7 months ago
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TransJamaican Highway Limited, TJH, will conduct a new traffic survey to guide its operational estimates going forward in a post-pandemic market.
The last traffic forecast was done three years ago.
“A reassessment of the projections post COVID-19 has been commissioned and is expected to be incorporated during 2024,” the company said in its year end financial report.
In May 2021, Steer, an external consultant from the United Kingdom, reassessed the projections to incorporate the impact of COVID-19 on traffic. A 10 percentage point movement in traffic can cost the company an extra US$2.35 million, TransJamaican said.
Currently, traffic levels are hovering near record highs, but dropped in 2020 and 2021 due to lockdowns and restrictions on movement. By 2022, however, 25.9 million vehicles travelled the toll highway, a 13 per cent increase from 2021 and 7.0 per cent higher than in 2019, the year that preceded pandemic disruptions.
TransJamaican 2023 traffic data is expected to be released with its annual report, the publication of which is pending.
The projected traffic helps the toll road operator to determine asset wear and tear reduction rates. Notably one intangible asset relates to its concession agreement, which decreased in value from US$212.1 million in 2022 to US$197.6 million in 2023. TJH operates and maintains Highway 2000 East-West under a 35-year concession from the National Road Operating & Constructing Company. The concession was issued in 2001.
TransJamaican booked the entire value of the concession in one go on its balance sheet and amortised it or reduced it’s value at 6.98 per cent for the Mandela to Old Harbour leg, 6.05 per cent for the Portmore leg, and 7.2 per cent for its Sandy Bay to May Pen leg in 2023. Under accounting rules, intangible assets are amortised, while tangible assets are depreciated.
“The amortisation of intangible assets is based on projected usage of the highway during the concession period,” TransJamaican said.
The traffic forecasts will also consider population growth, gross domestic product, and inflation.
Listed on JSE
The company was listed on the Jamaica Stock Exchange in March 2020 as the world entered into the pandemic. NROCC owns 20 per cent of TJH and members of the public hold 80 per cent.
TransJamaican made US$24 million profit on US$75.2 million in revenue for its 2023 year ending December. This compared to a loss of US$7.1 million from revenue of US$65 million the previous year. Profit retained in the period served to grow the company’s net worth or book value from US$40 million to US$49 million.
The company’s assets, including the concession agreement, are pledged for its borrowings. It relates to the issuance of US$225 million in senior secured debt notes which are listed on the Singapore Exchange Securities Trading Limited. The notes pay interest at a rate of 5.75 per cent per annum and mature in 2036.
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