Infratil pledges to invest in own businesses

Last financial year, Infratil bought half of Shell NZ's fuel business with the New Zealand Superannuation Fund. Photo / Bay of Plenty Times

Infrastructure investor Infratil, which has forecast a significant increase in annual earnings, expects to invest more in its existing businesses this financial year.

In its monthly investor update, Infratil said investment activities continued to be very positive, and operational and financial performance was largely in line with forecasts.

The company said last month that annual earnings were expected to be in the range of $415 million-$435 million. That compared with $363 million reported last year, which undershot the forecast of $390 million-$430 million. Infratil's financial year ended on March 31, and its result is announced next month.

Operating cash flow was forecast at $160 million-$180 million, and investment spending was expected to be $450 million-$500 million, compared with $193 million reported last year.

Last financial year, Infratil bought half of Shell NZ's fuel business with the New Zealand Superannuation Fund, and commissioned the 36MW Mahinerangi wind farm near Dunedin and the 120MW Kwinana power station in Western Australia.

It said it expected the 2012 financial year would be one of strong internal investment at its businesses.

"In-house investment is a crucial part of Infratil's strategy and the strong pipeline of development and upgrade projects is consistent with delivering target returns to shareholders over the medium term," it said.

The company's long-term goal is a 20 per cent per annum return after tax to shareholders through capital appreciation and dividends.

NZ Bus had solid growth particularly in Auckland. The performance in Wellington and Hutt Valley was "uneven".

Passenger numbers were flat at Wellington Airport but service increases and the use of larger aircraft would improve airline capacity this financial year. At Infratil's Glasgow Prestwick Airport, passenger numbers fell in February but freight volumes were higher.

- NZPA