Transcription of Transurban Group (ASX:TCL) CEO, Scott Charlton’s discussion on the Company’s H12016 Results and Outlook Transurban Group
(ASX:TCL) is one of the largest toll road companies in the world. And we started here very proudly in Melbourne back in 1995 with City Link, which again, is one of the world’s first multi-flow toll roads in the world. And since then we’ve expanded into Sydney, into Brisbane and into Virginia - northern Virginia which is around Washington DC. We have networks in all these cities and we’re expanding quite heavily, and investing in those networks to provide better outcomes for our customers.
Again, another very strong result. We look to continue to grow our distributions, but at the same time investing long term and you see that come through our results. We’ve had almost a 20 per cent uplift in revenue, that’s translated into almost a 15 per cent uplift in our EBITDA performance. And pleasingly for a lot of our security holders, an upgrade on our distribution guidance of one cent. So again, we have four very strong markets and we’re very lucky that our markets are growing quite quickly, from population and economic activity. So if I go around the ground starting again in Melbourne, we had a growth of around two per cent in traffic and very strong EBITDA growth. And again, two per cent growth on a very large number, is over approximately three million transactions done in growth, year on year for the half year.
We go to Sydney; we’ve had expansions in there with the M2 and the M5. That’s led to very strong, high, single digit growth across the whole of the Sydney network, translating again to very large EBITDA growth. We also have the truck toll multipliers going up, which is contributing to revenue. And in Brisbane, which is one of our newer assets, in ramp up we’re still seeing good growth, although Brisbane economy is a bit softer than Sydney and Melbourne. And in northern Virginia, where we run what is called dynamic pricing, which we price the capacity; we’re seeing strong growth. It’s actually 200 per cent, but that’s starting obviously from a very low base. But now that market’s contributing less than nine per cent of our total revenue, which is pleasing.
We did an equity raising back in November for acquisition of AirportlinkM7 in Brisbane, which is very complimentary to our existing network we have, the Queensland Motorway Network, which now means we completely own that network. So we can provide substantial efficiencies to our customers, but obviously benefits to our security holders as well. We’re well supported by our shareholders and that money now will be put to that use.
We have a fantastic project pipeline, not only for our security holders, but also for our customers. So we’re looking at about $11 billion worth of committed and planning projects, to enhance the networks where we operate, to cope with the growth and congestion that’s occurring. But also to create long-term value for our security holders, and we’ve been able to develop the pipeline in a way that still allows us though, to grow our distributions in the short-term.
Looking at technology going forward, fascinating to see all the developments coming through. And such a focus of the car manufacturers, and other players in this space, around the mobility going forward. What we see though from Transurban’s perspective, and we’re looking to how we partner with these technology companies, is most of this leads to increased trips, increased capacity on our road. And we think of a really interesting and a much safer future as well, for our road commuters which is great.
Our focus over the next sort of 12 months is execution, obviously we had that big pipeline that we talked about earlier, so we need to execute. And as well, we look at what’s happening in these major cities, particularly in Melbourne and Sydney and the economic activity. We actually see it in the major cities as pretty bullish on the outlook.
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