Infrastructure assets operator Infratil has booked a massive profit slump, from $51.6 million last year to $3.4 million, mainly due to writing down valuations on its UK airports.
The profit decline reflects $62.4 million of costs and write-downs from its two UK airports, from $37.3 million the previous year, while fluctuations in derivatives and other asset-value changes amounted to a further net cost of $20 million, compared with a net gain of $23 million a year earlier.
For its full year to March, Infratil's consolidated earnings before interest, tax, depreciation, amortisation and movements in the value of financial derivatives (Ebitdaf) from operations was up from $510 million to $538 million, while net cashflows from operating activities rose from $188 million a year ago to $288 million.
Infratil is considering floating its shares in Z Energy and has its two loss-making UK airports, Prestwick, in Glasgow, and Kent International, for sale.
Infratil shares were up slightly at $2.44 yesterday, following the announcement.
Capital expenditure up from $246 million a year ago to $414 million, chief executive Marko Bogoievski said in a market statement yesterday.
''The group has a comfortable financial position and retains bank and capital markets support which is enabling early refinancing of 2014 maturities,'' he said.
Infratil declared a final dividend of 6c per share, the total dividend for the year being 9.25c, up from 8c last year.
Brokers said the result was in line with expectations.
Craigs Investment Partners broker Peter McIntyre said core businesses for Infratil remained in good shape, including Wellington Airport and TrustPower which continued to be the company's ''mainstay'' investments.
''Over time, the [UK] airports are proving to be a poor investment,'' Mr McIntyre said.
He said the the market was looking closer at cashflows and Ebitdaf for Infratil, both of which were well up on last year's result, he said.
Forsyth Barr broker Peter Young said the result was ''solid overall'' and Infratil Energy Australia was the stand-out performer. The operating Ebitdaf of $537.8 million was in the middle of Infrati's revised guidance range of $525 million to $545 million, given in early March, and was up 6% on the previous full-year result, he said.
Mr Young said the European airports continued to be a ''drag'' on Infratil. A further loss of $14.8 million in the second half of 2013 appeared to include some further write-downs.
Mr Bogoievski said two particular highlights during 2013 were TrustPower starting construction of its $550 million Snowtown II wind farm, and Infratil Energy Australia's 52% increase in Ebitdaf contribution, to $98 million.
