Full Speed Ahead: TJH’s Growth Continues in Q2

• Driven by continued strong revenue performance, TransJamaican Highway Limited (TJH) reported a net profit of US$8.71Mn for the second quarter ended June 30, 2025 (Q2 2025), a 24.4% year-over-year increase.
• Second quarter revenues, which consist mainly of toll collections, increased by 13.2% to US$22.50Mn. This was primarily driven by sustained growth in toll collections and increased traffic volumes, supported by wider adoption of the t-tag system. The t-tag is an electronic toll system that lets drivers pay via a prepaid account linked to a T-Tag device, allowing quicker toll plaza passage, and offers a special rate to customers and a free pass on their 10th trip.
• Operating expenses (OPEX) for the quarter rose at a slower pace than revenues, up 10.4% to US$5.90Mn. Increased investment in tolling equipment and spares linked to ongoing technology upgrades, aimed at modernising operations and improving efficiency for commuters, was behind the increase in expenses. The increase also reflects higher marketing spending to support expanded T-Tag adoption and elevated bank charges. Meanwhile, administrative expenses, which primarily consisted of staff costs, depreciation of plant and equipment, and other routine office expenses, inched up 0.7% to US$2.47Mn.
• With revenue growth outpacing OPEX and administrative expenses, its margins expanded. Q2 operating margins increased from 62.1% to 64.7% while net profit margins increased from 34.0% to 36.7%.
• Ultimately, TJH’s strong Q2 performance supported a 27.7% increase in its six-month earnings to US$17.78M. Nonetheless, management continues to explore avenues to expand earnings. TJH signalled a strategic focus in its customer engagement, toll processing, and operational scalability by embracing artificial intelligence and a suite of digital enhancements, which could drive greater cost efficiency. This, alongside increased revenues from higher traffic volumes, fuelled by ongoing residential and commercial developments, and the implementation of its annual toll rate adjustment, is expected to strengthen earnings and enhance shareholder value.
• Despite its strong financial performance and solid dividend payments, TJH’s stock price has decreased by 21.7% since the start of the calendar year and is up 1.1% since its offer for sale in March. The stock closed Monday’s trading session at $3.64 and currently trades at a P/E of 8.3x, which is below the Main Market Energy, Industrial, and Materials Sector Average of 14.5x.

(Sources: JSE and NCBCM Research)