IFT - Infratil

[Steve]

Well now is as good a time as any to effect the buyback...

[Toddy]

IFT are bolstering their management ranks. The future looks exciting.

Infratil announced yesterday that Bogoievski had been appointed chief operating officer at the utilities investor and its manager, HRL Morrison.

Infratil also announced the appointment of Peter Coman as chief executive of HRL Morrison and Infratil Property. Coman was managing director of Jones Lang LaSalle, New Zealand.

I know Peter from my early London days.

[Lawso]

Is that the same Peter Coman that played cricket for Canterbury in - I think - the 1960s/70s?

[Toddy]

Is that the same Peter Coman that played cricket for Canterbury in - I think - the 1960s/70s?

No, he is not that old.

[Toddy]

The Trustpower result can best be described as 'steady'. Spot electricity prices have risen during January however this is offset by lower lake inflows in the North Island.

TPW
31/01/2008
QUARTER

REL: 1403 HRS TrustPower Limited

QUARTER: TPW: TrustPowerResult for the Nine Months Ended 31 December 2007

Media Statement
Thursday, 31 January 2008

TrustPower Limited Result for the Nine Months Ended 31 December 2007
TrustPower's unaudited after tax surplus for the nine months to 31 December
2007 was $78.9 million, compared with $87.6 million as restated for NZIFRS
adjustments, for the same period last year. The result for the period
includes a reduction in tax expense of $4.5 million attributable to a lower
deferred tax liability arising from the change in the corporate tax rate from
33 per cent to 30 per cent effective from 1 April 2008. Earnings before
Interest, Tax, Depreciation, Amortisation, and adjustments for Financial
Instruments ("EBITDAF") were $161.8 million versus $161.0 million for the
prior period.

The trading environment for the nine months to 31 December 2007 has seen a
continuation of the weak hydro inflows and lower than average electricity
spot prices experienced throughout the financial year to date. This was in
contrast to the trading conditions experienced by the Company during the
previous year when hydro inflows were significantly higher but in line with
the long term average.

TrustPower's own generation assets produced 1,600 GWh for the nine months
versus 1,570 GWh in the prior period. Wind production has been higher for
the nine month period than the previous period, boosted by the commissioning
of the 93MW expansion of the Tararua Wind Farm. Hydro generation was well
down on long term average and was 180 GWh lower in the nine months compared
with the prior period. TrustPower's hydro generation storage catchments are
close to average levels in the South Island but are currently well below
average levels in the North Island.

Electricity customer numbers were up slightly at 221,000 as at 31 December
2007. Total electricity sold to customers in the nine months totalled 3,475
GWh compared with 3,508 GWh sold in the prior period.

Telecommunication customers have increased to 22,000 from 16,000 at the end
of the last quarter.
The Company's balance sheet remains strong. The ratio of debt to debt plus
equity was 32 per cent as at 31 December 2007 up from 28 per cent at the same
time the previous year.

Construction on the 5 MW Deep Stream, Otago hydro generation scheme has been
slower than projected due to adverse weather conditions and commissioning is
now expected during March.
Provisional resource consent has been received for the 72 MW Wairau hydro
generation scheme in Marlborough. However, a further process is required to
determine the specific conditions of the consent. The hearing to determine
the conditions of consent is currently underway. Once conditions have been
finalised, subject to appeal, the Company will re-assess project economics.

The resource consent hearing for up to 46 MW of hydro generation at Arnold,
on the West Coast, has recommenced during January 2008.

The resource consent decision approving the 200 MW Lake Mahinerangi wind
project in Otago has been released. The Company is currently working through
the appeal process and appeals to the Environment Court are scheduled to be
heard in April 2008.
A resource consent application for up to 240 MW of wind generation at Kaiwera
Downs in Southland was lodged in November 2007 and a resource consent hearing
is scheduled to begin at the end of March 2008.

TrustPower continues to actively assess other wind and hydro generation
opportunities, particularly in the North Island.
The first wind turbine at Snowtown in South Australia was erected and
commenced operation prior to the end of 2007. The remainder of the project
schedule is on track with progressive erection and commissioning of turbines
expected during the period March to November 2008.

TrustPower has reached agreement with Suzlon Energy Australia to provide an
additional five S88 2.1 MW wind turbines for the Snowtown site, in addition
to the 42 turbine wind farm presently under construction. This will increase
the total capacity of the wind farm to 98.7 MW with an annual expected
production of 390 GWh. The expanded wind farm has been granted an amendment
to the existing generation licence issued by the Essential Services
Commission of South Australia. The forecast project cost, including
capitalised interest, is now expected to be approximately AUD 215 million.
The additional wind turbines are expected to be commissioned within the
original construction timetable.

The Board has resolved that TrustPower will cease reporting on a quarterly
basis from the end of the 2008 financial year. TrustPower will continue to
provide an operations report and an update on progress of generation
development projects on a quarterly basis.

The result for the nine months to 31 December 2007 was satisfactory given the
lower than average level of hydro generation produced. At this stage the
Directors are confident that the business fundamentals are sound, which
augurs well for a satisfactory annual result.

[Steve]

Given that IFT could be regarded as a bit of a defensive share, has it been a bit over-punished by remaining in the low 250's?

Why have they not continued with the buyback at these levels?

[Toddy]

Good question Steve. We can only speculate about this one. My guess is that IFT have put the buyback programme in place incase we have more volatile days like when IFT was sold down aggressively early last week.

I personally think that IFT have been working on a big deal in the background which current management know will give the SP some legs again. Hence, keeping the cash in the bank in the meantime.

The quarterly report is due any day soon so we will all know how the Australian energy business has been performing. If the result is better than average then we should see the IFT SP head in the right direction.

[Toddy]

What we need right now is for IFT to pull a 'rabbit out of the hat' to stop what seems like a never ending share slide.

Hopefully the quarterly results will provide us with some bullish news.

[POSSUM THE CAT]

Toddy Who in there right mind would buy a bus company off them and this is in my opinion is the millstone around their neck. Removed it from my watch list the moment they even suggested buying a bus company. How many have gone bust and how many have made a good profit in the last 20 years do some research you will be supprised.

[macduffy]

I take your point Possum but NZ Bus only represents about 10% of IFT's investments.

They won't have to get much cheaper to tempt me to add a few more.