Infratil Limited · NZX:IFT
Infratil — Investor Presentation (July 2004)
34 slides from Infratil's investor presentation, July 2004
Slide 1: Morrison & Co Investor Presentation July 2004
Morrison & Co Investor Presentation July 2004
Slide 2: Track Record
Track Record • Ten year record: >20% pa after tax return • In 7 of the 10 years the return was >20% pa after tax • $100 invested in March 1994 would have compounded to >$900 now • In ten years Infratil has raised $174.9million from shareholders. It has paid $175.9 million in gross dividends and has
Slide 3: Portfolio Evolution
Portfolio Evolution $M 800 600 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Energy Distribution Other Ports Generation Airports
Slide 4: 2004 Results Breakdown
2004 Results Breakdown 2004 2003 Dividends received (excluding WIAL) 27,168 16,323 TrustPower equity accounting (3,974) 1,032 Interest & other income 1,018 949 Realisations & revaluations 2,244 20,010 Wellington International Airport Earnings contribution before I, T, D, A 26,018 22,794 Tax (4,074)
Slide 5: Corporate/Investment Structure
Corporate/Investment Structure Governance Infratil Infratil Board Management Contract Co-Investment Agreement H.R.L. Morrison & Co Group Ownership Alliant Energy Directorships 66% Wellington 100% Glasgow Prestwick 35% TrustPower 9% Port of Tauranga International International Airport Airport 12% Ene
Slide 6: Wellington Airport
Wellington Airport
Slide 7: Wellington Airport
Wellington Airport
Slide 8: Wellington Airport
Wellington Airport • Aeronautical charges ¾ Major price redetermination 1 July 2002 to provide 10%pa. return on Aero assets ¾ Next reset 1 July 2007. Unit charges at that time depend on activity/assets values/costs • Aeronautical income - Passenger Growth ¾ Airline capacity and hence pax numbers gro
Slide 9: Wellington Airport
Wellington Airport $ Non-Property Income Per Passenger 000s Passengers 14 4,500 Aeronautical Income Terminal Services Income Domestic International 12 4,000 10 3,500 8 6 3,000 4 2,500 2 2,000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1997 1998 1999 2000 2001 2002 2003 2
Slide 10: Passenger Growth
Passenger Growth • The low-cost/fare airline model continues to propel growth 000s London-Barcelona (seats offered) • European developments 1,500 Iberia BA Others easyJet Ryanair illustrate how stable low-growth 1,200 routes respond to vigorous competition and lower fares 900 ¾ London-Barcelona in 1
Slide 11: Passenger Growth
Passenger Growth • A competitive aviation market focused on cost minimisation ¾ Results from genuine competition Index NZ Domestic/International Air Travel Costs: Real ¾ Demand for air travel is price 160 sensitive 150 Domestic International • NZ market competitiveness is 140 130 at risk from the Ai
Slide 12: Glasgow Prestwick Airport
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Slide 13: Glasgow Prestwick Airport
Glasgow Prestwick Airport • Initial 67% investment January 2001. 100% in March 2004 ¾ Complete infrastructure. Core freight business. Fledgling passenger business ¾ One step change in value already achieved c/o passenger growth ¾ Focus now on further growth and income • Operational priority to lever
Slide 14: Glasgow Prestwick Airport
Glasgow Prestwick Airport 2004 2003 2001 Change Total Passengers 1,969,458 1,483,000 988,000 26% pa Freight Volume 38,028 41,100 42,164 (3% pa) Total Aero Income £10.34m £10.44m £7.17m 13% pa Concession Contribution £4.96m £3.88m £2.23m 31% pa Property Income £2.78m £2.76m £2.69m 1% pa Aeronautical
Slide 15: Glasgow Prestwick Airport
Glasgow Prestwick Airport Passenger Numbers Freight Tonnage 4,500 50,000 Passengers Annual Total 250 2,500 4,000 45,000 Freight Annual Tota Monthly Passengers 3,500 40,000 Freight (Tonnes) 200 2,000 35,000 3,000 (Tonnes) 150 1,500 30,000 2,500 (000s) (000s) 25,000 2,000 100 1,000 20,000 1,500 15,000
Slide 16: TrustPower
TrustPower asa >
Slide 17: TrustPower
TrustPower • 1994 – 2004 a period of massive industry restructuring ¾ Initially the restructure was “man made” (Government made) ¾ More latterly resulting from Maui gas depletion and Kyoto ¾ The future depends on the cost of additional generation • TrustPower Generation ¾ Generation nationally distr
Slide 18: TrustPower
TrustPower 2004 2003 2002 2001 2000 Revenue $632m $663m $604m $508m $429m EBITDA $140m $110m $40m $67m $69m Profit $62m $47m $1m $24m $27m Generation 1,738GWh 1,672GWh 1,522GWh 1,613GWh 1,498GWh Customers 224,000 274,000 280,000 266,000 220,000 • Profitability driven off wholesale electricity prices
Slide 19: Electricity Prices: Actual
Electricity Prices: Actual Wholesale Electricity Price c/kWh 25 20 Monthly average 15 10 Half year average 2yr contracts 5 0 Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Oct-99 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 1 c/kWh increase = $20million increase to TrustPower’s earnings
Slide 20: Risk Management
Risk Management NZ$/UK£ Exchange Rate and NZ$/A$ Exchange Rate and Change in Investment Value Change in Investment Value 10 0.94 25 0.38 20 15 Change in Value (NZ$m) Change in Value (NZ$m 0.92 0.36 5 10 5 0.34 0.90 UK£/NZ$ 0 A$/NZ$ 0 -5 0.32 0.88 -10 -15 -5 -20 0.30 0.86 -25 -30 0.28 -10 0.84 -35 -4
Slide 21: Electricity Prices: Generation Tight
Electricity Prices: Generation Tight GWh Dry Year Margin Electricity Generation by Type 50,000 20% Hydro Geothermal forecasts 45,000 18% Other/wind Coal/Gas* 40,000 Oil Other Gas 16% New CCGT/Coal Dry Year Margin 35,000 14% 30,000 12% 25,000 10% 20,000 8% 15,000 6% 10,000 4% 5,000 2% 0 0% 1975 1980
Slide 22: Electricity Prices: New Plant Economics
Electricity Prices: New Plant Economics New Zealand Cost of Generation Alternatives c/kWh (firm base load equivalent) 9 8 7 6 5 4 3 2 1 0 Wind Hydro Gas @ $6/GJ Small Scale Large Scale Coal West Coast Coal @ $3.50/GJ @ $1.50/GJ Capital & O&M Fuel cost CO2 Tax @ $15/t
Slide 23: Electricity Prices: Gas Availability
Electricity Prices: Gas Availability 250 NZ Gas Supply and Demand Kupe Pohukura Minor On-shore 200 McKee/Mangahewa NZ Gas Supply (PJ pa) Kapuni Maui ROFR Maui 150 Base Demand + Methanol (low) + max Methanol & Huntly 100 50 0 2004 2006 2008 2010 2012 2014 2016 2018 2020
Slide 24: Port of Tauranga
Port of Tauranga Total Trade cents Financial Performance $M 60 100 14 400 Other Exports EPS EBITDA Containers Loaded (000) 12 Forestry 350 50 80 Tonnes (millions) Imports 300 Earnings per share 10 Containers Loaded 40 250 60 8 200 30 6 150 40 4 20 100 2 50 20 10 0 0 *EPS adjusted for share split 0 0
Slide 25: Energy Developments
Energy Developments • Sector ¾ Small distributed generation units ¾ Economies of scale ¾ Environmental CO2/CH4 benefits • Investment approach ¾ Long period of observation ¾ Opportunistic ¾ Subsequent disappointment with incumbent management • Now ¾ One board seat ¾ Changed management Standard 1.3 MW
Slide 26: Future: Infratil Investment Approach
Future: Infratil Investment Approach • Investment strategy & approach ¾ Invest in areas of expertise ¾ Invest to exert influence/control ¾ Invest in anticipation of above average returns on a risk adjusted basis • Sector selection critical • 10+ year track record of adherence to vision statement ¾ F
Slide 27: Future: Emerging Airports
Future: Emerging Airports • Low cost airlines are changing the sector (airline, airport, tourism, etc) ¾ Aviation industry undergoing step change • Short haul is moving to low-fare carriers which require a different airport package • Emerging airports ¾ Suits low-fare and freight airlines ¾ Success
Slide 28: Whenuapai: It Exists
Whenuapai: It Exists wt Waitakere City Council Te Taiao o Waitakere
Slide 29: Whenuapai: Auckland Central
Whenuapai: Auckland Central
Slide 30: Whenuapai: Land Transport Benefits
Whenuapai: Land Transport Benefits • Auckland region today has 1,200,000 people ¾ 2,000,000 forecast for 2050 ¾ 2050 North west Auckland population 850,000 (from 400,000) • Whenuapai would materially benefit Auckland’s traffic ills ¾ Road, ferry, rail ¾ Consistent with increasing Auckland density •
Slide 31: Whenuapai: Auckland Connectivity
Whenuapai: Auckland Connectivity 8 Hours 6 hours 4 hours 100% 100% 90% 97% 96% 96% 97% 94% 80% 83% % of resp on d en ts 70% 72% 60% 65% 65% 64% 61% 50% 54% 40% 47% 44% 41% 30% 38% 34% 35% 34% 20% 26% 10% 0% 3 nights 4 nights 5 nights 6 nights 7 nights 8 nights 9 nights Duration of stay
Slide 32: Future: Renewable/Waste Energy
Future: Renewable/Waste Energy • Early stage of value realignment ¾ Social policy is enhancing renewable/waste generation values • Social goal of more renewable generation, less waste disposal ¾ Environmental standards rising ¾ Social impact on pricing and values for waste disposal and transport • S
Slide 33: Future
Future Infrastructure investment is about people and environments
Slide 34: www.infratil.com
www.infratil.com