Drivers return to toll roads in post-pandemic increase

RBC Capital Markets analysts Owen Birrell and Nicholas Daish estimated the company would grow traffic during the quarter by nearly 19 per cent. “While slightly weaker than we were forecasting, we expect the market to react positively … given that ongoing traffic growth is supportive of the stock’s solid distribution growth profile,” they said.

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Macquarie’s analysts said the pace of recovery in Melbourne has slowed with traffic growth behind expectations. “Compared to 2019, traffic is still down 6.1 per cent, which is only marginally better than the previous 3 quarters [-7.2 per cent]. In short, there has been a structural stepdown in traffic post-COVID, which will take time to recover,” they said.

Ongoing construction work on Sydney’s road network – to increase capacity and improve traffic flows – and planned work on Melbourne’s West Gate Freeway caused some disruptions during the quarter, Transurban said.

The opening of M4-M8 link has also diverted some traffic away from the Eastern Distributor, Lane Cove Tunnel and Cross City Tunnel, but the company still stands to profit from its half ownership of the WestConnex system of which the M4-M8 link is a part.

The toll road behemoth owns a number of expressways in North America and is building the Westgate tunnel in Melbourne and the Rozelle interchange and M7-M12 widening and integration in Sydney.

Shares in the $45 billion company were up marginally in afternoon trade to $14.76.

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