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Infratil Monthly Operational Report

1 March 2010

 

Introduction

Shell NZ Transaction
Documentation of the planned acquisition of Shell NZ's sales and distribution business is at an advanced stage with an anticipated completion date of March 31, 2010. There are a number of third-party consents and approvals still to be obtained, and these are in the final stages of being negotiated and secured.

 

TrustPower

Third Quarter Operating Results for the Nine Months Ending 31 December 2009
TrustPower's electricity customer numbers as at 31 December 2009 were 226,000 up 6,000 on the same time a year earlier, but 3,000 fewer than as at 30 September 2009. For the year to date electricity sales of 3,169 GWh were in line with the same period the previous year. New Zealand generation of 1,620 GWh was down 6%. TrustPower's hydro storage is above average levels for this time of year. TrustPower indicated that "a satisfactory financial result for the year is expected."

A number of development projects were also progressed. Bids have been sought from equipment suppliers for wind turbines for the 30MW first stage of the Mahinerangi wind project near Dunedin. This will assist in determining if the project is economic at present.

TrustPower has agreed to provide water from its Highbank Station, near Ashburton, to an irrigation scheme and development of the larger Coleridge irrigation scheme has also advanced.

 

Infratil Energy Australia (IEA)

Customer numbers rose slightly over January to 408,000, an increase of 21,000 since March 2009. Growth prospects for 2010/11 are encouraging in all the states where IEA (and its subsidiaries) are currently engaged, ie. Victoria, South Australia, Queensland and West Australia. Albeit each has its own uncertainties, for instance in Queensland the Competition Authority has made a draft determination allowing a 13.8% increase to regulated electricity prices, but their final decision is not due until May.

In NSW the timetable for privatisation has again deferred and with state election due later in 2010 it is doubtful that the sale process will conclude this year.

Wholesale prices for gas and electricity continue to remain soft across the board and while this is a short term supply and demand phenomena it may be some time before the need for new capacity, the export of gas and carbon pricing result in sustainably higher prices. For IEA low wholesale prices prove a good environment for retail growth.

The 120MW Kwinana project in Perth remains on track for commissioning in June with 160 workers currently on-site and the station's four Pratt and Whitney gas turbines having been delivered last week. The 65MW Port Stanvac Power Station project, adjacent to IEA's Lonsdale facility in Adelaide, is also progressing to plan. The total cost of the two generation schemes is approximately A$180 million making them Infratil's major area of capital investment this financial year.

Work is now underway reviewing the feasibility of adding a further 120MW of capacity to Kwinana.

 

NZ Bus

Auckland patronage in January was 3.3% below the same month last year, a small improvement on the 4.3% decline experienced over the ten months since 31 March 2009.

The passenger trend reflects a number of factors that have disrupted services and reduced travel demand. A number of poorly patronised services have also been withdrawn as NZ Bus has worked with ARTA to reduce costs. Within the region patronage has held up on northern and western corridors, but has been weak in central and southern areas.

For the Southern Region patronage was down 3.4% in January relative to the same month in 2009, which is relative to flat patronage over the last year. The results of individual routes in Wellington and the Hutt have differed with some, for instance the Airport Flyer having an excellent month.

At the end of January NZ Bus and Greater Wellington Regional Council start the new commercially based contract in the Hutt which the parties expect will deliver better public transport at less cost to ratepayers.

Northern passenger trips January 10 months to 31 January
2009 2,234,615 29,050,426
2010 2,161,112 27,790,794
Change -3.3% -4.3%
Southern passenger trips January 10 months to 31 January
2009 1,222,276 16,494,125
2010 1,180,561 16,379,169
Change -3..4% -0.7%
 

Wellington Airport

Wellington Airport was ranked best Australasian airport by business passengers in the DKMA Airport Service Quality (ASQ) survey in the December quarter 2009. The Airport was also first ranked for ground transportation links.

In January international passengers were up 3.6% on the same month last year (up 2.6%YTD) and domestic passengers were up 1.4% (down 4.2% YTD).

This is the first positive percentage change on domestic travel since October 2008 and was achieved despite domestic seat capacity falling 8.7%, resulting in over 80% of those seats being sold which is well up over the year prior. The increase in domestic passengers was limited to the more competitive trunk services where use was up 6.1% on January 2009 while passengers on regional services were down 6.6%.

Traffic was positively affected in January by Wellington hosting two AC/DC concerts, while an unusual number of fog days had some negative impact on services

  January Domestic January
International
Total Passengers
10 months to 31 January
2008 374,495 54,414 4,062,049
2009 337,352 60,072 4,382,319
2010 342,010 62,211 4,234,243

Operational figures

International services were at 82% of seat capacity in January reflecting good demand and competitive pricing. In particular Sydney traffic was up 20.2% off a 21.3% increase in capacity due mainly to Pacific Blue's new services.

The new pay-by-use Wild at Heart Lounge (pictured) and on-line car parking booking service have improved Wellington Airport passenger services. Pacific Blue is now providing complementary lounge access for its Velocity Gold and Corporate Plus customers and guests.

 

Glasgow Prestwick

  January
Freight Tonnes
January
Passengers
Total Freight
10 months to 31 January
Total Passengers
10 months to 31 January
2008 1,804 145,550 26,047 2,068,511
2009 1,064 131,875 16,581 2,024,947
2010 747 103,188 10,661 1,488,638

Operational Figures

103,188 passengers used Glasgow Prestwick Airport in January, 22% less than a year prior, in line with recent trends. The winter sun destinations continue to perform with strong load factors.

Severe weather conditions continued into January resulting in occasional disruption to flight schedules. Glasgow Prestwick continued to handle diversions from other major UK Airports with airlines including ; Delta, Aer Lingus and British Airways.

Freight volumes for January were 747 tonnes which is a 30% reduction on the prior year.

Kent Airport

  January Freight Tonnes Total Freight
10 months to 31 January
2008 3,728 25,053
2009 2,265 17,555
2010 2,637 29,867

January freight volume at KIA was 2,637 tonnes, 16% up on January 2009. For the ten months of the financial year to date cargo traffic is 70% ahead of the comparative period in 2008/9.

In February Flybe, Europe's largest and most successful regional airline announced that it would commence daily services between Kent Airport and Edinburgh on the 27th of May 2010. The service will operate using 78 seat Bombardier Q400 aircraft and marks the return of daily scheduled passenger traffic to KIA.

 
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