It\u2019s not yet delivering the growth of a lifetime, however. <\/p>\n
Shareholder return for FY26 was 13.9%, ahead of its five-year average of 13.1% but lower than its 10-year run rate of 17.3%.<\/p>\n
And while AI helped One NZ cut costs and introduce new services, contributing to earnings growth for the telco (more below), it was not enough to counterbalance wider market forces as the telco\u2019s independent valuation \u2013 a key metric in the Morrison-managed Infratil universe \u2013 reduced by 10% or $326.8 million to $3.39 billion.<\/p>\n
One NZ\u2019s valuation decrease was pinned on the soft economy, increased competition and the falling market cap of its \u201cclosest comparator\u201d, Spark.<\/p>\n
Increased earnings<\/p>\n
Infratil\u2019s share of operating earnings from companies in its stable increased 11% to $984.4m for the year to March, near the top end of its guidance range ($960m to $1.0b).<\/p>\n
And it forecast another bump next year, saying its clip of the ticket (or proportionate operational ebitdaf \u2013 earnings before interest, tax, depreciation, amortisation and fair value adjustments) would increase 21% on a like-for-like basis.<\/p>\n
Shares were down 3.8% to $15.37 in late-morning trading, easing off their all-time high. The stock is up 38% over the past year.<\/p>\n
Its full-year dividend increased to 20.9 cents per share (cps) from the year-ago 20.5cps, in line with analyst expectations.<\/p>\n
It reported a parent surplus of $550m versus its year-ago $295m loss.<\/p>\n
Some $600m in assets were divested during the year, which the firm says will be invested in higher-growth opportunities.<\/p>\n
The total value of Infratil\u2019s assets increased 13% from $18.3b to $20.6b.<\/p>\n
Morrison’s management and incentive fees. Image \/ Infratil 2026 Annual Report<\/p>\n
However, the valuation growth of offshore assets was not enough for Infratil\u2019s manager, Morrison, to claim an incentive fee, which hit $346.9m last year as CDC\u2019s valuation went through the roof. <\/p>\n
\u201cInstead, a negative $18 million will be carried forward into the FY27 fee calculation and netted off future positive fees,\u201d the company said.<\/p>\n
Morrison\u2019s separate management fee increased from the year-ago $109.3m to $122.6m.<\/p>\n
Over the past three years, CDC has risen to dominate Infratil’s capital expenditure, and its 49.75% share in the data centre operator has become its most valuable asset. However, One NZ has been easily the largest contributor to operating earnings (ebitdaf). Image \/ Infratil 2026 Annual Report <\/p>\n
With the partially-owned companies in the infrastructure investor\u2019s portfolio reporting separately, and largely known quantities, there was analyst focus on the 99.9%-owned One NZ.<\/p>\n
Forsyth Barr had picked the telco would have operating earnings of $598m. In the event it chipped in $607.4m to proportionate ebitdaf from its year-ago $604m.<\/p>\n
In mobile phone plans, average postpaid revenue per user per month increased 3% from the year-ago $35.50 to $36.60. Forbarr noted increases to consumer mobile pricing in April.<\/p>\n
Infratil forecasts One NZ ebitdaf of between $600m and $640m for FY27.<\/p>\n
For the third year in a row, the fully-owned One NZ\u2019s profit contribution easily outstripped the 49.9%-owned CDC, the second-largest earnings generator with its $220.4m contribution (from $173.9m last year).<\/p>\n
The telco\u2019s profits \u2013 a contrast to under-pressure rival Spark \u2013 are helping to fund expansion elsewhere. One NZ\u2019s cash distribution to Infratil doubled to $180m.<\/p>\n
ForBarr had been looking for signs of another asset sale (One NZ earlier sold its cell-tower network\u2019s passive assets). <\/p>\n
There was no explicit mention of a sale, but Infratil did highlight the performance of One NZ\u2019s recently created EonFibre unit (which includes the Wellington and Christchurch cable networks inherited with the telco\u2019s purchase of TelstraClear, plus more recent \u201ccarrier grade\u201d fibre connections for mobile backhaul and data centre direct connections).<\/p>\n
Infratil\u2019s investor presentation says EronFibre delivered around $65m ebitdaf in its first full year of operation.<\/p>\n
It adds: \u201cEonFibre is gaining traction as a wholesale bandwidth provider, with good data centre demand and a material hyperscaler subsea contract in Q4 FY26.\u201d<\/p>\n
AI sentiment runs hot and cold <\/p>\n
CDC has had a boom start to FY2027, with its 555MW contract \u2013 Australasia\u2019s largest ever data centre deal<\/a> \u2013 with an unnamed tech giant. <\/p>\n It came as Amazon (in whole<\/a>) and Microsoft (in part<\/a>) have both backed away from Overseas Investment Office-approved plans to build their own data centres in favour of \u201cco-locating\u201d with existing players (widely assumed to include CDC).<\/p>\n \u201cCDC is now a global-scale data centre operator with over one gigawatt of capacity contracted and is forecasting its ebitdaf will grow more than 150% to over A$1 billion [$1.22b) in FY28,\u201d Infratil said in management commentary with its earnings (reiterating a CDC forecast first given in April as the data centre company\u2019s).<\/p>\n In the March quarter, CDC\u2019s independent valuation was increased by 7.2%, (or 3.2% and A$250m, allowing for a A$250m contribution from Infratil) to a fresh all-time high of A$15b, valuing Infratil\u2019s stake at $7.5b. <\/p>\n But the firm also acknowledged volatility in sentiment about AI over the past 18 months.<\/p>\n \u201cAt the end of FY25, we experienced the noise of potential changes to American renewable energy policy and uncertainty about data centre demand following the release of the Deep Seek AI model,\u201d chairwoman Alison Gerry wrote in the 2026 Annual Report released today.<\/p>\n The Chinese makers of DeepSeek were starved of Nvidia\u2019s latest chips, forcing them to make more efficient AI software. Some analysts saw it as a glimpse of a future where all AI software was better written, negating or at least reducing the need for data centres stuffed with servers running powerful new Nvidia chips.<\/p>\n \u201cNegative AI sentiment, along with expectations of longer-dated growth and rising rates, drive the share price lower,\u201d Gerry continued.<\/p>\n \u201cPositive outcomes through the first half of FY26 were then eroded when AI bubble concerns resurfaced and the Middle East conflict drove broader uncertainty,\u201d Gerry continued. The sentiment swing buffeted Infratil\u2019s shares once more before they rebounded sharply to their recent record high.<\/p>\n Chris Keall is an Auckland-based member of the Herald\u2019s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.<\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s not yet delivering the growth of a lifetime, however. Shareholder return for FY26 was 13.9%, ahead of…\n","protected":false},"author":2,"featured_media":445792,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[181942,2851,60698,534,806,49395,42110,18510,138,8325,4509,8611,34088,28471,4568,28164,15215,36996,18511,227422,5933,3180,111,139,69,5270,5340,12229,112747,1436,48992,145,1361,16541],"class_list":["post-445791","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-acknowledged","tag-also","tag-although","tag-amid","tag-as","tag-boosts","tag-bubble","tag-buoyed","tag-business","tag-cdc","tag-cold","tag-contribution","tag-delivered","tag-dominates","tag-earnings","tag-fears","tag-fullyear","tag-guidance","tag-infratil","tag-intermittent","tag-investor","tag-near","tag-new-zealand","tag-newzealand","tag-nz","tag-one","tag-profit","tag-result","tag-revolutionary","tag-rise","tag-sentiment","tag-technology","tag-that","tag-valuation"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/445791","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=445791"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/445791\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/445792"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=445791"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=445791"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=445791"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}