Transurban Group delivered solid FY25 results with a 7.4% increase in proportional EBITDA and a 4.8% distribution growth, while setting a confident 6% higher payout target for FY26 amid ongoing toll reform talks.
- FY25 proportional EBITDA up 7.4% to $2.676 billion
- Average Daily Traffic grew 2.2% across all markets, led by 6.4% in North America
- FY25 distribution of 65.0 cents per security, 99.5% covered by Free Cash
- FY26 distribution guidance set at 69 cents per security, about 6% growth
- Strong balance sheet with $1.7 billion capacity and 92.5% debt hedged
Robust Financial Performance Amid Growth
Transurban Group has reported a steady financial performance for FY25, with proportional EBITDA climbing 7.4% to $2.676 billion, supported by a 5.6% rise in toll revenue. The company’s statutory profit after tax stood at $178 million, reflecting the impact of non-recurring costs including litigation and restructuring expenses. Operational costs remained flat year-on-year, underscoring effective cost management despite inflationary pressures.
Traffic Gains Across All Regions
Average Daily Traffic (ADT) increased by 2.2% across Transurban’s portfolio, with North America leading the charge at 6.4% growth. This surge was driven by strong demand for Express Lanes, particularly on the 95 Express Lanes and the 495 Express Lanes in Virginia, where dynamic toll pricing continues to optimise revenue. Australian markets also showed resilience, with Sydney, Melbourne, and Brisbane posting modest traffic and revenue gains.
Distribution and Capital Strength
Reflecting its solid cash flow, Transurban declared a FY25 distribution of 65.0 cents per stapled security, nearly fully covered by Free Cash excluding capital releases. Looking ahead, the company has guided a 6% increase in distributions for FY26 to 69 cents per security, contingent on traffic and macroeconomic conditions. The balance sheet remains robust, with over $1.7 billion in estimated debt capacity and 92.5% of debt hedged, maintaining stable borrowing costs around 4.5%.
Strategic Progress and Toll Reform Outlook
Transurban continues to advance key infrastructure projects, including the near-completion of the West Gate Tunnel Project and the 495 Northern Extension, both critical to easing congestion and supporting regional growth. Meanwhile, negotiations with the NSW Government on toll reform are progressing positively, with the company optimistic about reaching a balanced resolution that safeguards contract values and investor returns.
Sustainability and Customer Focus
On the sustainability front, Transurban achieved its near-term emissions targets ahead of schedule and sourced 91% renewable energy across its operations. The Linkt Rewards program has expanded rapidly, enhancing customer value through partnerships and digital engagement. These initiatives align with Transurban’s broader strategy to improve travel experiences and unlock new value streams beyond traditional tolling.
Bottom Line?
Transurban’s FY25 momentum sets the stage for growth, but traffic trends and toll reform outcomes will be key to watch.
Questions in the middle?
- How will NSW Toll Reform negotiations ultimately impact Transurban’s revenue and contract terms?
- What risks could affect traffic growth projections, especially in North America and Australia?
- How might Transurban leverage its strong balance sheet to pursue new growth opportunities or acquisitions?