Utilities sector investment company Infratil has booked a 26% increase in annual after-tax profit, strongly underpinned by revenue from its purchase of 220 former Shell petrol stations and its Infratil Energy Australia holdings.
In reporting its year to March result yesterday, Infratil's operating earnings were up from $90 million to $173 million, operating cashflow was up 356% at $178.5 million. Its after-tax profit grew more than 26% from $95 million during the same period a year ago to $120 million.
Infratil shares were up more than 2% at $1.94, following the announcement.
Highlights for Infratil were the inaugural return of $116 million following its almost $1 billion 50% share in purchasing Shell outlets, which were last week rebranded Z Energy; made up of $55 million earnings and $61 million asset re-evaluations, plus the performance of long-term utility asset holder Infratil Energy Australia, and its $55 million contribution to earnings.
Craigs Investment Partners broker Peter McIntyre said the result was "strong and in line with estimates", the results of Z Energy and Infratil Energy Australia underpinning the result.
"The Infratil Energy Australia result was really impressive, for what was a start-up company not that long ago," Mr McIntyre said of its $116 million return.
Forsyth Barr broker Peter Young said the result confirmed a "solid contribution" from Z Energy and a "substantial lift" from Infratil Energy Australia.
While Infratil Energy Australia performed well during 2011, Mr Young noted this was due to some one-off gains and the outlook for full year 2012 was for its earnings to decrease.
"However, this does not change our positive view towards its Australian operations," Mr Young said.
Infratil signalled its confidence in its outlook by increasing its final dividend by 0.75c to 4.25c, boosting the full year dividend to 6.75c, after having been flat at 6.25c since 2006, Mr Young said.
Mr McIntyre said key to the year ahead for Infratil was its own highlighting of more deregulation ahead in the Australian energy market, New Zealand's introduction of the emissions trading scheme and potential for Public Private Partnerships to evolve on infrastructure asset ownership with the Government.
"There appears to be plenty of energy and infrastructure asset opportunities out there," Mr McIntyre said.
