13 Nov 2013

Infratil plans investment to drive growth

8:06 am on 13 November 2013

Infratil plans to invest $650 million - $710 million in the year ending next March to drive future earnings growth.

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Photo: RNZ

The infrastructure investor turned last year's small first half loss into a $230 million net profit, boosted by the gains from floating its stake in Z Energy.

Its profit for the six months to September includes nearly $183 million from the Z float and compares with the previous first-half loss of $17 million.

Underlying operating profit from continuing operations fell 3.3% to $285 million, largely reflecting softer results from its 50.4%-owned TrustPower and wholly-owned Infratil Energy Australia.

Chief executive Marko Bogoievski Infratil should be able to continue producing substantial returns.

"I think it is fair to say since listing in '94 that this is the most comfortable position Infratil has been in on its balance sheet," he said.

"If you use that wisely and you're patient about looking for the opportunities and keep emphasising the importance of the internal capital expenditure programme, I don't see any reason why we can't generate decent returns."

Mr Bogoievski said the company's plan was pretty generic - buy well-positioned assets at reasonable values, sell at strong values, actively manage what it had and expose equity to earlier-stage investments.

"But it's actually 'the plan', so we've got people attached to each of those elements. We've got incentives lined up against each of those elements, we have dollars allocated and, probably more importantly than anything else, we have accountabilities clarified," he said.

"So I don't really think there's a secret around this stuff."

The Australian market for public-private partnerships (PPPs) was much more developed than in New Zealand and Infratil believed there were a number of opportunities in areas such as roads, hospitals and education.

The company planned to invest $A100 million dollars on greenfields PPPs, spread over three or four years.