Interim results for the period ended 30 September 2020
Infratil Limited 5 Market Lane, PO Box 320, Wellington, New Zealand Tel +64-4-473 3663 www.infratil.com
12 November 2020
Interim results announcement for the period ended 30 September 2020
Infratil Limited today announced its half-year results for the six months ended 30 September 2020,
confirming a Net Parent Surplus from Continuing Operations of $27.8 million compared with $56.4 million
for the prior year.
Proportionate EBITDAF was up $25.4 million (+12.4%) to $229.5 million reflecting strong performance from
CDC Data Centres and significant contributions from Vodafone New Zealand and Trustpower. Proportionate
EBITDAF for the year to 31 March 2021 is forecast to be between $430 million and $470 million, including
an estimated $80 million reduction caused by Covid-19 related restrictions. Proportionate EBITDAF was
$446.0 million the previous year.
The results for the period were impacted by portfolio changes including the acquisition of Vodafone
New Zealand in 2019, and the sale of Perth Energy, NZ Bus, and the ANU Student Accommodation business
in 2019. The results also reflect Tilt Renewables’ December 2019 sale of the Snowtown 2 wind farm.
The period illustrated the benefits of Infratil’s diversification, where the progress at CDC Data Centres and
the renewable generation projects of Tilt Renewables and Longroad Energy more than balanced the impact
of the Covid-19 crisis on businesses such as Wellington Airport and Vodafone New Zealand.
Reflecting the overall good financial outcome and Infratil’s solid funding position the dividend for the period
will be 6.25 cps cash and 1.75 cps imputation credits. Between 31 March 2020 and 11 November 2020 the
share price has risen from $3.91 to $5.40.
The $300 million equity raise undertaken in June, and receipts from businesses, saw net debt decline
$385.0 million and gearing reduce to 28% of Infratil’s total capital as at 30 September.
Infratil’s strong record of shareholder returns is based on owning infrastructure businesses with opportunities
to invest to take advantage of long-term demand growth. On that basis it was positive to see $488.9 million
of proportionate investment over the period; including $322 million into renewable generation and
$122 million into digital infrastructure.
Reflecting its remarkable progress, the value of Infratil’s holding in CDC Data Centres rose $324 million over
the six months. Tilt Renewables provided cash returns of $180 million while continuing to advance renewable
generation developments in both Australia and New Zealand. Longroad Energy continued work on
$1.3 billion of generation projects in the USA and provided Infratil with $19.1 million of capital return.
Vodafone New Zealand materially advanced its plans to simplify its business and improve its customers’
experience, but also saw earnings reduce by $29 million due to Covid-19.
At the height of travel restrictions in April, 6,000 travellers used Wellington Airport, which had recovered to
350,000 for the month of October. RetireAustralia delivered the excellent result of keeping all its residents
and staff safe and well protected.
In October, Infratil announced a conditional agreement to acquire up to 60% of Australian diagnostic imaging
business Qscan. This important new initiative for Infratil is awaiting Foreign Investment Review Board
approval in Australia.
In conjunction with the interim report, Infratil has also published a Climate Change Position Statement
committing to the goal of reducing greenhouse gases and providing transparency about policies, goals, costs
and risks.
Infratil Limited 5 Market Lane, PO Box 320, Wellington, New Zealand Tel +64-4-473 3663 www.infratil.com
Notable achievements during the period:
• Longroad Energy commenced construction on three solar generation projects amounting to 840MW;
• Tilt Renewables completed construction of the 336MW Dundonnell wind farm in Victoria, Australia
and made significant progress on the 133MW Waipipi wind farm in Taranaki. 865,000 hours of work
was undertaken at the two construction sites without a single lost time injury;
• RetireAustralia kept its residents and staff safe and protected from Covid-19;
• CDC Data Centres commissioned 28MW of data centre capacity at Eastern Creek in Sydney;
• CDC Data Centres also started construction of two 10MW data centres in Auckland, and progressed
further expansion plans in Australia;
• Vodafone New Zealand progressed its investment in 5th generation mobile network infrastructure
and upgraded its international fibre links;
• Vodafone New Zealand’s simplification programme saw 1,500 products retired or improved. In the
most recent period 34% more customer requests were dealt with first time, while complaints were
down 53%;
• Wellington Airport plunged to 1% of normal activity in April. By October domestic traffic had
recovered to over 70% of normal levels reflecting the relaxation of travel restrictions. International
traffic awaits new border rules;
• Infratil Infrastructure Property opened its $70 million hotel, retail, and car park project in Auckland’s
Wynyard Quarter, and agreed to the sale of the Kilbirnie bus depot for $35 million;
• Infratil increased its commitment to Clearvision Ventures. One of its investments, Chargepoint,
owner of the world’s largest electric vehicle charging network, has indicated it plans to list on the
NYSE;
• Infratil raised $300 million via an equity issue;
• Infratil maintained its dividend, with an interim dividend of 6.25 cps to be paid on 15 December;
• In October Infratil announced the acquisition of up to 60% of Australian diagnostic imaging company
Qscan. A new sector with strong growth potential; and
• Infratil released its Climate Change Position Statement.
Over the decade to 30 September 2020 Infratil has:
• Provided an after-tax compound return to shareholders of 17.8% p.a.;
• Invested over $6 billion in key growth sectors and next generation infrastructure; and
• Grown proportionate EBITDAF from $300 million to the FY2021 forecast range of $430 million to
$470 million.
Investor briefing
There will be a briefing for institutional investors, analysts and media commencing at 10.00am at the
InterContinental Hotel, Featherston Room, 2 Grey Street, Wellington. The briefing and Q&A session will also
be available by webcast and teleconference.
A webcast of the presentation will be available live at: https://edge.media-server.com/mmc/p/c5imos3g
Any enquiries should be directed to:
Mark Flesher, Investor Relations
mark.flesher@infratil.com
---
Results
Announcement
For the six months ended
30 September 2020
12 November 2020
InfratilInterim Results Presentation –September 2020
Disclaimer
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 only 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, prospectus or other
disclosure document for the purposes ofthe Financial Markets Conduct Act 2013 or the Australian Corporations
Act 2001 (Cth).The Company is subject to a disclosure obligation that requires it to notifycertain material
information to NZX Limited (NZX) and ASX Limited (ASX) for the purpose of that information being made available
to participants in the market and that information can be found by visiting www.nzx.com/companies/IFT and
http://www.asx.com.au. This presentation should be read in conjunction with Infratil’s other periodic and
continuous disclosure announcements released to NZX and ASX.
Not financial product advice
This presentation is for information purposes only and is not financial, legal, tax, financial product or investment
advice or a recommendation to acquire the Company’s securities.This presentationhas been prepared without
taking into account the objectives, financial situation or needs of prospective investors.
2
InfratilInterim Results Presentation –September 2020
Disclaimer
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.
Non-GAAP Financial Information
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
EBITDAF and EBITDA. The non-IFRS/GAAP financial information and financial measures do not have a
standardised meaning prescribed by the NZ IFRS, AAS or IFRS, should not be viewed in isolation and should not
be construed as an alternative to other financial measures determined in accordance with NZ IFRS, AAS or IFRS,
and therefore, may not be comparable to similarly titled measures presented by other entities. Although the
Company believes the non-IFRS/GAAP financial information and financial measures provide useful information
to users in measuring the financial performance and condition of the Company, you are cautioned not to place
undue reliance on any non-IFRS/GAAP financial information or financial measures included in this presentation.
Further information on how the Company calculates Underlying EBITDAF can be found at Appendix I.
No part of this presentation may be reproduced or provided to any person or used for any other purpose.
3
InfratilInterim Results Presentation –September 2020
Half Year
Overview
Increased
exposure to our
preferred sectors
of digital
infrastructure
and renewable
energy is driving
growth
Half Year Overview
•Net parent surplus from continuing operations
of $27.8 million, compared to $56.4 million in
the prior year
•Proportionate EBITDAF of $229.5 million, up
from $204.2 million in the comparative period,
reflecting the growing contribution from data
& connectivity, partially offset by the direct
impact of Covid-19 on some revenue streams
•Proportionate capital expenditure and
investment of $488.9 million, including
$322.1 million in renewable energy and
$122.3 million in data & connectivity
•$300 million equity raise in June 2020 to
provide capital flexibility and to fund growth
opportunities
•Conditional acquisition of up to 60% of Qscan
for up to A$330 million announced in
October
•Partially imputed interim dividend of
6.25 cents per share to be paid in December
4
InfratilInterim Results Presentation –September 2020
Financial
Highlights
Reported results
reflect significant
changes in
portfolio
composition
5
30 September($Millions)20202019Variance% Change
Net Surplus from Continuing Operations 57.079.8(22.8)(28.6%)
Net Parent Surplus27.856.4(28.6)(50.7%)
Proportionate EBITDAF
1
229.5204.225.312.3%
International Portfolio Incentive Fee accrual 57.712.844.9350.8%
Proportionate Capital Expenditure & Investment488.91,432.3(943.4)(65.9%)
Earnings per share (cps) from continuing activities4.08.1(4.1)(50.6%)
Notes:
1.ProportionateEBITDAFisanunauditednon-GAAPmeasure.ProportionateEBITDAFdoesnothaveastandardisedmeaningandshouldnotbe
viewedinisolation,norconsideredasasubstituteformeasuresreportedinaccordancewithNZIFRS,asitmaynotbecomparabletosimilar
financialinformationpresentedbyotherentities.AreconciliationofProportionateEBITDAFtoNetprofitaftertaxisprovidedinAppendixI
InfratilInterim Results Presentation –September 2020
Results
Summary
Reported results
reflect significant
changes in
portfolio
composition
6
30 September($Millions)20202019
Operatingrevenue662.0802.4
Operatingexpenses(442.1)(485.7)
Operating earnings219.9316.7
International Portfolio Incentive fee(57.7)(12.8)
Depreciation& amortisation(57.2)(75.2)
Netinterest(72.1)(85.6)
Taxexpense(4.9)(46.1)
Realisationsand revaluations29.0(17.2)
Net surplus (continuing)57.079.8
Discontinuedoperations
1
-8.3
Net surplus57.088.1
Minorityearnings(29.2)(31.7)
Netparentsurplus27.856.4
•Operating revenue reflects the impact of
Covid-19 air travel restrictions on passenger
numbers at Wellington Airport and Tilt
Renewables’ sale of Snowtown 2 in
December 2019
•Operating expenses reflect strong cost control
during the period in response to Covid-19
•The FY2021 annual incentive fee accrual is
driven by Infratil’s investments in CDC Data
Centres and Tilt Renewables
•Net reduction in depreciation and amortisation
primarily reflects Tilt Renewables’ sale of
Snowtown 2
•Net interest decreased as funds received from
the sale of Snowtown 2 and Infratil’s recent
equity raise reduced net debt
•Discontinued operations in the prior period
include ANU Student Accommodation, NZ Bus,
Perth Energy and Snapper
Notes:
1.Discontinuedoperationsrepresentbusinessesthathavebeendivested,orbusinesseswhichwillberecoveredprincipallythroughasale
transactionratherthanthroughcontinuinguse
InfratilInterim Results Presentation –September 2020
Proportionate
EBITDAF
Full period
contribution
from Vodafone
NZand CDC Data
Centres growth
offset Covid-19
impacts
•Slightly higher contribution from Trustpower,
withan increase in higher margin telco
customers offset by lower generation volumes
•Reduction in Tilt Renewables’ contribution
largely resulting from the sale of the
Snowtown 2 wind farm in December 2019
•Contribution from Wellington Airport has
significantly reduced due to Covid-19 impacts
•CDC Data Centres year-on-year earnings
growth as new facilities come online
•Prior period includes a 2-monthcontribution
from Vodafone NZfollowingcompletion of the
acquisition on 31 July 2019
•Reduced contribution from Longroadas a result
of increased project development expenses in
the current period. EBITDAF excludes Longroad’s
gains on the sale of development projects
•Corporateand other excludes incentive fees
30 September ($Millions)20202019
Trustpower56.354.6
Tilt Renewables22.349.2
Wellington Airport7.233.3
CDC Data Centres38.026.3
Vodafone NZ112.139.0
RetireAustralia5.12.6
LongroadEnergy9.415.9
Corporate and other(20.9)(16.8)
Proportionate EBITDAF229.5204.2
Discontinued operations-14.1
Total Proportionate EBITDAF229.5218.3
Notes:
1.ProportionateEBITDAFrepresentsInfratil’sshareoftheconsolidatednetearningsbeforeinterest,tax,depreciation,amortisation,financial
derivativemovements,revaluations,gainsorlossesonthesalesofinvestments,andexcludestheimpactofInternationalPortfolioIncentive
Fees.ProportionateEBITDAFreplacesUnderlyingEBITDAFasmanagement’spreferredmeasureformeasuringtheunderlyingperformanceof
Infratil’sportfoliocompanies.
7
InfratilInterim Results Presentation –September 2020
Proportionate
Capital
Expenditure &
Investment
Continued
strong
investment in
growth
infrastructure
•Tilt Renewables’ construction of the
Dundonnell Wind Farm (336MW)and the
Waipipi Wind Farm (133MW)
•Wellington Airport suspended most of its
growth capital projects due to Covid-19
•CDC Data Centres' ongoing development
including completion of Eastern Creek 3 in
Sydney (28MW) and commencement of
construction of two data centres in Auckland,
New Zealand (20MW)
•Longroad currently has 840MW of utility scale
solar (Alabama, California & Texas) and 70MW
of utility scale wind (Minnesota) under
construction
•RetireAustraliacapital expenditure includes
construction at The Verge, Burleigh and The
Rise at Wood Glen
•Other capital expenditure includes the
construction of Infratil Infrastructure
Property’s 154 room Travelodge hotel and
carpark in the Wynyard Quarter which opened
in October 2020
8
Notes:
1.ThetableshowsInfratil’sshareoftheinvestmentspendingofinvesteecompanies.InaperiodwhereInfratilacquiresanewinvestment,the
considerationpaidisshownastheinvestmentforthatperiod.InJuly2019,Infratilacquireda49.9%shareofVodafoneNZfor$1,029.6
million,andthereforethisisshowastheinvestmentspendinginrelationtoVodafoneNZinthecomparativeperiod.Thecurrentperiod
includesInfratil’s49.9%shareofVodafoneNZ’scapitalexpenditure.
30 September ($Millions)20202019
Trustpower7.98.4
TiltRenewables200.380.9
WellingtonAirport7.621.1
CDC DataCentres77.4126.5
Vodafone NZ44.9-
RetireAustralia15.413.5
LongroadEnergy113.9131.3
Other13.921.0
Capital Expenditure481.3402.7
Vodafone NZ-1,029.6
Other7.60.4
Investment7.61,030.0
Total Capex & Investment488.91,432.3
InfratilInterim Results Presentation –September 2020
Debt Capacity
& Facilities
Strong capital
position and
liquidity across
the Group to
support near to
medium term
capital
commitments
9
Notes:
1.Infratilandwholly-ownedsubsidiariesexcludesTrustpower,TiltRenewables,WellingtonAirport,CDCDataCentres,VodafoneNZ,
RetireAustralia,LongroadEnergy,andGalileoGreenEnergy.
2.CompletionoftheacquisitionisconditionalonobtainingForeignInvestmentReviewBoardofAustraliaapprovalby31December2020,
whichcanbeextendedto26February2021.
•Tilt Renewables' capital return completed in
July 2020 (Infratil's share ~NZ$180 million)
•Infratil did not issue any infrastructure bonds in
the six months to 30 September 2020
•The market value of equity increased by
$1.028 billion since 31 March 2020, reflecting:
‐$300 million placement and share purchase
plan issue in June and July
‐the change in the IFT share price from $3.91
(March 2020) to $4.99 (September 2020)
•Infratil's next bank maturity is NZ$32 million in
February 2021
•Infratil's next two bond maturities are
NZ$93.9 million of IFT220 bonds in June 2021
and NZ$93.7 million of IFT190 bonds in June
2022
As at period ended ($Millions)
September
2020
March
2020
Net bank debt
1
85.8470.9
Infratil Infrastructure bonds1,071.91,071.9
Infratil Perpetual bonds231.9231.9
Market value of equity3,607.52,579.3
Total capital4,997.14,354.0
Gearing (net debt/total capital)27.8%40.8%
Infratil undrawn bank facilities
1
593.0268.0
100% subsidiaries cash16.29.1
Funds available609.2277.1
Forecast Qscan acquisition
2
350.0
InfratilInterim Results Presentation –September 2020
Strong
Shareholder
Returns
Delivered over
6 Months
Partially imputed
interim dividend
of 6.25 cents per
share maintained
Total Shareholder Return
1
PeriodTSR
6 months32.1%
5 Year16.9%
10 Year17.9%
Inception –26.5 years17.5%
1
Total shareholder returns are to 30 September 2020 based on a closing share price of $4.99
10
3.00
3.50
4.00
4.50
5.00
5.50
6.00
30/1230/0129/0231/0330/0431/0530/0631/0731/0830/0931/10
Infratil Share Price
Level 4Level 3
Level 2
AKL Level 3
$5.40
$4.99
InfratilInterim Results Presentation –September 2020
International
Portfolio
Annual
Incentive fee
Accrual reflects
the ongoing
outperformance
of the material
international
assets
11
•CDC Data Centres'accrual is based on an independent
valuation as of 30 September 2020, which values Infratil’s
investment at A$1,597 million -A$1,807 million
•The current CDC valuation reflects total capacity of 278MW
•The Tilt Renewables accrual has been determined with
reference to Tilt’s 30 September 2020 share price of $3.70
•The RetireAustralia accrual is based on an independent
valuation as of 30 June 2020, which values Infratil’s investment
at A$255 million -A$335 million
•A valuation of Longroad Energy has not been undertaken and
no accrual has been made as at 30 September 2020
•The accrual also reflects the impact of cash distributions
received from investments during the period, including the
$179.6 million Tilt Renewables’ capital return
30 September ($Millions)2020
CDC Data Centres43.5
Tilt Renewables16.7
RetireAustralia(2.5)
Longroad Energy-
ASIP-
FY2021 annual incentive fee accrual57.7
InfratilInterim Results Presentation –September 2020
Qscan
Acquisition
High quality
entry point to
a future scale
healthcare
infrastructure
platform
12
Transaction Details
•On 26 October 2020, Infratil executed a conditional offer to
acquire up to 60% of Qscan Group Holdings, a comprehensive
diagnostic imaging practice throughout Australia for equity
consideration of up to A$330 million
•The acquisition is strategically and financially compelling for
Infratil shareholders:
✓The diagnostic imaging sector is an essential services
industry, offering a combination of defensive
characteristics and structural long-term growth
✓Qscan is a market leader with a secure revenue base
backed by established referral networks and a track record
of strong, profitable growth with significant organic and
inorganic growth options
✓Qscan’spartnership model establishes it as the
infrastructure and services provider, with radiologists the
providers of patient care
✓Qscan is a highly cash generative business, that also offers
reinvestment options which give Infratil a clear path to
build a scale healthcare infrastructure platform
•Infratil’s investment will be funded from existing bank facilities
and available capital
•Completion of the acquisition is conditional on obtaining
Foreign Investment Review Board of Australia approval by
31 December 2020, which can be extended to
26 February 2021
InfratilInterim Results Presentation –September 2020
34%
44%
10%
10%
Renewable Energy
Digital Infrastructure
Airport
Social Infrastructure
Other
28%
17%
16%
14%
10%
5%
5%
CDC Data CentresTrustpower
Vodafone New ZealandTilt Renewables
Wellington AirportRetireAustralia
Qscan GroupLongroad Energy
Other
Portfolio
Composition
Well balanced
portfolio with
defensive
characteristics
and strong
capital growth
13
InvestmentSector
Portfolio composition assumes the forecast completion of the Qscan acquisition
Operating
Businesses
InfratilInterim Results Presentation –September 2020
CDC
Data Centres
Impressive
organic growth
amidst
substantial
adoption of
cloud-based
services
Performance
•Current period reported EBITDAF A$73.8 million, up
A$22.1 million (+42.7%) from the comparativeperiod
•Continued strong performance with revenue growth from
new data centres and additional stages in existing facilities
•FY21 forecast reported EBITDAF of A$145-A$155 million
Growth Trajectory
•Multiple drivers are underpinning future growth, aided by
increased demand for resilient digital infrastructure
•Significant growth as Covid-19 accelerates the transition to
remote working and adoption of cloud-based services
•Existing operating capacity of 133MW, with 70MW under
construction and 200MW+ capacity for future development
•Eastern Creek 3 (28MW) and Hume 4 (25MW) are now
operational
•Expansion into New Zealand underway with the construction
of two 10MW+ DCs in Auckland (NZ$300 million+)
•The Auckland expansion enables CDC to deliver geographic
diversity and expand its ecosystem which is highly attractive
to existing clients with data storage needs in New Zealand
•Whole of portfolio weighted average lease expiry (WALE) of
8.6 years, and 15.4 years with options (31 March: 8.6 years,
and 15.9 years with options)
15
InfratilInterim Results Presentation –September 2020
Vodafone
New Zealand
Major
investment in
digital
infrastructure
supporting
future service,
product and
operational
platforms
Performance
•Reported EBITDAF of $224.7 million
1
, including the negative
impact of ~$30 million relating to Covid-19
•Good consumer and enterprise mobile and fixed
performance; consumer broadband remains challenging
•Fixed Wireless Access rollout is on track; customer
experience is improving; IT and Network stability best in
3 years
•FY2021 EBITDAF impact of Covid-19 on roaming, pre-paid
and retail is forecast to be $60 million to $75 million
•FY2021 reported EBITDAF is forecast to be in the range of
$425 million to $455 million
2
Growth Trajectory
•New leadership capability adding strength to existing
management team
•Strong cost disciplines are enabling reinvestment in
customer experience, IT and network capability
•Digital transformation has begun and is at the core of the
future operating model
•5G leadership will underpin the next phase of margin
growth; fixed wireless access opportunity will drive next
phase of network investment
Notes:
1.ReportedEBITDAFincludes$27.3millionofadjustmentsrelatingtoIFRS16
2.ForecastreportedEBITDAFforFY2021includes$55.4millionof
adjustmentsrelatingtoIFRS16
16
InfratilInterim Results Presentation –September 2020
Longroad
Energy
Significant US
renewable
energy
development
platform poised
to accelerate
growth
17
Performance
•LongroadEnergy’s contribution to Infratil’sProportionate
EBITDAF was $9.4 million, compared to $15.9 million in the
prior period
•Cash distributions to Infratil in the period were $19.1 million
•Longroadis currently constructing 910MW of renewable
generation across 4 projects; equivalent to 8% of
New Zealand’s total generation capacity
•During the 6 months to 30 September, Longroad:
‐completed construction of the 379MW Prospero Solar
project in Texas and sold 50% of the equity
‐achieved financial close and the sale of the 294MW Muscle
Shoals Solar project
‐achieved financial close and commenced construction of the
331MW Prospero 2 Solar Project (US$320 million)
Growth Trajectory
•Total operating portfolio is currently 1,465MW, while also
managing construction of a further 910MW
•LongroadEnergy Services currently provides operating and
maintenance services to 2,941MW including 1,478MW for third
parties
•Selected by Hawaiian Electric Company to begin developing
two utility-scale solar and battery storage projects for
completion in 2023 (120MW and 40MW)
InfratilInterim Results Presentation –September 2020
Trustpower
Demonstrating
ongoing
resilience and
capability in
Covid-19
pandemic and
dry conditions
18
Performance
•EBITDAF of $110.4 million was $3.3 million (3.1%) above the
comparative period of $107.1 million
•Stronger wholesale prices drove generation earnings, despite
lower volumes
•Acquisition costs lower than the comparative period due to
materially reduced activity during Covid-19 lockdown
•Total retail utility accounts of 411,000 remained steady, with
50% of total customers now having more than one product
(over 80% of new customers continue to take 2 or more
products)
Growth Trajectory
•Asset management investment programme underway to
maximise the lifecycle valueof generation assets, with average
annual generation forecast to increase by 67GWh from
FY2021 to FY2025
•The ultimate closure of Tiwai Point will create slight increases
in both peaking capability and the value of North Island
generation, while South Island generation will become slightly
less valuable
•Bundled retail business continuing to grow, taking advantage
of the ongoing growth in data demand, supported by
additional wireless broadband and mobile capability
•Strong focus on automation as a way of improving the
customer experience with total digital contacts now 80% of
customer interactions
InfratilInterim Results Presentation –September 2020
Tilt
Renewables
Strengthened
position as the
Australasian
renewable
energy leader,
with several
accretive near-
term options
well progressed
19
Performance
•EBITDAF of A$31.8 million was A$2.9 million below the
comparative period of A$34.7
1
million
•Operating revenue was 6% down on the comparative period
2
despite the uplift from Dundonnell (‘DDWF’) commencing
production, reflecting the long-anticipated oversupply in the
Large-scale Generation Certificate market
•813GWh of emissions-free energy produced, up from
609GWh
2
in the prior period reflecting the energisation of the
DDWF
Growth Trajectory
•Civil works are largely complete on the 133MW Waipipi Wind
Farm, with 17 turbines fully erected and the transmission line
also completed
•Energisation of the project is expected in the near-term, with
the project on track for Q1 CY2021 completion
•Australian Energy Market Operator-related commissioning
delays for DDWF have continued over the period, with output
now increased to 226MW and all 80 turbines able to operate
and export energy. It is expected that this can be lifted again
to 300MW by the end of CY2020
•Progress has continued towards potential investment
decisions for the near-term options, with Rye Park Wind Farm
and the Snowtown Battery project progressing largely to plan
Notes:
1.ReportedEBITDAFinHY20AwasA$71.4million,whichincludedaA$36.7million
contributionfromtheSnowtown2WindFarmwhichwassoldinDecember2019
2.ExcludingSnowtown2
InfratilInterim Results Presentation –September 2020
Wellington
Airport
Unprecedented
impact of
Covid-19,
however
domestic
passenger
recovery has
exceeded
expectations
during
unrestricted
travel periods
Performance
•EBITDAF of $10.9 million was down from $50.4 million for
the same period last year
•Net cashflow from operations down $34.2 million,
reflecting a $45.3 million reduction in revenue, partially
offset by strong cost control measures
•Domestic traffic recovery well underway; passenger
numbers of 6,630 in April, moving to 300,000 in October,
including a peak day of 17,000 passengers compared to a
FY20 average of 15,000
Capital Support and Investment
•Safety and resilience projects progressing, including
earthquake strengthening, seawall remediation and
commencement of the bringing forward of the runway
overlay
•Good support from lenders reflected in the $100 million
6-year bond issue
•Shareholder commitment of $75 million remains on foot
but has not been required to date
•New Zealand’s aviation industry is working with health
officials to develop a plan to enable more people to travel
without increasing the risk of community infection
•Operating uncertainty remains difficult for staff, retail
tenants and airlines, but conditions have been improving
20
InfratilInterim Results Presentation –September 2020
Retire
Australia
Strong
performance for
the period,
however cautious
view maintained
for the short to
medium-term
21
Performance
•Underlying profit of A$13.3 million was A$7.8 million above
the comparative period of A$5.5 million
•138 resale settlements up from 130 in the comparative period
and a total collect of A$19.5 million vs A$16.6 million,
representing a strong performance against the backdrop of
Covid-19 restrictions
•Occupancy is marginally lower than 12 months prior but
remains withinthe industry average
Growth Trajectory
•Deposits are currently held against a number of vacant units,
with 82 additional settlements scheduled to occur in Q3
FY2021
•Practical completion of 24 apartments at The Rise at Wood
Glen on the Central Coast was achieved in September
•Stage one (40 units) of The Verge, Burleigh, a 177-unit
development co-located with Burleigh Golf Club, is forecast to
welcome its first residents in the first half of FY22
•Liquidity strengthened at the onset of Covid-19 through an
extension of bank facilities and committed shareholder
support, however neither have been required during the
current period
•Strong demographic and social drivers continue to underpin
growing demand in the sector and RetireAustralia’s response
to Covid-19 has favourably impacted resident satisfaction
InfratilInterim Results Presentation –September 2020
FY2021
Outlook
Diversified
portfolio
provides a
defensive
earnings outlook
despite short-
term Covid-19
exposure
22
Performance
•Infratil is currently forecasting FY21 Proportionate EBITDAF
from continuing operations of $430-$470 million
1
•Proportionate EBITDAF includes the proportion of the
EBITDAF of each portfolio company based on Infratil’slevel of
beneficial ownership interest and excludes incentive fees
•There remains inherent uncertainty in the current guidance
range as a result of the ongoing economic and travel impacts
of Covid-19
Component Guidance (100%)
•Trustpower forecast FY2021 EBITDAF in the range of
$185 million -$205 million
•Tilt Renewables forecast FY2021 EBITDAF in the range of
A$65 million -A$80 million
•CDC Data Centres forecast FY2021 EBITDAF in the range of
A$145 million -A$155 million
•Vodafone NZ forecast FY2021 EBITDAF in the range of
$425 million -$455 million
•Wellington Airport forecast FY2021 EBITDAF in the range of
$25 million -$30 million
Notes:
1.GuidanceisbasedonInfratilmanagement’scurrentexpectationsandassumptions
aboutthetradingperformanceofInfratil’scontinuingoperationsandissubjecttorisks
anduncertainties,isdependentonprevailingmarketconditionscontinuingthroughout
theoutlookperiodandassumesnomajorchangesinthecompositionoftheInfratil
investmentportfolio.Tradingperformanceandmarketconditionscanandwillchange,
whichmaymateriallyaffecttheguidancesetoutabove
InfratilInterim Results Presentation –September 2020
Summary
A balanced
portfolio with
exposure to
higher growth
essential services
supported by a
secure capital
base
•Infratil’s businesses have done an exceptional job managing the prolonged impacts of the
Covid-19 crisis; servicing our people and customers safely, while safeguarding the capital of
our shareholders
•Infratil’s diversified portfolio with overweight positions in renewable energy and digital
infrastructure should drive relative outperformance under multiple future economic
scenarios
•Infratil continues to be willing to invest ahead of the mainstream infrastructure market and
take on more complex operating businesses to position our shareholders in next generation
infrastructure
•The acquisition of Qscan provides a high-quality entry point into a sector with a structural
long-term growth outlook and potential to scale into a leading healthcare infrastructure
platform
•Infratil is continuing to evaluate opportunities in key growth sectors and new geographies,
however the default position is to prioritise capital to support existing platform
opportunities
23
For further
information:
www.infratil.com
InfratilInterim Results Presentation –September 2020
Appendix I
Reconciliation of
NPAT to
Proportionate
EBITDAF
25
Proportionate 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, Proportionate EBITDAF provides
a metric that can be used to report on the
operations of the business (as distinct from
investing and other valuation movements).
30 September ($Millions)20202019
Net profit after tax (‘NPAT’)57.0
88.1
Less: Associates
1
equity accounted earnings(83.8)
(100.6)
Plus: Associates
1
proportionate EBITDAF162.9
83.8
Less: minority share of Subsidiary
2
EBITDAF(69.5)
(95.8)
Net loss/(gain) on foreign exchange and derivatives(15.3)
16.4
Net realisations, revaluations and impairments(13.7)
0.8
Discontinued operations-
(8.3)
Underlying earnings37.6
(15.4)
Depreciation & amortisation57.2
75.2
Net interest72.1
85.6
Tax4.9
46.1
Proportionate EBITDAF (continuing operations)171.8
191.5
International Portfolio Incentive fee57.7
12.8
Proportionate EBITDAF (excluding Incentive fees)
229.5204.2
Notes:
1.Associates include Infratil’s investments in CDC Data Centres, Vodafone NZ, RetireAustralia, Longroad and Galileo Green Energy
2.Subsidiaries include Infratil’s investments in Trustpower, Tilt Renewables and Wellington Airport
InfratilInterim Results Presentation –September 2020
Appendix II
Comparison of
31 March 2020
Underlying
EBITDAF to
Proportionate
EBITDAF
26
Proportionate 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, Proportionate EBITDAF provides
a metric that can be used to report on the
operations of the business (as distinct from
investing and other valuation movements).
31 March 2020 ($Millions)OwnershipUnderlyingProportionate
Trustpower51.0%186.5
95.1
Tilt Renewables65.5%123.7
81.1
Wellington Airport66.0%103.2
68.1
CDC Data Centres48.1%59.6
59.6
Vodafone New Zealand49.9%154.9
154.9
RetireAustralia50.0%8.9
3.6
Longroad Energy40.0%4.7
19.3
Corporate and other(35.6)
(35.6)
Proportionate EBITDAF605.9
446.1
•EBITDAFis a non-GAAP measure of financial performance showing net earnings before interest, tax, depreciation, amortisation,
foreign exchange and financial derivative movements, revaluations, impairment and non-operating gains or losses on the sales
of investments and assets
•Proportionate EBITDAF shows Infratil’s share of the EBITDAF of the companies it has invested in, less Infratil’s operating costs,
excluding discontinued operations, and before incentive fees
•The primary difference between Underlying EBITDAF to Proportionate EBITDAF is a reduction in the level of reported EBITDAF
from the ‘consolidated entities’ (Trustpower, Tilt Renewables and Wellington Airport) from 100%, to Infratil’s proportionate share
of their respective EBITDAF
•Underlying EBITDAF also previously incorporated Infratil’s 50% share of the Underlying Profit of RetireAustralia. Similar tothe
above change RetireAustralia is now also shown as a proportionate share of its EBITDAF
•The other main difference reflects a change from the use of Infratil’s share of ‘net surplus before tax’ to a proportionate share of
EBITDAF for Longroad Energy and Galileo Green Energy. EBITDAF does not include any development gains from project sales by
Longroad Energy
•The underlying principle of taking a Proportionate EBITDAF approach is to better reflect the level of beneficial interest that
Infratil has in the results of its portfolio companies
1
2
3
1
2
3
InfratilInterim Results Presentation –September 2020
Appendix III
Movements in
Wholly Owned
Group Net Bank
Debt
27
The Wholly Owned Group comprises
Infratil and its wholly-owned subsidiaries
and excludes Trustpower, Tilt Renewables,
Wellington Airport, CDC Data Centres,
Vodafone NZ, RetireAustralia, Longroad
Energy, and Galileo Green Energy.
Wholly Owned Net Bank Debt comprises
the drawn bank facilities (net of cash on
hand) of Infratil’s wholly owned subsidiaries
30 September ($Millions)
Wholly Owned Group Net Bank Debt –31 March 2020
470.9
Trustpower dividend
(24.8)
Wellington Airport subvention payment
(37.5)
Vodafone NZ distributions and capital return
(42.2)
Tilt Renewables capital return
(179.6)
Longroad Energy distributions and capital return
(19.1)
Equity raise (net of issue costs)
(294.2)
International Portfolio Annual Incentive Fee (FY2020 First Instalment)
41.7
Net interest
34.2
Net other operating cashflows
30.5
Final dividend prior year
72.5
Net other investment & financing cashflows
33.4
Wholly Owned Group Net Bank Debt –30 September 2020
85.8
Infratil Infrastructure Property
13.9
ClearvisionVentures
5.0
Longroad Energy
3.3
Galileo Green Energy
5.0
Other
6.2
Net other investment & financing cashflows
33.4
1
1
---
Infratil
Interim Report
2020
2
There is now undeniable scientific
evidence that atmospheric
greenhouse gases have risen to levels
which are impacting the climate.
Unless net emissions are rapidly
curtailed material adverse
consequences are highly likely. Infratil
acknowledges that:
• Climate change is happening.
• Emissions must be reduced.
• Society’s goal should be to address
climate change and emission
reduction, fairly and efficiently.
• Companies must understand what
climate change and the transition
to lower emissions means for their
business and performance, and
they must be transparent about
goals, plans and actions.
There are uncertainties; the rate of
emission reduction, the physical effects
of climate change, government
policies, changes in consumer
behaviour, the evolution of low-
emission technologies; all of which are
interconnected and which give rise to
multiple scenarios which need to be
assessed.
From inception Infratil has sought to
invest its capital and to manage its
activities to accord with societal
concerns and priorities. In the context
of climate change that now means:
• Recognition of climate change and
the transition to lower emissions in
the analysis of portfolio activities
and investment opportunities.
• Proactively seeking investments
which are likely to benefit from
the transition to a low-carbon
economy and avoiding those
likely to be disadvantaged.
• Seeking to have companies Infratil
invests in recognise the
consequences of climate change
and the transition to lower
emissions, and ensure they measure
their emissions and have plans for
their reduction.
• Providing public information about
climate change related costs and
risks, and emission goals and
commitments which are accessible,
reliable, useful and aligned as
appropriate with external standards
such as those recommended by the
Task Force on Climate-related
Financial Disclosures (TCFD).
Introducing Infratil
Infratil’s Climate Change
Position Statement
Front cover: Wellington Airport managers
John Howarth and Nick Petkov oversee resurfacing
of the runway
Infratil was established in 1994 at a
time when dissatisfaction with public
stewardship of energy, transport and
communications infrastructure resulted in
the introduction of commercial disciplines
and private ownership. From its initial
$25 million equity base, Infratil has grown
to $7.9 billion of consolidated assets.
Infratil’s success is based on investing in
growth infrastructure and ensuring that its
facilities and services efficiently meet the
needs of their users and communities.
1
Six Month
Score Card
May
CDC Data Centres announces it
will build two 10MW data centres
in Auckland.
Longroad Energy
announces it will
build 160MW of solar generation and
a 640MWh battery in Hawaii.
Infratil and Wellington City Council
underwrite $75.8 million of Wellington
Airport equity in case it is required.
New Zealand emerges from 49 day
Level 4-3 lockdown. Infratil’s
businesses have maintained critical
infrastructure services. Lights stayed
on, telephone and internet services
worked, the airport was open, people
were safe.
August
Wellington Airport issues $100 million
of 6 year 2.5% per annum bonds.
Longroad Energy starts building
331MW of solar generation in Texas.
Infratil Property’s $70 million stage
one Wynyard Quarter development in
Auckland is on track for completion
this year, and the sale of the Kilbirnie
bus depot for $35 million is agreed.
During Auckland Level 3 Lockdown,
Vodafone NZ’s mobile data volumes
rose 24%, calls 45%, and texts 31%.
April
Covid-19 restrictions apply. The
priority is the health and safety of
customers and employees, followed
by managing the impact on the
businesses.
Vodafone NZ voluntarily commits
to keep customers connected
during Level 4 Lockdown. Calls rise
70% and data 50%.
Longroad Energy starts building
215MW of solar generation in
California.
Wellington Airport has 6,630
passengers for the month
(April 2019: 552,746).
July
Tilt Renewables erects the 80th
(and final) Dundonnell wind turbine
and the first (of 31) at Waipipi.
Budgeted spend on the two projects
is $984 million.
Infratil receives $180 million capital
return from Tilt Renewables. Over the
six months a further $124 million of
distributions and capital was received
from other subsidiaries and
investments.
Longroad Energy starts building
294MW of solar generation in
Alabama.
Wellington Airport has 304,695
passengers for the month (July 2019:
536,004).
June
Infratil pays 11cps final dividend for
FY20, the same as the prior year and
in line with guidance.
Infratil issues 63 million shares raising
$300 million of equity to ensure it has
the capital to support growth
initiatives.
Vodafone NZ upgrades 150 mobile
cell sites in preparation for 5G and to
improve 4G.
September
Wellington Airport starts runway
resurfacing and work on its sea
protection barrier.
RetireAustralia opens The Rise
retirement accommodation.
CDC Data Centres commissions
the 28MW Eastern Creek 3 data
centre in Sydney.
Having added 18 sites over the
period, Vodafone NZ now has over
150 rural 4G cell sites providing
mobile and broadband coverage.
Upgrading subsea optical links
means that Vodafone NZ is the only
New Zealand operator providing
connectivity through all three
international networks.
2
Corporate Structure
Capital Allocation
& Sources
Sector
Corporate Structure
Capital Structure
Net bank debt and dated bonds
Perpetual bonds
Equity (Market value)
EnergyAirportConnectivityDataSocial/Other
Pending Acquisition
66% Infratil
34% Wellington
City Council
Clearvision Fund
ASIP
Infratil Infrastructure
Property
50% Infratil
50% New Zealand
Superannuation Fund
49.9% Infratil
49.9% Brookfield
Asset Management
48% Infratil
24% Commonwealth
Superannuation
Corporation
24% Future Fund
51% Infratil
27% Tauranga Energy
Consumer Trust
66% Infratil
20% Mercury Energy
40% Infratil
40% New Zealand
Superannuation Fund
20% Management
40% Infratil
Shareholders
Banks
100% owned
Funding Subsidiaries
Bondholders
Renewable Energy
Digital Infrastructure
Airport
Social Infrastructure
Other
3
30 September 2020Comment
Net parent surplus$27.8 million
Significant portfolio changes.
Proportionate EBITDAF
1
$229.5 million
Significant portfolio changes.
Proportionate capital
expenditure
2
$488.9 million
Including $322 million renewable generation,
$122 million data and connectivity.
Net debt
3
$1,389.6 million
Net debt comprised 28% of Infratil’s
capital and was $385 million lower than
31 March 2020.
Dividends declared
6.25 cents cash
and 1.75 cents
imputation credits
The cash dividend is unchanged from last
year. The total payout is 3% higher care of
additional imputation credits.
1. EBITDAF is a non-GAAP measure of financial performance showing net earnings before interest, tax, depreciation, amortisation, financial derivative movements,
revaluations, and non-operating gains or losses on the sales of investments and assets. 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.
Proportionate EBITDAF shows Infratil’s share of the EBITDAF of the companies it has invested in less Infratil’s operating costs, excluding discontinued operations,
and before incentive fees. A reconciliation of net profit after tax to Proportionate EBITDAF is provided in the 30 September 2020 Infratil Interim Results
Presentation.
2. Investment and capital spending by Infratil and its 100% subsidiaries and Infratil’s share of the investment of investee companies.
3. Infratil parent and 100% subsidiaries.
Financial
Highlights
The period illustrated the benefits
of Infratil’s diversification. The
impact of the pandemic and
recession on businesses such as
Wellington Airport and Vodafone
New Zealand were offset by
progress at CDC Data Centres
and the renewable generation
projects of Tilt Renewables and
Longroad Energy.
Net Parent Surplus was down
$28.6 million relative to last year reflecting
changes in the portfolio. Infratil’s
Proportionate EBITDAF was
up $25.3 million. The independent
valuation of Infratil’s holding in CDC
rose $309 million over the six months.
On a proportionate basis, investment
by Infratil’s businesses rose $86.2 million
to $488.9 million. This will provide future
value and income growth for Infratil’s
shareholders.
The $300 million equity raise undertaken
in June, and receipts from businesses,
saw net debt decline $385.1 million to
comprise 28% of Infratil’s total capital as
at 30 September.
For the period the declared dividend is
6.25cps cash and 1.75cps imputation
credits.
4
Report of the
Chief Executive
During the six months to
30 September, we encountered
challenges which few individuals
or organisations have
experienced in living memory.
Yet, as with most adversities,
the outcomes reflect more on
the preparation, resilience and
capability of our people than
on the challenge itself.
I feel we can be proud of how we dealt
with the difficulties and where we now
find ourselves. It is important to give
credit for this. Many of our people had
to go beyond, with long hours working
on difficult tasks with considerable
inconvenience and concern.
The Infratil management team had a
moment of fun when we had our
photographs taken for the annual report.
Partners or children took the pictures in
each family’s bubble. It was a reminder
that our gratitude to our employees
should extend to their families as well.
Our priorities through this crisis were to
keep our people safe, to keep those who
rely on our businesses safe and to meet
their needs, and to safeguard the capital
of our shareholders.
For shareholders there was no doubt
considerable uncertainty arising from
volatile share market values, confusing
economic commentary, grim anecdotes,
novel policies, and the sometimes
disconcerting behaviour of political
leaders.
Against that backdrop, most of our
businesses have experienced “business as
usual”. Electricity and telecommunications
are still basic requirements. When people
are able to travel they want to fly. Data
continues to accumulate and require
storage. Older people want safe and
pleasant accommodation and facilities.
In addition to this stable demand, our
businesses continue to invest in their
activities. Infratil’s record of shareholder
returns is based on owning infrastructure
businesses with attractive opportunities to
invest to take advantage of long-term
demand growth.
CDC Data Centres commissioned its
largest data centre, committed to the
construction of two data centres in
Auckland, and is undertaking preparatory
work for further capacity in Canberra
and Sydney.
Tilt Renewables erected the 80th and last
wind turbine at its Dundonnell wind farm
in Victoria and the first of 31 turbines at
its Waipipi wind farm in Taranaki. The
budgeted cost of these two wind farms
is almost $1 billion.
Longroad Energy is building six solar
and wind power-stations in the US
at a total cost of over $2.6 billion.
Galileo Green Energy is working on
the development of 370MW of wind
generation in Ireland.
RetireAustralia is progressing construction
of additional apartments at two villages,
one of which is new.
Wellington Airport’s $30 million of
resilience projects will ensure it is prepared
as air traffic returns to normal; including
runway resurfacing, earthquake
strengthening, and seawall protection.
Vodafone New Zealand invested
$90 million in customer service, IT
and network upgrades and resilience.
Almost 10% of cell-sites were upgraded
in preparation for expansion of the
5th generation of mobile technology
and improvements to sub-sea fibre
links ensures its customers have the
best international access of any
New Zealand telecommunications
company.
These investments will pay off for
shareholders in future years. More
immediately we are experiencing solid
operational and value gains across our
businesses. Of course, in some areas,
“better than expected”, is hardly great.
However, even at our most badly
impacted business, Wellington Airport,
the recovery is encouraging as travel
restrictions are lifted.
Infratil’s largest investment commitment is
to renewable electricity generation and
the Covid-reset appears likely to be
positive for demand for capital and
returns on capital invested in that sector.
Vodafone NZ is transitioning to a simpler,
more efficient business, with excellent
customer services. We are aware of
shortcomings which are challenging to
remedy, but we understand what is
required and we are doing the work and
making the investment.
CDC continues to experience explosive
demand growth for data centre capacity
which is justifying capital outlay of over
$1 million a day. We are especially
delighted that operations are being
established in Auckland with over
$300 million being invested in the
construction of two data centres. Data
sovereignty is a growing issue and CDC’s
ultra-secure facilities and 100% Australia-
New Zealand ownership provide it with a
huge advantage.
Dividend / Guidance
In recent years Infratil has sought to
provide reasonable clarity about the
medium-term dividend outlook but there
have been obstacles to this over the last
two years.
In 2019 we had the $1 billion acquisition
of Vodafone NZ and this year we had
Covid-19 uncertainties.
5
While these events hampered our ability
to provide forecasts and guidance, the
actual earnings, cash flows and financial
circumstances of Infratil enabled us to pay
a final dividend for FY2020 which was
unchanged on last year’s final dividend.
With this report we can now declare an
interim dividend for FY2021 of 6.25 cents
cash and 1.75 cents of imputation credits.
The dividend will be paid on
15 December 2020 to shareholders of
record on 1 December 2020. The dividend
reinvestment plan will not operate for
shareholders on this occasion.
In the short-term, dividends are a function
of cash earnings and our funding position.
Medium-term, it reflects how we have
positioned Infratil’s portfolio and capital.
Our goal is to have a balance between
growth infrastructure which is absorbing
capital and creating value growth; and
investments which generate solid cash
returns. Our big recent investments in CDC
and Vodafone NZ will in future provide
cash earnings which will boost Infratil’s
dividends, but in the short-term the
priority is that they reinvest their funds in
their own activities.
Infratil is forecasting Proportionate
EBITDAF for the year to 31 March 2021 of
between $430 million and $470 million.
Proportionate EBITDAF incorporates
Infratil’s percentage share of investee
companies’ EBITDAF compared with the
reported results which consolidate 100%
of earnings in companies in which Infratil
has effective control. Had Covid-19 not
occurred it is estimated that the full year
EBITDAF to 31 March 2021 would have
been approximately $80 million higher
(compared to Proportionate EBITDAF of
$446.0 million for the previous year).
6
Report of the
Chief Executive
Funding
In June Infratil raised $300 million with the
issue of 63.3 million shares at an average
price of $4.74. The equity was raised to
ensure Infratil is well placed to support its
investment activities.
As at 30 September 2020 Infratil’s
leverage was 28% (net borrowing of
the 100% group as a percentage of total
debt and the market value of equity).
$593 million of bank facilities were
unutilised.
Qscan
After 30 September Infratil announced a
commitment to acquire up to 60% of
Australian diagnostic imaging business
Qscan for $350 million; giving an
enterprise value for the company of
$782 million (A$735 million). The transaction
is conditional on regulatory approval.
Diagnostics involves highly trained doctors
and medical staff using extremely
sophisticated equipment to identify and
screen health problems and to assist with
treatment. A critical attraction for Infratil in
making this investment was the support
shown by Qscan’s doctors and radiologists
who operate throughout its 73 clinics.
While it is an excellent business in a sector
that matters, the appeal for Infratil is the
potential for growth. Demand for
diagnostic imaging is increasing. It
reduces total healthcare costs, improves
outcomes, and there are significant scale
benefits, including from increased use of
advanced technology.
Markets, Regulation, Prospects
The current disruptions make it difficult to
be certain about the future. The 2007-08
Global Financial Crisis resulted in major
changes to financial sector regulation and
monetary policy. The health and economic
crisis we are now experiencing is likely to
have more far-reaching consequences.
In particular, governments everywhere are
now taking larger roles in peoples’ lives
and the regulation of the economy. It is
unlikely there will be a return to previous
boundaries after the pandemic recedes.
We have long advocated for government
and business to work cooperatively and
we hope that is an outcome of the new
environment we find ourselves in. When
governments set goals and policies to
incentivise businesses, more is achieved.
Whether the desired outcomes are
producing economic wealth and jobs or
improving environmental and social
outcomes such as reducing emissions or
providing better health care.
Ultimately, capital is mobile and Infratil is
now investing in New Zealand, Australia,
USA, and Europe. Infratil’s capital will be
deployed where returns are the most
prospective.
Infratil’s goal is to provide good risk-
adjusted returns for its shareholders by
investing in infrastructure sectors facing
demand growth. We remain confident
about the thematics which are driving our
capital allocation; communications and
digital infrastructure, decarbonisation,
aging populations, and expanding
consumption of the Asian middle classes.
Marko Bogoievski
Chief Executive
7
Photos from left to right: RetireAustralia’s The Verge village in Queensland. Vodafone 5G installation Auckland.
CDC Data Centres’ foundations Auckland. Longroad Energy’s utility scale solar installation Texas
8
Governance in periods of crisis
inevitably requires that a board
is more actively monitoring
and addressing risks and,
sometimes, opportunities.
In the main we were reassured by the
generally solid performance of our
businesses, our strong balance sheet,
and the resilience of the group’s
investment plans.
To ensure that Infratil could progress its
investment opportunities the board
supported raising $300 million of
additional equity. This was undertaken in
two stages with an overriding goal of
maximising the benefit to all shareholders
(whether they participated in the issue or
not) by:
• maximising the price at which shares
were issued; and
• maximising the opportunity for eligible
shareholders to participate pro rata.
There can be conflicts between these
objectives, but we believe Infratil’s issue
delivered both high shareholder
participation and negligible value dilution.
Needless-to-say, we are also confident
the proceeds are being applied to good
purposes and will generate value.
The structure and chronology of the issue
is summarised below, including answers
we gave to questions we received from
shareholders.
1. In June Infratil issued 63,273,696 shares
and raised $300 million. This was an
increase of 9.6% in the number of shares
on issue (a shareholder with 10,000
shares before the issue would need to
own 10,960 shares afterwards to avoid
dilution).
Report of the
Board Chair
9
issue we were in active communication
with the NZ Shareholders Association in
case of concerns about the issue
structure; we received no adverse
feedback.
Under the listing rules; “ If seeking
additional equity capital, issuers of
quoted equity securities should offer
further equity securities to existing
equity security holders of the same
class on a pro rata basis, and on no
less favourable terms, before further
equity securities are offered to other
investors.”. As noted above the issue
structure delivered this. All eligible
shareholders were offered pro rata
participation. The two stage process
gave retail shareholders an advantage
(which amounted to 11 cents per
new share) because of the “lower of”
price offer.
6. The issue resulted in a small shift in
Infratil’s proportionate ownership
as shown in the following table with
New Zealand institutional ownership
rising and international ownership
falling.
I hope that explanation of the mechanics
and outcome of the equity issue is of
interest and useful for anyone with
concerns about how it was done.
4. Details of the issue:
• The equity raise was announced 9th
of June. The fully underwritten
placement was at a price of $4.76,
8% below the prior day close and
almost exactly the average price
over the previous 25 business days.
• Over the 25 days after the issue the
average share price was $4.75 with
a price range of $4.65 to $4.92. The
average market price was within 1%
of the average issue price.
• This indicates the issue price
was very fairly set. To the extent
a shareholder did or did not
participate in the issue, they
incurred neither a material gain
nor cost.
• Infratil and UBS (the brokers of the
issue) were diligent in ensuring that
all shareholders were contacted and
able to participate pro rata. Infratil
had received a full register report as
at 2nd June and brokers were
contacted to ensure clients were
correctly allocated between the
institutional and retail placements.
5. We believe that management took all
reasonable steps to ensure that no
shareholder was disadvantaged by the
issue structure or terms. During the
2. The issue was undertaken in two
stages. On the 9th of June institutional
shareholders were invited to provide
bids which resulted in Infratil issuing
52,521,008 shares at $4.76 raising
$250 million. Infratil’s retail shareholders
were then offered $50 million of shares
with two protections, they would
receive at least enough shares to
maintain their proportionate ownership
and the share price would be a 2%
discount to the market price but no
more than $4.76. This resulted in Infratil
issuing 10,752,688 shares on 25th June
at $4.65 raising $50 million.
Infratil had the flexibility to issue more
shares in the retail issue if that had
been necessary to achieve the pro rata
outcome. This wasn’t required and
approximately 60% of eligible
shareholders participated.
3. A pro rata issue to eligible shareholders
is the benchmark, and we believe that
the structure used reduced uncertainty,
resulted in a better price, and provided
full rights for participation.
There is the question of negotiable
rights, where a shareholder that does
not wish to participate can sell the right
to buy a new share. But for that to be
of benefit to the shareholder, the value
of the right must be compensation for
the lower issue price. We are confident
that the combination of high issue price
and no rights delivered a better
outcome for shareholders who did not
participate.
30 September 202031 March 2020
Million sharesMillion shares
International16923.3%15924.2%
NZ institutions20928.9%18527.9%
NZ retail34547.8%3164 7. 9 %
To ta l723 660
10
Another area where the board represents
the interests of shareholders is in
managing the manager (Morrison & Co).
While we have few reservations about the
quality of Infratil’s management the large
incentive fee obligations incurred by
Infratil over the last two years have raised
natural questions about value for money.
Your board has a great deal of experience
with management contracts and
remuneration, and we also regularly seek
expert advice. In 2017 we commissioned
Fidato Advisory to review the fee structure
to ensure it was in the best interests of
shareholders.
The outcome of that review has previously
been reported and concluded that a
comparison of Infratil’s management
agreement and the terms of comparable
funds indicated that Infratil’s fee terms
were fair to Infratil shareholders.
In late 2019, your Board again
commissioned Fidato to update its review
of the fees. This entailed a comparison
of the terms of Infratil’s management
agreement related to remuneration,
ancillary services and the reimbursement
of expenses with those of comparable
funds and separate account mandates.
It also entailed an evaluation of the
incentive fees Infratil has actually paid
since inception in March 1994 against the
fees that would have been paid under a
hypothetical contemporary incentive fee
structure over the same period.
While contemporary fee structures for
infrastructure mandates vary, consistent
features include; a) performance fees
being payable across the entire portfolio,
b) hurdle rates substantially lower than the
12% per annum absolute hurdle applied
across the Infratil international portfolio,
c) a high-water mark mechanism to
ensure that a performance fee is payable
only once on a particular increase in value,
and d) some deferral of payment of
unrealised performance fees across more
than one fiscal period.
Analysis by Fidato indicated that
simulated incentive fees under a
contemporary fee structure would have
been materially larger than the incentive
fees actually accrued under Infratil’s
management agreement. On that
assessment, the current remuneration
structure has, in totality, been
demonstrably beneficial to Infratil
shareholders over the 26 years.
Further details on the Fidato review can
be found on Infratil’s website at https://
infratil.com/for-investors/.
A shareholder raised a question about
the three categories of the international
incentive fee and asked that Infratil
provide a breakdown of the annual
outcome in each category. We will do so
in future and for completeness we have
set out the outcome of each category for
the last two years. There are three
categories of the incentive fee and each
is assessed independently, which means
that if one is negative that amount will
not reduce the fee calculated in another.
In FY2019 the initial period fee was
$102.6 million, the annual fee was
($7.6 million), and there were no realisation
fees. In FY2020 the three figures were
$0, $125.0 million, and ($5.7 million)
respectively.
This feature of the current arrangement
was considered as part of Fidato’s review.
In the September 2018 Interim Report
and 2019 Annual Report we published
our ten year shareholder return targets.
This involved estimating the returns we
would achieve from our portfolio of
businesses and adjusting the shareholder
returns to include management costs and
the use of debt. This gave a target ten
year return range of 11% per annum to
15% per annum after tax.
When we published this analysis we
indicated that we intended to avoid
frequent adjustments, but would provide
periodic updates if anything major
occurred to modify our expectations.
I can report that we are not aware of
factors which would dramatically change
the target range for the ten year
shareholder returns from those signalled in
2018. However, it must be recognised that
while we have weathered stage one of
the Covid crisis we all face many
uncertainties about the recovery phase.
A significant equity issue, management
costs, and economic uncertainty have not
caused us to lose focus on shareholder
interest in the dividend. This, and Infratil’s
financial performance and circumstances,
saw the board support declaring a
dividend of 6.25 cents cash and 1.75 cents
imputation credits as the interim payment
for FY2021. The cash dividend is the same
as last year and the imputation credits are
up slightly.
It is expected that dividends will increase
in future as Infratil’s cash returns from its
investments rise.
Thank you for your continued support.
Mark Tume
Chair
11
Waipipi Wind Farm’s first turbine
12
Communication with
Shareholders & Bondholders
In addition to Infratil’s reports, releases
and normal one-on-one interactions, a
number of meetings are also hosted each
year which provide for two-way
communication and give share and bond
holders an opportunity to provide
feedback and raise questions and
concerns.
• The Annual Meeting on 20th August.
It includes formal aspects, such as
shareholder resolutions, a speech
by the Chair on issues relevant to
governance and strategy, a
presentation by management on
activities and prospects, and
considerable opportunity for questions
and observations.
• Results presentations; final (29th May)
and interim (12th November).
• The annual cycle of presentations to
shareholders around New Zealand
(3rd September to 1st October).
Annual Meeting 20th August
Due to Covid-19 restrictions the Annual
Meeting was undertaken remotely this
year. Director Alison Gerry chaired the
meeting. Director Marko Bogoievski was
also present as were several members of
the management team and
representatives of the auditors. The
remaining directors called in from remote
locations.
Over 500 people, presumably mostly
shareholders, remotely joined the meeting
and observed proceedings and, in some
cases, submitted questions. The meeting
is available at https://edge.media-server.
com/mmc/p/uckjzp66.
• Shareholder’s raised questions about
Infratil’s perpetual bonds, CDC Data
Centres, Wellington Airport, Vodafone
NZ, and the viability of renewable
electricity generation.
• At a more structural level, there were
questions about the respective roles of
board and management, and features
of the management agreement (see
page 10).
Shareholder Presentations: September
3rd Kapiti and Wellington, 4th Palmerston
North, 7th Nelson and Christchurch, 8th
Invercargill and Dunedin, 9th Napier, 15th
Hamilton, 16th Rotorua, Tauranga, 18th
New Plymouth, October 1st Auckland.
19 presentations in 13 centres to
approximately 1,500 share and bond
holders.
These meetings are more informal and
interactive than the Annual Meeting or
Results Presentations. They were held later
in the year than usual to enable in-person
attendance as regions returned to Level
1-2 restrictions.
Often similar questions were asked at
many of the meetings. The most common
ones are summarised below:
“What is happening with Wellington
Airport’s runway extension?” Work is
underway to get the necessary consents
and it will then be a matter of arranging
the financing. Since this process got
started the extension has become more
necessary because of the need to replace
the Cook Strait seawall and the increasing
size of the short-haul aircraft serving the
Capital.
“Is Infratil looking at Hydrogen?” Hydrogen
at present is not economic and its use as
a fuel (either replacing natural gas for
domestic use or to replace petrol or
batteries for vehicles) will depend on
government policies and incentives.
What is the plan to improve Vodafone NZ’s
service quality?” Work is underway now
with investment into both the network and
the systems supporting customer
experience.
“Why doesn’t CDC build a data centre
in Invercargill to take advantage of
the abundant electricity which will be
available after the smelter closes?”
The centres owned by CDC benefit from
close proximity to the users, which is why
they are being built in Auckland rather
than elsewhere in New Zealand. Also, it’s
the data centre users who pay for
electricity so the location of a centre due
to power prices would need to be driven
by the users.
“Management received a significant
incentive payment yet Infratil’s operating
profitability isn’t spectacular?” Infratil’s
returns have always encapsulated a
mixture of cash earnings and revaluation
gains. The incentives were calculated
on total returns not just the cash or
reported earnings.
Attendees to these presentations were
surveyed after the events. Some of the
results were:
Was the presentation comprehensive and
the right length? 84% and 87% said yes.
Did you have good access to
management? 97% yes.
Did it help you understand Infratil?
80% said a lot or very clearly. 20%
said somewhat.
13
Infratil’s Annual Meeting. Preparing to record and
broadcast in Morrison & Co’s boardroom
14
Infratil’s
Financial Trends
The graphs seek to illustrate key aspects of
Infratil’s decade. For FY2021 shareholder returns,
assets and funding are as at 30 September 2020.
Proportionate EBITDAF and investment are
annualised based on guidance.
Proportionate EBITDAF
1
Over the decade earnings have risen
over 50%. The composition has changed.
The long-term core of Trustpower, Tilt
Renewables and Wellington Airport has
gone from two thirds of the total to about
half as the contribution of other businesses
has risen.
Infratil's Assets
Proportionate Investment
0
0
20
30
40
50
60
70
80
90
00
%
Infratil's Capital Structure
0
5
0
5
20
0
00
200
300
400
500
600
700
Dividend, cents per share
$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
0
$Millions
Data
Other
SocialTransportTelecommunications
Energy
00
- 00
200
300
400
500
600
Perpetual bondsEquity (market value)Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
200
400
600
0
800
,000
,200
,400
,600
,800
2,000
0
500
,000
,500
2,000
2,500
3,500
3,000
Sold
Retire Australia
Wellington Airport
Trustpower
Vodafone NZ
Other
202
4,500
4,000
$Millions
5,000
202 2020 208209 202 203 204 207206 205
2020 208209 20 202 203 204 207206 205
202
2020 208209 20 202 203 204 207206 205
CDC
2020 208209 202 203 204 207206 205
Tilt Renewables
2020 208209 202 203 204 207206 205
0
200
400
600
800
,000
,400
,200
Longroad
Retire Australia
Wellington Airport
Trustpower
Other
Qscan
202
,800
,600
$Millions
2,000
CDC
Vodafone NZ
Tilt Renewables
2020 208209 202 203 204 207206 205
Longroad
Retire Australia
Wellington Airport
Trustpower
Sold
Total
Corporate
CDC
Vodafone NZ
Tilt Renewables
0
00
200
300
400
500
60%
40%
20%
0
-20%
-40%
2082020202*
209
Dividend ReturnCapital Return
20720*202203204205
Accumulation Index
Accumulation Index
70%
80%
Annual Return
206
* Six month periods
Shareholder Returns
Between 1 October 2010 and
30 September 2020 Infratil provided
its shareholders with an after tax
return of 17.8% per annum.
$100 invested at the start of the period
would have compounded to $515 by
the end if all distributions were reinvested.
The graphs show six month returns for
2011 and 2021 and full years in between.
Infratil's Assets
Proportionate Investment
0
0
20
30
40
50
60
70
80
90
00
%
Infratil's Capital Structure
0
5
0
5
20
0
00
200
300
400
500
600
700
Dividend, cents per share
$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
0
$Millions
Data
Other
SocialTransportTelecommunications
Energy
00
- 00
200
300
400
500
600
Perpetual bondsEquity (market value)Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
200
400
600
0
800
,000
,200
,400
,600
,800
2,000
0
500
,000
,500
2,000
2,500
3,500
3,000
Sold
Retire Australia
Wellington Airport
Trustpower
Vodafone NZ
Other
202
4,500
4,000
$Millions
5,000
202 2020 208209 202 203 204 207206 205
2020 208209 20 202 203 204 207206 205
202
2020 208209 20 202 203 204 207206 205
CDC
2020 208209 202 203 204 207206 205
Tilt Renewables
2020 208209 202 203 204 207206 205
0
200
400
600
800
,000
,400
,200
Longroad
Retire Australia
Wellington Airport
Trustpower
Other
Qscan
202
,800
,600
$Millions
2,000
CDC
Vodafone NZ
Tilt Renewables
2020 208209 202 203 204 207206 205
Longroad
Retire Australia
Wellington Airport
Trustpower
Sold
Total
Corporate
CDC
Vodafone NZ
Tilt Renewables
0
00
200
300
400
500
60%
40%
20%
0
-20%
-40%
2082020202*
209
Dividend ReturnCapital Return
20720*202203204205
Accumulation Index
Accumulation Index
70%
80%
Annual Return
206
* Six month periods
1. Proportionate EBITDAF is an unaudited non-GAAP
measure and is defined on page 3.
15
Infratil Assets
The graph shows the NZ IFRS values of
Infratil’s unlisted assets and the NZX values
of the listed ones. Over the decade Infratil’s
holdings in Trustpower, Tilt (which separated
from Trustpower in FY2017), and Wellington
Airport have risen in value by about $1 billion.
The other assets have both changed in
composition and increased from a value of
about $1 billion to a current value of about
$2.3 billion.
Infratil's Assets
Proportionate Investment
0
0
20
30
40
50
60
70
80
90
00
%
Infratil's Capital Structure
0
5
0
5
20
0
00
200
300
400
500
600
700
Dividend, cents per share
$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
0
$Millions
Data
Other
SocialTransportTelecommunications
Energy
00
- 00
200
300
400
500
600
Perpetual bondsEquity (market value)Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
200
400
600
0
800
,000
,200
,400
,600
,800
2,000
0
500
,000
,500
2,000
2,500
3,500
3,000
Sold
Retire Australia
Wellington Airport
Trustpower
Vodafone NZ
Other
202
4,500
4,000
$Millions
5,000
202 2020 208209 202 203 204 207206 205
2020 208209 20 202 203 204 207206 205
202
2020 208209 20 202 203 204 207206 205
CDC
2020 208209 202 203 204 207206 205
Tilt Renewables
2020 208209 202 203 204 207206 205
0
200
400
600
800
,000
,400
,200
Longroad
Retire Australia
Wellington Airport
Trustpower
Other
Qscan
202
,800
,600
$Millions
2,000
CDC
Vodafone NZ
Tilt Renewables
2020 208209 202 203 204 207206 205
Longroad
Retire Australia
Wellington Airport
Trustpower
Sold
Total
Corporate
CDC
Vodafone NZ
Tilt Renewables
0
00
200
300
400
500
60%
40%
20%
0
-20%
-40%
2082020202*
209
Dividend ReturnCapital Return
20720*202203204205
Accumulation Index
Accumulation Index
70%
80%
Annual Return
206
* Six month periods
Proportionate Capital Investment
Over the decade Infratil invested $6 billion,
split evenly between investment undertaken
by Infratil and Infratil’s share of investee
company investment.
Annual fluctuations indicate the intermittent
availability of good opportunities.
Infratil's Assets
Proportionate Investment
0
0
20
30
40
50
60
70
80
90
00
%
Infratil's Capital Structure
0
5
0
5
20
0
00
200
300
400
500
600
700
Dividend, cents per share
$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
0
$Millions
Data
Other
SocialTransportTelecommunications
Energy
00
- 00
200
300
400
500
600
Perpetual bondsEquity (market value)Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
200
400
600
0
800
,000
,200
,400
,600
,800
2,000
0
500
,000
,500
2,000
2,500
3,500
3,000
Sold
Retire Australia
Wellington Airport
Trustpower
Vodafone NZ
Other
202
4,500
4,000
$Millions
5,000
202 2020 208209 202 203 204 207206 205
2020 208209 20 202 203 204 207206 205
202
2020 208209 20 202 203 204 207206 205
CDC
2020 208209 202 203 204 207206 205
Tilt Renewables
2020 208209 202 203 204 207206 205
0
200
400
600
800
,000
,400
,200
Longroad
Retire Australia
Wellington Airport
Trustpower
Other
Qscan
202
,800
,600
$Millions
2,000
CDC
Vodafone NZ
Tilt Renewables
2020 208209 202 203 204 207206 205
Longroad
Retire Australia
Wellington Airport
Trustpower
Sold
Total
Corporate
CDC
Vodafone NZ
Tilt Renewables
0
00
200
300
400
500
60%
40%
20%
0
-20%
-40%
2082020202*
209
Dividend ReturnCapital Return
20720*202203204205
Accumulation Index
Accumulation Index
70%
80%
Annual Return
206
* Six month periods
Infratil Funding
While debt entails a materially lower cost/
yield than equity, Infratil’s use of debt
funding is demarcated by the policy of
targeting credit metrics broadly consistent
with an Investment Grade credit rating.
Infratil's Assets
Proportionate Investment
0
0
20
30
40
50
60
70
80
90
00
%
Infratil's Capital Structure
0
5
0
5
20
0
00
200
300
400
500
600
700
Dividend, cents per share
$Millions
$Millions
EBITDAF, Free Cash Flows, Dividends
Sources of Consolidated EBITDAF
0
$Millions
Data
Other
SocialTransportTelecommunications
Energy
00
- 00
200
300
400
500
600
Perpetual bonds
Equity (market value)Net bank debt and dated bonds
Operating cash flow
Interest, tax, working capital
Dividend (rhs)
200
400
600
0
800
,000
,200
,400
,600
,800
2,000
0
500
,000
,500
2,000
2,500
3,500
3,000
Sold
Retire Australia
Wellington Airport
Trustpower
Vodafone NZ
Other
202
4,500
4,000
$Millions
5,000
202 2020 208209 202 203 204 207206 205
2020 208209 20 202 203 204 207206 205
202
2020 208209 20 202 203 204 207206 205
CDC
2020 208209 202 203 204 207206 205
Tilt Renewables
2020 208209 202 203 204 207206 205
0
200
400
600
800
,000
,400
,200
Longroad
Retire Australia
Wellington Airport
Trustpower
Other
Qscan
202
,800
,600
$Millions
2,000
CDC
Vodafone NZ
Tilt Renewables
2020 208209 202 203 204 207206 205
Longroad
Retire Australia
Wellington Airport
Trustpower
Sold
Total
Corporate
CDC
Vodafone NZ
Tilt Renewables
0
00
200
300
400
500
60%
40%
20%
0
-20%
-40%
2082020202*
209
Dividend ReturnCapital Return
20720*202203204205
Accumulation Index
Accumulation Index
70%
80%
Annual Return
206
* Six month periods
16
Infratil’s Financial
Performance & Position
Infratil’s Financial
Performance & Position
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.
Breakdown of the Consolidated Results: Six Months Ended 30 September 2020
Infratil consolidates companies when it owns more than 50%, including Trustpower, Tilt and Wellington Airport. Associates such as
CDC, Vodafone NZ, Longroad and RetireAustralia are not consolidated. For those investments the EBITDAF column shows 100% of
their EBITDAF and the ‘Adjustments for associates’ column reflects the adjustment required to reconcile to Infratil’s share of their
Net Profit After Tax.
Six months ended 30 September 2020
$Millions
Infratil’s
share
EBITDAF
1
100%D&AInterestTa x
Revaluations
adjustments
Adjustments
for
associatesMinorities
Infratil’s
share of net
profit after
tax
Trustpower51.0%$110.4($21.9)($15.1)($13.3)($26.5)-($16.7)$16.9
Tilt Renewables65.5%$34.1($21.8)($5.5)($12.5)$34.4-($9.9)$18.8
Longroad Energy40.0%$23.4----($37.2)-($13.8)
Wellington Airport66.0%$10.9($13.5)($12.9)$8.2$4.5-($2.6)($5.4)
CDC Data Centres48.1%$79.1----$29.4-$108.5
Vodafone NZ49.9%$224.7----($240.3)-($15.6)
RetireAustralia50.0%$10.2----($3.8)-$6.4
Other/Parent($81.2)-($38.6)$12.7$16.6$2.5-($88.0)
To ta l($57.2)($72.1)($4.9)$29.0($249.4)$29.2$27.8
Six months ended 30 September 2019
$Millions
Infratil’s
share
EBITDAF
1
100%D&AInterestTa x
Revaluations
adjustments
Adjustments
for
associatesMinorities
Infratil’s
share of net
profit after
tax
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%$39.7----($21.9)-$17.8
Wellington Airport66.0%$50.4($13.4)($12.5)($7.2)$0.3-($7.8)$9.8
CDC Data Centres48.2%$54.6----$24.9-$79.5
Vodafone NZ49.9%$78.2----($81.4)-($3.2)
RetireAustralia50.0%$5.2----$1.3-$6.5
Parent/Other($29.6)($0.2)($42.5)($17.6)$0.3--($89.6)
($75.2)($85.6)($46.1)($17.2)($77.1)($31.3)$48.5
Discontinued$16.5($9.8)($1.1)($4.3)$ 7. 0-($0.4)$7.9
To ta l($85.0)($86.7)($50.4)($10.2)($77.1)($31.7)$56.4
1. EBITDAF is an unaudited non-GAAP measure and is defined on page 3.
17
Consolidated Results
The net parent surplus was $27.8 million
down from $56.4 million in the prior
period. The breakdown of both periods’
numbers are provided on the facing
page. Notable changes include; Tilt up
$10.5 million largely due to fair value
and foreign exchange movements.
Longroad down $31.6 million due to
timing of accounting of development
gains. CDC up $29.0 million. Vodafone NZ
down $12.3 million due to a longer
ownership period and amortisation of
intangible customer contracts.
Discontinued operations had
contributed $7.9 million to the prior
period result.
The accrual of incentive fees that Infratil
pays its manager on international
investments increased $44.9 million.
The fee reflects 20% of the gains returned
above the 12% hurdle on Infratil’s
investment in CDC, Tilt, Longroad,
RetireAustralia, and the ASIP Fund.
Six months ended 30 September ($Millions)Share20202019
Trustpower51%$56.3$54.6
Tilt Renewables66%$22.3$49.2
Longroad Energy40%$9.4$15.9
Galileo Green Energy40%($1.7)-
Wellington Airport66%$7.2$33.3
CDC Data Centres48%$38.0$26.3
Vodafone NZ50%$112.1$39.0
RetireAustralia50%$5.1$2.6
Parent/Other-($19.2)($16.8)
Proportionate EBITDAF
1
$229.5$204.2
1. Proportionate EBITDAF and EBITDAF are unaudited non-GAAP measure and are defined on page 3.
Proportionate EBITDAF
This table shows Infratil’s proportionate
EBITDAF contributions from its continuing
operations and management costs
excluding international performance
fees. For instance, Infratil owns 51% of
Trustpower. Trustpower’s EBITDAF for
the period was $110.4 million and 51%
of that is $56.3 million. With CDC,
Infratil owns 48.1% and CDC’s EBITDAF
was $79.1 million so Infratil’s share was
$38.0 million.
Six months ended 30 September ($Millions)20202019
Operating revenue$662.0$802.4
Operating expenses($442.1)($485.7)
Depreciation & amortisation($57.2)($75.2)
Net interest($72.1)($85.6)
Tax expense($4.9)($46.1)
Revaluations & realisations$29.0($17.2)
Discontinued operations-$8.3
Management incentive fees($57.7)($12.8)
Net profit after tax$57.0$88.1
Minority earnings($29.2)($31.7)
Net parent surplus$27.8$56.4
For 2020 the average exchange rates were NZ$/A$0.9329 and NZ$/US$0.6408 (0.9468 and 0.6557 in 2019).
Over the period CDC contributed a gain
of $309 million and Tilt $167 million
(including the capital return). For the half
year a full valuation exercise was not
undertaken for all investments and the
fee accrual is an estimate. The full
year actual incentive fee will be based
on 31 March 2021 year end independent
valuations and audited.
18
Infratil’s Financial
Performance & Position
Proportionate Capital
Expenditure and Investment
The table shows Infratil’s share of the
investment spending of investee
companies. For instance, Infratil owns
49.9% of Vodafone NZ which invested
$90 million, so Infratil’s share amounts
to $44.9 million.
Six months ended 30 September ($Millions)Share20202019
Trustpower51%$7.9$8.4
Tilt Renewables65%$200.3$80.9
Longroad Energy40%$113.9$131.3
Wellington Airport66%$ 7. 6$21.1
CDC Data Centres48%$77.4$126.5
Vodafone NZ50%$44.9-
RetireAustralia50%$15.4$13.5
Other-$21.5$21.0
Infratil investment into Vodafone NZ100%-$1,029.6
Proportionate Investment$488.9$1,432.3
For 2020 average exchange rates were NZ$/A$0.9329 and NZ$/US$0.6408 (0.9468 and 0.6557 in 2019).
Infratil and Wholly Owned
Subsidiaries Operating Cash
Flows
This table shows the operating cash
flows of Infratil and its 100% subsidiaries.
Receipts are from dividends, interest,
subventions and capital returns.
Outgoings are from operating costs
and interest.
Previous reports have shown the operating
cash flow for the consolidated group. It is
hoped that the “100% group” measure
will be more informative and useful.
The lack of cash income from CDC
reflects that company’s current appetite
for capital as it rapidly expands. “Other”
includes $19.6 million of management
expenses.
The incentive fee is the first instalment of
the FY2020 international portfolio annual
incentive fee.
$Millions
30 September
2020Comment
Trustpower$24.8Dividends (15.5cps)
Tilt Renewables $179.6Capital return ($2.91 per 5 shares held)
Longroad Energy $19.1$8.0 million distributions.
$11.1 million capital return
Wellington Airport$37.5Subvention
Vodafone NZ$42.2$8.7 million distributions.
$33.5 million capital return
Net interest($34.2)
Other($30.5)
$238.5
International incentive fee($41.7)
$196.8
19
$Millions
30 September
2020
31 March
2020
Net bank debt of 100% subsidiaries$85.8$470.9
Dated Infrastructure Bonds$1,071.9$1,071.9
Perpetual Infrastructure Bonds$231.9$231.9
Market value Infratil equity$3,607.5$2,579.3
Total Capital$4,997.1$4,354.0
Dated debt/total capital23.2%35.4%
Total debt/Total capital27.8%40.8%
As at 30 September 2020 Infratil and
100% subsidiaries had $695.0 million of
bank facilities drawn to $102.0 million.
$16.2 million was on deposit.
Infratil guaranteed letters of credit
issued by Longroad Energy which as at
30 September 2020 amounted to
$69.5 million (31 March: $94.6 million).
Infratil also had commitments to provide
up to $50.0 million of equity funding to
Wellington Airport and up to A$10.0 million
to RetireAustralia. Those were the only
credit supports provided by Infratil for any
less than 100% owned business.
Over the six months no bonds matured or
were repaid. $93.9 million of bonds are due
in June 2021. $32.0 million of bank facilities
Capital of Infratil and
100% Subsidiaries
$Millions
30 September
2020
31 March
2020
Trustpower$1,142.2$1,022.4
Tilt Renewables $913.7$926.0
Longroad Energy --
Wellington Airport$456.7$487.6
CDC Data Centres $845.8$693.4
Vodafone NZ$917.5$974.0
RetireAustralia$313.3$291.5
Other$211.3$169.1
To ta l$4,800.5$4,564.0
For 30 September 2020 exchange rates of NZ$/A$ 0.9253 and NZ$/US$ 0.6603 were used (0. 9740
and 0. 5997 for March 2020).
Infratil’s Assets
The asset values in the table are
consistent with NZ IFRS and in accord
with Infratil’s financial statements; with
the exception of Trustpower and Tilt
which are shown at their NZX values.
The Annual Report will include the
independent valuations required for
the purpose of calculating the
management performance fee on
Infratil’s international assets.
are due in February 2021. During the
period Infratil issued 63,273,696 shares
at an average price of $4.74 raising
$300 million before issue costs. Excluding
treasury stock, over the six month period
Infratil’s shares on issue rose from
659,678,837 to 722,952,533. The share price
rose from $3.91 to $4.99
.
20
Qscan
Infratil has a conditional
agreement to acquire up to
60% of Australian diagnostic
imaging business Qscan.
Settlement is expected to
occur this year following
regulatory approval and
satisfaction of final conditions.
The price for 60% is $350 million
(A$330 million) which gives Qscan an
enterprise value of A$735 million. In
the year to 30 June 2021, Qscan is
forecasting EBITDAF of between
A$52 million and A$58 million.
Approximately 50% of Qscan is being
acquired from a corporate investor.
Doctors and staff who now own the other
half are selling some shares and will retain
between 25% and 32%. The Morrison & Co
Growth Infrastructure Fund is to acquire up
to 15% alongside Infratil.
Infratil will initially fund the investment from
bank facilities and deposits. In due course
it is anticipated that longer term funding
will be introduced, including from issuing
bonds.
Infratil’s goal is an investment which over
time grows to a material scale within the
portfolio and Qscan is positioned to
deliver this. It is in a high growth sector
and is benefitting from significant recent
investment into equipment.
Qscan Profile
Diagnostic imaging involves highly trained
doctors and medical staff using extremely
sophisticated equipment to identify and
map health problems and to assist with
monitoring and treatment.
Qscan operates through 73 clinics, mostly
located in New South Wales and
Queensland, and owns over 300 scanning
machines: X-ray, magnetic resonance
imaging (MRI, as shown in the picture),
positron emission tomography (PET), and
computerised tomography (CT).
For Infratil, a critical attraction of Qscan
is the support the company has from its
over 100 radiologists, who are assisted by
730 medical and administration staff.
Being an “employer of choice” has real
benefits in a sector where expertise is
critical and in limited supply.
Qscan Services & Income
Australian government regulation and
payment arrangements for scanning
services has the following key features:
• The Australian government funds the
Medicare insurance scheme to meet all
or part of the cost of specified medical
procedures undertaken by licensed
private care givers.
• Qscan clinics hold Medicare licenses to
provide specified services.
• Approximately 85% of Qscan’s revenue
is provided by Medicare.
Theoretically Medicare can change fees
at will. In practice they understand the
benefits of diagnostic imaging as a means
to encourage early identification and
intervention, which is vastly more cost
efficient and better for people than
limiting this service and only discovering
problems when they are well advanced.
Expertise & Scale
Qscan’s doctors have specialist imaging
and diagnostic skills in musculoskeletal,
cardiac, oncology, abdominal, breast,
neuroradiology, paediatric radiology, and
oral medicine.
This means that a patient can be scanned
in one of Qscan’s 73 clinics and have the
diagnosis undertaken by a specialist,
whether in that clinic or located elsewhere.
Scale and expertise means that Qscan
can continue to invest in the latest
equipment, can allocate diagnosis to
where doctors are available, and can
progress employing advanced artificial
intelligence technology. It is a recipe for
being able to promptly and efficiently
interpret the images with a high degree
of accuracy.
Growth
Over the three years to 30 June 2020
Qscan’s number of clinics rose 6% (to 73),
revenue increased 27% (to A$237 million)
and EBITDAF 45% to A$48 million (on a pro
forma basis, excluding Job Seeker
receipts).
Over that period the company’s capital
investment was A$54 million.
Growth is projected to continue, due to
expanding demand for imaging and the
associated diagnostics, ongoing
technological improvements and further
improvements to the cost/benefit of
scanning.
On top of this organic growth, Qscan is
likely to have opportunities to expand via
acquisition. The sector remains
fragmented. Five larger companies
(including Qscan) make up about half of
the market and larger enterprises have
distinct cost and service advantages as
well as being more attractive places for
doctors and specialist staff to work.
21
Qscan magnetic resonance imaging machine
22
Trustpower
Year ended 31 March
Six months ended 30 September
30 September
2020
30 September
2019
31 March
2020
Retail electricity sales1,051 GWh1,025 GWh1,817GWh
Generation945 GWh989 GWh1,759GWh
Av. market electricity price13.5c/kwh11.7c/kwh10.7c/kwh
Electricity accounts262,923266,234266,102
Gas accounts42,22139,75441,298
Telecommunication accounts106,20899,837103,642
Customers with multiple services117,000111,000116,000
EBITDAF
1
$110.4m$107.1m$186.5m
Net profit after tax$33.6m$38.7m$97.7m
Investment spend $15.6m$16.4m$34.8m
Net debt $662.0m$636.0m$617.2m
Infratil cash income
2
$24.8m$51.1m$78.3m
Infratil’s holding value
3
$1,142.2m$1,321.1m$1,022.4m
1. EBITDAF is an unaudited non-GAAP measure and is defined on page 3.
2. Last year Trustpower paid a special dividend.
3. NZX market value.
thermal power stations close and
investment is made into transmission
and lower cost generation, but the
industry will cope.
The manmade challenges are more
problematic. They could be very good for
the owners of renewable power stations,
but several years of uncertainty are likely.
Government has indicated that it intends
taking steps to accelerate the closure of
all coal and gas fired generation. This will
require a multi-billion dollar investment in
alternatives, some of which will be
higher-cost than the plant being
replaced. Government has also indicated
that it will encourage production and use
of Green hydrogen as a fuel for vehicles
and industry. Production of Green
hydrogen requires electricity.
More immediately the sale of electric
vehicles has fallen behind targets while
the price of emissions (on the Emissions
Trading Scheme) has hit the $35/tonne
cap. Both have problematic
consequences for electricity demand and
prices and government policy initiatives.
Electricity systems are judged on the
trifecta of reliability, price and
sustainability. Today New Zealand’s scores
well on each criteria and investors’
confidence in market structures ensures
there is ample capital for investment into
long-life fixed assets. It remains to be seen
how furtherance of Government’s
renewable energy goals will play out.
Financial performance for the period was
slightly ahead of the year prior which is
particularly positive as the prior period
included a $7 million contribution from
the metering activities which were
subsequently sold. The fall in reported
Net Profit was due to a fall in the value of
energy hedges which was $14.3 million
more than last year.
The six month period contained
more than a normal level of
challenges for Trustpower and
the electricity sector. The
performance and outcomes are
testament to good industry
structure, corporate systems
and resilience.
Trustpower’s utility retailing activities
continued to expand in a highly
competitive market. Operational and
frontline staff and systems performed
to a high standard, generating and
dispatching electricity, and engaging
with customers. To date, the recession
and economic dislocation caused by
the pandemic has not resulted in a
material increase in non-payments.
Generation experienced several material
shocks. The existential one was the very
dry period in Trustpower’s North Island
catchment which also impacted other
hydro generators and caused high
wholesale prices. It is important to note
that few consumers will have noticed
because most are on fixed-price
contracts and the lights stayed on
because there is ample back up
generation.
The other challenges faced by electricity
generators are manmade. One relates to
the announced closure of the Tiwai Point
Smelter, and the imminent withdrawal of
12% of New Zealand’s electricity demand,
the other reflects potential government
policy initiatives.
The Smelter is a relic of a bygone era of
central panning. In many ways it, and the
Manapouri and Clyde power stations,
were such ecological and economic
disasters that they caused the shift away
from central panning towards the
market-based industry we have today in
New Zealand.
If the Smelter is allowed to close there will
be a period of disruption as high cost
23
Cobb Reservoir feeds into Cobb Power
Station. Commissioned in 1956 in the hills
100 kilometres northwest of Nelson
Society &
Environment
945GWh of emission free generation.
11,000 phone calls to customers
during Lockdown to check wellbeing.
$450,000 staff contribution to
community groups impacted by
Covid-19.
2020 participant in GRESB
benchmarking.
Trustpower Generation and Wholesale Electricity PriceElectricity, Gas and Telco Customers
2009
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50,000
00,000
50,000
200,000
250,000
300,000
Electricity Gas Telco
GWhCustomer accountscents/kwhs
0
5
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15
20
25
North Island GenerationSouth Island GenerationPrice
80
70
60
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Electricity Gas Telco
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North Island GenerationSouth Island GenerationPrice
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Photo credit: Daniel Murray
24
Tilt Renewables
Tilt’s goal is a steady stream
of generation development
pr
ojects to create value for
shareholders through solid cash
earnings or realisation.
Over the half year Tilt progressed its
$1 billion investment programme at
Dundonnell (Victoria) and Waipipi
(Taranaki), and returned A$258 million
to shareholders.
Dundonnell. 336MW. 80 turbines. 93% of
output sold through long-term contracts
Tilt finished construction of this
A$650 million project in south west
Victoria and 233GWh of electricity was
dispatched. Generation would have been
higher, but the Australian Energy Market
Regulator decided to limit the system
offtake while undertaking testing.
This is understandable as the regulator
needs to know the network can cope with
the output fluctuations intrinsic to wind
generation. It is however unfortunate that
it should occur so late in the programme.
Building this wind farm over its 20 months
of construction required 665,000 hours of
work (with no loss time injuries), 150,000
tonnes of concrete and 5,300 tonnes
of steel, 55 kilometres of roadways, 67
kilometres of underground cabling, 80
towers and turbines, and two substations.
Waipipi. 133MW. 31 turbines. 100% of
output sold through long-term contracts
Construction progressed on this
$277 million project in south Taranaki.
Almost 200,000 hours (no loss time
injuries) have seen 28 foundations poured,
22 towers erected, and 8 turbines installed.
Generation is on track for 2020.
Plans and Prospects
The opportunity to develop renewable
generation in Australia is immense. In 2019
renewables only provided 21% of total
electricity. To get to 50% requires
investment of A$42 billion (using the cost
of Dundonnell as a benchmark). To put
Dundonnell in context, its projected full
year output will be only about 20% of the
total 6,000GWh increase in renewable
generation which occurred between 2018
and 2019.
While New Zealand already has roughly
85% renewable generation, Government’s
policy goal is 100% by 2030. In addition, it
is expected that increasing electrification
of transport and industry will lift demand
by 60% over the next three decades (net
of Tiwai’s closure). This would require
investment of $15 billion using Waipipi as
a benchmark.
Financial Performance
The performance of Tilt’s New Zealand
operations were slightly ahead of last
year. Australia was down, reflecting the
sale of Snowtown 2 and a small
contribution from Dundonnell in its
first period of operation. Dundonnell’s
233GWh of generation (about 40% of
full output), was not sold under contract
and realised only low market prices
pertaining at the time.
Development Pipeline
WindSolarBattery
W
estern
Australia
105MW40MW
South
Australia
320MW40MWh
Victoria250MW300MWh
New South
Wales
1,500MW
Queensland250MW160MW
North Island142MW
South Island400MW
Tilt is positioned to meet growing demand
for renewable generation with its pipeline
of projects.
Year ended 31 March
Six months ended 30 September
All Australian $ unless noted
30 September
2020
30 September
2019
31 March
2020
NZ generation324GWh328GWh665GWh
Av. NZ electricity price7.5c/kwh7.0c/kwh6.6c/kwh
NZ revenueNZ$24.3mNZ$22.9mNZ$43.8m
Australian generation489GWh734GWh1,170GWh
Av. Aust electricity price6.7c/kwh11.1c/kwh11.0c/kwh
Australian revenue$33.3m$81.7m$128.6m
EBITDAF
1
$31.8m$71.4m$117.5m
Net profit after tax$26.8m$11.9m$478.4m
Investment spend $285.2m$117.3m$481.1m
Net debt $146.6m$355.9m($418m)
Infratil incomeNZ$179.6m--
Infratil’s holding value
2
NZ$913.7mNZ$834.4mNZ$926.0m
1. EBITDAF is an unaudited non-GAAP measure and is defined on page 3.
2. NZX market value.
Society &
Environment
813GWh of emission-free generation.
469MW of emission-free generation
under construction.
Winner of the Australian Clean Energy
Council's 2020 Community
Engagement Award for the Dundonnell
benefit sharing plan.
2020 participant in GRESB
benchmarking.
25
Erecting one of Waipipi Wind Farm’s 31 turbines 7 kilometres southeast of Patea. The blade tip reaches 160 metres from the ground
26
Longroad
E
nergy
The vibrancy of the US energy
market and the capability of the
Longroad team were further
illustrated by activities over the
half year.
I
n its four years since establishment
Longroad has instigated construction of
2,082MW of ge
neration at a total cost of
approximately
US$2,450 million. It has also
acquired existing plant and is managing
facilities for third parties. During the six
months, construction started on three
major projects, one was fully sold down
and 50% of an
other was on-sold. Longroad
also contracted to develop a solar and
battery facility on two Hawaii islands.
As explained below, the positive
operational and development
performance was not reflected in
Longroad’s con
tribution to Infratil’s income
over the period.
Infratil’s objective with this investment is
twofold, to pa
rticipate in the profitable
development of new generation and to
participate in the ownership of a portfolio
of generation. On the simple metrics of
projects initi
ated, generation owned, and
Infratil’s net cash position it is apparent
that Longroad is meeting Infratil’s goals.
During the peri
od, Infratil advanced
$3.3 million to Longroad and received back
$19.1 million.
Infratil’s share of Longroad’s net surplus and
fees was a loss of $13.8 million versus the
profit of $17
.8 million recorded the prior
year. This reflects the accounting treatment
of development gains, as they only arise on
the sale of 100% of a project. No gains are
accounted with a 50% sale or when 100%
ownership is retained.
As at 30 September 2020, Infratil
guaranteed $65.9 million of letters of credit
i
ssued by Longroad ($94.6 million as at
31 March 2020).
Year ended 31 March
Six months ended 30 September
30 September
2020
30 S
eptember
2019
31 March
2020
Owned generation1,385MW684MW1,054MW
Managed generation1,473MW1,608MW1,473MW
Employees118 people101 people111 people
EBITDAF
1
US$17.8mUS$27.7mUS$33.6m
Net surplus before tax
(US$32.9m)US$28.9mUS$6.7m
Infratil aggregate investment amount$189.1m$159.9m$185.8m
Infratil capital received back$203.8m$172.6m$184.7m
Infratil share of accounting earnings($13.8m)$17.8m$4.7m
Infratil holding book value-$3.5m-
Infratil holding market value
2
$147.5m$122.7m$162.4m
1. EBITDAF is an unaudited non-GAAP measure and is defined on page 3.
2. Based on independent valuations as at 31 March in the relevant years adjusted for changes to the
NZ$/US$ exchange rate.
Phoebe. 312MW
solar Texas
Construction initiated and the project sold in
FY2019. Output sold to Shell Energy100% sold
Rio Bravo. 238MW
wind Texas
US$300 million project initiated FY2019 and
sold in FY2020. Output sold to Citigroup Energy
100% sold
Prospero I. 379MW
solar Texas
US$416 million project commissioned in 2020.
Output sold to Shell Energy50% sold
El Campo. 243MW
wind Texas
US$335 million project. Commissioned 2020.
Output sold to two healthcare companies50% sold
Federal Street. 220MW
solar various
Acquisition of a portfolio of generation assets
-
Minnesota. 70MW windWind farm acquired in 2017 and now
undergoing a US$77 million repowering100% sold
Milford. 306MW
wind Utah
Acquisition of generation for income and
possible upgrade
-
Little Bear. 215MW
solar California
Construction underway with output sold to
an electricity retailer50% sold
Montgomery St. 108MW
wind/solar various
Acquisition of generation for income and
possible upgrade
Hawaii 160MW solar
and 640MWh battery
Selected by the Hawaiian Electric Company
to build generation and storage
-
Muscle Shoals. 294MW
solar Alabama
Construction underway. Electricity sold to
Tennessee Valley Authority100% sold
Prospero II. 331MW
solar Texas
US$320 million project under construction.
Output sold to healthcare companies-
The project score sheet
27
Prospero I – 379GWh solar generation, Andrew County
Texas. 18.5 hectares, 3,150,000 panels. 875GW of
output a year, sufficient for 64,000 average Texan
homes (or 125,000 New Zealand ones)
Society &
Environment
2,082MW of emission-free generation
built or under construction.
US$100,000 donation to Covid-19
relief measures.
10 year financial support
commitment to environmental
education.
28
Wellington
Airport
Over recent years Wellington
Airport’s challenge has been
to accommodate growth. That
abruptly changed with the
imposition of Covid-19 travel
restrictions. Fortunately, the
Airport was able to pivot and
manage the effects of the
collapse of traffic and the
operational requirements of
the pandemic.
Stage one entailed introducing protocols
to keep Airport workers and travellers safe,
followed by reducing costs to reflect the
expectation that previous levels of activity
were unlikely for at least two years. Over
the half year, the Airport’s net cash flows
from operations and capital works were
down $19.1 million relative to the same
period the prior year. Given that receipts
declined $45.3 million the offsetting
reduction in costs and outlays was
impressive.
Coping also meant arranging funding to
ensure the Airport has sufficient financial
resources. This included shareholders
committing to provide $75.8 million of
additional equity should that become
necessary. This commitment was shared
pro rata by Infratil and Wellington City
Council.
Council’s support, along with Infratil’s, and
the Airport’s lenders and staff underlined
how quickly and efficiently resilience
measures can be put in place when all
parties are aligned and work together.
It illustrates the Airport’s high-trust
relationships.
Wellington Airport also worked closely with
tenants and airlines to ensure they get
through this period with the least possible
damage. A lot of people are making
sacrifices and it is hoped that travel
restrictions can be unwound quickly to
minimise ongoing harm. Covid-19 is unlikely
to vanish and the goal now must be to
minimise both infections and the social
damage and economic cost.
New Zealand’s aviation industry is working
with health experts and officials to develop
a plan to enable more people to come and
go without increasing the risk of community
spread of the infection. It is hoped that this
initiative is given appropriate priority.
While travel cannot return to previous levels
until restrictions are lifted, the other criteria
are that people will want to travel and that
airlines will be there to provide affordable
services. On both fronts indications are
positive. When people have been able to
travel within New Zealand, they have. On
its busiest day since domestic restrictions
were relaxed, 17,000 travelers used
Wellington Airport (last year’s average was
15,000). Wellington’s three main domestic
airlines, Air New Zealand, JetStar, and
Soundsair lost no time resuming services.
International airlines have also indicated
they too will be back once it’s possible to
travel without onerous border restrictions.
The Airport’s hotel and conference facilities
also experienced an almost total recovery
in demand by September.
Wellington Airport agreed with its main
airline customers to hold charges at their
2019 levels. Recovery of foregone income
will be managed in future to minimise
disruption consistent with the Airport’s
economic regulation.
While health concerns have dominated
the period, the Airport remains totally
committed to its primary safety
responsibilities. Work is progressing to
earthquake strengthen buildings and
resurfacing the runway has been brought
forward. Strengthening the Cook Strait
seawall is also underway, as a stop gap
until consents, and funding, enables the
construction of new sea protection.
Year ended 31 March
Six months ended 30 September
30 September
2020
30 September
2019
31 March
2020
Passengers Domestic961,1162,717,9005,225,999
Passengers International137454,426919,741
Aeronautical income$11.3m$40.3m$80.8m
Passenger services income$6.7m$22.5m$45.2m
Property/other$6.5m$6.6m$13.5m
Operating costs($13.6m)($19.0m)($36.3m)
EBITDAF
1
$10.9m$50.4m$103.2m
Investment spend $11.5m$32.2m$80.6m
Net debt $585.4m$512.8m$516.9m
Infratil’s cash value$37.5m$44.3m$44.3m
Infratil’s holding value
2
$456.7m$467.4m$487.6m
1. EBITDAF is an unaudited non-GAAP measure and is defined on page 3.
2. Infratil’s share of net assets excluding deferred tax at period end.
04/20
9
08/20
9
04/2020
2/2020
08/202
12/20
9
08/2020
04/202
2/202
0
00,000
200,000
300,000
400,000
500,000
600,000
Passenger
Forecast
Range (May)
Actual
Passengers
Monthly Passenger Numbers
29
Society &
Environment
2030 goal of 30% reduction of
operational carbon emissions, waste
to landfill and electricity use.
Partner with Trees That Count and
Te Motu Kairangi on regenerative
planting.
2020 participant in GRESB
benchmarking.
Resurfacing the runway requires intense periods
of work while the Airport is closed
30
CDC
Data Centres
CDC maintained its exceptional
rate of growth, development,
and value increase.
Activities in Auckland are illustrative. Last
year CDC purchased 1.1 hectares in
Silverdale and 0.7 hectares in Hobsonville.
At both locations construction is now
underway on 10MW data centers (with
room for further expansion at Silverdale).
Both centres are already 80% pre-
contracted with commissioning due to
occur in 2022. Each centre will cost about
$150 million to build and will be amongst
the largest in New Zealand.
The rationale for these developments
include:
• New Zealand is experiencing rapid
growth in digitalisation, cloud
adoption, and information technology.
Technology exports are increasing
by over $1 billion a year and are now
New Zealand’s third largest export
sector (Ministry of Business, Innovation
& Employment).
• Data centres such as CDC’s are world
class in terms of efficiency, security and
reliability and users are requiring closer
proximity so as to have faster data
retrieval speeds.
• New Zealand is following the global
trend to localise data storage and to
require higher standards of privacy,
including though legislation such as the
Privacy Act 2020 which comes into
effect on 1 December 2020.
In Australia, CDC commissioned the 28MW
Eastern Creek 3 data centre in Sydney and
progressed further development in both
Sydney and Canberra. Additional land
was also acquired to enable further
expansion beyond the immediate plan for
278MW of capacity.
The financial and operational results for
the period show capacity increasing 66%
relative to last year while EBITDAF was
ahead 43%.
As at 30 September 2020, the
independent valuation of Infratil’s holding
in CDC gave a range of $1,726 million to
$1,953 million. Relative to six months prior,
the mid-point valuation was up 21% or
$309 million, although $92 million of that
was due to a rise in the value of the A$
relative to the NZ$.
In A$ terms, the low end of the valuation
rose A$270 million and the high end
A$132 million (to A$1,597-1,807 million from
A$1,327-1,675 million). The discrepancy
between the top and bottom of the range
reflects what occurred over the period
and how that affected the valuation.
The 31 March 2020 valuation anticipated
CDC expanding its capacity and
contracts to 278MW over a period
of approximately five years. The
30 September valuation was still for
278MW, but it was increased because
CDC commissioned Eastern Creek 3,
delivered six months of earnings, and
its future earnings are that much closer.
More materially, CDC gained new
contracts for future utilisation which
reduced its income risk, which had more
impact on the low-end of the valuation
range than the high-end.
Year ended 31 March
Six months ended 30 September
All Australian $ unless noted
30 September
2020
30 September
2019
31 March
2020
Available capacity133MW80MW105MW
EBITDAF
1
$73.8m$51.7m$117.5m
Net profit after tax$191.7m$142.0m$289.1m
Investment spend$150.3m$248.4m$446.6m
Net debt$1,031.8m$731.2m$912.4m
Contribution to InfratilNZ$108.5mNZ$79.5mNZ$161.0m
Infratil’s holding valueNZ$845.8mNZ$660.8mNZ$693.4m
Infratil’s holding market value
2
NZ$1,726m-
NZ$1,953m
NZ$1,355m-
NZ$1,711m
1. EBITDAF is an unaudited non-GAAP measure and is defined on page 3.
2. The valuations were undertaken independently as at the relevant dates.
31
Andrew Kirker CDC New Zealand manager and
Andrew Lamb Infratil Infrastructure Property manager
at one of CDC’s construction sites in Auckland
Society &
Environment
Sustainability is included in
CDC’s operating charter resulting
in targets to reduce water
consumption and carbon
footprint, and the provision of
green reporting for clients.
32
Vodafone
New Zealand
When Infratil acquired a 49.9%
shareholding in Vodafone NZ for
$1,029.6 million on 31 July 2019, it
did so with a medium-term plan
to provide good returns on the
investment by simplifying the
business and providing users with
world-class infrastructure and
products, and excellent service.
The simple assumptions behind this
strategy reflect expectations about what
customers want and how to deliver
efficiently.
It is believed that customers will choose
their telco provider if charges are fair, the
service experience is good, and the
network reliably accommodates
increasing demand for data.
Profitably delivering these customer
requirements will occur by reducing
product and back-office complexity to
lower cost, by improving the ability of
customers to self-service on-line, and by
increasing network capacity, efficiency,
and coverage.
Another aspect of lifting the performance
of Vodafone NZ will come from attracting
and retaining talented people who
will be able to drive performance as
the business improvement programme
progresses and the company moves
towards a modern digital operating
model.
In all areas Vodafone NZ is making good
progress.
Notably, in the most recent period 34%
more customer requests were dealt with
first time, complaints were down 53%, and
86% of all transactions were digital. 1,500
products were retired or improved and
Vodafone NZ is continuing to lead the
market with its installation of the 5th
Generation mobile network. Customers’
international connectivity is also
being enhanced though upgrades
to sub-sea links.
5G investment builds on Vodafone NZ’s
existing fibre, coaxial and mobile network
capability. In addition to improving
customer experience, it will accelerate
the take up of fixed wireless access to the
internet and provide the platform to bring
the Internet of Things (IoT) to life as new
uses emerge.
While Vodafone NZ is progressing the
medium-term plan, over the half year it
was also obliged to deal with the
consequences of Covid-19 restrictions.
The adverse net financial impact was
$29 million; travel restrictions reduced
shop sales and prepaid and roaming
revenue, and there was a need to provide
support to some customers. A similar
impact is anticipated over the second
half of the year. Unfortunately this has
more than offset the gains being
delivered by the business improvement
programme.
On the flip-side, Covid-19 has reinforced
the essential nature of connectivity and
it is expected to accelerate digital
adoption, increasing demand for data
connectivity and security and cloud
services.
Year ended 31 March
Six months ended 30 September
30 September
2020
31 March
2020
Mobile revenue$401.1m$890.2m
Fixed revenue$372.6m$726.1m
Other revenue$167.7m$433.0m
Operating costs($716.8m)($1,574.1m)
EBITDAF
1, 2
$224.7m$475.2m
Capex$90.0m$284.8m
EBITDAF – Capex$134.7m$190.4m
Net debt
3
$1,232.7m$1,265.2m
Infratil cash income
3
$42.2m$25.0m
1. EBITDAF is an unaudited non-GAAP measure and is defined on page 3.
2. The numbers shown as at 31 March 2020 are for the Vodafone NZ operating company, while the numbers as at
30 September 2020 incorporate the full Vodafone NZ holding structure which only existed from acquisition on
31 July 2019. There are no material differences between EBITDAF at the holding structure level to the operating
company level as at 30 September 2020.
3. The debt is Vodafone NZ’s net borrowings from its banks. It does not include shareholder loans, which were
reduced by $67 million over the period. Infratil’s cash receipts comprised $8.7 million interest and $33.5 million
capital return.
33
Vodafone NZ installs 5th generation mobile
technology in Mangere, Auckland
Society &
Environment
Voluntarily committed to keep customers
connected during Level 4 Lockdown.
Over the last year $2.3 million provided
to charitable works through the
Vodafone New Zealand Foundation.
Three year electricity use reduction plan.
2020 participant in GRESB
benchmarking.
34
RetireAustralia
Throughout the Covid-19 crisis
RetireAustralia’s retirement
villages have been havens for
almost 5,000 older Australians.
There has not been a case of Covid-19
among any of RetireAustralia’s
residents or employees. This reflects
stringent infection protective measures
and management’s communication and
engagement which has kept residents
and employees connected and informed
throughout.
Alongside health and safety practices,
RetireAustralia also put in place measures
to support residents’ social and emotional
wellbeing during extended periods,
separation from friends and family and
disruption to daily life. This has included
creative activities to keep residents
socially connected while being physically
apart, regular communications, grocery
and meal deliveries, daily wellness
check-in phone calls, support fulfilling
prescriptions, and conducting medical
appointments via telehealth.
The pandemic and associated restrictions
have reinforced the attractions of living in
a retirement village. Residents enjoy all the
perks of independent living, with the
safety and security of a community and
care and support when they need it.
In February 2020 RetireAustralia opened
Glengara Care within its established
Glengara Retirement Village on the
New South Wales Central Coast. With
70 apartments and a nurse led model
of care, Glengara Care offers families
certainty and personalised care with
respect and dignity.
This initiative reflects RetireAustralia’s
strategy of providing specialised facilities
and higher levels of assistance to meet
residents’ changing needs.
Uptake is progressing steadily despite
Covid-19 related impediments to the sale
and occupation of apartments.
Construction also continued at
RetireAustralia’s two new developments.
Year ended 31 March
Six months ended 30 September
All Australian $ (unless noted)
30 September
2020
30 September
2019
31 March
2020
Residents4,9334,9104,955
Serviced apartments535465535
Independent living units3,5443,5093,520
Unit resales138130292
Resale gain per unit$141,945$126,879$137,374
New unit sales7216
New unit average value$502,143$397,500$512,625
Occupancy receivable/unit
1
$116,449$114,342$114,173
Embedded resale gain/unit
2
$35,004$37,805$35,948
Underlying Profit
3
$13.3m$5.5m$17.0m
Net profit after tax$9.3m$12.4m($99.5m)
Capex$28.8m$25.6m$53.2m
Net external debt$181.8m$124.6m$153.4m
Infratil’s holding value
4
NZ$313.3mNZ$368.5mNZ$291.5m
1. The occupancy receivable per unit is the estimate at that point in time of the net sum RetireAustralia would
receive in cash for deferred occupancy fees and capital gains if all residents left and the occupancy rights were
resold on that particular date. The resale values were estimated by independent valuers based on market and
actual transactions. The discrepancy with the actual average resale gain achieved over the period is to be
expected as actual gains depend on the period of occupation of previous residents which is likely to be longer
than the average of all residents.
2. The embedded resale gain per unit is the average value of the deferred management fee per unit.
3. Underlying profit is an unaudited non-GAAP measure used by RetireAustralia that removes the impact of
unrealised fair value movements on investment properties, impairment of property, plant and equipment, one-off
gains and deferred taxation, while adding back realised resale gains and realised development margins.
4. Infratil’s holding was independently valued as at 31 March 2020. The 30 September 2020 value is the same
A$ figure adjusted for changes to the NZ$/A$ exchange rate.
The Rise; 24 well-appointed two and three
bedroom apartments within the
established Wood Glen Retirement Village
on the New South Wales Central Coast
opened for residents in September 2020.
The Verge; stage one of this new village is
40 apartments and penthouses
overlooking Burleigh Golf Course on
Queensland’s Gold Coast. It is on track to
begin accepting residents in early 2021.
RetireAustralia management is continuing
to work on long-term growth plans
including securing additional land so that
greenfield expansion can be undertaken
alongside infill growth within established
retirement communities.
Over the half year resales activity
outperformed expectations, despite
ongoing uncertainty in areas of the
Australian property market and restrictions
and health concerns which reduced
walk-in enquiries and appointments.
Positive performance was assisted by a
focus on local area marketing and
investment in digital channels.
Infratil, and co-shareholder
NZ Superannuation Fund, each
provided A$10 million equity
underwrite to RetireAustralia should
the company encounter financial
requirements outside of its bank facilities.
This standby has not been required.
35
Stage One of RetireAustralia’s The Verge village
on Queensland’s Gold Coast. 40 units co-located
with the Burleigh Golf Club
Society &
Environment
Prioritisation of the safety
of residents and caregivers.
Member of the Green Building
Council of Australia.
36
Other Investments
Galileo Green Energy
Following its January 2020 establishment,
Galileo has increased to 11 people and
engaged with identifying and working on
European renewable generation
development and investment
opportunities.
The first project, a joint venture with
developer EMPower and wind turbine
manufacturer Vestas, aims to build 370MW
of wind generation in Ireland. The first
stage is securing the necessary
construction consents. Once they are in
place contracts to sell the generation will
be sought which would be followed by
financing and construction.
Europe offers immense opportunity.
Dependence on non-European imports of
energy and aggressive carbon reduction
goals require huge renewable generation
investment to replace existing thermal
plant and to accommodate demand
growth as industry and transport shifts
from using oil, gas and coal.
Infratil Infrastructure Property
IIP was originally formed to develop and
dispose of the land holdings of previous
Infratil subsidiary NZ Bus.
Over the half year, IIP agreed the sale of
its Kilbirnie bus depot for $35 million for
settlement in March 2021, leaving only
the 1.7 hectare Wynyard Quarter site
remaining. There, the $70 million stage
one development has been completed
in October 2020 with the opening of the
154 room Travelodge hotel, carpark and
retail precinct.
The book value of Infratil’s investment in IIP
as at 30 September 2020 was $129 million
(including the expected proceeds from the
Kilbirnie sale).
Clearvision Ventures
In FY2016 Infratil committed to invest
US$25 million through California based
Clearvison to gain exposure to start-up
ventures of relevance to Infratil’s core
sectors. In addition to a positive return, the
objective with these investments is direct
exposure to technology which could
disrupt traditional infrastructure sectors,
providing Infratil with early warning of risks
and opportunities.
Over the half year a further US$4.7 million
was invested giving a total of
US$24.7 million advanced. The book
value as at 30 September 2020 was
$34.4 million. Having reached this
milestone it was decided to double the
commitment to US$50 million.
An interesting development is unfolding
with one of Clearvision’s investments;
Chargepoint which owns 134,000 electric
vehicle charging stations in North
American and Europe. This is the world’s
largest network of vehicle charging
stations and Chargepoint has announced
that it is in discussions which could lead to
a listing on the New York Stock Exchange.
At the indicated listing price, Infratil’s
$6 million investment would have a value
of approximately $16 million.
Australian Social Infrastructure
Partners
ASIP’s only asset is a 9.95% interest in the
Royal Adelaide Hospital which has a value
of approximately A$32.5 million. Work is
progressing to sell this prior to the end of
the financial year.
37
NZX Corporate
Governance Code
The NZX Corporate Governance Code (“NZX Code”) provides
guidance on corporate governance for NZX-listed companies,
giving recommendations under eight corporate governance
principles. If Infratil considers that a particular recommendation is
not appropriate for it, Infratil must explain why it has chosen not
to adopt the recommendation and the alternative measures it
has in place. The NZX Code therefore seeks to balance a desire
to promote strong corporate governance while remaining flexible
so that boards and listed companies can determine the
appropriate corporate governance practices for their businesses.
Infratil considers that it materially complies with the NZX Code,
but from time to time there may be recommendations which
Infratil does not consider appropriate for it, and where it has
adopted alternative arrangements which the Board considers
are more appropriate.
Set out below is commentary on equity raisings and board
composition at Tilt Renewables and Trustpower.
Equity Raisings
The NZX Corporate Governance Code recommends that, if
seeking additional equity capital, NZX listed companies should
offer further equity securities to existing security holders of the
same class on a pro rata basis, and on no less favourable terms,
before further equity securities are offered to other investors.
Infratil issued additional shares in 2019 and 2020 and considers
that its chosen capital raising structures, though not fully pro rata
offers, achieved a fair result for all Infratil shareholders.
• The Board was satisfied that additional equity could be issued
at a good price.
• The Board was satisfied that the equity capital raising would
maximise the opportunity for shareholders to access the
equity raising and minimise any dilution.
2019 Equity Capital Raising
Infratil raised $400 million of additional equity over May to
June 2019 to partially fund its $1,030 million purchase of 49.9%
of Vodafone NZ. This equity was raised via a $300 million fully
underwritten, pro rata accelerated renounceable entitlement
offer (“AREO”) and a $100 million fully underwritten institutional
placement (“2019 Placement”):
• The Board concluded that undertaking the AREO and the
2019 Placement to raise new equity was the best option for
Infratil and its shareholders, and balanced the desire of the
Board to direct a significant proportion of the equity raising
towards existing shareholders through the AREO whilst
providing the opportunity to introduce new, supportive
institutional and retail shareholders to the register through the
Placement.
• The AREO was on a pro rata 1 for 7.46 basis and was offered
to all Eligible Shareholders (which comprised New Zealand
and Australian retail shareholders, and institutional
shareholders in New Zealand, Australia and certain other
jurisdictions). New Zealand and Australian retail shareholders
comprised ~98% of Infratil’s retail shareholders, and Infratil
determined that it was unreasonable to extend the AREO to
shareholders in other jurisdictions (because of the small
number of such shareholders, the number and value of shares
held by them and the cost of complying with the applicable
regulations in such jurisdictions). However:
• The shares attributable to those shareholders were offered
for sale to eligible institutional investors under the retail and
institutional bookbuilds.
• The premium attributable to their shares through those
bookbuilds (being the amount by which the clearing price
in the bookbuild process exceeded the application price
under the AREO) was paid to those shareholders.
• The 2019 Placement balanced between the equitable
treatment of existing shareholders with the benefits of
targeting new institutional investors and increasing retail
broker holdings, having regard to the advice received by the
Board on the expected capacity of Infratil’s existing
shareholders to commit the new equity capital required to
fund the acquisition of Vodafone NZ.
2020 Equity Capital Raising
Infratil raised $300 million of additional equity capital in June
2020 to provide additional balance sheet flexibility. This equity
was raised via a $50 million share purchase plan (“SPP”) and a
$250 million fully underwritten institutional placement (“2020
Placement”):
• The Board’s key objective was to balance speed of execution
with ensuring that all shareholders were treated fairly. The
Board considered that the combination of the SPP and the
2020 Placement provided the tightest pricing, quickest
execution and time to settlement, and was able to be
structured to protect existing shareholders. To ensure fairness
and an equitable allocation, Infratil controlled the process of
allotment of shares in both the SPP and the 2020 Placement.
• Under the SPP, eligible shareholders in New Zealand and
Australia were invited to apply for up to NZ$50,000 of
additional shares:
37
38
•Based on the expected SPP offer price, the Board
estimated that Infratil shareholders holding up to
~100,000 shares (or ~99% of New Zealand and Australian
shareholders) would be able to maintain their pro rata
shareholding under the $50,000 SPP cap.
•
The SPP structure also provided a price protection
mechanism for retail shareholders to protect them
against market risk if the Infratil share price declined
through the SPP offer period. This feature is not available
under a pro rata entitlement offer.
•
The S
PP received strong shareholder support and
Infratil received applications totaling approximately
$130 million (for an offer of $50 million), so all
applications under the SPP were scaled back. As set out
in the SPP offer document and Infratil’s NZX/ASX
announcement following completion of the SPP, the
scaling was based on each applicant’s shareholding on
the Record Date, not based on each application as a
proportion of the total applications received.
•The Boar
d required that all SPP applicants were allotted
their pro rata entitlement under the equity raising before
allotting any additional shares to any applicant who
had applied for more than that. Infratil raised a total of
$300 million in new equity, which increased the total
number of Infratil shares by ~9.6%, so the pro rata
allocation under the equity raising was approximately
1:10 (i.e. 1 new share for every 10 shares held).
•Although the total SPP application pool was scaled to
approximately 38%, the scaling of each individual
applicant varied depending on how many shares had
been applied for. All applicants under the SPP applied
for at least their pro rata entitlement and, as a result, all
applications were scaled to ~11.37% of their pre-equity
raising shareholding. However, this meant that a
shareholder who applied for substantially more than
11.37% of their pre-equity raising shareholding under the
SPP was scaled back more than a shareholder who
applied for something closer to their pro rata
entitlement.
U
sing a shareholder who held $100,000 of Infratil shares
prior to the equity raising as an example, what this
meant in practice was:
•
That s
hareholder would have been allotted ~$11,400
worth of Infratil shares under the SPP.
•
If that s
hareholder had applied for the maximum
$50,000 of Infratil shares under the SPP, that
shareholder would have been allotted ~23% of the
shares applied for (which is lower percentage than
the overall 38% scaling of the total SPP applications).
•
Conversely, if that shareholder had applied for
$12,500 worth of Infratil shares under the SPP, that
shareholder would have been allotted ~91% of the
shares applied for (which is much higher percentage
than the overall 38% scaling of the total SPP
applications).
•The Board would have liked to have provided applicants
the opportunity to acquire more shares under the SPP,
but scaled the SPP this way to ensure all applicants
were treated fairly and equitably by being able to
purchase their pro rata entitlements before other
applicants were able to increase their shareholding.
•Any SPP applicant who held up to ~100,000 shares
(which
were ~99% of the shareholders who applied under
the SPP) maintained their proportionate shareholding in
Infratil as a result of the SPP.
•The 2
020 Placement provided the ability to protect existing
shareholder interests by ensuring participating institutional
shareholders and retail broker networks received a minimum
pro rata allocation in the bookbuild (including eligible existing
shareholders holding more than ~100,000 shares who were
not able to maintain their pro rata shareholding under the
$50,000 SPP cap). ~13% of the shares under the 2020
Placement were allotted to new shareholders and ~87% were
allotted to existing shareholders.
Tilt Renewables and Trustpower Boards
The NZX Corporate Governance Code recommends that a
majority of the board of an NZX listed company should be
independent directors.
The Infratil Board satisfies this, with six of the seven Directors
being independent. The Board Charter sets out the standards for
determining whether a Director is independent, and these
standards reflect the requirements of the NZX Listing Rules and
the NZX Corporate Governance Code.
Infratil is also the majority shareholder in two NZX listed
companies, Tilt Renewables and Trustpower. Infratil agrees that,
as a general rule, a majority of the board of a listed issuer should
be independent directors but also considers that, in certain
38
39
limited circumstances, that may not be appropriate. Infratil
considers that both Tilt Renewables and Trustpower are
examples of those very limited circumstances:
•Infratil is the majority shareholder in each of Tilt Renewables
and Trustpower, and each of those is a ~$1 billion investment
in the Infratil portfolio (as at 30 September 2020).
•Given the value of Infratil’s investment in those companies,
and given an Infratil Director’s legal duty to act in the best
interests of Infratil, the Board needs to ensure that Infratil (and
its shareholders) have appropriate representation on both
boards. However, the directors of Tilt Renewables or
Trustpower who are associated to Infratil – to provide that
representation – will not be independent directors.
•Each of Tilt Renewables and Trustpower has another major
shareholder (Mercury Energy and Tauranga Energy Consumer
Trust, respectively), and a director associated with that major
shareholder will also not be an independent director.
Trustpower’s Chief Executive is currently also a director and,
as such, is not an independent director.
•In both companies, the recommendation for a majority of
independent directors needs to be balanced against the
above, which means it may not be possible for there to be a
majority of independent directors. However:
•Infratil does not have, and has not sought, to have persons
associated with it to occupy a majority of the board seats
at either Tilt Renewables or Trustpower. Currently, 3 of the
7 directors of each of Tilt Renewable and Trustpower are
associated with Infratil. Infratil considers that this is an
appropriate level of representation on each board to
protect the interests of Infratil and its shareholders.
•Although neither the Tilt Renewables nor Trustpower
boards currently have a majority of independent directors,
this is due to other directors on those boards, in addition to
those associated with Infratil, being non-independent
directors:
•1 of the 4 other directors of Tilt Renewables is not an
independent director due to being associated with
Mercury Energy. As a result, Tilt Renewables has 3
independent directors.
•2 of the 4 other directors of Trustpower are not
independent directors (one being associated with
T
auranga Energy Consumer Trust and the other being
the Chief Executive). As a result, Trustpower has 2
independent directors.
•Infratil’s objective is to ensure effective governance in both
Tilt Renewables and Trustpower, which includes adequate
representation of and protection for the rights of minority
shareholders in those companies. Where this cannot be
assumed by a majority independent board, robust structures
and processes are appropriate to ensure conflicts of interest
are identified and appropriately managed.
39
40
Directory
Directors
M Tume (Chairman)
M Bogoievski
A Gerry
P Gough
K Mactaggart
C M Savage
P M Springford
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 31
60 Martin 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
42
---
1
Infratil
Interim Financial
Statements
For the 6 months ended
30 September 2020
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 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Operating revenue
7578.2 701.3 1,281.3
Dividends
-0.5 0.6
Total revenue578.2 701.8 1,281.9
Share of earnings of associate companies
583.8 100.6 86.8
Total income662.0 802.4 1,368.7
Depreciation
51.6 70.1 136.4
Amortisation of intangibles
5.6 5.1 11.1
Employee benefits
50.0 50.5 99.1
Other operating expenses
84 4 9. 8 448.0 929.4
Total operating expenditure557.0 573.7 1,176.0
Operating surplus before financing, derivatives,
realisations and impairments
105.0228.7 192.7
Net gain/(loss) on foreign exchange and derivatives
15.3 (16.4)6.2
Net realisations, revaluations and impairments13.7 (0.8)510.7
Interest income
3.1 6.2 10.7
Interest expense75.2 91.8 197.1
Net financing expense
72.1 85.6 186.4
Net surplus before taxation
61.9 125.9 523.2
Taxation expense
94.9 46.1 14.4
Net surplus for the period from continuing operations5 7. 0 79.8 508.8
Net surplus/(loss) from discontinued operations after tax
-8.3 (24.6)
Net surplus for the period5 7. 0 88.1 484.2
Net surplus/(loss) attributable to owners of the Company
2 7. 8 56.4 241.2
Net surplus attributable to non-controlling interest
29.2 31.7 243.0
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
(1.7)89.2 63.3
Share of associates other comprehensive income28.9 (9.8)(21.3)
Net change in fair value of equity investments at fair value through
other comprehensive income0.7(1.3)(0.5)
Ineffective portion of hedges taken to profit and loss
---
Fair value movements in relation to the executive share scheme
-(0.9)5.1
Income tax effect of the above items
0.2(18.4)(22.8)
Items that may subsequently be reclassified to profit and loss:
Differences arising on translation of foreign operations
6 7. 5 38.9 (17.8)
Realisations on disposal of subsidiary, reclassified to profit and loss
-(22.5)(22.5)
Effective portion of changes in fair value of cash flow hedges43.2 (58.3)(75.0)
Income tax effect of the above items
(5.5)20.5 20.8
Total other comprehensive income/(loss) after tax133.337.4 (70.7)
Total comprehensive income/(loss) for the period190.3125.5 413.5
Total comprehensive income for the period attributable
to owners of the Company
159.1 112.7 207.9
Total comprehensive income for the period attributable
to non-controlling interests
31.2 12.8 205.6
Earnings per share
Basic and diluted (cents per share) from continuing operations
4.0 8.1 41.5
Basic and diluted (cents per share) 4.0 9.5 37.6
Consolidated Statement
of Comprehensive Income
For the 6 months ended 30 September 2020
The accompanying notes form part of these financial statements.
3
Consolidated Statement
of Financial Position
As at 30 September 2020
Approved on behalf of the Board on 11 November 2020
Alison Gerry Mark Tume
Director Director
The accompanying notes form part of these financial statements.
Notes
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Cash and cash equivalents435.2 362.6 730.3
Trade and other accounts receivable and prepayments222.7 275.2 174.8
Derivative financial instruments31.9 17.5 18.9
Income tax receivable22.6 4.9 9. 3
Assets held for sale34.8 0.5 -
Current assets747.2 660.7 933.3
Trade and other accounts receivable and prepayments14.4 26.8 18.7
Property, plant and equipment4,271.7 4,306.4 3,958.2
Investment properties260.1 248.9 266.7
Right of use assets171.8 83.7 161.2
Derivative financial instruments163.7 153.1 65.5
Intangible assets34.6 35.0 35.1
Goodwill 113.1 113.1 113.1
Investments in associates52,082.7 2,058.1 1,961.9
Other investments678.2 83.1 71.4
Non-current assets7,190.3 7,108.2 6,651.8
Total assets7,937.5 7,768.9 7,585.1
Accounts payable, accruals and other liabilities200.7 227.4 227.3
Interest bearing loans and borrowings1086.3 430.2 134.7
Lease liabilities24.2 13.2 21.8
Derivative financial instruments22.8 30.7 8.0
Income tax payable-0.2 4.6
Infrastructure bonds1193.7 149.0 -
Trustpower bonds---
Wellington International Airport bonds75.0 25.0 25.0
Current liabilities502.7 875.7 421.4
Interest bearing loans and borrowings10826.4 831.6 835.0
Other liabilities83.3 2.8 86.5
Lease liabilities235.3 152.0 225.1
Deferred tax liability307.7 463.4 314.6
Derivative financial instruments199.5 151.0 121.3
Infrastructure bonds11968.6 1,012.9 1,061.3
Perpetual Infratil Infrastructure bonds11231.9 231.7 231.9
Trustpower bonds432.5 431.8 432.2
Wellington International Airport bonds and senior notes526.7 489.1 515.9
Non-current liabilities3,811.9 3,766.3 3,823.8
Attributable to owners of the Company2,513.0 2,078.4 2,132.2
Non-controlling interest in subsidiaries1,109.9 1,048.5 1,207.7
Total equity3,622.9 3,126.9 3,339.9
Total equity and liabilities7, 9 3 7. 57,768.9 7,585.1
Net tangible assets per share ($ per share) 3.27 2.93 3.01
4
Notes
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Cash flows from operating activities
Cash was provided from:
Receipts from customers551.6 933.6 1,495.0
Distributions received from associates16.7 22.8 75.2
Other dividends-0.5 0.6
Interest received4.3 6.3 10.8
572.6 963.2 1,581.6
Cash was disbursed to:
Payments to suppliers and employees(495.5)(767.0)(1,253.3)
Interest paid(77.5)(89.9)(177.5)
Taxation paid(43.9)(38.3)(50.8)
(616.9)(895.2)(1,481.6)
Net cash inflow/(outflow) from operating activities13(44.3)68.0 100.0
Cash flows from investing activities
Cash was provided from:
Proceeds from sale of associates-169.7 169.7
Capital returned from associates44.63.6
4.4
Proceeds from sale of subsidiaries (net of cash sold)-138.3 593.3
Proceeds from sale of property, plant and equipment--19.4
Proceeds from sale of investments-4.5 19.7
Return of security deposits78.3 7.7 14.4
122.9 323.8 820.9
Cash was disbursed to:
Purchase of investments(16.5)(1,097.3)(1,136.9)
Lodgement of security deposits(109.0)-(5.5)
Purchase of intangible assets(5.1)(6.7)(12.9)
Interest capitalised on construction of fixed assets0.2 -(4.4)
Purchase of shares in subsidiaries--(5.2)
Purchase of investment properties(13.9)-(22.9)
Purchase of property, plant and equipment(341.8)(216.5)(463.3)
(486.5)(1,320.5)(1,651.1)
Net cash inflow/(outflow) from investing activities(363.6)(996.7)(830.2)
Cash flows from financing activities
Cash was provided from:
Proceeds from issue of shares294.2 393.4 396.8
Bank borrowings404.7 615.5 1,436.2
Issue of bonds100.0 493.4 544.5
798.9 1,502.3 2,377.5
Cash was disbursed to:
Repayment of bank debt(476.8)(365.5)(824.4)
Repayment of lease liabilities(7.5)2.3 (12.1)
Loan establishment costs(3.1)(8.5)(10.1)
Repayment of bonds(25.0)(139.2)(288.2)
Bond issue expenses(1.3)(4.9)(6.0)
Share buyback--(3.7)
Capital return to non-controlling shareholders in subsidiary companies(94.0)--
Dividends paid to non-controlling shareholders in subsidiary companies(37.4)(64.0)(92.3)
Dividends paid to owners of the Company3(72.5)(72.5)(113.7)
(717.6)(652.3)(1,350.5)
Net cash inflow/(outflow) from financing activities81.3 850.0 1,027.0
Net increase/(decrease) in cash and cash equivalents(326.6)(78.7)296.8
Foreign exchange gains/(losses) on cash and cash equivalents31.5 (2.6)(10.4)
Cash and cash equivalents at beginning of the period730.3 414.3 414.3
Adjustment for cash classified as assets held for sale -29.6 29.6
Cash and cash equivalents at end of the period435.2 362.6 730.3
For the 6 months ended 30 September 2020
The accompanying notes form part of these financial statements.
Consolidated Statement
of Cash Flows
5
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 2020
754.9 655.1 (71.8)(108.4)902.4 2,132.2 1,207.7 3,339.9
Total comprehensive income for the period
Net surplus for the period
----27.8 27.8 29.2 57.0
Other comprehensive income, after tax
Differences arising on translation of foreign
operations
--79.9--79.9(12.3)67.6
Transfers to profit and loss on disposal
of subsidiaries
--------
Net change in fair value of equity investments at
FVOCI
---0.7 -0.7 -0.7
Realisations on disposal of equity investments at
FVOCI
--------
Ineffective portion of hedges taken
to profit and loss
--------
Effective portion of changes in fair
value of cash flow hedges
---22.8 -22.814.8 37.6
Fair value movements in relation to
the executive share scheme
--------
Fair value change of property, plant
& equipment recognised in equity
-(1.0)---(1.0)(0.5)(1.5)
Share of associates other comprehensive
income
---28.9 -28.9 -28.9
Total other comprehensive income
-(1.0)79.9 52.4 -131.3 2.0 133.3
Total comprehensive income for the period
-(1.0)79.9 52.4 27.8 159.1 31.2 190.3
Contributions by and distributions
to non-controlling interest
Issue/(acquisition) of shares held by outside
equity interest
------(91.6)(91.6)
Total contributions by and distributions to
non-controlling interest
------(91.6)(91.6)
Contributions by and distributions
to owners
Shares issued
294.2 ----294.2 -294.2
Share buyback--------
Shares issued under dividend reinvestment plan
--------
Conversion of executive
redeemable shares
--------
Dividends to equity holders
----(72.5)(72.5)(37.4)(109.9)
Total contributions by and
distributions to owners
294.2 ---(72.5)221.7 (37.4)184.3
Balance as at 30 September 2020
1,049.1 654.1 8.1 (56.0)857.7 2,513.0 1,109.9 3,622.9
The accompanying notes form part of these financial statements.
Consolidated Statement
of Changes in Equity
For the 6 months ended 30 September 2020
Attributable to equity holders of the Company – Unaudited
6
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 (65.4)(50.4)715.0 1,646.0 1,098.5 2,744.5
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 --2 7. 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 (41.3)2 7. 2 56.3 (18.9)37.4
Total comprehensive income for the period
-7. 0 63.4 (41.3)83.6 112.7 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 issued391.3 ----391.3 -391.3
Share buyback--------
Shares issued under dividend reinvestment plan--------
Conversion of executive redeemable shares0.9 ----0.9 -0.9
Dividends to equity holders
----(72.5)(72.5)(64.0)(136.5)
Total contributions by and distributions to
owners392.2 ---(72.5)319.7 (64.0)255.7
Balance as at 30 September 2019
754.0 692.0 (2.0)(91.7)726.1 2,078.4 1,048.5 3,126.9
The accompanying notes form part of these financial statements.
Attributable to equity holders of the Company – Unaudited
Consolidated Statement
of Changes in Equity
7
Consolidated Statement
of Changes in Equity
For the year ended 31 March 2020
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 2019361.8 685.0 (65.4)(50.4)715.0 1,646.0 1,098.5 2,744.5
Total comprehensive income for the year
Net surplus for the year
----241.2 241.2 243.0 484.2
Other comprehensive income, after tax
Differences arising on translation of foreign
operations
--(22.7)--(22.7)5.2 (17.5)
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
---(1.0)-(1.0)-(1.0)
Realisations on disposal of equity investments
at FVOCI
---(2.5)2.5 ---
Ineffective portion of hedges taken to profit
and loss
--------
Effective portion of changes in fair value
of cash flow hedges
---(32.7)-(32.7)(21.3)(54.0)
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
-22.9 --2 7. 2 50.1 (3.6)46.5
Share of associates other comprehensive
income
---(21.3)-(21.3)-(21.3)
Total other comprehensive income
-1.4 (6.4)(58.0)29.7 (33.3)(37.4)(70.7)
Total comprehensive income for the year
-1.4 (6.4)(58.0)270.9 2 0 7. 9 205.6 413.5
Contributions by and distributions to
non-controlling interest
Non-controlling interest arising
on acquisition of subsidiary--------
Issue of shares to non-controlling interests------1.7 1.7
Issue/(acquisition) of shares held by outside
equity interest
------(5.2)(5.2)
Total contributions by and
distributions to non-controlling interest
------(3.5)(3.5)
Disposal of Snowtown 2-(31.3)--30.2 (1.1)(0.6)(1.7)
Contributions by and distributions to owners
Shares issued390.9 ----390.9 -390.9
Share buyback
(3.7)----(3.7)-(3.7)
Shares issued under dividend reinvestment plan
5.0 ----5.0 -5.0
Conversion of executive redeemable shares
0.9 ----0.9 -0.9
Dividends to equity holders
----(113.7)(113.7)(92.3)(206.0)
Total contributions by and distributions to 393.1 ---(113.7)279.4 (92.3)187.1
Balance at 31 March 2020754.9 655.1 (71.8)(108.4)902.4 2,132.2 1,207.7 3,339.9
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 2020
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 2020 and should be read in conjunction with the previous
annual report. No changes have been made from the accounting policies used in the 31 March 2020 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.
COVID-19 pandemic
The Group’s financial statements for the year ended 31 March 2020 included a summary of the primary impacts of COVID-19 on the
Group’s consolidated balance sheet at 31 March 2020. An updated assessment as at 30 September 2020 is outlined below.
Investments (including associates)
The potential impact of COVID-19 was considered by RetireAustralia as part of the estimation of the fair value of their investment
properties and resident obligations at 31 March 2020. RetireAustralia have reviewed the key valuation assumptions at 30 September 2020
and did not identify any circumstances that suggest a material change to any of these assumptions is warranted. The valuation of
RetireAustralia’s investment properties and resident obligations increased in the six months ended 30 September 2020, primarily reflecting
capital expenditure during the period and the roll forward of the valuation. RetireAustralia did not call upon the A$20 million in shareholder
support arrangements during the period ended 30 September 2020 (Infratil share: A$10 million).
Vodafone New Zealand recorded an increase in its expected credit loss allowance for trade receivables at 31 March 2020 due to an
expectation of a deteriorating economic outlook in New Zealand as a result of COVID-19. Vodafone has not observed any material
adverse impact on cash collections to date at 30 September 2020 and the expected credit loss provision remains broadly in line with
31 March 2020.
Property, Plant and Equipment & Investment properties
COVID-19 has had a significant impact on the aviation industry and on Wellington International Airport’s (‘WIAL’) business. The longer-
term effects of COVID-19 on WIAL’s business remain uncertain and the impacts of the pandemic continue to evolve.
As at 30 September 2020, WIAL has made an assessment of whether the carrying amounts of property, plant and equipment and
investment properties differed materially from fair value. This assessment is based on the latest available information at the time of
preparation of these financial statements and includes passenger and cashflow forecasts.
WIAL has forecast a significant reduction in passengers for the year ending 31 March 2021 and a slow recovery back to pre-COVID-19
levels occurring in financial year ending 31 March 2023. These forecasts are arrived at by reference to various data sources including
airlines, the International Air Transport Association and travel and tourism bodies.
WIAL's estimates of passengers, recovery and growth rates remain uncertain and are dependent on a number of factors. This includes any
potential future restrictions on travel, for example as a result of further COVID-19 outbreak or changing of alert levels, border controls for
international travel, public demand and behaviour with respect to travel and airline scheduling. Material changes in any of these factors
might have a material impact on the WIAL's estimates of income and cashflows used in fair value assessments as at 30 September 2020.
In addition, the longer-term effects of COVID-19 on WIAL’s business remain uncertain and the potential impacts of the pandemic
continue to evolve.
WIAL did not draw upon its $75.8 million shareholder support arrangement during the period ended 30 September 2020 (Infratil share:
$50.5 million). An update on WIAL’s financing arrangements during the period is also provided in Note 10.
Trade and other accounts receivable and prepayments
Trustpower and Wellington International Airport increased their expected credit loss allowance for trade receivables at 31 March 2020, in
part due to the expectation of a deteriorating economic outlook in New Zealand as a result of COVID-19. Neither Trustpower nor
Wellington International Airport have materially altered their expected credit loss allowance at 30 September 2020.
9
Generation Asset Valuation
Since the previous valuation of generation assets by Trustpower and Tilt Renewables at 31 March 2020, New Zealand Aluminium Smelters
(‘NZAS’) has announced its intention to close its aluminium smelter at Tiwai Point. Electricity future pricing reflects an expectation this will
be a staged exit. The Electricity Authority has also announced its final Transmission Pricing Guidelines which would end Trustpower’s
avoided cost of transmission ('ACOT') revenue from 1 April 2024. Trustpower and Tilt Renewables have assessed the carrying value of their
respective New Zealand generation assets in light of these developments and concluded that the valuation remains within a reasonable
fair value range.
2 Nature of business
The Group owns and operates infrastructure businesses and investments in New Zealand, Australia, the United States and Europe.
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 2020
Unaudited
6 months ended
30 September 2019
Unaudited
Year ended
31 March 2020
Audited
Total authorised and issued capital shares at the beginning of the period659,678,837 559,278,166 559,278,166
Movements during the period:
New shares issued63,273,696 99,992,228 99,992,228
New shares issued under dividend reinvestment plan--1,030,793
Conversion of executive redeemable shares-265,267 265,267
Share buyback--(887,617)
Total authorised and issued capital shares at the end of the period 722,952,533 659,535,661 659,678,837
During the period the Company issued new shares to provide additional balance sheet flexibility and to fund growth investments across
Infratil’s existing portfolio companies as well as providing the opportunity to take advantage of any new investment opportunities that
may arise. In total net proceeds after issue costs of $294.2 million were raised via an institutional placement and share purchase plan for
existing shareholders. During the comparative period the Company issued new shares to support the acquisition of a 49.9% share of
Vodafone New Zealand Limited, raising net proceeds after issue costs of $390.9 million via an institutional placement and an entitlement
offer to existing shareholders. All fully paid ordinary shares have equal voting rights and share equally in dividends and equity. At 30
September 2020 the Group held 1,662,617 shares as Treasury Stock (30 September 2019: 775,000, 31 March 2020: 1,662,617).
Dividends paid on
ordinary shares
6 months ended
30 September 2020
cps
Unaudited
6 months ended
30 September 2019
cps
Unaudited
Year ended
31 March 2020
cps
Audited
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Final dividend prior year
11.00 11.00 11.00 72.5 72.5 72.5
Interim dividend paid
current year
--6.25 --41.2
Dividends paid on
ordinary shares
11.00 11.00 17.25 72.5 72.5 113.7
10
4 Operating segments
Reportable segments of the Group are analysed by significant businesses for reporting to the Infratil Chief Executive Officer.
The Group has five reportable segments, as described below (30 September 2019: seven reportable segments, 31 March 2020: seven
reportable segments): Trustpower and Tilt Renewables are renewable generation investments and Wellington International Airport is
an airport investment. Associates comprises Infratil's investments that are not consolidated for financial reporting purposes including
CDC Data Centres, Vodafone New Zealand, RetireAustralia, Longroad Energy and Galileo Green Energy. Further information on these
investments is outlined in Note 5. The Group's investments in NZ Bus, Perth Energy, ANU Student Accommodation and Snapper were
treated as Discontinued Operations as at 30 September 2019 and 31 March 2020. All other segments and corporate predominately
includes the activities of the Parent Company. The group has no significant reliance on any one customer. Inter-segment revenue primarily
comprises dividends from Trustpower, subvention income from Wellington International Airport and intercompany transactions between
Trustpower and Tilt Renewables.
Trustpower
New Zealand
$Millions
Unaudited
Tilt
Renewables
Australasia
$Millions
Unaudited
Wellington
International
Airport
New Zealand
$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 2020
Total revenue
506.3 60.0 25.8 -66.2 -658.3
Share of earnings of associate companies---83.8 --83.8
Inter-segment revenue
----(62.3)(17.8)(80.1)
Total income
506.3 60.0 25.8 83.8 3.9 (17.8)662.0
Operating expenses (excluding depreciation
and amortisation)(395.9)(25.9)(14.9)-(80.9)17.8 (499.8)
Interest income
0.3 2.3 0.2 -0.3 -3.1
Interest expense
(15.4)(7.8)(13.1)-(38.9)-(75.2)
Depreciation and amortisation(21.9)(21.8)(13.5)---(57.2)
Net gain/(loss) on foreign exchange and derivatives(26.5)34.4 0.6 -6.8 -15.3
Net realisations, revaluations and impairments--3.9 -9. 8 -13.7
Taxation expense
(13.3)(12.5)8.2 -12.7 -(4.9)
Net surplus/(loss) for the year
33.6 28.7 (2.8)83.8 (86.3)-57.0
Net surplus/(loss) attributable to owners
of the company16.9 18.8 (5.4)83.8 (86.3)-2 7. 8
Net surplus/(loss) attributable to
non-controlling interests16.7 9.9 2.6 - - -29.2
Current assets210.9 377.3 100.5 -58.5 -7 4 7. 2
Non-current assets
1,959.8 1,479.1 1,325.4 2,082.7 343.3 -7,190.3
Current liabilities
128.4 72.7 127.3 -174.3 -502.7
Non-current liabilities
946.3 760.8 713.4 -1,391.5 -3,811.9
Net assets
1,096.0 1,022.9 585.2 2,082.7 (1,163.9)-3,622.9
Non-controlling interest percentage 49.0% 34.4% 34.0% - - -
Capital expenditure and investments
15.6 305.7 11.5 15.8 16.4 -365.0
11
4 Operating segments (continued)
Trustpower
New Zealand
$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
Total 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)
Total income
539.4 109.2 72.6 76.1 114.2 101.1 4.5 (214.7)802.4
Operating expenses
(excluding depreciation
and amortisation)(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)
Net surplus/(loss) for the year
38.6 12.6 17.6 (35.4)(24.7)101.1 (20.6)(9.4)79.8
Net surplus/(loss) attributable
to owners of the company
19.4 8.3 9. 8 (35.4)(25.0)101.1 (20.6)(9.1)48.5
Net surplus/(loss)
attributable to non-
controlling interests19.2 4.3 7. 8 -0.3 --(0.3)31.3
Current assets188.4 358.9 37.7 (5.9)--81.6 -660.7
Non-current assets2,079.3 1,367.3 1,262.8 5.9 -2,058.1 334.8 -7,108.2
Current liabilities121.2 292.7 95.1 ---366.7 -875.7
Non-current liabilities944.7 742.0 638.9 ---1,440.7 -3,766.3
Net assets
1,201.8 691.5 566.5 - -2,058.1 (1,391.0)-3,126.9
Non-controlling interest
percentage 49.0% 34.7% 34.0% - 20.0% - - - -
Capital expenditure
and investments
16.4 123.9 32.0 2.7 0.2 1,104.9 18.2 (3.0)1,295.3
12
4 Operating segments (continued)
Trustpower
New Zealand
$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 2020
Total revenue
990.0 179.2 146.4 76.1 114.2 -135.1 (191.9)1,449.1
Share of earnings of
associate companies
-----87.3 -(0.5)86.8
Inter-segment revenue
------(125.3)(41.9)(167.2)
Total income
990.0 179.2 146.4 76.1 114.2 87.3 9. 8 (234.3)1,368.7
Operating expenses
(excluding depreciation
and amortisation)(803.5)(55.5)(43.2)(70.2)(102.1)-(170.5)216.5 (1,028.5)
Interest income
0.6 7. 6 0.7 -0.1 -7. 3 (5.6)10.7
Interest expense
(32.4)(49.0)(25.5)(3.9)(3.6)-(90.2)7. 5 (197.1)
Depreciation and
amortisation
(42.5)(76.3)(28.4)(7.1)(2.6)-(0.1)9. 5 (147.5)
Net gain/(loss) on foreign
exchange and derivatives
16.2 (9.0)0.1 ---(1.1)-6.2
Net realisations, revaluations
and impairments
8.9 511.5 (11.4)(68.6)(22.9)-6 7. 7 25.5 510.7
Taxation expense
(39.6)(4.9)34.5 1.7 (4.2)-(6.1)4.2 (14.4)
Net surplus/(loss) for the year
97.7 503.6 73.2 (72.0)(21.1)87.3 (183.2)23.3 508.8
Net surplus/(loss) attributable
to owners of the company
48.6 330.7 52.6 (72.0)(21.4)87.3 (183.2)23.6 266.2
Net surplus/(loss)
attributable to non-
controlling interests49.1 172.9 20.6 -0.3 --(0.3)242.6
Current assets150.8 730.5 35.0 ---1 7. 0 -933.3
Non-current assets1,960.0 1,046.0 1,336.9 --1,961.9 3 4 7. 0 -6,651.8
Current liabilities143.6 92.6 89.5 ---95.7 -421.4
Non-current liabilities8 6 7. 1 469.0 641.6 ---1,846.1 -3,823.8
Net assets
1,100.1 1,214.9 640.8 - - 1,961.9 (1,577.8)-3,339.9
Non-controlling interest
percentage 49.0% 34.4% 34.0% - 20.0% - - - -
Capital expenditure
and investments
34.3 506.4 80.6 2.7 0.2 1,134.5 41.0 (3.0)1,796.7
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 and
Europe. 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
Europe
$Millions
Unaudited
Eliminations
& discontinued
operations
$Millions
Unaudited
Total from
continuing
operations
$Millions
Unaudited
For the period ended 30 September 2020
Total revenue
622.6 35.7 ---658.3
Share of earnings of associate companies
(15.6)114.9 (13.8)(1.7)-83.8
Inter-segment revenue
(62.3)---(17.8)(80.1)
Total income
544.7 150.6 (13.8)(1.7)(17.8)662.0
Operating expenses (excluding depreciation
and amortisation)(500.9)(16.7)--17.8 (499.8)
Interest income
1.3 1.8 ---3.1
Interest expense
(68.5)(6.7)---(75.2)
Depreciation and amortisation
(42.4)(14.8)---(57.2)
Net gain/(loss) on foreign exchange and
derivatives
5.8 9. 5 ---15.3
Net realisations, revaluations and impairments13.7 ----13.7
Taxation expense
(2.3)(2.6)---(4.9)
Net surplus/(loss) for the year
(48.6)121.1 (13.8)(1.7)-57.0
Current assets603.2 144.0 ---7 4 7. 2
Non-current assets4,931.9 2,217.9 34.4 6.1 -7,190.3
Current liabilities
466.5 36.2 ---502.7
Non-current liabilities
3,281.6 530.3 ---3,811.9
Net assets
1,787.0 1,795.4 34.4 6.1 -3,622.9
Capital expenditure and investments
195.8 158.6 5.6 5.0 -365.0
For the period ended 30 September 2019
Total revenue
813.6 200.5 --(191.9)822.2
Share of earnings of associate companies
(3.3)86.5 1 7. 9 -(0.5)100.6
Inter-segment revenue
(98.1)---(22.3)(120.4)
Total income
712.2 287.0 1 7. 9 -(214.7)802.4
Operating expenses (excluding depreciation
and amortisation)(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 impairments33.0 (26.5)--(7.3)(0.8)
Taxation expense
(42.2)(8.2)--4.3 (46.1)
Net surplus/(loss) for the year
(17.6)88.9 1 7. 9 -(9.4)79.8
Current assets562.8 97.9 ---660.7
Non-current assets4,911.6 2,164.8 31.8 --7,108.2
Current liabilities606.8 268.9 ---875.7
Non-current liabilities
3,125.5 614.8 --26.0 3,766.3
Net assets
1,742.1 1,379.0 31.8 -(26.0)3,126.9
Capital expenditure and investments
1,195.3 96.7 6.3 -(3.0)1,295.3
14
Entity wide disclosure – geographical (continued)
New Zealand
$Millions
Audited
Australia
$Millions
Audited
United States
$Millions
Audited
Europe
$Millions
Audited
Eliminations
& discontinued
operations
$Millions
Audited
Total from
continuing
operations
$Millions
Audited
For the period ended 31 March 2020
Total revenue
1,391.4 249.6 --(191.9)1,449.1
Share of earnings of associate companies
(24.6)107.8 4.7 (0.6)(0.5)86.8
Inter-segment revenue
(125.3)---(41.9)(167.2)
Total income
1,241.5 357.4 4.7 (0.6) (234.3)1,368.7
Operating expenses (excluding depreciation
and amortisation)(1,147.5)(97.5)--216.5 (1,028.5)
Interest income
9. 1 7. 2 --(5.6)10.7
Interest expense
(170.0)(34.6)--7. 5 (197.1)
Depreciation and amortisation
(100.2)(56.8)--9. 5 (147.5)
Net gain/(loss) on foreign exchange and
derivatives
15.7 (9.5)---6.2
Net realisations, revaluations and impairments(3.4)488.6 --25.5 510.7
Taxation expense
(11.2)(7.4)--4.2 (14.4)
Net surplus/(loss) for the year
(166.0)6 4 7. 4 4.7 (0.6) 23.3 508.8
Current assets268.1 665.2 ---933.3
Non-current assets4,845.6 1,773.1 30.1 3.0 -6,651.8
Current liabilities
357.1 64.3 ---421.4
Non-current liabilities
3,434.0 389.8 ---3,823.8
Net assets
1,322.6 1,984.2 30.1 3.0 -3,339.9
Capital expenditure and investments
1,249.8 512.5 34.0 3.4 (3.0)1,796.7
15
5 Investments in associates
Note
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Investments in associates are as follows:
Vodafone New Zealand5.1917.5 1,026.4 974.0
CDC Data Centres5.2845.8 660.8 693.4
RetireAustralia5.3313.3 367.4 291.5
Longroad Energy 5.4-3.5-
Galileo Green Energy6.1 -3.0
Investments in associates 2,082.7 2,058.1 1,961.9
Equity accounted earnings of associates are as follows:
Vodafone New Zealand5.1(15.6)(3.2)(24.7)
CDC Data Centres5.2108.5 79.5 161.0
RetireAustralia5.36.4 6.5 (53.7)
Longroad Energy 5.4(13.8)17.8 4.7
Galileo Green Energy(1.7)-(0.5)
Share of earnings of associate companies 83.8 100.6 86.8
16
5.1 Vodafone New Zealand
On 31 July 2019, the Group acquired a 49.9% ownership interest in Vodafone New Zealand Limited (‘Vodafone’). The Group and consortium
partner Brookfield Asset Management Inc. ('Brookfield') each acquired 49.9% of the share capital, with the remaining shares held by
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 2019: 49.9%, 31 March 2020: 49.9%).
Movement in the carrying amount of the Group's investment in Vodafone:
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Carrying value at 1 April974.0 --
Acquisition of shares-690.3 690.3
Capitalised transaction costs--0.2
Shareholder loan-339.3 339.4
Total capital contributions during the period-1,029.6 1,029.9
Interest on shareholder loan5.2 2.5 9. 3
Share of associate’s surplus/(loss) before income tax(27.6)(4.1)(45.1)
Share of associate’s income tax (expense)6.8 (1.6)11.1
Total share of associate’s earnings during the period(15.6)(3.2)(24.7)
Share of associate's other comprehensive income1.3 -(6.2)
less: Distributions received--(19.1)
less: Shareholder loan repayments including interest(42.2)-(5.9)
Carrying value of investment in associate917.5 1,026.4 974.0
Summary financial information
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Summary information for Vodafone is not adjusted for the percentage ownership
held by the Group (unless stated)
Current assets540.6 540.2 598.7
Non-current assets3,679.0 3,989.2 3,811.7
Total assets4,219.6 4,529.4 4,410.4
Current liabilities552.0 564.9 580.9
Non-current liabilities2,442.2 2,593.0 2,565.0
Total liabilities2,994.2 3,157.9 3,145.9
Net assets (100%)1,225.4 1,371.5 1,264.5
Group's share of net assets611.4 684.4 631.0
Revenues9 3 9. 6297.21,382.6
Net surplus/(loss) after tax(37.1)(11.4)(68.1)
Total other comprehensive income1.2-2.2
17
5.1 Vodafone New Zealand (continued)
The summary financial information presented on the previous page is reflective of Infratil's period of ownership from 31 July 2019. This is
relevant for the profit and loss numbers presented in the comparative periods which are for 2 months and 8 months respectively.
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Reconciliation of the carrying amount of the Group's investment in Vodafone:
Group's share of net assets611.4 684.4 631.0
add: Shareholder loan305.9 341.8 342.8
add: Capitalised transaction costs0.2 0.2 0.2
Carrying value of investment in associate917.5 1,026.4 974.0
5.2 CDC Data Centres
On 14 September 2016 the Group completed the acquisition of 48.13% of CDC Data Centres ('CDC'). CDC operates across 3 accredited
and connected Data Centre campuses in Canberra and Sydney, with construction of additional facilities in Auckland, New Zealand
underway. 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 48.08% (30 September 2019: 48.22%, 31 March 2020: 48.22%).
Movement in the carrying amount of the Group's investment in CDC:
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Carrying value at 1 April693.4555.3555.3
Acquisition of shares7. 5 --
Shareholder loan-8.1 8.1
Total capital contributions during the period7. 5 8.1 8.1
Interest on shareholder loan6.3 7. 2 14.2
Share of associate’s surplus/(loss) before income tax147.7 1 0 7. 9 216.6
Share of associate’s income tax (expense)(48.6)(35.6)(69.8)
add: share of associate's share capital issued, net of dilution3.1 --
Total share of associate’s earnings during the period108.5 79.5 161.0
Share of associate's other comprehensive income(0.4)--
less: Shareholder loan repayments including interest-(0.6)(16.1)
Foreign exchange movements36.8 18.5 (14.9)
Carrying value of investment in associate845.8 660.8 693.4
18
5.2 CDC Data Centres (continued)
Summary financial information
30 September 2020
A$Millions
Unaudited
30 September 2019
A$Millions
Unaudited
31 March 2020
A$Millions
Audited
Summary information for CDC is not adjusted for the percentage ownership
held by the Group (unless stated)
Current assets148.3 78.9 87.2
Non-current assets3,118.6 2,299.4 2,703.3
Total assets3,266.9 2,378.3 2,790.5
Current liabilities79.4 6 9. 7 73.3
Non-current liabilities1,910.0 1,396.8 1,654.1
Total liabilities1,989.4 1,466.5 1,727.4
Net assets (100%)1,277.5 911.7 1,063.1
Group's share of net assets614.2 441.7 512.6
Revenues92.7 6 7. 2 173.6
Net surplus/(loss) after tax191.7 137.8 289.1
Total other comprehensive income(0.8)--
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Reconciliation of the carrying amount of the Group's investment
in CDC:
Group's share of net assets in NZD663.8 475.6 526.3
add: Shareholder loan182.0 185.2 167.1
Carrying value of investment in associate845.8 660.8 693.4
CDC's functional currency is Australian Dollars (A$) and the summary financial information shown is presented in this currency.
The NZD/AUD exchange rates used to convert the summary financial information to the Group's functional currency ($NZD) were
0.9253 (Spot rate) and 0.9329 (Average rate) (30 September 2019: Spot rate 0.9287, Average rate 0.9468, 31 March 2020: Spot rate 0.9740,
Average rate 0.9501).
19
5.3 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 2019: 50%, 31 March 2020: 50%).
Movement in the carrying amount of the Group's investment in RetireAustralia:
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Carrying value at 1 April291.5 289.3 289.3
Acquisition of shares-61.3 61.3
Total capital contributions during the period-61.3 61.3
Share of associate’s surplus/(loss) before income tax6.4 6.5 (53.7)
Share of associate’s income tax (expense)---
Total share of associate’s earnings during the period6.4 6.5 (53.7)
Share of associate's other comprehensive income---
less: Distributions received---
Foreign exchange movements15.4 10.3 (5.4)
Carrying value of investment in associate313.3 367.4 291.5
Summary financial information
30 September 2020
A$Millions
Unaudited
30 September 2019
A$Millions
Unaudited
31 March 2020
A$Millions
Audited
Summary information for RetireAustralia is not adjusted for the percentage
ownership held by the Group (unless stated)
Current assets216.4 193.1 196.4
Non-current assets2,300.9 2,355.6 2,266.4
Total assets2,517.3 2,548.7 2,462.8
Current liabilities1,753.6 1,733.1 1,738.0
Non-current liabilities183.8 133.4 157.1
Total liabilities1,937.4 1,866.5 1,895.1
Net assets (100%)579.8 682.2 567.7
Group's share of net assets290.0 341.1 283.9
Group's share of net assets and carrying value of investment in associate ($NZD)313.3 367.4 291.5
Revenues4 7. 1 38.8 77.5
Net surplus/(loss) after tax9.3 12.4 (102.1)
Total other comprehensive income---
RetireAustralia's functional currency is Australian Dollars (A$) and the summary financial information shown is presented in this currency.
The NZD/AUD exchange rates used to convert the summary financial information to the Group's functional currency ($NZD) were 0.9253
(Spot rate) and 0.9329 (Average rate) (30 September 2019: Spot rate 0.9287, Average rate 0.9468, 31 March 2020: Spot rate 0.9740,
Average rate 0.9501).
RetireAustralia’s net current asset deficiency has primarily arisen due to the requirement under Accounting Standards to classify resident
obligations as current liabilities as there is no unconditional contractual right to defer settlement for at least twelve months of balance
date (residents may give notice of their intention to vacate their unit with immediate effect). In contrast, the corresponding assets are
classified as non-current under Accounting Standards.
20
5.4 Longroad Energy
On 5 October 2016 the Group announced an initial investment in Longroad Energy Holdings, LLC ('Longroad Energy'), a renewable energy
development and operating vehicle headquartered in Boston, Massachusetts. Longroad Energy's focus is primarily in the development of
utility-scale wind and solar generation throughout North America. Infratil’s current shareholding is 40% (30 September 2019: 40%, 31
March 2020: 40%). The other establishment partners are the New Zealand Superannuation Fund (40%) and the Longroad management
team (20%). In December 2018 Longroad Energy distributed its membership interest in Montgomery Street Holdings, LLC ('MSH') to the
shareholders of Longroad Energy. The carrying value of MSH is included within the equity accounting for Longroad Energy presented
below.
Movement in the carrying amount of the Group's investment in Longroad Energy:
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Carrying value at 1 April-10.810.8
Capital contributions3.3 5.9 31.8
Total capital contributions during the period3.3 5.9 31.8
Share of associate’s surplus/(loss) before income tax(13.8)17.8 4.7
Share of associate’s income tax (expense)---
Total share of associate’s earnings during the period(13.8)17.8 4.7
Share of associate’s other comprehensive income28.0 (9.7)(15.0)
less: Distributions received(8.0)(17.7)(29.0)
less: Capital returned(11.1)(3.6)(4.4)
Foreign exchange movements1.6 -1.1
Carrying value of investment in associate-3.5 -
An adjustment to the carrying value of the investment in Longroad Energy has been recorded as at 30 September 2020 and 31 March
2020 as under NZ IAS 28 the carrying amount of the investment is not permitted to reduce below zero. This adjustment is included in share
of associate's other comprehensive income.
21
5.4 Longroad Energy (continued)
Summary financial information
31 December 2019
US$Millions
Unaudited
31 December 2018
US$Millions
Unaudited
Summary information for Longroad Energy is not adjusted for the percentage ownership held by the
Group (unless stated)
Current assets153.0 282.2
Non-current assets1,247.3 572.7
Total assets1,400.3 854.9
Current liabilities270.0 290.1
Non-current liabilities1,059.8 533.8
Total liabilities1,329.8 823.9
Net assets (100%)70.5 31.0
Revenues94.3 93.4
Net surplus/(loss) after tax6.8 5 9. 5
Total other comprehensive income(10.2)(1.1)
Longroad's functional currency is United States Dollars ($US) and the summary financial information shown is presented in this currency.
The NZD/USD exchange rates used to convert the summary financial information to the Group's functional currency ($NZD) were
0.6603 (Spot rate) and 0.6408 (Average rate) (30 September 2019: Spot rate 0.6277, Average rate 0.6557, 31 March 2020: Spot rate 0.5997,
Average rate 0.6474).
The summary information provided is taken from the most recent audited annual financial statements of Longroad Energy Holdings,
LLC which has a balance date of 31 December and are reported as at that date.
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 are on issue 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 2020, US$91.8 million (30 September 2019: US$104.4 million, 31 March 2020: US$113.5 million) in
Letters of Credit are on issue under the Longroad Letter of Credit facility.
22
6 Other investments
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Australian Social Infrastructure Partners36.0 46.1 33.4
Clearvision Ventures34.4 28.3 30.1
Other7.8 8.7 7.9
Other investments78.2 83.1 71.4
Australian Social Infrastructure Partners
Australian Social Infrastructure Partners ('ASIP') holds a 9.95% share of the equity in the New Royal Adelaide Hospital public-private
partnership (‘PPP’). ASIP divested its 49.0% equity interest in the South East Queensland Schools PPP during the year ended 31 March
2020, from which Infratil's share of cash proceeds was A$12.9 million. In 2014, Infratil made a A$100 million commitment to pursue
greenfield availability-based PPP opportunities in Australia via ASIP. As at 30 September 2020, A$69.0 million of the commitment remains
uncalled (30 September 2019: A$69.5 million; 31 March 2020: A$69.5 million) however no further Capital Calls are forecast from ASIP.
Clearvision Ventures
In February 2016 Infratil made an initial commitment of US$25 million to the California based Clearvision Ventures. An additional
commitment of US$25 million was made in May 2020 bringing Infratil's total commitment to US$50 million. The strategic objective is to
help Infratil's businesses identify and engage with technology changes that will impact their activities. As at 30 September 2020 Infratil
has made total contributions of US$25.7 million (30 September 2019: US$19.8 million, 31 March 2020: US$21.0 million), with the remaining
US$24.3 million commitment uncalled at that date.
7 Revenue
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Electricity458.0 534.8 940.2
Gas18.1 17.5 29.9
Telecommunications50.7 46.8 98.1
Aircraft movement and terminal charges11.3 40.3 80.8
Hotel and other trading activities14.5 32.3 39.1
Revenue allocated to customer incentives12.0 15.6 2 7. 9
Other13.6 13.9 65.3
Total operating revenue578.2 701.3 1,281.3
The reduction in Electricity revenue primarily reflects the sale of Tilt Renewable's Snowtown 2 wind farm in December 2019.
The reduction in Aircraft movement and terminal charges and Hotel and other trading activities primarily reflects the significant reduction
in passengers at WIAL as a result on restrictions on travel imposed as a resut of the COVID-19 pandemic.
23
8 Other operating expenses
Note
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Trading operations
Energy and wholesale costs105.0 123.2 207.1
Line, distribution and network costs133.2 151.6 280.7
Generation production & development costs22.4 26.0 45.5
Other energy business costs61.0 64.8 126.5
Telecommunications cost of sales32.8 32.8 63.3
Airport business costs10.0 14.2 27.5
Bad debts written off2.5 1.4 3.6
Increase in provision for expected credit loss- -3.2
Directors’ fees1.4 1.7 3.3
Administration and other corporate costs3.4 1.9 5.4
Management fee 1519.6 17.4 37.3
International Portfolio Incentive fee15 57.7 12.8 125.0
Donations0.8 0.2 1.0
Total other operating expenses449.8 448.0 929.4
9 Taxation
6 months ended
30 September 2020
$Millions
Unaudited
6 monthded ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Net surplus before taxation from continuing operations61.9 125.9 523.2
Taxation on the surplus for the period @ 28%17.3 35.3 146.5
Plus/(less) taxation adjustments:
Effect of tax rates in foreign jurisdictions1.7 (0.6)9. 6
Net benefit of imputation credits---
Timing differences not recognised--(3.1)
Tax losses not recognised/(utilised)(11.0)(3.2)6.2
Effect of equity accounted earnings of associates(24.7)(20.5)(2.1)
Recognition of previously unrecognised deferred tax-9. 0 (20.8)
(Over)/under provision in prior periods(6.5)7.5 (6.1)
Net investment realisations-(0.1)(148.8)
Other permanent differences28.1 18.7 33.0
Taxation expense4.9 46.1 14.4
Current taxation 15.1 36.8 35.1
Deferred taxation (10.2)9.3 (20.7)
Tax on discontinued operations-4.3 4.3
24
10 Loans and borrowings
This note provides information about the contractual terms of the Group's interest bearing loans and borrowings.
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Current liabilities
Unsecured bank loans57.0 225.0 118.0
Secured bank facilities32.4 210.3 19.8
less: Loan establishment costs capitalised and amortised over term(3.1)(5.1)(3.1)
86.3 430.2 134.7
Non-current liabilities
Unsecured bank loans328.9 338.8 460.7
Secured bank facilities506.4 504.3 384.0
less: Loan establishment costs capitalised and amortised over term(8.9)(11.5)(9.7)
826.4 831.6 835.0
Facilities utilised at reporting date
Unsecured bank loans385.9 563.8 578.7
Secured bank loans538.8 714.6 403.8
Secured guarantees128.1 187.4 162.2
Facilities not utilised at reporting date
Unsecured bank loans759.1 679.3 514.5
Secured bank loans174.9 348.2 303.6
Secured guarantees58.3 74.3 57.6
Interest bearing loans and borrowings –
current86.3 430.2 134.7
Interest bearing loans and borrowings –
non-current826.4 831.6 835.0
Total interest bearing loans and borrowings912.7 1,261.8 969.7
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Maturity profile for bank facilities (excluding secured guarantees):
Between 0 to 1 year179.9 635.2 220.0
Between 1 to 2 years532.2 603.8 248.9
Between 2 to 5 years926.3 786.7 1,118.4
Over 5 years220.3 280.2 213.3
Total bank facilities1,858.7 2,305.9 1,800.6
25
Financing arrangements
Infratil Finance Limited, a wholly owned subsidiary of the Company, has entered into bank facility arrangements with a negative pledge
agreement, 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 bank 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 2020 drawn debt and accrued interest under the IGG facilities was $52.0 million (30 September 2019: $327.7 million, 31
March 2020: $355.3 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 assets with a carrying amount of $346.6 million (30 September 2019: $400.9 million, 31 March 2020: $310.2 million) as
part of its bank facility arrangements. IENZ has total facilities of $125.0 million, of which $50.0 million was drawn as at 30 September 2020
(30 September 2019: $10.0 million, 31 March 2020: $125.0 million).
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 borrows under syndicated bank debt facilities (both general and project specific) and has granted security over its assets.
All non-wholly owned subsidiary facilities are subject to restrictions over the sale or disposal of certain assets without bank agreement.
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.
The impacts of COVID-19 have resulted in Wellington International Airport ('WIAL') forecasting a significant reduction in passenger
numbers and income. As a result, WIAL has modelled certain scenarios where a breach in certain covenants may occur at the
measurement dates of 31 March 2021 and 30 September 2021, without corrective action being undertaken. In response, and during the
six month period to 30 September 2020, WIAL has increased its bank facilities from $100.0 million to $170.0 million, extended its bank
facility maturity dates and issued a $100.0 million retail bond (WIA070). WIAL has also obtained a temporary waiver of certain bank and
USPP covenants for the test dates of September 2020, March 2021 and September 2021. Notwithstanding the temporary covenant
waivers obtained, WIAL complied with its financial covenants during the period and as at the test date of 30 September 2020.
Interest rates payable on bank loan facilities are floating rate 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 0.62% to 2.93% (30 September 2019: 1.60% to 3.70%, 31 March
2020: 1.45% to 4.10%).
26
11 Infrastructure bonds
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Balance at the beginning of the period1,293.2 1,127.6 1,127.6
Issued during the period-268.3 316.4
Exchanged during the period--(29.3)
Matured during the period--(119.7)
Bond issue costs capitalised during the period-(3.4)(4.2)
Bond issue costs amortised during the period1.0 1.1 2.4
Balance at the end of the period1,294.2 1,393.6 1,293.2
Current93.7 149.0 -
Non-current fixed coupon 846.9 902.3 939.7
Non-current variable coupon121.7 110.6 121.6
Non-current perpetual variable coupon231.9 231.7 231.9
Balance at the end of the period1,294.2 1,393.6 1,293.2
Repayment terms and interest rates:
IFT200 maturing in November 2019, 6.75% p.a. fixed coupon rate-68.5 -
IFT090 maturing in February 2020, 8.50% p.a. fixed coupon rate-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 rate56.1 56.1 56.1
IFT260 maturing in December 2024, 4.75% p.a. fixed coupon rate100.0 100.0 100.0
IFT250 maturing in June 2025, 6.15% p.a. fixed coupon rate43.4 43.4 43.4
IFT300 maturing in March 2026, 3.35% p.a. fixed coupon rate37.0 156.3 37.0
IFT280 maturing in December 2026, 3.35% p.a. fixed coupon rate156.3 -156.3
IFT270 maturing in December 2028, 4.85% p.a. fixed coupon rate
until 15 December 2023
146.2 146.2 146.2
IFTHC maturing in December 2029, 3.50% p.a. variable coupon rate123.2 112.1 123.2
IFTHA Perpetual Infratil infrastructure bonds231.9 231.9 231.9
less: Bond issue costs capitalised and amortised over term(9.6)(11.1)(10.6)
Balance at the end of the period1,294.2 1,393.6 1,293.2
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.
IFTHC bonds
The IFTHC bonds the Company has on issue are 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. Thereafter the rate will be reset annually at 2.50% per annum over
the then one year swap rate for quarterly payments.
27
IFT270 bonds
The interest rate of the IFT270 bonds is fixed for the first five years and then reset on 15 December 2023 for a further five years. The interest
rate for the IFT270 bonds for the period from (but excluding) 15 December 2023 until the maturity date will be the sum of the five year
swap rate on 15 December 2023 plus a margin of 2.50% per annum.
Perpetual Infratil infrastructure bonds ('PIIBs')
The Company has 231,916,000 (30 September 2019: 231,916,000, 31 March 2020: 231,916,000) PIIBs on issue at a face value of $1.00 per
bond. Interest is payable quarterly on the bonds. On 15 November 2019 the coupon was set at 2.67% per annum until the next reset date,
being 15 November 2020 (September 2019: 3.55%, March 2020: 2.67%). Thereafter the rate will be reset annually at 1.50% per annum over
the then one year swap 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 2019: nil, March 2020: nil) were repurchased by
Infratil Limited during the period.
Throughout the period the Company complied with all debt covenant requirements as imposed by its bond Supervisor.
At 30 September 2020 Infratil Infrastructure bonds (including PIIBs) had a fair value of $1,250.2 million (30 September 2019: $1,393.6 million,
31 March 2020: $1,161.5 million).
12 Financial instruments
12.1 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 2020 of $2,355.1 million (30 September 2019:
$2,415.4 million, 31 March 2020: $2,142.5 million) compared to a carrying value of $2,328.4 million (30 September 2019: $2,339.5 million,
31 March 2020: $2,266.3 million).
12.2 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 2019: 3.3% to 3.5%, 31 March 2020: 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.
28
12.3 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 2020
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- 2.0 155.3 157.3
Derivative financial instruments – cross currency
interest rate swaps
- 21.2 -21.2
Derivative financial instruments – foreign exchange- 0.1 -0.1
Derivative financial instruments – interest rate- 1 7. 0 -17.0
To ta l- 40.3 155.3 195.6
Liabilities per the statement of financial position
Derivative financial instruments – energy- - 91.1 91.1
Derivative financial instruments – cross currency
interest rate swaps
- - --
Derivative financial instruments – foreign exchange- - --
Derivative financial instruments – interest rate- 130.1 1.1 131.2
To ta l- 130.1 92.2 222.3
30 September 2019
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
29
31 March 2020
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- 3.1 32.6 35.7
Derivative financial instruments – cross currency
interest rate swaps
- 35.5 -35.5
Derivative financial instruments – foreign exchange- 1.6 -1.6
Derivative financial instruments – interest rate- 11.6 -11.6
To ta l- 51.8 32.6 84.4
Liabilities per the statement of financial position
Derivative financial instruments – energy- 0.3 14.9 15.2
Derivative financial instruments – cross currency
interest rate swaps
- - --
Derivative financial instruments – foreign exchange- - --
Derivative financial instruments – interest rate- 114.1 -114.1
To ta l- 114.4 14.9 129.3
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 2020 (30 September 2019: none, 31 March 2020: none).
12.4 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 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Profit and loss
10% increase in energy forward prices(4.7)(1.5)(2.2)
10% decrease in energy forward prices4.7 1.5 2.2
Other comprehensive income
10% increase in energy forward prices(59.4)(34.4)(57.7)
10% decrease in energy forward prices56.1 34.4 57.7
30
The following table reconciles the movements in level 3 Electricity price derivatives that 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.
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Assets per the statement of financial position
Opening balance
32.6 170.6 170.6
Foreign exchange movement on opening balance
1.1 2.8 0.8
Acquired as part of business combination
---
Gains and (losses) recognised in profit or loss
(21.9)(3.9)(106.0)
Gains and (losses) recognised in other comprehensive income
143.5 (23.2)(32.8)
Closing balance
155.3 146.3 32.6
Total gains or (losses) for the period included in profit or loss
for assets held at the end of the reporting period
61.1 (11.9)(33.1)
Liabilities per the statement of financial position
Opening balance
14.9 27.1 27.1
Foreign exchange movement on opening balance
1.0 0.7 (0.2)
Acquired as part of business combination
---
(Gains) and losses recognised in profit or loss
(13.8)1.3 (11.2)
(Gains) and losses recognised in other comprehensive income
89.0 16.8 (0.8)
Sold as part of the disposal of a subsidiary
---
Closing balance
91.1 45.9 14.9
Total gains or (losses) for the period included in profit or loss
for liabilities held at the end of the reporting period
(30.3) 12.9 3.6
Settlements during the period
(3.8)22.8 18.6
31
13 Reconciliation of net surplus with cash flow from operating activities
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Net surplus for the period57.0 88.1 484.2
Items classified as investing activity:
Loss on investment realisations and impairments0.8 23.4 (489.3)
Items not involving cash flows:
Movement in financial derivatives taken to the profit or loss8.7 16.4 (6.2)
Decrease in deferred tax liability excluding transfers to reserves10.1 13.8 (16.2)
Changes in fair value of investment properties(14.5)(29.1)5.0
Equity accounted earnings of associate net of distributions received(67.1)(78.3)(12.1)
Depreciation51.6 79.7 146.0
Movement in provision for bad debts0.1 1.4 6.0
Amortisation of intangibles5.6 5.3 11.3
Other(6.1)9.0 19.0
Movements in working capital:
Change in receivables(20.1)(7.8)24.7
Change in inventories-1.3 1.2
Change in trade payables(0.8)122.8 51.2
Change in accruals and other liabilities(39.4)(176.3)(108.9)
Change in current and deferred taxation(30.2)(1.7)(15.9)
Net cash flow from operating activities(44.3)68.0 100.0
14 Capital commitments
30 September 2020
$Millions
Unaudited
30 September 2019
$Millions
Unaudited
31 March 2020
$Millions
Audited
Committed but not contracted for 3.6 10.1 5.8
Contracted but not provided for198.2 707.0 500.4
Capital commitments201.8 717.1 506.2
Capital commitments are primarily associated with the Dundonnell and Waipipi Wind Farms which total A$159.7 million as at
30 September 2020 (30 September 2019: A$630.8 million, 31 March 2020: A$450.5 million). See Note 6 for Infratil's commitments to ASIP
and Clearvision Ventures.
32
15 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
period were:
Note
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
Management fees19.6 17.6 37.5
International Portfolio incentive fee16 57.7 12.8 125.0
Executive secondment and consulting0.1 0.1 -
Directors fees1.0 0.9 2.0
Financial management, accounting, treasury, compliance
and administrative services
0.8 0.7 1.3
Capitalised development fee0.3 0.3 0.6
Investment banking services-0.5 1.2
Total management and other fees79.5 32.9 167.6
The above table does not include any amounts paid by discontinued operations in the period ended 30 September 2020
(30 September 2019: $0.4 million, 31 March 2020: $0.4 million).
At 30 September 2020 amounts owing to MCIM of $3.3 million (excluding GST) are included in trade creditors (30 September 2019:
$3.7 million, 31 March 2020: $3.0 million).
33
16 International Portfolio Incentive Fee
International Investments 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.
To the extent that there are assets that meet these criterion, independent valuations are performed on the respective International
Investments to determine whether any Incentive Fees are payable.
International Portfolio Initial Incentive Fee
International Investments become eligible for the Initial Incentive Fee assessment on the third balance date (31 March) that they have
been held continuously by the Company. All International 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 those assets against
a benchmark of 12% p.a. after tax, compounding. No Initial Incentive Fees are payable as at 31 March 2021 (31 March 2020: nil).
International Portfolio Annual Incentive Fee
Thereafter International Investments 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.
The Company’s investments in CDC Data Centres, Longroad Energy, RetireAustralia, Tilt Renewables and ASIP are eligible for the
International Portfolio Annual Incentive Fee assessment as at 31 March 2021 (31 March 2020: CDC Data Centres, Longroad Energy,
RetireAustralia, Tilt Renewables and ASIP).
As at 30 September 2020, it is probable that Infratil will have an International Portfolio Annual Incentive Fee (for the year to
31 March 2021) due to MCO based on the performance of the above portfolio of assets, and as a result an amount of $57.7 million
has been provided for as at 30 September.
International Portfolio Realised Incentive Fee
Realised Incentive Fees are payable on the realised gains from the sale or other realisation of International Investments 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. No Realised Incentive Fees are expected to be payable as at 31 March 2021 (31 March 2020: nil).
6 months ended
30 September 2020
$Millions
Unaudited
6 months ended
30 September 2019
$Millions
Unaudited
Year ended
31 March 2020
$Millions
Audited
International Portfolio Incentive Fees
ASIP-(1.0)(0.8)
CDC Data Centres43.5 6.4 105.5
Longroad Energy-1.86.1
RetireAustralia(2.5)(5.8)(18.0)
Tilt Renewables16.7 11.4 32.2
57.7 12.8 125.0
All Incentive fees accrued relate to the Annual Incentive Fee assessment.
Payment of Annual Incentive Fees
Any Annual Incentive Fee calculated in respect of a Financial Year is earned and paid in three annual instalments, with the second and
third instalments only being earned and payable if, at each relevant assessment date, the fair value of the relevant asset (including
distributions, if any) exceeds or is equal to the greater of fair value or cost as at the date for which the Incentive Fee was first calculated.
The second and third instalments of the March 2020 Annual Incentive Fee remain payable as at 31 March 2021 and 31 March 2022.
34
17 Contingent liabilities and legal matters
The Company and certain wholly owned subsidiaries are guarantors of the bank debt facilities of Infratil Finance Limited under
a Deed of Negative Pledge, Guarantee and Subordination and the Company is a guarantor to certain obligations of subsidiary
companies.
There were no other contingent liabilities as at 30 September 2020.
18 Events after balance date
Acquisition of Qscan Group Holdings Pty Ltd
On 26 October 2020, Infratil announced that it had executed a conditional offer to acquire up to 60% of Qscan Group Holdings Pty Ltd
(‘Qscan’) from Quadrant Private Equity (‘QPE’) and existing doctor and management shareholders for total cash equity consideration of
up to A$330 million. Qscan is a comprehensive diagnostic imaging business operating predominantly on the eastern seaboard of
Australia. Qscan is one of Australia’s largest radiology providers, operating over 70 clinics across Australia. Infratil has made the offer in
conjunction with the Morrison & Co Growth Infrastructure Fund (‘MGIF’), which has conditionally offered to acquire up to 15% of Qscan.
Infratil’s investment will be funded from existing bank facilities and available capital.
Completion of the acquisition is conditional on obtaining Foreign Investment Review Board of Australia approval by 31 December 2020,
which can be extended by either party to 26 February 2021.
Dividend
On 11 November 2020, 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 15 December 2020.
© 2020 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 2020 and its financial
performance and cash flows for the six
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 2020;
—the consolidated statements of comprehensive
income, changes in equity and cash flows for the
six 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.
35
© 2020 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 2020 and its financial
performance and cash flows for the six
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 2020;
—the consolidated statements of comprehensive
income, changes in equity and cash flows for the
six 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.
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
11 November 2020
37
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
11 November 2020
Directory
Directors
M Tume (Chairman)
M Bogoievski
A Gerry
P Gough
K Mactaggart
C M Savage
P M Springford
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 31
60 Martin 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
38
---
Notes to the Financial Statements
For the 6 months ended 30 September 2020
(12)Related parties
The Company has the following significant loans and investments to/(from)/in its subsidiaries:
6 months
ended
30 September
2020
6 months ended
30 September
2019
Year
ended
31 March
2020
30 September
2020
30 September
2019
31 March
2020
Related party
UnauditedUnaudited
Audited
UnauditedUnaudited
Audited
$000$000$000$000$000$000
Advances
Infratil Finance
60,39759,257 122,7141,893,6441,762,704 1,645,101
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
153,897153,897 153,897
Infratil No. 1 Limited
78,02478,02478,024
Infratil PPP Limited
5,9425,9425,942
Infratil No. 5 Limited
248,001248,001 248,001
(13)Events after balance date
Acquisition of Qscan Group Holdings Pty Ltd
Dividend
Interest income
Intercompany (loan)/advance/investment at
carrying value
On 11 November 2020, 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 15
December 2020.
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.
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.
On 26 October 2020, Infratil announced that it had executed a conditional offer to acquire up to 60% of Qscan Group Holdings Pty Ltd (‘Qscan’) from Quadrant Private
Equity (‘QPE’) and existing doctor and management shareholders for total cash equity consideration of up to A$330 million. Qscan is a comprehensive diagnostic
imaging business operating predominantly on the eastern seaboard of Australia. Qscan is one of Australia’s largest radiology providers, operating over 70 clinics across
Australia. Infratil has made the offer in conjunction with the Morrison & Co Growth Infrastructure Fund (‘MGIF’), which has conditionally offered to acquire up to 15%
of Qscan. Infratil’s investment will be funded from existing bank facilities and available capital.
Completion of the acquisition is conditional on obtaining Foreign Investment Review Board of Australia approval by 31 December 2020, which can be extended by
either party to 26 February 2021.
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.
Page 9 of 10
© 2020 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 2020 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 2020;
— 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.
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;
2
— 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
11 November 2020
---
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 2020
Previous Reporting Period 6 months to 30 September 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$662,000 (17.5%)
Total Revenue $662,000 (33.4%)
Net profit/(loss) from
continuing operations
$57,000 (28.6%)
Total net profit/(loss) $57,000 (35.3%)
Interim/Final Dividend
Amount per Quoted Equity
Security
$ 0.06250000
Imputed amount per Quoted
Equity Security
$0.01750000
Record Date 1 December 2020
Dividend Payment Date 15 December 2020
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$3.27 $3.01
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 2020
(“Interim Financial Statements”). More detailed commentary on
the operations of the Group over the period has been provided
in the form of the Infratil Interim Results Presentation 2021 and
Interim Report 2021, 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
12 November 2020
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
Record date 1 December 2020
Ex-Date (one business day before the
Record Date)
30 November 2020
Payment date (and allotment date for
DRP)
15 December 2020
Total monies associated with the
distribution
1
$45,184,533
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.08000000
Total cash distribution
3
$0.06250000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.00794118
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
28.00000000%
Imputation tax credits per financial
product
$0.01750000
Resident Withholding Tax per
financial product
$0.00890000
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)
Start date and end date for
determining market price for DRP
Date strike price to be announced (if
not available at this time)
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
DRP strike price per financial product
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
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
12 November 2020
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.
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