Infratil posts $80.5 million full-year profit

Infrastructure investor Infratil today posted a net after tax profit of $80.5 million for the year to March 31.

The result was up sharply on last year's $16.5 million figure.

Infratil will pay a dividend of three cents per share on June 28.

Shares in Infratil were up a cent at $1.90 by 10.10am.

Excluding extraordinary items worth $57.96 million, Infratil's net surplus was $22.57 million, up 36 per cent.

The company, which has holdings in TrustPower, Wellington International Airport and Glasgow Prestwick International Airport, also announced it would buy back up to 2.5 million of its shares on market, beginning on June 7.

Earnings before interest, tax, depreciation and amortisation (ebitda) were $40.63 million up from $35.55 million a year earlier.

The result includes the equity accounting of TrustPower and the consolidation of Infratil's Wellington and Glasgow holdings for the first time, making comparison with past performance difficult.

But, on the key measure of growth in asset values, Infratil was well placed to continue to deliver above average returns to its shareholders, the company said.

The equity accounting of TrustPower and revaluations that have been undertaken by Wellington and Glasgow Airports, significantly contributed to an increase in Infratil's shareholders' funds to $319.97 million from the $161.72 million recorded in March 2001.

Earnings before depreciation, interest and tax (ebdit) at Infratil's 66-per cent owned Wellington Airport increased to $24.77 million from $23.64 million during the period.

The small improvement in Wellington's earnings came about despite low growth in aviation activities, and continuing cost from involvement in the Commerce Commission pricing inquiry and airline price determination consultation, Infratil said.

While traffic growth was flat, revenue from passenger services (duty free, retail, food and beverage, car parking) grew 11.6 per cent.

The failure of Qantas NZ in New Zealand and Ansett in Australia resulted in both direct loss of throughput on New Zealand domestic routes and aircraft being redirected by Qantas on to Australian routes.

However, the main source of weak passenger growth at Wellington Airport remains the relatively high cost of travel, Infratil said.

Since June 1997, when Wellington's landing fees were last fixed, the cost of domestic air travel has risen 43.2 per cent, according to Statistics New Zealand.

Infratil's 67 per cent owned Glasgow Airport recorded a net loss of $630,000 during the period, compared with a $660,000 loss a year earlier.

The result reflected significant development costs incurred in restructuring the business following its acquisition, and in expanding and upgrading retail and other passenger services, Infratil said.

There were also a number of new insurance and security costs associated with September 11 and freight services were dampened by a depressed economic climate in Europe and North America.

Total passenger traffic grew 32 per cent to 1.31 million, well above the level projected at the time of acquisition. Scheduled passengers increased 30 per cent to 1.15 million, while charter passengers rose by 52 per cent to 159,000.

"Looking forward, passenger numbers are forecast to continue to increase steadily over the coming year well ahead of the level forecast at the time of acquisition and freight is forecast to show a modest increase in growth," Infratil said.

The Port of Tauranga, in which Infratil owns a 19.9 per cent stake achieved a record net after tax profit of $22.41 million in the year to June 30 2001, followed by a net result of $12.30 million in the six months to December 31.

Infratil's 27.9 per cent holding in TrustPower proved to be the company's worst investment during the period. For the year ended March 31 TrustPower reported a net surplus after tax of $1.29 million compared with $23.49 million for the previous year.

The poor result was caused by last year's cold, dry winter, which left the company exposed to very high spot electricity prices.

Looking ahead, prospects looked better for that business, Infratil said.

The Government recently announced that Infratil's manager, HRL Morrison and Co, together with Orion NZ Ventures of Christchurch have been short listed as managers of a venture capital initiative, to be funded by Orion Limited, Infratil, and the Government in equal proportions.

If this progresses it will represent a commitment of up to $20 million by Infratil (around 5 per cent of Infratil's net assets).

- NZPA