IFT - Infratil

[macduffy]

Well at least IFT aren't thinking of taking ENE over. I hope not!

[Toddy]

Well at least IFT aren't thinking of taking ENE over. I hope not!

I'm not sure what the game here is. Reading between the lines maybe IFT has initiated the exercise (being the major SH) with the end goal of ending up with the cream of ENE's generating assets.

Or, someone has come to IFT with a deal. Signing off saying that you are not going to sell your holding before 18 August may well mean that IFT has already lined up a buyer?

Has anyone out there had experience/or seen this kind of deal (strategic review) before?

[macduffy]

I don't have any answers but the ENE story is a bit sad really. It was very successful several years ago, pioneering electricity from landfill gas in Australia, at a time when energy was much less valuable ( or at least, much less valued ) and building and operating remote power systems, some of them from coal seam methane, some diesel powered, for mines etc.
It was also a very good investment with a regular stream of heavily discounted cash issues and share purchase plans. One of my better investments!
The company started to go astray when it tried to develop a more sophisticated system for large scale gas from trash.
The name of the system escapes me now but suffice to say that ENE poured many millions into it before giving it up as a bad job. IFT became involved during this time so has never benefitted from ENE's golden period.
I wouldn't write ENE off entirely. It may be that IFT see some of the generation assets as attractive, although quite small scale, but as an IFT shareholder I'd rather they didn't make a big investment by taking over the entire company.

[Steve]

Steve

How did the presentation go?

It was positive in terms of the potential of their investments, with frustration at the way the shareprice is being marked down in the current environment.

There was a good example of how the value of Trustpower's generation capabilities is determined and a local example of how it was considered that the Dunedin City Council made an error in keeping the 'lines' business while flogging off the Waipori generation assets.

It was noted that the bus investments were still struggling due to 'red tape', but the potential was still there to be extracted.

Airport assets were discussed with regards to Wellington Airport, and there were questions from the floor regarding the lack of returns from the overseas airport investments. They missed out on bringing a freight distribution contract to one of the overseas airports, which would have released a huge increase in value for the airport if it had been successful.

No mention was made of this weeks announcement regarding the Aussie energy assets...

[Toddy]

Trustpower expects 15 pct earnings growth
Reuters | Friday, 11 July 2008

New Zealand electricity generator and retailer TrustPower says its 2008/09 earnings may grow around 15 percent, despite a dry and mild period hitting its electricity generation.

The country's second largest listed power company generates all its power through renewable sources -- wind and hydro -- making it vulnerable to drought.

Chief executive Keith Tempest said the company still expects growth in earnings before interest, tax depreciation, amortisation and financial instruments (ebitda) in the year to March 2009, despite the impact of the "one in a hundred year" dry and windless spell.

"Most analysts are looking in the $240 million region, which I'd put as achievable," he told Reuters in an interview.

Ebitda for the year to March 2008 was $208 million, with net profit of $98 million. Shares in TrustPower, 50.5 percent owned by utilities investor Infratil Ltd and 33 percent owned by a consumer electricity trust, last traded up 1.3 percent at $7.70. The stock has fallen 11 percent so far this year, compared to a 24 percent decline in the benchmark top 50 index.

TrustPower plans to almost double its renewable generation through new wind and hydro plants, which it expects to fund through debt.

[Rif-Raf]

I don't have any answers but the ENE story is a bit sad really. It was very successful several years ago, pioneering electricity from landfill gas in Australia, at a time when energy was much less valuable ( or at least, much less valued ) and building and operating remote power systems, some of them from coal seam methane, some diesel powered, for mines etc.
It was also a very good investment with a regular stream of heavily discounted cash issues and share purchase plans. One of my better investments!
The company started to go astray when it tried to develop a more sophisticated system for large scale gas from trash.
The name of the system escapes me now but suffice to say that ENE poured many millions into it before giving it up as a bad job. IFT became involved during this time so has never benefitted from ENE's golden period.
I wouldn't write ENE off entirely. It may be that IFT see some of the generation assets as attractive, although quite small scale, but as an IFT shareholder I'd rather they didn't make a big investment by taking over the entire company.

yes I wouldn't write off ENE, check out the chart, looks like someone seems to think there's
about to be some value unlocked.

It's interesting in the annual report, they talk about the series of one off issues that ENE has had, so recent developments could be a reflection of looking past these issues.

The question is who initiated this?

[Toddy]

Trustpower will be in profit clawback mode now. Earlier than predicted when they gave the profit downgrade.

Electricity industry relaxes
http://www.stuff.co.nz/4618378a13.html

[Toddy]

Just as usual they get some increase in patronage. So they decide they can rip them off some more. So back to cars.

Possum, got any stats to back your comment up.

According to the latest IFT email, Aucklanders love the new bus services.

NZ Bus Patronage

NZ Bus has seen an increase in year-on-year patronage as more Aucklanders and
Wellingtonians recognise and utilise the benefits of the cost effective
public transport system available to them. The reasons for increased
patronage are attributed to a number of factors and vary from route to route.

"We have seen significant growth in the number of customers using the Mt Eden
service" says Bruce Emson, CEO. "As a result of increasing service and
providing more buses more often, we have seen an increase in patronage of
approximately 17%."

"Community events also impact patronage. An example of this is that a number
of our Orakei routes have seen increases in the vicinity of 20%, largely as a
result of people travelling to and from the Sylvia Park retail complex" says
Mr Emson. Traffic infrastructure improvement has driven other increases -
for example, the installation of the Northern Expressway has driven increases
of up to 60% on some express services.

In Wellington, there has been noticeable growth on the Seatoun express
service (11%) and the Wainuiomata-Wellington commuter service (33%), which
has recently had extra capacity added. Improvements to the Airport Flyer
service have also increased patronage on that route by 15%.

"Naturally, travelling during peak times you can expect a degree of
congestion" says Mr Emson. "What we are seeing is that passengers who have
flexibility in their schedule are making decisions to travel off-peak."

"It is inevitable that as petrol prices continue to climb that people will
start to make smart choices with their disposable income. Catching the bus
is clearly one of those."

Auckland patronage June 2008 June 2007
Passengers 2,751,267 2,541,107
Adjusted for comparable days 2,718,487 2,541.107
Percentage increase 7.0%
Average passengers per day 90,616 84,704
Bus load equivalents per day 1,510 1,412

Wellington patronage June 2008 June 2007
Passengers 1,615,571 1,530,027
Adjusted for comparable days 1,592,926 1,530.027
Percentage increase 4.1%
Average passengers per day 53,098 51,001
Bus load equivalents per day 885 850

[POSSUM THE CAT]

Toddy read your own post re Wellington city council increasing fares

[QOH]

I find the statistics from their Kent and Lubeck airports very underwhelming. Maybe they should just sell off the land in Kent. I'd have thought an airport there would be doing well by now.