Almost a new ATH. Where is Black Peter when you need him.
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Almost a new ATH. Where is Black Peter when you need him.
Is today the day where Ift breaks the 11 bucks.
One day I will be right.....
I think it's the market generally that's holding it back at present.
Thurr she blows $11.11!!! Well done holders. Another ATH
Attachment 15071
Last trade helped a bit
Hopefully we will see some Fomo prior to the annual results being released in a couple of weeks.
Power demand to ramp up from AI,EV & Bitcoin
"Microsoft and Brookfield Sign Biggest-Ever Clean Power Deal"
https://finance.yahoo.com/news/micro...115226797.html
"Technology companies are clamoring for more clean energy to meet their own climate goals, just as overall energy demand is rising.
It’s difficult to estimate the cost for 10.5 gigawatts of new capacity because development costs vary significantly by energy type and location. But if all the development was US solar farms, they would cost more than $11.5 billion to build
power generator Exelon Corp. predicted a 900% jump in power demand from data centers planned in the Chicago area.
Such a dramatic forecast presents a challenge for technology companies to secure additional power supplies while simultaneously reducing emissions. Microsoft has a goal of matching all its electricity consumption with zero-carbon energy purchases by 2030.
Microsoft is pouring billions into developing its AI capabilities, and the data centers needed to support them, because it sees the technology as a key tool to attract customers for its cloud computing services"
The new man to join the team at Ift is James Shaw.
He will be in charge of driving the next generation of investment opportunities that support global decarbonisation.
What a talent to have on board.
I think it is an astute move, although there will be some IFT shareholders who may now need need to shift their attitude towards James Shaw, the former co-leader of the Green Party. He also brings his experience of dealing with government red tape. Maybe he will form the Chamelon Party as his next gig when he leaves Morrison. All power to him as a green capitalist.
"Wind farms are deflationary and capital costs reduce over time
India is ahead of the trend, with solar and wind locked in at US$30 a megawatt hour"
https://stockhead.com.au/energy/turn...nots-at-times/
"Basically, with wind and solar you just have to build the infrastructure to capture the energy, and from there on out it’s freely available and capital costs fall over time – as opposed to ye olde fossil fuels where you have ongoing capital costs in exploration for new reserves and drilling wells."
Although Small Modular Reactor Nuclear Baseload Power is high on the agenda for Big Tech to deliver the AI Global Citizens, Corporates and Government demand.
Here in NZ our 100% non Nuclear Energy and 100% reliance on ESG Renewables may be an Achilles Heal for our domestic Power users.
El Nino; low hydro? No wind blowing? No solar storage systems? Big cold freezes through the 2024 winter??
Well there exists a very easy off the shelf solution to this, and Australia is doing it like crazy to load balance their grids. Battery farms.
Boggles my mind this hasn’t been done for Auckland yet. Problem is generators are incentivized to not provide solutions like this because it would eliminate peak demand price gouging that they absolutely love.
Would these SMR’s be classed similarly as a rigid base load with poor ramp times or do they address this issue?
Am curious on the elements needed to create the batteries... having followed the Vanadium / Copper / Nickel narrative for the last 3 years closely I look at our Green Party and Labour's "no new mines" mantra and wonder about the hypocrisy.
And will these batteries have the Capacity so store future domestic energy demand...
These grid batteries seem to only have capacity to run full throttle for 2-3 hours once fully charged. Useful for smoothing out demand and production over the day (maybe would have been useful last week?) or as fast response but pretty useless over any longer timeframe.
yes - that is the exact purpose!
Charge during periods of excess production & low prices, and discharge during periods of peak demand and high prices.
The large battery farms in Australia have both stabilized their grids and also paid for themselves in a few short years due to the massive price arbitrage opportunities.
The arbitrage is doing the opposite of surge pricing. They will bid when supply is cheap (making it a little pricier) and offer when supply is pricey (making it a little cheaper). Acts as a smoothing function on price and supply.
Means that those really expensive bids from, say, a factory with contacted supply deciding to close for a shift and selling back the power, are no longer needed.
Interesting. Thanks for the reply.
A classic arbitrage will take advantage of pricing differences, geographic or time-based for example, in order to purchase low and sell at market. The hog is just wondering if there are periods of significant demand the pricing benefit for consumers (i.e. lower prices) are substantially dictated by competition between those able to remove duration/timing discrepancies. If there is limited competition from these players, the improvement in market efficiency will also be limited, no?
Whatever the discussion in regards to power supply for NZ and storage, this share, right now is a good opportunity for a longterm hold. Their primary future source of income right now is CDC, which coincidentally uses lots of power. I was just talking with people today who find our power expensive. They really need to go to Europe where Gas and Power is fricken expensive. Some good discussions to bring up at the roadshow coming up. I will be going to the one in Napier and will ask a question or two if Necessary.
Wellington Airport had a sizeable loss
http://nzx-prod-s7fsd7f98s.s3-websit...077/418452.pdf
Wellington airport:
Net operating profit before tax $20m
Less tax expense $49m
Net operating loss after tax ($29m)
Included in the $49m tax expense is $44m of deferred tax losses due to the change in building depreciation rules. Note A5 says : "Deferred tax impact from reversal of depreciation on buildings". Deferred tax is non cash.
Source: https://www.wellingtonairport.co.nz/...eport_FY24.pdf
I tried to understand this because it seemed a rather large sum to bring to account due to the change in depreciation rules for non residential structures, and I hold a lot of ARG who will be similarly affected.
Can anyone reduce this circumstance to something so basic even I can comprehend how it works?
I will give it a go but I apologise in advance for technical terms.
The income tax expense in the P&L for any given year is made of current tax expense (aka tax payable in cash) plus or minus deferred tax expense (which is non cash).
The current tax expense matches what is returned to the IRD every year per the income tax return. This is normal. This is what most small and medium sized businesses have - just current tax and no deferred tax.
Whereas deferred tax expense is an accounting construct that measures the tax effect of just timing differences between the tax return and what is showing in the accounts (note this is timing differences only, not permanent differences such as non-deductible expenditure). Using a different depreciation rate on assets for tax purposes versus that used for accounting purposes is an example of a timing difference where the company ends up with 2 different depreciation values. This is normal for Corporates to adopt such a practice - because they may want to depreciate an asset over a different time period to what the IRD allow for tax return purposes.
{Note that if you hold the asset to the death then all the depreciation differences will eventually reverse to zero. Hence it is a timing difference between tax years. The company has a higher or lower taxable profit in earlier years relative to accounting profit, that then reverses in later years. And this is where changes to the building depreciation deductibility rates impact the airport given the reversals can now not happen.}
So back to Wellington Airport. They reversed a deferred tax asset of $44m which resulted in an increase in their tax expense in the P&L of $44m. Assuming a 28% tax rate, this tells me the company had $157m of timing differences related to building depreciation accumulated over many years. In other words, the airport had been running accounting depreciation at a higher rate than the income tax returns (possibly due to unrealised revaluations perhaps?) and they were expecting this to reverse in years to come. However, given the Government changed the tax legislation this 'asset' cannot now be crystallised or reversed naturally in future which meant they had to write it off......hence the extra $44m tax cost which is a one-off correction.
Hopefully that makes sense....?
I know that IFT love the cashflows and leverage that the Airport gives them.
But if there is one asset that does not fit their portfolio strategy now, it's Wellington Airport.
Hopefully they can package the business up and sell it on in the near future.
Good explanation from Ferg. If you aren't familiar with the technical terms it is worth reading two or three times to let the whole explanation sink in. The thing that threw me a few years ago when looking into this accelerated depreciation effect myself was that it seemed very odd that a company could arrogantly disregard the Inland Revenue depreciation rules and set their own depreciation schedule. A sort of two fingered 'we know better' salute to the IRD (for public reporting purposes at least)! But I guess depreciation rules are formulated on a 'one size fits all' basis. And if your company is a 'different fit', those IRD sanctioned depreciation rules will give a false view of profits.
Ronaldson, you should be aware that the removal of 'building depreciation' as a tax deduction in the future applies only to the structural elements of buildings. Depreciation on other parts of the building like lifts, air conditioning systems, floor coverings, curtains and blinds, built in office furniture and non structural partitions are still allowable deduction items. This means that using Wellington Airport as an example of what to expect from the effect of the revised depreciation rules on Argosy may not pan out, as the type of buildings at at airport may not be analogous to the office tower and big box mix found within the Argosy property portfolio.
SNOOPY
Taxable Income for NZ Inland Revenue purposes may not necessarily be regarded as income as is generally understood or even as far as other tax authorities are concerned
<deleted wrong thread>
Thank you Ferg et al on this forum for your comments.
I am not a holder of IFT, but ARG reports on 22 May so I will look to closely follow the impact of again removing depreciation on the structural elements of non-residential buildings as a deductable expense, and the consequence on the Deferred Tax provision as shown in ARG's most recent Financial Statements (said in the note to the IFT statements to be a "non cash" adjustment).
Will be interesting to see what happens with it as the other shareholder, Wellington City Council, is debating whether to exit its shareholding. Whether or not if infratil wishes to remain as owner, or dispose of it, it will be beneficial either way if they had 100% ownership.
On a related note, there is actually an interesting small threat to the monopolies currently enjoyed by New Zealand’s airports in the form of a new high speed transport alternative that may eat into some of the regional domestic market for NZ airports within a couple of years. If the business model of this new company linked to below actually holds up, it would mean Airports like Auckland & Wellington would increasingly be focused on long distance & high capacity routes, whereas regional routes that are linked by open water would have much better economics using these new aircraft that don’t have to pay any landing fees at an airport.
https://www.oceanflyer.co.nz/news-monte
NZ is a pretty good launch market for this product - most of our population live in coastal cities. Auckland to Tauranga would be a good route, as would Wellington to Picton, Nelson & Christchurch.
I wonder if port companies might end up with new revenue streams.
What we alread knew?
"Data centre investments: real or hype (and the 14 key insights all investors need to be aware of)"
https://www.livewiremarkets.com/wire...rm=READ%20MORE
"Demand has arrived.
Global leasing activity has surged, achieving record-breaking levels in each of the last four quarters. Remarkably, more megawatts have been leased in this twelve month period than in the preceding three and a half years."
"The size of the generative AI market is set to grow exponentially, with revenues forecast to grow almost 20-fold to US$1.3trillion by 2032. Generative AI requires a tremendous amount of power relative to non-AI use, particularly in the training phase. Growth in the global AI market is certain to create ample demand for additional data centre capacity."
"Supply is responding. Capacity under construction in the US has surged to just over 3,000MW at the end of 2023. However over 80% of current construction is already pre-leased, compared to ~50% in prior years. This significantly decreases the risk of oversupply.
With development profits of 40%+ and stabilised net operating income (NOI) yields of 9%+, developments are proving to be lucrative which may suggest supply will accelerate from here (posing future investment risk). However, difficulty sourcing power and procuring generators and transformers are adding multi-year delays to the development timeline. "
"The chart shows the annual 15-year forecast peak power load forecast of Dominion Energy, who is the energy provider for North Virginia and surrounds. Notably, there is a substantial increase in future peak loads forecasted since the 2022 report. Utility providers in the US such as Dominion, have been taken by surprise by the rapid growth of data centre power demands, which has led to years of underinvestment in power generation and transmission infrastructure. There are upwards of seven year wait times for additional power, for development projects in cities such as Los Angeles.
Demand > supply = falling vacancies and surging rents…though not every market is benefiting"
Off to the races tomorrow for IFT supporters.
Im nervous as the market picks up on the smallest of negatives at the moment.
Panic buying today?
https://stocknessmonster.com/charts/ift.nzx/
Wild as swing trade & profitable !
I took a screen shot of today's closing price incase their is a bit of a ski slope tomorrow. If there is, it will be short lived.
Heading into the annual result at $11.25 is an impressive return. The sp was around $9.50 this time last year.
I was going to post about another ATH and then I thought don’t you have done it enough, although I haven’t mentioned it enough that the share price will go higher than today’s end.
They did it again. How impressive.
Let's see how the market reacts.
I've let alot the the talk on this forum get to my head and doubt IFT.
But take Retire Australia for example. They just make the business work with super cashflows. No mention of valuations this and that, just outright sales, cash, waiting lists etc. A total understanding of the 'Real' business.
Indeed. And interestingly it was one they were - probably still are - keen to exit. But with no reasonable sale opportunity, they just oversee that it is run very well.
IFT. Absolute ballers. I always hate seeing the size of the management fee, but man do they continue to justify it with extraordinary returns.
Net asset value per share $14.35
Feels a bit like the numbers provided by the likes of Blackstone and Brookfield, but I’ll take it!!
We might see 5 days worth of downward pressure for the management fee will be taken up in shares worth $50 million at 98% of the average share value over the next 5 days. The lower it is the more shares they receive and the better it is for them longterm. Either way I have never felt a management fee is the issue.
$10.80c?
why the negative reaction?
I don't know and really, seriously, I don't care. The report is solid. I like the stuff they are invested in. They seem to be able to deliver, over and over again.
I'm just going to sit back and enjoy the ride.
A wee drop in the share price is only of concern if you intend to sell. I don't. And if it dropped a lot more, and no other negatives, I'd buy more.
Management were just asked on the conference call regarding funding options, they strongly indicated that they have plenty of scope for funding through debt and regular asset sales in the renewables segment that cap raises won’t be needed. (A lot of the renewables segment capex planned is for projects that are usually sold to third parties before the project capex is actually required)
I just loved the graphic on the AL cover page. Shows the financial history of the company since inception. NICE! :t_up:
One of my favourite lines is
'Wellington City Council will vote in June 2024 on whether to proceed with potential divestment of its shareholding'... And the cheeky line 'we will continue to watch with interest'.
IFT exceeded expectations. So what hope has Mft got in reality. Any negative news will see the sp react accordingly. FPH are like IFT, they will deliver on the upside.
"Starlink gets cellular video calls off the ground, albeit at low quality"
[/FONT][/COLOR][/SIZE]https://www.interest.co.nz/technology/127880/starlink-gets-cellular-video-calls-ground-albeit-low-quality
https://x.com/SpaceX/status/17929818...it-low-quality
Tory Whanau has established a Wellington Council Business Group. Includes the likes of Brooke Roberts (Sharesies) and Mark McGuinness(Willis Bond).
So Tory looks like she will be heading into the Airport Sale meeting next month armed with answers to where the funds could be invested etc.
Positive steps.
Question for everyone here: What do we want IFT to do with Wellington Airport if they gain 100% control?
It is currently the odd one out in the portfolio, and carries significant seismic risk in the long term. Personally I would be ok with a full sale, especially in a year or two once interest rates retreat and overseas pension funds start getting hungry for higher yielding infrastructure investments again.
I would like to think that with their history of airport ownership, they should be pretty clear in their own minds what they want to do with Wellington airport, either way.
The Airport Investment is right up there with IFTs investment in the Port of Tauranga back in the day.
I would think a model more suited to the Wellington Council would be to float the Airport on the NZX. The Council could then keep some form of holding. This is where the Tory Business advice come into play.
IFT could then exit the investment and reinvest the funds in the growth sectors of its portfolio.
Most questions answered here.Onwards & upwards
https://wellington.scoop.co.nz/?p=160770
What would this group want c.f. Auckland Council?
Look at comments
Mayoral Business Group to help deliver “transformation of our city”
https://wellington.scoop.co.nz/?p=160794
Or priority infrastructure?
OOpsy
What has the council been doing?Asleep at the wheel again?
"Wellington Water has admitted overlooking a budget error that has resulted in an extra last-minute bill for councils of $51 million over three years.
At a meeting of the Wellington Water Committee this morning, board member Pat Dougherty apologised on behalf of the organisation and promised an independent inquiry.
He told angry mayors and councillors around the table that Wellington Water was conscious that this came at a time when councils were coming to the end of the hardest long term plan process many had ever faced, with “terrible pressure on operating budgets”.
“It’s the worst time in 20 years to make a mistake like that, and the worst moment to find out about it,” he said."
Option :sell the airport to fix the broken water system !
https://wellington.scoop.co.nz/?p=160879
Who owns Wellington Water?
"We're 100 percent council owned and funded and our job is to provide safe and healthy drinking water, collect and treat wastewater, and ensure the stormwater network is well managed."
https://www.wellingtonwater.co.nz/ab...are/our-story/
No news yet?
"RetireAustralia back up for sale by owners Infratil and NZ Super for $1B+"
https://www.theweeklysource.com.au/f...z-super-for-1b
"Why the WCC should sell its airport shares"
https://wellington.scoop.co.nz/?p=160833#more-160833
"The Wellington City Council has been consulting about selling its 34% shareholding in Wellington Airport, with a plan to invest the net sale proceeds in a new perpetual investment fund (PIF).
The income from the PIF would be paid to the Council each year for annual expenses (just as Airport dividends are now) and the capital would be preserved as a rainy day fund, perhaps to help with major earthquake damage.
Strong guardrails are proposed to stop the PIF being raided by this or subsequent Councils to repay debt, meet annual expense or funds other pet projects"
"If the money is in ~200 global shares then the value of, and income from, these will be unaffected by a local disaster."
"Equally, the returns on this diversified portfolio should match, and more likely exceed, the returns on the Airport shares. The shares have done well for the Council, increasing ~7x in value, plus dividends, since it declined to sell them to Infratil for ~$49.6m in 1998. But less well than if the Airport shares had been exchanged for Infratil shares, which are up ~15x in value, plus dividends over the same period."
"How big tech is crushing telcos - and what One NZ’s Jason Paris plans to do about it"
Well grounded CEO !
https://www.nzherald.co.nz/business/...GV3DGKEK6ZCUU/
What Craigs view is
Capex spend is up from 2023 that is up from 2022
" The main highlight was the FY25 capex guidance, with IFT forecasting
proportionate capex of $2.7-3.1b (compared to $1.7b in FY24). A significant
portion of this is at CDC where IFT expects capex of A$2.35-2.65b (IFT's
proportionate share NZ$1.2-1.4b) as the company ramps up development"
"NAV $11.59. Now trading at a 8% discount to NAV
We estimate the current NAV at $11.59, with IFT currently trading at a 8%
discount to NAV.
Price Target $11.70 (prev $11.35). Rating lifted to Overweight
Our Price Target remains at a 5% discount to our forward NAV estimate
which incorporates the CIP Price Target for MNW, dividends paid and
received, management fees, funding costs, and roll-forward valuations of the
unlisted assets.
We have lifted our rating from Neutral to Overweight reflecting the increase
in our NAV estimate and Price Target. Our valuation of CDC is a key driver of
this and is now 64c per IFT share greater than the Independent Valuers.
Towards the end of FY25 we think the valuers estimate could increase
materially as some significant data centre developments are completed."
To be noted
Craigs view has changed over the last few years from underweight,to neutral and now to overweight
Others
https://www.marketscreener.com/quote...4631/finances/
What I am seeing is the uplift in earnings
What are others/the market seeing?
The risks in the strategy?
Well better late than never I suppose.Quote:
To be noted
Craigs view has changed over the last few years from underweight, to neutral and now to overweight
IFT 350 bonds confirmed today with a coupon of 7.06% maturing in december 2031. Couldn't resist I had to dip my toe in.
Wellington City Council has voted 'Yes' to selling the Airport shares.
So tomorrow may be interesting. The Councils shares are worth $278m.
Now we can speculate about a possible sale, share market float, or break up of the airport assets by IFT.
What would shareholders like to see? Or what is the best way to extract value?
https://wellington.scoop.co.nz/?p=161072
https://wellington.scoop.co.nz/?p=161055
"News from WCC
At today’s Koraū Tōtōpū Long-term Plan, Finance and Performance Committee meeting, Mayor Tory Whanau and Wellington City Councillors made major decisions in the steps to confirming its 2024-34 Long-term Plan. Final votes on the decisions will be held at a full Council meeting at the end of June."
Interesting comment?
"Chris Calvi-Freeman, 30. May 2024, 20:51
This was a committee meeting, as the two unelected iwi representatives voted. Without them, the [airport shares] sale would have been a split vote with the committee chair having to exercise a casting vote. Presumably it still needs to come to full Council in which case the Mayor would have the casting vote. Still time for some councillors to lobby each other? [via twitter]"
https://infratil.com/news/infratil-i...tfolio-update/
"Growth investments complemented by core cash generating businesses"
One NZ is complemented by two other core cash generating businesses,
Wellington Airport and Manawa Energy
They support target credit and liquidity metrics and reinvestment into higher
returning growth capex options generated by these, and other investments"
We can be sure IFT has a plan.
IFT I dont think would sell in the current environment, instead they far more likely to snap up the council share at the currently depressed valuation, and then float/sell the entire asset when the macro conditions improve in 12-24 months when valuations will be considerably higher.
IFT should let the debate rage until end of June then offer to buy the airport by issuing shares in IFT in exchange for their shareholding
https://wellington.scoop.co.nz/?p=160833#more-160833
"The shares have done well for the Council, increasing ~7x in value, plus dividends, since it declined to sell them to Infratil for ~$49.6m in 1998. But less well than if the Airport shares had been exchanged for Infratil shares, which are up ~15x in value, plus dividends over the same period."
Council could then set up a new green, ethical Perpetual Investment Fund using the proceeds of selling the Council’s minority airport shares with only the annual dividend available to be accessed by the Council.
This might slightly lower IRR for IFT but support target credit and liquidity metrics and reinvestment into higher returning growth capex options generated by these, and other investments
That is more than the minimum guaranteed rate in the prospectus. Maybe demand for them was not great?
To answer my own question, demand was high as they issued $100m extra for over subscriptions from the $75m offer!
https://www.nzx.com/announcements/432058
So hopefully they have a bigger war-chest for good-value new investments.
[QUOTE=Bjauck;1054678]That is more than the minimum guaranteed rate in the prospectus. Maybe demand for them was not great?
To answer my own question, demand was high as they issued $100m extra for over subscriptions from the $75m offer!
]
Infratil hunger for cash, or it expects long-term interest to remain high. If the latter is right, buying IFTHA will be a better choice.
[QUOTE=Newman;1054699]Next review of IFTHA bonds due in december .... at current kiwi bond rate quote will be 4.5% + 2.5% premium = 7.00% , kiwi bonds likely to be at lower rate in december and then some more moves lower to maturity. I suggest IFT 350 is a better investment atm.
Remember that at today's price IFTHA's 7.06% is really just on 11% yield.
But I expect as you say that the rate will come down over the next few resets. But. the price of them may also fall, cushioning this somewhat.
But over the years the return has been all over the place, but I'm happy to hold mine.
The answer is to own both.
My decision this week was to buy some IFT350 as I see it as a good rate for the length to maturity of the bond.
But only reason to choose that over IFTHA is that I have recently topped up on those and have enough.
I see these as a good fit (I have other IFT bonds too).
But if I had neither and was looking at putting some money in only one, I'd probably opt for the IFT350, but there would be a lot of thinking to be had.
In reality I'd split my money between the two.
Hi all. My latest column published on my Substack, Just the Business, takes a look at why people were disappointed with Infratil's annual results. The headline is: Disappointment in Infratil's guidance is misplaced
And you can find it here: https://justthebusinessjennyruth.substack.com/
Nice little boost for Infratils Medical imaging business in NZ
https://www.nzherald.co.nz/nz/politi...OJHHE3S3BOPYU/