Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Infratil Ltd (ASX:IFT, Financial) reported a strong operating performance across its portfolio, despite challenging market conditions.
- CDC Data Centres, the company's largest investment, continues to experience significant demand growth, leading to ongoing investment in construction and securing power and land for future projects.
- One NZ performed well, aligning with guidance and making substantial progress on strategic priorities, contributing to a 9% increase in EBITDAF.
- The merger of Manawa Energy and Contact Energy was announced at a significant premium, with expected strong benefits for both companies.
- Infratil Ltd (ASX:IFT) completed a successful equity raise in June, enhancing balance sheet flexibility to support growth and shareholder value creation.
Negative Points
- Uncertainty from the US election results poses a potential headwind for Longroad Energy, particularly concerning tariffs and green policies.
- The investment in Console Connect was canceled, which was disappointing as the company remains positive about global next-generation connectivity platforms.
- Proportionate development EBITDAF reported a loss of $28 million, highlighting challenges in development expenditure.
- CDC Data Centres is trending towards the lower end of its guidance range due to shifts in project timelines.
- The Commerce Commission charges against One NZ could pose legal and financial challenges, although the company intends to challenge the charges vigorously.
Q & A Highlights
Q: Regarding CDC, has the timeline for the 388 megawatts online by the end of FY26 changed, and does this affect the EBITDA outlook?
A: The timeline for the 388 megawatts remains unchanged, and we still expect strong EBITDA growth in FY26. Some workloads have shifted, but the overall completion timeline is intact.
Q: Can you clarify the potential impact on CDC's contracted EBITDA if the 300 megawatts are signed pre-Christmas?
A: There will be some modest reservation, but we expect the capacity to come online as planned. The EBITDA per megawatt might dip slightly below $2 million but should trend back up over time.
Q: Are there any participation rights for Infratil in the partial sale process for CDC if the price is high?
A: We do not have any participation rights in the sale process, but we are closely monitoring the situation.
Q: With the US election outcomes, is there a risk of delay in Longroad Energy's 9.5 gigawatts capacity target by 2027?
A: The 9.5 gigawatts target may be high given current yields. We are focusing on value creation per year, and while delays are possible, especially post-election, we are working to mitigate these risks.
Q: Regarding One NZ, is there potential for further efficiencies, and how does the company plan to handle competitive pricing pressures?
A: Yes, further efficiencies are possible, particularly through IT transformation. We do not intend to follow the market down on pricing, focusing instead on providing high-quality offerings and maintaining a long-term focus.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
