Transurban Posts 7.6% Free Cash Flow Rise, Eyes $0.6B Capex in FY26

Robust Financial Performance Amid Infrastructure Expansion

Transurban Holdings Limited has unveiled its FY25 results, showcasing a resilient financial performance marked by a 7.4% increase in proportional operating EBITDA to $2.85 billion and a 7.6% rise in free cash flow to $2.01 billion. These gains were achieved alongside stable proportional operating costs, which remained flat at $947 million, underscoring effective cost discipline amid ongoing expansion.

The company’s proportional toll revenue climbed 5.6% to $3.73 billion, driven by a 2.2% growth in average daily traffic across its portfolio. This traffic growth was supported by network enhancements and a recovering economy, particularly in Sydney and North America, where the North American business posted an impressive 18% EBITDA growth.

Strategic Progress on NSW Toll Reform and Major Projects

Negotiations on the NSW Toll Reform are progressing positively, with the NSW Government affirming its commitment to respecting existing contracts and providing sustainable toll relief beyond the current $60 toll cap, which expires at the end of 2025. Transurban is actively engaged in collaborative discussions, aiming for a balanced solution that benefits motorists, investors, and the government alike.

Meanwhile, key infrastructure projects are advancing well. The M7 widening project is nearing completion, with 78% of works finished and widened sections expected to open by mid-2026. The West Gate Tunnel Project in Melbourne is over 95% complete, with an anticipated opening by the end of 2025, promising to alleviate congestion and enhance traffic flow.

Customer Experience and Technology Enhancements

Transurban continues to invest in technology and customer experience initiatives, including the expansion of the Linkt Rewards program, which now boasts 1.6 million members and offers travel time savings of up to 20 minutes in key markets. The company is trialing an 'earn and redeem' rewards program to further enhance customer value and is implementing new billing systems for a more personalized service.

Additionally, Transurban is exploring road user charging solutions and digital toll notice reforms to improve transparency and fairness for motorists. These efforts align with the company’s broader ESG commitments, including ambitious emission reduction targets and safety programs that have contributed to Transurban roads being more than twice as safe as comparable routes.

Strong Balance Sheet and Growth Pipeline

Transurban’s balance sheet remains robust, with $3.7 billion in corporate liquidity and an estimated $1.7 billion in balance sheet capacity to fund future growth. The company plans capital expenditure of approximately $0.6 billion in FY26, focusing on three major projects, including the M7-M12 Integration Project and the 495 Express Lanes Northern Extension in North America.

Transurban is also pursuing new market opportunities in the United States, with shortlisted bids for the I-285 East Express Lanes in Georgia and the I-24 Southeast Choice Lanes in Tennessee, both with proposals due in late 2026. These initiatives underscore Transurban’s strategy to leverage its partnership model and technological expertise to expand its footprint beyond Australia.

Ongoing Legal and Regulatory Considerations

The company is appealing a Supreme Court of Victoria decision related to ConnectEast litigation concerning tolling service fees. While this matter is ongoing, it does not affect customer toll payments. Investors should monitor this case as its outcome could have financial implications.

Overall, Transurban’s FY25 results reflect operational resilience, strategic momentum, and a clear focus on delivering value through infrastructure investment, customer-centric innovation, and sustainable practices.