TCL -0.57%: A good 1H23 result this morning for the toll road operator, with EBITDA for the half of $1.24bn, above the $1.09bn expected while the distribution of 26.5c is a small beat (exp 26c). Funding costs were better than expected and Transurban has been proactive in hedging their interest rate risk with 94% of their debt book hedged for the short term. They also increased distribution guidance for the full year to 57c, up from prior guidance (and consensus) of 53c, amid record traffic across both the Sydney & Brisbane markets. Melbourne traffic remains below pre-COVID levels, however the trend is improving with the December quarter traffic -6% vs -8% in the September Quarter. The resignation of Chief Executive Scott Charlton after 11 years behind the wheel was also taken as a negative by the market and was the main reason for pressure on shares today, alongside the RBA hike.
MM is long & bullish TCL in the Income Portfolio.
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