Daily ShareChat: Infratil

By Jenny Ruth

Sunday 29th May 2011

Infratil's 25% growth in annual earnings before interest, tax, depreciation, amortisation and financial instruments (EBITDAF) was driven by its Z Energy, the former Shell assets, say Geoff Zame and Grant Swanepoel at Craigs Investment Partners.

Z Energy contributed $38.7 million to the $443.2 million EBITDAF in the year ended March, above the $35.1 million the analysts had expected.

They note Infratil has revalued its 50% stake in Z Energy to $312 million compared with the original investment of $210 million.

“We also observe a performance recovery for Infratil Energy Australia (IEA) and New Zealand Bus in full-year 2011,” the analysts say.

Although IEA's retail customers fell slightly to 410,000, retail revenue grew 24.9% on improved electricity and gas margins and it contributed $54.7 million to EBITDAF.

NZ Bus' EBITDAF grew 37.8% to $40.1 million, reflecting strong passenger growth, overhead reduction and system improvements.

Infratil's guidance for the current year is for between 3.8% and 10.6% EBITDAF growth to between $460 million and $490 million which they say reflects some material one-off gains by IEA in the six months ended September 2010 and a conservative outlook for Z Energy.

Craigs is forecasting EBITDA of $468.4 million for the current year, rising to $524.4 million in the year ending March 2013.

Recommendation: buy.

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