Infratil lifts 1H dividend as electricity investments, Wellington airport shine

Tuesday 13th November 2012

Infratil, the infrastructure investment firm, lifted its first-half dividend 8.3 percent on the strength of its energy investments on both sides of the Tasman and a controlling stake in Wellington International Airport.

Earnings before interest, tax, depreciation, amortisation and unrealised changes in fair value (ebitdaf) gained 7 percent to $290.9 million in the six months ended Sept. 30, the Wellington-based company said in a statement.

The firm reported a net loss of $16.5 million, or 2.8 cents per share, compared to a profit of $50.2 million, or 8.3 cents, a year earlier, after writing down the value of its British airports and due to movements in the value of interest rate swaps and energy derivatives. Infratil will pay an interim dividend of 3.25 cents per share, or $19 million, on Dec. 14, up from 3 cents a year earlier.

The company held its annual ebitdaf guidance at a range of between $530 million and $560 million, while trimming $10 million from its forecast operating cash flow to $250 million and $280 million.

It increased forecast group investment by $175 million to $195 million, to a range of $415 million and $475 million. Infratil Energy Australia was the biggest gainer for the group, increasing ebitdaf 54 percent to $71.2 million on increased customer numbers and better gas and electricity margins. Infratil reviewed its ownership of Perth Energy in the period, and decided to stick with the status quo.

TrustPower increase ebitdaf 3 percent to $166.1 million, and remains Infratil's biggest earner, despite shedding customers and generating less energy. Infratil flagged the $550 million Snowton II windfarm investment as the major event in the period, and anticipates the project, which is the group's biggest ever investment, will add annual ebitdaf of $99 million when fully commissioned.

Wellington Airport improved earnings 11 percent to $39.5 million, though regulatory oversight of its pricing has left the transport hub uncertain about its long-term outlook. NZ Bus earnings shrank 9 percent to $21.8 million as bus usage slowed from the fillip of the Rugby World Cup last year, and Z Energy ebitdaf more than halved to $7.9 million on falling market share.

Infratil said management reviewed a number of potential acquisitions in the period without concluding any transactions, and is still trying to sell its loss-making Kent and Glasgow airports. The company didn't allude to reports that it's part of a consortium including its manager Morrison & Co and the New Zealand Superannuation Fund making a bid for Stansted airport, Britain's third-largest gateway.

Infratil paid a management fee of $10.1 million to Morrison & Co Infrastructure, up from $8.9 million a year earlier. The shares slipped 0.2 percent to $2.175 in trading yesterday, and have gained 16 percent this year. The stock is rated an average 'outperform' based on six analyst recommendations compiled by Reuters, with a median target price of $2.3175.

BusinessDesk.co.nz

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