The profile is currenly unclaimed by the seller. All information is provided by CB Insights.

citylink.se

Founded Year

2001

Stage

Acq - Fin | Acquired

About Citylink

Citylink provides telephony and computer solutions via fiberoptic networks. The company provides network services for toll-free calls as add-on services.

Citylink Headquarter Location

Vretenvagen 8

Solna, 171 54,

Sweden

46 8 50 125 000

Predict your next investment

The CB Insights tech market intelligence platform analyzes millions of data points on venture capital, startups, patents , partnerships and news mentions to help you see tomorrow's opportunities, today.

Latest Citylink News

Transurban’s inflation pitch: use toll roads and save on petrol

May 1, 2022

Share Transurban chief executive Scott Charlton doesn’t let a crisis get him down. Transurban has still not fully recovered from the pandemic: average daily traffic across its US and Australian toll roads was down 3.4 per cent in the three months ending in March, compared with the same period in 2019, and only up slightly on a year earlier – with the east coast’s heavy rain and floods deterring drivers in Sydney and Brisbane. Transurban’s headquarters are in Melbourne but CEO Scott Charlton has been taking advantage of Australia’s reopened border and travelling overseas. Eamon Gallagher But Charlton, who has recently returned from a trip to the US and is planning another overseas flight soon to check out the company’s toll road in Montreal, the A25, remains confident that his goal of increasing shareholder dividend payments and expanding Transurban’s operations will not be stopped by the surge in inflation. “Every time we’ve gone through one of these crises we’ve seen the traffic go back to what have been some of the underlying long-term trend lines, and we expect that to occur this time as well,” he says. Advertisement There is no doubt that some motorists will rethink the need to use toll roads as household costs rise and they try to save cash on non-essential items and services. Charlton acknowledges that when fuel prices soared above $2 a litre in March there was some hesitation by drivers to use toll roads, stalling the rebound in traffic that occurred in Sydney, Melbourne and Brisbane after COVID-19 restrictions eased. But on Monday, Charlton will tell investors at a briefing in Melbourne that some people are actually driving to work more often (and paying for parking) now that they are going to the office only three days a week as part of a “permanent shift” in working patterns. “Those people who used to commute, say, five days a week would take public transport, but if they’re only coming into the office say two or three days a week, some of them are choosing to drive,” he says. He will also argue that the price of petrol (which has dropped below $2 a litre since the federal government’s temporary cut in the fuel tax) doesn’t have a dramatic effect on how many drivers use its roads, saying that high unemployment rates are typically a bigger deterrent. Because toll roads are usually faster than free roads (because of less traffic congestion), people can save petrol when they are using them, Charlton says. Advertisement “As the cost of fuel gets higher, the benefit of the toll road increases because you save fuel as opposed to on the alternate routes.” Unlike some companies that struggle to pass on cost inflation to customers, most of Transurban’s tolling concessions allow it to automatically pass on increases in the consumer price index in the form of higher tolls. About 68 per cent of the group’s proportional toll revenues, which were $1.2 billion for the six months ended in December, are linked to some form of CPI escalation. The fares on some roads, such as Transurban’s Brisbane motorways, rise annually in line with increases in the state’s CPI – but the fares do not go down if there is deflation. Fares on other roads, such as Sydney’s Hills M2 and NorthConnex, rise quarterly, going up by at least 1 per cent or the rate of inflation, whichever is greater. Tolls on Sydney’s new WestConnex motorway rise annually by at least 4 per cent, or the rate of inflation. An exception is Transurban’s Melbourne toll road CityLink, where tolls rise at a fixed rate of 4.25 per cent every year until 2029. Advertisement CityLink has been slower to recover from the pandemic than Transurban’s other toll roads. While its traffic in the March quarter was higher than a year earlier, it was down 16.5 per cent compared with the same quarter in 2019. Charlton attributes the slower recovery in Melbourne to a delayed return of office workers following the city’s lockdowns. Some analysts have queried whether CityLink’s traffic flows are being hurt by a decline in Melbourne’s population because of the pandemic. But Charlton is optimistic traffic in the Victorian capital will fully recover, saying that Melbourne is still forecast to overtake Sydney as Australia’s biggest city over the next decade and that CityLink should benefit from strong demand from trucks – which account for almost a quarter of its traffic – and the expansion of the Port of Melbourne. The biggest consequence of rising interest rates for Transurban is higher debt costs. The company carries some $23 billion of debt. Charlton says the company has been preparing for interest rate rises over the past five years, with its debt book about 95 per cent hedged and its loans averaging about eight years before needing refinancing. Advertisement “We knew this day was coming when rates would go up. We’ve been hedging, we pay that cost and now we’ve got that covered for a substantial period of time.” In the short term, Transurban actually benefits from higher interest rates, Charlton claims. “Our revenue will rise with inflation while a large portion of our debt is hedged.” Investors do not appear to be rattled by the uncertain economic outlook, with Transurban’s shares rising 15 per cent this year, although the stock remains below its pre-pandemic levels, when it was trading above $16 a share. However, some analysts have raised questions about the quality of Transurban’s dividend payments, which dropped in the first half to 15¢ a share compared to 31¢ a share a year earlier. Macquarie analyst Ian Myles, who has an “outperform” rating on the stock and a 12-month price target of $14.91 per share, says as much as 10 per cent of Transurban’s annual dividend payments are “low quality” because they are funded from debt, not cash flows. Charlton says the company had to use cash flows – which have been hurt over the past two years by a drop in toll income during the pandemic – to fund expensive new projects such as WestConnex as the toll road was being built, and so used a small amount of debt to pay dividends. Advertisement But as more stages of WestConnex open, and Transurban’s toll income rises, the company expects to raise debt to help pay for other motorway projects and resume paying 100 per cent of dividends out of cash flow.

  • When was Citylink founded?

    Citylink was founded in 2001.

  • Where is Citylink's headquarters?

    Citylink's headquarters is located at Vretenvagen 8, Solna.

  • What is Citylink's latest funding round?

    Citylink's latest funding round is Acq - Fin.

  • Who are the investors of Citylink?

    Investors of Citylink include IK Partners.

Discover the right solution for your team

The CB Insights tech market intelligence platform analyzes millions of data points on vendors, products, partnerships, and patents to help your team find their next technology solution.

Request a demo

CBI websites generally use certain cookies to enable better interactions with our sites and services. Use of these cookies, which may be stored on your device, permits us to improve and customize your experience. You can read more about your cookie choices at our privacy policy here. By continuing to use this site you are consenting to these choices.