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Infratil Monthly Operational Report

18 December 2009

 

Introduction

Infratil and its partner the New Zealand Superannuation fund continue to progress the necessary due diligence and documentation to acquire Shell's sales and distribution activities in New Zealand and its stake in NZ Refining. The process is significantly advanced and is expected to complete early in 2010.

Progress has also occurred with Greenspark Power Holding's bid for Australian company Energy Developments Limited. The bid is at A$2.75 a share although recent trading in the market has been slightly higher. Infratil owns 32.5% of Energy Developments and has indicated that it supports the Greenspark bid.

Infratil's Interim Report is now available and will be mailed to shareholders over the next few days.

 

TrustPower

TrustPower announced the appointment of Vince Hawksworth as its new Chief Executive to succeed Keith Tempest. Vince was previously CEO of Hydro Tasmania and before that was head of retail for Genesis Energy.

TrustPower opened an issue of five and seven year bonds which is receiving good investor support. The 5 year issue will close on Friday 18 December having met its $75 million target, the 7 year offer remains open.

The Minister of Energy announced a raft of initiatives to enhance the efficiency of the New Zealand electricity market. The initiatives will take time to take effect but seem likely to be of benefit. It is crucial for the country to have an electricity sector which operates on sound economic principles.

However, investors will continue to have concerns about rational pricing and investment decisions being made by the three State Owned Companies, as their transparency, accountability and incentives have not been addressed by these changes.

 

Infratil Energy Australia (IEA)

At end of November customer numbers were up by approximately 20,000 for the year at 407,000 accounts. IEA is being selective about the customers it signs up.

Victoria remains very competitive with high churn and increasing concern from customer advocacy groups about some of the door-knocking and other direct sales channels. There are good growth prospects in NSW and Queensland, especially if margins can be maintained in those markets after recent network price increases.

The 120MW Kwinana generation project remains on track for 2010 commissioning.

 

NZ Bus

Patronage in November in Auckland still continued to feel the residual impact of service disruptions in October, with patronage for most business units falling below the prior year. Overall, patronage year to date is 4.5% lower.

Patronage in the Southern Region continues to grow and was 4.0% above the prior year, primarily due to strong growth for Go Wellington with improved recording of child passengers using Snapper.

Northern passenger trips Nov 8 months to 30 Nov 12 months to 30 Nov
2008 2,942,313 24,367,843 34,325,481
2009 2,784,781 23,269,768 34,451,964
Change -5.4% -4.5% +0.4%
Southern passenger trips Nov 8 months to 30 Nov 12 months to 30 Nov
2008 1,639,991 13,815,442 19,866,003
2009 1,705,622 13,747,073 19,963,765
Change +4.0% -0.5% +0.5%
 

Snapper

Snapper's roll-out in Wellington continues to plan. Snapper can now be used to purchase tickets on the East West ferries and onboard ticketing will commence in December. Installation of Snapper on Wellington's taxis remains on target for March 2010. The number of retailers also continues to increase and every Snapper retail spend over December, January and February enters that card into a draw to win top-ups. Snapper has also partnered with Reading Cinemas, Courtenay Place to deliver Snapper Mondays - $11.50 movie tickets when paying by Snapper.

Over December 16-18 the best junior divers from Asia and the Pacific will be at the Wellington High Performance Aquatics, Fisher & Paykel diving competition, and so will Snapper. Competitors and officials will have Snapper Photo IDs which contain a Snapper chip. This will grant access to the event, travel around Wellington on public transport and the ability to buy a coffee or Coke at the venue.

For sporting and cultural events it means that hosts can provide a low-cost but high-value benefit to guests. Retailers interested in attracting such short-stay visitors will also be offered partnership opportunities. It will be ideal for visitors such as cruise ship tourists who have little time and don't want to deal with cash.

Snapper reached agreement with NZ Bus to deploy on its Auckland fleet of over 600 vehicles providing approximately 40 million trips a year. This is scheduled to occur in 2010. Subsequent to this being announced the Auckland Transport Agency and the Government transport funding agency announced that they have signed with French security and defense group Thales to develop a ticketing system for Auckland.

Both Snapper and the Thales system will be required to comply with the yet to be defined NZ Standard for Integrated Ticketing. While it is anticipated that this will be practical, what is less clear is how Snapper will compete with a tax-payer funded option or if the Auckland Agency will even allow competition with its system.

 

Wellington Airport

Wellington Airport launched two passenger services new to New Zealand. Car parking can now be booked and paid for on-line. This will give the Airport greater ability to manage its car park capacity and to pass on this benefit to users with offers of upgrades and lower charges. In addition, Wellington is now offering a pay-per-use lounge for travellers who want these facilities, but do not want to purchase membership of an airline club.

The Wild at Heart Lounge is available to all airport users. It offers comfort, full office facilities, showers, and food and beverage catered by Wellington's iconic MOJO. Entry to the lounge is $25 per visit, discounted to $19 until March 2010.

Both the car parking and lounge can be viewed and booked on-line at www.wellington-airport.co.nz

In November international passengers were up 1.3% on the same month last year (up 2.2%YTD) while domestic passengers were down 0.6% (down 5.2% YTD).

Trunk services operated at over 78% of capacity, reflecting good demand and competitive pricing, but regional services continue to be affected by the recession with capacity off 10.4% relative to a year ago while passenger numbers were down 6.3%.

  Nov Domestic Nov International Total Passengers 8 months to 30 Nov
2007 403,474 49,198 3,184,056
2008 385,815 50,724 3,550,588
2009 383,527 51,375 3,393,814

Operational figures

Traffic to Sydney continues to grow following the introduction in September of Pacific Blue's new services. November 2009 saw 5.9% more passengers than a year prior. Brisbane passengers were also up 4.3% with Melbourne up 4.8%.

 

Glasgow Prestwick

  Nov Freight Tonnes Nov Passengers Total Freight
8 months to 30 Nov
Total Passengers
8 months to 30 Nov
2007 3,001 163, 389 21,407 1,754,993
2008 1,300 154,006 14,351 1,738,634
2009 873 112,612 9.063 1,278,417

Operational Figures

112,612 passengers used Glasgow Prestwick Airport in October, 27% less than a year prior, in line with recent trends. The winter sun destination continue to perform with strong load factors.

In November Ryanair announced a new route to the South of France city of Carcassonne, commencing March 2010 as well as increased frequencies on six existing routes. Ryanair also announced the withdrawal of the Shannon route due to commercial issues at Shannon Airport.

Freight volumes for November were down compared to prior months at 873 tonnes which is a 33% reduction in the prior year.


Kent International Airport

  Nov Freight Tonnes Total Freight
8 months to 30 Nov
2007 3,758 17,243
2008 1,235 10.009
2009 3,752 23,556

November freight volume at KIA was 3,752 tonnes, 1,025 tonnes (37.6%) ahead of last year and consistent with the strong freight results achieved at the airport during 2009. For the financial year to date cargo traffic is more than double that of the 2008 performance and 37% ahead of the previous peak volumes reached in 2007.

Cargo Italia paid its first visit to KIA in November, operating an MD-11 aircraft carrying concert equipment for Beyonce's tour dates at London's 02 Arena.


 
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