Insights

Transurban (ASX:TCL) share price on watch following FY21 earnings

FY21 saw Transurban struggling against a drop in traffic driven by COVID-19 in the United States and Melbourne.
The post Transurban (ASX:TCL) share price on watch following FY21 earnings appeared first on The Motley Fool Australia. –

The Transurban Group (ASX: TCL) share price will be one to watch this morning after the toll road operator released its financial year 2021 results.

Transurban share price in focus on $2.26 billion revenue

Transurban reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of around $1.81 billion – down 3.3% on FY20
Approximately $2.26 billion revenue – down 0.3% year-on-year
Free cash decreased 13.5% to around $1.27 billion
Dividends totalling 31.5 cents over FY21, including a 21.5 cent final dividend

What happened in FY21 for Transurban?

FY21 saw Transurban struggling against a drop in traffic driven by COVID-19 in the United States and Melbourne.

Transurban also sold its Chesapeake assets for approximately $2.8 billion in December. The news boosted the Transurban share price by 1.2%.

The group’s average daily traffic dropped by 0.4% over the 12 months to 30 June.

In Melbourne, Transurban’s average daily traffic fell 24.5% over the financial year. It also fell 13.3% in North America, spurring the company’s EBITDA to drop 53.6% in the region.

Fortunately, Sydneysiders used Transurban’s tolls 22.3% more than they had in FY20 thanks to the opening of the M8 tollway (formerly known as the New M5) and NorthConnex.

What did management say?

Transurban CEO Scott Charlton commented on the results likely to drive the Transurban share price today:

Over the course of FY21 Transurban demonstrated the resilience of our business model, strengthened our balance sheet, and continued investing for long term growth…  

Since the end of the financial year we have seen restrictions reimposed in Sydney, Melbourne and Brisbane, impacting traffic across all three regions. Fortunately, experience has shown us that traffic rebounds quickly when restrictions are lifted although the rate of recovery depends on the length and nature of ongoing restrictions.

What’s next for Transurban?

The company hasn’t given guidance for FY22.

However, it stated it has a “large pipeline of opportunities progressing in core markets”.

It is continuing to address challenges with Melbourne’s West Gate Tunnel project.

Transurban also said it will continue to prioritise giving its shareholders strong dividends. It plans to pay dividends in line with its free cash, excluding capital releases.

The Transurban share price has had a relatively average 12 months on the ASX.

It has gained 2.07% since this time last year.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 23.37% in the same time.

The post Transurban (ASX:TCL) share price on watch following FY21 earnings appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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