2016 Annual Report Highlights

Strategic Overview

Infratil owns energy, transport and social infrastructure businesses that provide essential services to individuals and communities. If they are efficient and provide good services they create opportunities for profitable growth. This requires continual refinement and improvement because the needs of individuals and communities evolve, business practices and models improve, and technology changes.

 

2016 Annual Report
2016 Annual Report
Download PDF (2.4 MB)

Evolution

Or how Infratil can surf the waves of change coming from financial markets, new technology and societal trends.

New Zealanders are a resilient people. We have sailed through changes, natural disasters and events which elsewhere have floored many.

One in four Kiwis was born outside of New Zealand (more than twice the comparable percentage of the people of the UK, France or Germany and almost double the rate of the USA). 19 of today’s 20 NZX20 companies weren’t on the list two decades ago. Land that recently grew pine trees and clover for sheep is now home to grapes or bees or irrigated and growing grass for cows. The country’s top export market was the UK, then Australia and is now China. New Zealand’s entire national computing power in 1995 would be less than that of the cell phones of a classroom of school children today.

There are lessons for companies. The benefit of being prepared to change and move-on even if it means write-offs, and that diversity is of benefit when meeting challenges.

Today Infratil faces disruptive influences which must be navigated if good services are to be provided to our communities and satisfactory risk-adjusted returns generated for shareholders.

Many people, companies and even countries have debt that is only supportable because of near-zero interest rates. “Free” money is distorting asset values and resulting in unsatisfactory retirement incomes for many people. Financial markets resemble Wile-E-Coyote’s moment of suspension.

Technology developments will also be disruptive, but in addition they offer huge promise and productivity gains, the connectivity of the mobile internet; electric vehicles; smart infrastructure; self-drive vehicles; low-energy appliances. It will not be long before you can share a ride on a cheap, efficient, electric powered, self-driving bus; assuming regulators allow it! Smart phones hugely increase connectivity, access to information and provide all manner of additional functionality. They have also half destroyed the traditional media industry, cameras with film and music shops. Impending changes to urban transport will be just as positive for individuals and just as disruptive to providers.

Alongside financial and technology changes comes societal change; more people living in cities, more elderly, more people with discretionary income to spend, and changes in people’s habits, spending patterns and preferences, all with consequences for road congestion, tourism, healthcare, housing, social facilities, and attitudes to the environment and social justice.

Several waves of change are colliding. Outcomes depend on choices not destiny.

This Annual Report covers Infratil’s operational and financial performance and how Infratil is coping with these powerful external factors.

2016 Annual Report
2016 Annual Report
Download PDF (2.4 MB)