Transurban Returns to Profit, Distribution Guidance Unchanged

By David Winning

SYDNEY--Transurban said higher traffic on its network of global toll roads helped it to return to a statutory profit in its fiscal first half, but rising interest rates in Australia are emerging as a new headwind.

Transurban reported a net profit attributable to securityholders of 298 million Australian dollars (US$211.2 million) in the six months through December, compared to a A$47 million loss at the same stage of fiscal 2025.

Proportional toll revenue--the company's preferred measure of the performance of its roads--increased by 6.4% to A$1.99 billion in the six-month period. Proportional earnings before interest, tax, depreciation and amortization--or Ebitda--rose by 22% to A$1.59 billion.

Transurban kept its distribution guidance for the full year steady at 69 Australian cents a security. Its first-half payout, which was pre-released, totaled A$0.34 a share.

Population growth, lower interest rates and investments all supported Transurban's improved performance in the period. Average daily traffic rose by 2.5% over the six months through December, despite bad weather in Sydney. In Australia, the fastest growth in traffic was in Melbourne, up 3.0%, reversing prior periods when it had been a relative laggard.

Transurban said its net finance costs fell to A$330 million in the six-month period, from A$444 million, reflecting lower borrowing costs compared to a year earlier.

However, Transurban is facing a changed backdrop as interest rates climb once more. The Reserve Bank of Australia this month lifted its benchmark rate by 25 basis points to 3.85%, representing the first increase in 18 months as it battles to squash a reacceleration in inflation. Economists have noted that the central bank typically raises rates more than once before hitting a pause.

Many investors consider Transurban to be one of the more defensive stocks on the Australian Securities Exchange as its tolls are linked to inflation and it has hedging in place. Transurban said 88.6% of its debt was hedged at the end of the first half.

Still, there are risks that households seeking to save money might use their car less or accept longer journey times than use toll roads, while higher interest rates could damp economic activity more broadly.

One positive development for Transurban's second-half performance is the opening of the West Gate Tunnel Project in Melbourne last in December. Transurban expects the tunnel, which connects the West Gate Freeway to the Port of Melbourne, to be well used by freight haulers.

"The 1H result reflects the accomplishment of key projects in North America and our home market of Melbourne, including the 495 Northern Extension and the opening of the West Gate Tunnel project," said Chief Executive Michelle Jablko.

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

(END) Dow Jones Newswires

February 18, 2026 16:07 ET (21:07 GMT)