It's the big picture that counts - Infratil

By ROELAND van den BERGH - The Dominion Post | Tuesday, 19 August 2008

Infratil urged shareholders yesterday to take a longer-term of view of its share price, which has shed about 40 per cent in the past year.

The shares opened the July 2007 financial year at $3.02 and closed on June 30 this year at $1.83.

Yesterday they closed at $2.16, unchanged on the day.

"Last year was not a great year for our shareholders," Infratil chairman David Newman told shareholders at the annual meeting in Wellington yesterday. "If you owned $100 of shares on April 1, 2007, you would have had that value reduced to $83.50 by March 31 this year."

But in the past 10 years shareholders would have seen the value of their shares increase more than eight-fold, he said. That was a return of 23 per cent after tax, even allowing for the fall in value in the past year.

Infratil posted a $1.7 million loss for the year to June, compared with a $68.2 million profit last year, as a result of the falling value of some assets.

In anticipation of a difficult market, Infratil raised $240 million of perpetual debt and $176 million of equity and the company was comfortable about its positioning and prospects.

"Not only is Infratil in a sound financial position, it has invested in sectors which are in the main not adversely impacted by the world-wide credit difficulties or general adverse economic circumstances."

Rising energy prices in New Zealand, and the Government's planned emissions trading scheme were both positive for Infratil's 51 per cent-owned Trustpower, which accounted for about half of the company's assets, Mr Newman said.

Wellington International Airport, jointly owned with Wellington City Council, had benefited from the arrival of Pacific Blue on domestic routes, and the response to the increased competition from Air New Zealand and Qantas had "resulted in a lot more people flying a lot more frequently".

Infratil chief executive Lloyd Morrison took another swipe at Air New Zealand as part of ongoing antagonism between Wellington Airport and the airline over landing charges and terminal developments. Domestic passenger numbers through Wellington were up 19 per cent in the four months till July, he said. "That is despite a recession, and the main reason for that is the competition that has been introduced by Pacific Blue."

Auckland Airport, of which Infratil owns 3.3 per cent, had a 20.3 per cent increase in domestic passengers, Mr Morrison said. It was ironic that Pacific Blue had just announced fights to Melbourne and Sydney from Auckland and Air New Zealand had cut its fares last weekend.

Airline criticism over airport charges were aimed at stopping development of airports to allow new competition to be introduced, Mr Morrison said.

Mr Newman said the difficult European aviation markets had hit passenger numbers and freight volumes at Infratil's European airports near Glasgow, London and Hamburg.