Infratil lifts operating profit to $521m in 'difficult climate'

Listed infrastructure company Infratil built on second-half momentum to yesterday report an improved operating profit of $521 million for the year ended March.

The profit was up 11% on the $471 million reported in the previous corresponding period.

The reported profit rose 6% to $127 million.

The company will pay a final dividend of 5c per share, taking the final payout to 8c, up 19% from 6.75c in the pcp.

Forsyth Barr broker Peter Young was enthusiastic about Infratil and its prospects.

"This is an excellent result in a very difficult economic climate. TrustPower, Z Energy and Wellington International airport are all performing very well, while Glasgow Prestwick and Manston Airports reported after-tax losses for Infratil.

Infratil assets were in great shape to deliver further growth next year, with profit guidance suggesting operating earnings increasing by up to $50 million, he said.

Infratil founder Lloyd Morrison died this year.

Chief executive Marko Bogoievski said during the last year, the priority for Infratil had been disciplined growth and operation.

"In difficult markets, it is tempting to chase market share, to postpone development, to harvest rather than sow. Infratil and its businesses continue to balance the requirement to invest in the long term while delivering current performance and yield."

Much work had gone into developing and executing investment options, he said.

The group's capital spending was $246 million for the year and was expected to grow next year. That was before taking into account the potential for TrustPower's "very substantial" Snowtown II project.

Over the medium-term, infrastructure businesses delivered higher earnings and value from growth, investment so the pipeline of activity was crucial.

In addition to the $246 million investment, the Infratil group also invested $39 million repurchasing shares.

"Operational discipline has meant ensuring that the basics are done well, services are fairly priced and that businesses pursue profitable growth."

Across most of Infratil's markets - energy in Australia and New Zealand and fuel and air travel in New Zealand - demand had been "relatively flat" and the priority was to keep meeting users needs effectively and efficiently without losing sight of the long-term, Mr Bogoievski said.

Public transport in Auckland was one exception to the market picture for Infratil, and NZ Bus was working with Auckland Transport to meet and encourage growing user demand.

The company earlier indicated it would sell its holdings in Glasgow Prestwick and Manston airports

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