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Manston is still a hole in the ground

Infratil, the New Zealand-based investment company that owns Manston Airport, has just published its end of year results. The core businesses of energy and power in New Zealand and Australia fared well, boosting the share price, but the “European airports” (Prestwick and Manston) continued to disappoint investors.

Losses increased from NZ$8.6m in 2010 to NZ$11.3m in 2011, and the book value of the two airports was reduced by NZ$35m – “Decrease in value of Infratil Airports Europe reflects a negative revaluation of Airport assets and investment properties”. So the businesses are losing money, and the assets are turning to dust in their hands.

On their website, Infratil state that “Infratil’s primary goal is to provide its shareholders with a consistent return of 20% per annum over the long term”.

Infratil don’t split out the numbers for the two airports, but it’s a safe assumption that Manston is losing money faster than Prestwick. The financial commentators in the New Zealand local press have noticed that the European airports are conspicuously under-performing:

NZ Herald

Infratil is upbeat about earnings in the coming year after reporting a sharp increase in its net surplus during the past 12 months.

The infrastructure investor reported a 26.3 per cent rise in full-year net surplus to $120 million for the financial year to March 31, in spite of flat earnings from its biggest investment – its stake in TrustPower – and being forced to write off $35 million from its European airports.

Infratil Airports Europe losses grew from $9 million to $11 million. In response to questions on the $35 million write-off the company said it had been overly optimistic about the value of the business previously.

and again:

Infratil’s European airports posted a loss of $11 million in the financial year. The company talked down the likelihood of more capital investment after spending some $500 million in the 2011 year, almost half of which went into the Shell assets.

“A number of divestment and investment transactions are in development, but the large reallocation of capital which occurred over the last two years is unlikely to reoccur in FY12,” the company said.

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