Channel Infrastructure NZ Limited Analysis

Overview

Channel Infrastructure is New Zealand’s leading independent fuel infrastructure company, based at Marsden Point, in Northland. Channel Infrastructure primarily acts as an import terminal for the fuel needed to power New Zealand’s economy. On behalf of its customers, the company receives, stores, tests and distributes transport fuels safely, reliably, and efficiently to the Northland and Auckland markets.

Performance

The following information was extracted from Channel Infrastructure NZ Limited's Full Year Results, released on 27 February 2025:

Channel Infrastructure (NZX: CHI), New Zealand’s largest fuel import terminal, has today released its financial results for the six months ended 30 June 2024 (HY24).

Highlights

• Strong safety track record maintained
• Throughput up 3% to 3.5 billion litres, reflecting continued growth in jet fuel demand and relatively stable diesel and petrol demand
• Updated Envisory outlook continues to show that Channel’s business will be underpinned by jet fuel demand and the need for a liquid fuel decarbonisation pathway for aviation in the long-term
• Continued world-class delivery of capital projects with the Transmix project completed, and the multiyear conversion project and private storage projects on track to complete safely, within budget and to schedule
• Three new storage contracts signed delivering ~$120 million (before PPI indexation) in incremental revenue over a 15-year period for an investment of between $55-66 million of incremental growth capital expenditure
• Successful bank refinancing and $50 million capital raise lowers Channel’s WACC and positions it to deliver on future growth opportunities
• Marsden Point Energy Precinct Concept released which outlines a range of potential energy projects that would boost New Zealand’s energy resilience. Being considered by the New Zealand Government as a potential Special -Economic Zone
• Entered into a conditional project development agreement with Seadra Energy Inc, who is partnering with consortium members Qantas, Renova Inc, Kent Plc, and ANZ, to develop a biorefinery at Channel’s Marsden Point site
• $381 million uplift in fair values of import terminal system and unutilised land resulting in an uplift in Net Tangible Assets to $1.98 per share
• The Board has declared an unimputed ordinary final dividend of 6.6 cents per share taking total dividends for the year to 11 cents per share for FY24, representing a dividend payout ratio of 69%
• FY25 EBITDA guidance of $89-$94 million, stay-in-business capex guidance of 8-10% of revenue and Normalised Free Cash Flow conversion in line with FY24