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Infratil takes $43.9M charge on British airports up for sale

Infratil takes $43.9M charge on British airports up for sale ahead of 1H result

By Paul McBeth

Nov. 9 (BusinessDesk) - Infratil, the infrastructure investment firm, has taken a $43.9 million charge to write down the value of the two British airports it's trying to sell ahead of its first-half results next week.

The Wellington-based firm wrote down the carrying value of the Glasgow Prestwick and Kent airports by 22.2 million pounds, which will be reflected in the first-half net profit, the company said in a statement. The investment firm is trying to sell the unprofitable airports, and has already written down their value by $60.4 million in the past two financial years.

"The impairment charge reflects market feedback received as part of this (sale) process," the company said. "Infratil continues to actively seek a buyer for the airports, while considering all other options available with respect to the ongoing operations."

Infratil is reportedly 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.

The investment firm has flagged earnings before interest, tax, depreciation, amortisation and changes in fair value (ebitdaf) will be between $530 million and $560 million in the 2013 financial year, up from $520.2 million a year earlier.

Infratil shares were unchanged at $2.19 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 $2.30.

Separately, Wellington International Airport, which is controlled by Infratil, reported a narrower first-half loss of $5.6 million in the six months ended Sept. 30, from $6.7 million a year earlier. The airport lifted revenue 8.1 percent to $51.4 million, with a 13 percent hike in landing and terminal charges, more than doubling ebitdaf to $9.5 million.

Last week, the airport was found to be targeting excessive returns in a draft Commerce Commission report which were beyond what the regulator considered reasonable.

"Wellington Airport is reviewing the findings set out in the draft report as it does not appear to recognise the overall forecast returns which are in line with the commission's guidelines," the airport said.

The airport made a subvention payment to Infratil subsidiaries of almost $30 million in the period, down from $30.1 million a year earlier.


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