Toll road giant Transurban has warned investors it will bleed up to $12 million every week that Sydney, Melbourne or Brisbane are in lockdown, and that COVID-19 restrictions will threaten its earnings until the end of this year.
The $39 billion group revealed on Monday that, excluding new roads opened during the year, average daily traffic on its roads across Australia and North America fell 7 per cent in the 12 months to June 30 due to the pandemic, causing a 9 per cent fall in revenue to $2.8 billion.
Transurban said it was losing $10 million to $12 million in revenue each week Sydney was in lockdown; $7 million to $9 million in Melbourne, and $5 million to $6 million in Brisbane.
The Berejiklian government’s decision to shut down the construction industry in NSW in the second half of July had an additional impact of $16 million to $18 million by emptying heavy vehicles off Sydney’s roads.
Transurban chief executive Scott Charlton said the company believed lockdowns would cease to be a risk from the end of the year, provided the country’s vaccine rollout stays on course. “Then it will just depend on the interim period, how it impacts our roads as we move through that time frame,” Mr Charlton said.
“The next three to four, five months may be a bit bumpy, but we’re very confident in the long-term nature of these assets.”
Transurban meanwhile confirmed for the first time it believes the cost of building its troubled and heavily delayed $6.7 billion West Gate Tunnel project will blow out by $3.3 billion.
Mr Charlton said he hoped commercial negotiations between Transurban’s partners – builders CPB Contractors and John Holland and the Victorian government – to determine how much each party paid would conclude in a “few months”. If not, the long-running dispute will head to court.
Transurban on Monday reported a full-year statutory profit of $3.27 billion, off the back of its sale of a 50 per cent stake in its US roads to a group of pension funds in December for $3.72 billion.