Infratil Limited

[Foreign Language] I'm Jason Boyes, the Chief Executive of Infratil and welcome to Infratil's annual results presentation for the year ended 31 March 2026. I'm here with our CFO, Andy Carroll.

Good morning, Andy.

Good morning.

And together, we're going to run through the annual results presentation that was released to the ASX and the NZX this morning. You can also find our annual report and a whole bunch of other supporting information in that release.

So without further ado, let's get going. This is an overview of the company that all of you will hopefully be familiar with.

We're very proud of the strong track record that we're showing on the right-hand side there, very strong growth over many periods and remarkable over such a long period since inception. If we then switch to having a quick look at the portfolio.

This is a snapshot of the portfolio as at 31 March. We had some farewells and a welcome during the year.

During the year, we sold RetireAustralia, Infratil Property and FortySouth, our towers business. We also sold Manawa Energy into Contact Energy as we progressed our medium-term target that we described last year of divesting up to $1 billion of assets over the medium term.

One welcome to Anytime Radiology, which was established during the year, our teleradiology business that we spun out of our ANZ radiology businesses. I'll talk about that a little bit more later on.

So quickly to the highlights. We delivered growth in what were very volatile markets.

I'll let Andy talk to the numbers in a second, but quickly focus on the 2 main drivers of growth, CDC and Longroad, both have their growth being accelerated by the massive build-out of AI infrastructure globally. CDC is now a global scale data center operator with more than 1 gigawatt of contracted capacity and a strong growth outlook.

That's underpinned by its new Moody's Baa2 public credit rating, which shows what a differentiated platform CDC continues to be for us. Longroad Energy is also accelerating, delivering strong earnings growth during the year and with a strong growth outlook as well that I'll talk about in a second.

Our largest New Zealand businesses were resilient with Wellington Airport and One NZ delivering their guidance and positive EBITDAF growth despite challenging market conditions. It wasn't all rosy though with Gurin Energy and Galileo and renewable energy development, having a difficult year, and our New Zealand radiology business dealing with a weak local economy.

I'll talk about both of those in a second. We're on track to achieve that $1 billion divestment target I talked about with 600 sold and a sales process underway for Qscan.

And we also announced our A credit rating, Standard & Poor's BBB+, which transforms our access to debt markets, which is perfect timing given the strong growth we're seeing from CDC and Longroad, in particular. Lastly, strong ESG performance across the portfolio is translating into higher ratings as we put out here, which exposes us to more ESG-oriented investors around the world.

Over to you, Andy, on the financial highlights.

Thanks, Jason. And just a couple of quick call-outs, which I'll touch on in a little more detail later on.

So $989 million proportionate operational EBITDAF, so almost $1 billion in the top half of guidance, $2.7 billion of proportionate CapEx. We've talked about that in the past.

That investment driving future earnings growth. And then in terms of total asset value, that's up 13%.

There's a few other steps there, but I'll touch on those a little later. Thanks, Jason.

Thanks, Andy, back to you later. And let's go through some of the portfolio companies and of course, starting with the big one, CDC.

A strong operating performance from CDC achieving their guidance, a nearly 20% uplift in EBITDAF during the year. Large uplifts in built operating capacity with 350 of the 450 megawatts that were under construction at the start of the year, completing construction.

CapEx was up $400 million to $2.1 billion, completing those builds, but also getting started on further builds with 572 megawatts under construction at year-end. The big news, of course, was the 555-megawatt customer contract announced on 5 May just after the 31 March cutoff, but important to mention, lifting our contracted capacity to over 1 gigawatt as we've got here.

Together with existing contracts that are expected to come billing as construction completes, as shown in this graph on the right-hand side, which is the same as the one we showed on the fifth. CDC has good funding flexibility to deliver that growth and more as CDC's CFO outlined on the call we had then.

This is supported by the credit rating, I mentioned before, which gives it access to multiple debt capital markets at a much lower cost than if it weren't rated. The first step in that program is the hybrid AMTN wholesale bond program or a bond issuance announced by CDC yesterday.

Looking ahead, that FY '27 EBITDAF guidance is that big jump we showed in March and again on the fifth to $680 million to $720 million. This exceeds our guidance last year that we were doubling the $330 million delivered in FY '25.

We're maintaining that $1 billion EBITDAF for FY '28, that we talked about in May, more than doubling again last year's earnings over the next 2 years, and we're on track to double again to $2 billion in FY '30 once the contracted capacity is fully deployed over FY '29. So remarkable growth really doubling earnings every 2 years, and that all contracted already.

Lots of work to do, but the contracted side is in good shape. CapEx guidance is understandably increasing also double last year's $2.1 billion at the top end, excluding land because that is lumpy.

And lastly, but importantly, we see further growth potential from here with unprecedented demand continuing for further small, medium and large-scale deployments that have the potential to accelerate the business even further towards the back end of this decade and beyond. The team are currently -- our contract discussions are progressing well for more signings, I should say, in the first half of this financial year and beyond as well.

And finally, the team are actively progressing a gigawatt or more of extensions to their growth pipeline which, as at 31 March was say a bit over 1 gigawatt, which you can see on the next slide here as well, just on the right-hand side, that's unchanged from what we showed in May. CDC is well positioned to continue to capture outsized growth as what we see and what we've been saying for some time is quite a differentiated platform with strong access to funding, driving off strong contracted earnings and premium customer mix with capability and pipeline enabling it to scale efficiently and continue to deliver strong returns for Infratil as the shareholder.

Moving then to Longroad. Probably the most new news in this section of the growth businesses anyway.

It also delivered its guidance lifting EBITDA for giant 170% over the year to this $121 million we are showing here. But importantly, future growth is strong, too, with another 2 gigawatts under construction and coming online over FY '27 and '28.

And a further 1.7 gigawatts expected to commence construction this year. So those 2 together, 3.7 gigawatts will more than double the capacity in operation at the beginning of this year, 3.5 gigawatts, all put into construction over the next -- last year and this year.

So another business looking to double every 2 years, if you like. Because its growth is so strong, we also report in track the step we're talking about on the right-hand side, OpCo run rate EBITDAF, which is a little like CDC's contracted earnings or EBITDAF that I just talked about that $2 billion I just talked about for them.

So how we do that is shown on the right-hand side, it's worth just stepping through it. At the end of FY '26, those earnings were USD 367 million, in line with the guidance we set at the start of the year as well.

So what that does is we take reported EBITDAF and then we add back the contracted annualized earnings of the projects that are under construction in that year, which is seeing that 144 on the right. And we also add back the development expenses, which are really investment in new projects and the corporate overheads to give a view of value of the -- just the operating projects or what we call the OpCo, the operating company.

If you wanted to convert that into a valuation, we see listed comps trading in the kind of 13 to 15x that number or that number looking a year ahead because the business is growing so quickly. And if you used about 60% gearing or 8x EBITDAF for leverage, remembering the revenue is contracted for 30 years or more with minimal maintenance CapEx, that should give you a good sense of the equity value pretty close to the independent valuation that we're putting out there.

Lastly, you might recall that law changes in the U.S. last year mean that tax credits for solar projects would expire by 2030.

But your projects had to be qualified in -- by later this year actually. We're confirming on the bottom of this slide that we've qualified more than 6 gigawatts of projects now to support our development targets out to 2030.

And remember that battery storage credits, which applied to half the CapEx effectively of the projects these days remain accessible through to 2037. So a much longer runway on that support from the federal government under the current settings.

These tax credits, what they do is they effectively reduce U.S. renewable energy power prices.

But renewable energy is still competitive without them. So we believe you can look through them for a lot of purposes.

The expiry though, of the solar tax credits should mean a big build program out to 2030 as developers and power buyers look to take advantage of them before they expire. So now looking ahead.

The biggest news here is that Longroad has materially increased its target development cadence for the next 4 years from 1.5 gigawatts per annum to 2 gigawatts per annum on average, a 33% increase. That's supported by what we've talked about for a long time now, the robust demand for electricity, supported by AI and broader electrification and decarbonization still going on in the U.S.

It's also supported by the good work the team has done, tax qualifying that more than 6 gigawatts of projects I talked about. And also new news today, a super large project Longroad acquired in April.

It's a 2.8 gigawatt solar and storage projects. So nearly as big as our entire operating fleet today and 1 project and importantly, has a PPA in place.

That project on its own would develop -- would deliver, I should say, the uptick in development cadence we have guided to. So there's potential to grow even faster, I think.

And the other key things to know about this project are it's expected to come online calendar year '28, '29, so towards the back end of the decade. And also that is contingent on 2 regulatory approvals that Longroad is confident can be obtained based on similar projects that have recently been approved and the clear need for the power.

We expect to be able to update on progress on those approvals over the year. What does that all mean?

If you took the average earnings from our projects, that uptick sees on the right-hand side of that graph, Longroad targeting $1 billion of OpCo run rate EBITDAF, run rate earnings measure I mentioned earlier, by the end of the decade. Double what those earnings will be at the end of this year, so that doubling in 2 years that I've mentioned.

I've also talked to multiples. You could use those to back solve the equity value of what I just talked about.

Or another way, we've guided in the past to about USD 300 million of net present value creation for every 1.5 gigawatts of projects because that's what we were trying to do every year. So $300 million a year.

So -- and I'd say that's conservative. If you lift that by 33%, the number of gigawatts you're delivering, then the NPV is bigger as well.

So another $100 million of NPV creation per annum is kind of what we're talking about. Or by the same metric, if you looked at our new project, that's kind of 2 years of development or USD 600 million of NPV, just to give you a rough sense of it, a significant acceleration, I would say, compared to where we were before.

But that's not all. At the bottom here, we're revealing that Longroad has also been actively progressing its own data center strategy to develop at the moment, 4-plus gigawatts of grid connected data centers co-located with Longroad solar and storage projects.

We can develop the power shell to have more value creation, either alone or with partners or simply sell that land as powered land to data center developers. Either way, you're able to accelerate Longroad's own core energy development pipeline developing through renewable energy for those facilities.

We're not ready to value this pipeline. It's not on the independent valuation, but it's a very logical and interesting opportunity that we intend to pursue.

So lastly to guidance. We're guiding a modest uplift this year, $120 million to $135 million.

That's because a lot of the construction that's underway will complete towards the back end of this financial year and actually into FY '28, but also because of increased development expenses really in line with that acceleration of the development business. I just talked about that increased development cadence.

That's taken another $20 million of that. But you can see the impact of that strong development addition, the extra 1.7 gigawatts we see coming under construction this year coming into the OpCo run rate EBITDA at the bottom, lifting that to nearly $500 million over the year, so $120 million increase.

Infratil has agreed to provide an additional $300 million of equity funding to support this acceleration, which would be deployed over the next 2 years, and we see very strong returns from that, obviously. I think that's it on Longroad.

Maybe over to you Andy, is it?

No, no, two more.

Two more. It's actually -- this is a good spot to put this because the U.S.

has been incredibly strong, but as I mentioned in the opening, elsewhere, it's been a little tricky. Gurin has done well in Southeast Asia progressing its projects.

But really, the big focus is on this key approval that we're waiting for, for Project Vanda, its own very large project. The government-to-government discussion appear to be producing positively, which are needed to facilitate that approval.

But it's fair to say that's taking longer than we hoped, and we hope to be able to update on that over the half. Turning to Europe.

That has been a difficult market as well. Really the prolonged effect of the Ukraine war depressing demand for new electricity there means that the markets have reached a kind of mature stage and values for earlier-stage projects have reduced markedly, making our target returns more difficult to achieve.

That's led to a strategy reset over the last half to focus on projects that are nearer term, so taking off the longer-term projects and the ones that can take the business to more material scale, which would be more resilient business over the near term as well, and we're showing the targeted state for that business by 2030. That resulted in some write-downs and write-offs, which I mentioned here, which are not particularly big or material from an Infratil perspective, but we're clearly not what we hoped for or what the team hoped for from the business.

They've got a good plan in place, I think, to get the business back to growth, and we'll be reporting on that over the half as well. Maybe now you, Andy.

Yes.

Thanks, Jason. One, the team is continuing to deliver well in challenging market conditions.

EBITDAF up $4 million on the prior periods. We promised a stronger second half, and that's what the team has delivered.

A few call-outs on this slide. So mobile revenues continuing to perform well.

And you'll also see an uplift in handset in other sales, which it does talk to the effectiveness of One Wallet as a retention tool so that program is going well. EonFiber had its first full year of operation with EBITDAF of $65 million.

And of particular note, secured a material undersea contract with a hyperscaler. Now there's work to be done there, so you don't expect revenues to turn out for 12 months or so and there is some CapEx and other spend associated with delivery of that contract over the next 12 months.

In terms of metrics that people regularly ask us about free cash flow and dividends, you'll see that they have both doubled over the last 12 months and that graph is on the next slide. In terms of outlook, my commentary has been largely unchanged for the last 18 months.

So soft economic conditions, challenging competitive environment and limited immigration, which all contributes to a pretty challenging operating environment. The team is conscious of careful financial management in those circumstances.

So a focused revenue growth in particular areas, and you'll see that there are price increases that have been applied to both mobile and fixed in April. We're also keeping a close eye on costs, while pushing on a number of key strategic programs of work.

You'll see to that end of cost control. We have over 50 AI solutions working across the business now delivering cost savings, productivity benefits and customer experience benefits.

The IT program continues to track to plan. Moving to guidance.

There is an uplift in EBITDAF guidance relative to the previous year. CapEx is unchanged.

I've noted some of the EonFiber-related spend. And our medium-term EBITDAF and EBITDA margin and CapEx intensity targets remain unchanged.

Thanks, Jason, back to you.

Nice one, Andy. Back to you in a minute, actually, but let me talk through the rest of the portfolio, starting with Wellington Airport.

Their results are already public. But from our perspective, resilient performance given the ongoing aircraft capacity issues last year and the weak economic environment, domestically, good growth in international, though that you can see here.

The outlook for the next year is relatively flat with aircraft back, but fuel crisis affecting capacity, of course. We'll have to revisit that guidance number if the crisis continues to be protected.

But the team is doing a great job managing them with the guidance so far, sensible CapEx to continuing and route development with the runway now able to accommodate long-haul flight to Asia. Matt tells me, and I'm looking forward to that.

Next is Kao data. Quickly on the London data center business, a strong year actually doubling its contracted capacity.

So that, I think, actually is nearly sold out at the moment. So you can see why Kao acquired a prime London data center site that we've talked about here, which would be attractive to multiple hyperscalers in that location and is progressing that as well as its existing Manchester site.

So it's growth ahead looks good, just at a much smaller scale than CDC, of course, from a shareholder perspective. Lastly, I think, is our health care businesses, but not least at all.

So diagnostic imaging, of course, it's been a difficult year, as I said, at the top for our New Zealand business with EBITDAF slightly down over the period, reflecting cost and competition pressures. The excellent team there, though, is implementing our performance improvement plan, as we've said there, to return the business to growth, and it's early days, and we'll report back at the half on that.

And Australia, on the other hand, Qscan has had an excellent year, delivering double-digit growth from a range of initiatives executed pretty well. The sales process for that business is ongoing, and we expect to update on that in the half as well.

And then finally, Anytime Radiology, the newest addition to the portfolio. is now up and running after being spun out of our ANZ businesses.

It's a pure-play teleradiology business, which is a subsector of radiology that's growing faster than traditional ones. It's small now, but we think more are likely to be successful and attractive in this stand-alone format.

Back to you, Andy.

Thank you. I think I've touched on a number of these metrics already.

So operational EBITDAF in the top half of guidance. Key drivers, CDC and Longroad as we had foreshadowed.

I didn't touch much on Infratil investment, but that alongside that proportionate capital expenditure are the ingredients for future earnings growth in shareholder value accretion. So I think those are the key numbers to touch on there.

Independent valuations, just touching on a few of the movements there. So CDC is the largest one, unsurprisingly, and part of that increase does reflect the additional investment that we made into CDC through the period.

If I touch on some of the pinks. So One NZ is down $320-odd million, and that broadly reflects that reduced growth outlook that we've seen in the New Zealand economy.

So moderated growth outlook. And I think now the midpoint of that independent valuation does align with market consensus.

Galileo is weaker for the reasons that Jason has outlined. So some write-downs.

And also some of those early-stage projects, less value attributed to that pipeline. And RHC also reduced.

So underperformance relative to guidance. So moderated growth outlook from a different base.

So those are a few things, that's just to call out on the independent valuation slide. Thank you.

Dividend. This is exactly as we foreshadowed at the half year, so $0.1365.

There are no imputation credits attached, and we will continue to run the DRP with a 2% discount. Funding and liquidity, I will spend a bit more time on this slide because there are some changes here.

So inaugural S&P BBB+ credit rating. We announced that in late December, and that is proving material in terms of reduced funding costs.

Broader access to capital sources and improved funding terms. So we have some brand-new banking arrangements in May.

That's 1 example of that with cost savings and improved borrowing terms realized. Today, we're launching our first capital bonds PDS, which should also enhance funding flexibility and you can expect to see further work from us to diversify funding sources over the balance of the this financial year.

Just to give you a sense of some of the cost saving benefits. So we see savings in the order of $10 million per annum in interest costs in the medium term.

And last but not least, on the slide, liquidity, $1.1 billion of available liquidity at 31 March. And clearly, we've enhanced that with the partial sale of our Contact stake recently.

Guidance. We've talked a lot about growth this year.

So proportionate operational EBITDA up materially 20% odd in this year, midpoint 30 and 50. And that largely reflects the CDC uplift, which we've talked to you about previously, proportionate development expenditure debts up per touch.

Corporate cost guidance. Now we have broken that out separately.

We did have that sitting within proportionate operational EBITDA. So all of the component parts here are unchanged, but there is a different dynamic that drives corporate costs.

That's largely related to the Infratil share price as opposed to proportional operating which talks to the earnings performance of the investments. We think it is helpful to break out those component parts, so you can better understand the individual drivers.

If you want to reassemble the guidance fruit salad, you're very welcome to. So yes, corporate costs called out separately.

And then proportionate CapEx guidance range, that's up 50% again, largely reflecting that CDC effect, which we have previously guided on. And I think I'm back to you now.

Thanks, Jason.

Great. Thanks, Andy.

Is there a slide you switched around. Great to see the $1 billion of proportional operating EBITDA, even if you reassemble the fruit salad as you say, I think we're touching over that, which is correct to see that finally happening.

I wanted to touch on 2 things before wrapping up and going to questions. First, sustainability highlights.

As I mentioned at the top, strong progress has been made across our portfolio and portfolio companies, some of which I mentioned here, resulting in the improved ratings, which we'll continue to work-on to improve I think the key metric to watch is our SBTi target, which really hinges on the scoping work CDC is doing to set its own SBTi target now that its first report under the new Australian reporting regime nears completion. So that's the 1 I would focus on from now.

And then the second thing is our medium-term strategic objectives that we set at the -- it was last year, wasn't it? On the first, we set a target of $1 billion of divestments and completed $600 million, as I said, with Qscan underway.

We see the potential for another $1 billion plus of divestments over the medium term as well of investments we think are unlikely to scale under our ownership. And as we said last year, we expect to be reinvesting those into growth or new businesses.

On the second objective, this is on track with improved distributions from One NZ and a stronger outlook for CDC and over the longer term, Longroad. I think this year, we needed a little under $90 million to cover all of the dividend being balanced, Andy.

So this is in sight. On the third, frankly, we're reassessing this a little bit.

CDC and Longroad have accelerated materially and see a very high bar for new ideas, which we have continued to look at. But now our focus is on interest in adjacent opportunities like Longroad's own data center ideas, for example.

In the near term, assisting these adjacent ideas is a high priority, and we'll update on this and the strategic objectives, I think, at our Investor Day, which I think is in September this year. That's probably the right place for that discussion.

Lastly, this year register while progress has been made, this still an important work on for the reasons we outlined last year. So let me wrap up.

Growth this year has been excellent, but we continue to position the portfolio for further step changes in growth ahead. CDC is facing this once in a lifetime opportunity to develop AI infrastructure globally.

I mean a globally relevant scale with strong demand and its deep capability pipeline and funding flexibility to continue to accelerate. Longroad also, right, setting materially higher development targets, its own path to the billion club, $1 billion of run rate EBITDA by the end of the decade, backed by the new very large-scale project that's been acquired, subject to regulatory approvals, of course.

But we continue to develop other materially -- potentially material growth opportunities, right, including Longroad's data center options, which we've revealed today and don't forget Gurin's Vanda project. As Andy outlined, Infratil has significant flexibility to support that growth, especially with the new credit rating.

And we continue to focus on lifting operational performance across the portfolio, as shown by One NZ and Qscan's strong performance this year and actually Wellington Airport, I would say, and improvement plans in place for the New Zealand Diagnostic Imaging business and Galileo. I feel like we have navigated the noise of 2025.

And while there's plenty of noise still about in the world, were as positive as ever about the opportunities and options for the portfolio ahead. So thank you to all the teams and the portfolio companies, all the teams at Morrison and all our customers and stakeholders for the progress we've made this year.

We might go to questions.

Could I please ask 1 question on Longroad and 1 on CDC. Just on Longroad and on the data center strategy, I was wondering if I could confirm, A, what the book or market value of that land is?

B, that the IE hasn't included that land value and the valuation. You said included the projects but haven't included the land value as well.

And C, that land value we should be thinking of that as maybe the floor. I'm just referencing your annual report, I think you made a comment you want to bring power and DC expertise together.

And I was just wondering, does that mean you can leverage CDC? And Longroad DC maybe even generate CDC type level returns, which would build cases more compelling than the land one.

Sorry, I'll pause there.

Yes. I think you've put all the pieces together there, well, Eric.

I don't think the landers will be in the valuation or if it is, it won't be particularly material. The land that we're generally acquiring, it's not metro or anything, and it's very competitively available.

I think the overall expenditure on this initiative would be in the low single-digit millions, and that's really just because you're converting stuff we already have or buying the land next door and what they do is put in an application to take load out of the grid rather than put it in to give you a sense of the activity. But there's so much alignment, I think, between this stage of development that longer it does and what CDC already does in Australia, that have made sense, I think, to recycle a lot of that capability and see what progress could be made.

And breakdown surprised how much they've managed to progress over 6 months. So none of that -- none of the potential PV of those being turned into powered land or being sold as powered land is in the independent valuation yet.

I think there is an interesting potential for CDC and Longroad to work together and certainly those teams have and are building a relationship. But even without that, there can be other partners in the U.S.

if that doesn't really work for CDC to develop it or that they could partner with. There are small development teams around.

I think Longroad and the shareholder group is still figuring out what the best way to take advantage of this opportunity is. Clearly, there's a lot more present value to be got through developing the data center as well and leasing it out and sort of stacking that on top of the value you're generating from the energy.

If you look at what CDC earns and turn that into U.S. dollars and maybe they could bit off, it's pretty interesting, right?

We make $70,000 of EBITDA per megawatt roughly from a Longroad energy project. That's pretty much what our average is saying.

You would be making more like $1 million of EBITDA on a data center if you added that to it. So pretty interesting kind of step-up in the NPV that's potentially available to Longroad or its partners.

That's how we're thinking about it.

It's very useful. And then just a quick 1 on CDC.

I'm just trying to do our own analysis on where that IE valuation could go once 500 megawatts in first half or any first half '27 is affected. So my question is, does the IE reference contracted EBITDA multiples at all?

And if so, is the benchmarking peer set in the mid- to high teens. And the piece of information we're missing is the CapEx that would be required to fulfill the existing 1 gigawatt plus of contracted capacity.

So maybe if you could help us out with that, so we could do this back of the envelope.

Yes, I understand the question. The independent valuer does reference a wide range of comps -- listed comps, but also the contracted earnings statistic you referred to, which I think is probably the most common way of eyeballing the valuation of these businesses.

It would be in the mid- to high teens. And of course, you've seen businesses trade at a 20% in the past as well on a contracted earnings basis.

You have to adjust that for the CapEx, of course, which is why you've got your next question. So hopefully, that answers the first one.

On the CapEx, we gave the guidance in May, which we were holding here, which is this kind of mid-teens per megawatt x land that you can use that. What you're probably missing is how much of that has already been spent or built, I am guessing.

And if you think of the 572 megawatt we're building now, I think we've spent about 1/4 of the CapEx for that amount of the megawatts. So hopefully, that will give you pretty close to, I guess, admit the number at the back end in a CapEx number.

I don't know if you had a quick follow-up to that and make sure I got your question.

I'm glad that Eric asked that around the percentage completion. I was sort of working off $3.2 million to $4.2 million divided by, say, $15 a megawatt would imply that it's about 50% complete, but you're saying it's more like a quarter complete.

That's of the 572 megawatt underway.

At the end of March. Yes.

Yes.

Extension to that, if you've sold -- once that's completed, you'll have roughly about 1.2 gigs of which you've sold about one. If you did another big contract, and therefore, we're starting to talk about developing the pipeline.

What's the time frame to sort of -- if we push more today, how long to build a 100-megawatt data center?

Yes. So we have 100-megawatt of sort of blocks of available still in our pipeline, you can sort of see that right.

And they would be -- I talked in the voiceover about sort of towards the back end of the decade. I think is what you're asking is when could that turn up in earnings when where is the real potential upside.

I think this year is largely done, right, '28 is capacity for upside, but then more '29, '30 onwards is the way to think about it, Wade, I think that's what you're asking.

Yes. I'm just sort of -- I guess, if I look at the 1.6 gig of pipeline, if we were to include the development gains of that and our valuation, a big part of that is understanding when those development gains arrived.

Are we talking 5 years? Are we talking 10 years?

Yes. So I would say nothing much in the next 2 years and then from '29 onwards is kind of what I'm saying and bigger chunks from 2030 onwards.

Okay. One, previous guidance has included, I think, last year, $25 million rise to space exclusivity and AI acceleration.

Is there anything in the guidance for this year?

Some of those elements are implicit in guidance. So SpaceX exclusivity has expired, but the service ongoing isn't free.

And there continues to be -- so we talked about SpaceX AI and there was a property move, so the property move is complete. There is ongoing AI spend still at the point where it's investment ahead of the return, albeit that some of the returns are absolutely in year, but that's growing momentum.

So there are still elements of that in their weight, yes.

Okay. And just finally, also on one, can you provide any update on where the new IT stack program, how that's looking?

Yes. So we talked at the half year about post -- prepaid being complete, we are now well through the postpaid migration and that is material, but it is tracking to plan.

And there is Phase 2 of broadly a 3-phase program. We've talked about 3 years.

So we're approaching the crunch time for Phase 2.

Just a couple of quick ones from me. Firstly, on -- just a follow-up on Eric's question on the valuation assumptions for CDC.

Is it fair to say the contracted capacity that was announced earlier this month, it's yet to flow through into the independent valuation?

That's correct. Came after 31 March, yes.

Yes. Okay.

All right. And then I guess just to answer to Eric's question, Jason, on CapEx and on the 572 megawatt.

So that mid-teens number, is that on a 572-megawatt basis? Or should we think of it on an ICT sort of contract?

Sorry, great clarification. That's the ICT number.

Yes, yes. Okay.

Understood. Yes.

Understood Yes. And then the second question was, again, not surprisingly on long road.

Just interested to understand this data center strategy a bit more. Firstly, how much capacity -- exactly how close it is?

And is there further capacity to increase that over time. U.S.

obviously is -- in terms of data centers, yes, demand is growing strongly, but there's a lot of supply as well. So how do you think about what that bit?

Yes. That's a great question.

And I think the key is to understand these are grid connected, they're co-located with often projects we were already planning to build. They just happen to be in good places for data centers as well.

So we have certainly a long-term view on the value of those sites as energy sites. On the data center side in terms of timing, Longroad is talking to like a lot of people in the market, pretty much all the hyperscalers.

They're all focused on like a 29 onwards type delivery date. And so some early studies have come and saying some of the projects could hit that time line, some of them are saying later.

So it's still reasonably early on to when we could say definitively that a project could hit a '29, '30 delivery date, which is kind of the zone where customers are interested just now. So maybe bear with us over the half, and we'll have the team down here in September at the Investor Day to get a good sense of that.

But it's still reasonably long dated. I think to hit that in the U.S.

at the moment, there's almost always a bridge to grid solution. So the bundled energy and data center side of things is getting, I think, quite a lot of traction.

And then if you zoom out from a shareholder perspective of Longroad, it just creates a different potential buyer set for this business if you roll out 2 or 3 years, if actually you're being able to generate your own -- in some ways, your own demand for your power projects through the data center side of your business, rather than necessarily relying on kind of utility RFPs and things like that. So zoom forward, potentially a much more stable sort of development business than we have enjoyed over the last few years.

Understood. I'll just ask 1 last question on the corporate cost, please.

That's obviously significantly higher and the development spend as well compared to last year. How are you thinking about on a go-forward basis?

And firstly, what's driving that? Is it just increased activity across the various businesses?

I think that corporate cost is about the same as last year. I think it was mostly in the development expenses where we had another $20 million.

That's really just increased team size, increased cadence on more megawatts than we were doing last year. And if there's an increase on the corporate side, it would be the element of that, that we can't automatically charge the project.

So I think it goes hand in hand with that. If you're asking should that happen every year?

I don't think so unless we're also increasing delivery cadence as well.

Just on Longroad; so I might have missed this. But your stakes has gone up to 42.5%.

And I assume that's from the extra equity you've put in, is there a read-through on the applied valuation of the extra equity?

Not yet, Grant. Not yet, no.

So that is led to the -- your overtipping in the extra equity share?

That's right. Yes.

But we haven't contributed the cash yet, Grant.

Yes, I saw that. The cadence stepped up a 1.5 to 2 gigawatts per annum on Longroad.

Is that factored in independent valuations yet? Because it seemed to have gone up very little.

Now the WACC did go up and offset some of it. It just seems that the long run valuation is just stalled for a while.

Yes. No, it isn't.

But a lot of the headwind in the long run valuation itself in U.S. dollar terms was raising interest rates, frankly, so you had a reasonable amount of discount rate expansion.

So the business did what it said it was going to do. It just was worth less than that interest rate environment effectively.

But no, this is really -- because we didn't buy the new project until April, all the stuff is not in that 31 March valuation yet.

Okay. This extra $1 billion of divestments you're talking about now, does that include the $495 million you've just realized for the contact sale?

And then what you're left in context is over $900 million, is that just the extra billion you're talking about here?

No, it doesn't include the $495 million, and we don't talk about exactly which business that we're choosing to divest for all sorts of reasons, including disruption to the businesses. We had in mind a target like this already to give you a sense of it.

So I think if you go through the portfolio, you can pretty easily see which investments aren't able to scale. It's definitely more than the context at which could actually scale.

So no, it's not just that.

And just my final question, just on CDC. You did answer the questions from Wade and Barrenjoey.

But these contracts you're talking about in first half of '27 just trying to get a feel of what the quantum could be. Just in terms of the buyers, when do they need you to start delivering megawatts that allows you to really scale again with another big contract.

I mean as Greg described this -- I think I know what you mean. As Greg described, there is great demand now sort of outstrips the available supply tomorrow.

But for a while, we've been talking about this delivery is '29, '30. You can look at peers and see where they're signing contracts for deliveries, clearly, that zone for lighting things out to an entity is the zone that people are most interested in now exactly the same as Longroad is hearing in the U.S.

So if you're thinking about the kind of next set of contracts, I think there good contracts. There's a kind of a broad range of the small, medium, large.

It's -- but they're very lumpy. So why we're sort of a little bit vague as well, 1 moves, I mean people think we're disappointed.

So they're lumpy, but they're all ranges of size, the demand is good. And we hope to have an update in the half on exactly what that kind of near-term contracting that Greg alluded to in May is.

And then longer term, I think it's sort of back end of the decade and beyond is probably more realistic at the stage in terms of further growth.

Just first 1 on Longroad. You just called out this project you acquired.

It still needs federal approval on the land lease extension. I think some of the other projects, renewable projects across the U.S.

have gone on to a bit of problems on federal land. Is that what Longroad's experience is?

And what gives you the confidence that you'll get the approval for that?

Yes, exactly. That's a big part of due diligence in the Board and shareholder discussions.

The thing that gives us confidence here is that it's in a region with a counterparty that's had good success recently on getting these approvals through for all sorts of various reasons but also because the demand is very strong. So without that track record, we'd be very skeptical, but that recent track record was what gave us confidence.

Yes. And then just on the projects that are completing later this year.

Is that sort of a delay in development that you sort of time to time table that you would have expected maybe 12, 18 months ago, noting that sort of completions are below your 1.5 gigawatt target over the last sort of 12, 18 months?

Yes. We guide the 1.5% on getting into operations rather than completions, but I know what you're saying.

I don't think any of those came in super late, but they are a longer build time. I was sort of surprised as it was coming through as well that there was so much in really in the next financial year.

But there's nothing material going on in terms of build times or delays and starts if that's what you're asking.

Yes. No, that's some good clarity.

And maybe 1 last 1 on One NZ. I know you talked through some of the AI improvements haven't shown up in cost savings overall.

But are you able to give it out or pull out a couple of examples of projects where you have seen deployed AI and sort of what cost savings you've seen in those specific projects to date because I know you sort of OpEx subsume the revenue sort of increased this year. And if we look at going to that 35% margin target will have to come down quite a bit over the next few years.

Yes. I'm not going to get into too many specifics.

But I mean, we have got a good sense of what's cost avoided, what's cost saved? And some of the projects that are more visible from a public perspective, you will see One NZ as referenced publicly, for example, when it comes to faults, call center AI agents collecting relevant data, response times reducing by 80% as a consequence.

And those are sort of early-stage projects that then you can think differently about how you resource them and there might be medium-term and longer-term cost savings. But I think the good news is the breadth of deployment and the nature of the benefits that are being realized does give us confidence that there is a medium term and longer-term material cost saving in the mix.

We've got some new investors lined up.

Just a couple from me. Just firstly, on Longroad.

You mentioned in your annual report the Zambales project is being developed for Meta. I just wondered if you could flesh that out, particularly in light of the 4-gig new DC development strategy, whether or not there's opportunities there at all.

Yes. I think the relationships are definitely proving helpful as we -- from selling electrons to showing land as well.

So having an existing relationship with Meta, that's not the only project we've built for them. And there have been tax equity on another project as well is helpful.

But that project, I believe, we bought with the PPA. So yes, it was well before this data strategy was let up.

But I think that's helpful. We have other projects that we sold to Microsoft and then there are others where Google has been in and around them.

So it's really those -- extending those relationships from the power side to the kind of infrastructure side as part of the strategy for sure.

Okay. And just on the $1 billion of further asset sales, can we get some sort of color on what you're thinking is around rationalizing the 13 company portfolio there.

As you said, we can do the math. But what's your latest thinking in terms of complexity and the price NAV gap?

Yes. We still believe, I think, Andy, that asking people at our current scale to analyze both data centers, energy offshore as well and say health care is probably too hard.

And so hence, the Qscan sales. So we would see it tightening down.

But it's not just there. I think there are some earlier-stage investments in energy and data centers, for example, where the path to material scale is not super clear.

And so there are things we're considering here. If you roll forward, as I was saying, we'll talk about this a bit more at Investor Day because we're still learning and developing our thinking.

Maybe 2 to 3 markets focused in and around AI infrastructure, so energy, building it up, could be kind of more coherent from a capital markets perspective. I think also take advantages of the capability we've got and the great start we've got across the platform.

And also lead to still an interesting growth profile just at our current scale. I think we haven't changed our spots.

Infratil has made its track record of moving in and out of sectors as they became more or less attractive. And we would still reserve the right to continue to do that over time.

But for a variety of reasons, a kind of more focused strategy over the next period feels good to us and something we have more focused on than spreading out again just now.

That's useful. Just a couple of quick ones.

Just back to Longroad. I think somebody else asked the question around your shareholding.

Are there any advantages to you going higher in terms of your existing shareholding and EMEA and then better going to be participating in the current equity raise?

There aren't any yet, so it's just more share of the good growth we see ahead. I think for those other 2 investors, they have their own kind of portfolio-related reasons for whether they're participating or not, which has given us the opportunity this time to get biggest share of kind of the future growth we see.

Going forward, who knows, that will be a question we'll be asking them as well.

Okay. And 1 last quick one, sorry.

The 1 gigawatt pipeline extension that you referred to on CDC. Did you say that the current contract discussions that are taking place that you're likely to update us on over the first half of this financial year will support that sort of 3.9 gigawatts ultimate pipeline?

Or were you saying that it's actually beyond that time frame?

No. I think they're quite separate things.

I think these contracts we've been -- we talked about we've been working on for a long period of time, and we already have the land and everything for those kind of near-term ones. We're talking about longer-dated contracting discussions that telling people realistically back into the decade and into the 2030s is when they would light up.

So topping up the land pipeline for those sorts of target dates, which you kind of obviously have to do having accelerated so quickly in terms of contracted over the last month.

But you'd want reasonable certainty on your contract discussions before you go on the land support an extra cash essentially is what you're saying?

No, no, no. No, I think we are seeing enough raw demand to justify actively progressing that now is what I'm saying.

You put down a deposit and pay later in a lot of instances and the amount you spend on the land is pretty immaterial relative to the overall build cost of it. So we're signaling -- you should see that I think 1.6 gigawatts of future pipeline we showed at 31 March, you should expect that to continue to extend over the year.

Just 2 for me. First one, just on your credit ratings.

I was just wondering if you could give us some comments on like what your plans around managing those are? Are you aiming to keep them stable through time for the head stock and for CDC?

Or is there scope for you to maybe look at a lower rating and more gearing now that you're in the rating system or a higher rating on what, sort of general plan?

Good question. Andy?

Well, I think both public ratings are brand-spanking-new. So I think you can expect us to continue to support those.

And we both have a number of tools available to us to support the current ratings and grow liquidity. In our case -- in both cases, we're looking at capital notes with equity credit, divestments, broadening our funding profile.

So I think you can expect steady as she goes from both of us for the foreseeable future. Yes.

Okay. Great.

And the second 1 was just on the Kao data and the AirCloud deal that you guys mentioned. Can you just give us a bit of color like how it came together and also just the structuring like is it similar to what you did with [indiscernible] where you've got some additional credit comfort?

Yes.

Yes. I think that particular customer has been growing strongly in the U.K., particularly as the government pushed the kind of sovereign AI efforts.

So Kao participated in a lot of the kind of white papers and worked with the government on that. And so I believe the relationship was built out of working either on those things.

The credit profile is obviously different from hyperscale. And so yes, there's slightly different technology than was used in [indiscernible] but trying to get to the same point where you're able to start using money from the customer to start building things and effectively raising the equity content in the build and then sort of ongoing credit support as well to give you comfort ahead that the rate is going to be paid and interest and all those things will be met.

So interesting to see how that technology is evolving all around the world. This is another iteration of it that we've seen and there's others we've heard of as well.

But yes, that's exactly what's going on. Okay.

I think we have 1 more question, do we?

So questions, so two. One was just on the Longroad's potentially long-term data center builds.

From what you said on the delivery date, it sort of feels to me like it's more traditional CDC Kao-style co-lo rather than potentially Neo cloud builds, obviously, unless those CPs are scrambling to secure energy. So I'm just trying to understand what the theoretical counterparty might look like, so I can get a feel for theoretical funding envelope?

Yes. Yes.

It's actually both in the kind of neo cloud at the kind of more institutional in because of the debt requirements, even the project finance require our energy right does narrow the aperture a bit. But -- and the traditional hyperscale.

Actually, it's been quite interesting to see how the U.S. market has developed its view on how to finance kind of lower investment credit rated or sub-investment credit rated neo-cloud-or model builds.

So kind of wrap technology from maybe the chip provider, their own credit support like we were just talking about with Paul there, plenty of innovation that's resulting in investment-grade credit structures for counterparties that I think a year ago would have been almost unimaginable for the market. So hopefully, that gives you a sense that there's actually a broader set than just the big hyperscalers that I think could back 1 of these projects.

Yes. And a lot of those NPCs are obviously backed by the hyperscalers as well.

Yes.

Cool. And just my second question was on Gurin's Project Vanda.

I just wanted to make sure I understood correctly. There's sort of slippage you're seeing at the moment, as I understand it is more governments taking their time as governments tend to do as opposed to any specific roadblocks you may need to overcome?

Yes. That's a good question.

Andy?

Yes, that's right. So the key milestone we are waiting on is Indonesian export license and that does involve conversations between Singapore and Indonesia.

That is the key milestone. We've got -- we've ticked off a number of the stepping stones that are precursors to that.

But that export approval is taking longer, so it is moving to the right.

Yes. And I think the context is for a new Indonesia government that's come in since these projects were started, is there enough benefit, right, for Indonesia that they're seeing.

So that's the kind of conversations that are going on. So not so much to do with our project, but that kind of broader context particularly in light of the energy crisis at the moment, I think, as well.

Okay. Well, let's wrap it up there.

Thank you very much for your attention today. Hopefully, see you out on the road tour we're about to do.

If not, we'll talk to you again around Investor Day. Have a good day.

Thanks.