Transurban Group (ASX: TCL) has reported its half year result to 31 December 2018.

Transurban owns and operates 15 toll roads in Melbourne, Sydney, and the greater Washington area. Revenue growth is derived from traffic growth and their very own rivers of gold – inflation protected toll prices. CityLink in Melbourne is Transurban’s biggest asset, in 2018 this accounted for approximaty 32% of their total toll revenue – working out to be about twice the size of the roads in Brisbane.

Transurban’s Half Year Report

The headline item is that proportional EBITDA grew by 9.8% to $1 billion, which was driven by proportional toll revenue growth of 9.3% to $1.29 billion (click here to learn what EBITDA is).

Average daily traffic (ADT) grew by 2.7% across Transurban’s network. The business boasted it saved 376,000 hours in average workday travel-time savings from July 2018 to December 2018.

In Sydney the NorthConnex tunnelling has been completed, the opening is scheduled for 2020. The WestConnex acquisition and financial close has been achieved, with integration progressing as forecast.

The Sydney proportional toll revenue grew by 7.7% to $513 million, with the ADT increasing by 2.1%.

In Melbourne, Transurban said its customers are experiencing improved travel-times with the completion of the works on the CityLink-Tulla Widening project.

The Melbourne proportional toll revenue increased by 5.6% to $409 million with ADT increasing by 4.6%.

In Brisbane, the Logan Enhancement Project is progressing with new ramps open at Logan and Wembley Road interchange. The Inner City Bypass upgrade is also complete.

The Brisbane proportional revenue increased by 1.7% to $204 million with ADT growing by 0.3%.

In North America, the 395 Express Lanes project is now over 50% complete with opening projected for FY20. An agreement has been reached to advance new 95 Express Lanes ramp at Opitz Boulevard and the A25 integration is substantially complete. Financial close is expected on Fredericksburg Extension later this year.

North American Proportional toll revenue grew 42.9% to $160 million with ADT increasing by 1.4%.

Transurban Distribution

Transurban will pay a distribution of 29 cents per share, which is an increase of 3.6% compared to last year.

The toll road operator has also predicted the distribution to be 59 cents per unit for FY19, which will be an increased of 5.4% compared to FY18.

Is Transurban A Buy?

Transurban has been a good income share for investors for quite a while. The steady growth of traffic and toll prices creates strong growth of proportional EBITDA and the distribution.

But with a forecast distribution yield of 4.7% for FY19 it doesn’t offer a hugely attractive yield. I’d want at least 5% if not more before considering Transurban shares.

Transurban does seem to be reliable, but the proven shares in the free report below could be even more reliable in tough times.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).