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- With the implementation of sweeping lockdown measures, Transurban’s (TCL) former profits have shrivelled away to a massive loss
- The company posted an $80 million profit in the first half of financial 2020, but reported a $448 million loss in the first half of 2021
- Completion of its West Gate Tunnel Project has also been pushed further back because of a failure to resolve soil disposal issues with contractors
- Even its revised completion date of 2023 will not be achieved, which JP Morgan estimates will cost the company at least an additional $1 billion
- Transurban is down 0.67 per cent to $13.27 per share
With the implementation of sweeping lockdown measures, Transurban’s (TCL) former profits have shrivelled away to a massive loss.
For the first half of financial 2021, the road toll operator posted a statutory loss of $448 million — a stark contrast to a profit of $80 million achieved in the same period last year.
It comes off the back of a 17.8 per cent drop in average daily traffic across the board, particularly in Melbourne and the Greater Washington Area which were most severely hit by COVID-related travel restrictions.
While more fortunate regions like Brisbane and Sydney made somewhat of a recovery, the company stressed that travel levels remain highly sensitive to future government responses and economic conditions.
Perhaps most significant, however, was the further delay of the West Gate Tunnel Project, which aims to provide an alternative route to Melbourne’s West Gate Bridge. It had originally been scheduled for completion in 2022, but now won’t even make its revised target of 2023 because of a failure to resolve soil disposal issues with contractors.
“We are progressing towards tunnelling commencement, however at this stage disposal sites participating in the D&C subcontractor led tender process would not be ready to accept tunnelling spoil soon enough to enable a 2023 completion,” said Scott Charlton, CEO of Transurban.
“We remain committed to working with project parties to deliver this much-needed project for the Victorian community as quickly as possible,” he added.
Victoria’s Transport Minister Jacinta Allan noted that the company had told shareholders they would lose millions of dollars a day as a result of the stalemate.
“That’s a matter for their shareholders to consider,” she said, adding that if an agreement could not be reached, the government would “leave no stone unturned” to bring the project to completion.
Transurban has so far spent roughly $2.6 billion on the West Gate Tunnel Project out of an estimated $4 billion in total. However, JP Morgan estimates that the added delays will cost the company at least another $1 billion, including $750 million for cost blowouts and $250 million in lost toll fare revenues.
Transurban is down 0.67 per cent to $13.27 per share at 4:49 pm AEDT.
