Infratil makes a killing on CDC investment

Infratil makes a killing on CDC investment

Infratil's datacentre investments continue to pay off handsomely while Vodafone NZ reports improvements.

Jason Boyes (Infratil CEO)

Jason Boyes (Infratil CEO)

Credit: Supplied

When Infratil bought 48 per cent of datacentre operator Canberra Data Centres (CDC) in 2017 it paid $411.5 million for a company with 39MW of capacity and earnings of $50.4 million.

Now, CDC is investing $1 billion more on new facilities totaling 70MW of capacity under construction and due for commissioning next year. It is also adding an additional 150MW of capacity in Melbourne to its development pipeline.

Four years on from its initial investment, the most recent independent valuation of CDC, as of 30 June 2021, valued Infratil’s investment at A$2.3 to A$2.5 billion, the company told investors today.

“CDC Data Centres is significantly expanding its capacity with over A$1 billion of investment across four sites, including two new facilities in Auckland," Infratil chief executive Jason Boyes said.

The infrastructure investment specialist also announced the $254 million purchase of 40 per cent of London datacentre business Kao Data last month, for which it sees significant growth potential.

“The market continues to value assets in the digital infrastructure and renewables sectors at significant premiums to Infratil’s carrying values," Boyes said.

Infratil announced the largest net surplus from continuing operations in its 27-year history today: $1.1 billion for the six months ended 30 September, mostly attributable to the August sale of its 65 per cent stake in Tilt Renewables. The overall result showed the business performing strongly and demonstrating resilience despite the ongoing challenges posed by the COVID-19 pandemic, Boyes said.

CDC's EBITDA for the period was A$75.2 million, a A$1.4 million, 1.9 per cent increase on the previous comparative period.

The business was ramping up for the next phase of growth, Infratil told investors, with a 46 per cent increase in employees since this time last year.

As well as its datacentre and other investments, Infratil bought Vodafone NZ in 2019. The telco’s cost efficiency programme was creating headroom to reinvest and helping improve margins, Infratil reported, while product simplification was driving down the cost to serve and making the customer experience simpler.

Vodafone NZ was investing in talent in growth areas including digitisation, automation, data analytics, enterprise ICT, cyber -security and customer experience. The unit reported EBITDA for the period of $251.8 million, a $27.1 million (12.1 per cent) increase on its comparative period.

However, COVID-19 continued to pose challenges for the telco's retail network, roaming and pre-pay revenues while the broadband market remained "highly competitive and commoditised".

Investment in both 4G and 5G networks continued, with utilisation improving through the expansion of wholesale activity.

"Network sharing is proving particularly necessary to improve rural connectivity, and telecommunications companies are working to bring this about while preserving the benefits of competition," Infratil reported.

Also during the period, another Infratil investment, Trustpower, announced the conditional sale of its electricity and telco retail business to Mercury Energy for $441 million.

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Tags mobileVodafonedata centresTelecommunicationsvodafone NZInfratil CDC Data Centres



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