Infratil profit fall expected

Infratil says it is in a strong position at the start of a global trend to renewable energy and public transport, despite yesterday posting a tax-paid profit of $12.5 million for the six months to September - nearly half that of last year's comparable period.

The result met market expectations. The Wellington utilities investor's earnings before interest, tax, depreciation, amortisation, realisations and impairments, and fair value movements of financial instruments, increased to $165 million, up from $69 million.

Forsyth Barr head of research Rob Mercer said the period did not show a lot of momentum in the individual electricity, transport and airport businesses. "But for each of the businesses we are comfortable with the medium-term outlook."

TrustPower, 51 per cent Infratil owned, contributed $63.1 million after tax to the result, up from $58.9 million at a time of low hydro-electric generation and low wholesale power prices.

Infratil said the Government's announced carbon emissions trading scheme, aiming for 90 per cent of the country's electricity generation from renewable resources by 2025, would ensure generators focused on investing in wind, hydro and geothermal plant.

New Zealand Bus, investing heavily in new buses for its Auckland and Wellington scheduled services network, contributed a net profit of $7.9 million from $10.1 million.

Pacific Blue's arrival on the airlines' domestic main trunk route has prompted a review of the investment programme to expand terminal facilities at Wellington International Airport. Nearly $40 million has been spent expanding the international passenger processing area, gate expansion and car parking.

A further $50 million is likely to be spent on the international terminal, including new gate lounges.

Passenger numbers at Infratil's 66 per cent-owned Wellington airport were up just 1.7 per cent. However, the airport earned $4.59 a passenger, which was up 16 per cent; property income gained 20 per cent and aeronautical income per passenger was up 6 per cent.

Infratil has built up a 7.29 per cent stake in Auckland International Airport, in conjunction with investment partner the New Zealand Superannuation Fund.

Infratil chief executive Lloyd Morrison will stand for election to the board at Auckland airport's annual meeting.

The move is regarded as controversial partly because Infratil favours development of Whenuapai Air Base as a commercial airport.

Mr Mercer said earnings from Infratil's three European airports were still several years away from supporting valuations, but the sector was in demand.

Infratil's bottom-line result was dragged down by depreciation and amortisation of $35.9 million, up from $19.8 million. Net costs more than doubled to $68.9 million, $20 million of that reflecting the consolidation of TrustPower. Infratil closed at $2.90, down 3 cents.