TransJamaican Highway Ramps Up Q2 Profits!

• TransJamaican Highway Limited (TJH) picked up speed in the second quarter ended June 30, 2026 (Q2 2026), with net profit accelerating 33.4% YoY to US$11.63Mn, supported by higher revenues, wider operating margins and lower finance costs.
• Toll revenue remained firmly in the fast lane, accelerating 26.5% to US$28.46Mn, as traffic growth continued across the road network, including Phase 1C, which commenced commercial operations in December 2025. Other gains, however, shifted to a lower gear, declining to US$0.65Mn on lower foreign exchange gains and investment income.
• Higher costs accompanied TJH’s expanded road network; operating expenses increased 15.8% to US$6.84Mn from US$5.90Mn, reflecting higher maintenance, operational support and amortisation costs on the Phase 1C corridor. However, revenue growth continued to outpace the rise in costs, with the operating margin widening to 69.0% from 68.3%, despite a 6.2% increase in administrative expenses to US$2.63Mn.
• Lower financing costs provided another tailwind to earnings, easing to 7.7% to US$3.13Mn as scheduled quarterly principal repayments on the secured notes continued and 20% of the cumulative redeemable preference shares were redeemed in January 2026. Consequently, profit before taxation surged 37.8% to US$16.51Mn, although a 49.3% increase in taxation to US$4.88Mn put the brakes on some of the bottom-line gains.
• The strong quarter kept TJH on track for a solid first half, with toll revenue rising 27.7% YoY to US$57.48Mn from US$45.01Mn, while lower finance costs helped drive profit before taxation up 38.3% to US$33.29Mn. Net profit consequently surged 39.8% to US$24.86Mn, demonstrating the earnings benefit from the expanded network and continued traffic growth.
• Looking ahead, TJH is positioning itself for the next leg of its growth journey. In addition to a full-year contribution from Phase 1C, continued traffic growth and increasing t-Tag penetration, the company is exploring further opportunities to extend its growth runway, including a potential operating role in the Montego Bay Perimeter Bypass, which is currently under construction and expected to be completed in 2026–2027.
• Discussions are also underway with National Road Operating and Constructing Company Ltd. (NROCC) regarding potential North-South and East-West highway extensions, while early discussions with the Government of Jamaica have begun around exercising the 2036 concession extension option. Collectively, these initiatives could broaden TJH’s operating footprint and provide additional avenues for longer-term earnings growth.
• However, there could still be a few speed bumps along the way. Earnings remain concentrated in a single tolled concession and are therefore sensitive to fuel costs, consumer activity and disruptions along the corridor. Furthermore, the expanded network brings structurally higher operating and amortisation costs, which could take some mileage out of the incremental revenue gains from Phase 1C.
• Investors have already driven TJH’s share price significantly higher, with the stock advancing 129.5% YTD. At its current price, TJH trades at a P/E of 19.7x, above the Main Market Energy, Materials and Industrials sector average of 18.6x, suggesting that a sizeable portion of the improved earnings outlook may already be reflected in the stock’s valuation.

(Sources: TransJamaican Highway Limited Unaudited Consolidated Financial Statements & NCBCM Research)