core markets,” Charlton said.

Transurban CEO Scott Charlton is leaving at the end of this year.Credit:Eamon Gallagher

“We have seen record traffic in Brisbane, as well as in Sydney even when excluding NorthConnex and M8/M5 East. This performance was underpinned by the urban nature of our roads, demonstrating that the diversity of everyday journeys across commuting, travel and leisure trips provides resilience throughout economic cycles.”

He highlighted the strength of the business model in a rising inflation and interest rate environment.

“Around 68 per cent of Transurban’s toll revenue is linked to CPI escalations, creating inbuilt inflation protection. Timing of escalations can be delayed depending on the asset, meaning that the flow through from recent higher inflation numbers has yet to be recognised across some of our markets,” he said.

Transurban raised forecasts for distributions to its investors based on the positive outlook and said Charlton will depart at the end of the calendar year after 11 years at the $43 billion company.

“Under his leadership, the Company has grown to become an ASX 20 listed entity, increasing its market capitalisation by more than five times to over $43 billion and has delivered Total Security Holder Returns of 289 per cent,” said Transurban chairman Craig Drummond.

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