By David Winning


SYDNEY--Transurban Ltd. said it achieved a small annual profit, driven by a late rebound in traffic on its global toll road network after governments relaxed pandemic restrictions.

Transurban reported a net profit attributable to securityholders of 19 million Australian dollars (US$13.2 million) in the 12 months through June, as it staged a recovery from a A$103 million loss at the half-year stage. A year earlier, the company had made a A$3.30 billion profit as it banked proceeds from asset sales.

Annual proportional toll revenue--the company's preferred measure of the performance of its roads--increased by 5.7% to A$2.63 billion.

With pandemic measures largely rolled back in its major markets, Transurban is benefiting from an apparent structural shift in consumer behavior in favor of private cars over public transport. The company has also said it doesn't believe a permanent and total shift away from workplaces is likely, despite some employers continuing to allow staff to work from home.

"While traffic numbers were broadly flat year-on-year from Covid-19-related disruptions and severe rainfall events in Queensland and NSW, it was encouraging to see fourth quarter traffic reaching a new high and exceeding pre-pandemic levels," said Chief Executive Scott Charlton.

Elevated inflation around the world has led investors to assess which companies' profits are most at risk from central banks raising interest rates aggressively. Transurban has taken on significant debt to develop and own projects that include the WestConnex highway in Sydney.

However, Transurban has signaled its assets can readily withstand an acceleration in inflation, as tolls are linked to inflation and it has hedging in place. In May, management said the benefit of a 1% increase in CPI is likely to be greater than the impact on costs of 1% higher interest rates, in the near term.

Some analysts agree with that assessment. Macquarie notes that Transurban's earnings were relatively stable during the 2008-2009 financial crisis. It ranks Transurban among a list of companies that would likely have resilient earnings in the event that the economy slides into recession.

In June, Transurban said it would pay a distribution of 26.0 Australian cents per security for the six months through June, higher than the payout of 21.5 cents at the same stage of 2021. It brought the annual distribution to 41.0 cents per security.

Transurban said it expects a distribution in fiscal 2023 of 53 cents per security, representing approximately 30% growth. It is likely to include a portion of additional WestConnex capital releases resulting from the acquisition to minimize dilution associated with the equity raising, the company said.

Separately, Transurban said Chairman Lindsay Maxsted would retire after the company's annual meeting of shareholders in October and would be replaced by nonexecutive director Craig Drummond.


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


(END) Dow Jones Newswires

08-17-22 1837ET