Infratil lifts 1H earnings, raises forecast

Tuesday 13th November 2018

Infratil has raised its full-year profit forecast for a second time in six weeks on the back of strong performances expected from its power, airports and data centre interests.

The company, which today reported a 19 percent increase in first-half underlying operating earnings, said its March-year earnings are expected to increase to between $560 million and $620 million.

That is up from the $540 million to $580 million of earnings before interest, tax, depreciation, amortisation and changes in financial instruments that the firm forecast in late September and the $525.8 million of ebitdaf it reported for the March 2018 year.

Infratil said the revised forecast reflects the current earnings “trajectory” and some changes within the portfolio.

It incorporates the earnings guidance of Trustpower, Tilt Renewables and Wellington International Airport. It also assumes 30 percent earnings growth at Canberra Data Centres and a year-to-date valuation uplift of $18.2 million.

The Wellington-based investor benefited from good first-half performances from some of its newer assets, while it looks to exit some older, or non-performing investments, including Perth Energy, NZ Bus and student accommodation in Canberra.

The company today reported ebitdaf of $338.8 million for the six months through September, $54.5 million more than a year earlier.

The strongest improvement was from the Longroad Energy solar and wind developer in the US. Infratil’s shares in that business contributed $51 million in the period, from almost $6 million of cost a year earlier, mostly from the sale of the developer’s 250 MW Phoebe solar project in Texas.

Perth Energy returned to profit with a $25.2 million contribution, while earnings were also higher for Tilt, Wellington Airport, and Canberra Data Centres.

Trustpower’s $129.7 million contribution was ahead of expectations but down from abnormally high earnings the year before.

Earnings from NZ Bus were almost $5 million lower, reflecting one-off restructuring and re-contracting costs, Infratil said. It expects to complete a strategic review of the business during the 2019 financial year.

Infratil said performance improvements at NZ Bus and Perth Energy are providing "confidence" about the potential outcomes of the strategic reviews of those businesses.

Weaker earnings from the Retire Australia business reflected reduced sales compared with a year earlier and the softer Australian real estate market.

Infratil invested just under $302 million in the period, about $188 million of which went into the group’s energy businesses, $58 million into transport and $21 million into Canberra Data Centres.

It is forecasting capex and investment of $560 million to $600 million for the full-year, up from almost $326 million last year. The forecast includes $95 million of spending for the Tilt takeover but no equity contribution for that firm’s A$560 million Dundonnell wind project.

Infratil company today reported a $106.1 million net profit for the half-year, up from $97.7 million a year earlier.

After adjusting for one-off gains, restructuring costs and businesses that have been sold, underlying earnings rose to $110.5 million from $79.5 million.

Excluding minority interests, the net surplus for the parent company rose to $58.5 million from $39.7 million.

Infratil will pay an interim dividend of 6.25 cents a share, up from 6 cents a year ago. The dividend, which comes with 1.5 cents of imputation credits, will be paid on Dec. 14.

(BusinessDesk)

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