Investment fund Infratil has reported the largest surplus in its 27-year history on the back of the sale of its renewable energy business.
Wellington-headquartered Infratil announced a net parent surplus from continuing operations of $1.1 billion for the six months to September 30.
Almost all of the gain came from the sale of its majority stake in Tilt Renewables, which contributed a gain of just over $1b.
Infratil's proportionate earnings before interest, tax, depreciation, amortisation and fair value adjustments (Ebitdaf) rose 28 per cent on a year earlier to $253.6 million.
Chief executive Jason Boyes said the results reflected good performance across the business, but trimmed the full-year profit expectations marginally to Ebitdaf of $500m to $530m due the addition of new data businesses and the impact of Covid restrictions on Wellington Airport and Infratil's diagnostic imaging businesses.
Infratil will pay a dividend of 6.5c a share, a 4 per cent increase on a year earlier.
At the start of August Infratil announced the sale of Tilt Renewables to a group of investors (including Mercury, which bought the New Zealand part of the business) for close to $3b.
Infratil owned around two-thirds of Tilt, meaning it received gross proceeds of almost $2b.
This enabled Infratil to pay off all of its debt, leaving a cash balance of more than $1b. The company has decided against paying special dividends because "we do not view special dividends as the best use of funds".
However Boyes flagged dividends increasing further in line with cash earnings from CDC Data Centres, Vodafone and its diagnostic imaging businesses.
"This approach provides our shareholders with a solid and sustainably rising dividend and enables us to continue to prudently and productively deploy the capital in ideas that matter."
Infratil has already made three significant investments since the Tilt sales, including the establishment of an Asian renewable energy developer, Gurīn Energy, a partnership with Auckland Radiology Group and the purchase of a cornerstone investment in a UK data centre business, Kao Data.