Infratil sees gain in operating earnings this year

Infratil predicts gain in operating earnings as interest costs fall, spending trimmed

May 18 – Infratil Ltd., whose investments include a controlling stake in Trustpower, bus services in Auckland and Wellington, and Wellington’s airport, forecast a 12% gain in operating earnings on lower interest costs and reduced investment spending.

Earnings before interest, tax, depreciation, amortization and revaluations (EBITDAF) may rise to between NZ$375 million to NZ$400 million in the year ending March 31, from NZ$356 million last year, the company said in a presentation with its results. Earnings growth may be little changed from last year’s 13%.

Wellington-based Infratil today posted a net loss of NZ$191 million for the year ended March 31, a deterioration from the previous year’s NZ$1.7 million loss, mainly reflecting the NZ$179 million writedown in the value of listed investments. It kept its final dividend unchanged at 3.75 cents a share.

“The last year witnessed an extraordinary test of the global financial markets and the companies functioning within it, chief executive Marko Bogoievski said. “Infratil did not deliver on its primary goal of providing its shareholders with superior risk-adjusted returns.”

While the focus on energy, airports and public transport “continue to offer excellent long-term prospects” some investments “have not performed and the immediate objective is to either improve their returns or re-allocate capital,” he said.

Shares of Infratil fell 2.9% to NZ$1.65 and are up 4.3% this year. In the past 12 months, the shares have declined 28%.

The value of Infratil’s biggest investment, 50.5% of TrustPower, was valued at NZ$1.12 billion as at March 31, down from NZ$1.19 billion a year earlier.

Infratil Airports Europe fell to 221.8 million from NZ$287.8 million and Auckland International Airport Ltd. fell to NZ%81.1 million from NZ$90.2 million.

By contrast, Wellington Airport was listed among assets as being worth NZ$285.9 million, up from NZ$247 million, and its NZ Bus unit rose to NZ$210.9 million from NI$202.8 million.

Discretionary investment is “on hold unless the opportunity is compelling and/or perishable,” the company said in its presentation today. “Use of capital must reflect value and opportunity cost.”

(Businesswire)

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