Transurban Group has reported a robust turnaround in its half-year results to December 2025, with revenue rising 8.1% and profit rebounding from a loss to $343 million. Major infrastructure projects like Melbourne’s West Gate Tunnel and Sydney’s M7-M12 integration are driving growth and operational momentum.
- Revenue increased 8.1% to $1.983 billion
- Profit after tax from ordinary activities rose to $343 million from prior loss
- Proportional EBITDA grew 21.6%, Free Cash up 2.4%
- Interim distribution declared at 34.0 cents per security, up from 32.0 cents
- West Gate Tunnel opened; M7-M12 integration and US 495 Express Lanes extension progressing
Strong Financial Turnaround
Transurban Group’s half-year results for the period ending 31 December 2025 reveal a significant financial rebound. The company reported revenue growth of 8.1% to $1.983 billion, driven by higher traffic volumes and toll price escalations across its portfolio. Most notably, profit after tax from ordinary activities swung from a loss of $15 million in the prior corresponding period to a $343 million profit, signalling a marked improvement in operational efficiency and market conditions.
Underlying earnings metrics also strengthened, with proportional EBITDA rising 21.6% to $1.592 billion and Free Cash increasing 2.4% to $1.085 billion. These figures underscore Transurban’s ability to convert revenue growth into cash flow, supporting sustainable distributions to security holders.
Distribution and Security Holder Returns
The Board declared an interim distribution of 34.0 cents per stapled security, up from 32.0 cents in the prior half-year. This distribution is fully supported by Free Cash generated during the period, reflecting Transurban’s commitment to delivering consistent returns. The Distribution Reinvestment Plan (DRP) participation rate was modest at 7.08%, with no discount applied to the issue price of stapled securities under the plan.
Operational Highlights and Infrastructure Progress
Operationally, Transurban continues to expand and enhance its toll road network. The opening of the West Gate Tunnel in Melbourne in December 2025 represents a major milestone, integrating seamlessly with the CityLink system and managed from a new state-of-the-art freeway control centre. In Sydney, the M7-M12 integration project is nearing completion, with key components like the Elizabeth Drive Connection expected to open in early 2026, promising improved connectivity to the Western Sydney International Airport.
In North America, the extension of the 495 Express Lanes by 4 kilometres towards the Maryland border opened ahead of the peak US travel season, enhancing traffic flow and infrastructure capacity. Meanwhile, in Queensland, Transurban is collaborating with the government on plans to widen the Logan Motorway, aiming to alleviate congestion and improve safety.
Segment Performance and Financial Position
Traffic growth was steady across all regions, with average daily traffic increasing between 1.8% and 3.6%. Proportional toll revenue rose notably in North America by 18.9%, reflecting strong demand and successful project integration. The Group’s net tangible asset backing per security stood at $2.79, down slightly from $2.91 at June 2025, reflecting ongoing capital investments.
Transurban maintains a robust financial position with $1.229 billion in cash and cash equivalents and a market capitalisation of $44.3 billion. The Group’s gearing ratio remains stable at 37.4%, supported by recent successful debt financings including senior secured notes in US and Euro markets.
Risk Management and Outlook
The company continues to manage financial risks prudently through hedging strategies and maintains strong liquidity with undrawn credit facilities exceeding $2.8 billion. While ongoing litigation and toll reform developments present some uncertainties, Transurban’s diversified asset base and contractual toll escalations provide resilience against inflationary pressures.
Looking ahead, the completion of key infrastructure projects and steady traffic growth position Transurban well for continued cash flow generation and distribution stability.
Bottom Line?
Transurban’s half-year momentum sets the stage for sustained growth, but investors will watch closely for toll reform impacts and litigation outcomes.
Questions in the middle?
- How will NSW toll reform developments affect Transurban’s future revenue streams?
- What is the potential financial impact of ongoing litigation on toll administration fees?
- How will the integration of new infrastructure projects influence traffic volumes and cash flow in coming periods?