Channel Infrastructure NZ (CHI) H2 2024 earnings summary

Executive summary

• Revenue increased 7% year-over-year to NZD 139.8 million, with EBITDA up 9% to NZD 95.1 million and a 68% margin, driven by higher terminal fees, increased throughput, and new storage contracts.

• Throughput grew 3% to 3.5 billion litres, reflecting strong 12% jet fuel demand growth and stable diesel/petrol demand.

• Three new storage contracts signed, adding approximately NZD 120 million in incremental revenue over 15 years.

• Major capital projects, including the Transmix upgrade, were completed on time and within budget; multi-year conversion and private storage projects are progressing.

• Successfully refinanced bank debt and raised NZD 50 million in equity, lowering WACC and strengthening the balance sheet.

Financial highlights

• Normalized free cash flow was NZD 63.4 million, with a 67% conversion rate.

• Net debt reduced to NZD 296 million from NZD 315 million, with leverage at 3.1x EBITDA and liquidity headroom increased.

• Dividend for FY24 declared at NZD 0.11 per share, up 5% year-over-year, with a payout ratio of 69%.

• NZD 381 million uplift in fair value of assets increased net tangible assets per share to NZD 1.98.

• Growth and conversion capex totaled NZD 42 million, with total capex of NZD 55 million in 2024.

Outlook and guidance

• FY25 EBITDA guidance set at NZD 89–94 million, reflecting the end of the Wiri lease and new contract contributions.

• Throughput expected to rise 5% in FY25, but guidance assumes flat jet fuel demand due to economic and aircraft supply risks.

• Steady-state business capex for FY25 expected at 8–10% of revenue.

• By 2027, new contracts signed in 2024 will generate an additional NZD 8 million in annual revenue.

• Normalized free cash flow conversion expected to remain in line with FY24.