IFT - Infratil

[Left Field]

Could this be the moment when the market finally "gets" IFT's potential?

The simple answer is YES.

The market fears concerning AI likely related to others in the industry (particularly in the USA) and applying these fears to CDC & IFT in the relatively stable economies of NZ & Aus,  was simply wrong for many reasons, for example;

1.) CDC have considerable 'first mover' advantages. Huge land banks and a team of builders and contractors who are delivering on time and under budget.
2.) CDC is one of very few data centre providers with 'green' renewable energy credentials. (Many of the USA DC's plan to use gas generated power!)
3.) CDC is unique in using circulating radiator water cooling. Others use evaporated water cooling which wastes billions of litres of water.
4.) IFT is using conservative BBB rated capital funding to finance CDC.
5.) Based on the revenue being generated for CDC from contracts as announced today, IFT said they could spend an additional $A 400 mill in Capex pa  and not exceed their self imposed limits.
6.) CDC have more major lease contracts in the pipeline and hope to close another one by the time of the 26 May update.
7.) The average lease span for CDC's data centres is 28 years.

etc etc...... I could go on, but that's enough from me!

[LaserEyeKiwi]

The simple answer is YES.

The market fears concerning AI likely related to others in the industry (particularly in the USA) and applying these fears to CDC & IFT in the relatively stable economies of NZ & Aus,  was simply wrong for many reasons, for example;

1.) CDC have considerable 'first mover' advantages. Huge land banks and a team of builders and contractors who are delivering on time and under budget.
2.) CDC is one of very few data centre providers with 'green' renewable energy credentials. (Many of the USA DC's plan to use gas generated power!)
3.) CDC is unique in using circulating radiator water cooling. Others use evaporated water cooling which wastes billions of litres of water.
4.) IFT is using conservative BBB rated capital funding to finance CDC.
5.) Based on the revenue being generated for CDC from contracts as announced today, IFT said they could spend an additional $A 400 mill in Capex pa  and not exceed their self imposed limits.
6.) CDC have more major lease contracts in the pipeline and hope to close another one by the time of the 26 May update.
7.) The average lease span for CDC's data centres is 28 years.

etc etc...... I could go on, but that's enough from me!

I think your point 5 about additional capex was actually the following: CDC is forecasting growing EBITDA at approx $400m each year going forward, and using the moodys approved ratio of 10x, that would enable $4 BILLION in additional capex each year.

[Greekwatchdog]

Note from For Bar this morning

IFT has announced CDC has signed a 555MW data centre contract. This is the step change in contracted capacity CDC alluded to at its recent investor day, but the size of this contract (~2.5x CDC's current billing capacity) is meaningfully above our expectations. Additionally, CDC has provided total contracted EBITDA for the first time, at ~A$2bn (to be achieved by March 2029); it is well above our prior FY30 estimate of A$1.4bn. Current demand is incredibly strong for data centres, and CDC indicated: (1) pricing has held up well with demand outstripping supply; (2) it is in further conversations for similar meaningful contracts; and (3) it is increasingly able to compete for global compute capacity.

CDC has now largely derisked its EBITDA path from ~A$0.7bn in FY27 to >A$2bn in FY30. With CDC's track record of winning large contracts, we believe its earnings risk remains to the upside. CDC's implied contracted EV/EBITDA multiple remains below data centre peers despite its faster growth and superior returns. Retain OUTPERFORM with an increased target price. $17.50 (was $14.40)

Well done holders

[Dolcile]

Yes very well done to holders.  I had a stake in IFT but got bored and sold too early :-(

[LoungeLizard]

$15!! You may be right LF. Onwards and Upwards!

[Left Field]

I think your point 5 about additional capex was actually the following: CDC is forecasting growing EBITDA at approx $400m each year going forward, and using the moodys approved ratio of 10x, that would enable $4 BILLION in additional capex each year.

Just goes to show your use of AI to take notes is much better than my ailing hearing!!

Plus your corrected figure likely to be revised upwards again on the next update.

Nice to be corrected with such an upside! 

Thanks.

[Left Field]

F.Barr have raised their target SP to $17.50

Onwards & upwards......happy to have IFT as circa 23% of my portfolio.

[Swala]

Yes, I have a similar exposure. I really think they have a very long runway with CDC. Long, long term hold.

[Left Field]

IFT see's better value for it's $ by reducing it's stake in Contact Energy

https://www.nzx.com/announcements/472904

Infratil Limited ("Infratil") (NZX/ASX:IFT) has agreed to sell 53,531,358 ordinary shares in Contact Energy Limited ("Contact") (NZX/ASX:CEN), comprising 5.0% of Contact's issued share capital, via a fully underwritten block trade. The sale is at a price of NZ$9.25 per ordinary share, generating expected gross proceeds of approximately NZ$495.17 million, and is expected to complete on 25 May 2026.

[Left Field]

Impressive results.......Forward projections exciting. Longroad and CDC are nailing it.

https://www.nzx.com/announcements/473284

Infratil delivers 11% earnings lift and confirms strong growth outlook
 
 • Proportionate operational EBITDAF[1] up 11% to NZ$989 million (FY25: NZ$895 million)
 • Proportionate capital expenditure up 17% to NZ$2.7 billion (FY25: NZ$2.3 million)
 • Total asset value up 13% to NZ$20.6 billion (FY25: NZ$18.3 billion)
 • Over NZ$600 million of assets divested to focus on larger-scale growth opportunities
 • Net parent surplus of NZ$550 million (FY25: loss of NZ$295 million)
 • Final dividend of 13.65cps unimputed; total FY26 dividend of 20.9cps
 • Guidance for FY27 Proportionate operational EBITDAF (excluding corporate costs) to increase 21% at the mid-point vs FY26 $1,114 million, on a like-for-like basis


Longroad Energy's EBITDAF increased 170% to US$121 million in FY26 and is forecast to grow strongly as more generation enters operation. It has lifted its solar and battery projects under construction to a record 2GW in FY26 which combined with the 3.5GW already in operation, will deliver total generation capacity equivalent to about half of New Zealand's current capacity.
 
 With electricity demand in the USA projected to increase by about 30% to 50% by 2040, Infratil has agreed to provide a further US$300 million to support Longroad's acceleration over the next two years. The business is targeting US$1 billion run-rate EBITDAF by CY29/30, based on lifting its development cadence to ~2GW annually. This is underpinned by the recent acquisition of a very large scale ~2.8GW solar and battery development project, which is subject to regulatory approvals.

Guidance for FY27:
 • Proportionate Operational EBITDAF of NZ$1,300 to $1,400 million (excluding Corporate Costs) up 21% at the mid-point on FY26 on a like-for-like basis
 • Corporate costs of NZ$150 to $170 million
 • Proportionate Development Spend of NZ$95 to $110 million
 • Proportionate capital expenditure of NZ$3,800 to $4,400 million

[LoungeLizard]

Excellent result which justifies market confidence (finally) in IFT and should see another surge in the SP. FY27 guidance shows the fruits of their capital expenditure coming on stream. Very happy holder!

[HAWKDOG]

looking like a strong open. 

[HAWKDOG]

looking like a strong open. 

lol nope

[LoungeLizard]

lol nope

Yeah, bit strange that SP is down $1 on what looks like a very good set of results. Maybe a bit of profit taking initially but I must be missing something. Or could be a buying opportunity perhaps?

[Left Field]

Yeah, bit strange that SP is down $1 on what looks like a very good set of results. Maybe a bit of profit taking initially but I must be missing something. Or could be a buying opportunity perhaps?

IFT's SP is up over 40% so far this calendar year..... so yes some profit taking.

Also if I recall correctly, the last big announcement re CDC hinted at another big contract by 26 May and there may be short term disappointment re that not being announced.....yet.

For long term holders, no worries. The FY27 projected 22% revenue increase looks good and likely understated.