Infratil ready to seek out opportunities

Infratil chief executive Marko Bogoievski says investment opportunities, particularly in energy, are scarce across the Tasman. Photo / Greg Bowker

Infrastructure investor Infratil says it will only invest in new businesses that are of exceptional quality or a "perishable" opportunity.

The company yesterday reported a full-year net loss after tax and minority interests of $191 million, mainly because of non-cash write-downs on assets. It wrote down $179 million in listed investment in the year to March 31. The company highlighted its consolidated earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf) which rose 13 per cent from the previous year to $356 million.

The operating surplus - earnings after interest, depreciation and amortisation - dropped to $77 million from $88 million.

Its European airports and Australian Energy Developments business continued to underperform, while its stake in Auckland International Airport incurred an impairment charge of $59.7 million after a fall in its share price. Infratil's chief executive Marko Bogoievski said investment opportunities, particularly in energy, were scarce across the Tasman where the company had a strong focus

"There have been a lot of high-profile failures in Australia and the assets that have come out of that process are still wrapped in debt and nobody wants to go near them until they emerge in an unencumbered fashion."

Those that had their debt taken off were trading at good multiples and this would be reflected in the purchase price.

"While we have not yet seen distressed sales of quality infrastructure assets in Intratil's sectors, opportunities will emerge."

He said the company had not fully anticipated the extent to which credit and equity markets would fall but was satisfied with how it had managed the fallout. "Infratil's risk management worked and both the financing and liquidity position is robust."

Bank debt increased $73 million to $323.2 million which pushed total debt including bonds and perpetual notes to $1.21 billion from $1.15 billion. Following write-downs, assets stood at $2.36 billion, down from $2.43 billion at balance date although since then the value of listed assets had risen about $80 million.

Bogoievski said with relatively low levels of bank debt he was satisfied with the company's gearing. "Debt is the flavour of the month in the capital market, the issue for us is to access capital to take advantage of opportunities."

Forsyth Barr research head Rob Mercer said the debt load was "an easy one to target but it's a bit overdone at the moment".

The result was symptomatic of Infratil's investments being exposed to changes in accounting standards and revaluations.

The company's single biggest investment, TrustPower, contributed $260 million to ebitdaf, up $52 million from last year. At the other end of the scale, Infratil Airports Europe - about 8 per cent of Infratil's business - was $18.9 million in the red, compared with earnings of $1.2 million last year.

Infratil shares lost 29 per cent of their value, including dividends, in the year to the end of March, compared with a 25.4 per cent fall of the NZX gross index over the same period. The company aims to achieve average returns of 20 per cent over a year. Shares in Infratil closed down 7c to $1.63.