Infratil's operating profit to be at low end of forecast range on Europe, Australia

Monday 17th August 2009

Infratil's operating profit will be at the low end of its forecast range this year as earnings from its European Airports unit and Australian energy business undershoot expectations.

The investment group’s TrustPower, Wellington Airport and New Zealand Bus are performing to forecast while Infratil Energy Australia is at the lower end of forecasts and the European Airports look likely to slightly under-deliver,” chief executive Marko Bogoievski told shareholders at their annual meeting.

“Operating income last year was up by 13% to $356 million, and in March was projected to increase this year by between 5% and 12%,” he said. “It now seems likely that the outcome will be closer to the lower end of that forecast range.”

Shares of Infratil fell 0.6% to NZ$1.81, a better performance than the NZX 50, which tumbled about 2% today. The shares have climbed 12% this year. Bogoievski said the performance of the company’s diverse portfolio of assets is “satisfactory” given weak global economic conditions.

He said Infratil hasn’t be exceptionally constrained by tight credit markets but the downturn also hasn’t thrown up any “extraordinary opportunities.”

“Capital spending has been tightened and capital is being extracted from low growth or low yield situations,” he said. “To date that has meant the sale of Fullers and some bus depots and progress at the European Airports and Energy Developments.”

He said the Key administration’s economic and regulatory reforms “are moving the economy in the right direction” though both NZ Bus and Wellington Airport face time-consuming legacy regulatory issues.

While the economies of New Zealand and Australia are benefiting from government fiscal and monetary intervention, there is an “unwind risk” when the largesse ends, he said.

Businesswire.co.nz

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