Infratil on Facebook
Email not displaying correctly? View it in your browser
Infratil Monthly Operational Report
26 August 2010
Shareholders at Infratil's annual meeting
briefly discussed and passed all resolutions. Chief Executive Marko
Bogoievski noted that performance over the first third of the financial
year had improved confidence about the 2010/2011 earnings guidance
of $390 million to $430 million (7% to 18% uplift over 2009/10)
and that the current environment is also providing attractive investment
opportunities, such as Greenstone Energy. Infratil
Infratil is to list on the ASX on Monday 30 August under
the ticker code IFZ, making its shares more accessible for Australian
investors. Coincidentally Infratil's subsidiary Perth Energy (82%
owned) commissioned its 120 MW power station at Kwinana. The site
of this station is adjacent to two gas pipelines and two high-voltage
transmission lines and is well placed for expansion once stage one
has an operating record.
Infratil Infrastructure Property (IIP) and the Public Infrastructure Partners
Fund (also managed by Morrison & Co) lodged proposals with the Crown
to develop the National Convention Centre at IIP's Halsey Street
site in the Auckland Viaduct Basin.
If this progresses IIP may sell its interest in this site to Auckland
City with the Public Infrastructure Partners Fund undertaking the
development in partnership with the City and Crown. Coincidentally
the PIP Fund recently announced it was making a $39 million investment
in the Melbourne Convention and Exhibition centre.
IIP is also progressing development options for its other land holdings
at Stoddard Road and New Lynn in Auckland and Kilbirnie in Wellington.
It must have been wet and windy over New Zealand April to June as
TrustPower's wind and hydro generation were both up markedly on
the same three months last year. South Australia conversely seems
to have enjoyed a quiet spell with TrustPower's windfarm at Snowtown producing 14% less electricity than the same period in 2009.
Over the last 12 months TrustPower's residential customer numbers
have fallen 3% and June quarter 2010 retail sales were down 7% versus
the same period in 2009 while sales to commercial customers rose
6%. The state owned generators are particularly active competitors
in the residential market.
Infratil Energy Australia
Perth Energy, 82% owned by Infratil
and part of the Infratil Energy Australia group, commissioned its
A$120 million, 120 MW Kwinana Power Station.
The Western Australia Energy Minister Peter Collier cut the ribbon
and noted that the station will help the State achieve its share
of the national target of 20 per cent renewable electricity by 2020.
"This will assist with increasing Western Australia's capacity
to manage intermittent power on the grid from renewable energy sources,
such as wind and solar. The station will also increase reliability
of supply during high demand periods and add significant security
during system emergencies through its capacity to quickly switch
fuels from gas to diesel."
media coverage from Perth now and
IEA Chief Executive Darryl Flukes noted that the station represented
the outcome of a complex jigsaw of development applications, network,
water and fuel agreements, leases and easements, financial arrangements,
procurement and construction projects. While many people contributed,
the finished power station was the product of Perth Energy managing
director Ky Cao's vision and tenacity. He identified and contracted
the site over a decade ago, built up Perth Energy's retailing business
and convinced the investors. Also deserving thanks are CTEC for
finishing construction bang on budget, the ANZ and ICBC banks who
managed the financing very efficiently and the West Australian government
which has progressed reform of the State's electricity industry
providing confidence that prudent and innovative investors and operators
will be rewarded.
Greenstone launched an issue of bonds
paying 7.35% maturing in October 2016. The issue has been well received
by the market with expressions of demand outstripping the initial
$100 million target. All of the bond proceeds will be used to retire
The bonds are an important test of the New Zealand capital market
as they come from a major new issuer operating in a sector to which
New Zealand investors have not previously been exposed. The company
undertook a comprehensive information and briefing programme for
banks and brokers and approximately 200 people attended presentations
held in Auckland, Wellington, Christchurch and Dunedin. The Investment
Statement has received considerable positive feedback.
Greenstone's operational performance has also been good with sales
strong in both retail and commercial fuels. Backing this up the
company has just announced the fourth new distribution site since
its acquisition of the Shell business in April. Greenstone operates
in an infrastructure intensive sector and growing throughput and
investment can only occur in unison.
The New Zealand Refining Company announced its results for the six
months to 30 June providing a positive surprise to the market as
its volumes and margins were both up on the previous six months.
Over the period approximately 30% of the refinery capacity was allocated
to Greenstone. NZRC also published its forecasts for NZ fuel demand
and its share of the consumption.
The NZ Bus staff voted to accept the
terms negotiated by the company and the Wellington Tramways and
Manufacturing and Construction Workers unions. Most driving and
maintenance staff now have employment agreements until 2012 for
Valley Flyer and 2013 for GO Wellington. Along with the Auckland
agreements reached last year this means stability in employment
relations through to 2013 and continued focus on improving services.
The engagement achieved with the Wellington unions is also a positive
platform to progress other initiatives in health, safety and training.
Ongoing discussions between Ministry of Transport and NZTA officials,
representatives of regional transport agencies and operators has
yet to produce a concrete outcome for the intended new contracting
regime. However progress is being made and the new regime should
start to be implemented later this year.
Patronage over the first four months of the financial year was up
2% in both Auckland and Wellington (about 350,000 more trips). In
July this momentum was maintained in Wellington while Auckland patronage
As seems to be the norm, individual route performance varied markedly
and at times it has been difficult to isolate the factors lifting
or depressing usage. Tertiary and senior use remains strong, but
factors such as Wellington commuter rail irregularities have flowed
through to all public transport as commuters have reverted to their
||4 months to 31 July
||12 months to 31 July
||4 months to 31 July
||12 months to 31 July
Trials were undertaken with the first
group of taxis and implementation of Snapper payment capability
in Wellington cabs is on track to be installed over the next month.
Six taxi companies, two bus lines and the Wellington ferries will
all be accepting Snapper. Which leaves only the Cable Car, trains
and Newlands and Mana buses awaiting better ticketing arrangements.
The next fillip for Snapper arrives
on 1 October when Greater Wellington's adjustments to fares increases
the benefit of using Snapper rather than cash.
The table below summarises the fare
changes and shows that except for City and One Zone fares, in every
other instance a bus patron can save money switching from cash to
Snapper even though the average fare increase is about 10%. The
new fares reflect the higher GST.
Over the first four months of the
financial year passenger numbers rose 1% relative to the same period
in 2009. In July, passengers were up 2% relative to the year prior
despite 2% less airline capacity.
Year to date domestic passenger numbers
are 1% ahead of the same period last year on 2% less capacity. In
July domestic load factors were 77% as against 74% a year prior
and domestic passengers were flat relative to the same month last
year. Auckland and Christchurch traffic were down but this was offset
by a 9% increase in passengers on regional services. Regional capacity
increased 2% with extra frequencies on the Nelson and Queenstown
International passengers were up 1%
over the four months on a 4% capacity lift. In July international
passengers were 11% higher than the year prior with Melbourne passenger
numbers increasing 8%, Sydney by 15% and Brisbane by 7%. Relative
to the same month last year international load factors were 2% higher.
The announcement by Pacific Blue that it is to withdraw its two
B737 from domestic services from October was a disappointment, but
the disruption will be minor as the airline currently only flies
between Wellington and Auckland three times a day and Wellington
and Christchurch twice daily. It is expected that Air New Zealand
and Jetstar will increase services to maintain the overall level
of services. Jetstar has already announced that it will be introducing
two further A320 to New Zealand domestic services.
Pacific Blue continues to provide Australian services to six New
Zealand cities and Wellington Airport anticipates continuing to
work with the airline on its connections with Sydney and Brisbane.
Pacific Blue remains an important part of New Zealand's international
|| July Domestic
4 months to 31 July
Passenger numbers were up 3% in July
relative to the same month last year. Glasgow's sunshine routes
continue to perform well with strong load factors and forward bookings.
Freight volumes were up 1% in July relative to the same month last
4 months to 31 July
4 months to 31 July
Manston (Kent International)
Freight decreased in July relative
to June mainly due to the unexpected cessation of Meridian Airlines
combined with aircraft technical problems causing diversions for
two other inbound flights. A smaller crop harvest in Kenya has also
lead to lower tonnages being exported to the UK.
Edinburgh passenger numbers continue to be strong and slightly ahead
||July Freight Tonnes
|| July Passengers
|| Total Freight
4 Months to 31 July
| Total Passengers
4 Months to 31 July
Unsubscribe me from this mailing list | Infratil.com | Infratil on Facebook