Infratil Investor Day 2014
Infratil has released the full package of presentation material for the annual investor day to be held in Wellington today. The presentations cover the global infrastructure market with more detailed discussion on the Infratil portfolio, NZ and Australian electricity markets, and Wellington Airport.
CEO Marko Bogoievski outlined the major factors influencing the current infrastructure market and confirmed Infratil's approach to delivering long-term returns to shareholders.
Infratil continues to target above average returns from active management of growth infrastructure achieved through a 'high-touch' operational approach. Bogoievski noted "Infratil was attracted to well positioned assets with opportunities for further investment. These development options can create strong payoffs but typically require a longer holding period to realise benefits and put in place systems and capability to manage downside risks".
In discussing today's infrastructure investment market, Mr Bogoievski said "the competition for low-risk core infrastructure from offshore capital highlighted the value of existing businesses and the importance of Infratil being able to consider assets with greenfield exposure, demand risk or markets undergoing significant change". "The long term macro trends such as urbanisation, privatisation and developed markets infrastructure renewal all required a significant increase in investment and operating capability".
Mr Bogoievski updated Infratil's guidance for the financial year ended 31 March 2014 and provided an initial outlook for the financial year ending 31 March 2015. The updated EBITDAF guidance for 2014 is at the lower end of the previous guidance range due to slightly weaker trading performance in New Zealand energy and public transport markets and the impact of the weaker AUD$ on earnings. However this was more than offset by higher operating cash flow where improvements in working capital and dividends received as part of the Z Energy IPO process offset the reduction in EBITDAF.
Referring to the outlook for the year ending 31 March 2015, Mr Bogoievski said Infratil's expectation was for strong EBITDAF growth due to completion of the Snowtown II generation plant in South Australia, a full year contribution from Metlifecare, and continued performance improvement and investment across other businesses, offset by a lower contribution from Z Energy due to Infratil's reduced shareholding. Confidence in the financial outlook, the strong market positions of Infratil's investments and its capital structure were very positive for continued dividend growth.