HomeInfratil News1999Announcement of Results for the Year Ended 31 March 1999

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Announcement of Results for the Year Ended 31 March 1999

17 May 1999


Infrastructure & Utilities NZ Limited's ("Infratil") net surplus after tax before investment realisations for the year ended 31 March 1999 increased by 50.6% to $14.9 million over the $9.9 million earned for the same period last year.

Net profit after tax, investment realisations and equity accounted contribution totalled $26.6 million, a 162.8% increase over the $10.1 million earned for the same period last year. Investment realisations surplus of $11.4 million included smaller, non strategic investments, realised principally to assist with funding the Wellington International Airport ("WIAL") acquisition.

Infratil has equity accounted its share of WIAL's operating surplus for the period 1 December 1998 to 31 March 1999. In addition, WIAL's assets and liabilities have been consolidated as at 31 March 1999.

Total dividends (ordinary and special) received from the Company's investments increased by 83.6% to $19.9 million from $10.8 million for the same period last year, based on another year of strong operating performances by TrustPower, Port of Tauranga and CentralPower.

Earnings per share, calculated on net surplus before realisations increased by 56.0% to 7.83 cents per share from 5.02 cents per share for the previous year on an undiluted basis.


Directors have declared a final dividend of 3.00 cents per share and a special dividend of 2.25 cents per share, a total of 5.25 cents per share fully imputed. These will be paid on 4 June 1999 to holders registered at 5:00 pm 28 May 1999.

The final ordinary and special dividends, together with the interim dividend paid in November 1998 represent a total distribution for the year of 8.00 cents per share fully imputed, equivalent to a gross dividend of approximately 12 cents per share for full tax paying shareholders.


A highlight of Infratil's 1998/99 year was the acquisition of 66% of Wellington International Airport Limited ("WIAL"). Infratil's agreement with Alliant International (NZ) Limited ("Alliant") and the progress made by TrustPower in becoming a national generator and retailer were also important milestones for the Company.

The acquisition of the WIAL stake was made in two steps. On 14 August 1998 the Government announced that NZ Airports Limited, an Infratil led consortium, had successfully bid for the Crown's 66% interest in WIAL. Infratil's 40% interest in the bidding vehicle represented a 26.4% interest in WIAL.

In a subsequent transaction, Infratil announced on 22 December 1998 it had reached an agreement with its co-investors to purchase the balance of the shares in NZ Airports Limited for $68 million. This transaction settled on 31 March 1999 and, as a result, Infratil now directly holds 66% of WIAL.

As part payment for the 39.6% stake in WIAL acquired through buying out Infratil's consortium partner's shares in NZ Airports Limited, the Company issued an initial 31 million Infrastructure Bonds and Infratil Warrants on 31 March 1999. A non-renounceable 1:10 issue of Infrastructure Bonds and Infratil Warrants to shareholders was also announced on 22 December 1998. The Infrastructure Bonds and Infratil Warrants commenced trading on the New Zealand Stock Exchange on 7 May 1999.

In December 1998 TrustPower announced the sale of its distribution network for $485 million. In doing so, it complied with Part II of the Electricity Industry Reform Act and signalled its objective to become a national generator and retailer. By 31 March 1999 TrustPower, through acquisitions, had increased its generation capacity to 439MW and customers to 203,000.

On 17 February 1999 Infratil announced that it had entered into a Co-Investment Agreement with Alliant to jointly pursue investments in the New Zealand electricity sector. In particular, both companies intend to support TrustPower's becoming a national generator and retailer. To strengthen the relationship Alliant acquired through market transactions a 10.1% stake in Infratil. Alliant is a subsidiary of US based Alliant Energy Corporation, a company with electricity generating output of nearly 5,000MW with 850,000 electricity customers, and with assets exceeding USD 5.0 billion.

During the year Infratil acquired 23.6 million convertible notes in TrustPower from the Rotorua Energy Charitable Trust. In a related transaction, Infratil on sold 15.4 million of these convertible notes to Alliant. Subsequent purchases by both Infratil and Alliant has resulted in shareholdings in TrustPower of 25.8% and 10.6%, respectively or 36.4% jointly.

Late in 1998 CentralPower and Powerco embarked on a process to jointly sell their respective generation and retail interests. CentralPower sold its retail and generation interests for $93 million, and Powerco for $143 million. The sale means both Companies comply with the Electricity Industry Reform Act.

In addition, Infratil, under the terms of the same Act is required to sell down its shareholding in CentralPower to not more than 10% of the company and to re-arrange its investment in Powerco.

During the period under review, Infratil sold its minority interests in Auckland International Airport, Ports of Auckland, Lyttelton Port Company and Enerco.

Historically Infratil has published a quarterly net tangible asset backing per share. However, with the Company's holding a smaller number of larger more influential investments, the Directors no longer believe it is appropriate to disclose a valuation using prices at which small minority shareholdings change ownership. In addition, with the acquisition of WIAL, which will be consolidated in Infratil's Statement of Financial Performance and Statement of Financial Position, the nature of the Company's business is changing, and the increased level of unlisted investments makes the net tangible asset backing measure less appropriate.


Effective from 14 May 1999, Mr Christopher Lindell, Managing Director of Alliant International (NZ) Limited will join the Infratil Board. The appointment highlights the significance and importance of the Alliant relationship to Infratil and enables a contribution at Board level of Mr Lindell's utility sector experience and skills.

The 1999 Annual Meeting will be held in Wellington on Monday, 12 July 1999.

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