Traffic flows on Jamaica’s toll roads continue to improve significantly and has now exceeded pre-pandemic levels.
This improvement has resulted in growth in revenues and profits at TransJamaican Highway Limited, which is responsible for the operation of the toll roads including toll collections. The lifting of the COVID-19 measures is the main reason for the significant rebound in traffic, now exceeding the pre-pandemic levels for five of the six months of 2022.
Traffic for the month of June 2022 was 14 per cent above the pre-pandemic traffic levels of June 2019. Traffic was also 10 per cent above that of June 2021. The second quarter traffic was up 12.5 per cent when compared to the pre-pandemic second quarter levels of 2019 and 19.3 per cent above the second quarter of 2021.
For the first six months of 2022, traffic was up 8.5 per cent when compared to 2019 and up 18 per cent when compared to 2021. As has been the case for the entire period of the pandemic, all of TransJamaican Highway’s financial obligations have been met and the company continues to maintain significant reserve balances.
TransJamaican Highway optimistic
While the toll road operator remains cognizant that COVID is not over, TransJamaican Highway, which is a listed company on the Jamaica Stock Exchange (JSE), continues to be optimistic about traffic levels. The toll road operator declared that absent any unexpected occurrences, the company expects traffic volumes for 2022 will not only be fully recovered but will also exceed 2019 numbers.
Revenues, which consist mainly of toll collections amounted to US$15.4 million for the June quarter, reflecting a 27 per cent increase of US$3.3 million, compared to revenues of US$12.1 million for 2021. This was attributable to the significant improvement in traffic following the lifting of the measures implemented to combat the spread of the COVID-19.
Revenue for the six-month period ended June 30, 2022, was US$30.3 million, compared to US$24.4 million for the same period in 2021, an increase of 24 per cent. The company had other gains of US$0.04million, reflecting a decrease of US$0.96 million when compared to other gains of US$1 million for the same period in 2021.
This was primarily due to foreign exchange losses emanating from the revaluation of the 8.0 per cent (JMD) ‘Cumulative Redeemable Preference Shares’ for the quarter and was offset by slightly higher interest earned from the investment of the ‘Restricted Cash’. For the quarter ended June 30, 2022, the company incurred operating expenses of US$9.5 million, reflecting an increase of US$1.1 million, compared to US$8.4 million for the same period in 2021.
This increase was primarily due to higher amortization of intangibles associated with the traffic recovery for the quarter and higher operator’s fee associated with the movement of the exchange rate and Consumer Price Index (CPI.) Other increases included costs relating to the company’s new My t-Tag app and associated marketing campaign.
Profitability continues to grow
Pre-tax profit for the quarter under review totalled US$1.9 million, reflecting an increase of US$1.2 million when compared to before-tax profit of US$0.7 million for the same quarter in 2021. This increase in profitability mainly resulted from the increased revenue, slightly lower finance costs and was offset by increased operating expenses.
Profit before tax for the six-month period was US$3 million and reflects an increase of US$1.7 million, compared to profit before tax of US$1.3 million for the same period in 2021. Net profit went up to US$2 million for the quarter, reflecting an increase of US$0.7 million, when compared to US$1.3 million in 2021. Corporate tax amounted to US$0.6 million and a deferred tax charge of US$0.4 million.
As at June 30, 2022, total assets stood at US$308.9 million, reflecting a decrease of US$0.3 million, compared to total assets of US$309.2 million as at December 31, 2021. This decrease resulted primarily from further amortization of the Intangible asset, a reduction of the deferred tax asset and was offset by an increase in restricted cash.