Infratil’s earnings rise as its portfolio proves resilient to volatility

Infratil chief executive Jason Boyes says the company's portfolio benefited from the "relative protection of infrastructure assets" during a volatile period. Photo / Mark Mitchell

Infratil’s share price inched up on the back of the company reporting “strong earnings growth in a volatile environment” in the six months to September.

Its earnings before interest, tax, depreciation, amortisation and fair value adjustments (Ebitdaf) rose by 11 per cent compared to the same period in 2021 to $275.6 million.

The rise reflected strong performances from companies Infratil invests in, including CDC Data Centres, Vodafone and Wellington Airport.

Infratil forecast its proportionate Ebitdaf for the year to March 2023 coming in at between $510m and $540m.

Chief executive Jason Boyes noted the company's portfolio had benefited from the "relative protection of infrastructure assets" in the volatile economic environment, as well as "inflation-linked pricing".

"CDC had a strong six months having delivered an additional 104MW of capacity across its Canberra, Sydney and Auckland campuses. The new Silverdale and Hobsonville data centres are the largest and most secure centres of their type in New Zealand," Boyes said.

"Vodafone is well positioned for the next stage of growth, with an increase in top-line revenue driven by strong post-paid trading performance and border openings, the upgrade and onshoring of major IT systems away from the Vodafone Group, as well as the sale of its passive tower assets for $1.7 billion.

"Following completion of the tower sale, Infratil will have received almost $1b in cash distributions in the just over three years since acquiring Vodafone for $1.03b, while still retaining a 49.9 per cent shareholding in the Vodafone business."

Boyes said Wellington Airport saw a strong rebound in domestic traffic with passenger numbers up by 24 per cent from the prior period. However, international travel is recovering at a slower pace, tempered by airline capacity.

As for Longroad Energy, Boyes said it had been a "stand-out period" with "the announcement of the now completed capital raise and introduction of new co-investor MEAG".

"The transaction implied a pre-money valuation for Longroad common equity of US$2b, with the new capital set to accelerate Longroad's growth ambitions."

Boyes said Infratil has a lot of available liquidity to pursue "both internal and external" investment opportunities.

He said the company deployed $471.7m in the half year across existing digital infrastructure and global renewable businesses.

It has over $1.4b available (including in undrawn corporate facilities and cash) to keep funding growth.

"In terms of our returns to shareholders, we will pay a fully imputed interim dividend of 6.75 cents per share," Boyes said.

"Infratil's share price also rose from $8.25 to $8.65 over the period, with an after-tax return to shareholders over the six months of 6.5 per cent and a return over the last ten years of 20.5 per cent."

Infratil's share price rose by 1.9 per cent to $8.55 by early afternoon.