Transurban Posts 7.4% EBITDA Growth, Projects 69cps Distribution in FY26
Transurban Group reported a solid FY25 with a 7.4% increase in proportional EBITDA and a 4.8% rise in distributions, underpinned by traffic growth across all markets. The company projects a further 6% distribution increase in FY26, while navigating NSW toll reform and advancing key infrastructure projects.
- FY25 proportional EBITDA up 7.4% to $2.676 billion
- Average daily traffic grew 2.2% across all regions, led by 6.4% growth in North America
- FY25 distribution increased 4.8% to 65.0 cents per security, nearly fully covered by free cash
- FY26 distribution guidance set at 69 cents per security, about 6% growth
- Key infrastructure projects progressing, including West Gate Tunnel and 495 Northern Extension
Strong Financial Performance Amid Operational Efficiency
Transurban Group has reported a robust financial performance for FY25, with proportional EBITDA rising 7.4% to $2.676 billion. This growth was supported by a 5.6% increase in proportional toll revenue to $3.732 billion, while operational costs remained flat at $947 million, leading to an improved EBITDA margin of 75.1%. Statutory profit after tax stood at $178 million, reflecting the company’s ongoing focus on operational efficiency and cost management.
Average daily traffic (ADT) across all markets increased by 2.2%, with North America emerging as the standout region, posting a 6.4% rise in traffic and nearly 20% growth in toll revenue. This performance underscores the value customers place on Transurban’s Express Lanes, particularly in Virginia, where recent infrastructure investments have enhanced capacity and service.
Distribution Growth and FY26 Outlook
Transurban declared a FY25 distribution of 65.0 cents per stapled security, representing a 4.8% increase and nearly fully covered by free cash flow, excluding capital releases. Looking ahead, the company has provided FY26 distribution guidance of 69 cents per security, signaling approximately 6% growth. This guidance is contingent on traffic performance and broader macroeconomic conditions, with the final distribution decision resting with the Board.
CEO Michelle Jablko highlighted the strong momentum built throughout FY25, emphasizing the company’s commitment to maintaining a payout ratio within 95–105% of free cash per security. She also pointed to the company’s solid balance sheet, with estimated debt capacity exceeding $1.7 billion as of June 30, 2025, and a hedged debt profile that keeps borrowing costs stable at 4.5%.
Strategic Progress and Market Developments
Transurban continues to advance several major infrastructure projects, including the West Gate Tunnel Project, now approximately 95% complete and on track for opening by year-end, and the 495 Northern Extension (Project NEXT), with 82% completion expected to open late 2025. The M7-M12 Integration Project is 78% complete, targeting 2026 completion, while the Logan West Upgrade is progressing through planning stages ahead of the 2032 Brisbane Olympics.
On the regulatory front, Transurban is engaged in constructive negotiations with the NSW Government regarding toll reform. The company remains optimistic about reaching a balanced solution that respects existing contracts and revenue streams, benefiting motorists, investors, and government stakeholders alike.
Customer Experience and Sustainability Initiatives
Enhancing customer experience remains a priority, with Transurban leveraging technology to improve travel decision-making and expanding its Linkt Rewards program, which now boasts over 1.6 million members. Early trials of an 'earn and redeem' feature aim to unlock further value for users.
On sustainability, Transurban achieved its near-term 2030 targets for Scope 1 and 2 emissions reductions ahead of schedule, sourcing 91% renewable energy across its operations in FY25. The company also reported significant travel time savings for customers, reinforcing its commitment to delivering both environmental and social value.
Bottom Line?
As Transurban balances growth, regulatory negotiations, and sustainability, FY26 will test its ability to sustain momentum amid evolving market dynamics.
Questions in the middle?
- How will NSW Toll Reform negotiations ultimately impact Transurban’s revenue and contract valuations?
- What risks or opportunities could arise from the company’s expanding North American Express Lanes portfolio?
- Can Transurban maintain its free cash coverage and distribution growth amid potential macroeconomic headwinds?
