Channel Infrastructure NZ (CHI) H1 2024 earnings summary

Executive summary

• Revenue rose 8% to NZD 69.8 million, with EBITDA up 10% to NZD 48.1 million and a margin of 69%.

• Net profit after tax from continuing operations was NZD 12.8 million, with total net profit after tax at NZD 16.6 million including discontinued operations.

• Throughput increased 8% year-over-year, driven by a 22% rise in jet fuel demand, now at 94% of pre-COVID levels.

• Interim dividend of 4.4 cents per share declared, a 5% increase from last year.

• Strong safety record maintained, with zero process safety incidents and increased reporting of minor injuries.

Financial highlights

• Normalized free cash flow was NZD 32.7 million, with a conversion rate of 68%.

• Net profit after tax from continuing operations was NZD 12.8 million, down from NZD 14.5 million year-over-year.

• Private storage revenue increased by NZD 3 million, with over 100 million liters commissioned in two years.

• Operating costs rose by less than NZD 1 million despite inflation and compliance pressures, aided by a favorable electricity contract.

• Net debt at 30 June was NZD 326 million; leverage at 3.4x EBITDA, within the 3x-4x target range.

Outlook and guidance

• Upgraded full-year guidance: EBITDA NZD 92-96 million, normalized free cash flow NZD 62-66 million, CapEx NZD 11-12 million.

• Jet fuel demand exceeded forecasts; cautious on economic environment and potential regulatory costs.

• Long-term outlook supported by stable, inflation-linked contracts and import terminal model.