Transurban Posts 7.4% EBITDA Growth and $2 Billion Free Cash in FY25
Transurban reports solid FY25 results with rising toll revenue, improved EBITDA margins, and strong free cash flow, while advancing key infrastructure projects and navigating NSW Toll Reform.
- Proportional toll revenue up 5.6% and operating EBITDA rises 7.4%
- Free cash flow grows 7.6%, supporting FY26 distribution guidance of 69 cents per security
- Major projects near completion, M7 widening and West Gate Tunnel
- Active NSW Toll Reform negotiations with government commitment to sustainable toll relief
- North American operations deliver 18% EBITDA growth, expanding US infrastructure footprint
Robust Financial Performance Amid Infrastructure Expansion
Transurban Holdings Limited has delivered a strong financial performance for FY25, underpinned by a 5.6% increase in proportional toll revenue to $3.73 billion and a 7.4% rise in proportional operating EBITDA to $2.85 billion. This growth was achieved alongside stable operating costs and an improved EBITDA margin of 75.1%, reflecting operational leverage and disciplined cost management.
Free cash flow rose 7.6% to $2.01 billion, enabling the company to maintain a healthy distribution payout, with FY26 guidance set at 69 cents per security, expected to be 95-105% covered by free cash. The company’s strong liquidity position, with $3.7 billion in corporate liquidity and a BBB+ credit rating, provides a solid foundation for ongoing capital deployment.
Progress on Major Projects and Market Expansion
Transurban is nearing completion of significant infrastructure projects, including the widening of the M7 Motorway in Sydney, with 78% of works finished and sections expected to open by mid-2026. The West Gate Tunnel Project in Melbourne is over 95% complete, targeting a late 2025 opening, promising to ease congestion and improve travel times.
In North America, the company’s operations continue to gain momentum, with an 18% EBITDA increase driven by strong traffic growth and network enhancements. The 495 Express Lanes Northern Extension is progressing well, with service commencement anticipated in late 2025. Transurban is also actively pursuing new projects in the US, including the I-285 East Express Lanes in Georgia and the I-24 Southeast Choice Lanes in Tennessee, signaling strategic expansion beyond its Australian base.
Navigating Regulatory and Market Challenges
Transurban is engaged in constructive negotiations with the NSW Government on toll reform, aiming for a balanced solution that respects existing contracts while delivering sustainable toll relief beyond the current $60 cap, which expires at the end of 2025. The company supports proposed enhancements such as toll notice digitisation to improve transparency and fairness for motorists.
Despite a $143 million non-recurring cost related to an adverse Supreme Court ruling in the ConnectEast litigation, which Transurban is appealing, the company’s underlying operational performance remains resilient. Traffic growth of 2.2% across the portfolio, led by airport traffic and strong demand in Brisbane and North America, supports ongoing revenue expansion.
Customer Experience and ESG Commitments
Transurban continues to enhance customer value through technology and service innovations, including the expansion of its Linkt Rewards program and improved travel time transparency. The company reports significant travel time savings across its markets, reinforcing its commitment to delivering a superior customer experience.
On the sustainability front, Transurban has made notable progress in reducing greenhouse gas emissions, sourcing 91% renewable energy, and maintaining strong safety performance with zero employee fatalities and reduced contractor injury rates. The company’s ESG initiatives align with global standards and underpin its long-term operational resilience.
Bottom Line?
With solid FY25 results and a robust project pipeline, Transurban is well-positioned to navigate regulatory reforms and capitalise on growth opportunities ahead.
Questions in the middle?
- How will the final NSW Toll Reform terms impact Transurban’s future revenue and costs?
- What is the potential financial impact if the ConnectEast litigation appeal is unsuccessful?
- How will Transurban balance capital allocation between growth projects and shareholder distributions in FY26 and beyond?
