Infratil looks to ride strong momentum

Marko Bogoievski. Photo / Greg Bowker

Infrastructure investor Infratil said it expected to build on its earnings momentum in the current financial year after producing a strong lift in its net profit for 2011/12.

Infratil, the brainchild of the late Lloyd Morrison, who died in February from cancer, said its net profit rose by 6 per cent to $127 million in the year.

The company, whose interests range from hydro-generation to airports in Europe, announced a final dividend of 5c a share, up 18 per cent on the previous final dividend.

The dividend brings the total for the year to 8c per share.

Infratil said momentum in the second half carried its earnings before interest, tax, depreciation, amortisation and movements in the value of financial derivatives (ebitdaf) to $520 million, up 10.5 per cent compared with the previous year.

The result compares with Infratil's own forecast of ebitdaf - the company's preferred performance measure - of $460 million to $490 million. For the current 2012/13 year, Infratil forecasts ebitdaf of $530 million to $560 million.

Infratil, which owns just over half of power generator and energy retailer TrustPower, said the year had been one of "disciplined growth". "In difficult markets it is tempting to chase market share, to postpone development, to harvest rather than sow," chief executive Marko Bogoievski said.

"Infratil and its businesses continue to balance the requirement to invest in the long-term while delivering current performance and yield," he said.

Bogoievski said the company had many moving parts, but most were moving in the right direction.

Rob Mercer, head of research at brokers Forsyth Barr, said there was an "air of confidence" around the momentum that Infratil had built up in most of its businesses.

"Over the next few years, we see quite good profit growth out of Z Energy, NZ Bus and TrustPower," Mercer said.

But it was not all plain sailing for the group.

Management have initiated formal processes to sell Infratil's two remaining European airports - Glasgow Prestwick and Kent.

Infratil Airports Europe has been classified as "held for sale" and was disclosed separately in Infratil's books as discontinued operations.

This had the effect of increasing Infratil's reported ebitdaf by $12 million in the 2011/12 year and by $11 million in 2010/11. Including $26 millon in impaired asset charges, the loss from these came to $37 million.

Bogoievski said the company supported in principle the Government's plan to partially privatise energy assets.

Infratil shares closed unchanged yesterday at $2.03.