What does Infratil’s (ASX:IFT) independent valuation of CDC centres suggest?  

Summary

  • Infratil has conducted an independent valuation of CDC data centres, indicating a significant increase in its value.
  • The increased valuation reflects a surge in demand witnessed by CDC data centres.
  • Infratil’s share price is trading 1.3% down at A$7.03 (as at 12:05 PM AEDT).

On 4 January 2021, Infratil Limited (ASX:IFT) announced that it had conducted an independent valuation of CDC Data Centres, indicating a significant increase in the value of the company’s investment in CDC from 30 September 2020.

Infratil’s 48.1% investment in CDC has now increased to A$2,039 million - A$2,334 million as at 31 December 2020, compared to the earlier valuation of A$1,597 million - A$1,807 million as at 30 September 2020.

This surge in the valuation reflects the increasing demand that CDC is witnessing from the new and existing customers. This surge in demand is expected to surpass the data centres' existing capacity earlier than expected. Consequently, an impact on the growth forecast of the company would be seen, details of which would be revealed in the company’s upcoming Investor Day on 16 February 2021.

Impact on FY2021 International Portfolio

Earlier, Infratil provided an estimate for its FY2021 International Portfolio incentive fee accrual, based on the interim results of the six months ended 30 September 2020. However, due to the latest valuation upgrade, Infratil has increased its estimates of international portfolio annual incentive fee by $89.9 million to $147.6 million.

As of 30 September 2020, Infratil’s value of shareholding in Tilt Renewables stood at $3.70 per share of Tilt Renewables. The company is planning to revise this assessment and is undertaking a strategic review, which is expected to be concluded in six months.

As the strategic review is going on and an updated assessment of the value of Infratil’s shareholding is still pending, the Company will continually communicate to the market, all the necessary updates regarding the strategic review in a timely manner.

The company also stated that an independent valuation of the investments would be looked upon in order to determine international portfolio annual incentive fee as of 31 March 2021.

Read More: Infratil (ASX:IFT) confirms acquisition of Qscan

Stock Performance

Infratil’s share price is trading 1.3% down at A$7.03 (as at 12:05 PM AEDT) . The stock has witnessed a decent rally in the last three months, garnering a healthy return of over 50%. The one-year return stands at 42.5%.

 

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