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In this article, we would discuss four stocks from the industrial sector. All the four players are the constituent of the S&P/ASX 200 & S&P/ASX 200 Industrials (Sector). On 26 July 2019, the S&P/ASX 200 Industrials (Sector) Index closed at 6,958.10 down by 46.1 points, and the Australian benchmark index S&P/ASX 200 closed at 6793.4 down by 24.6 points.
Atlas Arteria (ASX: ALX)
Atlas Arteria (ASX: ALX) is an Australian company, engaged in the business of developing and operating the toll roads globally. The company operates the business in France, Germany and the USA, and it is constituent of S&P/ASX 200, S&P/ASX 200 Industrials (Sector), S&P/ASX MidCap 50 and a few more indices.
On 24 July 2019, the company released toll revenue & traffic statistics for Q2 2019. Accordingly, the weighted average traffic for Q2 2019 was 2.1% lower than Q2 2018, and it was 1.1% down compared with the half year in 2018. Also, the company had expected a similar results primarily due to the strong traffic performance in 2018 caused by the French National Railway strikes.
Reportedly, the weighted average toll revenue for the reported period was slightly up by 0.3% than Q2 2018, and it was 1.2% higher compared with the half year 2018; this depicts an increase in toll prices and the traffic mix at APRR.
Toll Revenue & Traffic Performance (Source: Companyâs Announcement)
APRR
As per the release, the traffic divergences in Q2 2019 and Q2 2018 period depicts the oddly strong traffic levels in Q2 2018 due to the nationwide French National Railways strike from 3 April 2018 to 28 June 2018, and Air France pilot strikes, which took place early in that quarter. Considering the past ten years, the growth rates for LV (Light Vehicles) traffic have averaged 1-2% per annum. Concurrently, HV (Heavy Vehicle) traffic has averaged the growth of 2-3% per annum.
Reportedly, the traffic in the first half of 2019 was 1% lower than the first half of 2018, and it represented 3.5% higher than in the same period in 2017. Also, the toll revenue performance for the reported period and first half of 2019 depicted the traffic mix and the toll increases of 1.81% and 2.01% at APRR and AREA respectively. Besides, the traffic performance at ADELAC in Q2 2019 was affected by similar events to APRR.
Dulles Greenway
As per the release, this year Easter fell in April against March last year, and it had affected the traffic at Dulles Greenway in Q2 2019 compared with Q2 2018. Also, the performance was impacted by increased tolls on the Dulles Toll Road (DTR), construction works and network factors. Besides, the US Federal Government shutdown from 22 December 2018 to 25 January 2019 and the weather conditions had negatively impacted the traffic performance for H1 2019 at Dulles. Further, a 5% reduction of traffic on the DTR was estimated due to the first toll increment since 2014. Moreover, the toll revenue was down due to the increase in toll prices on 10 April 2019, and regulatory factors delayed the effect of price increment.
Warnow Tunnel
As per the release, the traffic has been positively impacted by the roadworks on competing routes in Rostock which started in Q2 2018. Also, the growth in traffic has initiated to moderate resulting in a 0.1% increase in the traffic growth for Q2 2019 compared with previous corresponding period. Besides, the toll revenues in the first half 2019 increased by 8.3% compared with first half 2018, and this was due to the escalated traffic and a 3% increment in tolls from 1 November 2018.
On 26 July 2019, ALX stock last traded at A$8.21, up by 0.244% from the previous close. Over the past one year, the return of the stock has been of +27.97%.
Transurban Group (ASX: TCL)
Transurban Group (ASX: TCL) is an Australian company, which is also one of the largest toll-road operators, involved in the businesses from building, designing new roads and safe road technology. It also operates in the USA and Canada, and stock of the company is a constituent of S&P/ASX 20, S&P/ASX 50, S&P/ASX 200, S&P/ASX 200 Industrials (Sector) and more.
On 19 July 2019, the company released an update related to the dividend announcement to include the DRP price. Accordingly, the DRP price had been calculated using the period between 4 July 2019 to 17 July 2019, which resulted in the DRP price of AUD 15.1549, and the issue date was 9 August 2019. Also, the company claimed that the security holders denoting 3% of issued capital have chosen to take part in the Distribution Reinvestment Plan (DRP).
Funding Strategy (Source: 2019 Investor Day Presentation, April 2019)
On 27 June 2019, the company notified about the pricing of the â¬350 million private placement of senior secured 15 year notes. Accordingly, the placement was consistent with the Euro Medium Term Note, and the TCLâs monetary vehicle â Transurban Finance Company Pty Ltd.
Transurban CFO, Adam Watson, stated that the company successfully completed the debt placement in favourable terms, which extends the average debt maturity. Also, the placement would enable the company to manage the funding requirement and also to get a new long term debt investor base.
On 26 July 2019, TCLâs stock last traded at A$15.4, down by 0.581% from the previous close. During the last 12 months period, the stock has given a return of +34.72%. Also, the stock over the last 3 months period and one month has given returns of +12.82% and -1.97%, respectively.
Sydney Airport (ASX: SYD)
Sydney Airport (ASX: SYD) is one of the most important infrastructure in Australia. It connects to over 90 destinations across the globe and generates a substantial economic activity within the region. The stock of the company is a constituent of S&P/ASX 100, S&P/ASX 50, S&P/ASX 200 & S&P/ASX 200 Industrials (Sector).
On 25 July 2019, Sydney Airport had notified that the results for half-year ended 30 June 2019 would be released on 15 August 2019. Also, on 19 July 2019, the company reported Sydney Airport Traffic Performance June 2019. Sydney Airportâs CEO, Geoff Culbert, stated that the international passenger traffic grew by 1.1 per cent to 1.3 million travellers against the prior corresponding period, and domestic passenger fell by 1.6 per cent to 2.1 million against the prior corresponding period.
Distribution Growth (Source: 2019 AGM Presentation, May 2019)
Also, the numbers of passengers passed through the airport in June 2019 were over 3.4 million, down by 0.5 per cent compared with June 2018. Besides, the airport also saw double digit growth against the June 2018 for the passengers to Vietnam, Taiwan, Japan, USA and India. Further, the native travellersâ population were down due to a drop in the capacity and passive load aspects.
On 26 July 2019, SYDâs stock last traded at A$8.22, down by 0.844% from the previous close. Over the last 12 months period, the stock has been a return of +15.32%. Further, the stock across the past 3 months and one-month timeframe has generated returns of +8.51% and -0.36%, respectively.
Brambles Limited (ASX: BXB)
Supply-chain logistics company, Brambles Limited (ASX: BXB) operates a sustainable logistics business in over sixty countries. It intends to minimise the impact on the environment, efficiency, and safety through the utilisation of one of the largest pools of reusable pallets, crates and containers. The stock of the company is a constituent of S&P/ASX 20, S&P/ASX 50, S&P/ASX 200, S&P/ASX 200 Industrials (Sector) and more indices.
On 2 July 2019, the company had reported the cancellation of the shares acquired through the buy-back program of the company. Accordingly, the company had cancelled 6,039,299 Brambles Limited shares. Below are the numbers of shares and the amount paid against those shares:
Cancellation of Shares (Source: Companyâs Announcement)
On 3 June 2019, the company had announced the completion of the sale of IFCO RPC pooling business. Accordingly, consistent with the announcement on 25 February 2019, wherein the company executed a binding agreement with Triton and a subsidiary of the Abu Dhabi Investment Authority (ADIA) to sell the IFCO reusable plastic containers (RPC) business for an enterprise value of US$2.51 billion.
It was reported that following the approvals, the completion of the sale occurred on 31 May 2019 in the Netherlands. Also, the company would be utilising the proceeds from the sale to return the value to shareholders, payment of the debt to be line with approved credit policy. In addition, the company had decided to return the proceeds though pro-rata return of cash for ~US$300 million, and an on-market buy-back of up to US$1.65 billion.
Reportedly, the company had intended to wrap the on-market buyback by 23 June, which marks the entry to blackout period until the publishing of full year result of 2019 scheduled for 21 August 2019. Also, the ATO ruling and the shareholder approval at 2019 AGM are the conditions subject to the pro-rata return of cash to shareholders nod, and it is anticipated that this would be completed by October 2019.
On 26 July 2019, BXBâs stock last traded at A$12.98, up by 0.077% from the previous close. The return of the stock, during the past 12 months period has been of +28.97%. Also, the stock in the past 3 months and one-month timeframe has given returns of +4.28% and -3.50%, respectively.
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