Tollroad operator Transurban has steered itself back into profit, largely thanks to the booming property markets in Sydney and Melbourne.
Transurban made a net profit of $81 million for the six months to December 31, a turnaround from its $185 million loss a year earlier when it bought Queensland Motorways.
The result was driven by an 8.4 per cent rise in average daily traffic on its network of 12 Australian tollroads, which include Melbourne’s CityLink and Sydney’s cross city tunnel.
Chief executive Scott Charlton says Sydney and Melbourne’s economies were strong and fuelling the rise in tollroad users.
“What’s happening in Sydney around residential and property development, the amount of money being spent on infrastructure, we see the economy of Sydney to be strong,” he said.
“In Melbourne, given the amount of residential development, as well as population growth, we are seeing strong economic activity there too.
“Brisbane has been a little bit softer.”
Brisbane’s population growth was lower than the other two cities, he said, and the city had seen less infrastructure investment by the Queensland government.
“The December housing approvals was the strongest in Brisbane since 2010 and, hopefully, that will drive a pick-up in the Brisbane market,” he added.
Transurban upgraded its guidance for the full year distribution it plans to pay investors based on expectations toll road revenue will continue to accelerate.
It lifted its guidance by one cent to 45.5 cents per security, a healthy rise on the 40 cents investors received in the 2015 financial year.
Mr Charlton said the company would drive further growth from technology initiatives and improved road infrastructure.
Transurban has $11 billion of committed and planned road projects in the pipeline in Sydney, Melbourne, Brisbane and North Virginia in the US.