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 full year results, released on 21 May 2024:

Infratil today announced a strong result for the year ended 31 March 2024, with Proportionate EBITDAF exceeding guidance. Alongside the result Infratil has provided an update on the significant investment in growth underway across the portfolio and accelerating into the next financial year.

Infratil CEO Jason Boyes said, “we are pleased to report that as we celebrate 30-years of Infratil we continued to build on our legacy of success, delivering a strong financial result and making significant strides in growing our portfolio. While we celebrate these achievements, we recognise that our approach is designed for sustainable, long-term growth, not overnight success, and therefore this year’s result is the culmination of many years work.”

Proportionate EBITDAF was $864.1 million – a 63% increase on the $531.5 million from the same period the previous year. “While a substantial portion of this increase can be attributed to the higher ownership stake in One NZ since June 2023, even after adjusting for this change, growth stood at an impressive 15.5%. This earnings expansion underscores the strong performance across the portfolio's operational businesses,” Mr. Boyes said.

The net parent surplus from continuing operations was $854.0 million, up from $643.1 million in the prior year. The result included a $1,075 million revaluation of Infratil’s initial 49.95% stake in One NZ, following the acquisition of a further 49.95% stake in June this year.

One NZ’s normalised EBITDAF of NZ$600 million was a 13.7% increase from the prior year and at the mid-point of guidance, reflected a strong performance despite challenging economic conditions. Growth was driven through Consumer Mobile and Wholesale, alongside careful cost management. The Enterprise side of the business has been challenging with downward pressure on connections and revenue, as both public and private sector Enterprise customers downsize and look for cost savings in the current economic environment.

“Pleasingly, one year after its launch, the One NZ brand continues to be well-received, with key metrics surpassing those of the former Vodafone New Zealand brand. Metrics such as brand awareness and non-customer consideration are tracking ahead of expectations, indicating strong public reception and confidence in the rebranding strategy,” Mr. Boyes said.

Longroad Energy delivered EBITDAF of US$56 million, up US$24 million from the prior period, supported by 209MW of projects commencing operations and the completion of restoration works at Prospero 1 and 2 in Texas.

One NZ EBITDAF for the period was $279.4 million, up $21.5 million (8.3%) from the prior year. EBITDAF margin improvement has been driven through lower brand and rebrand costs, and mobile outperformance. Mobile performance continues to reflect the benefits from higher value endless data and unlimited data plans, roaming revenues returning, and annual pricing adjustments.

“Longroad Energy delivered a strong result for the half year with an EBITDAF contribution of US$57.7 million, up US$17.0 million (41.7%) from the prior period. Performance was primarily driven by Longroad’s projects in Texas which were damaged by a severe hailstorm in the prior period. The rebuild of those projects has now been completed, and they’ve been the benefactors of high merchant pricing due to extreme heat in Texas over the summer months