Amended interim results announcement
Infratil Limited 5 Market Lane, PO Box 320, Wellington, New Zealand Tel +64-4-473 3663 www.infratil.com
15 November 2019
Amended interim results announcement for the period ended 30 September 2019
Infratil advises that it has corrected an error in the Statement of Cashflows on page 4 of the Infratil
Group Interim Financial Statements to 30 September 2019. The subtotals for cash flows provided
from operating activities and cash disbursed to operating activities were incorrect, although the
individual line items and the net cash inflow from operating activities were correct.
A corrected version of the Infratil Group Interim Financial Statements to 30 September 2019, along
with further copies of the other documents released on 13 November, are attached.
Any enquiries should be directed to:
Phillippa Harford, Chief Financial Officer, Infratil Limited Phillippa.Harford@infratil.com
---
Infratil Limited 5 Market Lane, PO Box 320, Wellington, New Zealand Tel +64-4-473 3663 www.infratil.com
13 November 2019
Interim results announcement for the period ended 30 September 2019
Significant capital invested in high performing renewable energy, data and connectivity
platforms
During the six months ended 30 September 2019 Infratil invested $1.4 billion which included the
acquisition of Vodafone NZ (‘Vodafone’) for $1,029 million. The remaining $332.6 million was invested
in Infratil’s existing businesses, including significant projects developed by Tilt Renewables and further
expansion of CDC Data Centres.
The acquisition of Vodafone represented the largest corporate transaction in New Zealand for over a
decade when Infratil acquired a 49.9% stake alongside global infrastructure investor Brookfield Asset
Management. The acquisition is transformational for Infratil and significantly strengthens the cash
generative core of the portfolio while increasing Infratil's exposure to long-term data and connectivity
growth. The deal was well supported by shareholders, reflected by the strong backing of the
NZ$400 million capital raise undertaken to as part of the acquisition.
Just as significant as the investment that was made during the period were the announcements around
future investment and the momentum within Infratil’s existing platforms:
• Tilt Renewables and Longroad Energy announced three new renewable generation projects
over the period amounting to 755MW of capacity at a total cost of $1,470 million. In aggregate
these two companies are now building 712MW of wind and 379MW of solar generation at a total
cost of $2,070 million;
• RetireAustralia is in the process of taking delivery of 70 new care-units at its Glengarra Village,
while construction is underway on 177 units at The Verge village adjacent to the Burleigh Golf
Club in Queensland;
• CDC Data Centres has outlined plans for the construction and fit out of up to an additional
150MW of data centre capacity across Canberra and Sydney;
• Vodafone is in the process of the initial roll-out of New Zealand’s first commercial 5G deployment
with 108 enabled cell-sites soon to provide 5G coverage in Queenstown, Christchurch,
Wellington, and Auckland; and,
• Wellington Airport has released its 2040 Master Plan which could involve $1,000 million of
investment over the next decade expanding capacity and improving resilience.
While the six-month period under review was dominated by investment, the divestments of four portfolio
businesses, ANU Student Accommodation, NZ Bus, Perth Energy and Snapper are also significant in
the context of Infratil’s goals and strategies. In addition to releasing capital, the asset sales reflect the
desire to simplify Infratil’s portfolio and recognise that those activities were unlikely to grow to a material
scale. The new investments reflect Infratil’s focus on growth infrastructure and commitment of capital
to high conviction platforms, in particular exposure to long-term data and connectivity growth and
renewable energy.
For the six-month period Infratil’s net parent surplus was $56.4 million, down from $58.5 million in the
prior period. This result included unfavourable foreign exchange and derivative movements of $16.4
million, compared to gains of $12.0 million in the prior period.
Underlying EBITDAF from continuing operations was $289.4 million for the year ended 30 September
2019, up from $284.6 million in the prior year. This included an initial two-month contribution from
Vodafone of $39.1 million. Excluding the contribution from Vodafone the main changes were lower
contributions from Trustpower and Longroad arising from low hydro generation in New Zealand and the
2
timing and terms of Longroad’s development activity and asset sales. As part of the 30 September 2019
result’s announcement Infratil is able to reaffirm its Underlying EBITDAF guidance range from
continuing operations of $655-$695 million for the year ending 31 March 2020.
Over the 6 months the Infratil share price rose from $4.17 to $4.92 and a dividend of 11.0 cps and
2.0 cps imputation credits was paid. In addition, shareholders had the opportunity to buy one share at
$4.00 for each 7.46 shares they owned under the pro-rata accelerated renounceable entitlement offer.
Shareholders who did not take up this offer received a payment equivalent to 4.69 cps.
The interim dividend will be 6.25 cps to be paid on 13 December 2019 to shareholders of record as at
29 November 2019. This will carry 1.5 cps of imputation credits. For this dividend, Infratil is
re-instituting its Dividend Reinvestment Plan in response to requests from shareholders. Details of how
to take advantage of this Plan are set out in a separate letter to be sent to shareholders.
There will be a briefing for institutional investors, analysts and media commencing at 10.00am at Prefab
Hall, 14 Jessie Street, Te Aro, Wellington. The briefing and Q&A session will be webcast live.
Conference call 10:00am (NZ time) access phone numbers:
Confirmation code: Infratil
From Wellington: 04 830 1013
From Auckland: 09 950 5335
From New Zealand: 0800 122 360
From Australia: 1800 760 146
From Hong Kong: 800 960 484
From Singapore: 800 101 3287
From USA: 1844 393 3437
From UK: 0808 145 3702
Further information is available on www.infratil.com
Any enquiries should be directed to:
Mark Flesher, Investor Relations, Infratil Limited mark.flesher@infratil.com
---
Results
Announcement
For the 6 months ended 30 September 2019
13 November 2019
Disclaimer
InfratilInterim results presentation 20202
Disclaimer
This presentation has been prepared by Infratil Limited (NZ company number 597366, NZX:IFT; ASX:IFT)
(Company).
To the maximum extent permitted by law, the Company, its affiliates and each of their respective affiliates, related
bodies corporate, directors, officers, partners, employees and agents will not be liable (whether in tort (including
negligence) or otherwise) to you or any other person in relation to this presentation.
Information
This presentation contains summary information about the Company and its activities which is current as at the
date of this presentation. The information in this presentation is of a general nature and does not purport to be
complete nor does it contain all the information which a prospective investor may require in evaluating a possible
investment in the Company or that would be required in a product disclosure statement under the Financial
Markets Conduct Act 2013 or the Australian Corporations Act 2001 (Cth). Any historical information in this
presentation is, or is based upon, information that has been released to NZX Limited (NZX) and ASX Limited. This
presentation should be read in conjunction with the Company’s Interim Report for the 6 months to 30 September
2019, market releases and other periodic and continuous disclosure announcements, which are available at
www.nzx.com, www.asx.com.au or infratil.com/for-investors/.
Not financial product advice
This presentation is for information purposes only and is not financial, legal, tax, investment or other advice or a
recommendation to acquire the Company’s securities, and has been prepared without taking into account the
objectives, financial situation or needs of prospective investors.
Past Performance
Any past performance information given in this presentation is given for illustrative purposes only and should not
be relied upon as (and is not) an indication of future performance. No representations or warranties are made as to
the accuracy or completeness of such information.
Disclaimer
InfratilInterim results presentation 20203
Future Performance
This presentation may contain certain “forward-looking statements” about the Company and the environment in
which the Company operates, such as indications of, and guidance on, future earnings, financial position and
performance. Forward-looking information is inherently uncertain and subject to contingencies outside of the
Company’s control, and the Company gives no representation, warranty or assurance that actual outcomes or
performance will not materially differ from the forward-looking statements.
Financial data
This presentation contains certain financial information and measures that are “non-GAAP financial information”
under the FMA Guidance Note on disclosing non-GAAP financial information, "non‐IFRS financial information"
under Regulatory Guide 230: ‘Disclosing non‐IFRS financial information’ published by the Australian Securities and
Investments Commission (ASIC) and are not recognised under New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS), Australian Accounting Standards (AAS) or International Financial Reporting
Standards (IFRS). The non-IFRS/GAAP financial information and financial measures include Underlying EBITDA,
Underlying EBITDAF, and Net Debt. The non-IFRS/GAAP financial information and financial measures do not have a
standardised meaning prescribed by the NZ IFRS, AAS or IFRS, and therefore, may not be comparable to similarly
titled measures presented by other entities, nor should they be construed as an alternative to other financial
measures determined in accordance with IFRS, AAS or IFRS. Although Infratil believes the non-IFRS/GAAP financial
information and financial measures provide useful information to users in measuring the financial performance and
condition of Infratil, you are cautioned not to place undue reliance on any non-IFRS/GAAP financial information or
financial measures included in this presentation.
Currency
All currency amounts in this presentation are in NZ dollars unless stated otherwise.
No part of this presentation may be reproduced or provided to any person or used for any other purpose.
Significant capital invested
in high performing
renewable energy, data and
connectivity platforms
•Divestments and tightening ofthe portfolio
substantially complete
•Acquisition of 49.9% of Vodafone NewZealand
completed on 31 July 2019 for $1.03 billion
•Capex of $326 million invested during the
period, including $123 million in renewables
and $127 million at CDC Data Centres
•Partially imputed interim dividend of 6.25 cents
per share (cps)
•Total shareholder return of 25.4% for the
6 months to 30 September 2019
4
Financial
Highlights
Major cash
generating
businesses
supporting
capital
requirements of
growth platforms
InfratilInterim results presentation 20205
6 months to 30 September ($Millions)20192018Variance% Change
Net Parent Surplus (continuing activities)56.458.5(2.1)(3.6%)
Underlying EBITDAF
1
(continuing activities)289.4284.64.81.7%
Net Operating Cash Flow68.0142.7(74.7)(52.3%)
Capital Expenditure & Investment1,362.2301.61,060.6351.7%
Earnings per share (cps) (continuing activities)9.510.5(1.0)(9.5%)
Notes:
1.Underlying EBITDAF is an unaudited non-GAAP measure. Underlying EBITDAF does not have a standardised meaning and should not be viewed
in isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS, as it may not be comparable tosimilar financial
information presented by other entities. A reconciliation of Underlying EBITDAF to Net profit after tax is provided in Appendix I
Results
Summary
Steady
operating result
as capital is
deployed and
strategic
disposals are
completed
InfratilInterim results presentation 20206
30 September ($Millions)20192018
Operating revenue802.4736.2
Operating expenses(485.7)(425.0)
Operating earnings316.7311.2
International incentive fee(12.8)(29.4)
Depreciation & amortisation(75.2)(83.7)
Net interest(85.6)(72.1)
Tax expense(46.1)(46.2)
Revaluations(17.2)12.6
Discontinuedoperations
1
8.313.7
Net profit after tax88.1106.1
Minority earnings(31.7)(47.6)
Net parent surplus56.458.5
•Operating revenue includes a full period
production contribution from Tilt’s Salt Creek
and the impact of higher average spot prices in
New Zealand for Trustpower
•Incentive fee accrual driven by Infratil’s
investments in CDC Data Centres, Tilt
Renewables and Longroad Energy
•Net interest has increased as capital is deployed
to new investments and capex developments
are completed
•Reduction in depreciation and amortisation
reflects the revaluations of Generation Assets as
at 31 March 2019
•Discontinued operations include ANU PBSA,
NZ Bus, Perth Energy and Snapper
Notes:
1.Discontinued operations represent businesses that have been divested, or businesses which will be recovered principally through a sale transaction rather
than through continuing use
Underlying
EBITDAF
1
Capital
investment
drives
EBITDAFgrowth
•Lower contribution from Trustpower, with higher
average spot prices and lower generation volumes
•Tilt Renewablesincludes a full contribution from
Salt Creek and overall portfolio wind conditions in
line with long-term expectations
•CDC Data Centresyear-on-year earnings growth
as new facilities come online
•Longroad Energyincludes the gain on the sale of
Project Rio Bravo, a wind development in Texas,
USA
•Current period includes an initial 2-month
contribution from Vodafone NZ following
completion of the acquisition on 31 July 2019
•Corporate and Other includes an incentive fee
accrual of $12.8 million ($29.4 million in the
comparative period)
•Contributions from ANU PBSA, NZ Bus,
Perth Energy and Snapper reflect their respective
ownership periods before disposal
InfratilInterim results presentation 20207
30 September ($Millions)20192018
Trustpower107.1129.6
Tilt Renewables75.472.5
Wellington Airport50.449.6
CDC Data Centres26.317.7
RetireAustralia2.95.0
Longroad Energy17.851.1
Vodafone NZ 39.1-
Corporate and Other(29.6)(40.9)
Underlying EBITDAF
1
(continuing)289.4284.6
NZ Bus5.913.2
Perth Energy12.125.3
ANU PBSA0.55.5
Snapper(1.5)(2.3)
Total Underlying EBITDAF
1
306.4326.3
Notes:
1.Underlying EBITDAF is an unaudited non-GAAP measure. Underlying EBITDAF does not have a standardised meaning and should not be viewed
in isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS, as it may not be comparable tosimilar financial
information presented by other entities. A reconciliation of Underlying EBITDAF to Net profit after tax is provided in Appendix I
Capital
Expenditure &
Investment
Building a
balanced
portfolio
capable of
delivering long-
termcapital
growth
•Tilt Renewables’ ongoing construction of the
Dundonnell Wind Farm (336MW)and
commencement of construction of the Waipipi
Wind Farm (133MW)
•Wellington Airport completed its main terminal
upgrade
•CDC’s ongoing development including:
‐Eastern Creek 2, Sydney (10MW) –final
handover forecast for December 2019;
‐Hume 4, Canberra (25MW) –final handover
forecast for FY20; and,
‐Commencement of construction of Eastern
Creek 3, Sydney (25MW)
•RetireAustralia includes completion of
construction of the GlengaraCare Apartments
which are expected to welcome their first
residents in November 2019
•Other includes the construction of the Infratil
Infrastructure Property’s 154 room Travelodge
hotel and carpark in the Wynyard Quarter –
forecast completion June 2020
InfratilInterim results presentation 20208
Notes:
1.The amounts depicted are Infratil’s proportionate share of the investee company’s capital expenditure
2.Shares acquired under Infratil and Mercury Energy's full cash takeover offer for Tilt Renewables Limited
30 September ($Millions)20192018
Trustpower16.411.4
Tilt Renewables117.350.6
Wellington Airport32.044.8
CDC Data Centres
1
126.520.7
RetireAustralia
1
13.515.9
NZ Bus2.712.7
Other18.110.3
Capital Expenditure326.5166.4
Vodafone NZ1,029.6-
Longroad Energy5.971.1
Tilt Renewables
2
-55.0
ANU PBSA-9.1
Investment1,035.5135.2
Total Capex & Investment1,362.2301.6
Distributions
FY2020 interim
dividend
maintained at
FY2019 interim
level on a cents
per share basis
Interim Ordinary Dividend
•An interim ordinary dividend of
6.25 cps payable on
13 December 2019, partially
imputed with 1.5 cps of imputation
credits attached
•On par with the 2019 interim
dividend, but an increase in
absolute dollar terms given the
additional shares on issue
•The record date will be
29 November 2019
•The dividend reinvestment plan
will be reactivated for this
dividend, however, shareholders
will need to re-elect into the plan
Dividend Outlook
•Infratil expects its FY2020 final
dividend to be maintained at the
same level as the FY2019 final
dividend on a cents per share basis
InfratilInterim results presentation 20209
0
2
4
6
8
10
12
14
16
18
20
20132014201520162017201820192020
Ordinary dividend per share profile
InterimFinal
Debt Capacity
& Facilities
Duration
extended
through new
retail bond
issues and bank
facilities capacity
preserved
•Infratil and wholly-owned subsidiaries’ Net bank debt of $306.4 million and drawn bank facilities of
$337.0 million as at 30 September 2019 (undrawn facilities of $536.0 million)
•The acquisition of Vodafone NZ was part-funded by $400.0 million of new debt facilities
•Bond maturities of $68.5 million and $80.5 million in November 2019 and February 2020 respectively
•On 22 October Infratil opened a new bond issue (IFT300) maturing in March 2026, offering up to
$50 million of bonds (with the option to accept up to $75 million in oversubscriptions)
InfratilInterim results presentation 202010
Maturities to 31 March ($Millions)
Infratil and wholly-owned subsidiaries
1
TotalFY20FY21FY22FY23FY24-
FY30
>FY30
Bonds
1,404.7149.0-93.9193.7736.2231.9
Wholly-owned drawn bank debt
337.0
Wholly-owned drawn bank faciliities
873.033.0410.0115.0200.0115.0-
Notes:
1.Infratil and wholly-owned subsidiaries excludes Trustpower, Tilt, Wellington Airport, CDC Data Centres, RetireAustralia, Longroad Energy
and Vodafone NZ
Debt Capacity
& Facilities
Moderate
Gearing and
Funds Available
for Investment
remain
InfratilInterim results presentation 202011
Notes:
1.Infratil and wholly-owned subsidiaries excludes Trustpower, Tilt, Wellington Airport, CDC Data Centres, RetireAustralia, Longroad Energy
and Vodafone NZ
•The market value of equity has increased by
$1,248.3 million since 30 September 2019. This
included:
‐the increase in the IFT share price from $3.57
(September 2018) to $4.92; and,
‐The $400 million placement and rights issue.
•In the 6 months to 30 September 2019, Infratil
issued $156.3 million of the IFT280 bond series
(maturing December 2026) and $112.1 million of
the IFTHC series (annual rate re-set, maturing
December 2029)
•Investment and re-investment opportunities
across the portfolio continue to exceed current
available capital
30 September ($Millions)20192018
Net bank debt (cash on hand)306.4(85.2)
Infratil Infrastructure bonds1,172.8769.6
Infratil Perpetual bonds231.9231.9
Market value of equity3,244.91,996.6
Total capital4,956.02,913.0
Gearing (net debt/total capital)34.5%31.5%
Infratil undrawn bank facilities536.0319.0
100% subsidiaries cash30.6121.0
Unpaid Tilt acceptances-(42.0)
Funds available566.6398.0
(0.50)
0.50
1.50
2.50
3.50
4.50
5.50
20092010201120122013201420152016201720182019
Infratil Share Price
Total Shareholder Return
1
PeriodTSR
YTD 25.4%
1 Year50.8%
5 Year20.7%
10 Year19.6%
Inception –25 years18.0%
1
Total shareholder returns are to 30 September 2019 based on a closing share price of $4.92
12
InfratilInterim results presentation 2020
Share Price
Performance
Outstanding
returns delivered
over the short,
medium and
long-term
Operating Businesses
Trustpower
Diverse
generation
portfolio
highlights
resiliency during
unplanned
outage
Financial
•EBITDAF
1
of $107.1 million was $22.5 million (17.3%)
below the comparative period of $129.6 million
•Current period impacted by lower generation volumes
resulting from plant outages and materially lower
North Island inflows compared to the prior period
Customers
•Total retail utility accounts 406,000, up 7,000 on the
comparative period, while customers with two or more
products rose 8.8% to over 111,000
•Successful bundling strategy remains a key growth
opportunity, as bundled customers demonstrate
increased loyalty, and satisfaction, bringing higher
long-term value
•Wireless Broadband offerings launched in August, with
a Mobile offering coming soon
Generation
•Generation volumes significantly impacted by
hydrology relative to the comparative period and the
Highbankoutage for three months (43GWh reduction)
•Trustpower storage has recovered well, creating a
strong position to capitalise on above average
wholesale prices
•Asset enhancements continue to be a key strategic
priority
14InfratilInterim results presentation 2020
1.EBITDAF is an unaudited non-GAAP measure and is defined at Appendix I.
Tilt
Renewables
Balanced focus
on delivery of
development
and optimisation
of the existing
portfolio
15
Financial
•EBITDAF
1
of A$71.4 million was A$4.5 million (6.3%) above
the comparative period of A$66.9 million
•Australian asset production up 22GWh (or 3%) on the
comparative period largely as a result of less curtailment
from Snowtown 1 and 2 assets
•Production from New Zealand assets 30GWh lower (or
8%) due to wind conditions reverting towards P50 (inline
with expectation) and below target availabilities
Construction and development
•Construction has commenced on the 133MW Waipipi
Wind Farm, with a forecast cost of NZ$277.0 million
project, without the need for shareholder equity
•Combined with the Dundonnell Wind Farm, Tilt now has
469MW under construction for a total forecast investment
of more than $900 million
Snowtown 2 Wind Farm Strategic Review
•Strategic review announced inJune 2019, with a further
update expected by the end of the calendar year
•Portfolio debt structure has been optimised to allow the
divestment to proceed with minimal impact on the
balance of Tilt’s financing
InfratilInterim results presentation 2020
1.EBITDAF is an unaudited non-GAAP measure and is defined at Appendix I.
Wellington
Airport
Consistent
earnings growth
and completion
of significant
infrastructure
projects
Financial
•EBITDAF
1
of $50.4 million was $0.8 million (1.6%) above
the comparative period of $49.6 million
•Passenger growth was flat over the six months as airlines
paired capacity and increased loadings
•Main terminal upgrade completed
•Arrival of Singapore Airlines’ Airbus A350-900 on the
Wellington-Singapore route via Melbourne, increasing
from four to five times weekly from 1 January 2020
•Recently named Airport of the Year for 2019 at the NZ
Airports Association Awards
Outlook
•2040 master plan now published for public feedback,
following extensive consultation with airlines and other
stakeholders
•Master plan shows how the airport will cater for an
increase in travellers to 12 million per year by 2040
•Consultation with the airport’s airline customers over
aeronautical charges for the five year period 2020 to 2024
has commenced
16InfratilInterim results presentation 2020
1.EBITDAF is an unaudited non-GAAP measure and is defined at Appendix I.
CDC Data
Centres
Rapid growth
continues with a
range of
ongoing,
diversified
growth
options
Financial
•Current period reported EBITDAF
1
A$51.7 million (100%),
up A$17.8 million (+52.5%) from the comparativeperiod
•Strong performance comes from continued revenue
growth from new data centres and additional utilisation of
existing data centres
•FY2020 forecast reported EBITDAF
1
of A$110-A$120
million from a pipeline of opportunities with new and
existing clients
•Current run rate EBITDAF
1
of A$120 million, with the
31 March 2020 run rate EBITDAF
1
forecast as
$A135 million -A$145 million
Growth and development
•New Eastern Creek site in Western Sydney could be
Australia’s largest data centre campus (by capacity) if its
full capacity of 120MW is built out
•Development accelerating with construction of the
following data centres underway:
•Eastern Creek 2 (13MW) –final handover forecast for
December 2019;
•Hume 4 (25MW) –final handover forecast for FY20;
•Eastern Creek 3 (25MW)
•Whole of portfolio weighted average lease expiry (WALE)
has extended to 9.0 years, and 16.7 years with options
(HY2019: 4.6 years, and 13.1 years with options)
17InfratilInterim results presentation 2020
1.EBITDAF is an unaudited non-GAAP measure and is defined at Appendix I.
Vodafone NZ
Committed to
transformation
and market
leadership
18
Financial
•The current period includes an initial 2-month EBITDAF
1
contribution from Vodafone NZ of $39.1 million
•FY2020 forecast EBITDAF
1
of $460-$490 million excluding
transaction costs and non-cash IFRS 15/16 adjustments
Transformation programme
New operating model in place and detailed strategy
development is underway for capability step-change
•New channel expansion with Noel Leeming to
significantly improve mobile performance and in-home
technology experience
•Fixed Wireless Access (FWA) being scaled
•Digitisation and simplification will enable a greater range
of strategic choices
Extensive infrastructure network
•Long-term growth requires execution on business
improvement programme and successful investments,
e.g. in 5G and FWA
•5G launching December 2019 in Auckland, Wellington,
Christchurch and Queenstown
•Best-in-class partnerships in Cloud with AWS and Azure
InfratilInterim results presentation 2020
1.EBITDAF is an unaudited non-GAAP measure and is defined at Appendix I.
Longroad
Energy
Expanded
development of
renewables in
the US
19
Financial
•HY2020 Associate earnings of NZ$17.8 million, compared
to NZ$51.2 million in the comparative period
•To date Infratil has invested NZ$154.1 million, and received
distributions and capital returns of NZ$161.6 million
•During the period Longroad announced that it had closed
the financing of its 243MW El Campo wind project.
Longroad sold a 50% equity interest in the project on
financial close and while it retains the other 50% has not
recorded any gain on the sale to date
Operations
•Total operating portfolio of 684MW and managing
construction of a further 622MW
•Providing operating and maintenance services to 2,292MW
including 985MW for third parties
Development
•As well as the 243MW El Campo wind project, during the
period Longroad also closed financing and commenced
construction of the 379MW Prospero Solar project
Pipeline
•Next wave of projects includes up to 700MW of near-term
development projects
InfratilInterim results presentation 2020
Longroad
Energy
Construction on
622MW of
generation
against a full
year goal of
800MW is
underway
20InfratilInterim results presentation 2020
ProjectCapacityStatus
Project Rio Bravo
Texas Wind
238MW•LEH developed and financed -US$300 million
•100% of the project sold in December 2018
•Development gain recognised on completion of
construction in June 2019
El Campo
Texas Wind
243MW•LEH developed and financed -US$335 million
•50% of the equity has been sold to two Danish pension
funds
•Longroad will provide construction management, asset
management, operations, and services to the project over a
20-year term
•Remaining 50% consolidated by LEH, therefore
no development gain recognised
Prospero I
Texas Solar
379MW•LEH developed and financed -US$416 million
•When completed in 2020 will be one of the largest solar
farms in the U.S.
•12-year Power Purchase Agreement for the project’s power
off-take in place
•Marketing currently underway
•Potential for the sale to be structurally similar to El Campo
Foxhound
Virginia Solar
108MW•Targeting financial close by March 2020
•12 month construction period
•Marketing currently underway
RetireAustralia
Patience remains
to realise long-
termmarket
opportunity for
high quality
retirement living,
with a built-in
continuum of
care
Financial
•Underlying Profit
1
of A$5.5 million, a decrease from
A$9.1 million in HY2019
•130 resale settlements vs 128 in HY2019. Total collect
A$16.6 million vs A$17.1 million with the mix of units
sold driving the lower average collect
•FY2020 performance weighted to second half of the year,
with 174 settlements forecast vs 130 achieved in first half
(76 units deposited at 30 September)
•Mandatory buyback legislation also being considered in
NSW
‐A$7.3 million of buybacks funded in Queensland and
South Australia during the period
Development
•2 urban villages (The Verge, Burleigh Golf Club
(Queensland) and The Rise, Wood Glen (NSW)) currently
under construction
•Pre-construction work completed at The Verge. Stage 1
is set to deliver 40 Independent Living Apartments in
FY2021
•70 purpose-built care apartments completed at Glengara
(NSW) with first residents expected in November 2019
•Total development pipeline of 833 units
21InfratilInterim results presentation 2020
1.Underlying Profit is an unaudited non-GAAP measure and is defined at Appendix I.
Strategic
Review
Update
Portfolio
divestments
andtightening
substantially
complete
InfratilInterim results presentation 202022
ANU PBSA
•In May 2019 Infratil disposed of its 50% interest in the Australian National University’s Student
Accommodation concession to AMP Capital for cash proceeds of A$162.1 million, as well as
distributions at completion of A$4.8 million
Snapper
•The sale of Snapper to AllectusCapital completed on 31 May 2019for nominal consideration
NZ Bus
•On 2 September 2019 Infratil completed the sale of NZ Bus to Next Capital
•Upfront cash proceeds of $93 million have been received. The final consideration after post-
completion adjustments for working capital, capital expenditure, and an earnout mechanism is
expected to be between $125-145 million
Perth Energy
•On 3 September 2019 Infratil completed the sale of Perth Energy to AGL
•Infratil received cash proceeds of A$53.3 million for its 80% shareholding, with final proceeds to be
adjusted for working capital and net debt
•Infratil may receive further sale proceeds of up to A$18.6 million in cash within three years however
as at 30 September these contingent amounts have not been recognised
•Completion of the sale released Infratil from its credit support of Perth Energy which as at
31 March 2019 amounted to A$64.7 million
FY2020
Outlook
Guidance
maintained
and reflects
Vodafone
acquisition
FY2020 earnings guidance and dividends
Guidance ($Millions)2020
Underlying EBITDAF655-695
Net Interest165-175
Depreciation & amortisation150-160
Capital expenditure700-800
•FY2020 Underlying EBITDAF
1
guidance from
continuing operations maintained at
$655-$695 million
•Key assumptions include:
▪Trustpower EBITDAF guidance of
$200-$215 million
▪Tilt EBITDAF guidance of A$127-$132 million
▪Infratil’s share of CDC’s reported EBITDAF of
A$110-A$120 million
▪Longroad contribution assumes two
development project gains together with the
Rio Bravo development gain
2
▪Infratil’s share of Vodafone NZ full year
FY2020 Underlying EBITDAF of between
NZ$460-$490 million
3
with an expectation
towards the bottom end of that range
excluding transaction costs and non-cash IFRS
15/16 adjustments
▪Accrued incentive Fees are excluded from
guidance
•Infratil expects to maintain its FY2020 final dividend at the
FY2019 final dividend level on a cents per share basis
•Underlying EBITDAF guidance is presented on a
continuing operations basis and therefore excludes any
contributions from NZ Bus, ANU, Perth Energy and
Snapper
4
•Capital expenditure excludes the acquisition of
Vodafone NZ, and includes a proportionate share of
capital expenditure spent by other associates
Notes:
1.Underlying EBITDAF and EBITDAF are non-GAAP measures and are reconciled and defined at Appendix I
2.Longroad Energy has closed the financing of its 243MW El Campo wind project including the sale of a 50% equity interest to two Danish pension
funds. As the sell down was for a 50% stake, Longroad will continue to consolidate the project and no gain on sale has been recorded to date
3.8 month contribution from Vodafone NZ, based on a 49.9% share of Underlying EBITDAF from 1 August 2019
4.Discontinued operations represent businesses that have been divested, or businesses which will be recovered principally through a sale
transaction rather than through continuing use
InfratilInterim results presentation 202023
Realising value across the
portfolio
Balanced portfolio offering growth and
resilience
•Major cash generating businesses delivering
targeted returns andsupporting capital
requirements of growth platforms
•Portfoliofavourably aligned with high-
convictiontrends
•Diversified cashflows generating reliable
non-correlated returns across several
jurisdictions
Proprietary growth options
willdrive continued investment
and valuation upside
Multiple growth platforms delivering
opportunities to deploy significant capital
•Significant in-flight project delivery in U.S.
andAustralasianrenewables and Australasian
data and telecommunications
•Ongoing strengthening of global renewables
pipeline and Australian data centre options
Rationing capital to sequence highest-value
developments
•Default position to prioritise capital to support existing
platform opportunities
•Continuing evaluation of capital required in key growth
platforms
25
26
For further
information:
www.infratil.com
Appendix I
Reconciliation of
NPAT to
Underlying
EBITDAF
InfratilInterim results presentation 202027
Underlying EBITDAF is an unaudited
non-GAAP (‘Generally Accepted Accounting
Principles’) measure of financial
performance, presented to provide
additional insight into management’s view
of the underlying business performance.
Specifically, in the context of operating
businesses, Underlying EBITDAF provides a
metric that can be used to report on the
operations of the business (as distinct from
investing and other valuation movements).
Market analysts also use Underlying
EBITDAF as an input into company
valuation and valuation metrics used to
assess relative value and performance of
companies across a sector.
30 September ($Millions)20192018
Net profit after tax88.1
106.1
Less: share of RetireAustralia associate earnings(6.5)
10.3
Less: share of CDC Data Centresassociate earnings(79.5)
(30.2)
Less: share of Vodafone NZ associate earnings3.2
-
Plus: share of RetireAustralia Underlying Profit2.9
5.0
Plus: share of CDC Data CentresEBITDAF26.3
17.7
Plus: share of Vodafone NZ EBITDAF39.1
-
Net loss/(gain) on foreign exchange and derivatives16.4
(12.0)
Net realisations, revaluations and (impairments)0.8
(0.6)
Discontinued operations(8.3)
(13.7)
Underlying earnings82.5
82.6
Depreciation & amortisation75.2
83.7
Net interest85.6
72.1
Tax46.1
46.2
Underlying EBITDAF (continuing operations)289.4
284.6
Appendix I
Reconciliation of
NPAT to
Underlying
EBITDAF
•Underlying EBITDAF is presented on a continuing operations basis and excludes any contributions
from discontinued operations.
•Underlying EBITDAF comprises:
•100% of the EBITDAF of the entities which are fully consolidated for Infratil’s Group Financial
Statements, that is Trustpower, Tilt Renewables and Wellington Airport;
•Infratil’s share of EBITDAF for CDC Data Centres (48%) and Vodafone NZ (49.9%);
•Infratil’s 50% share of the Underlying Profit of RetireAustralia (see definition below); and
•Infratil’s 40% share of the surplus before tax of Longroad Energy.
•Infratil’s approach to calculating Underlying EBITDAF is consistent with the prior reporting period,
with the exception of CDC Data Centres which was previously included on the basis of Infratil’s
share of Net profit after tax. Management’s view is that this change provides additional insight into
the underlying business performance of CDC Data Centres following growth in this investment.
•EBITDAFis net earnings before interest, tax, depreciation, amortisation, financial derivative
movements, revaluations, impairment, gains or losses on the sales of investments.
•Underlying Profit is a non-GAAP performance measure used by RetireAustralia that removes the
impact of unrealised fair value movements on investment properties, impairment of property, plant
and equipment, one-off gains and deferred taxation, while adding back realised resale gains and
realised development margins. It is management’s view that Underlying Profit provides a more
predictable and consistent measure of performance year-on-year for RetireAustralia and is viewed
as a better reflection of the underlying performance.
InfratilInterim results presentation 202028
Underlying EBITDAF is an unaudited
non-GAAP (‘Generally Accepted Accounting
Principles’) measure of financial
performance, presented to provide
additional insight into management’s view
of the underlying business performance.
Specifically, in the context of operating
businesses, Underlying EBITDAF provides a
metric that can be used to report on the
operations of the business (as distinct from
investing and other valuation movements).
Market analysts also use Underlying
EBITDAF as an input into company
valuation and valuation metrics used to
assess relative value and performance of
companies across a sector.
---
1
Financial
Statements
For the 6 months ended
30 September 2019
Consolidated Statement
of Comprehensive Income 02
Consolidated Statement
of Financial Position 03
Consolidated Statement
of Cash Flows 04
Consolidated Statement
of Changes in Equity 05
Notes to the Financial
Statements 08
2
Notes
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Operating revenue
8 701.3 663.8 1,333.2
Dividends
0.5 1.3 2.6
Total revenue701.8 665.1 1,335.8
Share of earnings of associate companies
5 100.6 71.1 106.4
Total income802.4 736.2 1,442.2
Depreciation
70.1 75.9 145.1
Amortisation of intangibles
5.1 7.8 15.3
Employee benefits
50.5 44.9 90.8
Other operating expenses
9 448.0 409.5 907.0
Total operating expenditure573.7 538.1 1,158.2
Operating surplus before financing, derivatives,
realisations and impairments
228.7 198.1 284.0
Net gain/(loss) on foreign exchange and derivatives
(16.4)12.0 0.3
Net realisations, revaluations and (impairments)(0.8)0.6 0.6
Interest income
6.2 3.7 6.8
Interest expense91.8 75.8 155.3
Net financing expense
85.6 72.1 148.5
Net surplus before taxation
125.9 138.6 136.4
Taxation expense
10 46.1 46.2 72.0
Net surplus for the period from continuing operations79.8 92.4 64.4
Net surplus/(loss) from discontinued operations after tax
7 8.3 13.7 (12.0)
Net surplus for the period88.1 106.1 52.4
Net surplus/(loss) attributable to owners of the Company
56.4 58.5 (19.5)
Net surplus attributable to non-controlling interest
31.7 47.6 71.9
Other comprehensive income, after tax
Items that will not be reclassified to profit and loss:
Net change in fair value of property, plant & equipment
recognised in equity
89.2 (152.5)(283.6)
Share of associates other comprehensive income
(9.8)(12.3)(11.6)
Fair value movements in relation to the executive share scheme
(0.9)-(0.1)
Income tax effect of the above items
(18.4)45.3 69.8
Items that may subsequently be reclassified to profit and loss:
Differences arising on translation of foreign operations
38.9 43.6 (18.9)
Transfers to profit and loss on disposal of subsidiaries
(22.5)--
Net change in fair value of equity investments at fair value
through other comprehensive income
(1.3)(1.2)2.6
Ineffective portion of hedges taken to profit and loss
---
Effective portion of changes in fair value of cash flow hedges
(58.3)7.6 5.9
Income tax effect of the above items
20.5 (1.4)(3.6)
Total other comprehensive income/(loss) after tax37.4 (70.9)(239.5)
Total comprehensive income/(loss) for the period125.5 35.2 (187.1)
Total comprehensive income for the period attributable to
owners of the Company
112.7 29.8 (164.3)
Total comprehensive income for the period attributable to
non-controlling interests
12.8 52.1 (22.8)
Earnings per share
Basic and diluted (cents per share) from continuing operations
8.1 8.0 (1.3)
Basic and diluted (cents per share) 9.5 10.5 (3.5)
Consolidated Statement
of Comprehensive Income
For the 6 months ended 30 September 2019
The accompanying notes form part of these financial statements.
3
Consolidated Statement
of Financial Position
As at 30 September 2019
Notes
30 September 2019
$Millions
Unaudited
30 September 2018
$Millions
Unaudited
31 March 2019
$Millions
Audited
Cash and cash equivalents362.6 219.3 414.3
Trade and other accounts receivable and prepayments275.2 251.0 226.1
Derivative financial instruments17.5 5.1 17.8
Inventories-5.9 -
Income tax receivable4.9 0.5 1.2
Assets held for sale0.5 -521.8
Current assets660.7 481.8 1,181.2
Trade and other accounts receivable and prepayments26.8 64.3 22.8
Property, plant and equipment4,306.4 4,614.8 4,201.5
Investment properties248.9 82.8 86.5
Right of use assets83.7 --
Derivative financial instruments153.1 119.7 156.7
Intangible assets35.0 38.3 33.5
Goodwill 113.1 117.4 113.2
Investments in associates5 2,059.2 991.0 856.5
Other investments6 83.1 67.7 81.2
Non-current assets7,109.3 6,096.0 5,551.9
Total assets7,770.0 6,577.8 6,733.1
Accounts payable, accruals and other liabilities227.4 384.9 274.5
Interest bearing loans and borrowings11 430.2 124.5 295.3
Lease liabilities1 13.2 --
Derivative financial instruments30.7 18.5 32.2
Income tax payable0.2 19.9 9.3
Infrastructure bonds12 149.0 111.4 148.9
Trustpower bonds-113.8 114.0
Wellington International Airport bonds25.0 25.0 25.0
Liabilities directly associated with the assets held for sale--146.2
Total current liabilities875.7 798.0 1,045.4
Interest bearing loans and borrowings11 831.6 844.8 696.8
Other liabilities2.8 39.2 25.9
Lease liabilities1 152.0 --
Deferred tax liability463.4 486.6 442.5
Derivative financial instruments151.0 36.9 85.3
Infrastructure bonds12 1,012.9 652.8 747.2
Perpetual Infratil Infrastructure bonds12 231.7 231.3 231.5
Trustpower bonds431.8 209.0 307.8
Wellington International Airport bonds and senior notes489.1 402.8 405.1
Non-current liabilities3,766.3 2,903.4 2,942.1
Attributable to owners of the Company2,079.5 1,852.6 1,647.1
Non-controlling interest in subsidiaries1,048.5 1,023.8 1,098.5
Total equity3,128.0 2,876.4 2,745.6
Total equity and liabilities7,770.0 6,577.8 6,733.1
Net tangible assets per share ($ per share) 2.93 3.03 2.68
Approved on behalf of the Board on 12 November 2019
Alison Gerry Mark Tume
Director Director
The accompanying notes form part of these financial statements.
4
Notes
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Cash flows from operating activities
Cash was provided from:
Receipts from customers933.6 953.5 1,825.6
Distributions received from associates22.8 43.8 52.2
Other dividends0.5 1.3 1.8
Interest received6.3 3.8 7.1
963.2 1,002.4 1,886.7
Cash was disbursed to:
Payments to suppliers and employees(767.0)(743.3)(1,388.7)
Interest paid(89.9)(73.0)(149.3)
Taxation paid(38.3)(43.4)(71.8)
(895.2)(859.7)(1,609.8)
Net cash inflow from operating activities14 68.0 142.7 276.9
Cash flows from investing activities
Cash was provided from:
Proceeds from sale of associates169.7 --
Proceeds from sale of subsidiaries (net of cash sold)138.3 --
Proceeds from sale of property, plant and equipment-5.8 12.9
Proceeds from sale of investments4.5 5.9 5.9
Return of security deposits7.7 --
320.2 11.7 18.8
Cash was disbursed to:
Purchase of investments(1,093.7)(76.2)(69.9)
Lodgement of security deposits-(4.5)(2.7)
Purchase of intangible assets(6.7)(3.6)(8.3)
Interest capitalised on construction of fixed assets---
Purchase of shares in subsidiaries-(55.0)(109.3)
Purchase of property, plant and equipment(216.5)(96.3)(258.2)
(1,316.9)(235.6)(448.4)
Net cash inflow/(outflow) from investing activities(996.7)(223.9)(429.6)
Cash flows from financing activities
Cash was provided from:
Proceeds from issue of shares393.4 --
Sale of shares in non-wholly owned subsidiary-6.3 6.3
Proceeds from issue of shares to non-controlling Interests--92.6
Bank borrowings615.5 198.4 346.7
Issue of bonds493.4 -346.2
1,502.3 204.7 791.8
Cash was disbursed to:
Repayment of bank debt(365.5)(174.3)(229.8)
Repayment of lease liabilities2.3 --
Loan establishment costs(8.5)(1.2)(10.8)
Repayment of bonds(139.2)-(111.4)
Infrastructure bond issue expenses(4.9)(0.1)(6.9)
Share buyback---
Share buyback of non-wholly owned subsidiary---
Dividends paid to non-controlling shareholders in subsidiary companies(64.0)(50.4)(117.7)
Dividends paid to owners of the Company3 (72.5)(60.1)(95.1)
(652.3)(286.1)(571.7)
Net cash inflow/(outflow) from financing activities850.0 (81.4)220.1
Net increase/(decrease) in cash and cash equivalents(78.7)(162.6)67.4
Foreign exchange gains/(losses) on cash and cash equivalents(2.6)1.4 (4.0)
Cash and cash equivalents at beginning of the period414.3 380.5 380.5
Adjustment for cash classified as assets held for sale 29.6 -(29.6)
Cash and cash equivalents at end of the period362.6 219.3 414.3
For the 6 months ended 30 September 2019
The accompanying notes form part of these financial statements.
Consolidated Statement
of Cash Flows
5
Consolidated Statement
of Changes in Equity
For the 6 months ended 30 September 2019
Capital
$Millions
Revaluation
reserve
$Millions
Foreign
currency
translation
reserve
$Millions
Other
reserves
$Millions
Retained
earnings
$Millions
To ta l
$Millions
Non-
controlling
$Millions
Total
equity
$Millions
Balance as at 1 April 2019
361.8 685.0 (64.3)(38.1)702.7 1,647.1 1,098.5 2,745.6
Total comprehensive income for the period
Net surplus for the period
----56.4 56.4 31.7 88.1
Other comprehensive income, after tax
Differences arising on translation
of foreign operations
--47.1 --47.1 (3.9)43.2
Transfers to profit and loss on
disposal of subsidiaries
-(21.5)16.3 0.4 -(4.8)(17.7)(22.5)
Net change in fair value of equity
investments at FVOCI
---(1.3)-(1.3)-(1.3)
Ineffective portion of hedges taken
to profit and loss
--------
Effective portion of changes in fair
value of cash flow hedges
---(29.7)-(29.7)(12.4)(42.1)
Fair value movements in relation
to the executive share scheme
---(0.9)-(0.9)-(0.9)
Fair value change of property, plant
& equipment recognised in equity
-28.5 --27.2 55.7 15.1 70.8
Share of associates other
comprehensive income
----(9.8)(9.8)-(9.8)
Total other comprehensive income
-7.0 63.4 (31.5)17.4 56.3 (18.9)37.4
Total comprehensive income for the period
-7.0 63.4 (31.5)73.8 112.7 12.8 125.5
Contributions by and distributions
to non-controlling interest
Issue/(acquisition) of shares held by
outside equity interest
------1.2 1.2
Total contributions by and distributions
to non-controlling interest
------1.2 1.2
Contributions by and distributions
to owners
Shares issued
391.3 ----391.3 -391.3
Conversion of executive redeemable
shares
0.9 ----0.9 -0.9
Dividends to equity holders
----(72.5)(72.5)(64.0)(136.5)
Total contributions by and distributions
to owners
392.2 ---(72.5)319.7 (64.0)255.7
Balance as at 30 September 2019
754.0 692.0 (0.9)(69.6)704.0 2,079.5 1,048.5 3,128.0
The accompanying notes form part of these financial statements.
Attributable to equity holders of the Company – Unaudited
6
Consolidated Statement
of Changes in Equity
For the 6 months ended 30 September 2018
Capital
$Millions
Revaluation
reserve
$Millions
Foreign
currency
translation
reserve
$Millions
Other
reserves
$Millions
Retained
earnings
$Millions
To ta l
$Millions
Non-
controlling
$Millions
Total
equity
$Millions
Balance as at 1 April 2018
361.8 798.2 (42.4)(0.5)818.5 1,935.6 1,199.4 3,135.0
Adjustment on initial application
of IFRS 15 (net of tax)
----10.6 10.6 10.2 20.8
Adjusted balance as at 1 April 2018
361.8 798.2 (42.4)(0.5)829.1 1,946.2 1,209.6 3,155.8
Total comprehensive income for the period
Net surplus for the period
----58.5 58.5 47.6 106.1
Other comprehensive income, after tax
Differences arising on translation of foreign
operations
--45.1 --45.1 (0.8)44.3
Transfers to profit and loss on disposal
of subsidiaries
--------
Net change in fair value of equity
investments at FVOCI
---(1.2)-(1.2)-(1.2)
Ineffective portion of hedges taken
to profit and loss
--------
Effective portion of changes in fair
value of cash flow hedges
---2.5 -2.5 3.0 5.5
Fair value movements in relation to
the executive share scheme
--------
Fair value change of property, plant
& equipment recognised in equity
-(62.6)---(62.6)(44.6)(107.2)
Share of associates other comprehensive
income
----(12.3)(12.3)-(12.3)
Total other comprehensive income
-(62.6)45.1 1.3 (12.3)(28.5)(42.4)(70.9)
Total comprehensive income for the period
-(62.6)45.1 1.3 46.2 30.0 5.2 35.2
Contributions by and distributions
to non-controlling interest
Issue/(acquisition) of shares held
by outside equity interest
---(63.5)-(63.5)(140.6)(204.1)
Total contributions by and distributions to
non-controlling interest
---(63.5)-(63.5)(140.6)(204.1)
Contributions by and distributions
to owners
Shares issued
--------
Dividends to equity holders
----(60.1)(60.1)(50.4)(110.5)
Total contributions by and distributions to
owners
----(60.1)(60.1)(50.4)(110.5)
Balance as at 30 September 2018
361.8 735.6 2.7 (62.7)815.2 1,852.6 1,023.8 2,876.4
The accompanying notes form part of these financial statements.
Attributable to equity holders of the Company – Unaudited
7
Consolidated Statement
of Changes in Equity
For the year ended 31 March 2019
Capital
$Millions
Revaluation
reserve
$Millions
Foreign
currency
translation
reserve
$Millions
Other
reserves
$Millions
Retained
earnings
$Millions
To ta l
$Millions
Non-
controlling
$Millions
Total
equity
$Millions
Balance as at 1 April 2018
361.8 798.2 (42.4)(0.5)818.5 1,935.6 1,199.4 3,135.0
Adjustment on initial application
of IFRS 15 (net of tax)
----10.6 10.6 10.2 20.8
Adjusted balance as at 1 April 2018
361.8 798.2 (42.4)(0.5)829.1 1,946.2 1,209.6 3,155.8
Total comprehensive income for the period
Net surplus for the period
----58.5 58.5 47.6 106.1
Other comprehensive income, after tax
Differences arising on translation of foreign
operations
--45.1 --45.1 (0.8)44.3
Transfers to profit and loss on disposal
of subsidiaries
--------
Net change in fair value of equity
investments at FVOCI
---(1.2)-(1.2)-(1.2)
Ineffective portion of hedges taken
to profit and loss
--------
Effective portion of changes in fair
value of cash flow hedges
---2.5 -2.5 3.0 5.5
Fair value movements in relation to
the executive share scheme
--------
Fair value change of property, plant
& equipment recognised in equity
-(62.6)---(62.6)(44.6)(107.2)
Share of associates other comprehensive
income
----(12.3)(12.3)-(12.3)
Total other comprehensive income
-(62.6)45.1 1.3 (12.3)(28.5)(42.4)(70.9)
Total comprehensive income for the period
-(62.6)45.1 1.3 46.2 30.0 5.2 35.2
Contributions by and distributions
to non-controlling interest
Issue/(acquisition) of shares held
by outside equity interest
---(63.5)-(63.5)(140.6)(204.1)
Total contributions by and distributions to
non-controlling interest
---(63.5)-(63.5)(140.6)(204.1)
Contributions by and distributions
to owners
Shares issued
--------
Dividends to equity holders
----(60.1)(60.1)(50.4)(110.5)
Total contributions by and distributions to
owners
----(60.1)(60.1)(50.4)(110.5)
Balance as at 30 September 2018
361.8 735.6 2.7 (62.7)815.2 1,852.6 1,023.8 2,876.4
Capital
$Millions
Revaluation
reserve
$Millions
Foreign
currency
translation
reserve
$Millions
Other
reserves
$Millions
Retained
earnings
$Millions
To ta l
$Millions
Non-
controlling
$Millions
Total
equity
$Millions
Balance as at 1 April 2018361.8 798.2 (42.4)(0.5)818.5 1,935.6 1,199.4 3,135.0
Adjustment on initial application
of IFRS 15 (net of tax)
----10.6 10.6 10.2 20.8
Adjusted balance as at 1 April 2018
361.8 798.2 (42.4)(0.5)829.1 1,946.2 1,209.6 3,155.8
Total comprehensive income for the year
Net surplus for the year
----(19.5)(19.5)71.9 52.4
Disposal of revalued assets
-0.2 --(0.2)---
Other comprehensive income, after tax
Differences arising on translation
of foreign operations
--(21.9)--(21.9)0.2 (21.7)
Transfers to profit and loss on
disposal of subsidiaries
--------
Net change in fair value of equity
investments at FVOCI
---2.6 -2.6 -2.6
Ineffective portion of hedges taken
to profit and loss
--------
Effective portion of changes in fair
value of cash flow hedges
---(1.1)-(1.1)6.2 5.1
Fair value movements in relation to
the executive share scheme
---0.6 -0.6 -0.6
Fair value change of property, plant
& equipment recognised in equity
-(113.4)---(113.4)(101.1)(214.5)
Share of associates other comprehensive
income
----(11.6)(11.6)-(11.6)
Total other comprehensive income
-(113.4)(21.9)2.1 (11.6)(144.8)(94.7)(239.5)
Total comprehensive income for the year
-(113.2)(21.9)2.1 (31.3)(164.3)(22.8)(187.1)
Contributions by and distributions
to non-controlling interest
Non-controlling interest arising on
acquisition of subsidiary
--------
Issue of shares to non-controlling
interests
------92.6 92.6
Issue/(acquisition) of shares held by
outside equity interest
---(39.7)-(39.7)(63.2)(102.9)
Total contributions by and distributions
to non-controlling interest
---(39.7)-(39.7)29.4 (10.3)
Contributions by and distributions
to owners
Shares issued
--------
Dividends to equity holders
----(95.1)(95.1)(117.7)(212.8)
Total contributions by and distributions
to owners
----(95.1)(95.1)(117.7)(212.8)
Balance at 31 March 2019361.8 685.0 (64.3)(38.1)702.7 1,647.1 1,098.5 2,745.6
The accompanying notes form part of these financial statements.
Attributable to equity holders of the Company – Audited
8
Notes to the Financial
Statements
For the 6 months ended 30 September 2019
1 Accounting policies
Reporting Entity
Infratil Limited ('the Company') is a company domiciled in New Zealand and registered under the Companies Act 1993. The Company
is listed on the NZX Main Board ('NZX') and Australian Securities Exchange ('ASX'), and is an FMC Reporting Entity in terms of Part 7 of the
Financial Markets Conduct Act 2013.
Basis of preparation
These unaudited condensed consolidated half year financial statements ('half year statements') of Infratil Limited together with its
subsidiaries and associates ('the Group') have been prepared in accordance with NZ IAS 34 Interim Financial Reporting and comply with
IAS 34 Interim Financial Reporting. These half year statements have been prepared in accordance with the accounting policies stated in
the published financial statements for the year ended 31 March 2019 and should be read in conjunction with the previous annual report.
Except as described below, no changes have been made from the accounting policies used in the 31 March 2019 annual report which
can be obtained from Infratil's registered office or www.infratil.com. The presentation currency used in the preparation of these financial
statements is New Zealand dollars, which is also the Company's functional currency. Comparative figures have been restated where
appropriate to ensure consistency with the current period.
Changes in accounting policies
The Group has adopted NZ IFRS 16 Leases ('NZ IFRS 16') from 1 April 2019.
i) NZ IFRS 16 Leases
NZ IFRS 16 replaces NZ IAS 17 Leases and removes the classification of leases as either operating leases or finance leases and
consequently for the lessee, all leases (other than short term or low value leases) are recognised on the Statement of Financial Position.
Similar to the previous finance lease model, this has resulted in the Group recognising right of use assets and related lease liabilities on
the statement of financial position. As a result, payments for leases previously classified as operating leases – which include leases of
land and buildings, telecommunications equipment and electricity transmission lines – have been reclassified from other operating
expenses to depreciation and interest expense. Lessor accounting remains materially unchanged under the new standard.
The Group has adopted NZ IFRS 16 using the modified retrospective approach and has not restated comparative amounts for the period
prior to first adoption. The Group has utilised the practical expedients permitted by NZ IFRS 16 in respect of short-term and low value
leases where appropriate. The Group has also elected not to reassess whether a contract contains a lease at the date of initial
application.
The lease liability was measured at the present value of the minimum lease payments, discounted at the incremental borrowing rate
applicable to that lease (or portfolio of leases) at 1 April 2019. In line with the modified retrospective approach, the associated right of
use assets were measured at the amount equal to the lease liability relating to that lease at 1 April 2019, with no overall change in net
assets. Where the lease pertains to property held to earn rental income, the right of use asset is classified as Investment Property and is
measured at fair value.
The impact of adoption of NZ IFRS 16 in the Group’s Consolidated Statement of Financial Position is summarised in the table below:
Consolidated Statement of Financial Position effect
30 September 2019
$Millions
Unaudited
1 April 2019
$Millions
Unaudited
Right of use assets83.780.5
Investment properties80.079.1
Lease liabilities165.2 159.6
Change in net assets(1.5)-
When compared to the accounting policies applied in the prior comparative period, the adoption of NZ IFRS 16 on the Group’s
Consolidated Statement of Comprehensive Income for the six months ended 30 September 2019 is summarised in the table below:
Consolidated Statement of Comprehensive Income effect
30 September 2019
$Millions
Unaudited
Other operating expenses(7.3)
Depreciation4.4
Interest expense4.4
The weighted average incremental borrowing cost applied to lease liabilities at 1 April 2019 was 4.9%.
9
2 Nature of business
The Group owns and operates infrastructure and utility businesses and investments in New Zealand, Australia and the United States.
The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is
5 Market Lane, Wellington, New Zealand.
More information on the individual businesses is contained in note 4 (Operating segments) and note 5 (Investments in associates)
including the relative contributions to total revenue and expenses of the Group.
The Group's business is not highly seasonal, but individual businesses are subject to seasonality due to differences in demand for
certain services. The seasonality does not result in material differences in the interim and full year reporting.
3 Infratil shares and dividends
Ordinary shares (fully paid)
6 months ended
30 September 2019
Unaudited
6 months ended
30 September 2018
Unaudited
Year ended
31 March 2019
Audited
Total issued capital at the beginning of the period559,278,166 559,278,166 559,278,166
Movements in issued and fully paid ordinary shares during the period:
New shares issued99,992,228 --
Conversion of executive redeemable shares265,267 --
Total issued capital at the end of the period 659,535,661 559,278,166 559,278,166
All fully paid ordinary shares have equal voting rights and share equally in dividends and equity. At 30 September 2019 the Group held
775,000 shares as Treasury Stock (30 September 2018: 775,000, 31 March 2019: 775,000).
Dividends paid on
ordinary shares
6 months ended
30 September 2019
cps
Unaudited
6 months ended
30 September 2018
cps
Unaudited
Year ended
31 March 2019
cps
Audited
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Final dividend prior year
11.00 10.75 10.75 72.5 60.1 60.1
Interim dividend paid
current year
--6.25 --35.0
Dividends paid on
ordinary shares
11.00 10.75 17.00 72.5 60.1 95.1
10
4 Operating segments
Reportable segments of the Group are analysed by significant businesses. The Group has seven reportable segments,
as described below:
Trustpower and Tilt Renewables are renewable generation investments, Wellington International Airport is an airport investment,
NZ Bus is a transportation investment and Perth Energy is a non-renewable generation investment in Western Australia. Associates
comprises Infratil's investments that aren't consolidated for financial reporting purposes including CDC Data Centres, RetireAustralia,
ANU Student Accommodation, Longroad Energy and Vodafone New Zealand. Further information on these investments is outlined in
note 5. The Group's investments in NZ Bus, Perth Energy, and ANU Student Accommodation were divested during the period and treated
as Discontinued Operations as at 30 September 2019. Further information on these investments is outlined in note 7. All other segments
and corporate includes predominately the activities of the Parent Company. The group has no significant reliance on any one customer.
Trustpower
Australasia
$Millions
Unaudited
Tilt
Renewables
Australasia
$Millions
Unaudited
Wellington
International
Airport
New Zealand
$Millions
Unaudited
NZ Bus
New Zealand
$Millions
Unaudited
Perth Energy
Australia
$Millions
Unaudited
Associates
$Millions
Unaudited
All other
segments &
corporate
New Zealand
$Millions
Unaudited
Eliminations &
discontinued
operations
$Millions
Unaudited
Total from
continuing
operations
$Millions
Unaudited
For the period ended
30 September 2019
Segment revenue
539.4 109.2 72.6 76.1 114.2 -102.6 (191.9)822.2
Share of earnings of
associate companies
-----101.1 -(0.5)100.6
Inter-segment revenue
------(98.1)(22.3)(120.4)
Segment revenue – external
539.4 109.2 72.6 76.1 114.2 101.1 4.5 (214.7)802.4
Operating expenses(432.3)(33.8)(22.2)(70.2)(102.1)-(34.8)196.9 (498.5)
Interest income
0.3 3.6 0.5 -0.1 -7.2 (5.5)6.2
Interest expense
(17.3)(17.2)(13.0)(3.9)(3.6)-(44.3)7.5 (91.8)
Depreciation and
amortisation
(19.8)(41.8)(13.4)(7.1)(2.6)-(0.1)9.6 (75.2)
Net gain/(loss) on foreign
exchange and derivatives
(12.2)(3.2)(1.6)---0.8 (0.2)(16.4)
Net realisations, revaluations
and (impairments)
(2.4)-1.9 (32.0)(26.5)-65.5 (7.3)(0.8)
Taxation expense
(17.1)(4.2)(7.2)1.7 (4.2)-(19.4)4.3 (46.1)
Segment profit/(loss)
38.6 12.6 17.6 (35.4)(24.7)101.1 (20.6)(9.4)79.8
Investments in associates
-----2,059.2 --2,059.2
Total non-current assets
(excluding derivatives and
deferred tax)
2,125.3 1,288.0 1,243.0 --2,059.2 240.7 -6,956.2
Total assets
2,367.8 1,726.2 1,300.5 --2,059.2 316.3 -7,770.0
Total liabilities
1,065.9 1,034.7 734.0 ---1,807.4 -4,642.0
Capital expenditure
and investments
16.4 123.9 32.0 2.7 0.2 1,104.9 18.2 (3.0)1,295.3
11
4 Operating segments (continued)
Trustpower
Australasia
$Millions
Unaudited
Tilt
Renewables
Australasia
$Millions
Unaudited
Wellington
International
Airport
New Zealand
$Millions
Unaudited
NZ Bus
New Zealand
$Millions
Unaudited
Perth Energy
Australia
$Millions
Unaudited
Associates
$Millions
Unaudited
All other
segments &
corporate
New Zealand
$Millions
Unaudited
Eliminations &
discontinued
operations
$Millions
Unaudited
Total from
continuing
operations
$Millions
Unaudited
For the period ended
30 September 2018
Segment revenue
512.2 104.7 67.5 99.2 138.8 -78.2 (241.9)758.7
Share of earnings of
associate companies
-----76.6 -(5.5)71.1
Inter-segment revenue
------(72.9)(20.7)(93.6)
Segment revenue – external
512.2 104.7 67.5 99.2 138.8 76.6 5.3 (268.1)736.2
Operating expenses
(382.6)(32.2)(17.9)(86.0)(113.6)-(46.9)224.8 (454.4)
Interest income
1.0 0.5 0.2 -0.1 -5.9 (4.0)3.7
Interest expense
(14.4)(16.7)(8.9)(3.0)(3.7)-(35.9)6.8 (75.8)
Depreciation and
amortisation
(24.9)(47.8)(10.9)(12.8)(3.0)-(0.3)16.0 (83.7)
Net gain/(loss) on foreign
exchange and derivatives
(1.0)7.3 0.4 ---5.4 (0.1)12.0
Net realisations, revaluations
and (impairments)
(0.3)-0.9 (1.7)---1.7 0.6
Taxation expense
(25.2)(6.6)(8.8)0.7 (8.3)-(7.0)9.0 (46.2)
Segment profit/(loss)
64.8 9.2 22.5 (3.6)10.3 76.6 (73.5)(13.9)92.4
Investments in associates
(including those held for sale)
-----991.0 --991.0
Total non-current assets
(excluding derivatives and
deferred tax) 2,268.5 1,119.5 1,180.9 178.9 141.0 990.9 96.6 -5,976.3
Total assets
2,429.4 1,320.6 1,209.2 198.4 206.5 991.1 222.6 -6,577.8
Total liabilities
873.0 871.2 656.2 28.8 111.3 -1,160.9 -3,701.4
Capital expenditure
and investments
11.4 50.6 44.8 12.7 0.3 80.2 10.0 (25.6)184.4
12
4 Operating segments (continued)
Trustpower
Australasia
$Millions
Audited
Tilt
Renewables
Australasia
$Millions
Audited
Wellington
International
Airport
New Zealand
$Millions
Audited
NZ Bus
New Zealand
$Millions
Audited
Perth Energy
Australia
$Millions
Audited
Associates
$Millions
Audited
All other
segments &
corporate
New Zealand
$Millions
Audited
Eliminations &
discontinued
operations
$Millions
Audited
Total from
continuing
operations
$Millions
Audited
For the year ended
31 March 2019
Segment revenue
1,030.1 207.1 137.9 184.2 269.9 -158.6 (461.3)1,526.5
Share of earnings of
associate companies
-----119.2 -(12.8)106.4
Inter-segment revenue
------(147.8)(42.9)(190.7)
Segment revenue - external
1,030.1 207.1 137.9 184.2 269.9 119.2 10.8 (517.0)1,442.2
Operating expenses
(807.9)(62.7)(36.5)(166.8)(234.0)-(142.4)452.5 (997.8)
Interest income
1.4 1.4 0.3 -0.2 -13.3 (9.8)6.8
Interest expense
(29.6)(33.6)(19.7)(7.1)(7.6)-(73.3)15.6 (155.3)
Depreciation and
amortisation
(47.2)(89.5)(23.7)(21.1)(6.0)-(0.6)27.7 (160.4)
Net gain/(loss) on foreign
exchange and derivatives
(5.8)(2.1)1.2 ---7.0 -0.3
Net realisations, revaluations
and (impairments)
(10.9)-4.8 (29.2)--3.5 32.4 0.6
Taxation expense
(37.5)(7.4)(0.2)4.2 (12.1)-(30.3)11.3 (72.0)
Segment profit/(loss)
92.6 13.2 64.1 (35.8)10.4 119.2 (212.0)12.7 64.4
Investments in associates
(including those held for sale)
-----964.7 -(108.2)856.5
Total non-current assets
(excluding derivatives and
deferred tax)
2,093.5 1,114.7 1,213.6 174.8 107.7 964.7 117.1 (390.9)5,395.2
Total assets
2,314.5 1,601.0 1,260.5 200.0 211.3 964.7 181.1 -6,733.1
Total liabilities
965.5 915.8 656.9 29.7 110.5 -1,309.1 -3,987.5
Capital expenditure and
investments
27.7 127.1 72.1 45.9 0.4 139.0 27.8 (55.6)384.4
13
Entity wide disclosure – geographical
The Group operates in two principal areas, New Zealand and Australia, as well as having certain investments in the United States.
The Group's geographical segments are based on the location of both customers and assets.
New Zealand
$Millions
Unaudited
Australia
$Millions
Unaudited
United States
$Millions
Unaudited
Eliminations
& discontinued
operations
$Millions
Unaudited
Total from
continuing
operations
$Millions
Unaudited
For the period ended 30 September 2019
Segment revenue
813.6 200.5 -(191.9)822.2
Share of earnings of associate companies
(3.3)86.5 17.9 (0.5)100.6
Inter-segment revenue
(98.1)--(22.3)(120.4)
Segment revenue – external
712.2 287.0 17.9 (214.7)802.4
Operating expenses
(589.8)(105.6)-196.9 (498.5)
Interest income
8.2 3.5 -(5.5)6.2
Interest expense
(80.8)(18.5)-7.5 (91.8)
Depreciation and amortisation
(51.7)(33.1)-9.6 (75.2)
Net gain/(loss) on foreign exchange
and derivatives
(6.5)(9.7)-(0.2)(16.4)
Net realisations, revaluations and (impairments)33.0 (26.5)-(7.3)(0.8)
Taxation expense
(42.2)(8.2)-4.3 (46.1)
Segment profit/(loss)
(17.6)88.9 17.9 (9.4)79.8
Investments in associates
1,026.4 1,029.3 3.5 -2,059.2
Total non-current assets
(excluding derivatives and deferred tax)
4,836.8 2,087.6 31.8 -6,956.2
Total assets
5,252.1 2,486.1 31.8 -7,770.0
Total liabilities
3,762.0 880.0 --4,642.0
Capital expenditure and investments
1,195.3 96.76.3 (3.0)1,295.3
For the period ended 30 September 2018
Segment revenue
783.2 217.4 -(241.9)758.7
Share of earnings of associate companies
-25.4 51.2 (5.5)71.1
Inter-segment revenue
(72.9)--(20.7)(93.6)
Segment revenue – external
710.3 242.8 51.2 (268.1)736.2
Operating expenses
(564.2)(115.0)-224.8 (454.4)
Interest income
7.2 0.5 -(4.0)3.7
Interest expense
(64.5)(18.1)-6.8 (75.8)
Depreciation and amortisation
(60.8)(38.9)-16.0 (83.7)
Net gain/(loss) on foreign exchange
and derivatives
4.2 7.9 -(0.1)12.0
Net realisations, revaluations and (impairments)(1.1)--1.7 0.6
Taxation expense
(40.8)(14.4)-9.0 (46.2)
Segment profit/(loss)
(9.7)64.8 51.2 (13.9)92.4
Investments in associates
(including those held for sale)
0.3 912.1 78.6 -991.0
Total non-current assets
(excluding derivatives and deferred tax)
3,930.6 1,949.0 96.7 -5,976.3
Total assets
4,281.9 2,199.2 96.7 -6,577.8
Total liabilities
2,890.6 810.8 --3,701.4
Capital expenditure and investments
80.1 58.8 71.1 (25.6)184.4
14
Entity wide disclosure – geographical (continued)
New Zealand
$Millions
Audited
Australia
$Millions
Audited
United States
$Millions
Audited
Eliminations
& discontinued
operations
$Millions
Audited
Total from
continuing
operations
$Millions
Audited
For the year ended 31 March 2019
Segment revenue1,555.8 432.0 -(461.3)1,526.5
Share of earnings of associate companies-72.7 46.5 (12.8)106.4
Inter-segment revenue(147.8)--(42.9)(190.7)
Segment revenue – external1,408.0 504.7 46.5 (517.0)1,442.2
Operating expenses (1,214.4)(235.9)-452.5 (997.8)
Interest income15.1 1.5 -(9.8)6.8
Interest expense(135.2)(35.7)-15.6 (155.3)
Depreciation and amortisation(116.0)(72.1)-27.7 (160.4)
Net gain/(loss) on foreign exchange
and derivatives0.8 (0.5)--0.3
Net realisations, revaluations and (impairments)(31.8)--32.4 0.6
Taxation expense(62.8)(20.5)-11.3 (72.0)
Segment profit/(loss)(136.3)141.5 46.5 12.7 64.4
Investments in associates
(including those held for sale)-953.9 10.8 (108.2)856.5
Total non-current assets
(excluding derivatives and deferred tax) 3,785.9 1,962.6 37.6 (390.9)5,395.2
Total assets4,173.2 2,522.3 37.6 -6,733.1
Total liabilities3,115.3 872.2 --3,987.5
Capital expenditure and investments161.9 176.6 101.5 (55.6)384.4
15
5 Investments in associates
Note
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Investments in associates are as follows:
CDC Data Centres5.1660.8 487.8 555.3
RetireAustralia5.2368.5 317.0 290.4
ANU Student Accommodation7.1- 107.3 -
Longroad Energy 5.33.5 78.6 10.8
Vodafone New Zealand5.41,026.4 - -
Mana Coach Holdings- 0.3 -
Investments in associates 2,059.2 991.0 856.5
Equity accounted earnings of associates are as follows:
CDC Data Centres5.179.5 30.2 83.9
RetireAustralia5.26.5 (10.3)(23.9)
Longroad Energy 5.317.8 51.2 46.4
Vodafone New Zealand5.4(3.2)--
Share of earnings of associate companies 100.6 71.1 106.4
16
5.1 CDC Data Centres
On 14 September 2016 the Group completed the acquisition of 48.13% of CDC Data Centres ('CDC'), with consortium partner the
Commonwealth Superannuation Corporation acquiring 48.13% and CDC Executives 3.74%. CDC operates 80MW (30 September 2018:
39MW, 31 March 2019: 67MW) of installed capacity across 3 accredited and connected Data Centre campuses in Canberra and Sydney.
These facilities provide highly secure outsourced co-location Data Centre services to Australian Government entities and third party
service providers. Infratil’s current shareholding is 48.22% (30 September 2018: 48.22%, 31 March 2019: 48.22%).
Movement in the carrying amount of the Group's investment in CDC Data Centres:
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Carrying value at 1 April555.3 453.2 453.2
Acquisition of shares--31.7
Capitalised transaction costs---
Shareholder loan8.1 -11.0
Total capital contributions during the year8.1 -42.7
Interest on shareholder loan (including accruals)7.2 7.1 14.5
Share of associate’s surplus/(loss) before income tax107.9 29.4 108.6
Share of associate’s income tax (expense)(35.6)(6.3)(39.2)
Total share of associate’s earnings during the year79.5 30.2 83.9
Share of associate's other comprehensive income---
less: shareholder loan repayments including interest(0.6)(6.3)(12.6)
Foreign exchange movements recognised in other comprehensive income18.5 10.7 (11.9)
Carrying value of investment in associate660.8 487.8 555.3
Summary financial information
30 September 2019
A$Millions
Unaudited
30 September 2018
A$Millions
Unaudited
31 March 2019
A$Millions
Audited
Summary information for CDC is not adjusted for the percentage ownership
held by the Group:
Current assets78.9 50.3 35.0
Non-current assets2,299.4 1,367.3 1,799.4
Total assets2,378.3 1,417.6 1,834.4
Current liabilities69.7 30.2 20.5
Non-current liabilities1,396.8 766.2 1,039.9
Total liabilities1,466.5 796.4 1,060.4
Revenues67.2 42.5 115.5
Net surplus/(loss) after tax137.8 47.4 137.5
CDC's functional currency is Australian Dollars (A$) and the summary financial information shown is presented in this currency.
17
5.2 RetireAustralia
On 31 December 2014, the Group acquired a 50% shareholding of RetireAustralia, with consortium partner the New Zealand
Superannuation Fund acquiring the other 50%. RetireAustralia operates 27 retirement villages across three states in Australia –
New South Wales, Queensland and South Australia. Infratil’s current shareholding is 50% (30 September 2018: 50%, 31 March 2019: 50%).
Movement in the carrying amount of the Group's investment in RetireAustralia:
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Carrying value at 1 April290.4 319.0 319.0
Acquisition of shares61.3 --
Total capital contributions during the period61.3 --
Share of associate’s surplus/(loss) before income tax6.5 (10.3)(23.9)
Share of associate’s income tax (expense)---
Total share of associate’s earnings during the period6.5 (10.3)(23.9)
Share of associate's other comprehensive income---
less: distributions received---
Foreign exchange movements recognised in other comprehensive income10.3 8.3 (4.7)
Carrying value of investment in associate368.5 317.0 290.4
Summary financial information
6 months ended
30 September 2019
A$Millions
Unaudited
6 months ended
30 September 2018
A$Millions
Unaudited
Year ended
31 March 2019
A$Millions
Audited
Summary information for RetireAustralia is not adjusted for the percentage
ownership held by the Group:
Current assets193.1 184.4 191.1
Non-current assets2,355.6 2,306.0 2,319.6
Total assets2,548.7 2,490.4 2,510.7
Current liabilities1,733.1 1,730.3 1,746.0
Non-current liabilities133.4 180.7 210.8
Total liabilities1,866.5 1,911.0 1,956.8
Revenues38.8 35.3 74.6
Net surplus/(loss) after tax12.4 (19.0)(44.5)
RetireAustralia's functional currency is Australian Dollars (A$) and the summary financial information shown is presented in this currency.
18
5.3 Longroad Energy
On 5 October 2016 Infratil announced an initial (45%) investment in Longroad Energy Holdings, LLC ('Longroad), a recently formed
renewable energy development and operating vehicle headquartered in Boston, Massachusetts. Longroad's focus is primarily
in the development of utility-scale wind and solar generation throughout North America. The other establishment partners were the New
Zealand Superannuation Fund (current shareholding is 40%) and the Longroad management team (current shareholding is 20%). Infratil’s
current shareholding is 40% (30 September 2018: 40%, 31 March 2019: 40%).
Movement in the carrying amount of the Group's investment in Longroad Energy:
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Carrying value at 1 April10.8 10.1 10.1
Capital contributions5.9 3.7 19.8
Shareholder loan-0.4 0.4
Mezzanine debt drawdowns-67.0 67.0
Total capital contributions during the year5.9 71.1 87.2
Interest on shareholder loan (including accruals)---
Interest on mezzanine debt (including accruals)-3.0 4.6
Share of associate’s surplus/(loss) before income tax17.8 48.2 41.8
Share of associate’s income tax (expense)---
Total share of associate’s earnings during the year17.8 51.2 46.4
Share of associate’s other comprehensive income(9.7)(12.3)(12.0)
less: distributions received(17.7)(32.0)(32.7)
less: capital returned(3.6)(13.4)(16.5)
less: shareholder loan repayments including interest-(1.6)(1.6)
less: mezzanine debt repayments including interest--(71.6)
Foreign exchange movements recognised in other comprehensive income-5.5 1.5
Carrying value of investment in associate3.5 78.6 10.8
Summary financial information
31 December 2018
US$Millions
Audited
31 December 2017
US$Millions
Audited
Summary information for Longroad Energy is not adjusted for the percentage
ownership held by the Group:
Current assets282.2 91.4
Non-current assets572.7 549.0
Total assets854.9 640.4
Current liabilities290.1 35.0
Non-current liabilities533.8 531.7
Total liabilities823.9 566.7
Revenues93.4 18.1
Net surplus/(loss) after tax59.5 (22.6)
Total comprehensive income58.4 (22.6)
The summary information provided is taken from the most recent audited annual financial statements of Longroad, LLC which have a
balance date of 31 December and are reported as at that date. Longroad's functional currency is United States Dollars (US$) and the
summary financial information shown is presented in this currency.
19
Letter of credit facility
Longroad has obtained an uncommitted secured letter of credit facility of up to US$150 million from HSBC Bank. Letters of credit under
the facility have been issued to beneficiaries to support the development and continued operations of Longroad. Infratil has provided
shareholder backing of the Longroad Letter of Credit facility, specifically, Infratil (and the New Zealand Superannuation Fund) have
collectively agreed to meet up to US$150 million of capital calls (i.e. subscribe for additional units) equal to Longroad’s reimbursement
obligation to the extent that a Letter of Credit is called and Longroad cannot fund the call, taking into account immediately available
working capital. As at 30 September 2019, US$104.4 million (30 September 2018: US$47.6 million 31 March 2019: US$115.3 million) in
Letters of Credit have been issued under the Longroad Letter of Credit facility.
5.4 Vodafone New Zealand
On 31 July 2019, the Group acquired a 49.9% shareholding of Vodafone New Zealand Limited ('Vodafone'), in conjunction with
consortium partner Brookfield Asset Management Inc. which also acquired a 49.9% ownership interest. The remaining shares were
reserved for management of Vodafone. Vodafone is a full service telecommunications company in New Zealand and the acquisition
increases Infratil’s exposure to long-term data and connectivity growth. Infratil’s current shareholding is 49.9% (30 September 2018:
N/A, 31 March 2019: N/A).
Movement in the carrying amount of the Group's investment in Vodafone:
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Carrying value at 1 April---
Acquisition of shares690.3 --
Shareholder loan339.3 --
Total capital contributions during the period1,029.6 --
Interest on shareholder loan (including accruals)2.5 --
Share of associate’s surplus/(loss) before income tax(4.1)--
Share of associate’s income tax (expense)(1.6)--
Total share of associate’s earnings during the period(3.2)--
Share of associate's other comprehensive income---
less: distributions received---
less: shareholder loan repayments including interest---
Carrying value of investment in associate1,026.4 --
20
6 Other investments
30 September 2019
$Millions
Unaudited
30 September 2018
$Millions
Unaudited
31 March 2019
$Millions
Audited
Australian Social Infrastructure Partners46.1 40.8 45.4
Clearvision Ventures28.3 18.1 26.8
Other8.7 8.8 9.0
Other investments83.1 67.7 81.2
Australian Social Infrastructure Partners
Australian Social Infrastructure Partners ('ASIP') has currently invested in 9.95% and 49.0% respectively of the equity in the New Royal
Adelaide Hospital PPP and the South East Queensland Schools PPP. As at 30 September 2019 Infratil has made total contributions
of A$30.5 million (30 September 2018: A$30.5 million; 31 March 2019: A$30.5 million).
Clearvision Ventures
In February 2016 Infratil made a commitment of US$25 million to the California based Envision Ventures Fund 2. The strategic objective
is to help Infratil's businesses identify and engage with technology changes that will impact their activities. As at 30 September 2019
Infratil has made total contributions of US$19.8 million (30 September 2018: US$13.0 million, 31 March 2019: US$19.5 million), with
the remaining US$5.2 million commitment uncalled at that date. During the prior period Envision Ventures Fund 2 LP was renamed
Clearvision Ventures Ecosystem Fund LP.
7 Discontinued operations
Summary of results of discontinued operations
Note
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
ANU Student Accommodation7.166.6 5.5 12.7
NZ Bus7.2(32.6)(1.5)(30.8)
Perth Energy7.3(23.1)12.2 14.2
Snapper(2.6)(2.5)(8.1)
Net surplus from discontinued operations after tax8.3 13.7 (12.0)
21
7.1 ANU Student Accommodation
On 21 May 2019 Infratil announced that the sale of its 50% interest in the Australian National University’s PBSA concession to funds
controlled by AMP Capital had completed. Infratil received cash proceeds of A$162.1 million, as well as shareholder loan interest
and distributions of A$4.8 million in the period from 31 March 2019 to completion. The investment was classified as held for sale at
31 March 2019 and is reported in the financial statements as a discontinued operation. Financial information relating to the discontinued
operation for the period to the date of disposal is set out below.
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Carrying value at 1 April108.2 96.1 96.1
Acquisition of shares-4.1 4.1
Shareholder loan-5.0 5.0
Total capital contributions during the period-9.1 9.1
Interest on shareholder loan (including accruals)0.5 1.8 3.8
Share of associate’s surplus/(loss) before income tax-3.7 8.9
Share of associate’s income tax (expense)---
Total share of associate’s earnings in the period0.5 5.5 12.7
less: Distributions received(3.5)(4.6)(5.2)
less: Shareholder loan repayments including interest(57.6)(1.0)(1.7)
less: Capital returned(49.4)--
Foreign exchange movements recognised in other comprehensive income1.8 2.2 (2.8)
Carrying value of investment in associate-107.3 108.2
The net gain on the sale is calculated as follows:
Gross sale proceeds172.2 --
Carrying amount of assets and liabilities as at the date of sale104.1 --
Gain on sale before cost of disposal68.1 --
Cost of disposal(2.0)--
Net gain on sale66.1 --
Net surplus from discontinued operation after tax66.6 5.5 12.7
Basic and diluted earnings per share (cents per share)11.2 1.0 2.3
The profit from the discontinued operation is attributable entirely
to the owners of the Company.
Cash flows from/(used in) discontinued operation
Net cash from operating activities4.0 5.6 6.9
Net cash from/(used) in investing activities169.7 (9.1)(9.1)
Net cash used in financing activities---
Net cash flows for the period173.7 (3.5)(2.2)
There was no cumulative income recognised in other comprehensive income relating to ANU Student Accommodation at
30 September 2019 (30 September 2018: $2.2 million, 31 March 2019: -$2.4 million).
22
7.2 NZ Bus
On 2 September 2019 Infratil announced that the sale of its NZ Bus business to funds controlled by Next Capital had been completed.
The final consideration after post-completion adjustments for working capital, capital expenditure, and an earnout mechanism is
estimated to be between $125–$145 million. Upfront cash proceeds of approximately $93 million have been received. The balance (after
the post-completion adjustments and earnout) will be paid in cash and a vendor loan of up to $20 million (based on the expected
proceeds), repayable within 5.5 years of completion. The investment was classified as held for sale at 31 March 2019 and is reported in
the financial statements as a discontinued operation. Financial information relating to the discontinued operation for the period to the
date of disposal is set out below. Gross sale proceeds are based on Management's best estimate of the post-completion adjustments at
30 September 2019.
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Results of discontinued operation
Revenue76.1 99.2 184.2
Operating expenses70.2 86.0 166.8
Results from operating activities5.9 13.2 17.4
Depreciation & amortisation of intangibles(7.1)(12.8)(21.1)
Net realisations, revaluations, (impairments)0.2 (1.7)(29.2)
Net financing expense-(0.1)(0.2)
Net surplus/(loss) before tax(1.0)(1.4)(33.1)
Taxation (expense)/credit0.6 (0.1)2.3
Net surplus/(loss) after tax(0.4)(1.5)(30.8)
The net loss on the sale is calculated as follows:
Gross sale proceeds134.7 --
Carrying amount of assets and liabilities as at the date of sale166.9 --
Loss on sale before cost of disposal(32.2)--
Cost of disposal---
Net loss on sale(32.2)--
Net loss from discontinued operation after tax(32.6)(1.5)(30.8)
Basic and diluted earnings per share (cents per share)(5.5)(0.3)(5.5)
The loss from the discontinued operation is attributable entirely
to the owners of the Company.
Cash flows from/(used in) discontinued operation
Net cash from operating activities(0.1)(3.0)2.6
Net cash from/(used) in investing activities92.9 1.5 2.8
Net cash used in financing activities---
Net cash flows for the period92.9 (1.5)5.4
There was no cumulative income recognised in other comprehensive income relating to NZ Bus at 30 September 2019
(30 September 2019: nil, 31 March 2019: nil).
23
7.3 Perth Energy
On 2 September 2019 Infratil announced that the sale of Perth Energy to AGL Energy Limited had been completed. Infratil received cash
proceeds of A$53.3 million for its 80% shareholding, with final proceeds to be adjusted for normal working capital and net
debt adjustments. The investment was classified as held for sale at 31 March 2019 and is reported in the financial statements as a
discontinued operation. Financial information relating to the discontinued operation for the period to the date of disposal is set
out below.
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Results of discontinued operation
Revenue114.2 138.8 269.9
Operating expenses102.1 113.5 234.0
Results from operating activities12.1 25.3 35.9
Depreciation & amortisation of intangibles(2.6)(3.0)(6.0)
Net realisations, revaluations, (impairments)---
Net financing expense(1.1)(1.1)(2.1)
Net surplus/(loss) before tax8.4 21.2 27.8
Taxation (expense)/credit(4.9)(9.0)(13.6)
Net surplus/(loss) after tax3.5 12.2 14.2
The net loss on the sale is calculated as follows:
Gross sale proceeds63.7 --
Carrying amount of assets and liabilities as at the date of sale89.6 --
Loss on sale before cost of disposal(25.9)--
Cost of disposal(0.7)--
Net loss on sale(26.6)--
Net surplus/(loss) from discontinued operation after tax(23.1)12.2 14.2
Basic and diluted earnings per share (cents per share)(3.9)2.2 2.5
The profit/(loss) from the discontinued operation is attributable entirely
to the owners of the Company.
Cash flows from/(used in) discontinued operation
Net cash from/(used) operating activities3.5 4.9 11.9
Net cash from/(used) in investing activities63.5 (0.2)(0.4)
Net cash (used) in financing activities(2.3)(1.6)(4.5)
Net cash flows for the period64.8 3.1 7.0
There was no cumulative income recognised in other comprehensive income relating to Perth Energy at 30 September 2019
(30 September 2018: $1.2 million, 31 March 2019: $5.1 million).
24
8 Revenue
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Operating revenue – contracted
675.6 661.5 1,318.9
Operating revenue – outside the scope of NZ IFRS 1525.7 2.3 14.3
Total operating revenue701.3 663.8 1,333.2
Operating revenue – contracted
Electricity*
524.4 527.0 1,037.9
Gas
17.5 17.8 29.2
Telecommunications
46.8 43.3 87.7
Aircraft movement and terminal charges40.3 40.6 81.5
Transport, hotel and other trading activities19.2 14.3 30.5
Other27.4 18.5 52.2
Total operating revenue – contracted675.6 661.5 1,318.9
* Electricity comprises revenue from Trustpower and Tilt Renewables
9 Other operating expenses
Note
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Trading operations
Energy and wholesale costs123.2 87.3 234.6
Line, distribution and network costs151.6 154.9 284.5
Generation production & development costs26.0 19.3 46.5
Other energy business costs59.1 66.4 123.1
Telecommunications cost of sales32.8 24.8 54.4
Transportation business costs---
Airport business costs14.2 12.0 24.0
Bad debts written off1.4 1.0 2.0
Increase in provision for doubtful debts ---
Directors’ fees1.7 1.2 3.2
Administration and other corporate costs7.6 1.0 7.1
Management fee
(to related party Morrison & Co Infrastructure Management)
16 17.4 11.4 24.1
International Portfolio incentive fee16 12.8 29.4 102.6
Donations0.2 0.7 0.9
Total other operating expenses448.0 409.5 907.0
25
10 Taxation
6 months ended
30 September 2019
$Millions
Unaudited
6 monthded ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Net surplus before taxation from continuing operations125.9 138.6 136.4
Taxation on the surplus for the period @ 28%35.3 38.8 38.2
Plus/(less) taxation adjustments:
Effect of tax rates in foreign jurisdictions(0.6)0.3 (0.1)
Net benefit of imputation credits---
Timing differences not recognised--(1.0)
Tax losses not recognised/(utilised)(3.2)0.4 30.1
Effect of equity accounted earnings of associates(20.5)(18.4)0.6
Recognition of previously unrecognised deferred tax9.0 -(1.2)
(Over)/Under provision in prior periods7.5 2.1 0.9
Net investment realisations(0.1)-(0.4)
Other permanent differences18.7 23.0 4.9
Taxation expense46.1 46.2 72.0
Current taxation 36.8 41.8 52.4
Deferred taxation 9.3 4.4 19.6
Tax on discontinued operations4.3 9.1 11.4
26
11 Loans and borrowings
This note provides information about the contractual terms of the Group's interest bearing loans and borrowings.
30 September 2019
$Millions
Unaudited
30 September 2018
$Millions
Unaudited
31 March 2019
$Millions
Audited
Current liabilities
Unsecured bank loans
225.0 78.0 97.7
Secured bank facilities210.3 47.4 201.9
less: Loan establishment costs capitalised and amortised over term(5.1)(0.9)(4.3)
430.2 124.5 295.3
Non-current liabilities
Unsecured bank loans338.8 178.0 200.2
Secured bank facilities
504.3 668.0 505.3
less: Loan establishment costs capitalised and amortised over term(11.5)(1.2)(8.7)
831.6 844.8 696.8
Facilities utilised at reporting date
Unsecured bank loans563.8 256.0 298.0
Unsecured guarantees---
Secured bank loans714.6 715.4 707.0
Secured guarantees187.4 113.5 129.5
Facilities not utilised at reporting date
Unsecured bank loans679.3 599.0 391.0
Unsecured guarantees---
Secured bank loans348.2 20.2 380.8
Secured guarantees74.3 6.0 85.7
Interest bearing loans and borrowings – current430.2 124.5 295.3
Interest bearing loans and borrowings – non-current831.6 844.8 696.8
Total interest bearing loans and borrowings1,261.8 969.3 992.1
Financing arrangements
Infratil Finance Limited, a wholly owned subsidiary of the Company, has entered into bank facilities with a negative pledge arrangement,
which, with limited exceptions does not permit the Infratil Guaranteeing Group (‘IGG’) to grant any security over its assets. The IGG
comprises entities subject to a cross guarantee and comprises Infratil Limited, Infratil Finance Limited and certain other wholly owned
subsidiaries. The IGG does not incorporate the underlying assets of the Company’s non-wholly owned subsidiaries and investments in
associates. The IGG facilities also include restrictions over the sale or disposal of certain assets without bank agreement. Liability under
the cross guarantee is limited to the amount of debt drawn under the IGG facilities, plus any unpaid interest and costs
of recovery. At 30 September drawn debt and accrued interest under the IGG facilities was $327.7 million (30 September 2018: nil,
31 March 2019: $70.2 million).
Infratil Energy New Zealand Limited (‘IENZ’), a wholly owned subsidiary of the Company, is not a member of the IGG and has granted a
security interest over its assets as part of its bank facility arrangements. IENZ has total facilities of $125.0 million, of which $10.0 million was
drawn as at 30 September 2019 (30 September 2018: nil, 31 March 2019: nil).
The Group’s non-wholly owned subsidiaries also enter into bank facility arrangements. Amounts outstanding under these facilities are
included within loans and borrowings in the table above. Wellington International Airport and Trustpower facilities are both subject to
negative pledge arrangements, which with limited exceptions does not permit those entities to grant security over their respective assets.
Tilt Renewables has granted security under a General Security Agreement in relation to its bank facilities. All non-wholly owned subsidiary
facilities are subject to restrictions over the sale or disposal of certain assets without bank agreement.
27
The various bank facilities across the Group require the relevant borrowing group to maintain certain levels of shareholder funds and
operate within defined performance and gearing ratios. Throughout the period the Group has complied with all debt covenant
requirements as imposed by the respective lenders.
Interest rates are determined by reference to prevailing money market rates at the time of draw-down plus a margin. Interest rates paid
during the period ranged from 1.6% to 3.7% (30 September 2018: 2.2% to 4.5%, 31 March 2019: 2.2% to 4.5%).
12 Infrastructure bonds
30 September 2019
$Millions
Unaudited
30 September 2018
$Millions
Unaudited
31 March 2019
$Millions
Audited
Balance at the beginning of the period1,127.6 994.4 994.4
Issued during the period268.3 -246.2
Exchanged during the period--(51.1)
Matured during the period--(60.4)
Purchased by Infratil during the period---
Bond issue costs capitalised during the period(3.4)-(3.6)
Bond issue costs amortised during the period1.1 1.1 2.1
Balance at the end of the period1,393.6 995.5 1,127.6
Current149.0 111.4 148.9
Non-current fixed coupon 902.3 652.8 747.2
Non-current variable coupon110.6 --
Non-current perpetual variable coupon231.7 231.3 231.5
Balance at the end of the period1,393.6 995.5 1,127.6
Repayment terms and interest rates:
IFT180 maturing in November 2018, 6.85% p.a. fixed coupon rate-111.4 -
IFT200 maturing in November 2019, 6.75% p.a. fixed coupon rate68.5 68.5 68.5
IFT090 maturing in February 2020, 8.50% p.a. fixed coupon rate80.5 80.5 80.5
IFT220 maturing in June 2021, 4.90% p.a. fixed coupon rate93.9 93.9 93.9
IFT190 maturing in June 2022, 6.85% p.a. fixed coupon rate93.7 93.7 93.7
IFT240 maturing in December 2022, 5.65% p.a. fixed coupon rate100.0 100.0 100.0
IFT210 maturing in September 2023, 5.25% p.a. fixed coupon rate122.1 122.1 122.1
IFT230 maturing in June 2024, 5.50% p.a. fixed coupon rate
56.1 56.1 56.1
IFT260 maturing in December 2024, 4.75% p.a. fixed coupon rate100.0 -100.0
IFT250 maturing in June 2025, 6.15% p.a. fixed coupon rate43.4 43.4 43.4
IFT280 maturing in December 2026, 3.35% p.a. fixed coupon rate156.3 --
IFT270 maturing in December 2028, 4.85% p.a. fixed coupon rate146.2 -146.2
IFTHC maturing in December 2029, 3.50% p.a. variable coupon rate 112.1 --
IFTHA Perpetual Infratil infrastructure bonds231.9 231.9 231.9
less: Bond issue costs capitalised and amortised over term(11.1)(6.0)(8.7)
Balance at the end of the period1,393.6 995.5 1,127.6
Throughout the period the Company complied with all debt covenant requirements as imposed by the bond trustee.
28
Fixed coupon
The fixed coupon bonds the Company has on issue are at a face value of $1.00 per bond. Interest is payable quarterly on the bonds.
25 days prior to the maturity date of the IFT090 series, Infratil can elect to convert all of the bonds in that series to equity by issuing
the number of shares calculated by dividing the $1.00 face value by 98% of the market price of an Infratil share. The market price is the
average price weighted by volume of all trades of ordinary shares over the 10 business days up to the fifth business day before the
maturity date.
IFTHC bonds
The Company has 112,053,000 (30 September 2018: nil, 31 March 2019: nil) IFTHCs on issue at a face value of $1.00 per bond. Interest
is payable quarterly on the bonds. For the period to 15 December 2020 the coupon is fixed at 3.50% per annum (September 2018: nil,
March 2019: nil). Thereafter the rate will be reset annually at 2.50% per annum over the then one year bank rate for quarterly payments.
Perpetual Infratil infrastructure bonds ('PIIBs')
The Company has 231,916,000 (30 September 2018: 231,916,000, 31 March 2019: 231,916,000) PIIBs on issue at a face value of
$1.00 per bond. Interest is payable quarterly on the bonds. For the period to 15 November 2019 the coupon is fixed at 3.55% per
annum (September 2018: 3.50%, March 2019: 3.55%). Thereafter the rate will be reset annually at 1.50% per annum over the then one
year bank rate for quarterly payments, unless Infratil's gearing ratio exceeds certain thresholds, in which case the margin increases.
These infrastructure bonds have no fixed maturity date. No PIIBs (September 2018: nil, March 2019: nil) were repurchased by Infratil
Limited during the period.
At 30 September 2019 the Infrastructure bonds (including PIIBs) had a fair value of $1,393.6 million (30 September 2018: $973.9 million,
31 March 2019: $1,104.4 million).
13 Financial instruments
13.1 Fair values
The carrying amount of financial assets and financial liabilities recorded in the financial statements is their fair value, with the
exception of bond debt and senior notes held at amortised cost which have a fair value at 30 September 2019 of $2,415.4 million
(30 September 2018: $1,762.3 million, 31 March 2019: $1,997.8 million) compared to a carrying value of $2,339.5 million
(30 September 2018: $1,746.1 million, 31 March 2019: $1,979.5 million). The fair value of the Group's bank loans are not materially
different to the carrying values disclosed in note 11.
13.2 Estimation of fair values
The fair values of financial assets and financial liabilities are determined as follows:
• The fair value of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined
with reference to quoted market prices.
• The fair value of other financial assets and liabilities are calculated using market-quoted rates based on discounted cash flow analysis.
• The fair value of derivative financial instruments are calculated using quoted prices. Where such prices are not available, use is made of
discounted cash flow analysis using the applicable yield curve or available forward price data for the duration of the instruments.
Where the fair value of a derivative is calculated as the present value of the estimated future cash flows of the instrument, the two key
types of variables used by the valuation techniques are:
• forward price curve (for the relevant underlying interest rates, foreign exchange rates or commodity prices); and
• discount rates.
Valuation inputSource
Interest rate forward price curve
Published market swap rates
Foreign exchange forward prices
Published spot foreign exchange rates
Electricity forward price curve
Market quoted prices where available and management's best
estimate based on its view of the long run marginal cost of new
generation where no market quoted prices are available
Discount rate for valuing interest rate derivatives
Published market interest rates as applicable to the remaining
life of the instrument
Discount rate for valuing forward foreign exchange contracts
Published market rates as applicable to the remaining life of
the instrument
Discount rate for valuing electricity price derivatives
Assumed counterparty cost of funds ranging from 3.3% to 3.5%
(30 September 2018: 3.3% to 3.5%, 31 March 2019: 3.1% to 4.1%)
The selection of variables requires significant judgement and therefore there is a range of reasonably possible assumptions in respect of
these variables that could be used in estimating the fair value of these derivatives. Maximum use is made of observable market data
when selecting variables and developing assumptions for the valuation techniques.
29
13.3 Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices) (level 2)
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The following tables present the Group's financial assets and liabilities that are measured at fair value.
30 September 2019
Level 1
$Millions
Unaudited
Level 2
$Millions
Unaudited
Level 3
$Millions
Unaudited
Total
$Millions
Unaudited
Assets per the statement of financial position
Derivative financial instruments – energy- 1.0 146.3 147.3
Derivative financial instruments – cross currency
interest rate swaps
- 19.8 -19.8
Derivative financial instruments – foreign exchange- 1.0 -1.0
Derivative financial instruments – interest rate- 2.5 -2.5
To ta l- 24.3 146.3 170.6
Liabilities per the statement of financial position
Derivative financial instruments – energy- 3.9 45.9 49.8
Derivative financial instruments – cross currency
interest rate swaps
- - --
Derivative financial instruments – foreign exchange- - --
Derivative financial instruments – interest rate- 131.9 -131.9
To ta l- 135.8 45.9 181.7
30 September 2018
Assets per the statement of financial position
Derivative financial instruments – energy- 1.0 122.7 123.7
Derivative financial instruments – cross currency
interest rate swaps
- 0.1 -0.1
Derivative financial instruments – foreign exchange- - --
Derivative financial instruments – interest rate- 1.0 -1.0
To ta l- 2.1 122.7 124.8
Liabilities per the statement of financial position
Derivative financial instruments – energy- 2.7 19.9 22.6
Derivative financial instruments – cross currency
interest rate swaps
- - --
Derivative financial instruments – foreign exchange- - --
Derivative financial instruments – interest rate0.1 32.7 -32.8
To ta l0.1 35.4 19.9 55.4
30
31 March 2019
Level 1
$Millions
Audited
Level 2
$Millions
Audited
Level 3
$Millions
Audited
Total
$Millions
Audited
Assets per the statement of financial position
Derivative financial instruments – energy- 0.3 170.6 170.9
Derivative financial instruments – cross currency
interest rate swaps
- 2.9 -2.9
Derivative financial instruments – foreign exchange- - --
Derivative financial instruments – interest rate- 0.7 -0.7
To ta l- 3.9 170.6 174.5
Liabilities per the statement of financial position
Derivative financial instruments – energy- 8.1 27.1 35.2
Derivative financial instruments – cross currency
interest rate swaps
- - --
Derivative financial instruments – foreign exchange- - --
Derivative financial instruments – interest rate- 82.3 -82.3
To ta l- 90.4 27.1 117.5
There were no transfers between derivative financial instrument assets or liabilities classified as level 1 or level 2, and level 3 of the
fair value hierarchy during the period ended 30 September 2019 (30 September 2018: none, 31 March 2019: none).
13.4 Energy derivatives
The Group meets its energy sales demand by purchasing energy on spot markets, physical deliveries and financial derivative
contracts. This exposes the Group to fluctuations in the spot and forward price of energy. The Group has entered into a number of energy
hedge contracts to reduce the energy price risk from price fluctuations. These hedge contracts establish the price at which future
specified quantities of energy are purchased and settled. Any resulting differential to be paid or received is recognised as a component
of energy costs through the term of the contract.
Energy price sensitivity analysis
The following table shows the impact on post-tax profit and equity of an increase/decrease in the relevant forward electricity
prices with all other variables held constant:
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Profit and loss
10% increase in energy forward prices(1.5)(0.3)(2.2)
10% decrease in energy forward prices1.5 0.3 2.2
Other comprehensive income
10% increase in energy forward prices(34.4)(33.9)(33.2)
10% decrease in energy forward prices34.4 33.9 33.2
31
The Group's energy derivatives are classified within level 3 of the fair value hierarchy because the assumed location factors which are
used to adjust the forward price path are unobservable. The following table reconciles the movements in level 3 Energy derivatives.
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Assets per the statement of financial position
Opening balance
170.6 107.5 107.5
Foreign exchange movement on opening balance
2.8 2.8 (2.3)
Acquired as part of business combination
---
Gains and (losses) recognised in profit or loss
(3.9)(4.4)11.7
Gains and (losses) recognised in other comprehensive income
(23.2)16.8 53.7
Closing balance
146.3 122.7 170.6
Total gains or (losses) for the period included in profit or loss
for assets held at the end of the reporting period
(11.9)8.5 53.4
Liabilities per the statement of financial position
Opening balance
27.1 27.3 27.3
Foreign exchange movement on opening balance
0.7 4.1 (0.2)
Acquired as part of business combination
---
(Gains) and losses recognised in profit or loss
1.3 (8.0)(4.1)
(Gains) and losses recognised in other comprehensive income
16.8 (3.6)4.1
Sold as part of the disposal of a subsidiary
---
Closing balance
45.9 19.9 27.1
Total gains or (losses) for the period included in profit or loss
for liabilities held at the end of the reporting period
12.9 0.6 (3.9)
Settlements during the period
22.8 2.8 24.9
32
14 Reconciliation of net surplus with cash flow from operating activities
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Net surplus for the period88.1 106.1 52.4
Items classified as investing activity:
Loss on investment realisations and impairments23.4 2.0 36.7
Items not involving cash flows:
Movement in financial derivatives taken to the profit or loss16.4 (12.0)(0.3)
Decrease in deferred tax liability excluding transfers to reserves13.8 14.5 34.3
Changes in fair value of investment properties(29.1)(0.9)(4.8)
Equity accounted earnings of associate net of distributions received(78.3)(32.7)(67.0)
Depreciation79.7 91.3 171.7
Movement in provision for bad debts1.4 1.5 2.2
Amortisation of intangibles5.3 8.4 16.5
Other9.0 4.6 5.6
Movements in working capital:
Change in receivables(7.8)(50.8)(83.4)
Change in inventories1.3 (1.6)0.2
Change in trade payables122.8 44.0 5.7
Change in accruals and other liabilities(176.3)(29.2)129.8
Change in current and deferred taxation(1.7)(2.5)(22.7)
Net cash flow from operating activities68.0 142.7 276.9
15 Capital commitments
30 September 2019
$Millions
Unaudited
30 September 2018
$Millions
Unaudited
31 March 2019
$Millions
Audited
Committed but not contracted for 10.1 48.5 37.2
Contracted but not provided for707.0 139.3 544.1
Capital commitments717.1 187.8 581.3
Capital commitments associated with the Dundonnell Wind Farm and Waipipi Wind Farm total A$630.8 million as at 31 March 2019. See
note 6 for Infratil's commitments to Clearvision Ventures.
33
16 Related parties
Certain Infratil Directors have relevant interests in a number of companies with which Infratil has transactions in the normal course
of business. A number of key management personnel are also Directors of Group subsidiary companies and associates.
Morrison & Co Infrastructure Management Limited ('MCIM') is the management company for the Company and receives management
fees in accordance with the applicable management agreement. MCIM is owned by H.R.L. Morrison & Co Group Limited Partnership
('MCO'). Mr Bogoievski is a director of Infratil and is a director and Chief Executive Officer of MCO. Entities associated with Mr Bogoievski
also have beneficial interests in MCO.
Management and other fees paid by the Group (including associates) to MCIM, MCO or its related parties during the year were:
Note
6 months ended
30 September 2019
$Millions
Unaudited
6 months ended
30 September 2018
$Millions
Unaudited
Year ended
31 March 2019
$Millions
Audited
Management fees17.6 11.8 24.9
International Portfolio incentive fee17 12.8 29.4 102.6
Executive secondment and consulting0.1 0.1 -
Directors fees0.9 1.0 2.2
Financial management, accounting, treasury, compliance
and administrative services
0.7 0.7 1.4
Capitalised development fee0.3 -0.3
Investment banking services0.5 0.5 1.2
Total management and other fees32.9 43.5 132.6
The above table includes $0.4 million paid by discontinued operations in the period ended 30 September 2019 (30 September 2018: $0.6
million, 31 March 2019: $1.5 million).
At 30 September 2019 amounts owing to MCIM of $3.7 million (excluding GST) are included in trade creditors (30 September 2018:
$2.5 million, 31 March 2019: $3.6 million).
On 8 May 2017 the Company obtained a standing waiver from the former NZSX Listing Rule 9.2.1 (which, under the transition
arrangements for the new NZSX Listing Rules, has been grandparented to 30 June 2020 to allow for re-documentation under the new
NZSX Listing Rules). The effect of the waiver is to waive the requirement for Infratil to obtain an Ordinary Resolution from shareholders to
enter into a Material Transaction with a Related Party to the extent required to allow Infratil to enter into transactions with co-investors
that have also engaged an entity related to MCO for investment management or advisory services. The waiver is provided on the
conditions specified in paragraph 2 of the waiver decision, which is available on Infratil's website: www.infratil.com/for-investors/
announcements. As yet, no transaction has been entered into with reliance on this waiver.
On 31 May 2019 Infratil announced that the sale of its public transport ticketing subsidiary Snapper to Allectus Capital Limited (‘Allectus’)
for nominal consideration. Allectus is owned by ICM Limited (‘ICM’). Infratil notes that Duncan Saville, a director of MCO, is the Chairman
and founder of ICM. Infratil confirms that the sale of Snapper was considered and approved by the Independent Directors of Infratil, who
are satisfied that the transaction was negotiated and entered into on an arm’s length commercial basis and that the directors associated
with MCO have not exercised any undue influence over the Board in its decisions in respect of the transaction.
34
17 International Portfolio incentive fee
International Investments ('International Portfolio Assets') are eligible for International Portfolio incentive fees (‘Incentive fees’) under the
Management Agreement between MCIM and Infratil. The Agreement allows for incentives to be payable for performance in excess of a
minimum hurdle of 12% per annum in three separate areas:
• Initial Incentive Fees;
• Annual Incentive Fees; and,
• Realised Incentive Fees.
All investments that are acquired in any one financial year are grouped together for the purposes of the Initial Incentive Fee, and an Initial
Incentive Fee is payable at 20% of the outperformance of these assets against a benchmark of 12% p.a. after tax, compounding.
Thereafter International Portfolio Assets are grouped together, and an Annual Incentive Fee is payable at 20% of the outperformance
of those assets against the higher of, a benchmark of 12% p.a. after tax, relative to the most recent 31 March valuation, or cost. Realised
Incentive Fees are payable on the realised gains from the sale or other realisation of an International Portfolio Asset at 20% of the
outperformance (since the last valuation date) against the higher of, a benchmark of 12% p.a. after tax, relative to the most recent
31 March valuation, or cost.
The investments in Australian Social Infrastructure Partners, CDC Data Centres, Longroad Energy, RetireAustralia and Tilt Renewables are
currently eligible for the International Portfolio Annual Incentive fee assessment as at 31 March 2020. There are no other International
Portfolio Assets.
As at 30 September, it is probable that Infratil will have an International Portfolio Annual Incentive fee (for the year to 31 March 2020)
due to MCO based on the performance of the above portfolio of assets, and as a result an amount of $12.7 million has been accrued as
at 30 September. Incentive fee calculations as at 31 March are based on independent valuations as at that date.
18 Contingent liabilities and legal matters
Snowtown Wind Farm Stage 2 Pty Ltd, a wholly-owned subsidiary of Tilt Renewables, has been served with court proceedings on behalf
of the Australian Energy Regulator ('AER') in relation to their investigations into the system black event which occurred in South Australia on
28 September 2016. The company will continue to engage with the AER in an endeavour to resolve this matter.
There were no other contingent liabilities as at 30 September 2019.
19 Events after balance date
Infratil Infrastructure Bond Offer
On 22 October 2019, Infratil announced the offer of a new series of unsecured unsubordinated Infrastructure Bonds, with a fixed coupon
of 3.35% and a maturity date of 15 March 2026. Infratil has also extended the closing date for its offer of IFTHC bonds
(due 15 December 2029) to 13 November 2019.
Snowtown 2 Wind Farm Refinancing
On 24 October 2019 Tilt Renewables reached financial close on a standalone A$616 million Project Financing Facility
for the Snowtown 2 Wind Farm. The proceeds of these funds were used to repay a facility which was due to expire at the end of
October 2019 along with other Tilt Renewables facilities. Proceeds of the refinancing have been retained by the business and are
intended to be used as the equity contribution for other near team development opportunities.
Dividend
On 12 November 2019, the Directors approved a partially imputed interim dividend of 6.25 cents per share to holders of fully paid ordinary
shares to be paid on 13 December 2019.
© 2019 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
Independent Review
Report
To the shareholders of Infratil Limited
Report on the condensed consolidated half year financial statements
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed
consolidated half year financial statements on pages 2 to
34 do not:
i.present fairly in all material respects the
group’s financial position as at 30 September
2019 and its financial performance and cash
flows for the 6 month period ended on that
date; and
ii.comply with NZ IAS 34 Interim Financial
Reporting.
We have completed a review of the accompanying
condensed consolidated half year financial statements
which comprise:
— the consolidated statement of financial position as
at 30 September 2019;
— the consolidated statements of comprehensive
income, changes in equity and cash flows for the 6
month period then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for conclusion
A review of condensed consolidated half year financial statements in accordance with NZ SRE 2410 Review of Financial
Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited assurance engagement. The
auditor performs procedures, consisting of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures.
As the auditor of Infratil Limited, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit
of the annual financial statements.
Our firm has also provided other services to the group in relation to taxation services, audit of regulatory disclosures and
other assurance engagements. Subject to certain restrictions, partners and employees of our firm may also deal with the
group on normal terms within the ordinary course of trading activities of the business of the group. These matters have
not impaired our independence as reviewer of the group. The firm has no other relationship with, or interest in, the group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we might state to
the shareholders those matters we are required to state to them in the Independent Review Report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
shareholders as a body for our review work, this report, or any of the opinions we have formed.
© 2019 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
Independent Review Report
To the shareholders of Infratil Limited
Report on the condensed consolidated half year financial statements
Conclusion
Based on our review, nothing has come to our
attention that causes us to believe that the
condensed consolidated half year financial
statements on pages X to X do not:
i.present fairly in all material respects the
group’s financial position as at 30
September 2019 and its financial
performance and cash flows for the 6
month period ended on that date; and
ii.comply with NZ IAS 34 Interim Financial
Reporting.
We have completed a review of the accompanying
condensed consolidated half year financial
statements which comprise:
—the consolidated statement of financial position
as at 30 September 2019;
—the consolidated statements of comprehensive
income, changes in equity and cash flows for
the 6 month period then ended; and
—notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for conclusion
A review of condensed consolidated half year financial statements in accordance with NZ SRE 2410 Review of
Financial Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited
assurance engagement. The auditor performs procedures, consisting of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
As the auditor of Infratil Limited, NZ SRE 2410 requires that we comply with the ethical requirements relevant to
the audit of the annual financial statements.
Our firm has also provided other services to the group in relation to taxation services, audit of regulatory
disclosures and other assurance engagements. Subject to certain restrictions, partners and employees of our
firm may also deal with the group on normal terms within the ordinary course of trading activities of the
business of the group. These matters have not impaired our independence as reviewer of the group. The firm
has no other relationship with, or interest in, the group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we
might state to the shareholders those matters we are required to state to them in the Independent Review
Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the shareholders as a body for our review work, this report, or any of the
opinions we have formed.
DRAFT
35
© 2019 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
Independent Review
Report
To the shareholders of Infratil Limited
Report on the condensed consolidated half year financial statements
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed
consolidated half year financial statements on pages 2 to
34 do not:
i.present fairly in all material respects the
group’s financial position as at 30 September
2019 and its financial performance and cash
flows for the 6 month period ended on that
date; and
ii.comply with NZ IAS 34 Interim Financial
Reporting.
We have completed a review of the accompanying
condensed consolidated half year financial statements
which comprise:
— the consolidated statement of financial position as
at 30 September 2019;
— the consolidated statements of comprehensive
income, changes in equity and cash flows for the 6
month period then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for conclusion
A review of condensed consolidated half year financial statements in accordance with NZ SRE 2410 Review of Financial
Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited assurance engagement. The
auditor performs procedures, consisting of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures.
As the auditor of Infratil Limited, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit
of the annual financial statements.
Our firm has also provided other services to the group in relation to taxation services, audit of regulatory disclosures and
other assurance engagements. Subject to certain restrictions, partners and employees of our firm may also deal with the
group on normal terms within the ordinary course of trading activities of the business of the group. These matters have
not impaired our independence as reviewer of the group. The firm has no other relationship with, or interest in, the group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we might state to
the shareholders those matters we are required to state to them in the Independent Review Report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
shareholders as a body for our review work, this report, or any of the opinions we have formed.
© 2019 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
Independent Review Report
To the shareholders of Infratil Limited
Report on the condensed consolidated half year financial statements
Conclusion
Based on our review, nothing has come to our
attention that causes us to believe that the
condensed consolidated half year financial
statements on pages X to X do not:
i.present fairly in all material respects the
group’s financial position as at 30
September 2019 and its financial
performance and cash flows for the 6
month period ended on that date; and
ii.comply with NZ IAS 34 Interim Financial
Reporting.
We have completed a review of the accompanying
condensed consolidated half year financial
statements which comprise:
—the consolidated statement of financial position
as at 30 September 2019;
—the consolidated statements of comprehensive
income, changes in equity and cash flows for
the 6 month period then ended; and
—notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for conclusion
A review of condensed consolidated half year financial statements in accordance with NZ SRE 2410 Review of
Financial Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited
assurance engagement. The auditor performs procedures, consisting of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
As the auditor of Infratil Limited, NZ SRE 2410 requires that we comply with the ethical requirements relevant to
the audit of the annual financial statements.
Our firm has also provided other services to the group in relation to taxation services, audit of regulatory
disclosures and other assurance engagements. Subject to certain restrictions, partners and employees of our
firm may also deal with the group on normal terms within the ordinary course of trading activities of the
business of the group. These matters have not impaired our independence as reviewer of the group. The firm
has no other relationship with, or interest in, the group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we
might state to the shareholders those matters we are required to state to them in the Independent Review
Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the shareholders as a body for our review work, this report, or any of the
opinions we have formed.
DRAFT
36
2
Responsibilities of the Directors for the condensed consolidated half year
financial statements
The Directors, on behalf of the group, are responsible for:
— the preparation and fair presentation of the condensed consolidated half year financial statements in accordance with
NZ IAS 34 Interim Financial Reporting;
— implementing necessary internal control to enable the preparation of condensed consolidated half year financial
statements that are fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the condensed consolidated half year
financial statements
Our responsibility is to express a conclusion on the condensed consolidated half year financial statements based on our
review. We conducted our review in accordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything
has come to our attention that causes us to believe that the condensed consolidated half year financial statements are not
prepared, in all material respects, in accordance with NZ IAS 34 Interim Financial Reporting.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance
with International Standards on Auditing (New Zealand). Accordingly we do not express an audit opinion on these
condensed consolidated half year financial statements.
This description forms part of our Independent auditor’s Report.
KPMG
Wellington
12 November 2019
37
Directory
Directors
M Tume (Chairman)
M Bogoievski
A Gerry
P Gough
K Mactaggart
P M Springford
C Savage
Company Secretary
N Lough
Registered Office
New Zealand
5 Market Lane
PO Box 320
Wellington
Telephone: +64 4 473 3663
Internet address: www.infratil.com
Registered Office
Australia
C/- H.R.L. Morrison & Co Private Markets Pty Ltd
Level 37, Governor Phillip Tower
1 Farrer Place
Sydney NSW 2000
Telephone: +61 2 8098 7500
Manager
Morrison & Co Infrastructure Management Limited
5 Market Lane
PO Box 1395
Wellington
Telephone: +64 4 473 2399
Facsimile: +64 4 473 2388
Internet address: www.hrlmorrison.com
Share Registrar
New Zealand
Link Market Services
Level 11, Deloitte House
80 Queen Street
PO Box 91976
Auckland
Telephone: +64 9 375 5998
Email: enquiries@linkmarketservices.co.nz
Internet address: www.linkmarketservices.co.nz
Share Registrar
Australia
Link Market Services
Level 12
680 George Street
Sydney NSW 2000
Telephone: +61 2 8280 7100
Email: registrars@linkmarketservices.com.au
Internet address: www.linkmarketservices.com.au
Auditor
KPMG
10 Customhouse Quay
PO Box 996
Wellington
Calendar
Half year end30 September 2019
Half year results released13 November 2019
Interim dividend paid13 December 2019
Financial year end31 March 2020
Updates/Information
Infratil produces an Annual Report and Interim Report each year.
In addition, Infratil produces occasional reports on the operations
of its subsidiaries. These are available at www.infratil.com.
All Infratil’s reports and releases are on the website, which also
contains profiles of Infratil’s businesses and links.
2
Responsibilities of the Directors for the condensed consolidated half year
financial statements
The Directors, on behalf of the group, are responsible for:
— the preparation and fair presentation of the condensed consolidated half year financial statements in accordance with
NZ IAS 34 Interim Financial Reporting;
— implementing necessary internal control to enable the preparation of condensed consolidated half year financial
statements that are fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the condensed consolidated half year
financial statements
Our responsibility is to express a conclusion on the condensed consolidated half year financial statements based on our
review. We conducted our review in accordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything
has come to our attention that causes us to believe that the condensed consolidated half year financial statements are not
prepared, in all material respects, in accordance with NZ IAS 34 Interim Financial Reporting.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance
with International Standards on Auditing (New Zealand). Accordingly we do not express an audit opinion on these
condensed consolidated half year financial statements.
This description forms part of our Independent auditor’s Report.
KPMG
Wellington
12 November 2019
38
---
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
Notes
$000 $000 $000
Unaudited Unaudited Audited
Dividends received from subsidiary companies-- 186,145
Subvention income---
Operating revenue 19,893 14,650 30,265
Total revenue 19,893 14,650 216,410
Directors' fees524 419 822
Other operating expenses21,042 14,353 29,578
Total operating expenditure 421,566 14,772 30,400
Operating surplus before financing, derivatives, realisations and impairments(1,673)(122) 186,010
Net gain/(loss) on foreign exchange and derivatives 1,441 2,461 4,421
Net realisations, revaluations and (impairments)---
Interest income59,261 24,593 62,497
Interest expense(34,081)(32,315)(66,721)
Net financing expense25,180(7,722)(4,224)
Net surplus/(loss) before taxation 24,948(5,383) 186,207
Taxation credit/(expense) 6 2,917 1,568(5,155)
Net surplus/(loss) for the period 27,865(3,815) 181,052
Other comprehensive income, after tax
Fair value movements in relation to the executive share scheme-- 573
Total other comprehensive income after tax-- 573
Total comprehensive income for the period 27,865(3,815) 181,625
The accompanying notes form part of these financial statements.
Infratil Limited
Statement of Comprehensive Income
For the 6 months ended 30 September 2019
Page 1 of 10
CapitalOther reservesRetained
earnings
Total
Notes
$000 $000 $000 $000
For the 6 months ended 30 September 2019
Unaudited Unaudited Unaudited Unaudited
Balance as at 1 April 2019354,55291298,891454,355
Total comprehensive income for the period
Net surplus for the period--27,86527,865
Other comprehensive income after tax
Fair value movements in relation to the executive share scheme-(912)-(912)
Conversion of executive redeemable shares
883--
883
Total comprehensive income for the period
883(912)27,865
27,836
Contributions by and distributions to owners
Dividends to equity holders
3--(72,536)
(72,536)
Shares issued
391,305--
391,305
Total contributions by and distributions to owners391,305-(72,536)
318,769
746,740-54,220
800,960
Balance at 30 September 2019
746,740-54,220
800,960
CapitalOther reservesRetained
earnings
Total
$000 $000 $000 $000
For the 6 months ended 30 September 2018
Unaudited Unaudited Unaudited Unaudited
Balance as at 1 April 2018354,55233912,916367,807
Total comprehensive income for the period
Net surplus for the period--(3,815)(3,815)
Total comprehensive income for the period
--(3,815)
(3,815)
Contributions by and distributions to owners
Dividends to equity holders
3--(60,122)
(60,122)
Total contributions by and distributions to owners--(60,122)
(60,122)
Balance at 30 September 2018
354,552339(51,021)
303,870
CapitalOther reservesRetained
earnings
Total
$000 $000 $000 $000
For the year ended 31 March 2019
Audited Audited Audited Audited
Balance as at 1 April 2018354,55233912,916367,807
Total comprehensive income for the year
Net surplus for the year--181,052181,052
Other comprehensive income after tax
Fair value movements in relation to executive share scheme
-573-
573
Total other comprehensive income
-573-
573
Total comprehensive income for the year
-573181,052
181,625
Contributions by and distributions to owners
Dividends to equity holders
3--(95,077)
(95,077)
Total contributions by and distributions to owners--(95,077)
(95,077)
Balance at 31 March 2019
354,55291298,891
454,355
The accompanying notes form part of these financial statements.
Infratil Limited
Statement of Changes in Equity
Page 2 of 10
30 September
2019
30 September
2018
31 March
2019
Notes
$000 $000 $000
Unaudited UnauditedAudited
Cash and cash equivalents---
Prepayments and sundry receivables2,3801,9162,065
Derivative financial instruments 8-554-
Income tax receivable---
Advances to subsidiary companies 121,762,704863,6401,151,916
Current assets1,765,084866,1101,153,981
Deferred tax18,57120,58414,203
Investments 12585,529585,529585,529
Non-current assets604,100606,113599,732
Total assets2,369,1841,472,2231,753,713
Bond interest payable6,0695,7135,507
Accounts payable4,6172,6714,069
Accruals and other liabilities3,624185429
Infrastructure bonds 7148,961111,364148,857
Derivative financial instruments 8659-1,729
Loans from Group companies 12153,897153,897153,897
Total current liabilities317,827273,830314,488
Infrastructure bonds 71,012,876652,771747,169
Perpetual Infratil Infrastructure bonds 7231,725231,343231,534
Derivative financial instruments 85,79610,4106,167
Non-current liabilities1,250,397894,524984,870
Attributable to shareholders of the Company800,960303,870454,355
Total equity800,960303,870454,355
Total equity and liabilities2,369,1841,472,2231,753,713
Approved on behalf of the Board on 12 November 2019
Director Director
The accompanying notes form part of these financial statements.
As at 30 September 2019
Infratil Limited
Statement of Financial Position
Page 3 of 10
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
Notes
$000 $000 $000
Unaudited Unaudited Audited
Cash flows from operating activities
Cash was provided from:
Dividends received from subsidiary companies--186,145
Subvention receipt---
Interest received59,26124,59362,497
Operating revenue receipts20,97414,91029,297
80,23539,503277,939
Cash was dispersed to:
Interest paid(33,526)(32,239)(64,703)
Payments to suppliers(20,677)(16,710)(31,043)
Taxation paid(2,066)(2,801)(2,750)
(56,269)(51,750)(98,496)
Net cash flows from operating activities
923,966(12,247)179,443
Cash flows from investing activities
Cash was provided from:
Net movement in subsidiary company loan(611,696)72,373-
(611,696)72,373-
Cash was dispersed to:
Acquisition of shares in subsidiary---
Net movement in subsidiary company loan--(215,330)
--(215,330)
Net cash flows from investing activities
(611,696)72,373(215,330)
Cash flows from financing activities
Cash was provided from:
Proceeds from issue of shares392,217--
Issue of bonds268,332-246,249
660,549-246,249
Cash was dispersed to:
Repayment of bonds--(111,418)
Infrastructure bond issue expenses(283)(4)(3,867)
Repurchase of shares---
Dividends paid
3(72,536)(60,122)(95,077)
(72,819)(60,126)(210,362)
Net cash flows from financing activities
587,730(60,126)35,887
Net cash movement ---
Cash balances at beginning of period---
Cash balances at period end---
The accompanying notes form part of these financial statements.
Note some cash flows above are directed through an intercompany account. The cash flow statement above has been prepared on the assumption that these
transactions are equivalent to cash in order to present the total cash flows of the entity.
Infratil Limited
Statement of Cash Flows
For the 6 months ended 30 September 2019
Page 4 of 10
Reporting entity
Basis of preparation
Changes in accounting policies
(i) NZ IFRS 16 Leases
(3) Infratil shares and dividends
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
UnauditedUnauditedAudited
Total issued capital at the beginning of the period559,278,166559,278,166559,278,166
Movements in issued and fully paid ordinary shares during the period:
Share buyback (held as treasury stock)---
Shares issued100,257,495--
Total issued capital at the end of the period
659,535,661559,278,166559,278,166
Dividends paid on ordinary shares
Dividends declared and paid by the Company for the period
were as follows:
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
Unaudited Unaudited
Audited
Unaudited Unaudited
Audited
cpscpscps
$000
$000$000
Final dividend prior year11.00 10.75 10.75 72,536 60,122 60,122
Interim dividend paid
--
6.25 --34,955
11.00 10.75 17.00 72,536 60,122 95,077
NZ IFRS 16 Leases replaces NZ IAS 17 Leases and removes the classification of leases as either operating leases or finance leases – for the lessee – effectively treating
all leases as finance leases. Lessor accounting remains similar to current practice – i.e. lessors continue to classify leases as finance and operating. The standard is
effective for annual reporting periods beginning on or after 1 January 2019. The Company is not party to any material lease contracts and therefore the adoption of
this accounting standard has not had a material impact on the financial statements.
These unaudited condensed half year financial statements ('half year statements') of Infratil Limited have been prepared in accordance with NZ IAS 34 Interim
Financial Reporting and comply with IAS 34 Interim Financial Reporting. The half year statements have been prepared in accordance with the accounting policies
stated in the published financial statements for the year ended 31 March 2019 and should be read in conjunction with the previous annual report. Other than those
noted below, no changes have been made from the accounting policies used in the 31 March 2019 annual report which can be obtained from Infratil's registered
office or www.infratil.com. The presentation currency used in the preparation of these financial statements is New Zealand dollars, which is also the Company's
functional currency. Comparative figures have been restated where appropriate to ensure consistency with the current period.
Infratil Limited ('the Company') is a company domiciled in New Zealand and registered under the Companies Act 1993. The Company is listed on the NZX Main Board
('NZX') and Australian Securities Exchange ('ASX'), and is an FMC Reporting Entity in terms of Part 7 of the Financial Markets Conduct Act 2013.
Notes to the Financial Statements
For the 6 months ended 30 September 2019
(1) Accounting policies
The Company has adopted NZ IFRS 16 Leases from 1 April 2019.
All fully paid ordinary shares have equal voting rights and share equally in dividends and equity. At 30 September 2019 the Company held 775,000 shares as
Treasury Stock (30 September 2018: 775,000, 31 March 2019: 775,000).
(2) Nature of business
The Company is the ultimate parent company of the Infratil Group, owning infrastructure and utility businesses and investments in New Zealand, Australia and the
United States. The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is 5 Market Lane,
Wellington, New Zealand.
Page 5 of 10
Notes to the Financial Statements
For the 6 months ended 30 September 2019
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
UnauditedUnaudited
Audited
$000$000
$000
Administration and other corporate costs3,809 2,956 5,627
Management fee (to related party Morrison & Co Infrastructure Management)1217,233 11,397 23,951
Total other operating expenses21,042 14,353 29,578
(6) Taxation
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
UnauditedUnaudited
Audited
$000$000
$000
(Loss)/surplus before taxation24,948(5,383)186,207
Taxation on the (loss)/surplus for the period @ 28% tax rate6,986(1,507)52,138
Plus/(less) taxation adjustments:
Exempt dividends--(52,121)
Tax losses not recognised/(utilised)-145-
Subvention payment---
Loss offset to/(from) group company(6,771)-10,140
Timing differences not recognised---
(Under)/over provision in prior periods(3,172)-190
Other permanent differences41(206)(5,192)
Taxation expense/(credit)(2,917)(1,568)5,155
Current taxation (58)-2,750
Deferred taxation (2,859)(1,568)2,405
(2,917)(1,568)5,155
There was no income tax recognised in other comprehensive income during the period (30 September 2018: nil, 31 March 2019: nil)
(5) Net investment realisations and (impairments)
At 30 September 2019 the Company reviewed the carrying amounts of loans to Infratil Group companies to determine whether there is any indication that those
assets have suffered an impairment loss. The recoverable amount of the asset was estimated by reference to the counterparties' net asset position and ability to
repay loans out of operating cash flows in order to determine the extent of any impairment loss. As a result the Company did not impair any loans to Infratil Group
companies in the period (30 September 2018: nil, 31 March 2019: nil).
(4) Other operating expenses
Page 6 of 10
Notes to the Financial Statements
For the 6 months ended 30 September 2019
(7) Infrastructure bonds
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
UnauditedUnauditedAudited
$000$000$000
Balance at the beginning of the period1,127,560994,448994,448
Issued during the period268,332-246,249
Exchanged during the period--(51,050)
Matured during the period--(60,367)
Bond issue costs capitalised during the period(3,468)-(3,867)
Bond issue costs amortised during the period1,1381,0292,147
Balance at the end of the period1,393,562995,4771,127,560
Current148,961111,364148,857
Non-current fixed coupon 902,259652,771747,169
Non-current variable coupon110,617--
Non-current perpetual variable coupon231,725231,343231,534
Balance at the end of the period1,393,562995,4771,127,560
Repayment terms and interest rates:
IFT180 maturing in November 2018, 6.85% p.a. fixed coupon rate-111,418-
IFT200 maturing in November 2019, 6.75% p.a. fixed coupon rate68,50068,50068,500
IFT090 maturing in February 2020, 8.50% p.a. fixed coupon rate80,49880,49880,498
IFT220 maturing in June 2021, 4.90% p.a. fixed coupon rate93,88393,88393,883
IFT190 maturing in June 2022, 6.85% p.a. fixed coupon rate93,69693,69693,696
IFT240 maturing in December 2022, 5.65% p.a. fixed coupon rate100,000100,000100,000
IFT210 maturing in September 2023, 5.25% p.a. fixed coupon rate122,104122,104122,104
IFT230 maturing in June 2024, 5.50% p.a. fixed coupon rate56,11756,11756,117
IFT260 maturing in December 2024, 4.75% p.a. fixed coupon rate43,413-100,000
IFT250 maturing in June 2025, 6.15% p.a. fixed coupon rate100,00043,41343,413
IFT280 maturing in December 2026, 3.35% p.a. fixed coupon rate156,279--
IFT270 maturing in December 2028, 4.85% p.a. fixed coupon rate146,249-146,249
IFTHC maturing in December 2029, 3.50% p.a. variable coupon rate reset annually from December 2020112,053--
IFTHA Perpetual Infratil infrastructure bonds231,917231,917231,917
less: Bond issue costs capitalised and amortised over term(11,147)(6,069)(8,817)
Balance at the end of the period1,393,562995,4771,127,560
Fixed coupon
IFTHC bonds
Perpetual Infratil infrastructure bonds ('PIIBs')
The Company has 112,053,000 (30 September 2018: nil, 31 March 2019: nil) IFTHCs on issue at a face value of $1.00 per bond. Interest is payable quarterly on the
bonds. For the period to 15 December 2020 the coupon is fixed at 3.50% per annum (September 2018: nil, March 2019: nil). Thereafter the rate will be reset
annually at 2.5% per annum over the then one year bank rate for quarterly payments, unless Infratil's gearing ratio exceeds certain thresholds, in which case the
margin increases. These infrastructure bonds mature on 15 December 2029.
Throughout the period the Company complied with all debt covenant requirements as imposed by the bond Supervisor.
At 30 September 2019 the infrastructure bonds (including PIIBs) had a fair value of $1,393.6 million (30 September 2018: $973.9 million, 31 March 2019: $1,104.4
million).
The fixed coupon bonds the Company has on issue are at a face value of $1.00 per bond. Interest is payable quarterly on the bonds. 25 days prior to the maturity
date of the IFT090 series, Infratil can elect to convert all of the bonds in that series to equity by issuing the number of shares calculated by dividing the $1.00 face
value by 98% of the market price of an Infratil share. The market price is the average price weighted by volume of all trades of ordinary shares over the 10 business
days up to the fifth business day before the maturity date.
The Company has 231,916,000 (30 September 2018: 231,916,000, 31 March 2019: 231,916,000) PIIBs on issue at a face value of $1.00 per bond. Interest is payable
quarterly on the bonds. For the period to 15 November 2019 the coupon is fixed at 3.55% per annum (September 2018: 3.50%, March 2019: 3.55%). Thereafter the
rate will be reset annually at 1.5% per annum over the then one year bank rate for quarterly payments, unless Infratil's gearing ratio exceeds certain thresholds, in
which case the margin increases. These infrastructure bonds have no fixed maturity date. No PIIBs (September 2018: nil, March 2019: nil) were repurchased by
Infratil Limited during the period.
Page 7 of 10
Notes to the Financial Statements
For the 6 months ended 30 September 2019
(8) Financial instruments
Interest rates
Fair value hierarchy
(9) Reconciliation of net surplus with cash flow from operating activities
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
UnauditedUnaudited
Audited
$000$000$000
Net surplus/(loss)27,865(3,815)181,052
Add items not involving cash flows
(1,441)(2,468)(4,427)
Amortisation of deferred bond issue costs1,1381,0362,147
Movements in working capital
Change in receivables(315)(819)(968)
Change in trade payables549(209)1,190
Change in accruals and other liabilities538(1,995)(1,956)
Change in taxation and deferred tax(4,368)(3,976)2,405
Net cash inflow/(outflow) from operating activities23,966(12,247)179,443
(10) Commitments
There are no outstanding commitments (30 September 2018: nil, 31 March 2019: nil).
(11) Contingent liabilities
Movement in financial derivatives taken to the profit or loss
The Company has agreed to guarantee certain obligations of Infratil Trustee Limited, a related party, that is the Trustee to the Infratil Staff Share Scheme. The
amount of the guarantee is limited to the loans provided to the employees.
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2)
The analyses of financial instruments carried at fair value, by valuation method is below. The different levels have been defined as follows:
Infratil Finance Limited, a wholly owned subsidiary of the Company, has entered into bank facilities with a negative pledge arrangement, which, with limited
exceptions does not permit the Infratil Guaranteeing Group (‘IGG’) to grant any security over its assets. The IGG comprises entities subject to a cross guarantee and
includes Infratil Limited, Infratil Finance Limited and certain other wholly owned subsidiaries. The IGG does not incorporate the underlying assets of the Company’s
non-wholly owned subsidiaries and investments in associates. The IGG facilities also include restrictions over the sale or disposal of certain assets without bank
agreement. The Company's liability under the cross guarantee is limited to the amount of debt drawn under the IGG facilities, plus any unpaid interest and costs of
recovery. At 30 September drawn debt and accrued interest under the IGG facilities was $327.7 million (30 September 2018: nil, 31 March 2019: $70.2 million).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
Interest rate risk is the risk of interest rate volatility negatively affecting the Company's interest expense cash flow and earnings. The Company mitigates this risk by
issuing borrowings at fixed interest rates or entering into Interest Rate Swaps to convert floating rate exposures to fixed rate exposure. Borrowings issued at fixed
rates expose the Company to fair value interest rate risk which is managed by the interest rate profile and hedging.
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
The Company has interest rate swap derivatives that are classified as Level 2 and have a fair value liability of $6.5 million at 30 September 2019 (30 September 2018:
$9.9 million, 31 March 2019: $7.9 million).
Page 8 of 10
Notes to the Financial Statements
For the 6 months ended 30 September 2019
(12) Related parties
The Company has the following significant loans and investments to/(from)/in its subsidiaries:
6 months
ended
30 September
2019
6 months
ended
30 September
2018
Year
ended
31 March
2019
30 September
2019
30 September
2018
31 March
2019
Related party
UnauditedUnaudited
Audited
UnauditedUnaudited
Audited
$000$000$000$000$000$000
Advances
Infratil Finance
59,25724,58962,4891,762,705863,3071,151,010
Aotea Energy Holdings Limited
---(153,897)(153,897)(153,897)
Investments in
Infratil Investments Limited
87,66587,66587,665
Infratil 1998 Limited
12,00012,00012,000
Infratil Finance Limited
153,897153,897153,897
Infratil No. 1 Limited
78,02378,02378,023
Infratil PPP Limited
5,9425,9425,942
Infratil No. 5 Limited
248,001248,001248,001
(13) Events after balance date
Certain Infratil Directors have relevant interests in a number of companies with which Infratil has transactions in the normal course of business. A number of key
management personnel are also Directors of Group subsidiary companies and associates.
Interest income
Intercompany (loan)/advance/investment at
carrying value
Infratil Infrastructure Bond Offer
On 22 October 2019, Infratil announced the offer of a new series of unsecured unsubordinated Infrastructure Bonds, with a fixed coupon of 3.35% and a maturity
date of 15 March 2026. Infratil has also extended the closing date for its offer of IFTHC bonds (due 15 December 2029) to 13 November 2019. In both instances
Infratil may elect to close the offer earlier.
Dividend
On 12 November 2019, the Directors approved a partially imputed interim dividend of 6.25 cents per share to holders of fully paid ordinary shares to be paid on 13
December 2019.
Morrison & Co Infrastructure Management Limited ('MCIM') is the management company for the Company and receives management fees in accordance with the
applicable management agreement. MCIM is owned by H.R.L. Morrison & Co Group Limited Partnership ('MCO'). Mr Bogoievski is a director of Infratil and is a
director and Chief Executive Officer of MCO. Entities associated with Mr Bogoievski also have beneficial interests in MCO.
MCIM is owned by H.R.L. Morrison & Co Group Limited Partnership ('MCO'). Mr Bogoievski is a director of Infratil and is also a director and Chief Executive Officer of
MCO. Entities associated with Mr Bogoievski also have beneficial interests in MCO.
Page 9 of 10
Notes to the Financial Statements
For the 6 months ended 30 September 2019
Directors
Mark Tume (Chairman)
Marko Bogoievski
Alison Gerry
Paul Gough
Kirsty Mactaggart
Catherine Savage
Peter Springford
Company Secretary
Nick Lough
Registered Office - New ZealandRegistered Office - Australia
5 Market LaneC/- H.R.L. Morrison & Co Private Markets
PO Box 320 Level 37
WellingtonGovernor Phillip Tower
Telephone: +64 4 473 36631 Farrer Place
Internet address: www.infratil.comSydney
NSW, 2000
Telephone: +64 4 473 3663
Manager
Morrison & Co Infrastructure Management
5 Market Lane
PO Box 1395
Wellington
Telephone: +64 4 473 2399
Facsimile: +64 4 473 2388
Internet address: www.hrlmorrison.com
Share Registrar - New ZealandShare Registrar - Australia
Link Market ServicesLink Market Services
Level 11, Deloitte HouseLevel 12
80 Queen Street680 George Street
PO Box 91976Sydney
AucklandNSW 2000
Telephone: +64 9 375 5998Telephone: +61 2 8280 7100
E-mail: enquiries@linkmarketservices.co.nzE-mail: registrars@linkmarketservices.com.au
Internet address: www.linkmarketservices.co.nzInternet address: www.linkmarketservices.com.au
Auditor
KPMG
10 Customhouse Quay
PO Box 996
Wellington
Directory
Page 10 of 10
© 2019 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
Independent Review
Report
To the shareholders of Infratil Limited
Report on the condensed half year financial statements
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed half year
financial statements on pages 1 to 9 do not:
i. present fairly in all material respects the
company’s financial position as at 30
September 2019 and its financial performance
and cash flows for the 6 month period ended
on that date; and
ii. comply with NZ IAS 34 Interim Financial
Reporting.
We have completed a review of the accompanying
condensed half year financial statements which
comprise:
— the statement of financial position as at 30
September 2019;
— the statements of comprehensive income, changes
in equity and cash flows for the 6 month period
then ended; and
— notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for conclusion
A review of condensed half year financial statements in accordance with NZ SRE 2410 Review of Financial Statements
Performed by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited assurance engagement. The auditor
performs procedures, consisting of making enquiries, primarily of persons responsible for financial and accounting matters,
and applying analytical and other review procedures.
As the auditor of Infratil Limited, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit
of the annual financial statements.
Other than in our capacity as auditor we have no relationship with, or interests in, the company.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we might state to
the shareholders those matters we are required to state to them in the Independent Review Report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
shareholders as a body for our review work, this report, or any of the opinions we have formed.
2
Responsibilities of the Directors for the condensed half year financial statements
The Directors, on behalf of the company, are responsible for:
— the preparation and fair presentation of the condensed half year financial statements in accordance with NZ IAS 34
Interim Financial Reporting;
— implementing necessary internal control to enable the preparation of condensed half year financial statements that
are fairly presented and free from material misstatement, whether due to fraud or error; and
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the condensed half year financial
statements
Our responsibility is to express a conclusion on the condensed half year financial statements based on our review. We
conducted our review in accordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude whether anything has come to
our attention that causes us to believe that the condensed half year financial statements are not prepared, in all material
respects, in accordance with NZ IAS 34 Interim Financial Reporting.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance
with International Standards on Auditing (New Zealand). Accordingly we do not express an audit opinion on these
condensed half year financial statements.
This description forms part of our Independent auditor’s Report.
KPMG
Wellington
12 November 2019
---
Growing
on a strong
foundation
Infratil
Interim Report
2019
Infratil invests in infrastructure businesses that provide
essential services to communities, and individuals.
Shareholders receive good risk-adjusted returns if the
businesses deliver high-quality service, are efficient,
and risks are well managed.
Infratil’s investment approach entails:
• Finding infrastructure opportunities
where demand is growing and it is
possible to invest with a realistic
prospect of fair returns that
compensate for risks and endeavour,
and with sufficient scale to warrant
active management.
• Ensuring funding and investment
diversity so that changes in
circumstances can be withstood
and opportunities taken.
• Building long-term relationships
with co-investors that have aligned
interests and values.
The infrastructure investment market is
competitive and evolving. In particular,
ultra-low interest rates are causing
institutional investors to shift capital
from bonds into “bond-like” investments.
This market dynamic is impacting the
returns available on low-risk
infrastructure assets and increasing the
attractiveness of existing assets and
proprietary development opportunities.
1
Variable30 September 2019Comment
Net parent surplus$56.4 million
$2.1 million reduction on last year.
Underlying EBITDAF
1
from
continuing operations
2
$289.4 million
$4.8 million uplift.
Operating cash flow
$68.0 million
$74.7 million reduction due to a
$107.0 million working capital increase.
Capital expenditure$1,362.2 million
$1,060.6 million uplift.
Net debt$1,711.1 million
Net debt comprised 34.5% of Infratil’s
capital
3
.
Declared dividend
6.25 cents cash
and 1.50 cents
imputation credits
Unchanged from last year.
Financial
Highlights
For the six months to 30 September 2019
Infratil reconfirms its full year
EBITDAF
1
guidance range of
$655 million to $695 million.
This was the range provided in
May, later adjusted to incorporate
the 31 July 2019 Vodafone NZ
acquisition.
A highlight of the period was the
$1,029 million acquisition of 49.9% of
Vodafone NZ.
Funding for this and other investments
was provided by a mixture of debt, a
$400 million equity raise and cash asset
sale proceeds of $317 million.
Infratil’s portfolio of businesses provide
resilience and growth-potential and a
sound base for good shareholder returns.
In addition to contributions from
Vodafone NZ, Infratil anticipates
earnings and value growth from the
almost $3,000 million of announced
investment plans and activities of
Tilt Renewables, Longroad Energy, CDC
Data Centres and Wellington Airport.
1. Underlying EBITDAF is an unaudited non-GAAP (‘Generally Accepted Accounting Principles’) measure. Underlying EBITDAF does not have a
standardised meaning and should not be viewed in isolation, nor considered a substitute for measures reported in accordance with NZ IFRS,
as it may not be comparable to similar financial information presented by other entities. A definition of Underlying EBITDAF and reconciliation
of Underlying EBITDAF to Net profit after tax is provided in the Infratil Interim Results Presentation 2020.
2. Continuing operations excludes NZ Bus, Perth Energy, Snapper and ANU Student Accommodation. All of which have been sold.
3. Infratil parent and 100% subsidiaries.
2
Report of the
Chief Executive
In May Infratil participated in the
largest corporate transaction in
New Zealand for over a decade
when it acquired a 49.9% stake in
Vodafone NZ alongside global
infrastructure investor Brookfield
Asset Management.
The sale by Vodafone’s UK parent to
focus on opportunities closer to home
created a significant opportunity for
Infratil and Brookfield to invest in the
New Zealand telecommunications
sector.
There is no doubt that for Infratil the
success of this investment matters
and there is also no doubt that to be
successful Vodafone NZ must deliver
for its customers and NZ-Inc, as well
as providing a good workplace for
the skilled people it needs.
To deliver for customers, country,
employees and owners Vodafone NZ
must address both challenges and
opportunities. It needs to significantly
improve its customer service experience
and show leadership in the next
generation of mobile network technology.
It also needs to cope with a market which
is highly competitive where customers
expect to get more for less.
We believe that the expertise available
to Infratil and Brookfield and within
Vodafone NZ will be able to navigate
the risks and opportunities. The simple
metrics of the acquisition are
summarised below:
• $3,400 million was paid to Vodafone
Plc for its New Zealand operations.
$1,349 million was raised by Vodafone
NZ as bank debt. $1,029 million came
from Infratil and the same sum was
provided by Brookfield.
• Infratil anticipates a mid-teen equity
return on its $1,029 million investment.
This is based on Vodafone NZ
maintaining revenues while delivering
on new products, customer service,
platform rationalisation, and ongoing
cost savings.
• There are downside risks. The
business case is reliant on a rational
industry structure and behaviour and
sensible regulation. And improving
Vodafone NZ’s operations could take
longer than anticipated.
• There is upside potential too. The
valuation base-case assumes that
Vodafone’s investment in the next
generation mobile network
technology (“5G”) is value neutral.
That outcome will be better if the
additional capacity results in higher
revenues or more profitable services.
Vodafone NZ’s shareholders and
management are committed to
improving efficiency, to lifting customer
service and to meeting demand growth
through network investment. Nothing we
have seen since closing the acquisition
on 31 July 2019 has changed those
goals or materially changed our view
on the market potential or our ability
to deliver.
While the period under review may have
been dominated by the $1,029 million
investment into Vodafone NZ, several
other transactions were important for
Infratil, financially and in the context of
our goals and strategies:
• Infratil sold its interests in ANU
Student Accommodation, Snapper,
Perth Energy, and NZ Bus.
• Longroad Energy announced the
commencement of work on two
generation facilities in the USA with
a combined cost of approximately
$1,170 million. Tilt Renewables
announced that it will be building a
$277 million wind farm in Taranaki.
Wellington Airport published its
Master Plan intention to invest over
$600 million in facilities over the
next five years, and CDC laid out
plans for the construction and fit out
of additional data centre capacity at
its three campuses at a total cost of
over $600 million.
In addition to releasing capital, the
asset sales reflect our desire to simplify
Infratil’s portfolio and recognise that
those activities were unlikely to have
opportunities to grow to a material
scale. The new investments reflect
Infratil’s focus on growth infrastructure.
Infratil has been transitioning for
an extended period as we sought
to allocate capital to growth
infrastructure businesses which provide
the right balance of strong cash flows,
resilience and returns. Now the priority
is more about making the best of
Infratil’s existing businesses than about
repositioning capital.
Capital & Funding
Over the six months, the net debt of
Infratil and 100% subsidiaries as a
percentage of total capital (measured
by market value) increased to 34.5%
from 33.6%. This is consistent with Infratil
maintaining shadow “Investment Grade”
credit metrics.
However, a snapshot of the capital
structure only conveys that moment in
time. Of greater relevance is the support
of capital providers, which was
illustrated by the provision of $400 million
of new equity and $268 million of
long-term bond funding. This support is
greatly appreciated and reflects a long
history of delivering strong returns.
3
As important as the backing of the
debt and equity capital markets was
the support Infratil received from its
banks. They provided funding while
more permanent sources of capital
were arranged. The acquisition
funding was well led by ANZ Bank.
We received some criticism for not
undertaking the whole $400 million
equity raising on a pro-rata basis
(75 million shares were offered pro-rata
to existing shareholders, and 25 million
were sold by tender). We believe that
the best outcome for shareholders
meant taking a balanced approach
to both maximising value (i.e. selling
the shares at the highest price) and
maximising the right to participate. The
success of the equity raise is evident
and the Infratil shares have performed
well since the offer closed.
Earnings, Guidance &
Dividends
Infratil’s Net Parent Surplus was
$56.4 million down from $58.5 million
due to an adverse $29.8 million
swing in revaluations and realisations.
For the six month period the EBITDAF
1
of Infratil’s continuing operations were
$289.4 million from $284.6 million last
year. Excluding the contribution from
Vodafone NZ the main changes were
lower contributions from Trustpower
and Longroad arising from low hydro
generation in New Zealand and
the timing and terms of Longroad’s
development activity and asset sales.
The guidance for FY2020 given back
in May (later adjusted to reflect the
Vodafone NZ transaction) is reaffirmed.
31 March ($Millions)FY2020
Underlying
EBITDAF
1
$655m – $695m
Net interest$165m – $175m
Depreciation &
amortisation
$160m – $170m
Over the period the Infratil share
price rose from $4.17 to $4.92 and a
dividend of 11.0 cents per share (“cps”)
cash and 2.0 cps imputation credits
was paid. In addition, shareholders had
the opportunity to buy one share at
$4.00 for each 7.46 shares they owned.
Shareholders who did not take up this
offer received a payment equivalent
to 4.69 cps.
All told, a shareholder with 1,000
shares with a market value of
$4,170 as at 31 March 2019 who
reinvested the after-tax value of
the dividend and the rights
pay-out, would have had 1,032
shares as at 30 September with
a market value of $5,077.
Over the twenty five and a half years
since listing, Infratil has returned 18.0%
per annum compound after tax for a
shareholder who reinvested all dividends
and the value of rights.
1. Underlying EBITDAF is an unaudited non-GAAP
measure and is defined in the Infratil Interim
Results Presentation 2020.
4
Report of the
Chief Executive
The interim dividend will be 6.25 cps to be
paid on 13 December 2019 to shareholders
of record as at 29 November 2019. This will
carry 1.5 cps of imputation credits. For this
dividend, Infratil is re-instituting its
Dividend Reinvestment Plan (DRP) in
response to requests from shareholders.
Details of how to take advantage of
this are set out in a separate letter sent
to shareholders.
Dividends reflect financial
circumstances, prospects and cash
earnings. As previously signalled,
dividends on a per share basis were
expected to be flat for the FY2020
financial year, recognising that the
number of shares has increased 18%.
As Infratil starts to receive higher
cash earnings from its more recent
investments, we expect this to feed
through to allow Infratil to raise its
per share dividend.
People
During the period we welcomed
Catherine Savage to Infratil’s board
and said farewell to Humphry Rolleston
after thirteen years. Our CEO team
was boosted with Jason Paris at
Vodafone NZ and Dr Brett Robinson at
RetireAustralia. With the sale of Snapper
and NZ Bus we lose Miki Szikszai
and Zane Fulljames who we thank for
their contributions over the years.
Markets, Regulation, Change
Progress continues in New Zealand
towards a comprehensive policy
framework to reduce greenhouse gas
emissions. Policies to reduce emissions
are intrinsically debatable. Some people
believe in immediate unilateral action,
others prefer a multilateral approach to
ensure that all countries do their share
and incur similar net costs.
For investors in long-life infrastructure
assets long-term price signals are
critical. For this, the legislation and
associated institutions must be widely
supported and based on sound
principles. Otherwise, investors will be
discouraged by the risk of change.
The score-card of the Zero Carbon
Act as it has evolved is positive, but
not perfect. Government’s response
to expert advice to avoid a massive
intervention into the electricity sector
(already one of the greenest in the
world and getting greener) and to give
farmers five years to develop their own
emission reduction plan shows common
sense. But there is still no clarity about
how the pricing of emissions in
New Zealand will be linked to credible
offshore jurisdictions. While everyone
should want New Zealand’s emissions
to be reduced, the global reduction of
emissions will happen faster and at
much lower cost if capital is attracted
to where it can achieve the greatest
reduction for the least cost.
If, for instance, reducing emissions in
New Zealand were to cost $100 per
tonne while the same reduction could
be achieved for $5 elsewhere, it’s not
helping New Zealand or the other
country or the planet to misallocate the
investment to the higher cost project.
It also undermines the credibility of the
regime.
It has to be noted that while
New Zealand’s emerging emission
reduction plan isn’t perfect, it is far
better than the ad hoc approach
occurring in many other countries.
In addition to making submissions on
New Zealand’s emission reduction
policies, Infratil also submitted to the
Reserve Bank on its plans to raise the
level and hence cost of bank capital.
Unlike the formation of decarbonisation
policies, parliament and its elected
representatives are largely absent from
decisions affecting the financial sector
because the regulatory power has been
delegated to the Reserve Bank.
Prospects
Infratil’s goal is to provide
attractive cash and value returns
for its shareholders and a safe
investment for its bondholders.
The strategy to deliver on those
goals is based on owning a portfolio
of businesses where some provide
strong resilient cash income and value
protection, and others provide growth.
We feel that the portfolio is well
balanced and reflects our longer-term
perspective on sectors that will drive
New Zealand and other economies.
Infratil is supported by its shareholders
and their backing of the $400 million
capital raise is greatly appreciated.
By way of context, after this equity raise,
Infratil had (over the period since March
1994) received a net $745 million from its
shareholders as subscribed capital, paid
out cash dividends of $1,365 million, and
as at 30 September 2019 had a market
value of $3,245 million.
Marko Bogoievski
Chief Executive
5
6
Over the six month period
the Board oversaw Infratil’s
largest ever transaction, being
the acquisition of 49.9% of
Vodafone NZ for $1,029 million.
The role of the directors in a transaction
of this significance is material. While
management undertakes the relevant
analysis, negotiates transaction terms
and prepares documents, the Board
performs an overall review and must
ultimately decide if the transaction will
add value for Infratil’s shareholders.
Report of the
Board Chair
It will take several years before we know
if Vodafone NZ will provide the returns
we expect, but it is reasonable to infer
from the market response and specific
feedback that this was a transaction
worth undertaking.
Another question for directors relates to
the equity raising. As reported elsewhere
in this report, we had several priorities:
• When we announced that we had
agreed to acquire the interest in
Vodafone NZ we had to have
certainty of raising $400 million of
equity. This meant that the issue
had to be underwritten.
• The ideal outcome of any equity issue
is that it is taken up proportionately
by all shareholders.
Balancing the objectives of certainty,
equitable participation, and a fair price;
resulted in the Board supporting the
issue structure employed.
I would also note that for the Board this
transaction entailed the management
of a number of conflicts due to director’s
other interests. I am confident these
were dealt with in an appropriate and
professional manner.
I am satisfied that your Board did a
good job in a compressed timeframe
overseeing this transaction. The
feedback from shareholders and in
correspondence with key stakeholders
such as the NZ Shareholders Association,
has generally been positive.
We appreciate when shareholders show
serious interest in what we are doing. By
way of example I note below a summary
of a question I received at this year’s,
well attended, annual meeting. It was
asked by Tony Mitchell who is chair of
the NZ Shareholders Association.
Considerations of the Board included:
• What are the standalone merits
of the investment and how do they
compare with other opportunities?
• How does this large investment
fit with Infratil’s portfolio; is it
complementary and how does it
change the risk/return balance?
• Is the investment partner
compatible?
• How will asset sales, new equity and
debt change Infratil’s risk profile?
• What are the reputational
consequences?
• How will the equity raising impact
shareholders?
7
Q: A key role for boards is to manage
risk. What does the Infratil Board
consider to be the three key risks,
how do you manage them and
what do you do to check on their
management?
A: The critical risk is underperformance
by the companies Infratil has invested
in. The Board spends a lot of time
getting to understand what is going
on in those companies, their
circumstances, operations and capex
programmes. The Infratil Board does
not manage the companies, but it
needs to understand the key metrics
that will deliver success and what
risks they face.
A second key risk comes from the
structure of the balance sheet. The
big learning from the Global Financial
Crisis (GFC) was the need to focus
not so much on interest rate risk as
liquidity risk, especially the ability to
refinance debt when times get hard.
A lot of Board time focuses on liquidity
risk, the liquidity profile, and the ability
to withstand a GFC-type event.
The third risk relates to having the
best people available to manage
Infratil and the investee companies.
We are very focused on human
resources and depth.
It’s good for the Board to hear from
shareholders. While it is sometimes
not possible to satisfy all requests, we
do listen, and I encourage both our
shareholders and bondholders to get
in touch.
The interim dividend being paid in
December reflects feedback we have
received from shareholders. We are
maintaining the cash dividend and
restarting the dividend reinvestment plan.
Over the year, the Board has undergone
changes. We have increased the
number of directors to seven, appointing
Kirsty Mactaggart and Catherine
Savage. Humphry Rolleston retired after
thirteen years as an Infratil director.
As I said at the Annual Meeting, I thank
Humphry for his service to Infratil. He
often provided a unique perspective
on issues based on his extensive
experience in business. He challenged
proposals and the views of others, but
always played the ball and not the
man, and was unfailingly cordial. Infratil
has benefited from his perspective and
rigour and we enjoyed working with him.
New directors are recommended to the
Board by our Nominations Committee
comprising Alison Gerry, Paul Gough
and myself. We use a formal search and
appointment process. New directors
are put to a vote of shareholders at
the following Annual Meeting. Director
terms are for three years when they
need to stand for re-election if they
wish to continue in the role. At this year’s
Meeting Alison Gerry, Kirsty Mactaggart
and Catherine Savage were subject
to shareholder vote and each received
over 99% support.
Infratil is fortunate in that it has quite
stable ownership. Our issue of nearly
100 million new shares went mostly to
existing shareholders but about a third
have gone to new parties. We intend
to justify your support in Infratil; and on
behalf of the board and management
thank all those who participated in
providing this capital.
Mark Tume
Chair
8
Infratil’s
Financial Trends
Infratil Assets
The goal of asset allocation is to achieve a
balance between core and growth assets;
ones that provide robust income and those
that will generate value growth. This
objective is reflected in the evolving
portfolio of businesses.
The values used in this graph were extracted
from annual reports.
Capital Investment
Infrastructure is intrinsically capital intensive.
Only by deploying capital is it possible to
generate compound growth.
Over the last ten years, $5,455 million was
invested. $3,388 million was undertaken by
Infratil owned businesses growing their own
activities and $2,067 million was allocated
to acquisitions.
On these two pages are graphs of Infratil’s
assets, capital investment, funding, earnings,
cash flow, and dividends over the decade;
along with brief explanations. For the Financial
Year 2020 the figures are either as at
30 September 2019 or a mid-point estimate
of the full year outcome.
Infratil's Assets
0
10
20
30
40
50
60
70
80
90
100
%
Infratil's Capital Structure
0
5
10
15
0
100
200
300
400
500
600
700
2018
Dividend, cents per share$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
Capital Investment
0
Wellington Airport
Other
Vodafone NZ
Tilt Renewables
Trustpower
2018
$Millions
Data/Telco
Other
Social
Transport
Energy
2020
2020 20182019 2011 2012 2013 2014 20172016 2015
20182019 2011 2012 2013 2014 201720162015
100
200
300
400
500
600
700
Perpetual bonds
Equity (market value)
Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
2020
200
400
600
0
800
1,000
1,200
1,400
2020 2019 2011 2012 2013 2014 2017 2016 2015
0
500
1,000
1,500
2,000
2,500
3,500
3,000
4,000
5,000
4,500
$Millions
RetireAustralia
Wellington Airport
Trustpower
Longroad Energy
Vodafone NZ
Tilt Renewables
Other/Sold
2020 20182019 2011 2012 2013 2014 20172016 2015
2019 2011 2012 2013 2014 2017 2016 2015
CDC
Infratil's Assets
0
10
20
30
40
50
60
70
80
90
100
%
Infratil's Capital Structure
0
5
10
15
0
100
200
300
400
500
600
700
2018
Dividend, cents per share$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
Capital Investment
0
Wellington Airport
Other
Vodafone NZ
Tilt Renewables
Trustpower
2018
$Millions
Data/Telco
Other
Social
Transport
Energy
2020
2020 20182019 2011 2012 2013 2014 20172016 2015
20182019 2011 2012 2013 2014 201720162015
100
200
300
400
500
600
700
Perpetual bonds
Equity (market value)
Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
2020
200
400
600
0
800
1,000
1,200
1,400
2020 2019 2011 2012 2013 2014 2017 2016 2015
0
500
1,000
1,500
2,000
2,500
3,500
3,000
4,000
5,000
4,500
$Millions
RetireAustralia
Wellington Airport
Trustpower
Longroad Energy
Vodafone NZ
Tilt Renewables
Other/Sold
2020 20182019 2011 2012 2013 2014 20172016 2015
2019 2011 2012 2013 2014 2017 2016 2015
CDC
9
Underlying EBITDAF
1
Over the decade the combined earnings
of the core businesses Trustpower/Tilt/
Wellington Airport rose 38% (3.2% per
annum) while the contribution of the rest
increased 707% (23.2% per annum).
The level of earnings of recent years reflects
recycling capital (selling from mature higher
earnings companies and reinvesting into
businesses at an earlier stage of their
commercial lives) and because Infratil only
accounts for its share of the after tax profits
of RetireAustralia, CDC and Longroad, as
they are not consolidated.
Operating Cash Flows & Dividends
Robust cash earnings have supported the
increase in the dividend to Infratil’s
shareholders. Recent investments resulted
in guidance that dividends would be flat for
two years with growth expected to resume
as Vodafone NZ provides cash income and
imputation credits.
Operating cash flows comprise EBITDAF
1
less
payments of interest and tax and any
adjustment required for changes in working
capital (which can be up or down).
Infratil Funding
The use of debt is constrained by Infratil’s
policy of maintaining credit metrics that are
broadly consistent with an Investment Grade
credit rating (Infratil is not credit rated)
and with maintaining availability of funds for
investment opportunities.
Infratil's Assets
0
10
20
30
40
50
60
70
80
90
100
%
Infratil's Capital Structure
0
5
10
15
0
100
200
300
400
500
600
700
2018
Dividend, cents per share$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
Capital Investment
0
Wellington Airport
Other
Vodafone NZ
Tilt Renewables
Trustpower
2018
$Millions
Data/Telco
Other
Social
Transport
Energy
2020
2020 20182019 2011 2012 2013 2014 20172016 2015
20182019 2011 2012 2013 2014 201720162015
100
200
300
400
500
600
700
Perpetual bonds
Equity (market value)
Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
2020
200
400
600
0
800
1,000
1,200
1,400
2020 2019 2011 2012 2013 2014 2017 2016 2015
0
500
1,000
1,500
2,000
2,500
3,500
3,000
4,000
5,000
4,500
$Millions
RetireAustralia
Wellington Airport
Trustpower
Longroad Energy
Vodafone NZ
Tilt Renewables
Other/Sold
2020 20182019 2011 2012 2013 2014 20172016 2015
2019 2011 2012 2013 2014 2017 2016 2015
CDC
Infratil's Assets
0
10
20
30
40
50
60
70
80
90
100
%
Infratil's Capital Structure
0
5
10
15
0
100
200
300
400
500
600
700
2018
Dividend, cents per share$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
Capital Investment
0
Wellington Airport
Other
Vodafone NZ
Tilt Renewables
Trustpower
2018
$Millions
Data/Telco
Other
Social
Transport
Energy
2020
2020 20182019 2011 2012 2013 2014 20172016 2015
20182019 2011 2012 2013 2014 201720162015
100
200
300
400
500
600
700
Perpetual bonds
Equity (market value)
Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
2020
200
400
600
0
800
1,000
1,200
1,400
2020 2019 2011 2012 2013 2014 2017 2016 2015
0
500
1,000
1,500
2,000
2,500
3,500
3,000
4,000
5,000
4,500
$Millions
RetireAustralia
Wellington Airport
Trustpower
Longroad Energy
Vodafone NZ
Tilt Renewables
Other/Sold
2020 20182019 2011 2012 2013 2014 20172016 2015
2019 2011 2012 2013 2014 2017 2016 2015
CDC
Infratil's Assets
0
10
20
30
40
50
60
70
80
90
100
%
Infratil's Capital Structure
0
5
10
15
0
100
200
300
400
500
600
700
2018
Dividend, cents per share$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
Capital Investment
0
Wellington Airport
Other
Vodafone NZ
Tilt Renewables
Trustpower
2018
$Millions
Data/Telco
Other
Social
Transport
Energy
2020
2020 20182019 2011 2012 2013 2014 20172016 2015
20182019 2011 2012 2013 2014 201720162015
100
200
300
400
500
600
700
Perpetual bonds
Equity (market value)
Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
2020
200
400
600
0
800
1,000
1,200
1,400
2020 2019 2011 2012 2013 2014 2017 2016 2015
0
500
1,000
1,500
2,000
2,500
3,500
3,000
4,000
5,000
4,500
$Millions
RetireAustralia
Wellington Airport
Trustpower
Longroad Energy
Vodafone NZ
Tilt Renewables
Other/Sold
2020 20182019 2011 2012 2013 2014 20172016 2015
2019 2011 2012 2013 2014 2017 2016 2015
CDC
1. Underlying EBITDAF and EBITDAF are unaudited non-GAAP measures and are defined in the Infratil Interim Results Presentation 2020.
10
Infratil’s Financial
Performance & Position
Consolidated Results
Net operating earnings rose
$22.1 million, but interest, depreciation,
amortisation, and tax increased
$4.9 million and there was an adverse
movement in revaluations of $29.8 million.
Six months ended 30 September ($Millions)20192018
Trustpower$107.1$129.6
Tilt Renewables$75.4$72.5
Longroad Energy$17.8$51.1
Wellington Airport$50.4$49.6
CDC Data Centres$26.3$17.7
Vodafone NZ$39.1-
RetireAustralia$2.9$5.0
Parent/Other($29.6)($40.9)
To ta l$289.4$284.6
Discontinued operations$17.0$41.6
Underlying EBITDAF
1
An explanation of the sources of
these figures is provided under the
next table.
Trustpower’s earnings last year
benefitted from a period of
extraordinary hydrology and
wholesale market electricity prices.
This year generation was below
average due to a plant outage
and higher costs which were not
passed on.
Longroad’s relatively volatile
earnings largely reflect the different
accounting treatment and timing
of project development gains which
depend on the circumstances of
each sale.
CDC’s higher earnings reflected
demand growth and past investment
in capacity.
Six months ended 30 September ($Millions)20192018
Operating revenue$802.4$736.2
Operating expenses($498.5)($454.4)
Net operating earnings$303.9$281.8
Depreciation & amortisation($75.2)($83.7)
Net interest($85.6)($72.1)
Tax expense($46.1)($46.2)
Revaluations & realisations($17.2)$12.6
Discontinued operations$8.3$13.7
Net profit after tax$88.1$106.1
Minority earnings($31.7)($47.6)
Net parent surplus$56.4$58.5
Infratil provides audited financial
statements annually for years to
31 March. The six month interim
accounts to 30 September are reviewed
by Infratil’s auditors but not audited.
A summary of the interim accounts is
provided in this report. The full financial
statements are available by contacting
Infratil or on its website.
$39.1 million was Infratil’s share of
Vodafone NZ’s EBITDAF
1
for the two
month period following acquisition.
In 2018, Parent costs included a
$29.4 million accrual against anticipated
management performance fees. This
year the accrual is $12.8 million.
For 2019 the average exchange rates were
NZ$/A$0.9468 and NZ$/US$0.6557 (0.9222
and 0.6861 in 2018).
1. Underlying EBITDAF and EBITDAF are unaudited non-GAAP measures and are defined in the Infratil Interim Results Presentation 2020.
11
Breakdown of Consolidated Results
Six months ended 30 September 2019
$Millions
Infratil’s
share
Underlying
EBITDAF
1
D&AInterestTa x
Revaluations
adjustmentsMinorities
Infratil share
of earnings
Trustpower51.0%$107.1($19.8)($17.0)($17.1)($14.6)($19.2)$19.4
Tilt Renewables65.3%$75.4($41.8)($13.6)($4.2)($3.2)($4.3)$8.3
Longroad Energy40.0%$17.8-----$17.8
Wellington Airport66.0%$50.4($13.4)($12.5)($7.2)$0.3($7.8)$9.8
CDC48.2%$26.3---$53.2-$79.5
Vodafone NZ49.9%$39.1---($42.3)-($3.2)
RetireAustralia50.0%$2.9---$3.6-$6.5
Parent/Other($29.6)($0.2)($42.5)($17.6)$0.3-($89.6)
$289.4($75.2)($85.6)($46.1)($2.7)($31.3)$48.5
Perth Energy80.0%$12.1($2.6)($1.1)($4.9)($26.6)($0.4)($23.5)
NZ Bus100.0%$5.9($7.1)-$0.6($32.0)-($32.6)
ANU Student
Accommodation50.0%$0.5---$66.1-$66.6
Snapper100.0%($1.5)($0.1)--($1.0)-($2.6)
To ta l$306.4($85.0)($86.7)($50.4)$3.8($31.7)$56.4
Infratil consolidates companies when it owns more than 50%. At CDC, Vodafone NZ, and RetireAustralia the EBITDAF
1
column
shows Infratil’s share of the relevant EBITDAF
1
and the Revaluations/Adjustments column adds Infratil’s share of costs and
revaluations. For Longroad Energy only Infratil’s share of net surplus after tax is shown.
Commentary on each businesses’ earnings and financial circumstances are provided later in this report.
Six months ended 30 September 2018
$Millions
Infratil’s
share
Underlying
EBITDAF
1
D&AInterestTa x
Revaluations
adjustmentsMinorities
Infratil share
of earnings
Trustpower51.0%$129.6($24.9)($13.4)($25.2)($1.3)($32.3)$32.5
Tilt Renewables58.4%$72.5($47.8)($16.2)($6.6)$7.3($4.3)$4.9
Longroad Energy40.0%$51.1-----$51.1
Wellington Airport66.0%$49.6($10.9)($8.7)($8.8)$1.3($9.2)$13.3
CDC48.2%$17.7---$12.5-$30.2
RetireAustralia50.0%$5.0---($15.3)-($10.3)
Parent/Other($40.9)($0.1)($33.8)($5.6)$5.3$0.3($74.7)
$284.6($83.7)($72.1)($46.2)$9.8($45.5)$47.0
Perth Energy80.0%$25.2($3.0)($1.1)($9.0)-($2.1)$10.0
NZ Bus100.0%$13.2($12.8)($0.1)($0.1)($1.7)-($1.5)
ANU Student
Accommodation50.0%$5.5-----$5.5
Snapper100.0%($2.3)($0.2)----($2.5)
To ta l$326.2($99.7)($73.3)($55.3)$8.1($47.6)$58.5
1. Underlying EBITDAF and EBITDAF are unaudited non-GAAP measures and are defined in the Infratil Interim Results Presentation 2020.
12
Infratil’s Financial
Performance & Position
Six months ended 30 September
$Millions20192018
Trustpower$16.4$11.4
Tilt Renewables$117.3$105.6
Longroad Energy$5.9$71.1
Wellington Airport$32.0$44.8
CDC Data Centres$126.5$20.7
Vodafone NZ$1,029.6-
RetireAustralia$13.5$15.9
Other/Parent$18.1$10.0
Discontinued operations$2.9$22.1
To ta l$1,362.2$301.6
$Millions
30 September
2019
31 March
2019
Trustpower$1,321.1$1,055.9
Tilt Renewables $834.4$720.9
Perth Energy-$89.3
Longroad Energy $3.5$10.8
Wellington Airport$457.2$481.5
NZ Bus-$166.2
CDC Data Centres $660.8$555.3
Vodafone NZ$1,026.4-
RetireAustralia$368.5$290.4
ANU Student Accommodation -$108.2
Other$189.5$105.8
To ta l$4,861.4$3,584.2
Capital Expenditure &
Investment
For consolidated subsidiaries the table
shows the total capital investment.
For Longroad the figure is the amount
of cash Infratil provided during the
period. For CDC and RetireAustralia it
shows 48% and 50% respectively of their
capital investment. The Vodafone NZ
sum is Infratil’s investment amount.
The “Other/Parent” investment includes
$0.4 million advanced to Clearvision
and $17.6 million advanced to Infratil
Infrastructure Property (IIP).
Not shown in the table are Infratil’s
incremental $61.3 million investment
into RetireAustralia, and $8.1 million
investment into CDC.
Infratil’s Assets
The values of Trustpower and
Tilt Renewables reflect their NZX
share prices on the relevant dates.
The other values are book values
excluding deferred tax when capital
gains tax is not anticipated.
It should be noted that accounting
book values are not necessarily the
same as market values. For instance,
Wellington Airport’s book value
represents approximately 11 times
that company’s EBITDAF
1
and a market
value would almost certainly be higher.
As at 31 March 2019, the independent
market values of Infratil’s investment in
Longroad and CDC were respectively
$123 million and $889 million.
Over the period Infratil received
consideration of $359 million from asset
sales including $135 million which is the
provisional NZ Bus proceeds. $93 million
of this was received as cash with the
balance being a $42 million loan (this
asset is included in “Other”). The final
NZ Bus proceeds are subject to an
earnout mechanism.
$1,029.6 million was invested in Vodafone
NZ, $8.1 million in CDC, $61.3 million in
RetireAustralia, and $17.6 million in Infratil
Infrastructure Property. Infratil advanced
$5.9 million to Longroad and received
back $21.3 million as capital returns and
distributions.
Over the period, an independent
valuation of IIP’s properties resulted
in a $25.2 million uplift. This, and the
additional funding, resulted in Infratil’s
book value of this investment being
$73.3 million as at 30 September 2019.
For 30 September exchange rates of NZ$/A$ 0.9287 and NZ$/US$ 0.6277 were used
(0.9574 and 0.6785 for 31 March).
1. EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
13
$Millions
6 months to
30 September
2019
6 months to
30 September
2018
Underlying EBITDAF
1
$289.4$284.6
Net interest($83.6)($69.2)
Tax paid($38.3)($43.4)
Working capital($107.0)($39.9)
Discontinued operations$7.5$10.6
Operating cash flow$68.0$142.7
$Millions
30 September
2019
31 March
2019
Net bank debt*$306.4$44.3
Dated Infrastructure Bonds$1,172.8$904.5
Perpetual bonds$231.9$231.9
Equity at market value$3,244.9$2,332.2
$4,956.0$3,512.9
Dated debt/Capital29.8%27.0%
Total debt/Capital34.5%33.6%
For 30 September exchange rates of NZ$/A$ 0.9287 and NZ$/US$ 0.6277 were used
(0.9574 and 0.6785 for 31 March).
* Infratil parent and 100% subsidiaries.
Consolidated Operating
Cash Flow
The increase in working capital
reflects the payment of $102.5 million
in management fees which were
outstanding as at 31 March 2019.
As at 30 September 2019 Infratil and
100% subsidiaries had $873.0 million of
bank facilities drawn to $337.0 million.
Infratil guaranteed letters of credit
issued by Longroad Energy which
as at 30 September 2019 amounted
to $83.2 million (31 March 2019
$85.0 million). That is the only credit
support provided by Infratil to any
less than 100% owned business.
Over the six months no bonds matured.
Infratil issued two new bonds raising
$268.3 million:
• $112,053,000 to December 2029.
3.50% per annum initial coupon with
the coupon reset annually from
15 December 2020 to yield 2.50%
over the one year bank swap rate.
• $156,279,000 to December 2026.
3.35% per annum fixed coupon.
During the period Infratil issued new
shares. 100 million were issued as a part
of the Vodafone NZ transaction raising
$391.3 million (net of brokerage). The
issue was structured to provide Infratil
with certainty of proceeds (via
underwriting), an opportunity for all
shareholders to participate, a high issue
price (to minimise dilution), and a strong
after-market.
Capital of Infratil and 100%
subsidiaries
• 25,000,000 shares were sold by tender.
• 29,505,098 shares were offered
pro rata to institutional shareholders.
27,805,098 were taken up and
1,700,000 sold by tender.
• 45,487,130 shares were offered
pro rata to retail shareholders.
30,400,000 were taken up and
15,087,130 sold by tender.
Shares not taken up in the pro rata
issue were all tendered at $4.35, with
the 35 cents paid to the shareholder
which had not taken up the entitlement.
In addition to the above, 265,267
shares were issued to management of
subsidiaries as a part of incentive plans.
Excluding treasury stock, over the six
month period Infratil’s shares on issue
rose from 558,503,166 to 659,535,661.
The share price rose from $4.17 to $4.92.
1. Underlying EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
14
Trustpower
Year ended 31 March
Six months ended 30 September
30 September
2019
30 September
2018
31 March
2019
Retail electricity sales1,025GWh1,067GWh1,845GWh
Generation989GWh1,166GWh1,994GWh
Av. market electricity price11.7c/kwh8.3c/kwh12.5c/kwh
Electricity accounts266,000270,000267,000
Gas accounts40,00038,00039,000
Telecommunication accounts100,00091,00096,000
Customers with multiple services111,000102,000107,000
EBITDAF
3
$107.1m$129.6m$222.2m
Net profit after tax$38.7m$64.9m$92.7m
Investment spend $16.4m$11.4m$27.7m
Net debt $636.0m$487.3m$562.1m
Infratil’s holding value
4
$1,321.1m$995.2m$1,055.9m
Over the last five years, low electricity
prices resulted in approximately 5% of
national capacity being decommissioned
(largely high cost gas-fired generation)
while less than 1% of new capacity was
added. Almost the mirror image of what
happened 2009-2014. Now higher prices
are incentivising construction of wind
and geothermal generation capacity.
Trustpower is undertaking feasibility
analysis of a number of geothermal and
smaller-scale hydro projects.
While the recent low level of investment
in new generation capacity was mainly
due to low electricity prices, construction
would also have been held back pending
release of two government reports which
could have been negative for the sector.
One was the Electricity Price Review
undertaken by a Minister appointed
panel and the other was the Interim
Climate Change Committee report on
decarbonising New Zealand’s electricity
generation.
In the event, both endorsed the
structure of the industry and provided
recommendations which sensibly
balanced costs and benefits. While
few industries enjoy such reviews, it’s a
shame they are not used more widely
as many industries’ “locked and loaded”
regulatory structures would benefit from
re-evaluation. For no obvious reason
the electricity industry regularly gets a
regulatory spring clean and seems the
better for it.
Trustpower had a disappointing
period reflecting low generation,
high wholesale electricity
prices, and higher operating
costs which were not passed on
to fixed tariff retail customers.
Customers on fixed tariff terms tend to
be insulated against wholesale market
price volatility if it just reflects hydrology
or some other short-term supply
constraint. But it now appears that the
period of national generation over-
capacity is ending and this may mean
that higher and more volatile wholesale
prices are not a brief phenomenon and
will raise end user prices.
0
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25
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200
300
400
500
600
700
800
2014
20152016
2017
2018
2019
2014
20152016
2017
2018
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Generation GWh
($Millions)
Price c/kwh
GWhc/kwh
0
2000
4000
6000
8000
10000
12000
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0
100
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2014
20152016
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Generation GWh
($Millions)
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GWhc/kwh
0
2000
4000
6000
8000
10000
12000
Quarterly Generation and NZ market price
1
Quarterly generation value
2
1. The graph shows Trustpower’s quarterly generation over the last five years and the wholesale market price of
that generation.
2. This graph shows the value of Trustpower’s generation (volume times price). Which shows the recent heightened
volatility and higher value, reflecting the emerging tighter supply-demand situation. Of course, whether
Trustpower actually benefits from higher prices depends on whether they are passed on to end users.
3. EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
4. Share market value.
15
CEO Vince Hawksworth in
Trustpower’s energy
control centre in Tauranga.
Coleridge Power Station
links Lake Coleridge with
the Rakaia River.
16
Tilt Renewables
EBITDAF
1
was up due to higher
Australian generation with
Salt Creek operating for a full
period and less South Australian
system constraints (approximately
20GWh of generation was
curtailed, half the level of last
year) and higher prices on output
not sold on contract.
Tilt’s proportionately smaller New Zealand
generation capacity saw 8% less output
due to lighter winds.
While full year earnings guidance
increased slightly, the story of the
period was largely about progress at
Tilt’s generation projects (Tilt has 636MW
of operational capacity, 469MW under
construction, and a further 3,400MW in
its development pipeline).
Dundonnell, Victoria. 336MW,
124 turbines, A$560 million cost.
On track and on budget for
commissioning later in calendar
2020. The construction project is
being managed by Vestas (turbines
and towers) and AusNet (transmission
connection), with Tilt participating
through overall management. Tilt’s
development and construction
expertise is reflected in its track
record of bringing its development
projects in on time and on budget.
Waipipi, Taranaki. 133MW, 31 turbines,
NZ$277 million cost. Construction is
now underway following arrangement
of $241 million of debt funding, with the
NZ$36 million balance provided by Tilt.
All of the wind farm’s 455GWh of annual
generation has been sold to Genesis
Energy to 2041.
Waipipi is forecast to provide annual
EBITDAF
1
of $22 million a year and free
cash flow after paying debt interest and
principal of $9 million per annum. The
advantageous economics of this project
reflect both the low financing costs
and the technological steps taken by
turbine manufacturer Siemens Gamesa,
which is illustrated by a comparison of
Tilt’s oldest and newest wind farms.
3,400MW of other wind, solar, and
storage projects are at various stages
of development across Australia and
New Zealand.
Snowtown II, South Australia. 270MW,
90 turbines, A$400 million construction
cost. This wind farm was commissioned
in 2014 and with a proven generation
record and long-term off-take and
maintenance agreements is a very
low risk asset and source of revenue.
Reflecting this, Tilt is reviewing its
ownership of this facility to ascertain
if the capital should be redeployed
into growth opportunities. The first
stage of the review involved arranging
a A$616 million five-year loan which
is secured against the wind farm’s
income and value. This enabled the
repayment of A$483 million of Tilt’s
original demerger debt and provided
A$86 million of funds for other uses.
Year ended 31 March
Six months ended 30 September
All Australian $ unless noted
30 September
2019
30 September
2018
31 March
2019
NZ generation328GWh358GWh659GWh
Av. NZ electricity price (NZ$)7.0c/kWh7.3c/kWh6.8c/kwh
NZ revenue (NZ$)$22.9m$26.1m$45.0m
Australian generation734GWh712GWh1,395GWh
Av. Aust electricity price11.1c/kwh10.2c/kwh10.8c/kwh
Australian revenue$81.7m$72.5m$151.3m
EBITDAF
1
$71.4m$66.9m$134.8m
Net profit after tax$11.9m$8.5m$12.2m
Investment spend $117.3m$46.7m$127.1m
Net debt $355.9m$568.5m$346.3m
Infratil’s holding value (NZ$)
2
$834.4m$427.8m$720.9m
1. EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
2. Share market value. Since 30 September 2018 Infratil has invested $54.3 million increasing its shareholding from
58.4% to 65.3%.
Turbines
Turbine
capacity
Blade
length
Tower
height
Annual
output
Tararua I
19981030.66MW23.5m40m245GWh
Waipipi
2021314.3MW65m95m455GWh
17
Dundonnell wind
farm construction.
Waverley iwi turning
soil for the Waipipi
wind farm.
18
Longroad
Energy
During the six months Longroad
started construction on two new
renewable generation projects,
Prospero I and El Campo, and
completed the sale of its interest
in the Rio Bravo wind project and
sold a 50% interest in El Campo.
An outline of each of Longroad’s
projects is set out on the right.
As at 30 September 2019, Longroad had
provided Infratil with a net $12.7 million
of cash (i.e. Longroad has paid out more
than Infratil has put in) and it owned
684MW of solar and wind generation,
has two projects under construction
with Longroad owning 100% of
one (Prospero I) and 50% of the other
(El Campo), and was the contracted
manager of 2,292MW of generation
plant, about half for third parties.
The two new projects mean that since
31 March 2019, Longroad has started
construction on 622MW of generation
against a full year goal of 800MW, and
approximately 700MW targeted in FY2021.
The USA remains favourable for the
development of renewable generation.
US corporates are active buyers of
“green” electricity on long-term
contracts. Low cost debt and tax-
efficient funding is available to credible
counterparties. Many states are
supportive of initiatives to increase
renewable electricity generation which,
together with falling plant cost, is
balancing lower Federal support.
These features make for a very active
and progressive market, and Longroad’s
credentials as a reliable successful
developer ensures it has wide access
to transactions and counterparties.
The development and operational
experience also helps with understanding
opportunities in other developed markets.
NZ$ values are for the relevant six and twelve month period.
The US$ periods are as noted below.
30 September
2019
31 March
2019
Infratil aggregate investment amount$159.9m$154.0m
Infratil capital received back$172.6m$151.3m
Infratil share of accounting gains$17.8m$46.4m
The book value of Infratil’s holding$3.5m$10.8m
Period EBITDAF
1
US$32.9mUS$36.3m
Period net surplus before tax
2
US$17.4mUS$59.5m
Period operating cash flow
2
US$92.9m
Owned generation684MW684MW
Managed generation2,292MW1,236MW
Employees101 people90 people
1. EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
2. Longroad has a 31 December financial year. The US$ figures in the 31 March column are for the year ended
31 December 2018 while those for 30 September 2019 are for the nine months period to that date.
ProjectCapacityStatus
Phoebe solar. Texas315MWThis project was sold in FY2019.
Rio Bravo wind. Texas238MWThe project was sold with settlement in FY2019
and FY2020. Longroad has an ongoing asset
management role.
Prospero I solar. Texas379MWConstruction has started on this US$419 million
project with output sold to Shell.
El Campo wind. Texas243MWConstruction of this US$335 million project is
underway. 194MW of the output has been sold
to Crown Holdings and DaVita Industries.
50% of the equity has been sold to two Danish
pension funds.
Longroad has an ongoing asset management role.
Federal Street solar.
Various locations
245MW100% ownership. Longroad manages this generation
which provides stable earnings.
Minnesota. Wind80MW100% ownership. Longroad manages this generation
which provides stable earnings and the potential for
repowering and sale.
Milford wind. Utah309MW100% ownership. Longroad manages this generation
which provides stable earnings.
Over the period, Infratil advanced
$5.9 million to Longroad, received back
$21.3 million, and accounted for a net
contribution of $17.8 million being
Infratil’s share of Longroad’s net surplus
and fees. As at 30 September 2019, Infratil
guaranteed $83.2 million of letters of
credit issued by Longroad ($85.0 million
as at 31 March 2019).
19
Remote management
of wind and solar
generation across the
entire United States
is undertaken from
Longroad’s control
operation in Portland
Maine.Prospero I Solar Farm.
20
Wellington
Airport
Traffic at Wellington Airport was
flat over the six months as airlines
paired capacity and increased
loadings. As has happened in the
past, consolidation is following
a period of substantial growth.
Wellington’s traffic is a mixture of
domestic-trunk, regional, short-haul
international, and a sliver of long-haul
which is noted below. The flat overall
result included solid regional
performance, a mixture on international,
and weak trunk traffic. The changed
mix of passengers resulted in a lower
average aeronautical charge.
While relatively positive regional traffic
mainly reflects airline decisions, the new
airport hotel also contributed. Four
out of five journeys between the regions
around Wellington (Nelson, Napier,
New Plymouth, etc.) and international
destinations go through Auckland
or Christchurch. Offering travellers a
pleasant overnight stay at the Rydges
Hotel at the start and end of their
journeys will encourage some to change
their itineraries.
Wellington’s only wide-bodied long-haul
service received a fillip during the period
with Singapore Airlines announcing
the upgrade of its four times a week
Wellington-Melbourne-Singapore B777
service to five times a week with a
new A350. Illustrating the benefits of
the latest generation aircraft, its carbon
footprint per passenger is estimated
to be 20% lower than that of the older
aircraft.
For Wellington Airport, the main event of
this period was publication of the draft
2040 Master Plan. This measures the
Airport’s physical infrastructure against
forecast demand growth and formulates
what is required to ensure compatibility.
The exercise identified the need for over
$1,000 million to be invested over the
next decade; buying land, expanding
the terminal and airfield, and resilience
measures such as replacing the seawall
which protects the runway.
Preparation is underway with serious
work expected to start later in 2020
after further analysis and consultation.
The Plan has attracted some interest
from those concerned about aviation
related carbon emissions. An efficient
capable airport doesn’t create demand
for air travel any more than hospitals
make people sick. As illustrated by
the Singapore Airlines’ A350, better
equipment and more efficient operations
significantly reduces waste and emissions.
Wellington Airport is working to
reduce its own emissions and hopes
to contribute to improving the public
transport links with the city. It has
also undertaken its first GRESB social
and environmental report to improve
the quality and objectivity of that
information.
Year ended 31 March
Six months ended 30 September
30 September
2019
30 September
2018
31 March
2019
Passengers Domestic2,717,9002,716,2645,488,013
Passengers International454,426448,316 929,457
Aeronautical income$40.3m$40.6m $81.5m
Passenger services income
3
$22.5m$20.5m$43.5m
Property/other$6.6m$6.3m $12.9m
Operating costs
3
($19.0m)($17.8m)($36.5m)
EBITDAF
1
$50.4m$49.6m $101.4m
Investment spend $32.2m$44.8m $72.1m
Net debt $524.4m$464.0m$459.8m
Infratil’s holding value
2
$457.2m$449.1m $481.5m
1. EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
2. Infratil’s share of net assets excluding deferred tax at period end.
3. To enable like for like comparisons, in the latest period $3.2 million of hotel operating costs have been
excluded from both passenger services income and operating costs.
21
The first flight to Wellington of
the Singapore Airlines’ A350.
Wellington Airport received
the NZ Airport of the Year
award for passenger
facilities and positive
collaboration with airlines.
22
CDC
Data Centres
Over the six months, CDC Data
Centres continued to expand
capacity to accommodate
burgeoning demand.
A$248.4 million was invested constructing
and fitting out data centres at the
campuses at Fyshwick and Hume in
Canberra and Eastern Creek in Sydney.
CDC is on track to have a further 50MW
of capacity available in FY2021.
If its full 120MW of capacity is built out,
Eastern Creek could become Australia’s
largest data centre campus by capacity
(20MW is now available with 25MW
under construction).
CDC is forecasting FY2020 reported
EBITDAF
1
of between A$110 million and
A$120 million (double the level of FY2018)
and an end of year EBITDAF
1
run-rate
of between $135 million and A$145 million
(up from A$65 million two years prior).
Funding for the construction is coming
from a mixture of retained earnings,
debt and shareholder contribution.
In a presentation given to fund
managers and analysts in October,
CDC management explained CDC’s
unique features and why they are
attracting customers willing to write
long-term contracts. It is a combination
of factors which includes:
• CDC data centres offer the highest
level of accredited reliability and
security. Notwithstanding this,
construction costs are amongst the
lowest in the world on a per MW basis.
• Specifically with regards to the
Eastern Creek campus, it has
immediate proximity to Sydney’s
high voltage grid which has a 100%
availability record, as well as
sufficient onsite generation should a
network outage ever occur. Eastern
Creek also has comprehensive
communication links with connections
via 17 telecommunication
companies.
• CDC’s strong customer relationships
and scale means it can tailor its
offering to suit different user needs.
A government agency may want
to only pay for what is used while
still having likely room to grow if
storage needs expand. A hyperscale
user may be willing to pre-contract
a large capacity footprint for
an extended period so as to have
certainty of availability.
CDC’s customer mix, by revenue is:
• 40% Government, growing
at 12-15% per annum. With
very specific, non-negotiable
requirements for data storage
and availability.
• 45% Hyperscale, growing 20-28%
per annum. Highly sophisticated
clients which require certainty of
available capacity to meet their
rapidly expanding needs.
• 15% National Critical infrastructure
providers and other commercial
clients, growing 12-15% per annum.
Growth is coming both from
expanding needs and as companies
reassess the costs/benefits of
in-house data storage.
Year ended 31 March
Six months ended 30 September
All Australian $ unless noted
30 September
2019
30 September
2018
31 March
2019
Available capacity80MW39MW80MW
EBITDAF
1
$51.7m$33.9m$72.3m
Net profit after tax$142.0m$47.4m$137.5m
Investment spend$248.4m$43.0m$291.6m
Net debt$731.2m$364.6m$517.8m
Infratil share of EBITDAF
1
NZ$26.3mNZ$17.7mNZ$37.4m
Contribution to Infratil NPATNZ$79.5mNZ$30.2mNZ$83.9m
Infratil’s holding valueNZ$660.8mNZ$487.8mNZ$555.3m
1. EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
23
Eastern Creek
data centre.
CDC data centre,
Canberra.
24
Vodafone
New Zealand
Infratil closed its purchase of
49.9% of Vodafone NZ on 31 July.
Over the subsequent two months
to 30 September 2019 its
contribution to Infratil’s result was
$39.1 million EBITDAF
1
and a net
loss of $3.2 million after deducting
interest, tax, depreciation,
adjustments and transaction
costs (both figures reflect Infratil’s
49.9% ownership).
For its full year to 31 March 2020,
Vodafone NZ is forecasting EBITDAF
1
about the same as recent years.
However, while FY2020 is forecast to
produce a financial outcome similar
to prior years, a great deal of work is
underway to revitalise the business
and ensure Vodafone NZ maintains
leadership in an attractive market in
the future.
Year ended 31 March
$Millions2016201720182019Forecast 2020
Revenue$1,963m$2,027m$2,039m$1,986m$2,000-2,100m
Operating costs$1,541m$1,558m$1,570m$1,523m-
EBITDAF
1
$422m$469m$466m$463m$460-490m
Net profit after tax($18.3m)$47.6m$39.9m$21.3m-
Capex$229m$223m$244m$253m$275-325m
Opex/Revenue79%77%77%77%-
Capex/Revenue12%11%12%13%14-15%
1. EBITDAF is an unaudited non-GAAP measure and is defined in the Infratil Interim Results Presentation 2020.
• The initial roll-out of the 5G mobile
network using Nokia technology is
underway with 108 enabled cell-sites
soon to provide coverage for parts
of Queenstown, Christchurch,
Wellington, and Auckland. This will
be New Zealand’s first commercial
5G deployment delivering increased
mobile broadband speeds and
paving the way for additional mobile
applications.
The challenge for mobile telco
operators is to capture value from the
5G network investment. The learning
from the upgrade to 4G a decade
ago was that consumers got more for
less while telecommunication
companies failed to grow returns on
their capital. Positively, New Zealand
market data shows that fixed wireless
broadband connections are
increasing about 20% per annum
while fibre broadband and mobile
connections are also rising slightly;
while all other means of connection
are shrinking.
• Like most integrated
telecommunication businesses,
Vodafone NZ has legacy customer
service systems which are expensive
to operate and can cause customers,
staff and management frustration.
This situation reflects the company’s
history of acquisitions and relatively
slow progress on digitisation and
process simplification. The focus now
is to rationalise the multiple systems
to provide customer, product
development, and cost benefits.
Notwithstanding the relatively slow
progress in the past, Vodafone NZ
has the opportunity to dramatically
improve its capability and
performance utilising cloud-based
integrated, lower-cost IT systems that
have the potential to differentiate its
market position.
In the short-term, while the investment
in systems is underway, Vodafone NZ
has increased its local customer service
team so as to improve its customers’
experience and reduce fault resolution
times.
25
Rural wireless broadband
and cell phone network
coverage is provided
co-operatively by the
three main operators.
Abraham Shearing Gang
enjoy a coffee break and
connectivity, in Eketahuna.
Installation of 5G
equipment on
cellphone towers.
26
RetireAustralia
The Australian retirement
sector continues to experience
difficult market conditions. The
weak housing market is making it
harder to sell the family home and
is having a negative effect on the
affordability of village apartments
and units.
In addition, the Royal Commission
into Aged Care Quality and Safety,
while not specifically directed at
retirement village operators, is creating
negative sentiment towards the sector.
Over time both factors will ameliorate,
and RetireAustralia is focussing on
maintaining occupancy at its villages,
improving its offer of care services, and
progressing the development of units,
especially care-units, within its existing
villages. However, development of new
villages has slowed to reflect the market.
Development initiatives include:
• 70 new care apartments have been
commissioned at the Glengara
village on the Central Coast, NSW.
The first residents will be entering
the community later in 2019.
• Construction has started on the
40 unit stage one of the 177 unit,
The Verge, village adjacent to the
Burleigh Golf Club on the Gold Coast.
• Final planning approval has been
received for The Green in Tarragindi
Brisbane, but development of the
nearby Fancutts at Lutwyche has
been deferred.
• Planning and design of the Lane
Cove village in Sydney is progressing.
Positively, resale rates are improving.
Unit prices in some villages are above
valuation, while in other regions the soft
residential market has been reflected in
targeted discounts.
In addition to keeping its villages
occupied and progressing growth
initiatives, RetireAustralia is also
continuing to expand its offer of care
services. This is a long-term initiative
intended to improve the experience of
residents so that RetireAustralia’s villages
are an attractive place for ageing
people to live as their needs increase.
Two key senior management roles
were filled over the period with the
appointment of Dr Brett Robinson as
CEO and Paulene Henderson as CFO.
Dr Robinson’s professional career started
in surgery as an orthopedic registrar
and researcher before he moved into
health sector management.
Ms Henderson has a 25 year career in
finance including almost a decade as
CFO of a residential property company.
“RetireAustralia’s purpose is to provide
supportive, caring and fulfilling
communities for its residents. We
have a vision to allow our residents to
age in place through the provision of
high quality care, both through home
care services, and with dedicated
care facilities. The opening of our care
apartments at Glengara on the Central
Coast is a significant milestone in our
journey. RetireAustralia looks to offer our
residents a complete continuum of care,
so they can continue to enjoy life
in our communities, even as their needs
change.” – CEO Dr Brett Robinson
All Australian $ (unless noted)
30 September
2019
30 September
2018
31 March
2019
Residents4,9104,9534,943
Serviced apartments465465 465
Independent living units3,5093,507 3,507
Unit resales130128244
Resale gain per unit$126,879$133,504$133,666
New unit sales2915
New unit average value$397,500$778,778$721,600
Occupancy receivable/unit
1
$114,342$107,770$112,143
Embedded resale gain/unit
1
$37,805$41,874$39,381
Underlying Profit
2
$5.5m$9.1m$17.1m
Net profit after tax$12.4m($19.1m)($44.5m)
Capex$25.6m$29.3m$59.4m
Net external debt$124.6m$173.4m$198.2m
Infratil’s holding value
3
NZ$368.5mNZ$317.0mNZ$290.4m
1. The values are estimates of point in time value.
What RetireAustralia would receive in cash for
deferred occupancy fees and capital gains if
all residents left and the occupancy rights were
resold on that particular date. The resale values
were estimated by independent valuers based
on market and actual transactions.
2. Underlying Profit is an unaudited non-GAAP
measure and is defined in the Infratil Interim
Results Presentation 2020.
3. Since 31 March 2019 Infratil has increased its
investment in RetireAustralia by $61.3 million.
27
CEO Dr Brett Robinson with
residents of Wellington
Manor Retirement Village.
Residents of Wellington
Manor Retirement
Village enjoying a game
of croquet.
28
Other Investments
Infratil Infrastructure Property (IIP)
Construction of IIP’s 154 room Travelodge
Hotel in Auckland’s Wynyard Quarter
is progressing. The first stage of this
development should be open for use well
before the 2021 America’s Cup regatta.
In Wellington, IIP has arranged a
new location for the NZ Bus’ main base
of operations and construction will
commence when the necessary consents
have been received. Once this has
occurred, and NZ Bus has vacated the
existing 2.4 hectare Kilbirnie depot, IIP
will initiate its redevelopment or sale.
During the half year, Infratil advanced a
further $17.6 million to IIP to fund the
Wynyard construction, and this, along with
a $25.2 million increase in IIP’s properties
following Infratil’s sale of NZ Bus, gave a
30 September 2019 value of $73.3 million.
Clearvision Ventures Funds
During the period, Infratil provided
Clearvision with an additional
US$0.25 million. US$19.75 million of the
total US$25.0 million commitment has now
been advanced. The book value of the
investment as at 30 September 2019 was
NZ$28.3 million.
Clearvision made one new investment
over the period; the US ride sharing
company Zum which is targeting the youth
market by offering students a reliable safe
alternative to using an aging yellow bus to
get to and from school.
The Fund’s main other investments;
Orbital Insights, Autogrid, Climacell and
Chargepoint; continue to grow and
develop their businesses.
Australian Social Infrastructure
Partners (ASIP)
The sale of ASIP’s interest in Queensland
schools is expected later in FY2020, while
sale of the stake in the Royal Adelaide
Hospital will be progressed following
resolution of outstanding construction
and commissioning disputes.
The 30 September 2019 value of Infratil’s
interest in ASIP was $46.1 million, slightly
up on the 31 March figure.
Australian National University Student
Accommodation
On 21 May Infratil received A$162.1 million
proceeds from the sale of its 50% interest
in ANU student accommodation. In
addition, Infratil received a final distribution
of A$4.8 million.
This was a very successful investment.
Infratil provided an initial $85 million of
funding in FY2017 and then additional
funds as the ANU facilities were
developed and expanded.
Value was created through the excellent
relationship formed with the University
leadership and the ability of the
partnership to deliver additional student
accommodation and facilities to budget
and on time.
Snapper Services
Infratil’s ten year development of the
Snapper ticketing and payment system
ended with its sale for nominal
consideration on 31 May. This was not a
successful investment.
When Infratil set up Snapper it was
recognised that success required it to
be widely used. At that time, there were
about 100 million annual rides on all
New Zealand public transport and a
sophisticated payment tool such as
Snapper was only going to be viable if it
be used on most of them. In the event,
local and central government transport
agencies preferred to establish a
government owned competitor; which
doomed everyone to losses.
The Snapper team developed a number
of novel mobile payment and charging
tools which they were able to sell to
offshore transport agencies, but it wasn’t
enough to offset the local diseconomies
of scale.
Perth Energy
On 8 August Infratil sold its 80%
shareholding in Perth Energy to AGL
Energy for A$53.3 million. A further sum of
up to A$18.6 million may also be received
depending on the outcome at Perth
Energy from a material contract and the
tax treatment of penalty refunds which
Perth Energy may become entitled to.
Completion of the sale has also
released Infratil from its credit support of
Perth Energy, which as at 31 March 2019
amounted to A$64.7 million.
Infratil became a shareholder in Perth
Energy in 2007 through its Australian
Energy business and the shareholding
was retained when the rest of that
enterprise was sold in 2014. It was an
illustration of the problem of a small-scale
business operating in a complex market.
NZ Bus
On 2 September Infratil completed the
sale of NZ Bus for $93 million cash and a
$42 million loan. The final proceeds are
subject to an earnout mechanism and will
be between $125 million and $145 million.
The sale of NZ Bus was a disappointment.
When the company was acquired in 2005
it was hoped that regional transport
agencies in Wellington and Auckland
would recognise that by far the quickest
and lowest cost way to improve mobility in
those regions would involve a significant
expansion in bus public transport.
Unfortunately, public transport turned out
to be subject to a complex and conflict
riven regulatory and funding regime.
Ultimately the new contracting model that
was implemented transferred absolute
control and most of the risk to the regional
councils while prioritising cost minimisation
above everything else. There was an
unfortunate irony as billions of dollars were
allocated to “mass transit” while far lower
cost options such as better bus services
were relegated.
Directory
Directors
M Tume (Chairman)
M Bogoievski
A Gerry
P Gough
K Mactaggart
P M Springford
C Savage
Company Secretary
N Lough
Registered Office
New Zealand
5 Market Lane
PO Box 320
Wellington
Telephone: +64 4 473 3663
Internet address: www.infratil.com
Registered Office
Australia
C/- H.R.L. Morrison & Co Private Markets Pty Ltd
Level 37, Governor Phillip Tower
1 Farrer Place
Sydney NSW 2000
Telephone: +61 2 8098 7500
Manager
Morrison & Co Infrastructure Management Limited
5 Market Lane
PO Box 1395
Wellington
Telephone: +64 4 473 2399
Facsimile: +64 4 473 2388
Internet address: www.hrlmorrison.com
Share Registrar
New Zealand
Link Market Services
Level 11, Deloitte House
80 Queen Street
PO Box 91976
Auckland
Telephone: +64 9 375 5998
Email: enquiries@linkmarketservices.co.nz
Internet address: www.linkmarketservices.co.nz
Share Registrar
Australia
Link Market Services
Level 12
680 George Street
Sydney NSW 2000
Telephone: +61 2 8280 7100
Email: registrars@linkmarketservices.com.au
Internet address: www.linkmarketservices.com.au
Auditor
KPMG
10 Customhouse Quay
PO Box 996
Wellington
Calendar
Final dividend paid27 June 2019
Annual meeting22 August 2019
Half year end30 September 2019
Half year results released13 November 2019
Interim Dividend paid13 December 2019
Financial year end31 March 2020
Updates/Information
Infratil produces an Annual Report and Interim Report each year.
In addition, Infratil produces occasional reports on the operations
30
---
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer Infratil Limited
Reporting Period 6 months to 30 September 2019
Previous Reporting Period 6 months to 30 September 2018
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$802,400 9.0%
Total Revenue $994,000 1.2%
Net profit/(loss) from
continuing operations
$79,800 (13.6%)
Total net profit/(loss) $88,100 (17.0%)
Interim/Final Dividend
Amount per Quoted Equity
Security
$ 0.0625000
Imputed amount per Quoted
Equity Security
$0.01500000
Record Date 29 November 2019
Dividend Payment Date 13 December 2019
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$2.93 $3.03
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
This Results announcement should be read in conjunction with
the attached unaudited condensed consolidated half year
financial statements for the 6 months ended 30 September 2019
(“Interim Financial Statements”) and Infratil’s most recent Annual
Report. More detailed commentary on the operations of the
Group over the period has been provided in the form of the
Infratil Interim Results Presentation 2020 and Interim Report
2020, which have been released alongside the Interim Financial
Statements.
Authority for this announcement
Name of person
authorised
to make this announcement
Phillippa Harford, Chief Financial Officer
Contact person for this
announcement
Phillippa Harford, Chief Financial Officer
Contact phone number 64 4 473 3663
Contact email address Phillippa.Harford@hrlmorrison.com
Date of release through MAP
13 November 2019
Unaudited financial statements accompany this announcement.
---
Distribution Notice
Please note: all cash amounts in this form should be provided to 8 decimal places
Section 1: Issuer information
Name of issuer Infratil Limited
Financial product name/description Ordinary Shares
NZX ticker code IFT
ISIN (If unknown, check on NZX
website)
NZIFTE0003S3 / ASX IFT
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies X
Record date 29 November 2019
Ex-Date (one business day before the
Record Date)
28 November 2019
Payment date (and allotment date for
DRP)
13 December 2019
Total monies associated with the
distribution
1
$41,220,979
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.07750000
Total cash distribution
3
$0.06250000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.00680672
Section 3: Imputation credits and Resident Withholding Tax
4
Is the distribution imputed Partially imputed
If fully or partially imputed, please
state imputation rate as % applied
24.00000000%
Imputation tax credits per financial
product
$0.01500000
Resident Withholding Tax per
financial product
$0.01057500
1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
4
The imputation credits plus the RWT amount is 33% of the gross distribution for the purposes of this form. If the distribution is fully
imputed the imputation credits will be 28% of the gross distribution with remaining 5% being RWT. This does not constitute advice
as to whether or not RWT needs to be withheld.
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
Nil
Start date and end date for
determining market price for DRP
Close of trading on:
28 November 2019
Close of trading on:
4 December 2019
Date strike price to be announced (if
not available at this time)
Close of trading on:
5 December 2019
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
Bought on market and/or new issue
DRP strike price per financial product
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
2 December 2019
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Phillippa Harford, Chief Financial Officer
Contact person for this
announcement
Phillippa Harford, Chief Financial Officer
Contact phone number 64 4 473 3663
Contact email address Phillippa.Harford@hrlmorrison.com
Date of release through MAP
13 November 2019
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.