Infratil Limited Analysis

Overview

Infratil owns renewable energy, transport, data and connectivity, and social infrastructure businesses in growth sectors

Performance

The following information was extracted from Infratil Limited's half year results, released on 14 November 2024:

Infratil today announced Proportionate operational EBITDAF for the half year of $506 million – a 25% increase on the $400 million from the same period the previous year – with full year guidance on track.

The net loss attributable to shareholders was $212.2 million, which was down from a net surplus of $1.1 billion in the prior period. The prior year included a $1.1 billion accounting revaluation of Infratil's stake in One NZ, with the current period impacted by elevated amortisation relating to that transaction and negative $63 million of foreign exchange and derivative revaluations.

The operational earnings growth was off the back of strong contributions from CDC, One NZ and Wellington Airport, while also reflecting the period of One NZ under full ownership following our purchase of Brookfield’s 49.95% stake in June last year.

Infratil CEO Jason Boyes said that delivering increased operational EBITDAF was an impressive accomplishment despite the testing domestic landscape and global volatility, with Infratil’s operating performance across key areas of its portfolio showing marked resilience. Operational EBITDAF increased 7% compared with the first half of 2023 on a like for like basis.

The Company will pay shareholders an unimputed interim dividend of 7.25 cents per share (‘cps’). In the first half of the financial year, Infratil delivered a total shareholder return of 14.5%, a significant achievement in a market where the NZX50 grew by 2.7%. Over the last five years, Infratil’s total shareholder returns have averaged over 23% annually.

Mr Boyes said that with geopolitical tensions, persistent inflation, and high living costs shaping the investment landscape, Infratil will continue its disciplined approach to capital allocation and its focus on capturing long-term value across its investments.

“External valuation indicators underscore the strong global appeal for digital assets. The independent valuation of Infratil's CDC investment at 30 September 2024 increased A$753 million over the six months since 31 March 2024. This equates to approximately NZ$0.84 per Infratil share, showcasing the substantial value being created.

“CDC’s EBITDAF for the period was A$159 million, up A$36 million (29%) from the prior period, driven by the commissioning of the first Melbourne data centre (34MW) in June and higher utilisation across existing data centres.

“CDC continues to experience significant growth in demand, driving an expansion of its development pipeline. Reflecting the increased demand signals, CDC's forecast build capacity for FY2034 has expanded by over 1,000MW since March 2024.”

Mr Boyes said it was pleasing to see One NZ performance in line with our expectations and with a number of strategic priorities on track.

“One NZ’s EBITDAF for the period was $304 million, an increase of $25 million (9%) from the prior period. Growth was driven by consumer mobile and a strong focus on cost management, with the benefits now flowing through from action taken on cost in the previous financial year.”

Mobile ARPU increased to $33.80 from $32.45. Operating costs reduced by $14 million compared to a year ago. EBITDAF margin continues to expand increasing to 32% up from 29% for the first half of 2024, partially reflecting fewer low margin handset sales.