Transurban raising $700m for another buy
Transurban's full-year profit has slipped 65 per cent to $171 million and the toll road operator is raising up to $700 million as it aims to take sole ownership of Sydney's M5 West motorway.
Revenue for the 12 months to June 30 rose 26.3 per cent to $4.166 billion but profit was dragged down by nearly $300 million of stamp duty and other costs related to the acquisition of its WestConnex stake and other projects.
Transurban was part of a consortium that bought 51 per cent of WestConnex from the NSW government for $9.26 billion in September, giving it roughly a one-quarter stake in what has been described as Sydney's largest transport project since the Harbour Bridge, which was completed in 1932.
Transurban said on Wednesday it planned to raise $500 million through a fully underwritten institutional placement as it acquired the 34.62 per cent of the M5 West it did not already own for $468 million.
It also wanted to raise up to $200 million in equity through a share purchase plan.
The M5 West, which has already been partly owned by the road and toll giant for 27 years, will from 2026 form part of the WestConnex M5 concession.
Transurban chief executive Scott Charlton said traffic volumes from the new M4 WestConnex tunnels had been larger than anticipated since they opened in July.
"It is very early days but again the new M4 traffic and tunnels are ahead of the investment case," Mr Charlton said.
In Melbourne toll revenue was up by 4.2 per cent to $813 million, driven by traffic growth through the widened CityLink Tulla freeway, and a 5.5 per cent increase of large vehicles using the roads.
Traffic flows in Brisbane were affected by upgrades to the Logan and Gateway motorways - as part of its Logan Enhancement Project aimed at reducing congestion - with a toll revenue growth of 2.3 per cent to $402 million, following customer fee reductions.
Toll revenue in North America was up 45 per cent to $324 million, boosted by the acquisition of the 7.2km A25 road in Montreal last year.
This is the first financial year revenue garnered from the A25 was included for the full 12-month period.
Full-year 2020 distribution guidance is forecast at 62 cents.
Transurban shares were $15.23 at the close yesterday before the company entered into a trading halt on Wednesday. It will resume trading on Thursday.
TRANSURBAN'S FY19 RESULTS
* Revenue up 26.3pct to $$4.166b
* Profit down 65pct to $171m
* Final distribution up 2.5 cents to 30 cents
* Fully franked final dividend down 0.5 cents to 2.0 cents
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