Transurban says enough debt available even as traffic slumps

01 April 2020 - 12:00 am UTC

Transurban today said that light vehicle traffic on its roads in the US, Canada and Australia fell 36% in the past week as the COVID-19 outbreak forced more people to stay at home.

The toll road operator predicted traffic will decline a further 35%-40% this week compared a year earlier, warning that larger revenue drops will follow, in a trading update for the March quarter. 

Heavy vehicle traffic also fell across its motorways, by 7% in the last week of March, as freight and deliveries continued.

Overall, traffic was down 4% for the March quarter for light vehicles and 1% for heavy vehicles.

Chief Executive Scott Charlton said the first few days of this week were showing a continuation of further declines as lockdowns tighten globally.

Traffic began to fall from the second week of March when there was a 2% drop, followed by a 17% fall in the third week when coronavirus-related shutdowns came into place. 

“The most material have been in our North American assets where the governments have effectively locked down [most people],” Charlton told analysts at the briefing.

He said restrictions began ramping up in North America on 12 and 13 of March, which led to a rapid decline in traffic on its roads around Washington and Montreal, leading to a 65% decline in North America last week.

Montreal also suspended tolls on its A25 motorway as the government deemed tolls a non-essential activity. Transurban will be compensated for the loss of revenue under a contract with the government.

Traffic has fallen more gradually in Australia as restrictions have been less severe there to date. In NSW it fell 29% last week, in Victoria 43% and in Queensland 27%.

Charlton said the motorways around Washington DC – where tolls apply on lanes that are used only when roads are congested – had been badly affected.

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