Ann: MONTHLY: IFT: Infratil Montly Operational Re

• Release Date: 21/12/12 15:08
• Summary: MONTHLY: IFT: Infratil Montly Operational Report
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IFT
21/12/2012 13:08
MONTHLY

REL: 1308 HRS Infratil Limited

MONTHLY: IFT: Infratil Montly Operational Report

Infratil Monthly Operational Report
21 December 2012

Infratil's Monthly Operational Report for December 2012 is available here.

Infratil has released its interim report and it is available here. Infratil
is also now producing reports in a format tailored to smartphone and tablets
(such as iPad). If you have one of these devices you may find it a more
convenient way to read Infratil's information releases. To download the free
Infratil App search for "Infratil" in the Apple Store or for the Android app
on Google Play from January 2013. Paul Gough has joined the Infratil Board as
an independent director. Paul is a New Zealander and partner in STAR Capital
Partners, a private equity fund based in London where he specialises in the
transport and energy sectors and is a director of several international
companies. Infratil's Chairman David Newman noted that Paul would add both
diversity in thinking and the experience of working across Europe and Asia to
the Infratil Board.

TrustPower

The Electricity Authority has extended the submission deadline for the
Transmission Pricing Methodology Review to 1 March 2013.
Between October and November short-term wholesale electricity prices rose
slightly as lake storage levels reduced. By the end of November South Island
storage was 106% of average while North Island storage was 87% (in both cases
down about 15% over the month).

Longer-term wholesale prices remained flat and well down on where they were
the same time last year or earlier in 2012 when lake storage levels were
threatening all-time lows. The baseload hedge price for the period to March
2015 is now about 7.5c/kwh, against about 9.0c/kwh in late 2011 or early
winter 2012.

Infratil Energy Australia/Lumo

Lumo has increased customer numbers 14% over the last twelve months, or
36,000 accounts since March.

Customers
Electricity
Gas
Total
November 2012
332,162
145,254
477,416
March 2012
313,984
127,804
441,788
November 2011
292,846
127,400
420,246

Potentially of great importance for Lumo's growth plans, the South Australian
Government has announced that it is to follow the recommendation of the
Australian Energy Market Commission and will deregulate retail prices for
electricity and gas from January 2013 which will bring that state into line
with Victoria.

The experience of Victoria is that deregulation increases consumer choice,
incentivises retailers to innovate and lowers regulatory costs. However,
deregulation of prices in South Australia will take time to filter through.
The existing price controls were only relevant for some consumers, largely
being some of AGL's electricity customers and some of Origin's gas customers,
and muting the impact of the deregulation, both companies have agreed to a
discount from 1 February 2013 and to fix components of the prices charged for
the relevant customers for two years.

The South Australian market comprises approximately 800,000 electricity and
380,000 gas customers, with Lumo having about a 5.5% share of the former.
Price deregulation is the trend across the National Electricity Market states
(SA, VIC, NSW and QLD) and the Australian Energy Market Commission is now
reviewing whether competition is effective in NSW and QLD.

Another feature of the National Electricity Market is declining electricity
consumption, especially on a per-capita basis.
The decline reflects reduced industrial load, retail energy efficiency
schemes, rooftop solar (which is not included in the consumption figures),
and higher retail prices. The latter point is apparent from the following
table which shows the standing offer of an incumbent South Australian
retailer to an average customer, and the tariff breakdown (all dollar figures
in the table are A$).

YE June (ex GST)
2011
2012
2013
Wholesale electricity
10.7c/kwh
11.8c/kwh
11.4c/kwh
Carbon/Green
0.8c/kwh
0.9c/kwh
3.1c/kwh
Network
10.0c/kwh
12.6c/kwh
16.2c/kwh
Retail
3.0c/kwh
3.2c/kwh
3.3c/kwh
Total
24.6c/kwh
28.8c/kwh
34.0c/kwh
1 February 2013 discount
(3.1c/kwh)
Average account
$1,719
$2,018
$2,165

A feature of these price changes is the relatively stable cost of wholesale
energy but the markedly higher network charges.
Wholesale energy prices are being held down by increasing renewable
generation and less demand (in part due to higher tariffs) while network
charges are being driven up as increasing peak demand from air conditioners
requires investment in network capacity.

Z Energy

Since October a strong NZ$ and softer oil and refined product prices has
lowered the retail price of fuel and helped overall industry demand.

Z is also continuing to expand its retail network with Z Broadway near
Wellington Airport opening to very strong customer demand. A new Z service
station in Wellington's Vivian Street is also progressing well with an
anticipated opening in March 2013. In a mature fuels market, strategically
positioned flagship sites with the full Z convenience offer provide an
important competitive edge.

Z is also in the advanced stages of re-negotiating its crude oil supply
terms. Earlier in the year Z captured a $5 million per annum saving by
changing its source of imported refined fuels to a Korean refinery and it is
expected that the renegotiation of crude products will also deliver material
cost savings.

The Ministry of Business, Innovation and Employment has just concluded a
public submission process on the resilience in the New Zealand domestic and
global liquid fuel supply chain. With the gap between industry fuel storage
and fuel demand widening over time, this could have material consequences for
the future of New Zealand's energy infrastructure. All submissions on this
matter, including from Z, can be viewed at
http://www.med.govt.nz/sectors-industries/energy/energy-security/oil-security
/oil-security-review-2012/submissions.

NZ Bus

During November, the Collective Employment Agreement for the Auckland
combined unions, representing approximately 900 drivers, was ratified. This
is only the second time in the last 20 years of bargaining where full
industrial action has been avoided, so this was an outstanding result. The
agreement is a significant step forward in the employment relationship as NZ
Bus strives to deliver New Zealand's best passenger transport service.

In early December the first new ADL Enviro200 bus was unveiled in Wellington.
These are of the highest quality and are powered by the environmentally
friendly Euro 5+ low emissions engines. They are equipped with very
comfortable Italian designed high back seats, air conditioning, step free
entrance and exit, and a wheelchair ramp and priority seating for mobility
impaired customers.

NZ Bus' November patronage was 2% lower than the same month last year, mostly
due to the residual impact of the 2011 Rugby World Cup. For the 12 months to
the end of November, patronage is up 2% or 1.3 million trips.

Northern passenger trips
November
8 months to 30 November
12 months to 30 November
2011
3,381,835
26,450,074
37,923,217
2012
3,255,089
26,678,143
38,941,205
Change
-3.7%
0.9%
2.7%

Southern passenger trips
November
8 months to 30 November
12 months to 30 November
2011
1,739,950
14,055,722
20,291,659
2012
1,772,627
14,190,200
20,567,830
Change
1.9%
1.0%
1.4%

Wellington Airport

November passenger numbers were up 8% relative to the same month in 2011.

Domestic passengers were up 9%, with Jetstar's 50% capacity increase on
Auckland and Christchurch making a big impact and Air New Zealand responding
competitively with innovative promotional fares helping to stimulate demand.
Air New Zealand's special Night Rider services, operating late night flights
between Auckland and Wellington have proved popular, with the flat rate $29
fares sold out several weeks in advance.
International passenger numbers and capacity were both up 2%. Late November
saw international attention on Wellington as part of The Hobbit world
premiere and a marked increase in Australian visitors.

Wellington Airport has made a submission to the Commerce Commission following
the release of the Commission's draft review of the impact of Wellington
Airport's new
information disclosures. The Commission is assessing the effectiveness of the
new disclosure in promoting outcomes consistent with a competitive market.

The Commission is scheduled to publish its final report in February 2013.
Later in 2013 similar reviews will also be undertake of Auckland and
Christchurch airports.

Domestic Month
Domestic 12 Months
International
Month
International 12 Months
November 2011
393,547
4,419,482
59,328
697,732
November 2012
426,582
4,555,171
60,561
722,030
Annual change
8.4%
3.0%
2.0%
3.4%

Snapper

Snapper continues to be recognised for its achievements and was listed in the
Deloitte Fast 500 as one of the fastest growing technology companies in Asia
Pacific region. Snapper Mobile has also been short listed for the MasterCard
International Transport Ticketing awards to be presented in London in early
2013.

Snapper's efficiency and effectiveness is being reflected in the New Zealand
market with new products and services under development for launch in early
2013
End CA:00231560 For:IFT    Type:MONTHLY    Time:2012-12-21 13:08:59