Release Date: May 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Infratil Ltd (ASX:IFT, Financial) reported strong EBITDAF of $864 million, slightly above the top end of their revised guidance range.
- The company achieved a significant 22% shareholder return over the past decade, indicating strong portfolio momentum.
- Infratil Ltd (ASX:IFT) made substantial investments across its portfolio, including over $2 billion in CDC, One NZ, Longroad Energy, and Kao Data.
- CDC Data Centres experienced a 26% increase in EBITDAF, driven by a surge in demand for AI-related capacity.
- The company remains committed to sustainability, with improved ratings from GRESB and Sustainalytics, and the release of their first sustainability report.
Negative Points
- The enterprise segment for One NZ faced challenges due to cost reductions by customers in both enterprise and public sectors.
- Fixed broadband remains highly competitive, with aggressive pricing from energy retailers impacting One NZ's performance.
- There was a slight rise in the portfolio level LTIFR frequency rate, indicating increased safety incidents.
- Longroad Energy's development side fell short of its 1.5 gigawatt target, achieving only 1.1 gigawatts of projects reaching financial close.
- Wellington Airport's recovery to pre-COVID passenger levels is still incomplete, currently at nearly 90%.
Q & A Highlights
Q: Can you provide more details on the significant investments made by Infratil over the past year?
A: Jason Boyes, CEO: Infratil invested over $2 billion into its portfolio companies, dominated by the acquisition of Brookfield's half of One NZ. Additionally, $150 million was invested in Kao Data and $200 million in renewable platforms to expand their pipelines and growth.
Q: What are the key drivers of growth for CDC Data Centres?
A: Jason Boyes, CEO: CDC is experiencing a surge in demand, mainly from Hyperscale workloads for AI-related capacity. The company announced over 200 megawatts of additional contracted capacity and increased its pipeline by over 400 megawatts. EBITDAF grew by 26% to $271 million.
Q: How has One NZ performed over the past year?
A: Andrew Carroll, CFO: One NZ reported an EBITDAF of $600 million, a 14% increase after adjusting for one-offs. The growth was driven by mobile revenue, transitioning from prepaid to postpaid accounts, and higher adoption of unlimited data plans. However, the enterprise segment remains challenging.
Q: What is the outlook for Longroad Energy?
A: Jason Boyes, CEO: Longroad's guidance for next year is up 17% at the midpoint, driven by new projects like Sun Streams 3 and Three Corners. The development pipeline is strong, with 1.6 gigawatts targeted for 2024. The Inflation Reduction Act and recent tariffs on Chinese imports support Longroad's strategy.
Q: How is Wellington Airport recovering post-COVID?
A: Jason Boyes, CEO: Wellington Airport is back at nearly 90% of pre-COVID passenger levels. The airport has strong airline partnerships, with Qantas emerging as the largest international airline. The new aeronautical pricing and commercial momentum are expected to drive 20% growth in FY24.
Q: What are the key financial metrics for Infratil's FY24 results?
A: Andrew Carroll, CFO: Infratil delivered an EBITDAF of $864 million, slightly above the top end of the revised guidance range. Shareholder returns were strong at almost 22%. Proportionate CapEx increased by $600 million to $1.7 billion.
Q: Can you elaborate on Infratil's sustainability initiatives?
A: Jason Boyes, CEO: Infratil is committed to integrating sustainable investing practices. The company released its first sustainability report, focusing on decarbonization and people. Science-based target initiatives and carbon disclosures were announced, and the company received improved ratings from GRESB and Sustainalytics.
Q: What is the dividend policy for Infratil?
A: Andrew Carroll, CFO: Infratil declared a partially imputed final dividend of $0.13 per share, continuing the trend of modestly increasing dividends. A Dividend Reinvestment Plan (DRP) is offered at the full year with a 2% discount.
Q: How is the Diagnostic Imaging business performing?
A: Jason Boyes, CEO: The Diagnostic Imaging business had a solid year, with investments in new clinics, machines, and IT infrastructure. The business is well-positioned with good catchment dynamics, pricing power, and equity participation of doctors. Guidance for next year indicates double-digit growth.
Q: What is the CapEx guidance for Infratil in FY25?
A: Andrew Carroll, CFO: The CapEx guidance for FY25 is $2.7 billion to $3.1 billion, a $1.2 billion increase from FY24. The investment is focused on development and growth in core plus parts of the portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
