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Infratil Results for the Six Months ended 30 September 2010

16 Nov 2010

The year to date has been characterised by positive earnings and value performance.

Infratil measures itself on how well its businesses increase their value - the total return. For a long-term investor this will reflect operational performance and factors which change future earnings. At both levels the start of the 2010/11 financial year was positive. Greenstone and Infratil Energy Australia, especially, stood out with both their earnings contributions and progress with their long-term strategies. Infratil’s other businesses performed satisfactorily over the six months when measured on a value or total return basis:

  • Net surplus after tax was $43 million, up from $14 million last year. This would have been $64 million but for non-cash tax charges following removal of deductibility of building depreciation and changes to the tax rate.
  • The result was driven by a 25% increase in earnings EBITDAF which rose to $258 million from $207 million. The increase was primarily due to Infratil Energy Australia’s higher earnings ($61 million from $10 million) and the  $13 million equity accounted contribution from Greenstone Energy (stand alone current cost EBITDAF of $100 million). Total group income rose 11%.
  • Net surplus attributable to shareholders was $16 million from last year’s ($31 million) loss. The operating surplus was $119 million, up from $70 million. Net operating cash flow was $94 million, up from $47 million.
  • Group capital expenditure was $94 million and $210 million was invested to acquire the 50% interest in Greenstone Energy.
  • TrustPower raised $75 million with an issue of seven year bonds and Greenstone $147 million with an issue of six year bonds.
  • Infratil and 100% subsidiaries net debt with a maturity date as a percentage of total debt plus equity capitalisation was 37% up from 32%.  Net borrowing rose $183 million, to fund the Greenstone purchase, and un-utilised bank facilities were $258 million down from $377 million.

A dividend of 2.5 cps fully imputed will be paid 17 December to shareholders on the share register as at 3 December. The Dividend Reinvestment Plan will operate.

In March EBITDAF earnings guidance was given for FY2011 of $390 million to $430 million. The first half result was very strong and the full year result is now expected to be between $415 million to $435 million.

The emerging success of Infratil Energy Australia and Greenstone Energy are both in different ways illustrative of the “Infratil model”. Both companies, one a start-up, the other a venerable 100 years old, were difficult to execute and required a willingness and ability to invest for the future. IEA has been a six year project. Greenstone was acquired amidst scepticism about the transaction’s merits and the sector.

A good half year is only that, half way there. The objective now is to maintain the momentum, both in the second half and beyond.

Infratil Result Announcement in full

Infratil Results Breakdown

Results Presentation

Infratil Limited Unaudited Financial Statements for the six months ended 30 September 2010 (6MB)

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