Infratil lifts first-half profit 16 per cent as strong Trustpower generation delivers earnings boost

Infratil shares last traded at $3.195 and have gained 16 per cent so far this year. Photo / 123RF

Infratil lifted first-half profit 16 per cent as the infrastructure investor's earnings were buoyed by a strong result from electricity generator and retailer Trustpower.

Net profit attributable to shareholders rose to $33.4 million, or 6 cents per share, in the six months ended Sept. 30, from $28.9 million, or 5.1 cents, a year earlier, the Wellington-based company said in a statement.

Revenue slipped 3.7 per cent to $935.7 million reflecting declines in its NZ Bus and Perth Energy operations, however earnings before interest, tax, depreciation, amortisation and fair value adjustments climbed 18 per cent to $291.3 million due in part to a "very strong result" from Trustpower. Infratil affirmed recently upgraded annual earnings guidance to be between $460 million and $500 million.

"The company is well-resourced and well-positioned to progress many growth initiatives and to continue to deliver value and earnings gains for Infratil's shareholders," chief executive Marko Bogoievski said.

"The 18 per cent uplift (in earnings) was largely due to positive generation and market circumstances for Trustpower."

Infratil has reshaped its portfolio in recent years, investing in the likes of Canberra Data Centres, Australia National University student accommodation, and US renewable business Longroad, while exiting Z Energy, Lumo and iSite.

It sees its core-cash generating assets as being Trustpower, Wellington International Airport, NZ Bus and the ANU student accommodation, while holding Tilt Renewables, Retire Australia, CDC and Longroad for growth.

The board declared an interim dividend of 6 cents per share, payable on Dec. 15 to shareholders of record as at Nov. 28. That's up from 5.75 cents a year earlier.

Trustpower delivered the biggest contribution to Infratil in the period, with earnings up 34 per cent to $159.1 million as favourable weather helped boost generation, while Tilt's earnings slipped 19 per cent to $52.8 million on unfavourable wind conditions in Australia and New Zealand. Wellington Airport's earnings climbed 8.2 per cent to $47.3 million on rising passenger numbers, while NZ Bus earnings dropped 28 per cent to $17.9 million on the loss of its South Auckland contracts.

Perth Energy narrowed its ebitdaf loss to $6.4 million, while CDC delivered its first full contribution with earnings of $18.9 million and Retire Australia's earnings more than doubled to $14.7 million on strong unit prices.

Infratil invested $139.5 million in the half across almost all of the portfolio and affirmed its annual forecast for capital expenditure and investment of between $350 million and $400 million.

"The investments now underway reflect long lead times of planning, consenting and negotiating satisfactory terms for the relevant construction and utilisation agreements," Bogoievski said.

Infratil shares last traded at $3.195 and have gained 16 per cent so far this year.