Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you provide insights on your potential future growth opportunities, particularly in the US and New Zealand, and your approach to concession lengths and Greenfield traffic risk? A: (Michelle Jabko, CEO) We are exploring opportunities in the US and New Zealand, focusing on partnerships that can bring complementary skills. In the US, longer concession lives are typical, and we aim to build a presence in a low-risk manner. For New Zealand, the government's ambitious investment pipeline and policy settings like road user charging are of interest. We target a 25 to 30-year average concession length for our portfolio, ensuring each project adds value.
Q: Can you elaborate on the recent improvements in traffic volumes and the factors contributing to this trend? A: (Henry Byrne, CFO) We've seen a positive trend in traffic volumes, particularly in the second quarter. This improvement is driven by new links like the Rozelle Interchange and Sydney Gateway, as well as a broader recovery post-COVID. Construction impacts persist in some areas, but new infrastructure is offsetting these effects. In North America, investments in the 95 corridor have enhanced value propositions, supporting traffic growth.
Q: Regarding your OpEx commentary, why do you expect costs to grow below inflation for FY25? A: (Henry Byrne, CFO) We are managing inflation across cost categories, particularly in road operating costs due to ONM agreements. The timing of maintenance spend is more weighted to the second half, contributing to the expected cost growth below inflation. We are driving sustainable efficiencies in the business, which will continue to offset some of these costs.
Q: Can you provide more details on the New South Wales toll reform and the principles guiding your discussions with the government? A: (Michelle Jabko, CEO) We are under non-disclosure agreements, limiting what we can share. However, the government has publicly stated that protecting the value of contracts and revenue is a guiding principle. We are working constructively to find solutions that meet the government's objectives while respecting existing contracts.
Q: How does your capital allocation strategy align with your growth opportunities, and what is your approach to managing liquidity and debt? A: (Henry Byrne, CFO) We have a strong liquidity position with $2.8 billion available, supporting further growth. Our capital allocation strategy balances growth with portfolio optimization and increasing distributions. We are cautious with capital releases, considering the current cost of funding environment. Our approach is to find value-accretive growth opportunities while maintaining financial discipline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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