Interim profit of $10M for Infratil NZ

By Phil Boeyen, ShareChat Business News Editor

Tuesday 31st October 2000

Utilities investment company Infratil New Zealand has posted a $10 million half year profit compared to $25 million for the same period last year, although last year's figure included a $22 million gain from selling its investment in CentralPower.

Earnings before interest and tax were up 25% on last year at $12.32 million, however net tax paid profit before realisations was only $1.39 million compared to $4.37 million last year.

The company says higher interest costs and a lower level of realisation gains reduced profit attributable to shareholders, but it adds that the robustness of its operating revenue shows the defensive nature of the utility sector and the balance achieved by its investment portfolio.

The company realised $8.73 million of realisation gains as it reduced its investment in CentralPower, Powerco and NGC.

Wellington International Airport performed well for Infratil delivering a 30% increase in Ebit compared with last year, but the company says the result was below budget due to slow air traffic growth because of the economic slowdown and the Ansett New Zealand strike and change of ownership.

Concession income and carparking income were both up almost 30% at the airport, and operating costs fell 12% on last year.

Infratil says its TrustPower investment has been a standout performer in the domestic electricity market, achieving solid retail growth. Its Port of Tauranga investment also had a strong result, increasing after tax operating profits by 27%.

Infratil's divestment from NGC has progressed, and from a peak of over $70 million the company has now reduced its investment to less than half of that level. It has also divested part of its interest in the newly merged Powerco realising a gain of $9.5 million, but it continues to hold 5%.

During the period the company increased its investment in Tranz Rail and now has a 7.2% interest. It says restructuring plan that Tranz Rail has announced indicates an intention to increase shareholder value by simplifying the business and improving service levels.

At the end of September Infratil had net tangible assets of $202.18 m and total assets of $494.64 million. The company valuing Wellington Airport at cost and other investments at current market prices, Net Tangible Assets, excluding minorities, exceed $300 million.

A four cents per share dividend has been declared.

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