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The Docklands, Australia-based Transurban Group (ASX:TCL) is involved in the development, operation, maintenance as well as financing of toll road network projects along with relationship management of the associated customers and clients. The principal business segments comprise Queensland, New South Wales, Victoria, and the Greater Washington Area. Besides, it also researches and develops innovative tolling and transport technology aimed at creating easy travel solutions. Transurban International Limited, Transurban Holdings Trust and Transurban Holdings Limited constitute the main subsidiaries of the blue-chip company.
On the Australian Securities Exchange (ASX), TCL is listed with a market capitalisation of AUD 32.57 billion and ~ 2.67 billion outstanding shares. With the close of the trading session on February 15th, 2019, the TCL stock last traded at a market price of AUD 12.180, down 0.082%, indicating an intra-day loss of AUD 0.010. Given the 52-week high of AUD 12.500 and the 52-week low of AUD 10.620, the ongoing stock price is towards the upper end of the spectrum. Also, the stock has generated positive returned yields in the past six months as reflected in a positive YTD return of 4.41%. However, over the previous five days, TCL has generated a negative return of 1.85%.
Thus, investors may adopt a balanced approach from an equity investment standpoint. Growth prospects are yet to be ascertained in order to say that the group can witness upside momentum going forward. This stock would be an interesting one to watch.
Recently, the Transurban Group announced results for its Half-year ended December 31st, 2018 (H1 FY2019), updating the stakeholders on various activities and financials.
According to the statutory results posted compared to the prior period, that is Half-year ended December 31st, 2017, the revenue from ordinary activities stood at $2,114 million, an increase of 30.2 per cent. While the profit from ordinary activities after tax decreased by 56.1 per cent to $ 145 million and the profit from ordinary activities after tax excluding significant items decreased by 32.4 per cent to $ 224 million. In addition, the net profit attributable to security holders of the stapled group fell to $ 129 million, by 61.7 per cent and the net profit excluding significant items decreased 38.4 per cent to $ 208 million. Moreover, the $ 32 million hike in net finance costs can be primarily attributed to foreign exchange losses and higher drawn debt to fund the development pipeline.
Besides, the earnings less depreciation, amortisation, net finance costs, equity related investments, and incomes tax cuts (EBITDA) stood at $ 971 million, an increase of 14.2 per cent relative to the prior period. While the EBITDA excluding significant items increased 16.2 per cent to $ 988 million.
As for the proportional results compared to the prior period, the toll revenue was recorded at $ 1,286 million, a rise of 9.3 per cent on prior period, mainly driven by traffic growth and new ownership across the Australian and North American networks. Also, the EBITDA fell by 23.9 per cent to $ 693 million accompanied by an increase in EBITDA excluding significant items, by 9.9 per cent to $ 1,001 million. In addition, free cash with the company grew 23.0 per cent to $ 715 million.
The company mentioned a couple of highlights in the investor presentation including 376,000 hours in average workday travel-time savings from July to December 2018. The average daily traffic grew by approximately 2.7%. Also, the tunnelling for the NorthConnex project in Sydney was completed with paving, mechanical-and-electrical work underway, scheduled for commercial operation in 2020. Besides, the company also revised the guidance for FY2019 distribution to 59.0 cents per share, a growth of 5.4% over FY2018.
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