Infratil predicts gain in operating earnings

Monday 18th May 2009

Infratil, whose investments include a controlling stake in Trustpower, bus services in Auckland and Wellington, and Wellington’s airport, forecast a 12% gain in operating earnings on lower interest costs and reduced investment spending.

Earnings before interest, tax, depreciation, amortization and revaluations (EBITDAF) may rise to between $375 million to $400 million in the year ending March 31, from $356 million last year, the company said in a presentation with its results.

Earnings growth may be little changed from last year’s 13%.Wellington-based Infratil today posted a net loss of $191 million for the year ended March 31, a deterioration from the previous year’s $1.7 million loss, mainly reflecting the $179 million writedown in the value of listed investments. It kept its final dividend unchanged at 3.75 cents a share.

“The last year witnessed an extraordinary test of the global financial markets and the companies functioning within it, chief executive Marko Bogoievski said. “Infratil did not deliver on its primary goal of providing its shareholders with superior risk-adjusted returns.”

While the focus on energy, airports and public transport “continue to offer excellent long-term prospects” some investments “have not performed and the immediate objective is to either improve their returns or re-allocate capital,” he said.

Shares of Infratil fell 2.9% to NZ$1.65 and are up 4.3% this year. In the past 12 months, the shares have declined 28%.

The value of Infratil’s biggest investment, 50.5% of TrustPower, was valued at $1.12 billion as at March 31, down from $1.19 billion a year earlier. Infratil Airports Europe fell to 221.8 million from $287.8 million and Auckland International Airport fell to %81.1 million from $90.2 million.

By contrast, Wellington Airport was listed among assets as being worth $285.9 million, up from $247 million, and its NZ Bus unit rose to $210.9 million from $202.8 million.

Discretionary investment is “on hold unless the opportunity is compelling and/or perishable,” the company said in its presentation today. “Use of capital must reflect value and opportunity cost.”

Businesswire.co.nz

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