20 May 2008
Infratil had a successful year as measured by the value created at its core businesses, the positioning of those businesses relative to the trends which have been propelling their growth, and its management of the financial environment’s increased risk.
Earnings (EBITDAF) were $315.9 million, the 94% increase from the previous year’s $162.7 million mainly reflecting consolidation of TrustPower for a full year. The operating surplus before tax of $87.8 million was up 171% from $32.4 million. The NPAT was ($1.7 million) after $68.2 million, with this decline being due to a $78.9 million turn around in accounting revaluations, realisations and asset impairments which last year contributed a $66.4 million gain and this year a $12.5 million loss.
A final dividend of 3.75 cps fully imputed will be paid on 16 June 2008 to all shareholders on the register as at 5.00 pm on 6 June 2008. For holders of partly-paid shares, the final dividend will be 1.875 cps fully imputed.
Over the year, Infratil’s -16.5% total shareholder return performance was in line with the market’s performance and the share price has risen 10% since 31 March 2008. Since its establishment in 1994 Infratil has delivered compound returns of over 20%pa. after tax.
Infratil was proactive in the management of its exposure to financial market risk; undertaking its first capital raising ($176 million) in a decade, issuing $240 million of subordinated perpetual debt, increasing its number of relationship banks and extending its bank facilities, and taking insurance against equity market risk.
To ensure Infratil continues its track record of delivering excellent returns to its shareholders $436 million of investment was concluded over the year (giving a total of $822 million over the last two years). This has impacted short term returns but reflects Infratil’s confidence in the trends driving each of its business sectors.
Renewable energy: New Zealand and Australia are to introduce pricing of greenhouse gas emissions in 2010. NZ has a target of 90% of electricity generation from renewable sources by 2025 (now 70%). TrustPower has invested $348 million over the last 2 years and has 4 major NZ projects in consenting.
Australian energy: Privatization and deregulation of its energy market continues. Infratil Energy Australia grew customer numbers from 186,000 to 286,000 and progressed its third peaker power station and the 120MW Perth dual-fuel facility.
Airports:Competition on New Zealand trunk services initiated by Pacific Blue spurred domestic growth and indicated the potential for international growth when the current shortage of long-haul aircraft is alleviated. Wellington Airport had 8% passenger growth and 21% EBITDAF growth.
Public transport: Social and political interests remain focused on assisting public transports development as a real alternative to the car. Patronage rates are on the up in Wellington and are stable in Auckland.
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