Ann: FLLYR: IFT: Infratil Results for Year Ended

• Release Date: 14/05/13 10:30
• Summary: FLLYR: IFT: Infratil Results for Year Ended 31 March 2013
• Price Sensitive: No
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IFT
14/05/2013 08:30
FLLYR

REL: 0830 HRS Infratil Limited

FLLYR: IFT: Infratil Results for Year Ended 31 March 2013

For the year ended 31 March 2013 Infratil delivered on its earnings guidance
and committed significant investment capital to underpin future growth.
Infratil's core businesses are performing well and the positive earnings and
value trajectory is being maintained.

Net Surplus was $3.4 million against $51.6 million last year. The decline
reflects $62.4 million of costs and write downs associated with the two UK
airports, from $37.3 million the previous year. Fluctuations in derivatives
and other asset value changes amounted to a further net cost of $20 million
from a net $23 million gain the previous year.

Consolidated earnings before interest, tax, depreciation, amortisation and
movements in the value of financial derivatives (EBITDAF) from continuing
operations was $538 million compared with $510 million in the prior year.
This includes Z Energy's contribution measured on a current cost basis
adjusted for revaluations, impairments and realisations. For the year to
March 2014 EBITDAF from continuing operations adjusted for Z's current cost
earnings in the range of $520-$560 million is anticipated, assuming no
changes in the Infratil portfolio.
Net cashflow from operating activities was $288 million up from $188 million
in the prior year.

Capital expenditure(1) was $414 million up from $246 million.
The group has a comfortable financial position and retains bank and capital
markets support which is enabling early refinancing of 2014 maturities. The
solid position and good financial performance has allowed Infratil to declare
a final dividend of 6.0 cents per share bringing the total dividend for the
year to 9.25 cents up from 8.0 cents for the prior year. The dividend will be
paid on 14 June to shareholders on the register as at 31 May. The dividend
reinvestment plan will operate.

There were two particular highlights in the 2013 financial year; TrustPower
starting construction of the $550 million Snowtown II wind farm, and Infratil
Energy Australia's 52% increase in EBITDAF contribution to $98 million. In
their own ways both represent the Infratil approach. Both developments
involved years of hard work, the application of a great deal of expertise and
diligent management of risks. The commencement of the Snowtown wind farm is
the start of a new stage of earnings growth for TrustPower.

Other developments during the year included:
o Wellington Airport unveiled plans for expansion of the domestic terminal,
and is also considering its response to the Commerce Commission analysis
which forecasts returns in excess of the Commission's benchmarks from the
2015 financial year;
o NZ Bus had a good year operationally and is well positioned to enter the
new public transport regulatory regime;
o Snapper has continued to roll out innovative payment products, but has also
been required to withdraw from the public transport market in Auckland;
o The two UK airports have not yet been sold and have been written down
further;
o Z Energy produced a solid result and its shareholders initiated a process
which may lead to a partial public float.

Meeting Customer Needs
Each year we set our businesses two paramount objectives - look after your
customers and look after growth. We believe that if our businesses are well
placed in growth sectors and they are well regarded by their customers then
they will be able to invest in expansion.

Over the last year each of our major companies have delivered in an
environment with intense competition and a modest macroeconomic backdrop.
Each of our businesses has to provide services to a high standard and do so
at the least possible cost.

Infratil operates in markets where there is heightened sensitivity over
prices and long-run returns. Energy, airport, public transport, and fuel
prices are all subject to significant scrutiny and commentary. An
illustration is the Commerce Commission forecast that Wellington Airport will
generate excess aeronautical earnings from the year ended 31 March 2015.  The
Commission's approach is being tested in the High Court and the next steps
are likely to be influenced by the outcome of that merits appeal.

The Airport's management are maintaining their focus on a wide range of
operational needs, expansion of the domestic terminal and car park, enhanced
air services, as well as the project to attract direct air services with
Asia.

Investment and Divestment
Over last year group capital expenditure was $414 million; largely on power
generation in Australia, Z's retail network, and the NZ Bus fleet. This
capital outlay is expected to increase Infratil's future earnings and value.

While the sum is very substantial, the allocations were conservative and
reflect where the group has a competitive edge. Infratil also participated in
a number of new investment transactions, none of which resulted in an
acquisition. This was disappointing, and educational about the risk and
return appetite of other investors.

If Infratil proceeds to a partial sell-down of its holding in Z Energy, or
other major asset sales take place, the Company is likely to have additional
capital flexibility. Infratil shareholders should not anticipate immediate
reinvestment. Infratil's criteria for both internal capital spending and
acquisition will not be softened, in fact if anything the current market
requires particular care. These are unusual times and it is difficult to
arrive at high-confidence forecasts about the economy or financial markets.

At present Infratil is actively involved with the sale of two assets; the
exit from its UK airports and the more recently initiated market testing of
the partial sale of Z Energy. The state of European markets has made the sale
of the airports unpredictable and difficult. On the other hand, the latter
process will run its course relatively quickly. If the eventual indications
of value are satisfactory the transaction is likely to be concluded before 30
September 2013.

In addition to the $414 million invested in operating assets, Infratil also
applied $13 million repurchasing shares. Share buy-backs will continue to be
an option, especially if the shares remain below the value the directors
believe to be implicit in their net asset backing.

Capital and Debt
During the year $57 million of Infratil infrastructure bonds matured and $111
million were issued to mature in 2018.
As at 31 March 2013 net borrowings by Infratil and its 100% subsidiaries was
$364 million, from $363 million at the start of the year. The 100% Infratil
group had dated debt (excludes perpetual bonds) as a percentage of debt and
equity market value of 39%, down from 42% in the prior year.

Over the year Infratil issued 3.0 million shares for $6 million under its
dividend reinvestment plan and repurchased 6.4 million shares on market for
$13 million.

Infratil's ownership changed slightly with local ownership rising to
approximately 78% from 76% a year prior.

Looking Forward
For the financial year to 31 March 2014 Infratil's earning and cashflow
guidance is:
o Consolidated EBITDAF from continuing operations $520-$560 million (compared
with $536 million in the current year). In both cases including Z Energy's
contribution measured on a current cost basis adjusted for revaluations,
impairments and realisations.
o Consolidated operating cash flow $250-$280 million,  from $288 million in
the current year.
o Investment spending of $580-$645 million, up from $414 million (includes
100% of Z capital expenditure).
The EBITDAF outlook is consistent with last year and reflects softer
expectations from TrustPower and Infratil Energy Australia. In both cases
EBITDAF is expected to improve after the 2014 financial year as both
companies are investing in assets or operational capability.

As always there are short term challenges and naturally faster growth in the
overall economy would be desirable. Infratil's businesses are well positioned
to continue to provide increasing returns to shareholders, they are operating
well and our people are energetic and committed.

Marko Bogoievski
Chief Executive

David Newman
Chairman
End CA:00236168 For:IFT    Type:FLLYR      Time:2013-05-14 08:30:06