KEY POINTS:
Infratil's bottom line this year would likely be weighed down by the requirement to write down the value of its investment in Auckland International Airport and Energy Developments, chief executive Marko Bogoievski said yesterday.
Speaking at Infratil's Investor Day in Wellington, Bogoievski said the company was "not immune to some of the accounting implications of some of the changes in markets".
Infratil built up a 3.3 per cent stake in Auckland Airport ahead of Canada Pension Plan's $3.65 a share bid for 40 per cent of the company last year. It had decided to sell its stake, as well as the 7.2 per cent its management company HRL Morrison manages on behalf of the New Zealand Superannuation Fund, into the offer which was disallowed at the last moment by the last Labour government.
Since then, Auckland Airport shares have sunk well below Infratil's average entry price, yesterday closing down 7c at $1.76.
Infratil's 30 per cent stake in Brisbane-based landfill and coal-seam gas company Energy Developments has also been hit in the recent bear-market conditions.
"Unless market conditions change materially between now and March 31 this group is looking at a likely impairment on Auckland Airport and Energy Developments," said Bogoievski.
"I'm talking about a permanent charge that goes through the profit and loss."
Infratil still considered Auckland Airport, "the single most attractive asset in this part of the world in terms of infrastructure", retained its "hold" view on the stock and "and is cognisant that significant corporate activity could occur following the Auckland governance review".
Infratil shares closed down 4c at $1.65 yesterday, almost a dollar below the $2.60 a share the company sees as its net asset backing.
