A snapshot of MIG’s FY2008 financial performance is set out in the table below. In a year of significant market volatility, the operational performance of MIG’s toll road businesses has underpinned a solid result.
MIG management views the proportionally consolidated results as key indicators of the operational performance of MIG’s portfolio. On a pro forma1 basis, traffic increased by 1.2%, revenue increased by 7.3% and EBITDA increased by 8.3% compared to the pcp. The pro forma basis reflects the period on period performance of MIG’s current portfolio, which has continued to perform well from both revenue generation and cost control perspectives.
At 30 June 2008 MIG’s portfolio of 11 assets was valued at A$8.6 billion compared to A$8.5 billion at 30 June 2007. This represents the impacts of both macroeconomic and operational factors. Over the year, real interest rates fell an average of 0.7%, resulting in an increase in portfolio valuation that was partially offset by the appreciation of the Australian dollar (which increased an average of 8.0% against MIG’s portfolio currencies). Operationally, current market conditions have been reflected in traffic and other forecasts underpinning the valuations, as well as the risk premiums applied to derive the discount rates. Further details on MIG’s valuation methodology are provided in the guide to valuations on page 44.
Taking into account MIG’s non-investment balances (primarily MIG corporate level cash balances) as well as its portfolio valuation, MIG’s Net Asset Backing per security2 (NAB) at 30 June 2008 was A$3.84, a small decrease from A$3.89 at 30 June 2007.
In terms of MIG’s statutory results, which do not include the valuation of M6 Toll, the profit attributable to MIG security holders for the year ended 30 June 2008 was A$767 million, largely made up of revaluation gains recognised during the period. Total MIG security holders’ interest at 30 June 2008 was A$6 billion. The discussion and analysis included on pages 56 to 57 provides a detailed commentary on MIG’s FY2008 results.
Traffic, Revenue and EBITDA Growth1
Proportionally consolidated pro forma asset performance for 12 months to 30 June 2008
FINANCIAL HIGHLIGHTS
| 12 months to 30 June 2008 |
12 months to 30 June 2007 |
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| Distributions | Distribution (cash) | A$0.20 per security | A$0.20 per security |
| Distribution (SRG in-specie) | – | A$0.38 per security | |
| Reported results | Net profit attributable to MIG security holders |
A$767 million | A$1,702 million |
| Pro forma proportionally consolidated results1 |
MIG proportionate earnings (post corporate expenses) |
A$262 million | A$163 million |
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| As at 30 June 2008 |
As at 30 June 2007 |
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| Balance sheet | Total assets | A$9,747 million | A$10,332 million |
| Total MIG security holders’ interest | A$5,950 million | A$6,421 million | |
| Other | Asset portfolio valuation | A$8,569 million | A$8,454 million |
| Net Asset Backing per security2 | A$3.84 | A$3.89 | |
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1Includes the earnings from individual assets for the current and prior period in the proportion of MIG’s equity ownership in the current period prepared in accordance with the policies set out in MIG’s 30 June 2008 MIR. This information has not been prepared in accordance with Australian Accounting Standards.
2Before deferred tax. The NAB incorporates valuations of all investments in the MIG portfolio. As Australian Accounting Standards only permit the revaluation of non-controlled assets, it is not referable to the MIG financial report.
DISTRIBUTIONS PAID A$ MILLION
MIG has distributed A$4 billion to investors since January 2005, more than two thirds of MIG's current market capitalisation
MIG’s Asset Debt Maturity Profile3
- Average asset debt maturity of six to seven years
- MIG holds A$673 million in cash at corporate level4
- An additional A$1.6 billion is held by the assets (MIG proportionate share A$546 million), the majority of which is retained as part of debt security packages
3Assuming all assets 100% consolidated as at 30 June 2008. Represents legal maturity of debt.
4As at 21 August 2008.
5On a proportionally consolidated basis.
MIG declared distributions totalling A$482 million for the year ended 30 June 2008. These distributions were 54% covered by MIG’s proportionate earnings, which are post MIG level corporate expenses including management fees.
The graph to the left shows MIG’s total distributions since listing. MIG has distributed A$4 billion, or A$1.77 per security, to investors since January 2005. These distributions, together with movements in the security price, contribute to a substantial total return to security holders over that period.
On 14 January 2008 MIG completed its A$1.0 billion on-market security buy-back. The buy-back was initiated because MIG assessed that it was the most efficient way of distributing surplus cash and generating value for security holders. A total of 292,218,706 stapled securities were bought back and cancelled, at a weighted average price of A$3.42. The buy-back improved MIG’s NAB and has decreased the amount of cash required to fund future distributions.
In the current environment there is, rightly, increased focus on financing structures and balance sheet positioning. Post payment of the June 2008 distribution, MIG has a corporate level cash balance of A$673 million and no corporate level debt. The debt at MIG’s assets, which is non-recourse to MIG, is 87%5 hedged for the next two years. MIG’s assets are also required to maintain substantial cash reserves. As shown in the graph to the left, less than 8% of total asset level debt matures within the next two years. Most of these maturities relate to APRR and 407 ETR debt, a number of tranches of which have successfully been refinanced over the past year. Management therefore believes that MIG is well positioned in the current market to withstand any further credit market volatility.
Mary Nicholson
Chief Financial Officer
Macquarie Infrastructure Group