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Infratil [NZX: IFT] lowered its expected earnings for the year just ended, citing a weaker performance from the infrastructure investor's New Zealand energy and public transport markets and the impact of a lower Australian currency.
Earnings before interest, tax, depreciation, amortisation, financial derivatives and adjusted for Z Energy replacement cost of inventory were $490 million to $500 million in the year ended March 31, down from its previous guidance of $500 million to $540 million, the Wellington-based company said in a statement, citing unaudited figures. That's down from EBITDAF of $538 million a year earlier.
"The updated EBITDAF guidance for 2014 is at the lower end of the previous guidance range due to a slightly weaker trading performance in New Zealand energy and public transport markets and the impact of the weaker AUD$ on earnings," chief executive Marko Bogoievski told an investors' briefing in Wellington.
Shares in Infratil dipped 1.4 percent to $2.24. The stock is rated an average 'buy' according to analysts polled by Reuters.
In the past year, Infratil has reduced its holding in petrol retailer Z Energy and added a stake in retirement village developer and operator Metlifecare to its energy, airport and public transport holdings. In an environment of increased completion for low-risk core infrastructure, the company favours investment in well positioned assets with opportunities for further investment which may require a longer holding period, Bogoievski said today.
He said Infratil is repositioning its portfolio for the next 10 to 15 years, though it hasn't changed its fundamental approach in seeking high-growth infrastructure investments.
"We'll come at opportunities in any market if we feel ultimately we can deliver our model," Bogoievski said.
In the latest year, Infratil had benefited from higher operating cash flow from improvements in working capital and dividends received from selling some of its holding in Z Energy in an initial public offering, he said.
Infratil upgraded its expectation for operating cash flow in the year ended March 31 to $400 million to $420 million, from a previous forecast of $360 million to $400 million.
Meantime, the company's net interest costs would probably fall to $180 million to $195 million, from a previous forecast of $195 million to $205 million, it said.
For the coming 2015 year, Infratil expects EBITDAF of $530 million to $560 million, operating cash flow of $330 million to $360 million and net interest costs of $180 million to $190 million, it said.