Infratil Limited

Welcome to Infratil's half-year results presentation for financial year 2026. I'm Jason Boyes, the chief executive of Infratil, and I'm here with my partner in crime, Andy Carroll, the CFO. Welcome, Andy.

Good morning.

We're going to talk through the presentation that's been released to the NZX and ASX this morning, along with other material for our half. And then there'll be questions as usual, time for questions as usual at the end. So let's get into it. Excellent to be speaking to you today on the half just gone and how we feel about the half and further ahead. In short, we feel good with recent contract wins and progress on our strategic initiatives and strong demand for more data centres and power to run them. The portfolio is extremely well positioned for growth, including the big guns, CDC and Long Road. And also Gurren and potentially Kaio poised to join that acceleration. Those big guns have driven the half also with their strong contracted growth starting to come through in earnings with more to come. And One New Zealand has done a good job too in a challenging domestic environment. So with that introduction, let's go to the highlights, which will be on your screen now. Actually not too much new news in the announcements today, but one at the top here. Announcing signing to sell our stake in 40 South, our Towers business, and our old New Zealand bus property in Halsey Street there in Auckland. That's in line with our strategic objective to sell a billion of assets that we feel can't scale to be meaningful in the portfolio. Alongside the sale of Retire Australia that we announced earlier in the year, we're over halfway towards our target. with a strategic review of our investment in QSCAN, already announced that we'd finish the job and that we expect to progress in the next half. Secondly, on this slide I want to call out, Andy will talk to the numbers more shortly, some puts and takes as usual between different assets in the portfolio, but pleasing growth overall, that 7% increase in proportionate operational EBITDAF compared to the same half last year, in line with expectations, I think. When we look at the other key things that happen in the half, digital and renewable energy thematics are stronger than ever. As data and electricity demand continues to accelerate across multiple markets, you've got that 140 megawatts of contracting that CDC's announced in the half, actually since our investor down in September even, and Long Road has continued to push ahead. With an exceptional volatility in its market, commencing construction of further nearly gigawatt contracts, of capacity. We talk about our move on to energy that we've already announced and the strong sustainability results later. I might hand to Andy for some highlights on the financial side.

Yes, good morning again. So this is a new slide just summarising three key financial metrics in a quick snapshot. In terms of highlights, operational proportionate EBITDAF continues to grow with one around 60%, but you can see CDC and Long Road are growing strongly. Proportionate capex of over a billion reflects continued material investment, particularly within our growth engines of CDC and Long Road. And our asset valuation has now reached $19 billion, materially up on the first half last year, with a significant transaction-based uplift in CDC's valuation. Value increases in the last six months have been more modest, with nearer-term growth effectively captured in last year's uplift. Thank you, Andy.

Let's go through the portfolio. The big one, CDC, a good result up on the previous comparable half as another 50 megawatts or so of in-construction reached operations and starting to be billing. The big news in the period, as I said before, since our investor day in September has been 140 megawatts of new contracts. announced. The large AI contracts steal the limelight, but CDC isn't a one-trick pony and is seeing strong growth across all its customer segments with wins in government, critical infrastructure and cloud as well, so don't forget those. Looking at the half and its ability to win and be relevant in these new contract discussions, CDC's flexible infrastructure deserves a call out. It's proving beneficial, being able to scale efficiently as computing weight and density increases and also skirt permitting and social licence issues that are faced by data centres that use significant water. Remember CDC is cooling with a closed loop liquid cooling system. So that is, as we talked about in the past, still very relevant. Looking ahead, those contract wins I mentioned underpin our targeted doubling of EBITDAF by 2027 and expect to see a further step up in EBITDA from the following year as the full impact, full year impact of those contracts comes through so that momentum carries through. We mentioned at our Investor Day that the timing of those new contracts meant CDC was tracking towards the lower end of their guidance range this year which is confirmed here as well. Looking further ahead with the strong demand I mentioned CDC is engaged in multiple opportunities with existing and new customers for significant additional capacity. So we see further growth from here. This is going to be supported by the existing significant build program we talked about on this slide, still 450 megawatts coming to completion. Expansion opportunities from densification of current and planned developments, essentially squeezing more megawatts into the same building envelope. That's part of that flexible infrastructure I talked about before. And of course CDC's already deep and diverse pipeline of potential data centre sites. CDC's accelerating its own investment to prepare for and meet that demand with CapEx guidance increased $300-400 million to the $1.9 and $2.2 we have on this slide, billion dollars, for this year. And we expect the CDC equity raise we've talked about for a while now to take place in the next half. Aussie dollar $2.50 is in for two shares. and that will reinforce CDC's significant debt capacity to complete its planned growth. All those data centres need power and that's where Long Road is seeing strong demand. A strong half of delivery though from Long Road through the exceptional volatility of the tax reforms we talked about at the full year, with EBITDAF more than doubling versus the same period last year as over a gigawatt of new projects came online. They are on track to reach their target of 5.5 gigawatts of operating and under construction projects by the end of this financial year. And also in the half they've signed revenue arrangements for a further 200 megawatts of future projects, so that demand that we talk about starting to come through. The US tax credit reforms that dominated the discussions at our full year results, as I said, are nearly complete. All 1.3 gigawatts of the 2025 projects qualified for tax credits with a further 6 gigawatts qualified that could meet the in-service date of 2029 required to get access to those credits, which is essentially equivalent to our 1.5 gigawatt per annum target out to that date. We're looking to qualify more than another two gigawatts of projects between now and when the qualification window closes next year. Looking further ahead then, we're shifting long-roads guidance up $10 million to that $120 to $130 we mentioned here, that's US dollars, largely from the Serrano project coming on earlier than forecast this year. In the next half, we see another solar project, Sampon, coming online and a further 400 megawatts of construction set to commence. Looking further ahead, as I've alluded to, demand signals remain really strong, what Longlow described as a generational growth opportunity at our investor day. That's driven by data centres, of course, but also reshored manufacturing in the US. And their pipeline is well-placed to address that demand, and the business is well-positioned to execute on its 1.5 gigawatts per annum target over the next three years. And even though achieving that will be a lot of work in itself, we do see the potential for upside beyond this as momentum in the market and the business continues to build ahead of the solar and wind tax credits running off in 2030. I'll hand back to you, Andy.

Thank you. One, so the team is doing a really good job of delivering in challenging market conditions with a market leading offering. So you'll see revenue is up $14 million from the prior period with strong growth in mobile and procurement and other offsetting declines in fixed. The standout on this slide is the continued growth in mobile revenues, with notable growth in consumer postpaid connections and postpaid ARPUs overall. Wallet and SpaceX have been valuable differentiators. Handset sales show good growth, reflecting improved trading momentum and strong mobile activation. Key elements within wholesale and E.ON are progressing well, with 1NZ taking a strong share of MVNO growth from onboarding and growing connections, with a couple of new partnerships announced recently. The challenging areas remain challenging, enterprise and fixed, as the 1NZ team covered at our investor day. While the enterprise pipeline is stronger with good winds on the back of the SpaceX offering, like the Department of Conservation, we continue to see aggressive competitive discounting. EBITDAF performance for the first half is down relative to the prior period, and that reflects the circa 25 mil of discretionary OPEC spend on strategic initiatives that I talked about at the full year. But cash flow has improved and is an area of continued focus. Moving to outlook, there is no change in either of our EBITDAF or CAPEX guidance, so that's confirmed today. We are expecting a stronger financial performance in the second half, as Nick talked to at our investor day, reflecting seasonal trading and the benefit of first half price increases flowing through to the second half. In terms of strategic programs of work, T1 is progressing very well with phase one, prepaid complete. SpaceX is also performing very well. More than six million texts have been sent and it's delivering great coverage, productivity, and health and safety benefits. And now we're looking at app-based voice calling. Our confidence in the AI opportunity is growing, with benefits being realised across many areas. This has included AI for network reliability, cybersecurity, detecting scams and fraud, and improving customer service. For those of you still running around with old handsets, hopefully not too many on this call, another reminder of 3G shutdown from the end of 2025. That closure will provide further simplification and cost benefits and free up network capacity. Medium term, we continue to note our intention to continue to grow EBITDA margins to the mid 30s with reduced capital intensity and improved cash generation. And you'll see on the bottom right there the very smart new premises that the team moved into 10 days ago. So that should be great for customers and staff in Auckland on time and under fit-out budget. So nice job team. Back to you Jason.

Same to you. Nothing worse than getting the 3G come up on your phone. Won't miss that in future. Let's stick with New Zealand for a bit and turn to Wellington Airport. These results have been out for a while, so only a quick comment on track performance with the team working hard to offset economic and domestic capacity headwinds. No pun intended in Wellington. Good lift in international shows demand is there for capacity, though, and the headwinds will abate eventually, and they're getting ready for that with the car park and terminal upgrades and the EMAS being installed. Always working on expanding international further. Ever since I've known Matt Clarke, that's been top of his mind. They've announced this MOU with Guangzhou, which is the base for China Southern, and I hope to see a China Southern tail in Wellington at some stage once the EMAS is in place. Diagnostic imaging, a bit of a mixed bag here in New Zealand, a difficult half with a lower than expected margin mix of scans coming through, which means their guidance is coming back a little bit to be flat year on year. Improvement initiatives are underway, including a new clinic coming in Dunedin. across the Tasman Q-scan, double digit growth and guidance unchanged, so a good performance there. Also happy to announce today that both our New Zealand and Australian businesses are collaborating to separate and consolidate their tally radiology businesses. into a new standalone business. So this is literally radiologists in front of computers reading scans that are taken elsewhere, maybe urgent scans from hospitals or overflow work from bricks and mortar businesses. So that's been consolidated into a new single business. We expect more efficiency and growth with a dedicated focus team and immediate scale in the space through this consolidation. Being less capital intense, these businesses tend to trade on higher multiples as well. Quite a lot of work, I know, between the teams to get to this stage and looking to complete the establishment of that by the end of the year. On to renewables. Back to them for a second. On contact energy, we were pleased to acquire TEC's 4.92% stake recently with a mixture of cash and infertile shares, increasing our overall stake to 14.3%. This fits our strategy of seeking scaled cash flow generating businesses while also giving us more financial flexibility as a relatively liquid listed holding. We like Contacts Outlook too with synergies from Integrating Manawa to be realised and interesting development options ahead. What about Garen, you can do this Andy.

Thank you. As given the nature of the business, there's not a lot of news relative to the update that ASAD provided in September. You can see that the first solar plant in the Philippines is beginning to make a revenue contribution, and Gurren has recently bought a wind and solar project in South Korea from a European developer. For Vanda, the key milestone remains approval of the export licence by the Indonesian government. The team is right into detailed planning work with RFPs for the construction of the project assets currently in market. And we're targeting a final investment decision for this project around the middle of the next calendar year. Thanks, Jason.

Nice one. Turning to Europe. Galileo is navigating a tricky market. There's an update here. The demand across the market is still affected by the war and a large data centre build-out is not arriving as quickly there as it has in other markets. I would say that the medium-term outlook is as strong as anywhere. That will arrive. And in the meantime, the team is allocating its capital carefully to the most meaningful projects it has, like this offshore wind one mentioned here, and they've got other interesting wind projects in Battery, and also some modest build like this, their first project in Italy. And lastly, in or at least next to Europe, Cowdata. Although data centre build-out is more modest in Europe than say the US, demand has increased really markedly since last financial year, which we talked about in May. and in a much more tightly constrained market than the US. So an increase in demand with not a lot of supply is creating quite an interesting environment. KO data is well placed with over 20 megawatts of near-term capacity and interest from a number of parties that would see all that capacity contracted. This would be an exciting step change for the business and unlock debt capacity for further growth. On that positive note, go to the numbers.

Thank you. So proportion of EBITDAF, 514 for the half, that's up 7% on the prior period. You'll see most of the uplift comes from CDC and Long Road, reflecting the growth of their operating assets. Proportionate development EBITDAF was up 15% on the prior period, which reflects the growth of our development platforms. proportionate capex was down slightly, but there's still very material capex spend occurring. A quick bridge on independent valuations. I touched on this earlier. It's been relatively modest growth in the last six months following the material uplift in CDC's transaction-based independent valuation in the previous period. the biggest movements right to CDC with part of that reflecting our additional investment Manawa in contact swap positions with some uplift in the contact valuation plus 180ml of cash proceeds which isn't reflected here. Long Road is up 160ml across the period with some drivers noted in our disclosures today and on the downside we've reflected Retire Australia's sale price in this bridge. and the decrease in RHC's latest valuation performed by a new valuer and reflecting a range of factors again as covered in the disclosures today. Funding capacity, this is an update of the graph that we showed at investor day with the announced divestments bar growing. We have material funding capacity available to us. Dividends, we're declaring a partially imputed interim dividend of seven and a quarter cents. We are signalling an intention for an uplift in the final dividend to deliver annualised dividend growth of circa 2% per annum, subject to the usual provisos. We continue to operate the DRP with a 2% discount. And a whistle-stop tour of guidance. We've summarised a few changes in EBITDAF guidance here, which we have touched on as we've run through the pack today. To recap, as we signalled at investor day, we expect CDC to land at the lower end of FY26 guidance, so we've tightened the range to reflect that. Long road guidance is up, largely reflecting the early delivery of Serrano. RHC's guidance is revised downward, which Jason touched on, and corporate cost guidance has increased, reflecting a mathematical impact of an uplift in infantile share price on management fees. In net terms, we remain within our previous guidance range before we adjust for the divestments of retired Australia in 40 South. So taking all of that into account, we've got an updated range of $960 million to $1 billion. We're tightening up our expected proportionate development expenditure range by $5 million, so the revised range is now 85 to 100 mil. and on capex guidance the net effects of an uplift in CDC's guidance and removing our divestments leaves our proportionate capex guidance range unchanged at 2.2 to 2.6 billion. Funding and liquidity usual update on debt facilities and liquidity position. The one thing that's new is that we've made a slight change in the leverage metric that we're reporting, so we've moved to a loan-to-value metric, which we think is more relevant than our previous measure. And as I've noted a few times, we're in a strong financial position with considerable flexibility to support further growth. Back to you. Thanks, Jason.

Thanks, Andy. Let's finish up. First, here's an updated view of the three pillars of the portfolio we introduced at our four-year results in May, with entire Australia and 40 South removed, knowing that those sales are still conditional and to complete. And if you remember, that sort of pillar approach led us to these four medium-term strategic objectives, which are set out here. Most progress in the half on divestments as we've said but directionally at least also on our operating cash flow and these four KPIs continue to be our focus. Next, sustainability, where our work is turning up intangible results with strong GRISP, as we call them, outcomes. These are the people who rate private real asset businesses for their sustainability work. Infratools management score was the first out of 135 peers, and 1NZ performed well, winning medium-sized company of the year at global sustainability awards. This flows through, importantly, to global listed indices. Some of which are here with our Sustainalytics rating among the best in the world. And we're also committed to progressing our SPTI target and we'll continue to report on that as we have here. So let me wrap up and we can go to some questions. Increased investment in contact, strong progress on divestments, growing operating cash flow as I've said. That is all underpinning Infratil having significant financial flexibility to invest for future growth. Long Road and CDC both have strong contracted growth profiles with material earnings expected. You can see that in this half starting to come through. as development sites convert to operations that will support distributions from them in the future. That's my first point. AI represents significant upside potential from that already attractive growth and Longwood and CDC are well positioned to capture that through strong track records, deep pipelines and financial flexibility. As I've said, CDC has multiple opportunities with existing and new customers for significant additional capacity, while Long Road could push beyond its one and a half gigawatt per annum target in the future. Gurin's poised to join at scale, as we've reported, and maybe KO is well positioned as well. We're high conviction on these opportunities, and I said at the outset we feel good about them, but we'll continue always to position the portfolio for long-term growth. scanning as we always do for attractive new growth pillars as well. So I'll finish there and go to questions please Harmony.

Thank you. Your first question comes from Eric Choi from Barranjoey. Please go ahead.

Hey guys, maybe I'll just queue if that's alright. Thanks for the questions by the way. Just a long-winded first one on CDC. You know, you've got a qualitative comment in there that the run range for F528 is pretty good. I was just wondering if there's kind of multiple ways to triangulate maybe even a potential $900 million plus EBITDA outcome. If we think about the investor today, Greg was saying the growth trajectory will continue beyond F527, and then in F527 you're going to grow EBITDA at $270 million. If you just annualize your 140 megawatts of recent contracts, that's like a $100 million benefit by itself. And if you look at your kind of CapEx bill, you'll have sort of 825 megawatts gross, and maybe that's 600 megawatts IT low, but even kind of assuming a sub $2 billion per megawatt number could suggest $900 million as well. So it all kind of points at $9 million plus. Sorry, Jason, is that ballpark?

I think I'm following you. Yeah, yeah, I think I'm following you. I'm just running that through. I think, how would I put it? I think 900 is possible. And I think the way you're constructing the maths is sensible. But it's by no means in the bag, right? That would require additional contracts, which we're working on. And we'll be updating on where we've got to on all of that, certainly by the full year. But I think the way you're constructing the maths is sensible. A couple of maybe comments just listening to you now. In terms of the EBITDA per megawatt, I think it is sensible to be conservative overall but around that because what you see I think going forward and it's maybe a little bit missed to date is the densification that we're seeing with new contracts coming through means that your ROIC on some of those contracts is exceptionally good, even with a lower per megawatt kind of assumption around it. So if you're tracking for an EBITDA number, then I think some conservatism is sensible. We are very IRR and ROIC driven, so you can be assured that we're driving to exactly the same underwriting standards we've talked about in the past, that kind of mid-teens plus. One way that's possible in this environment is that very strong densification we're seeing, squeezing more megawatts into the same space. Does that help?

Very, very helpful. Thank you, Jason. Actually, can I do one more then? Maybe just segueing from your comment on maintaining returns. Obviously, the new information is a bunch of near-cloud deals being signed in the sector. So just listening to what Furbis has to say, they're sort of saying, they've got a gigawatt plus commitment to CDC. So I just wonder if you can tell us or give some color on how their rights of first refusals work, are firmness and neocloud terms at least as good as hyperscaler terms and maybe, you know, hyperscalers are viewed very favorably by lenders. I just wonder how lenders view neoclouds versus hyperscalers as well.

I can give maybe some general comments. I don't like talking about individual customers, although on that particular one, Firmus, so the committed committed is 40. I think we're very clear on that at the CDC side. But having said that, Greg is personally very keen to lean in for the Australian company he's founded to support other Australian companies like Firmus develop what he thinks could be an important export industry in the future. Firmus agrees. So they'll be leaning in to try and support their growth in the way I think Firmus is describing to you, having just listened to what you said there. But having said that, as I said before, we in CDC haven't changed our spots on how we underwrite. The type of contractual profile we need to see, underlying customer mix, et cetera, is all still underwritten. very important that we got very comfortable with the contract we signed, that sort of stuff doesn't happen overnight, the usual due diligence is done. Firmus has a good track record in particular of providing these services globally. And the underlying customer mix, they already announced themselves that Nvidia is there, all goes to support the credit profile that we look at. And I expect, going on to the second part of your question, where the debt providers are. We don't have insight into their particular debt arrangements, but as part of our scanning for AI bubble type stuff, one of the big things we are focused on is underwriting standards for credit. in the space and what we've seen so far suggests actually very sensible underwriting where you're seeing underwriting of debt shorter than useful life, shorter than contracts from credit worthy counterparties and payback periods all still looking reasonably robust. Now we don't see the whole market but that is I guess a comment on exactly what we're looking for to assure ourselves that underwriting standards aren't slipping and people are getting ahead of themselves which we haven't seen

Thank you.

Your next question comes from Ben Crozier from Fawcett Bar. Please go ahead.

Good morning all and well done on the slide result. Just a couple of questions for me. First, just on this identification you're talking about on the data centre side of things, what exactly does it look like? Can you give us a little bit more examples of it? going through to some of the older data centers built 10 years ago and up in the megawatts? So what's sort of required from that point of view? Or is it just sort of the ones in the pipeline saying you're looking at them now and saying maybe they can be more megawatts than what you sort of indicated previously?

At the moment, the latter. Yeah. So stuff in the pipeline has been built. Yeah. Yeah. Yeah. Greg would say all his infrastructure can scale, et cetera, et cetera, but we're not banking any of that in yet.

Yeah.

Yeah.

And then just on sort of free cash flow, if we look at both Wellington Airport and 1NZ, sort of free cash flow was below what you've had as distributions back to Infrator over the last sort of 12 months or so, particularly in this first half for 1NZ. What do you think a sustainable level of cash flow coming out of these entities? Is it what you've distributed now and that these companies have to grow to that level or is it you're just looking at these as a, you know, the moment you've got a bit of a mismatch as you've alluded to at the current level and this is just a be allocation of capital sort of levering up those entities or do you think that say 1MZ and Wellington over time can grow to this current level? Yeah, I understand the question. Do you want to cover it Andy?

Thanks Ben. I mean we are looking for growth from both. In terms of the recipe to get that medium term guidance or outlook that we've talked about for one is is material to that. Wellington Airport volumes, pricing, yes again we're expecting more from Wellington Airport through time and then if you look at the other assets we can reasonably expect material uplift and operating earnings, it's the CDCs and the long roads. Probably more the CDCs, but we've seen the operating earnings grow in this period. So that's the sort of medium-term picture, if that helps.

Yeah, that's pretty clear. And we just asked on one end there, obviously mobile growth is still pretty solid, but it is becoming a bit more reliant on price growth and the connections were slightly down year on year. Do you think over the next few years you can stabilise that market share? I think it's obviously been a little bit under pressure from just two degrees discounting. Is there things you're actually doing in market to improve market share, increasing marketing or anything?

Yes, I mean that's always the aspiration. There is a balancing act isn't there between price increases and market share. I think the team is doing a really good job of managing that balance. Would we like to see more prepaid growth? Yes we would. Now with those customers in the new stack we think we've got greater flexibility in terms of how pricing constructs are created, so watch out for that. But it's a continuing area of focus, but I think the team's doing a really good job in a challenging market.

Is it all price or is there mix? Sorry to ask a question.

Yeah, that's right. Thank you. So there is mix in some of the growth and consumer postpaid has come from prepaid. So I think we would say the quality of the mobile revenues are improving through time.

Sorry, Ben. Thank you very much.

Cool. Thank you. The next question comes from Phil Campbell from UBS. Please go ahead.

Morning, Phil. Morning, guys. Just a few questions from me. Just on CDC, just talking to a number of the Australian data center operators recently, they're kind of indicating there's been like an affliction in demand, you know, quite a substantial increase in demand in the last three or four months, which is kind of what you were alluding to as well. So I was just wanting to get your view, Jason, on kind of what's driving that. You did say it was across the board, but I'm just interested in getting your views on what's changed in the last three or four months that's actually driven that. Then the second question was just on the neoclouds. You kind of alluded to it a little bit, but I'd just be interested in kind of what you include in your contracts to try and mitigate any kind of credit risk around some of these smaller or newer players, and also to what extent kind of NVIDIA plays a role in that. And then just the last question on the long road, I just noticed that there was a bankruptcy of a reasonably large solar developer in the US. And I know at the invest today we were kind of talking with the guys and they were expecting a number of the smaller guys to probably find difficulties there. And it was going to be an opportunity for long row. But I'd just be interested in your views if you had any intelligence as to what's gone on there. And again, I'm assuming it is kind of an opportunity for long row.

Awesome. Thanks, Phil. We'll take those in turn. So inflection in demand, it feels... consistent with what we were communicating at the full year actually, which if you recall was that the demand we were seeing in June hadn't really gone away but it had shifted to where it was coming from. So while go back all the way last year, Hyperscale was doing all the work. In May we were seeing more or less that same demand, very strong, but coming from multiple pockets and you can sort of see that happening globally as well through different people building the infrastructure that is largely going back to all the same uses, whether it's your open AIs or or Meta or other uses like that. So I think it has been very strong since that period we were talking about in May and quite an inflection after that kind of period earlier in the year while the market was transitioning to where it had been 12 months before to the state we're in now. So very positive. And I think the good thing from a data centre operator perspective is you're able to have, as I've put in this presentation, multiple concurrent conversations with multiple people so that if one falls away, there are multiple people who you can still talk to. But none of it's in the bag, I would say. The demand is good. But a lot of the workload is globally oriented. So this is a... This is a key moment for CDC's business, Australia and New Zealand as countries, I think, to get on the front foot to get its fair share of it. And you can see CDC trying to do its best there with accelerating CapEx, getting its pipeline in order, cranking its infrastructure to provide as much capacity near term as it can possibly be provisioned to do, because that is still the key definer of whether contracts can be won in your time to market. So that's a little bit of colour on demand, I think still as strong as we felt in May. On credit risk, it's difficult to go into detail on specific contracts. or even generally, given that we've only announced one. But I would say that we haven't changed our underwriting standards. And key things for us are underlying customer mix, obviously, and NVIDIA being there as a customer in particular is obviously material to an underwriting case. And more broadly from a CDC perspective, There's definitely a desire to help Australia get on the map here, but that building that relationship with NVIDIA is a key strategic plank for us as the key player in this space for a long period of time. So all of that goes into the mix. I think the densification is probably a little bit overlooked as well, as I said to Eric earlier. Clouds tend to deploy at much higher density so your capital employed or capital at risk is quite a different equation as well. All of that then goes into the mix to come up with an underwriting case that we can support. Last one, smaller platforms in the US. M&A has got really busy in the US renewable market for sure. People selling interesting projects, smaller developers coming to the market under stress and knowing there's an opportunity and not a million buyers either. So the team is very active. We were quite active on quite a big portfolio, which we lost to someone else, so the team will pivot to something else. But I definitely think those opportunities are coming up in this next period, partly while we're saying there's the kind of potential for upside here, even if it's still early days and the market is building momentum towards that 2030 date. I think that's covered it all, hopefully. Great, thanks, Liam. Okay, great.

Thank you. Your next question comes from Grant Swinapole from JADN.

Please go ahead. Good morning, Tim. Just a couple of quick ones. You're proportionally with DAPI saying that it's broadly unchanged, other than the latest adjustment. Over the last few months, your translational currencies have moved against the New Zealand dollar by about 5%. What is your outlook for the New Zealand dollar in terms of what you've got in your forecast?

Well, I think we've noted the exchange rates there Grant.

Yeah, what do we have? Okay, so actually it's a softer outlook to give a debt in million dollar terms or in high currency terms.

It's a very modest sum.

Second question, just on your now half-pregnant, beg more half-pregnant, if there's such a thing, on contact at 14.5%. When will you be able to give some sort of cut-out when this thing isn't just a proxy for cash?

I think the options are all there in terms of whether it becomes a core part of the portfolio or, as you say, a proxy for cash. We don't have a strong view or need to form that view uh now i don't think the the tech stake was a little bit their timing their ability to and willingness to transact on terms that were particularly attractive to us in terms of their mix of shares and cash. So I wouldn't read too much more into that other than it being slightly opportunistic. And we haven't really formed firm views either way in terms of proximate cash or a strategic long term holding and don't really need to yet. But I do think It's not sustainable to hold 15% of a listed company for ages. We do have the synergies that are going to come through over the next year or so. I think once those are all fully priced in, then you're probably in a situation where you have to make a stronger call. And that feels, I don't know, six to 12 months away in my mind, depending on what happens to the market price. While we're in that period, we'll keep forming our views and seeing how the rest of the portfolio evolves, what happens to other cash flow generating assets. But in that sort of time period, I suspect we do need to make a call, as you say.

Thanks, Jason, as we go. No worries.

Thank you. Your next question comes from Paul Mason from Evans & Partners. Please go ahead.

I was wondering if you could make some comments on the power position of the business because you've got about 2.5 gigawatts including future build in the presentation. How much line of sight do you have over that 1.6 future build in terms of the power being secured already and do you have like short or medium term time frames for like any that's not fully firm to get secured as well. Yeah.

And to answer the question, I don't have that complete breakdown. I mean, it doesn't really go in the pipeline until we have line of sight on the power. So we'd have line of sight on it. The key point is when it's deliverable, as you're alluding to. Near-term delivery is pretty constrained in both those key markets, and the team are working pretty hard to get as much on as soon as you can in that kind of next 12 to 24-month period because that's where a lot of the demand sits. I don't have the exact numbers, but you couldn't turn on 1.6 gigawatts of power on all those sites today, tomorrow, or next year for sure. It is for delivery in a stage way over those periods. Cool. Thank you.

Thank you. Your next question comes from Stephen Hudson from Macquarie Securities. Please go ahead.

Hi, Jason and Andy. Just a couple from me. I just wondered if you could give any sort of feel for what you're seeing in the stabilised data centre pricing space, so cap rates, around stabilised data centre transactions. And then just a further one on CDC, just on the independent valuation, whether or not the current independent valuation includes Marsden Park benefits and fully incorporates the West Australia campus as well. Thanks.

On the first one, we are quite interested in this space, funnily enough. I don't know, six and a half cap rate for good quality. Stellar outcome, people would be pushing for a tad under six, which you can see in the odd portfolio around the world, but difficult to get as a bit of guidance. The densification, no, is not in the 30 September independent valuation, I'm pretty sure. Andy's nodding here next to me. So, yeah, that's still to come.

And the West Australia campus as well, that does look as if it's in there.

Oh, no, actually. Do you know that? Oh, a little bit.

Just a little bit. And maybe, Andy, straight to you, but the March recut, is that the most likely timing for the independent valuation to incorporate at least those two factors, a last-in-park notification in West Australia?

But potentially, I mean management will need to take a view of it before the independent valuer takes it into account. So I'll put it in the potentially camp. Which record was that Paul? I think you're alluding CDC March valuation.

Maybe December. I'll send him one more. You've indicated that it may be useful for Infratil to secure a credit rating over time. You've obviously had a significant improvement in your parent operating cash flow position. I think you're sort of travelling at about $160 million. Is that sort of job done, or do you think you need to see more improvement there to secure credit? an investment grade credit rating and I guess a part B to that, what do you also need to see on the liquidity front?

It's something we have turned our mind to Stephen. Part of the answer depends what methodology you pursue and there are various options but it's fair to say the metrics that we think are most relevant are beginning to turn up or have already turned up. Yeah, I think that's right.

And you can see one of them in the change Andy's made and how we're presenting gearing in this PIC now, right? So that is one of the measures we think is the more relevant one for what you're talking about.

Yeah. Excellent. That makes sense. Thanks, guys. Great.

Thank you. The next question comes from Siraj Navani from Citi. Please go ahead.

Thank you. Just a follow-up to one of the earlier questions initially. On the secured power of the 1.6 gigawatts pipeline, is it possible to make some comments, Jason, on that? How much is secured already?

As I said, we have line of sight to all of it. Really the key is timing, though, in this environment. Yeah, when can you get it on? And that's a combination of work with, what I was trying to say is work with utilities, but also work on our side of the line in terms of densification and other things we can do on our site. So it seems to be great, I think, at getting big watches of power on in good time frames and continuing to be successful at that as a key differentiator for them.

And then maybe just a related question on the partnership that you announced recently with Firmus. Obviously, Firmus have been in the press talking about much bigger numbers. Is it fair to say that Infratil has capacity in the current book to fulfill all of that or you need to grow the business a bit more?

I think you'd be looking to grow the business a bit more for all of that capacity. Not all of it will need to be where this first workload is. And even they've talked about their Tasmanian site, for example, would be a growth. CDC is leaning into that relationship, because we think it's an important one, particularly with NVIDIA there. But we need to run through our normal underwriting standard as well, and we're looking to, at a CDC level, continue to achieve a very attractive mix of customers. So not all of our pipeline is going to go to Thermos or any cloud. There will be an attractive mix, so you have an expansion would be implied and then I agree with that.

And then in the back there were some comments around CDC where you talked about the impact of development completions into FY28. Is that similar to these numbers that were being discussed I guess early on, the $900 million in response to one of the first questions?

I think, no, just continuing the full year impact of contracts that come online to hit our 660 or whatever it's going to be, 8.27, isn't going to get you all the way to 900. But it will get you beyond the 660, say, wherever we land. So I'm just saying there's my mention through there. To be clear on the 900, all I was agreeing with Eric is it's possible, but not in the back. We will be needing to sign further contracts, which obviously we're working on, and then to even have a chance to hit that. And then it would depend on exactly when those contracts convert to billing as well. So a few things need to fall our way for 900 to turn up as actual. And to be double clear, we're not changing guidance at that point. We're just sort of talking theoretically about how the maths could work. Yeah.

Of course. And just one final one on CDC, I'll jump off then, is on the CapEx side, the CapEx has gone up this period. Is that a function of just putting more capacity to work and not an increase in cost per megawatt?

No, definitely not an increase in cost per megawatt. It's additional capacity and fitting out for new contracts that we've announced in the period.

Perfect. Thanks a lot.

Great. Thanks, Saroj.

Thank you. Your next question comes from Grant Sonopal from John. Please go ahead.

I'm sorry, that's a glitch. Back for more? No, fair enough. Back to you, Harmony. Anyone left?

Thank you. Once again, a reminder, if you do wish to ask a question, please press star 1. The next question comes from Wade Gardner from Craig's Investment Partners. Please go ahead.

Great. Morning, Wade. Hi there. Just getting away from data centres for a second. Separation of the teleradiology business within Q-scan and RHC, does that have the potential to be... material and how does that affect the strategic review and sale of QSCAN?

We think it doesn't detract from the strategic reviews, the strategic reviews going ahead. TallyRad is an faster growing, higher multiple vertical for sure than bricks and mortars and there's been an opportunity for both the doctor owners, remember we own it with them, and for us to grab a position of scale in an interesting market through doing this ahead of the strategic review essentially is how you should think about it. Could it grow to be material? It would be a long road to doing it, but it could, given the dynamics I mentioned. It's much more scalable and not a lot of capital intensity required. To give you a sense of the size, it's sort of roughly 10 million of EBITDA going across and maybe a couple million or more of extra OPEX in terms of setting up and running it as a standalone business from which it should grow from. So, yeah, that could give you a feel for it.

Right, so that would essentially lower the value of what you're selling.

Yes, although arguably, hopefully, on a total basis, you'll have a higher multiple on that EBITDA, so you should be up. Yeah. Okay.

Cool. Thank you. Good one.

Thank you. There are no further questions at this time. I'll now hand back to Mr Boyce for closing remarks.

Thank you Harmony, thanks everyone for the questions and the attention. Really just on a final note, as I said at the outset, we feel really good with where the portfolio is at. With those contract wins at CDC I don't think our valuation for that business is now particularly challenging and nor is Long Road obviously under pressure through that period with a strong demand ahead and the business is well positioned to win new contracts and accelerate for further growth from here on top of already attractive contracted contracts. That stuff isn't in the bag. It needs to land, and we need to win it, but we feel good about our prospects of doing that. So I'll finish there. Thank you from Andy and I, and see you around.

Thanks, everyone.