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Gains in Infratil's energy portfolio overshadowed a mixed performance at its airport investments, the infrastructure investor's first-half earnings show.
Its Australian energy arm gained more than 40,000 new gas and electricity customers over the half year, taking its total customer base to 120,000.
The division turned a $300,000 net loss last year into a profit of $5 million despite costs linked to the increase in customers.
Electricity generator Trustpower contributed $20.2 million of the group trading profit, up from $17.8 million last year. Infratil is to take control of Trustpower, which disclosed a rise in first-half net profits from $50.7 million to $57.5 million at the end of last month. Infratil has agreed to buy out rival cornerstone shareholder Alliant Energy of the US.
Infratil Airports Europe, with airports in England, Scotland and Germany, delivered to target, but the division has faced difficulties recruiting and retaining customers.
Growth at Glasgow airport was constrained by fleet rationalisation by one of the airfield's major customers, Ryanair, while its car park operations were disappointing, Infratil said.
This was offset by improvements in freight and the airport's retail outlets.
However, planning work at Germany's Lübeck airport indicated greater potential for development than previously thought, while the airport at Kent had outstripped forecasts.
Infratil said: "The reassuring feature of the mixed performance of the European airports is that the issues are well understood, the management team is well resourced ... and the potential rewards remain attractive."
Infratil's shares rose 15 cents to $4.90. However, much of the enthusiasm for its shares reflects the Trustpower deal. Infratil acquired Alliant's 23.8 per cent stake in Trustpower and just over 5 per cent of its own shares for $445 million.
The deal gave Infratil its stake in Trustpower for around $6.20 a share - a steep discount to last night's close of $7.65. Infratil is to sell down its stake in Trustpower to just over 50 per cent on Thursday. It will also sell the inherited Infratil shares next week.
"The Trustpower deal overshadows everything else," Forsyth Barr head of research Rob Mercer said.
Net profits for the period fell from $14.9 million to $11.8 million, reflecting higher interest and depreciation costs arising from the acquisition of the airports in Europe and a power station in Australia. Trading profits rose from $39.1 million to $66.6 million.
Infratil's public transport arm, which includes the Stagecoach bus operator acquired last year, benefited from increased patronage.
Growth continues in Wellington but there has been a flattening out of demand in Auckland.
The firm said the apparent political enthusiasm to encourage increased public transport usage was not translating into concrete action.
"When Infratil made its investment last year it did so with an agenda of growth, which thus far has been less than hoped for due to a number of Government initiatives coincidentally acting to restrict the potential expansion of bus and ferry public transport," Infratil said.
The bus company, not owned a year earlier, contributed $8.7 million.
Profit from the company's 66 per cent stake in Wellington International Airport slipped 11 per cent to $11.3 million amid "flat aviation markets" and higher depreciation charges.
