Infratil posts 12pc increase in half year profit

By NZPA

Thursday 14th November 2002

Utilities investors Infratil today said its September half year profit rose 12.2 percent to $19.6 million.

The company said it was not paying a dividend as it had insufficient inputation credits and in the circumstances a divdend would not be tax advantageous.

The company said it expected the suspension of dividend to be short-lived as it expected its investments in Trust Power and Wellington International Airport, to resume paying taxable profits to provide credits for tax-free dividends.

Infratil said it intended to pay a fully imputed final final dividend.

Earnings per share rose to 9.87 cents from 9.40 cents.

Infratil said a modest share buy-back may continue "if it remains of benefit to the company".

Operating profit was $1.4 million ($0.8 million), realisation gains $19.8 million ($17.8 million) and earnings before interest, depreciation, tax and realisations was $20.5 million ($19.0 million).

It said the period was marked by a return to profit by TrustPower in which Infratil holds a 27.9 percent stake and a steady peformance by two thirds owned Wellington International Airport (WIAL).

Infratil has on paper lost almost a third of its $31.5 million investment in 7 percent of Tranz Rail.

"There is little doubt that Tranz Rail has objectives that, if met, will see its value increase. Whether the objectives are attainable will depend on the unity, focus and skill of Tranz Rail's workers and the restoration of credibility with major customers," Infratil said.

"Infratil's management are closely monitoring the situation and working to enhance Infratil's position."

Infratil's 67 percent owned Glasgow Prestwick International Airport (GPIA) continued to experience robust growth.

During the period Infratil paid $48.5 million for 9.9 percent of Australian energy company Energy Developments Ltd (EDL), realised $25.6 million from the sale of Port of Tauranga 3.5 million shares and paid $10.6 million to shareholders as dividend or by way of share buyback.

The company started the period with no bank debt and $28.6 million of bank deposits. At September 30, net bank debt was $5.1 million.

Shareholders' equity increased to $330.7 million from $320.0 million.

Infratil said Wellington Airport was projected to slightly improve its profit next year but much depended on a row over landing charges and the possibility of Air New Zealand and Qantas forming a partnership.

The determination of new aeronautical charges for the period from July 1 "unfortunately remains outstanding", although an interim 10 percent increase was agreed with the airlines.

WIAL still faces the potential for collusion between Air New Zealand and Qantas to reduce competition, increase airfares, and impact passenger growth, Infratil said.

Infratil is continuing to sell its Port of Tauranga shares, which hit a record high today. It held 14.8 percent on September 30 and now holds 13.5 percent.

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