The Transurban Group (ASX: TCL) share price has edged lower this morning despite the company providing a positive update. It is down by 2.18% at the time of writing.

Gradual recovery in traffic volumes

Pleasingly, Transurban reported today that it has seen a progressive recovery in traffic volumes across Australia. This recovery began in mid-April and correlated with the easing of government restrictions as the impact of coronavirus improved.

There had previously been a sharp decline in traffic numbers from early March due to COVID-19 restrictions. Transurban noted today that declines in traffic volumes from the commercial segment have been less severe.

Despite the positive news, Transurban pointed out that traffic volumes in the near future will still be highly impacted by any further government responses to COVID-19. This will be especially significant in the event of subsequent waves of the pandemic. 

Recovery of traffic volumes in North America has been slower than in Australia. This is due to the higher impact of COVID-19 restrictions in this market, particularly in the greater Washington Area.

Global project update

In Australia, Transurban advised that its NorthConnex initiative located in Northern Sydney is on track to open in the first quarter of FY2021. Also in the Sydney area, the M8 motorway is expected to open during this quarter. The M8 will connect with the M4-M5 Link, which is currently under construction, as well as the M6 Extension which is in procurement.

In North America, construction on both the Fredericksburg Extension and 495 Northern Extension projects continues to progress well.

Final FY2020 dividend of 16 cents per share declared

Transurban today declared a 2H FY2020 distribution of 16.0 cents per share. This takes Transurban’s overall FY2020 dividend distribution to 47.0 cents per share which is down on its FY2019 distribution of 60 cents per share.

Strong liquidity position

Despite the challenging conditions, Transurban commented that it remains in a strong liquidity position. It believes that the company has sufficient funds on its books  to meet any capital requirements and debt refinancing obligations that may arise before the end of FY 2021.

Transurban’s overall cash position has improved since the height of the crisis on the back of rising traffic volumes. The company further noted that this now places it in a stronger position to capitalise on any emerging opportunities.

Can the Transurban share price push higher?

The Transurban share price has recovered fairly strongly since its March lows at the peak of the coronavirus crisis. With a 2.18% share price decline so far today, it is still trading below its 12-month peak in February, despite the positive news release. It will be interesting to see if the Transurban share price can push higher in the weeks ahead.

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Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The SEEK Limited (ASX: SEK) share price is on the move on Monday after the release of a trading update.

At the time of writing the job listings company’s shares are down slightly to $21.67.

What did SEEK announce?

This morning SEEK released a further update on how its businesses are performing during the pandemic.

According to the release, the SEEK ANZ and SEEK Asia businesses have experienced a consistent trend of improving weekly billings since their collapse in March and April.

In April SEEK’s billing declines for these businesses were in the range of -65% to -70% compared with the prior corresponding period. Whereas in June, the businesses are now observing weekly billing declines in the range of -40% to -50%.

Things are even better in China for its Zhaopin business. In February its billings were 60% lower than management’s expectations. Whereas in May, its billings improved to be around 10% behind the prior corresponding period.

Elsewhere, the company notes that its LatAm business has been significantly impacted, but both its OES business and ESV investments are performing well.

What does this mean for its FY 2020 result?

In light of the above, management is expecting revenue of approximately $1,575 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of approximately $410 million in FY 2020.

Though, it has warned that this is an estimate only to keep the market as well informed as possible. It remains subject to audit and could still be impacted by a range of factors including foreign exchange, second wave impacts, macro conditions, and business performance.

On the bottom line, SEEK expects to post a loss after tax on a reported basis. This follows its decision to recognise an aggregate non-cash impairment charge of $190 million to $230 million. This charge relates to its Brasil Online, OCC Mundial, and four non-core minority investments.

These impairments will not have any material impact on SEEK’s debt covenants. Nevertheless, SEEK has obtained a temporary increase to key covenant limits in its senior syndicated debt facility and is strengthening its balance sheet with a $175 million senior note offer.

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Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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