Infratil ended in green post releasing its half-year results

Summary

  • Recently, Infratil reported lower profit in its 6-month results due to coronavirus pandemic impacting its business.
  • Vodafone NZ, which Infratil half owns since July 2019 saw earnings lowered as well.
  • Acquisitions and diversification of the business provided a defensive shield to Infratil.

On 12 November 2020, Infratil Limited (NZX:IFT)  released its half-year report for the six months ended 30 September 2020. The Company confirmed a Net Parent Surplus from continuing operations standing at NZ$27.8 million compared to the prior year's NZ$56.4 million.

Infratil has informed steeply lower profit attributing COVID-19 related restrictions hitting the earnings of its major investments.

However, the Company reported EBITDAF rising to NZ$25.4 million to NZ$229.5 million. It reflects a more robust performance from CDC Data Centres and received significant contributions from Trustpower, and even its last year acquisition of Vodafone New Zealand.

Vodafone focused on improving customer satisfaction

Vodafone New Zealand, which Infratil half owns (49.9% shareholding) saw earnings lowered by NZ$29 million because of the coronavirus pandemic. It plans to simplify its businesses and improvise customer relationship services. The complaints were reported to have reduced to 53 per cent during the six months period.

Thirty-four per cent more customer requests were handled for the first time. Vodafone had previously admitted that the customer support is lagging behind and therefore announced to invest about NZ$10 million to build a new team of NZ based 100 customer service staff. The company named the team X Squad.

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Acquisitions improved the numbers in financial reports:

Infratil stated that its acquisitions and sales had an impact on its financial results, such as the acquisition of Vodafone New Zealand in July 2019. The Company also sold Perth Energy, NZ Bus, and the ANU Student Accommodation business last year, which impacted its results.

Infratil said that the results reflected the sale of its Snowtown 2 wind farm in South Australia to renewable energy company Tilt Renewables.

Diversification to rescue amid COVID-19 impacts on businesses:

The Group said its two businesses Wellington Airport and Vodafone New Zealand saw a significant impact of the COVID-19 crisis. In contrast, its other companies like CDC Data Centres and the renewable generation projects of Tilt Renewables and Longroad Energy saw progress during the same period.

The Company believes the diversification provided a defensive earning despite COVID-19 damaging the businesses. Reflecting its remarkable progress, the report shows Infratil's businesses managing the impacts of COVID-19 crisis in a better way.

The Company says it has served its employees and customers keeping safety a priority, as it also protected the capital of its shareholders.

The diversified portfolio with a firm footing in sectors such as renewable energy and digital infrastructure has helped the Company achieve its target performance, especially under volatile and fluctuating economic conditions.

Infratil said that it now intends to invest further in mainstream infrastructure markets, which will take the business to higher altitudes and place its shareholders in the next-generation infrastructure.

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Outlook:

Infratil is taking the next step into healthcare sector as it made a conditional offer to buy around 60% of Australia based Qscan Group Holdings, a provider of specialist cancer diagnostic imaging services.

The Company intends on have an outlook of long-term structural growth. Infratil also plans on exploring more opportunities in growing sectors along with expanding its footprints in new geographies. Nonetheless, Infratil's current focus is to financially support its existing platforms.

Share performance:

At the end of the trading session, on 12 November, Infratil shares were at NZ$5.40, up by 0.9% from its previous close.

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