Infratil Limited · NZX:IFT
Infratil — Energy Developments — FY2004 Earnings Presentation
35 slides from Infratil's earnings presentation, Aug 25, 2004
Slide 1: June 2004 Financial Results and Business Update
ENE June 2004 Financial Results and Business Update 25 August 2004 Supplement to ASX Release Appendix 4E Page 1 1
Slide 2: Contents
Energy Developments Contents • Operating and Development Highlights • June 2004 Financial Results • Corporate Governance • Resolution of Engine Performance Issues • Development Activities • Closing Comments Page 2 2
Slide 3: Operating & Development Highlights
June 2004 Financial Results Operating & Development Highlights Operating • ENE lifts operating profits before and after tax to $27.7 million* and 18.6 million*. • EBITDA increased by 15% to $74.7 million*. • Resumption of dividends – 1.5 cents per share franked at ~ 46%, payable on 5 October 2004. •
Slide 4: Operating & Development Highlights
June 2004 Financial Results Operating & Development Highlights Development • 46MW West Kimberley PPA signed on 2 July 2004. Planning, permitting and design well underway. • Additional 31MW of new capacity brought on: – Cannington Expansion 12 MW – US LFG 11MW – UK/ Europe LFG 8 MW • German Creek Was
Slide 5: June 2004 Financial Results
June 2004 Financial Results Page 5 5
Slide 6: Earnings
June 2004 Financial Results Earnings • Loss after Significant Items and tax attributable to members - $8.9 million. (2003: Loss $119.9 million) Normalised Results • Profit before tax $27.7 million* (2003: $20.3 million*) • Profit after tax of $18.6 million* (2003: $16.8 million*) • Earnings per shar
Slide 7: Revenue & EBIT
June 2004 Financial Results Revenue & EBIT • Revenue for the full year (including share of net profit in associates) of $128.1 million (2003: $117.4 million) • Earnings before interest, tax and depreciation (EBITDA) of $74.7 million* (2003: $64.5 million*) • Earnings before interest and tax (EBIT) o
Slide 8: Earnings: Reconciliation of Normalised Earnings
June 2004 Financial Results Earnings Reconciliation of Normalised Earnings FY04 H1 H2 Total A$m A$m A$m Profit after tax before specific items 10.3 8.3 18.6 • Specific items after tax: - Asset Impairment – US LFG projects using DEUTZ (16.4) - (16.4) engines - Reversal of US tax benefits previously r
Slide 9: Historical Full Year Trends
June 2004 Financial Results Historical Full Year Trends Revenue EBITDA 140 100 90 120 80 100 70 60 A$ Million A$ Million 80 50 60 40 40 30 20 20 10 0 0 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Note: June 03 and Jun 04 results exclude specific items Page 9 9
Slide 10: Historical Full Year Trends
June 2004 Financial Results Historical Full Year Trends EBIT Profit Before Tax 50 30 45 40 25 35 A$ million A$ million 30 20 25 15 20 15 10 10 5 5 0 0 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Note: Jun 03 and Jun 04 results exclude specific items Page 10 10
Slide 11: Historical Full Year Trends
June 2004 Financial Results Historical Full Year Trends Profit After Tax Generating Capacity 25 450 400 20 350 300 15 A$ Million 250 MW 200 10 150 5 100 50 0 0 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 22.7% 18.6% 20.0% 17.3% 32.8% Effective Tax Rate % Note: Jun 03 and Ju
Slide 12: Cash and Funding
June 2004 Financial Results Cash and Funding • Cash at 30 Jun $ 77.2 million (2003 $ 29.9 million) • Total net debt 30 Jun $220.8 million (2003 $235.9 million) • Gearing ratio 30 Jun 42 % (2003 46 %) • Undrawn lines $ 92.4 million Debt 1. Australian refinancing executed Dec 2003: – Refinanced $210 m
Slide 13: Cash and Funding
June 2004 Financial Results Cash and Funding Equity • Institutional placement Sep 2003 $39.7 million • Share purchase plan Dec 2003 $ 6.5 million Application of Funds • ENE to continue selective exploitation of LFG and Remote Power opportunities over next 12-18 months. • Funds available over next 12
Slide 14: Segment Results: Australia
June 2004 Financial Results Segment Results Australia (A$) Revenue $92.6 million (2003 $81.8 million ) EBITDA $64.0 million* (2003 $50.1 million*) EBIT $42.7 million* (2003 $30.6 million*) • Stable performance from CSM and Remote Power. 12MW Cannington mine expansion on line November – full second h
Slide 15: Segment Results: Australia – LFG
June 2004 Financial Results Segment Results Australia – LFG MWh Revenue (Local Currency) 450,000 45 400,000 40 350,000 35 300,000 30 $A millions 250,000 25 MWh 200,000 20 150,000 15 100,000 10 50,000 5 0 0 2002 2003 2004 Av. Installed MW 74 74 74 • Generation improvement reflecting increased emphasi
Slide 16: Segment Results: Australia – Remote/CSM
June 2004 Financial Results Segment Results Australia – Remote/CSM MWh Revenue (Local Currency) 1,500,000 60 50 1,200,000 40 900,000 $A Millions MWh 30 600,000 20 300,000 10 0 0 2002 2003 2004 Av. Operating Capacity 199 191 190 • Generation reflecting expiry of Cosmo Howley contract in Dec 2002. • F
Slide 17: Green Credits – RECs / NGACs
June 2004 Financial Results Green Credits – RECs / NGACs RECs Federal MRET scheme NGACs NSW Government quasi carbon emissions trading scheme • NGAC scheme interlinks with MRET scheme for baselines. • All significant ENE LFG sites accredited. • Credits generated and sold: FY04 FY03 ‘000 A$m ‘000 A$m
Slide 18: Segment Results: United Kingdom - LFG
June 2004 Financial Results Segment Results United Kingdom - LFG H1 H2 Total 2003 A$m A$m A$m A$m Revenue 8.4 10.4 18.8 17.9 EBITDA 3.5 5.6 9.1 8.6 EBIT 1.7 3.8 5.5 4.0 • Continued focus on better gasfield management, asset utilisation and tight cost control. • H2 performance reflects engine post re
Slide 19: Segment Results: United Kingdom – LFG
June 2004 Financial Results Segment Results United Kingdom – LFG M Wh Revenue (Local Currency) 300,000 10 250,000 8 200,000 GDP Million 6 MWh 150,000 4 100,000 2 50,000 0 0 2002 2003 2004 Av. Operating MW 36 37 38 • Generation increase reflecting better management of gasfields and utilisation of equ
Slide 20: Segment Results: United States
June 2004 Financial Results Segment Results United States (A$) H1 H2 Total 2003 A$m A$m A$m A$m Revenue 7.1 7.5 14.6 14.4 EBITDA 1.0 (0.2) 0.8 3.6 EBIT (1.3) (2.4) (3.7) (0.6) • Significant remediation costs/revenue losses due to engine reliability/performance issues and remediation costs. • Taylor
Slide 21: Segment Results: United States – LFG
June 2004 Financial Results Segment Results United States – LFG MWh Revenue (Local Currency) 300,000 15 250,000 12 200,000 9 US $million MWh 150,000 6 100,000 3 50,000 0 0 2002 2003 2004 Av. Operating MW 18 43 53 • Increased generation reflecting additional MWs and engine remediation. • Further impr
Slide 22: Segment Results: European Joint Ventures
June 2004 Financial Results Segment Results European Joint Ventures H1 H2 Total 2003 A$m A$m A$m A$m Greece - Share of net results 0.2 0.5 0.7 0.6 of associate France - Share of net results (0.5) 0.4 (0.1) 0.1 Of associate • Greece performance better in H2 reflecting H1 gasfield works. • France disa
Slide 23: Segment Results: Taiwan
June 2004 Financial Results Segment Results Taiwan (A$) H1 H2 Total 2003 A$m A$m A$m A$m Share of net results of associate 0.6 (0.5) 0.1 1.7 • ENE holds 49% interest in 20MW Taiwanese LFG JV. • As flagged at half year, disappointing performance due to gas shortfalls at all 4 sites reflecting earlier
Slide 24: FY2004/05 Profit Outlook
June 2004 Financial Results FY2004/05 Profit Outlook ENE is broadly comfortable with market FY05 NPAT estimates of $24 -27 million. Earnings improvement will be influenced by: • Benefits accruing from new LFG projects completed in late FY04 and early FY05. • Ongoing operational initiatives, particul
Slide 25: Corporate Governance
Corporate Governance Page 25 25
Slide 26: Corporate Governance
June 2004 Financial Results Corporate Governance • ENE has longstanding commitment to high standards in corporate governance. • During FY04 ENE took further steps necessary to comply with the Corporate Governance Principles and Recommendations issued in March 2003. • ENE complies in all respects exc
Slide 27: Resolution of DEUTZ Engine Performance Issues
Resolution of DEUTZ Engine Performance Issues Page 27 27
Slide 28: Resolution of DEUTZ Engine Performance Issues
June 2004 Financial Results Resolution of DEUTZ Engine Performance Issues • DEUTZ and ENE to enter into 10 year spare parts and maintenance agreements for its US (42), UK (17) and Australia (5) DEUTZ engine fleet. • Under the agreements DEUTZ will: – carry out performance tests on all engines to sat
Slide 29: Resolution of DEUTZ Engine Performance Issues
June 2004 Financial Results Resolution of DEUTZ Engine Performance Issues • New arrangements are expected to take a full year to be implemented, especially in the US. ENE will continue to operate and maintain the engines until DEUTZ assume responsibility. • ENE’s remediation/high O & M costs expecte
Slide 30: Development Activities
Development Activities Page 30 30
Slide 31: Development Activities Highlights
June 2004 Financial Results Development Activities Highlights • Focus on incremental opportunities in LFG & Remote power. • FY04 - 31MW of new generation (ENE share) bringing total to 420MW. Remote Power – Successful commissioning of 12MW Cannington Remote Power expansion in November – full contribu
Slide 32: Australian LFG Optimisation
June 2004 Financial Results Development Activities Australian LFG Optimisation • Relocation of existing engines to expand existing projects with surplus gas and favourable PPA terms: Commence – Browns Plains 1 MW Sept 04 – Lucas Hts II 4 MW Oct 04 – Eastern Creek 2.5 MW Operating – Wingfield 2 MW Op
Slide 33: Remote Power: West Kimberley Power Project Update
June 2004 Financial Results Remote Power West Kimberley Power Project Update Project Scope - Natural gas supply - LNG Plant at Maitland Industrial estate near Karratha - LNG road transport to remote towns Power Stations at - Broome, Derby, Looma, Fitzroy Crossing and Halls Creek. Capacity - Initial
Slide 34: Coal Mine Waste Methane: German Creek Project
June 2004 Financial Results Coal Mine Waste Methane German Creek Project - Anglo Coal Capacity up to 32 MW (nominal) Project Funding GGAP funding and new construction line Project Revenue Power sales and NGAC revenue GGAP Grant Up to $15.5m subject to further commercial assessment Timing on Line Q4
Slide 35: Closing Comments
June 2004 Financial Results Closing Comments • Bottom line improving with positive signs in most businesses, especially the UK and Australian LFG. • Green credit revenue an integral part of Australian LFG and optimisation process underway. • DEUTZ agreements should underwrite essential improvement i