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Utilities investor Infratil is looking for opportunities to move in on assets where investors are "caught short" as fallout grows from a credit squeeze in the United States.
The company today reported a first quarter net profit after tax of $45.9 million for the three months to June 30.
The results are Infratil's first under new accounting rules and it has restated the figure on that basis for the corresponding period in 2006 to $7.7 million.
Earlier this month Infratil announced it would undertake a rights issue to raise $175 million.
The company said the aim was to better position the company to take advantage of potential opportunities that could arise from current and expected turbulence in world capital markets.
Releasing the latest results, Infratil chief executive Lloyd Morrison said that in the past few years Infratil's biggest problem had been competing against people who geared their assets to get acquisitions, which Infratil had not done.
Because of the type of leverage in capital markets in the past three or four years he expected some people would now be "caught short", Mr Morrison said.
Infratil's gearing was moderate, with bank debt as a proportion of capitalisation at 6 per cent, and total debt at 40 per cent.
With perpetual bonds over seven, 10 and 15 years, Infratil had a degree of insulation others did not have.
"It puts us in a very strong position," he said.
In a difficult market, financiers would start to get worried, put pressure on companies and look for someone to sort out their problems.
"In that sort of environment we want to be one of the strong guys who sort problems out for others," Mr Morrison said
"There's not a guarantee that anything will arise for us, of course."
Infratil aimed to stick to its knitting and was looking for investments in areas of renewable energy, airports and public transport.
Infratil owns 50.6 per cent of TrustPower, taking majority control in late December after acquiring the New Zealand assets of US-based Alliant Energy for $445m.
Infratil also owns Glasgow Prestwick, Kent International and Luebeck airports and two-thirds of Wellington International Airport.
Its other investments include New Zealand Buses and stakes in oil and gas explorer Austral Pacific and two Australian energy companies.
Infratil said the increase in net profit for the June quarter was largely due to the accounting treatment, under the new rules, of the fair value of electricity derivative contracts.
That resulted in a gain over the period of $78.7m, with an accrual of tax of $23.4m, largely arising from electricity contracts held by subsidiary Infratil Energy Australia. That impact was likely to reverse in later periods as electricity prices returned to normal.
The three months to June also saw TrustPower results consolidation in first quarter results for the first time.
Infratil includes a figure called ebitdaf -- earnings before interest, tax, depreciation, amortisation, realisations and impairments, and fair value movements of financial instruments -- in its result.
In the June quarter, Infratil's ebitdaf was $64.5m, compared to $31.2m in the corresponding period a year earlier.
Earlier today Infratil revealed it was taking a 6.2 percent stake in Auckland International Airport, in conjunction with the New Zealand Superannuation Fund.
Infratil shares were down 7c in late morning trade today to $2.75.
- NZPA WGT mjd nb
