Infratil reports flat profits, says talks over airport extension funding constructive
Infratil says conversations with the Beehive over funding towards Wellington Airport's runway are constructive, but a number of hurdles must be cleared before the matter is considered.
On Friday the Wellington-headquarered infrastructure investors announced a small increase profits from its continuing activities for the six months to September 30, up $600,000 to $28.9 million.
During the first half Infratil's investment activity ramped up, buying a 50 per cent interest in student accommodation at the Australian National University in Canberra and a 48 per cent share of a Canberra data centre business.
It also established a North American renewable energy business alongside the New Zealand Super Fund and spun off the wind farm business of Trustpower.
At Wellington Airport - in which it has a 66 per cent stake - capital spending rose by more than half to $44 million, as it extended its terminal and began construction of a major new parking building.
The airport is aiming for a much larger capital project, applying for resource consent for a 355 metre extension into Cook Strait to enable long haul flights.
Infratil has signalled that the project - estimated to cost $300 million - would require local and central government support, with the airport only able to generate enough revenue to justify spending around a third of the total cost.
Chief executive Marko Bogoievski said consents and funding from the airport and local government needed to be secured "before anyone in the Beehive thinks about it".
Economic Development Minister Steven Joyce has publicly questioned the need for taxpayer support given Infratil's strong profitability, but Bogoievski said conversations with central government were "absolutely" constructive.
"[There are] no commitments, but the clear message [from the Beehive] is you have to get the first two things done before they're prepared to consider [funding]," he said.
"Right now there's a bit of an information gap both about the economics of the airport, what it costs to build the actual runway itself and if the resource consent imposes any conditions."
Infratil said it would pay an interim dividend of 5.75c a share, compared to 5.25c a year earlier. The company also said it had approved a share buyback of up to $50m.
Shares in the company were down 6.5c at $2.88 at 2:30pm.