Infrastructure investment company Infratil has recorded a turnaround profit for the year, but has cautioned "profound changes" may lie ahead in understanding Government and private co-investment in infrastructure projects.
Its after-tax profit for the year to March produced a $220 million turnaround, from a $191 million loss last year to $29 million in the black.
It included a $68 million loss on non-cash hedge revaluations and an $84 million net gain on the sale of assets.
"Strong returns were delivered by TrustPower and Wellington Airport.
Infratil Energy Australia and its New Zealand business had satisfactory outcomes given the negative one-off items in both businesses.
Infratil Airport Europe performed credibly in very difficult market conditions," the company said in a statement to markets yesterday.
Craigs Investment Partners broker Peter McIntyre the result was in line with market expectations, underpinned by its "steady performers" such as Wellington Airport and TrustPower.
He noted net operating cashflows were up 7.6%, operating earnings 16% and operating revenue almost 6%.
"All the important numbers that count have improved and delivered a solid performance," he said. While the the infrastructure/utilities sector in general could be expected to continue to perform even through a recession, many companies had been hard-hit by asset revaluations during the financial crisis at the same time, he said.
TrustPower contributed $274 million in earnings, Wellington Airport $68 million, Infratil Energy Australia $11 million and NZ Bus $29 million, but Infratil Airports Europe posted a $9 million loss.
Asset sales during the year totalled $392 million, against a book value of $264 million.
They included Fullers Ferries, Auckland Airport, three bus depots, Lubeck Airport, and Energy Development.
Infratil's operating earnings rose 16% to $90 million, including from an $18 million reduction in interest costs and partially off-set by a $12 million increase in depreciation and amortisation following recent investment and revaluations.
"The infrastructure sectors in which Infratil operates have largely come through financial crisis and economic downturn in good shape, but profound changes may be on the horizon.
"Society continues to want better infrastructure, but governments have less capacity to pay for it," the company said.
This meant governments being more willing to partner with private providers, but Infratil cautioned that this private-public partnership sector was only just beginning in New Zealand.
"New Zealanders remain wary of private ownership of infrastructure," Infratil said.
However, the company's history of partnerships with public bodies, councils and community trusts reflected how good relationships could be developed for the benefit of both communities and investors.
Infratil's divestment programmes raised $392 million and reduced its debt by $382 million to $830 million during the period.
There will be a fully imputed dividend for the year of 3.75 cents per share.
During the past four years Infratil had invested $1.5 billion, including $193 in internal capital expenditure plus $210 million buying Shell's New Zealand fuels distribution and retailing outlets.
