Australian earnings have underpinned infrastructure investment group Infratil's revenue and profit, prompting an upgrade and narrowing of its earnings guidance.
Infratil's after-tax profit, for the six months to September, was up from $14 million for the same half last year to $43 million - and would have been $64 million but for a non-cash tax charge following removal of deductibility of building depreciation and changes to the tax rate by the Government.
Chairman David Newman said total group income rose 11%, with revenue for the six months above $1 billion, and a 25% increase in earnings from $207 million to $258 million.
"The increase was primarily due to Infratil Energy Australia's higher earnings, at $61 million from $10 million, and the $13 million equity accounted contribution from Greenstone Energy," Mr Newman said.
Infratil and the New Zealand Superannuation Fund purchased 50% each of Shell's retail fuel and distribution assets in April for a total $696.5 million, plus $208 million in working capital - a joint venture which operates under the banner of Greenstone Energy.
Craigs Investment Partners broker Peter McIntyre said despite criticism about the Shell purchase, the Greenstone investment appeared to be earnings accretive "from day one".
Group capital expenditure was $94 million and $210 million was invested to acquire the 50% interest in Greenstone Energy.
Mr Newman said Infratil Energy Australia had been a six-year project while Greenstone Energy was "acquired amidst scepticism about the transactions merits and the sector".
He cautioned "A good half-year is only that, half way there.
The objective now is to maintain the momentum, both in the second half and beyond".
Earnings guidance released by the company in March, for the full year, was forecast at between $390 million and $430 million, but yesterday it upgraded that to between $415 million and $435 million.
Mr McIntyre said "the guidance has been narrowed down and is more concise, which will give the market confidence Infratil will hit its forecast."
Infratil announced a 2.5c-per-share dividend yesterday.
It's shares rose 2c to trade around $1.92 yesterday.
However, Mr McIntyre noted Intratil's investment in Airways Europe, with stakes in the airports Glasgow-Prestwick and another in Kent, lost $5 million for the six-month period; which follows a $9 million loss for the previous full-year.
On Friday, Greenstone Energy is due to give its financial report for its first full six months.
