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Infratil FY net profit drops to $3.4 mln on UK writedowns, charges

Tuesday 14th May 2013

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Infratil, which is mulling the float of its Z Energy chain of petrol stations, reported a drop in full-year profit after writing down the value of its UK airports and recognising accounting charges.

Net profit fell to $3.4 million in the year ended March 31, from $51.6 million a year earlier, the Wellington-based company said in a statement. Operating revenue rose to $2.37 billion from $2.17 billion.

The drop in net profit reflects $62.4 million in costs and writedowns associated with its two UK airports, which it is trying to sell, up from charges of $37.3 million a year earlier. It also recognised a $20 million net drop in the value of derivatives and other assets, compared to a year-earlier gain of $23 million.

Infratil met its own guidance for earnings before interest, tax, depreciation, amortisation and movements in the value of financial derivatives (EBITDAF) from continuing operations, which rose to $538 million from $510 million a year earlier. The company said that measure included Z Energy's contribution measured on a current cost basis adjusted for revaluations, impairments and realisations.

On that same basis, 2014 EBITDAF from continuing operations adjusted for Z's current cost earnings would be in the range of $520 million to $560 million, broadly unchanged from the 2013 result. The softer outlook reflected "softer expectations from TrustPower and Infratil Energy Australia," the company said.

Infratil is managed by Morrison & Co Infrastructure Management, which is owned by Wellington-based investment bank HRL Morrison & Co. In the latest year, MCIM received management fees of $20.1 million, up from $18.3 million a year earlier.

At the start of this month, Infratil and the New Zealand Superannuation Fund named First NZ Capital and Goldman Sachs as arrangers, and Craigs Investment Partners/Deutsche Bank and Forsyth Barr as joint lead managers should they decide to proceed with an IPO.

"If Infratil proceeds to a partial sell-down of its holding in Z Energy or other major asset sales take place, the company is likely to have additional capital flexibility," it said.

The exit from the UK airports was challenging because "the state of European markets has made the sale of the airports unpredictable and difficult," it said.

TrustPower, the company's biggest investment, provided segment revenue of $805.5 million, down from $807 million a year earlier, while earnings slipped to $123.4 million from $131.7 million.

Wellington Airport revenue fell to $106.2 million from $109 million and earnings rose to $35.9 million from $30.8 million.

Infratil's NZ Bus unit had revenue of $216 million, down from $219.8 million and earnings fell to $9.2 million from $13.6 million. Infratil Energy Australia generated revenue of $1.2 billion, up from about $1 billion and earnings fell to $29.8 million from $34 million.

Revenue from Infratil Airports Europe fell to $36 million from $44.4 million, for a loss of $66.5 million, wider than the previous year's loss of $39.9 million.

Infratil will pay a final dividend of 6 cents a share, bringing the payments for the year to 9.25 cents, up from 8 cents a year earlier.

Infratil shares last traded at $2.43 and have gained 22 percent in the past 12 months. The stock is rated 'outperform' based on a Reuters poll of six analysts.

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