Shares in Infratil Ltd (ASX: IFT) have plunged on Tuesday after the company issued "underwhelming" guidance for next year.
The company, which invests in data centre and renewable energy businesses, said full-year EBITDAF was up 11% to NZ$989 million, while its total asset value was up 13% to NZ$20.6 billion.
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Outlook seen as weak
Infratil said it expected earnings to increase 21% in FY27, which RBC Capital Markets said came in below their expectations and which were "soft" and "underwhelming".
The company said its earnings were mainly driven by investments in the Australasian data centre business CDC and the US renewable energy business Longroad Energy.
Infratil Chief Executive Officer Jason Boyes said the company was "very pleased to deliver a 13.9% total shareholder return across FY26, despite ongoing market noise and volatility".
Demand for efficient AI infrastructure is striking and may be the investment opportunity of a lifetime. CDC's announcement in early May of Australasia's largest ever data centre contract has swept aside the market ups and downs of FY26, adding approximately 35% of returns since 31 March. CDC has demonstrated Australasia's opportunity to attract global computing capacity, supported by regional stability, competitive build costs and access to renewable energy.
Infratil said CDC now had more than 1 gigawatt of contracted capacity and was forecasting earnings growth of more than 150% to more than $1 billion in FY28.
The company said that Longroad was also benefiting from data centre expansions.
Longroad Energy's EBITDAF increased 170% to US$121 million in FY26 and is forecast to grow strongly as more generation enters operation. It has lifted its solar and battery projects under construction to a record 2GW in FY26 which combined with the 3.5GW already in operation, will deliver total generation capacity equivalent to about half of New Zealand's current capacity. With electricity demand in the USA projected to increase by about 30% to 50% by 2040, Infratil has agreed to provide a further US$300 million to support Longroad's acceleration over the next two years.
Longroad is targeting US$1 billion in earnings by CY29/30, Infratil said, underpinned by the recent acquisition of a very large-scale, circa 2.8 gigawatt solar and battery development.
Sticking to the strategy
Mr Boyes said the company was constantly on the lookout for new opportunities, with data centres and renewables likely to remain the best bets.
We're exploring more opportunities to bring power and data centre expertise together – delivering integrated solutions for customers in a way that is more efficient and at greater scale. Longroad, for example, has established a dedicated data centre team and is progressing options to develop more than 4GW of grid-connected data centres, co-located with its solar and battery storage projects. These options could include simply providing the sites as powered land, or with powered shells developed by Longroad or with other partners.
Infratil shares were 6.4% lower on Tuesday at $12.22. The company is valued at $13.05 billion.
