Infratil confident on earnings outlook

Photo / Brett Phibbs

Infratil is growing increasingly confident about its guidance for full year operating earnings of between $390 million and $430 million, chief executive Marko Bogoievski told shareholders at the company's annual meeting in Wellington today.

The forecast of earnings before interest, tax, amortisation and depreciation was issued in May, and would be updated as the year progressed, with the specialist infrastructure investor confident its active portfolio management style would suit it in the period ahead.

While there were plenty of passive utility investment funds in the market, there were few like Infratil that actively sought to manage utility and infrastructure assets to higher earnings, said Bogoievski, who trod familiar ground in the presentation, praising the 50 per cent investment in Greenstone Energy, and stressing the likely strong performance of 50.5 per cent-owned TrustPower, Infratil's largest single investment.

However, he told shareholders to expect greater ability to value the assets of Infratil Energy Australia, which owns power stations in Western and South Australia, and has recently placed its retail consumer business under the brand name, Lumo Energy.

The board will be in Perth next week to attend the opening of the 120 Megawatt gas-fired Kwinana power station.

Lumo expects rising per customer valuations leading into New South Wales electricity industry privatisation, and further consolidation in the Australian market to three or four major players.

Shareholders would be "better able to see free cashflows" and more visibility on the outlook for the next two to three years.

Group capital expenditure of between $400 million and $460 million would be driven largely by decisions on 558MW of consented or nearly consented TrustPower electricity and irrigation projects, and the 200MW opportunity to expand the Snowtown South Australian wind farm.

Greenstone would also be able to make opportunistic investments in attractive retailing sites and on-site equipment to supply major commercial or industrial customers in a way that had not been possible when the company's assets were owned by Shell, and required decisions from head office in the Netherlands.