MONTHLY: IFT: Infratil Monthly Operational Report

1 Feb 2010 10:28 am

IFT 01/02/2010 MONTHLY

REL: 1028 HRS Infratil Limited

MONTHLY: IFT: Infratil Monthly Operational Report

Infratil Monthly Operational Report

1 February 2010

Introduction Documentation of the acquisition of Shell's New Zealand sales and distribution activities is progressing satisfactorily. Completion is anticipated shortly at which time Infratil will be providing the market with a full briefing on the transaction and the businesses being acquired.

On 11 January Infratil sold its 32.5% holding in Energy Developments for $176 million bringing Infratil's total asset sales since 31 March 2009 to $391 million. The Energy Developments sale results in a gain on sale of approximately $94 million. Over the entire life of this investment the cost to Infratil amounted to $19 million excluding dividends received and funding costs.

TrustPower

Retail market activity appears to be moderating after a flurry of new initiatives. It is unclear whether the apparent lower level of activity is due to targets having been met by the more aggressive retailers, the reality of very low margins, changes to forecasts of wholesale prices in 2010, or the industry reforms announced by Government.

TrustPower closed its bond offer having raised $140 million for a mixture of five and 7 year maturities.

Infratil Energy Australia (IEA)

Customer numbers were steady at 407,000 at the end of December (387,000 as at 31 March 2009).

The West Australia Kwinana power station is on track for commissioning in June and work has kicked off on the substantial Lonsdale expansion.

Although Victoria and SA are having another hot summer, with resulting high electricity demand for air conditioning, in Queensland it hasn't been as hot as last year and peak electricity demand has been lower. IEA's retailing operations and its management of price risk have coped well with demand and wholesale price volatility.

Illustrating the evolution of the market another of IEA's smaller competitors, Jackgreen, did not survive the period going into administration and having its customers transferred to incumbent retailers.

Regulatory developments continue to create uncertainty. Carbon emissions reduction programmes are stalled with the Government's scheme defeated in Parliament and the new Opposition leader being opposed to the ETS. The NSW privatisation progressed, but with no real certainty as to outcomes or the model being proposed for that state which has recently appointed a new Premier - the third since the last election.

The need to fund investment in generation, transmission, smart meters and carbon pricing, to say nothing of simply remedying years of artificially low prices, is resulting in increased attention from both politicians and regulators. The topic of electricity prices is likely to become a major election issue later in the year.

NZ Bus

Auckland patronage continues to recover from October's service disruptions. While total regional patronage in December was down on a year ago, individual routes are again seeing growth. Patronage in the Southern Region remains about the same as the prior year.

Northern passenger trips Dec 9 months to 31 Dec 12 months to 31 Dec 2008 2,447,968 26,815,811 34,652,500 2009 2,359,914 25,629,682 34,363,910 Change -3.6% -4.4% -0.8% Southern passenger trips Dec 9 months to 31 Dec 12 months to 31 Dec 2008 1,456,407 15,271,849 19,958,885 2009 1,451,535 15,198,608 19,958,893 Change -0.3% -0.5% 0.0%

Snapper

Card numbers continued to increase hitting the 100,000 level.

The main focus of activity is around improving the functionality of the ticketing and payment system for users. This includes:

Arranging with banks so that their EFTPOS and/or VISA cards contain a Snapper capability.

An agreement with Korea Smart Card to add further functions, such as post paid cards and the ability to "reload" on an automatic basis from bank or credit card accounts .

Improvements to the website, including making internet reloads simpler.

Development of on the ability to load passes on a Snapper card. This is being trialed at present with initial availability for bus and ferry operators likely soon. Snapper's trial with Reading Cinemas Courtenay Place has generated considerable interest. Cinema tickets purchased with a Snapper card attract a discount and are eligible for prizes. The next stage may include transport-entertainment packages, for instance bundling bus fares, Zoo entrance and something from the Zoo caf?.

The New Zealand Transport Agency is working to develop a national standard for integrated ticketing. This is strongly supported by Snapper as it will provide a platform for all interested parties to develop their payment systems. It can be noted that regional transport agencies have already spent well over $10 million of tax and rate payer money on the development of Auckland and Canterbury's respective ticketing systems so it is important that a national standard is developed soon.

Wellington Airport

Wellington Airport released its final 2030 Master Plan following a public consultation. It is projected that over the next 20 years passenger numbers will almost double and an investment of $450 million (2009 dollars) will be required to accommodate this increased demand.

In December international passengers were up 4.1% on the same month last year (up 2.5%YTD) while domestic passengers were down 0.2% (down 4.7% YTD)

Airlines continued to manage capacity on domestic services, decreasing seat availability by 5% while achieving an average of 78% loading in December. While competitive pricing boosted passenger numbers on the trunk services by 2.1% relative to a year ago, regional passengers were down 4.9%.

December Domestic December International Total Passengers 9 months to 31 December 2007 395,149 53,935 3,633,140 2008 376,412 57,934 3,984,895 2009 375,682 60,323 3,830,022

Operational figures

International services operated at 80.5% of capacity, reflecting good demand and competitive pricing. Traffic to Sydney grew by 12.9% in December following the increase of Pacific Blue's new service from 3 to 5 times a week in December. Melbourne's passengers were also up 6% with Brisbane steady at 0.1%.

The Rock international terminal development remains on track for completion later this year. The distinctive copper cladding is currently being applied (see picture above) and once this is in place the final form will be much more apparent.

Infratil Airports Europe

Tom Wilson has been appointed to the position of Chief Executive, Infratil Airports Europe having previously been CEO of L?beck Airport and prior to that Managing Director of Glasgow Prestwick Airport.

Glasgow Prestwick

December Freight Tonnes December Passengers Total Freight 9 months to 31 December Total Passengers 9 months to 31 December 2007 2,836 167,968 24,243 1,922,961 2008 1,167 154,438 15,517 1,893,072 2009 877 107,033 9.913 1,385,450

Operational Figures

107,033 passengers used Glasgow Prestwick Airport in December, 31% less than a year prior, in line with recent trends. The winter sun destinations continue to perform with strong load factors, with reductions coming primarily from domestic UK and Irish routes.

In December the UK experienced the worst winter weather conditions for more than 30 years. Prestwick staff did a fantastic job rising to the many challenges which included handling diversions from Heathrow, Gatwick, Dublin, Manchester, Glasgow and Edinburgh. Flights from airlines including Virgin Atlantic, British Airways, BMI, Logan air, and Easyjet were handled by the Prestwick team.

Freight volumes for December were 877 tonnes, a 25% reduction on the prior year.

Kent International Airport

December Freight Tonnes Total Freight 9 months to 31 December 2007 4,082 21,325 2008 2,554 15,290 2009 3,674 27,230

December freight volume at KIA was 3,674 tonnes, 1,120 tonnes (44%) ahead of December 2008 and consistent with the strong freight results achieved at the airport during 2009. For the nine months of the financial year to date cargo traffic was more than double the 2008 total and 28% ahead of the comparative period in 2007. End CA:00190719 For:IFT Type:MONTHLY Time:2010-02-01:10:28:37

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