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Infratil's first-half earnings fall

NZ Newswire logoNZ Newswire 11/11/2016 Paul McBeth

Infratil reported a 7.1 per cent fall in earnings as the listed infrastructure investor's Perth Energy division faced difficult retail conditions in Western Australia, and the company now sees its annual result tracking at the bottom end of its forecast.

Underlying earnings before interest, tax, depreciation, amortisation and fair value of financial instruments (ebitdaf) fell to $246 million in the six months ended Sept. 30 from $253.1m a year earlier, the Wellington-based company said in a statement.

Net profit sank 93 per cent to $28.9m, though the year-earlier period included $407.1m of gains from the sale of Infratil's stakes in Z Energy and iSite Holdings. It raised its interim dividend to 5.75 cents per share, payable on Dec. 15 with a Nov. 28 record date, from 5.25 cents a year earlier.

Perth Energy was the biggest drag on earnings, posting an ebitdaf-loss of $9.7m due to expensive product purchase arrangements and a lack of wholesale hedging products, which led to "poor performance in the retail business," Infratil said.

Infratil warned annual ebitdaf was tracking at the bottom end of the projected $485m-to-$525m range because of the flat performance from Trustpower, Perth Energy's troubles, the cost of demerging Tilt Renewables from Trustpower, and the loss of NZ Bus's South Auckland contracts.

Offsetting that will be growth at Wellington International Airport and contributions from newer investments King Country Energy, Canberra Data Centres, Australia National University student accommodation, and its US renewable business, Longroad.

The company has been on the hunt for new investments after selling out of Z, Lumo and iSite, and recycled some of that capital into CDC, ANU and Longroad through the six month period.

It still has more than $500m in cash and undrawn bank facilities and has said it favours renewable energy, the retirement sector, social infrastructure such as housing, telecommunications infrastructure, and waste management.

The shares last traded at $2.945, having declined 10 per cent so far this year.

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