Johnny Lee writes:

Infratil’s nationwide roadshows are in full swing, as the infrastructure investment company tours the country updating shareholders on recent developments.

I attended the Kapiti presentation, alongside several hundred investors and interested parties. Deputy CFO Matthew Ross provided a clear summary of Infratil’s current position, recent decisions, and the company’s intended future direction.

Current state

Rapid growth in valuations over recent years has changed the makeup of Infratil’s portfolio. It is now heavily concentrated in three areas: its data centre business, telecommunications provider One NZ, and US-based renewable energy developer Longroad. This concentration may increase, as the company continues to invest in digital infrastructure and renewable energy.

This focus has contributed to share price volatility in 2025, driven by external events. The share price ended 2024 at approximately $12.50, before falling sharply and then rebounding in early April.

Some volatility was short-lived. For instance, the threat of tariffs spooked markets before being postponed (or possibly cancelled) days later. Other developments, such as the Deepseek disruption in January, highlighted lingering market uncertainty toward data centre investments, prompting some investors to reduce exposure.

Infratil also noted that its recent inclusion in the MSCI Index contributed to share price swings.

Recent moves

A key development has been increasing Infratil’s stake in its Australasian data centre operator, CDC. The main goal was to gain greater governance rights and strengthen oversight of CDC’s strategic direction.

At One NZ, internal system modernisation remains a challenge. Cost control, automation, and use of artificial intelligence are ongoing priorities.

Longroad has been active, responding to policy and regulatory changes. Proposed tariffs on Asian-sourced batteries and the potential winding back of US tax credits prompted the company to accelerate investment and procurement. While its solar panels are primarily sourced domestically, batteries remain a supply chain vulnerability. Longroad took advantage of the temporary pause on tariffs to secure battery inventory.

Infratil hopes to retain access to current US tax credits for as long as possible and is positioning for their potential return under a future administration.

Future direction

Infratil’s strategy remains focused on holding a small number of large investments in key infrastructure sectors, rather than diversifying broadly. Control and scalability are prioritised over breadth.

Of the hour-long presentation, nearly 50 minutes were dedicated to digital infrastructure and renewable energy. It's other holdings in Wellington Airport, healthcare investments, and Contact Energy were mentioned only briefly.

The company’s thematic focus remains on "ideas that matter": investments in sectors with long-term relevance and growth potential. At present, those are digital infrastructure and renewable energy, and further investments are expected in both.

Four roadshow events remain this week: Dunedin, Invercargill, Napier, and Nelson.

Channel Infrastructure

Last week, Channel Infrastructure (formerly New Zealand Refining) also delivered a presentation as part of the Rapid Insights Conference hosted by Craigs Investment Partners and Wilsons Advisory.

The company has transitioned from refining to importation and distribution of fuels - petrol, diesel, and jet fuel.

While investor interest in the company was historically limited, Channel is adapting to a changing energy landscape. A chart in the presentation outlined expected declines in petrol and diesel use over time, reflecting both technological change and shifting political priorities.

Jet fuel, by contrast, is expected to grow in demand, supporting Channel’s long-term role. This aligns with Auckland Airport’s recent comments on anticipated growth in air travel.

Channel’s success will hinge on effectively using its land and storage assets. It has already secured inflation-linked contracts with major counterparties including Z Energy and Higgins, and sees opportunities to expand beyond Marsden Point.

Future capital deployment may include new investments or industry consolidation, supported by relatively strong access to capital.

The company aims to maintain a stable and growing dividend, ensure workplace safety, and pursue selective growth in revenue.

Travel

Palmerston North – 1 July – David ColmanLower Hutt – 9 July – Fraser HunterChristchurch – 23 July – Fraser Hunter

Please contact us if you would like to make an appointment to see any of our advisers.

Chris Lee & Partners