By David Winning


SYDNEY--Transurban Group raised its annual distribution guidance after it returned to a half-year profit, as traffic surged on many of its tollroads to exceed levels achieved prior to the Covid-19 pandemic.

Transurban reported a net profit attributable to securityholders of 41 million Australian dollars (US$28.2 million) in the six months through December, representing a turnaround from a A$103 million loss at the same stage of fiscal 2022.

Proportional toll revenue--the company's preferred measure of the performance of its roads--increased by 43% to A$1.66 billion in the six-month period.

On Tuesday, Transurban raised its distribution guidance for the full year to 57 Australian cents a security, representing an increase of 4 cents on its prior forecast.

Transurban has recovered well from the pandemic, with traffic on several Australian tollroads now higher than before the pandemic, although its Melbourne assets remain in catchup mode.

The company said traffic volumes had reached record levels in the half, with average daily traffic volumes exceeding 2.5 million trips in November. Traffic reached an all-time high in Sydney, despite some unseasonably heavy rainfall, while a recovery in tourism is helping to drive traffic in Brisbane higher.

Another trend is Transurban's favor is lingering caution around the use of public transport, with some people preferring to commute to work in their own vehicles despite high fuel costs in recent months.

"It is pleasing to see traffic for the half setting a new record for the business," said Chief Executive Scott Charlton. "Our roads have benefited from freight volumes which achieved an all-time high, ongoing traffic growth in our core markets, and the continued investment in business capability to improve the experience for our more than 10 million customers."

A key theme for investors in the current corporate-earnings season is the ability of companies to navigate the impact of elevated inflation and rising interest rates, including on debt costs.

Transurban has said its concession arrangements are structured in a way that they have built-in inflation protection, with around two-thirds of revenue linked to CPI escalations. Also, the company says 97% of its debt book is fully hedged, which reduces its exposure to swings in market rates. That cushion is important as Transurban has taken on significant debt to develop and own projects that include the WestConnex highway in Sydney.


Write to David Winning at david.winning@wsj.com


(END) Dow Jones Newswires

02-06-23 1623ET