Infratil beat its annual earnings guidance, and said it expects profitability to increase in the future on the back of its recent investments.
The infrastructure investor reported consolidated underlying earnings before interest, tax, depreciation, amortisation before adjustments for fair value movements, realisations and impairments of $552.4 million in the year ended March 31, ahead of $519.5m last year and above its forecast for $510m to $525m, due to associate investment valuations.
Infratil was established 24 years ago as a vehicle for infrastructure investment. Its initial investments in ports, power plants, wires and airports has widened in recent years in response to changes in society, technology, and consumer preferences to include data storage and transmission, and social infrastructure such as retirement villages and student accommodation.
The company reiterated its forecast for 2019 normalised ebitdaf of $500m to $540m, compared with $488m in 2018.
"Infratil had a positive year of operating performance and capital allocation and is well placed to provide good returns going forward," the Wellington-based company said in a statement.
"These investments provide the source of future income and value growth. Each of last year's new investments, Canberra Data Centres, Longroad Energy and ANU Student Accommodation, performed above expectations" while its investments in Wellington Airport and Trustpower investments delivered record results, it said.
The company spent $325.9m on its investments over the past year, down from $728.2m the previous year and "a little less than hoped for" as a couple of investment plans took longer than expected to execute. It highlighted that it has $533m of funds available for potential future investment.
Over the past year, the company provided additional capital to RetireAustralia to enable a doubling of its rate of development, and Tilt Renewables started construction of a wind farm in Victoria and contracted the electricity output, it said.
"Looking forward, it is anticipated that earnings will rise materially over the next few years as recent investments lift their earnings contributions," the company said.
Infratil will pay a final dividend of 10.75 cents a share on June 18, bringing the full-year dividend to 16.75 cents, up from 15.75 cents last year.
"Capital structure and confidence in outlook are positive for continued growth in dividends per share, with potential for higher dividend as Longroad development gains are realised," it said.
Its 2018 net profit fell to $60.5m from $66.1m in 2017 due to higher depreciation, tax and minorities, partially offset by lower interest costs.
Its shares advanced 0.8 per cent to $3.24 in early trading today. The stock has shed 3.2 per cent so far this year.