Infratil profits up nearly 4x, meets council about bus problems

By NZPA

Monday 19th February 2007

Utilities investor Infratil announced a near fourfold increase in profits today, but also had to meet Greater Wellington council representatives to discuss problems with the city's bus system.

The company said its net profit in the nine months to December was $52.7 million, compared with $13.3 million a year earlier.

The result came on the back of asset sales, improved returns from energy investments, and a contribution from bus operations.

Infratil bought bus services in Wellington and Auckland, along with some ferry operations, in November 2005 from company Stagecoach.

Called NZ Bus, the public transport provider, contributed $11.5 million to Infratil for the nine months.

Infratil said it bought into public transport because it believed in the long term future of the sector, and that improved services would drive patronage and profit growth.

For now those goals were impeded as management focus was diverted to procurement reviews being carried out by the Ministry of Transport, Land Transport New Zealand, and Auckland Regional Council.

Infratil executive director Lloyd Morrison said the company had apologised for the problems with Wellington's buses.

The immediate cause had been a lack of drivers, and a combination of the introduction of a new system, some people being unfamiliar with it, and some drivers not being happy with it.

There were also problems with the partly opened new Wellington inner city bypass, that was causing massive delays not peculiar to buses, of 40 to 50 minutes, Morrison said.

NZ Bus director Tim Brown said passenger numbers were slightly down in Auckland and a little up in Wellington for the nine months, after an earlier surge when numbers increased by as much as 9% in Wellington.

"Because there hasn't been the capacity increases, effectively that growth in patronage, with fuel prices coming down, has dipped away a bit," he said.

In Auckland 22 new low emission buses would be starting to arrive soon for an inner city route, freeing up buses that would be available for elsewhere in the network.

In Wellington, Infratil was optimistic agreement would be reached on a contract for trolley buses that would be about 30% larger than existing buses.

Among Infratil's other investments are Glasgow Prestwick, Kent International and Luebeck airports and two-thirds of Wellington International Airport. It also has just over half of TrustPower.
Today the company said its third quarter overall was dominated by transactions and capital developments.

They included the purchase of 15% of TrustPower for $286m, the sale of 5% of Port of Tauranga for $44m, and the sale of 2.5m Infratil shares for $12.3m.

TrustPower has announced the building of a $A200m ($NZ227.3m) windfarm in South Australia, and today Morrison said he hoped the beachhead into Australia was the start of something significant across the Tasman.

TrustPower's contribution to Infratil's earnings for the nine months was $29m.

Wellington Airport's earnings before interest, tax, depreciation and amortisation (ebitda) increased $2.2m to $37.2m for the nine months.

Income growth came from increased rentals from off-airport retail development. Passenger numbers were almost unchanged and were expected to remain at the current level during the 2007 calendar year.

Infratil Airports Europe contributed a loss of $0.8m to ebitda, down from a $5.6m positive contribution last year which included only part periods for Kent and Luebeck airports which were bought in 2005.

Infratil Energy Australia, which provides wholesale risk management and energy trading support to Infratil's energy retailing subsidiary Victoria Electricity and is pursuing energy investments, had ebitda of $7.3m, compared to a loss of $2.1m.

Customer growth continued at Victoria Electricity which had 147,200 customers at the end of 2006 from 77,000 at the end of March.

Infratil shares were down 1c to $5.79 in mid-afternoon trade today.

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