TRANSURBAN GROUP asx release
12 February 2015
Transurban has announced its financial results for the six months ended 31 December 2014. Proportional toll revenue increased by 9.8 per cent compared to the prior corresponding period (pcp).1
This result excludes changes relating to acquisitions in the current period to enable a like for like comparison. Proportional EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 13.6 per cent.2 Transurban believes its proportional results are the most accurate
reflection of its portfolio's performance.
On a statutory accounting basis, Transurban's net loss was $354 million, compared with a net profit of
$81 million in the pcp. The net loss included significant items related to the acquisition of Queensland Motorways on 2 July 2014 of $406 million, incurred during the period. Excluding these items, net profit was $52 million.
Free cash for the half year was $378 million, up 57.5 per cent compared to the pcp. The increase in free cash was driven by healthy growth in the underlying portfolio as well as contributions from newly acquired businesses referred to above.
A 19.5 cent distribution per stapled security will be paid for the six months ended 31 December 2014. The distribution includes a 3.5 cent fully franked component. The Board today announced distribution guidance had been upgraded for the year ending 30 June 2015 to 39.5 cents per security. This is expected to be approximately 100 per cent cash covered. This change reflects the strong first half financial performance reported today.
Transurban CEO Scott Charlton commented: "We have achieved a number of critical milestones against our strategic objectives during the period, including the completion of the M5 widening in Sydney, the opening of the 95 Express Lanes in Northern Virginia USA, and more recently the financial close of the NorthConnex project in Sydney."
"These projects highlight the value embedded in Transurban's networks through effective partnering with governments to deliver network enhancements. There remain significant development opportunities in all of our markets," Mr Charlton said.
"Over the medium to longer term, there are opportunities for Transurban to participate in the policy and technology enhancements that are emerging today, which are expected to drive significant changes in transport network management over time. Transurban is well positioned to contribute to the work being undertaken in these areas," Mr Charlton said.
1Excludes contributions associated with Cross City Tunnel, Queensland Motorways and changes in ownership interest in the US
business, which were not in the pcp. Including these changes, proportional toll revenue increased 36.7 per cent.
2 Excludes transactions costs and contributions associated with Cross City Tunnel, Queensland Motorways and changes in
ownership interest in the US business, which were not in the pcp. Including these changes, underlying proportional EBITDA
increased 37.4 per cent.
Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
asx release
Key activities for the year: Development Acquisition of Queensland Motorways: In April 2014, a Transurban-led consortium (62.5 per cent Transurban, 25 per cent AustralianSuper and 12.5 per cent Tawreed Investments Limited, a wholly owned subsidiary of the Abu Dhabi Investment Authority) reached agreement to acquire Queensland Motorways for $6,673 million, plus stamp duty and transaction costs of $447 million. Transurban will operate the network on behalf of the owners. Financial close was achieved on 2 July 2014.
Queensland Motorways comprises four operating assets in Brisbane (Gateway Motorway, Logan Motorway, CLEM7 and Go Between Bridge) and Legacy Way Tunnel, which is under construction and expected to commence operations in the first half of calendar year 2015.
During the half year ended 31 December 2014 work commenced to integrate the operations of the Queensland Motorways assets into the Transurban Group.
M5 West Widening: Construction work on the M5 widening was completed in the period with all lanes returning to 100km/hour speed limit on 15 December 2014.
NorthConnex3: Financial close was achieved on the NorthConnex project on 31 January2015. Construction of the project will commence early in 2015.
CityLink-Tulla Widening: On 6 October 2014 Transurban reached contractual close with the
Victorian State Government to deliver the CityLink Tulla widening.
The project will add additional lanes to the Tullamarine Freeway from Melrose Drive in the north, along CityLink to the Bolte Bridge. Additional lanes will also be added to the West Gate Freeway eastbound between the Bolte Bridge and Power Street.
Major construction on the CityLink Tulla Widening project is expected to start in October 2015 and be finished in early 2018.
Thiess was announced as the preferred design and construction contractor for the sections of the project to be delivered by Transurban.
95 Express Lanes: Works have been completed on the 95 Express Lanes with the project opening to motorists on 14 December 2014 and tolling commencing 29 December 2014.
The project was completed on time and on budget with more than 4 million work hours without a lost time injury.
Operations Tolling systems: A program to roll out the GLIDe tolling system on Transurban's assets in Sydney following its successful implementation on CityLink in FY12 has continued during the half year with Hills M2 and M1 Eastern Distributor transferring to the new platform.
3 Previously known as F3-M2 or M1-M2.
Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
asx release
This tolling system has delivered improvements in the customer interface and service offering on CityLink. In addition it has resulted in improved enforcement and revenue capture, reflected in the growth in fee revenue since implementation.
Operations & maintenance (O&M): On 30 April 2014, Transurban acquired TransLink Operations (TLO). TLO manages the CityLink traffic control room as well as other key aspects of CityLink operations, including incident response. These activities are now provided in- house, enhancing Transurban's oversight of key activities.
Transurban has also enhanced its asset management capability in New South Wales to improve oversight of O&M contractors in that market. Operations for Hills M2 and LCT moved in-house from 1 April 2014.
M1 Eastern Distributor major maintenance: A two-year resurfacing program and upgrade of the Operations Management and Control System (OMCS) on the Eastern Distributor continued during the period.
Logan Motorway: Significant pavement rectification works were completed during the period.
The works lead to traffic disruption. These works are now complete however it is expected that a rehabilitation and resheeting program will continue on other parts of the motorway in the future. The scope and timing of those works is currently under review.
Distribution and DRP
A distribution totalling 19.5 cents per stapled security will be paid on 13 February 2015 for the six months ended 31 December 2014. This will consist of a 16.0 cent distribution from Transurban Holding Trust and a 3.5 cent fully franked component from Transurban Holdings Limited.
The final distribution will have a tax deferred component. The extent to which the distributions paid in FY15 are tax deferred will be confirmed in Tax Statements to be issued with the final distribution in August 2015.
The Distribution Reinvestment Plan (DRP) will operate again for this distribution payment. For further information on distributions and the DRP, visit the Investor Centre at www.transurban.com.
Company Secretary
Investor enquiriesGeneral Manager Investor Relations Henry Byrne +61 438 564 245 investor.relations@transurban.com
Note: Further details are provided in the Appendices and the Investor Presentation attached to this release.
Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
asx release
Appendix 1:
Operating performance of Transurban's portfolio of assets (100%)
Toll revenue ($'m) 289 110 38 28 56 127 98
Fees and other
revenue ($'m) 28 3 2 1 2 3 10
Total revenue ($'m) 317 113 40 29 58 130 108Toll revenue growth 7.2% 17.1% 10.1% N/A 6.2% 10.5% 4.4% Traffic growth 2.4% 12.5% 6.6% (0.4%) 1.4% 6.8% 3.1% Total costs ($'m) (47) (20) (15) (12) (18) (18) (15) EBITDA ($'m) 270 93 25 17 40 112 93
EBITDA growth 10.9% 19.2% 10.7% N/A 16.2% 16.8% 5.6%
EBITDA margin 93.4% 85.2% 65.1% 58.2% 70.9% 88.1% 95.1%
Gateway Motorway Logan Motorway Go Between Bridge Clem7 495 Express LanesToll revenue ($'m) 95 73 6 24 19
Fees and other
revenue ($'m) 8 7 0 1 4
Total revenue ($'m) 103 80 6 25 23Toll revenue growth N/A N/A N/A N/A 61.8% Traffic growth 3.3% (0.7%) 1.0% (1.0%) 15.4% Total costs ($'m) (28) (27) (2) (14) (13) EBITDA ($'m) 75 53 4 11 10
EBITDA growth N/A N/A N/A N/A 326.6%
EBITDA margin 80.8% 72.4% 75.3% 45.6% 48.5%
Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
asx release
Appendix 2:
Statutory results
Toll revenue 738 451 63.7% Fee and other road revenue 71 47 49.8% Construction revenue 152 54 183.4% Business development and other revenue 3 20 (81.0%) Total revenue 964 572 68.6% Road operating costs (176) (113) 55.6% Corporate costs (34) (18) 93.3% Business development costs (6) (9) (35.4%) Construction costs (151) (51) 196.0% Transaction and integration costs (416) - 100%
Total direct costs (783) (191) 310.4% Profit before depreciation and amortisation, net finance costs, equity accounted investments and tax 181 381 (52.5%)Depreciation and amortisation (275) (160) 71.9% Finance income 48 58 (18.7%) Finance costs (337) (187) 79.5% Net finance costs (289) (129) 123.7%
Share of net profits (losses) of equity accounted
investments 9 (15) (160.4%)
Profit/(loss) before income tax (374) 77 (586.0%)Income tax benefit 20 4 406.7%
Profit/(loss) for the half (354) 81 (536.7%)Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
asx release
Appendix 3:
Proportional results
Toll revenue 761 556 36.7% Fee and other revenue 71 58 23.0% Total revenue 832 614 35.4% Operating costs (172) (129) 33.6% Business development costs (2) (5) (58.3%) Corporate costs (22) (17) 28.3%
Total costs (196) (151) 29.9% Proportional EBITDA excluding significant items 636 463 37.4% Significant items (264) - (100.0%) Proportional EBITDA 372 463 (19.8%)Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
asx release
Appendix 4:
Reconciliation of Proportional EBITDA to the statutory income statement
Less: EBITDA attributable to Non-controlling interest - Eastern Distributor (10) (9) Less: EBITDA attributable to Non-controlling interest - Queensland 98 - Less: EBITDA attributable to Non-controlling interest - 495 Express Lanes (1) - Less: EBITDA attributable to Non-controlling interest - DRIVe operations 1 - Add: M5 proportional EBITDA 47 44
Add: M7 proportional EBITDA 56 48
Add: Pocahontas proportional EBITDA - 4
Add: 495 proportional EBITDA - (3) Add: DRIVe operations proportional EBITDA - (2) Proportional EBITDA 372 463
Significant items 264 -
Proportional EBITDA excluding significant items 636 463Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
asx release
Appendix 5:
Reconciliation of statutory Cash Flows from operating activities to Free Cash
Cash flows from operating activities before transaction and integration
cash payments 379 227
Less transaction and integration cash payments from non 100 per owned
entities (406) -
Cash flow from operating activities (refer Group statutory accounts) (27) 227Add back cash payments for maintenance of intangible assets 53 7
Add back transaction and integration cash payments from non 100 per
cent owned entities 406 -
Less consolidated cash flows from non 100 per cent owned entities* (187) (42)
245 192
Adjust: dividends and distributions received and maintenance expenditure
M1 Eastern Distributor - distribution 14 13
M5 Interlink - distribution and Term Loan Note interest 27 28
Transurban Queensland - distribution and Shareholder Loan Note interest 52 -
M7 Term Loan Notes interest 57 21
Allowance for maintenance of capital expenditure for CityLink, Hills M2
and Lane Cove Tunnel, Cross City Tunnel and e-Tag expenditure (17) (14)
Free cash 378 240* Consolidated cash flows from non 100 per cent owned entities
Consolidated cash flows from non 100 per cent owned entities includes Eastern Distributor, Transurban Queensland, DRIVe and 495 Express Lanes. In the prior corresponding period this included Eastern Distributor only.
Classification Transurban Group Transurban International Limited ABN 90 121 746 825
Transurban Holdings Limited
ABN 86 098 143 429
Transurban Holding Trust
ABN 30 169 362 255
ARSN 098 807 419
www.transurban.com.au
Level 23
Tower One, Collins Square
727 Collins Street
Docklands VIC 3008
Australia
Telephone +613 9612 6999
Facsimile +613 9649 7380
Level 9
1 Chifley Square
Sydney NSW 2000
Australia
Telephone +612 9254 4900
Facsimile +612 9254 4990
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