2016 Annual Report Highlights

Financial Summaries

The financial results of FY2016 were dominated by Infratil’s divestment from Z Energy and iSite, and the investment programmes of Trustpower and Wellington Airport. The former delivered gains of $419.3 million, but of course reduced the potential contribution from those companies’ earnings. Similarly the investment activities of subsidiaries such as Wellington Airport and Trustpower are intended to build future returns, but have adverse consequences for current earnings. Having $728.6 million on deposit with banks earning 2% per annum also held back earnings. 

 

277,000 households using renewably generated electricity

62,000 householders with internet

11,550 residents in retirement accommodation or care

59,900,000 public transport trips

5,800,000 airport passenger movements

Highlights

Year ended 31 March

2016

2015

Net Parent Surplus

$438.3m

78.0 cents per share 

$383.5m

68.3 cents per share 

Underlying EBITDAF1

$462.1m 

$450.7m 

Capital Expenditure

$220.9m 

$465.4m 

Divestments

$530.5m 

$700.0m 

Net Debt

Infratil and 100% subsidiaries 

$295.9m

14% of capitalisation 

$760.8m

30% of capitalisation 

Capital Management

-

$120.0m 

Ordinary Dividends Declared

14.25cps 

12.5cps 

1. Underlying EBITDAF is a non-GAAP measure of financial performance, presented to show management’s view of the underlying business performance. Underlying EBITDAF represents consolidated net earnings before interest, tax, depreciation, amortisation, financial derivative movements, revaluations, non-operating gains or losses on the sales of investments, and includes Infratil’s share of its associates’ (Metlifecare and RetireAustralia) underlying profits. Underlying profit for Metlifecare and RetireAustralia removes the impact of unrealised fair value movements on investment properties, impairment of property, plant and equipment and excludes one-off gains and deferred taxation. 

Financial Trends

The graphs show the evolution of Infratil's portfolio of businesses, EBITDAF, cash flow, dividend, asset and capital structure.

Financial Trends

EBITDAF

Underlying EBITDAF* (Earnings before interest, tax, depreciation, amortisations and adjustments for fair value movements, realisations and impairments) Since 2012 businesses that contributed approximately $115 million have been sold for $1,606 million. Retained businesses have grown by $36 million while retirement businesses acquired for $369 million contributed $34 million over FY2016. 

Infratil  Sources of Consolidated EBITDAF1
Operating Cash Flows and Dividends

Operating cash flow comprises underlying EBITDAF less payments of interest and tax and changes to working capital. 

Infratil  EBITDAF, Free Cash Flows, Dividends1
Infratil’s Assets

Over the graphed period Infratil has invested $3,313 million and raised $2,060 million from divestments. This, depreciation and changes to market values has resulted in the evolution of Infratil’s assets. 

Infratil  Infratil's Assets1
Infratil’s Capital Structure

The proportion of Infratil’s funding provided by equity (at market value) and perpetual and dated debt. 

Infratil  Infratil's Capital Structure1

Infratil Financial Performance

Consolidated Results

Year Ended 31 March
($Millions)

2016

2015

Operating revenue

$1,775.7

$1,635.0

Operating expenses

($1,284.3)

($1,186.2)

Depreciation & amortisation

($172.1)

($148.3)

Net interest

($169.9)

($180.2)

Tax expense

($24.8)

($19.3)

Revaluations

($65.4)

($6.8)

Discontinued operations

$463.3

$372.1

Net Profit after tax

$495.5

$466.3

Minority earnings

($57.2)

($82.8)

Net parent surplus

$438.3

$383.5

 

Reconciliation of Net Profit After Tax to Underlying EBITDAF

Year Ended 31 March
($Millions)

2016

2015

Net Profit After Tax

$495.5 

 $466.3

less: share of MET & RA* investment property revaluations

 ($58.4)

 ($16.1)

plus: share of MET & RA realised resale gains

 $14.2

$5.3 

plus: share of MET & RA development margin

 $7.9

$3.4 

plus: share of MET & RA deferred tax expense and non-recurring items

$2.8 

$9.5 

NZ Bus onerous depot lease provision adjustment

 $4.2

 -

Net loss/(gain) on foreign exchange and derivatives

$13.6 

$36.3 

Net realisations, revaluations and (impairments)

$51.8 

($29.5) 

Discontinued operations

 ($436.3)

 ($372.1)

Underlying earnings

 $95.3

 $102.9

Depreciation & amortisation

$172.1 

$148.3 

Net interest

$169.9 

 $180.2

Tax

 $24.8

$19.3 

Underlying EBITDAF

$462.1 

 $450.7

*MET is Metlifecare and RA is RetireAustralia

 

Underlying EBITDAF 

Year Ended 31 March
($Millions)

2016

2015

Trustpower

$329.4 

$330.7 

Wellington Airport

 $86.1

$82.1 

NZ Bus

$42.0 

 $34.2

Perth Energy

 $2.9

$14.1 

Metlifecare

 $12.4

 $9.4

Retire Australia

 $21.1

$2.6 

Parent/Other

 ($31.8)

 ($22.4)

Underlying EBITDAF (Continuing operations)

 $462.1

 $450.7

Discontinued operations

$18.4 

 $71.4

Total Underlying EBITDAF

$480.5 

 $522.1

 

Breakdown of Consolidated Underlying EBITDAF & Net Surplus before Revaluations

The following tables give the breakdown of Infratil’s underlying EBITDAF, depreciation & amortisations, interest and tax by business, for the last two financial years. 

Year Ended 31 March 2016  

($Millions)

     EBITDAF

D&A

Interest

Tax

Total

Ownership

Infratil Share

Trustpower

$329.4 

 ($117.0)

($81.1)

($33.2) 

$98.1

51% 

$50.1 

Wellington Airport

$86.1 

($16.5)

($16.8)

($11.1)

$41.7

66% 

 $27.5

NZ Bus

$42.0 

 ($31.4)

($3.0)

$0.4

$8.0

100%

$8.0

Perth Energy

$2.9

($6.4)

($4.2)

$2.1

($5.6)

80%

($4.5)

Metlifecare1

$12.4

 -

-

-

$12.4

20%

$12.4

RetireAustralia 1

$21.1

-

-

-

$21.1

50%

$21.1

Parent/Other

($31.8)

 ($0.8)

 ($64.8)

$17.0

($80.4)

100%

($80.4)

Total

$462.1

($172.1)

($169.9)

($24.8)

$95.3

 

$34.2

Discontinued operations

$18.4

($1.1)

 -

$0.3

$17.6

100%

$17.6

Total

$480.5

($173.2)

($169.9)

($24.5)

$112.9

 

 $51.8

1. With Metlifecare and RetireAustralia Infratil accounts for its share of their earnings.
Year Ended 31 March 2015

($Millions)

     EBITDAF

D&A

Interest

Tax

Total

Ownership

Infratil Share

Trustpower

$330.7

 ($98.2)

($78.5) 

 ($20.7)

$133.3 

51% 

$68.0 

Wellington Airport

$82.1 

($16.2) 

($17.8) 

($9.5) 

$38.6 

66% 

$25.5 

NZ Bus

$34.2 

($26.4) 

($1.0) 

$3.6 

$10.4 

100% 

$10.4 

Perth Energy

$14.1 

($5.9) 

($4.4) 

($1.1) 

$2.7 

80% 

$2.2 

Metlifecare 

$9.4 

 -

$9.4 

20% 

$9.4 

RetireAustralia 

$2.6 

$2.6 

50% 

$2.6 

Parent/Other

($22.4) 

 ($1.6)

($78.5) 

$8.4 

($94.1) 

100% 

($94.1) 

Total

 $450.7

($148.3) 

($180.2) 

($19.3) 

$102.9 

 

$23.9 

Discounted operations 

$71.4 

 ($10.9)

($0.1) 

($11.1) 

$49.3 

 100%

$49.3 

Total

$522.1 

($159.2) 

($180.3) 

($30.4) 

$152.2 

 

$73.2 

 

Consolidated Operating Cash Flow 

Year Ended 31 March
($Millions)

2016

2015

Underlying EBITDAF (continuing operations)

 $462.1

 $450.7

Net interest

 ($161.8)

 ($167.4)

Tax paid

($51.8) 

 ($57.0)

Working capital/other

($12.4) 

 ($4.4)

Discontinued operations

 $14.4

 $13.7

Operating cash flow

$250.5 

$235.6 

 

Infratil’s Assets 


($Millions)

31 March 2016

31 March 2015

Trustpower

 $1,223.6

 $1,270.0

Wellington Airport

 $408.9

$349.9 

NZ Bus

$201.5 

$285.8 

Perth Energy

 $69.2

 $76.7

Z Energy

 $410.4

Metlifecare

 $222.7

$199.6 

RetireAustralia

 $252.9

 $208.6

Infratil Energy Australia

Other

$73.2 

$86.5 

 

 $2,452.0

 $2,887.5

For 31 March 2016 a NZ$/A$ exchange rate of 0.9027 was used (0.9785 for 2015). Values exclude 100% subsidiaries' cash balances and deferred tax where CGT does not apply.

Changes to the values of Trustpower and Metlifecare are due to changes in their share prices on the NZX. $0.6 million was also invested in Metlifecare through the reinvestment of dividends.

Changes in the value of Perth Energy, Wellington Airport, RetireAustralia and NZ Bus reflect the difference between the companies’ net surplus over the period and payments to shareholders. Infratil also wrote down goodwill associated with NZ Bus by $55 million. The value of Perth Energy and RetireAustralia will also change with fluctuations in the NZ$/A$ exchange rate.

“Other” now includes Snapper, Infratil Infrastructure Property and ASIP. 

Infratil's Funding

($Millions)

31 March 2016

31 March 2015

Net cash of 100% subsidiaries

 ($661.1)

 (228.4)

Dated Infrastructure Bonds

 $723.6

 $754.3

Perpetual Infrastructure Bonds

 $233.4

 $234.9

Market value Infratil equity

 $1,844.4

 $1,786.8

Total capital

 $2,140.3

 $2,547.6

Net dated debt / total capital

2.9% 

 20.6%

Net debt / total capital

13.8% 

 29.9%

 

The $464.9 million reduction in the net debt of the 100% group is largely explained by the $528.2 million received from asset sales.

As at 31 March 2016 Infratil and 100% subsidiaries had $343.5 million of committed bank funding facilities of which $67.5 million was drawn. 

Shareholder Returns & Ownership

Infratil’s share price rose from $3.18 on 1 April 2015 to $3.28 on 31 March 2016. Fully imputed dividends of 14.4 cents per share and 5.25 cps were paid in June and December 2015 respectively.

Had the dividends been reinvested in Infratil shares at the time they were paid they would have provided a return of 6.5% per annum on the 1 April 2015 share price. The share price appreciation returned a further 3.1% per annum. Jointly the total return amounted to 9.6% per annum. The prior year returns were 13.9% per annum from dividends and 40.7% from share price movement.

Over the last five years Infratil’s compound return after tax to shareholders has been 17.74% per annum. Over the 22 years since Infratil listed compound after tax returns have been 17.95% per annum.

Someone who invested $1,000 in Infratil shares on 31 March 1994 and subsequently reinvested all dividends and the value of rights issues, etc. (i.e. who neither took money out nor put money in) would, as at 31 March 2016, own 11,519 shares worth $37,781. 

 

22 Year Track Record

 Infratil  22 year track record 22 year track record

Ownership

Approximately 20% of Infratil's shares changed hands over the year, about the same as the prior year. New Zealand domiciled ownership increased to slightly over 76%. The ten largest New Zealand institutional holdings amounted to 140 million shares as at 31 March 2016 from 145 million shares a year ago. The ten largest offshore institutional holdings rose to 88 million shares from 76 million a year prior.

 

31 March 2016

31 March 2015

 

Million Shares

%

Million Shares

%

New Zealand retail investors

250

44%

242

43%

New Zealand institutions

149

27%

145

26%

Utilico

20

4%

39 

7%

Management/other

30

5%

35

6%

Offshore

113

20%

101

18%

 

 562

 

 562

 

 Infratil has approximately 23,000 individual shareholders and 16,000 bondholders. Approximately 100 of the owners are offshore domiciled.

2016 Annual Report
2016 Annual Report
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