Infratil beats annual profit guidance, forecasts higher future earnings from investments
By Tina Morrison
May 17 (BusinessDesk) - Infratil beat its annual earnings guidance, and said it expects profitability to increase in the
future on the back of its recent investments.
The infrastructure investor reported consolidated underlying earnings before interest, tax, depreciation, amortisation
before adjustments for fair value movements, realisations and impairments of $552.4 million in the year ended March 31,
ahead of $519.5 million last year and above its forecast for $510 million to $525 million, due to associate investment
valuations.
Infratil was established 24 years ago as a vehicle for infrastructure investment. Its initial investments in ports,
power plants, wires and airports has widened in recent years in response to changes in society, technology, and consumer
preferences to include data storage and transmission, and social infrastructure such as retirement villages and student
accommodation.
The company reiterated its forecast for 2019 normalised ebitdaf of $500 million to $540 million, compared with $478
million in 2018.
"Infratil had a positive year of operating performance and capital allocation and is well placed to provide good returns
going forward," the Wellington-based company said in a statement. "These investments provide the source of future income
and value growth. Each of last year’s new investments, Canberra Data Centres, Longroad Energy and ANU Student
Accommodation, performed above expectations" while its investments in Wellington Airport and Trustpower investments
delivered record results, it said.
The company spent $325.9 million on its investments over the past year, down from $728.2 million the previous year and
"a little less than hoped for" as a couple of investment plans took longer than expected to execute. It highlighted that
it has $533 million of funds available for potential future investment.
Over the past year, the company provided additional capital to RetireAustralia to enable a doubling of its rate of
development, and Tilt Renewables started construction of a wind farm in Victoria and contracted the electricity output,
it said.
"Looking forward, it is anticipated that earnings will rise materially over the next few years as recent investments
lift their earnings contributions," the company said.
Infratil will pay a final dividend of 10.75 cents a share on June 18, bringing the full-year dividend to 16.75 cents, up
from 15.75 cents last year.
"Capital structure and confidence in outlook are positive for continued growth in dividends per share, with potential
for higher dividend as Longroad development gains are realised," it said.
Its 2018 net profit fell to $60.5 million from $66.1 million in 2017 due to higher depreciation, tax and minorities,
partially offset by lower interest costs.
Its shares advanced 0.8 percent to $3.24 in early trading today. The stock has shed 3.2 percent so far this year.
(BusinessDesk)