2018 Transurban Annual Report · PDF file Toll revenue increased 8.0 per cent to $2,249...

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Transcript of 2018 Transurban Annual Report · PDF file Toll revenue increased 8.0 per cent to $2,249...

  • 2018 Transurban Annual Report

  • Contents

    1

    Security holder information 134

    Corporate Governance Statement Transurban’s 2018 Corporate Governance Statement is located at www.transurban.com/corporate-governance-statement

  • 12018 Transurban Annual Report

    Transurban Holdings Limited and Controlled Entities ABN 86 098 143 429 (Including Transurban International Limited and Transurban Holding Trust)

    Annual report for the year ended 30 June 2018

  • 2018 Transurban Annual Report2

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    Contents

    Directors’ report ....................................................................................................................................................... 3

    Section A: Group financial statements ................................................................................................................... 47

    Section B: Notes to the Group financial statements .............................................................................................. 55

    Section C: Transurban Holding Trust (‘THT’) and Transurban International Limited (‘TIL’) financial statements ............. 106

    Section D: Notes to the THT and TIL financial statements .................................................................................. 112

    Section E: Signed reports .................................................................................................................................... 125

  • 32018 Transurban Annual Report

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    Directors’ report The Directors of Transurban Holdings Limited (‘the Company’, ‘the Parent’ or ‘THL’) and its controlled entities (‘Transurban’, ‘Transurban Group’ or ‘the Group’), Transurban International Limited and its controlled entities (‘TIL’), and Transurban Infrastructure Management Limited (‘TIML’), as responsible entity of Transurban Holding Trust and its controlled entities (‘THT’), present their report on the Transurban Group for the financial year ended 30 June 2018 (‘FY18’). The controlled entities of THL include the other members of the stapled group being TIL and THT.

    Principal activities Transurban is an integrated transport company. The principal activities of the Group during the financial year were the development, operation, maintenance and financing of toll road assets as well as management of the associated customer and government relationships.

    Operating and financial review Figures used for calculating percentage movements in the Directors’ report are based on whole numbers.

    Executive Summary Financial year 2018 has been another successful year for Transurban with the following key highlights:

    Statutory results:

     Toll revenue increased 8.0 per cent to $2,249 million;

     Profit from ordinary activities after tax increased 124.0 per cent from $209 million to $468 million;

     Profit from ordinary activities after tax excluding significant items1 increased 134.3 per cent from $209 million to $489 million;

     Earnings before depreciation and amortisation, net finance costs, equity accounted investments and income taxes (‘EBITDA’) increased 8.1 per cent to $1,649 million;

     EBITDA excluding significant items1 increased 9.5 per cent to $1,670 million;

     Net profit attributable to security holders of the stapled group increased 102.5 per cent to $485 million; and

     Net profit excluding significant items1 attributable to security holders of the stapled group increased excluding significant items1 111.5 per cent to $506 million.

    Proportional results:

     Average Daily Traffic (ADT) increased 2.2 per cent;

     Toll revenue increased 8.7 per cent to $2,340 million;

     EBITDA2 increased by 8.9 per cent to $1,775 million;

     EBITDA2 excluding significant items increased by 10.2 per cent to $1,796 million; and

     Free cash decreased 0.5 per cent to $1,215 million.

    1. Significant items are those items where their nature and amount is considered material to the financial statements and not in the ordinary

    course of business. Refer to note B6 of the Group financial statements for further information. 2. Refer to Note B4 of Group financial statements for the definition of proportional EBITDA.

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    Operating and financial review (continued) Other highlights:

     Financial close on the West Gate Tunnel (WGT) Project in Melbourne;

     Acquisition of the A25 toll road and bridge in Montreal, Canada;

     395 Express Lanes project reached financial close in the Greater Washington Area (GWA);

     Retail tolling brand Linkt launched across Brisbane, Sydney and Melbourne;

     $4.8 billion of debt raised with minimal debt to be refinanced in FY19;

     $1.9 billion of equity raised from an entitlement offer;

     Improved and reduced fee structures for Australian customers; and

     Completion of the CityLink Tulla Widening (CTW) Project in Melbourne providing travel time savings to customers.

    A distribution of 28.0 cents per stapled security will be paid for the six months ended 30 June 2018 on 10 August 2018. This takes the total distribution for FY18 to 56.0 cents per stapled security, of which 5.0 cents will be fully franked. Further details of the distribution is presented in note B10 of the financial statements.

    Our business Population growth is putting demands on cities across the world and, for many, traffic congestion is impacting living standards and productivity.

    Partnering with governments to address these challenges is at the core of Transurban’s business and we are undertaking major development projects in each of our regions to create more efficient transport routes and ease congestion.

    In Sydney, construction is underway on the NorthConnex tunnel to link the city’s north to the orbital network and form part of the National Highway route. In Melbourne, construction has begun on the WGT Project to create a vital alternative to the West Gate Bridge.

    We are also creating additional capacity and upgrading a number of assets, including the Logan Enhancement Project and the Gateway Upgrade North in Brisbane and have recently completed the City Tulla Widening Project.

    In the GWA, we are extending the northern end of the 95 Express Lanes for 11km to the Washington DC border to ease congestion in the corridor as part of the 395 Express Lanes Project.

    The nature of the response to address the population challenge is changing. Technology is providing the opportunity for sophisticated and innovative solutions that look beyond physical engineering. Advanced on-road technologies, such as freeway management systems are giving us the opportunity to increase the efficiency of both existing roads as well as new projects. Data and advanced analytics capability allow us to further optimise our roads to provide drivers with more efficient journeys.

    Furthermore, the increase in ride-hailing and ride-sharing services, electric and autonomous vehicles, integrated transport platforms and transport-on-demand apps will give customers greater certainty, choice and convenience in how they travel. These technologies will converge and combine in many different ways that we cannot predict yet, but will fundamentally change urban mobility.

    At Transurban, we have been building our capability over a number of years and today almost 40 per cent of our workforce is in technology with a focus on data, network performance and security. We have introduced apps to customers who are increasingly wanting to manage their toll road travel through digital channels and we have launched the world’s first GPS tolling app. LinktGO allows drivers to see their toll travel in real time and pay trip- by-trip using their smartphones with no ongoing commitment. The app provides greater convenience for occasional toll road users.

    As a first step to preparing our roads for an automated future, Transurban is running a series of trials on motorways in Melbourne, Sydney and GWA to investigate how connected and autonomous vehicles respond to road infrastructure such as signs, lines, signals and ramps. Autonomous vehicles will bring significant safety and efficiency benefits as well as providing more travel options for disadvantaged groups, presenting greater potential for more efficient transport networks.

  • 52018 Transurban Annual Report 5

    Operating and financial review (continued) Strategy and risk management Transurban’s strategy is to be the partner of choice with governments and we aim to achieve this through the ongoing management of our existing road networks and by applying our unique skills to the infrastructure challenges in our markets.

    Our core capabilities are:

    Sustainability Strategy Transurban’s Sustainability Strategy is fundamental to our day-to-day business activities and to our long-term objectives.

    The strategy’s three pillars – be good neighbours, use less and think long term - guide us in how we manage our operations, deliver new projects and identity and plan future initiatives.

    Ultimately, this strategy helps ensure we consistently deliver tangible benefits to communities, customers, employees and business partners.

    We have made a number of commitments under the Sustainability pillars and report against them each year in our Sustainability R