Infratil Aktie

[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.

[Operator Instructions] The first question today comes from Eric Choi from Barrenjoey.

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.

The next question comes from Wade Gardiner from Craigs Investment Partners.

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.

The next question comes from Suraj Nebhani from Citi.

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.

The next question comes from Grant Swanepoel from Jarden.

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.

The next question comes from Ben Crozier from Forsyth Barr.

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.

The next question comes from [ Ben Cura ] from [ Shakespeare ]. Ben, your line is open if you'd like to ask your question. I might move on to the next question here.

We've got some new investors lined up.

Maybe. It's from Stephen Hudson from Macquarie Securities.

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.

The next question is from Paul Mason from E&P.

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?

Yes. Nick Harris from Morgans Financial.

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.

Thank you for standing by, and welcome to the Infratil Limited Conference Call. [Operator Instructions] I would now like to hand the conference over to Mr. Jason Boyes, Chief Executive. Please go ahead.

Good morning, everyone. It's Jason Boyes here, the Chief Executive of Infratil. We're very pleased to be talking to you this morning about some contracts that CDC have signed and announced overnight. There's a release that's gone out to the exchange and a presentation that we're going to run through with you here this morning. [indiscernible] opportunity questions and answers here at the end. I'm joined by Greg Boorer, CDC Founder and CEO; and David Collins, the CDC CFO as well. We're going to do the bulk of the lifting on the presentation. I won't steal any of their thunder, and I'll hand over to Greg now who will be on Page 3 of the presentation.

Over to you, Greg.

Thanks, Jason, and good morning, everybody. I love a great day to be talking to everyone after a long buildup, which has taken quite a few months to get this significant contract across the line, but the largest contract in CDC's history, but also probably one of the bigger contracts in the history of APAC. So it's a wonderful day, and that takes us up to more than 1 gigawatt of contracted capacity. And the slide in front of you demonstrates the rollout timetable for that capacity over the coming years.

Now the size of this contract and the length of the contract are quite significant. And that really goes to the heart of the confidence that the customer has in CDC's ability to deliver certainly from a capacity and capability perspective, but also from the wherewithal in terms of the capital to meet the size and scale of the opportunity.

It also speaks volumes to the technological flexibility and something that I've been talking about for a long time, the adaptation that's inherent in the model that we created nearly 20 years ago, which enables customers to adapt to changing technologies and densities and methods of cooling architectures, et cetera, over time. And that plays a big role in our ability to win these outside contracts.

It also speaks volumes to the sustainability story. The sustainability story of CDC is really, really significant. And this is an absolute differentiator, just like the other elements or pillars of our offering around security, technological future-proof fairness, the sustainability is increasingly important and one of the most important considerations. And the fact that we are going to be in calendar year 2026, the first 100% certified net zero data center operator is proof of those credentials.

But I think more importantly, which one of the bigger challenges when it comes to consenting or application approvals in Australia is the use of water. And this contract alone through CDC's unique cooling architecture that uses closed-loop cooling architecture, which uses no water will actually save 14 billion liters of clean drinking water per annum that won't be used for evaporative cooling, which is part of the industry standard today, unfortunately. So that's a really important takeaway, and that is very important to our end customer, of course.

The end customer, it's a single customer. It's a U.S.-based hyperscaler, probably no surprises there and investment-grade counterparty, which then increases the investment-grade counterparty percentage in CDC's business from a capacity basis to pretty close to 100%, which is amazing. And one of the reasons why the wonderful rating agencies continue to support an investment-grade credit rating for CDC, which then goes to speaks to our ability to raise capital very, very efficiently in market-leading rates, which then transforms into even more momentum for the business in the future.

If we change slides and go to the development program. What's important to take away here is that there's no real risk here because the capacity that we've contracted yesterday is going to be delivered through existing sites that are well down the development path much faster consenting and permitting in all of those things, and we're actually delivering these buildings as we speak. And that then leads into the conversation of the size and scale of the pipeline. So from 1 gigawatt of contracted capacity, we still have more than that, 1.6 gigawatts of land that we own, power that is secured that we're progressively going to work through.

And that's important because the size and scale of the business today is such that we need to have a large pipeline to continue to grow at the velocity that we have been growing in recent times. And we do feel that, that growth is really in sort of -- in the large-scale growth is only just beginning. And we're very, very confident of doing more business of this size and scale in the future, hence, the importance of that 1.6 gigawatts of capacity that we're slowly bringing into -- bringing online over the coming years.

What's also important to recognize here is the size and scale of the opportunity for Australia is significant, but the number of counterparties that actually have all of the characteristics that make them suitable to be a delivery partner in the new AI world are becoming smaller and smaller. And that's because not everybody can actually have to find the capital to deliver at this scale. And not many people have the expertise or experience or the referenceability to actually deliver these very, very sophisticated liquid cooling AI builds in the way that CDC has. And again, that differentiation whilst in a rising tide in terms of AI and capacity, people might argue that most all boats will float higher. It's just not necessarily the case because the cost of the IT equipment, the GPUs is so high now and the risk of getting liquid cooling wrong and destroying that equipment is such that the biggest customers in the world, the most important customers in the world are really relying on a smaller and smaller number of trusted counterparties that have that capability to deliver.

So given our credentials, given the fact that we've been doing this for 20 years and the liquid cooling story is part of our history from day 1, then I'm very, very confident that we will continue to grow in a faster rate in an outsized way relative to the industry, which is growing fast, notwithstanding. So with that, we might -- I might hand you over to our Chief Financial Officer, David, to step through the financial impacts of this contract on the business, but also, most importantly, how we plan to fund this and to give everyone confidence that we've got all of those details in hand.

Over to you, David.

Thanks, Greg, and good morning, everyone. It's great to be with you today. I'm on Slide 5. I wanted to make a couple of comments on EBITDAF and CapEx forecast following this contract announcement. So starting with EBITDAF, we are seeing a significant step-up in EBITDAF looking forward as contracted capacity comes online. Existing guidance for FY '27 is unchanged at $680 million to $720 million. We are advising today that expected EBITDAF in full year '28 will exceed $1 billion. As always with our earnings subject to us the timing of build delivery and customer activation. And looking past full year '28 to when this contract is fully deployed and we will be over 1 gigawatt of contracted capacity, that will deliver annualized contracted EBITDAF of around AUD 2 billion. So a very significant step-up as we look forward in EBITDAF as a result of this contract.

Moving to CapEx. CapEx does lift and will lift in full year '27 to support the ongoing strong capacity demand that we're seeing in the market. We are guiding today to full year '27 CapEx guidance of AUD 3.8 billion to AUD 4.2 billion, excluding land, which is up from the full year '26 guidance of $1.9 billion to AUD $2.2 billion.

In terms of the cost of CapEx per ICT megawatt, that does vary by site, location and customer. But on average, on a per million measure, that is in the mid-teens for CapEx, excluding land. And as you would expect and as our history shows, we have a continued focus on efficiently deploying our capital and aligning that with revenue generation and indeed with customer demand.

Moving on to Slide 6 and some comments on the funding capacity of our business. If I start with debt and make a few comments around the debt platform we have within our business. Starting with what we have in our hand at the moment, we have AUD 3.9 billion of cash and undrawn bank borrowings as at the 31st of March. So we're in a very solid position from a liquidity perspective. Our weighted average cost of debt is around 6% at full year '26. Very importantly, on the 21st of April, Moody's announced a public credit rating for CDC Australia at Baa2 and stable. What that rating gives us is a path to a deeper and broader range of capital markets, broadening from our existing funding sources of bank debt and USPP and allowing us to extend into broader debt, both senior and hybrid capital markets.

As you will have seen recently, we did complete a structural separation of the New Zealand business from the Australian business, which was done for reasons of both capital and operating and balance sheet efficiency, and that did deliver $827 million of capital back to the Australian business, which helped to reduce debt on the Australian side of our business. Importantly, for the New Zealand business and that part of the structure, whilst it's not publicly rated, it does maintain an investment-grade profile and will support the New Zealand business going forward.

A couple of specific comments on Moody's and on the announcement on the 21st of April. This was a critical milestone for our business. We have long held a private rating at investment-grade Baa2, but this is a public acknowledgment and announcement for Moody's. They do point to in their report, the strength of our business around demand, proportion of investment-grade weighted customers, long weighted average lease life and indeed our approach to CapEx.

So very important for us as we look forward to funding the growth of our business. We have a detailed plan to fund this contract. We are active on that plan at present. We are looking at both senior and hybrid capital markets. And I would note specifically with hybrids, it's important to note the equity content that comes with hybrid issuances in the marketplace.

Lastly, in terms of equity, we are privileged to have very supportive and strong shareholders who have supported our business over time and indeed, most recently provided $500 million of equity in February of this year, of which Infratil contributed their share at $250 million. Today's contract announcement does not require any equity going forward to fund, but indeed or instead, we will fund this through the debt capacity we have in our business, as I've just outlined.

With that, I'll hand over to Greg for Slide #7. Thank you.

Thank you, David. This slide builds on the update that I provided investors in Sydney at the end of March, so not so long ago and shows the global requirement in terms of data center capacity over the coming years. Now this has been also echoed in recent announcements or earnings calls by every single major hyperscaler, where every single hyperscaler mentioned that they are also very, very capacity constrained in their data center portfolios. And so I think the future looks very, very bright. And indeed, we are working with a number of large clients as we speak on large-scale future deployments, which I'm really excited about and hope to be able to provide even more clarity on those conversations at the end of May during Infratil's earnings and end of year update. But this reinforces this announcement last night today that sort of reinforces the fact that we've been -- CDC has been working really, really hard for 20 years across lots of different sections of the addressable market and has been very successful at adapting to the changing demands, requirements of customers.

And it also speaks volumes of the differentiation of the CDC offering relative to the industry and why we continue to grow faster than the industry as a whole. So looking very forward to getting our teeth into execution and delivery. We'll continue to execute to continue to meet all of the time frames, which are really important. That's one of the important elements here is the largest customers in the world will only back the companies that they have trust and confidence that can hit the dates that they have been promised in their contractual agreements because the implications financially to the largest customers in the world if those dates are missed are quite material.

So with that, I might hand back to Jason to round out this morning's conversation and then to invite a question-and-answer session.

Congratulations. The smiles in the room are pretty big here, everyone. I think what we wanted to capture on this last slide is really should have been evident from what Greg and David are saying the relentless focus on all the little bits and pieces that have gone together to maintain what we see as a very attractive mid-teens plus infrastructure like investment. So you have infrastructure style financing producing infrastructure style cost of capital rolling up to what we continue to see as a very attractive investment for Infratil sitting in that growth very much in that growth driver part of the portfolio going forward. reiterating what David said, this does not require further shareholder equity from shareholders for CDC.

And I guess the other key message I was listening to Greg and David talk there is that this isn't the end for CDC. This is the beginning and the business remains incredibly well positioned with pipeline and everything Greg and we have been talking about for a long time to continue to capture an outsized growth like this, which will be amazing not only for CDC, Infratil shareholders, but for the Australian industry as well, which I know is a big motor Greg.

We've got here a reference to our own investment-grade credit rating, which was achieved late last year, which reflects our strong liquidity position, backed by the divestment program we've talked about for the last year, which continues to be on track. And so if you look back over the last year, you'll see all these little bits and pieces being put in place, our credit rating, David's credit rating, some of the raises that have been done, some of the raises that have been coming to make sure that when we reach this moment, which is happily here, we're well placed to confirm to the market that the attractive equity investment story certainly remains strong and alive.

So with that, I'll finish up here and hand back to you, Ashley, for some questions.

[Operator Instructions] Eric Choi with Barrenjoey.

Can I please ask 2 numerical questions, just one on funding and one on returns. Just on funding, firstly, I just wanted to check the logic on why further equity isn't required. And that is, if we look at Moody's, they've got a 10x gearing target, you're spending $4 billion of CapEx in FY '27. So $4 billion divided by $10 billion is $400 million of EBITDA growth required.

Coincidentally enough, your $700 million of EBITDA in '27 probably goes to $1.5 billion by FY '29. So you're actually growing $400 million a year. So my question is, does all of that math actually suggest the credit agencies will allow you to debt fund $4 billion of CapEx every year based on your current profile? And actually, you could fund more CapEx than that if your EBITDA growth ever stepped above that kind of $400 million a year. Sorry, that's a long-winded first question.

I think we got it in the half, but I think we got...

Thanks, Eric, for the question. Moody's are clear with the metrics that -- or the thresholds for us, which, as you know, is 10x net debt to -- it's very important that -- and I'm sure you know this from looking from your experience that Moody's will look through periods of time where entities like us are temporarily above that level when you have rapid deleveraging coming as earnings grow looking forward.

So the math broadly that you described is right. It's a 10x net debt-to-EBITDA ratio. What I would point out though is there is variation from year-to-year. There are some years where spend will be higher for commercial reasons, but you can look through that as the deleveraging follows with earnings. So reiterating, we have a detailed funding plan that we are actively pursuing at present for this contract and for our broader business, we can fully debt fund this contract.

We do have hybrid markets available to us as well as senior debt markets, all of which we are looking at as we speak. So the rating is important to us. We work closely with Moody's, as you would expect, and we're very confident that we will be able to continue to maintain that rating without the need for shareholder equity support to deliver this contract.

Do you have a second one?

Yes, please, sorry. Just secondly, on returns, obviously, investors are very focused on returns versus your cost of capital spread. But if I oversimplify the return cap to 4 drivers, there's cost of build ramp time, EBITDA per megawatt, cost of debt. It looks like 2 of those are improving, which is cost to build and ramp time. One looks flat based on your guidance, which is EBITDA per megawatt and then one could be worse, which is interest cost. But if you got 2 better, worse and you run that through a DCF it suggests returns are actually improving. So my question is, can we actually conclude the equity IRR on this 555-megawatt contract is actually better than your historic mid-teens IRR?

I can talk a little bit to that because we've guided that in the past, you might have a contribution. I think the -- yes, so the mid-teens is actually our overall investment in CDC, right? And so individual developments will generally be higher than that. But of course, we're holding a bunch of operating assets that are probably like a 9% to 10% cost of equity. So when I talk about it from an Infratil perspective, what I want to see a big part of the portfolio is a mid-teens plus profile, and we're well and truly in terms of the blending on profit. I don't know if you have anything to add on.

I would just add 2 things to that. As you understand, we don't quote IRRs on individual contracts at a CDC level or even in total. But what I would say is that you get variations across customers and sites according to the particular contract. We do have, over time, as we look forward, very strong and improving operational leverage. So you will see that as we scale, we get more efficiency in the use of our cost base, and you will see our EBITDAF margins grow over time.

On interest cost, as you mentioned, sure, in the market at present, interest rates have increased, particularly with what's happened in the Middle East. However, what I would say is we have a forward-looking hedging profile, which looks to smooth out the impact of market volatility on interest rates. So that's something that we think is an important part of the overall mix for us. So -- and probably one last comment. A number of our contracts as we look at them now and negotiations with customers are at campus level. So a campus has multiple data centers on it. And again, that drives efficiency, scale and operating leverage for our business, all of which ultimately feeds margins and IRRs. So that's probably what I would say.

Your next question comes from Roger Samuel with Jefferies.

I've got 2 questions as well. First is just on the delivery time frame. It looks like you have to fulfill this new contract by the end of FY '29. My question is what gives you confidence that you can meet the delivery time frame given the sheer scale of development required?

Thanks for the question, Roger. We have lots and lots of confidence. We have a significant in-house capability in terms of construction code management alongside our trusted general contractors. trusted general contractors have been with us for many, many years and built many, many data centers. And so -- and plus, the campus model that David alluded to a moment ago actually improves the speed significantly because you can have a rolling workforce that kind of stays on your land for a number of years, never never leaves. And that makes it much more efficient to deliver these buildings.

And the fact that I think we've built about 28 data centers so far in CDC's history, and we have a wonderful track record of delivering data centers efficiently to a really high standard. And that gives us, again, confidence to do it. We have a detailed construction and implementation plan. We are one of the largest partners of the largest infrastructure providers in the world, which gives us incredible leverage in the long lead time equipment and supply chain areas. And we've been prepositioning long lead time equipment for this particular opportunity and indeed, our forward-looking pipeline for many years already. And so I'm very confident every which way that I consider this and look at it that we will not only meet those time frames, but hopefully exceed those and generate the revenue even earlier.

Yes. Okay. And my second question is on that EBITDA for this new contract, yes, it looks like it's not going to be much lower than $2 million per megawatt despite such a large size. I'm just wondering how competitive was the tendering process for this contract? Perhaps it's not very competitive given that you're probably the only one in Australia who can actually deliver the 100-plus megawatt contract.

Yes. It's -- the global nature of some of these workloads is such that we're not necessarily competing for these contracts with other organizations in Australia or APAC. In many instances, you're actually competing for these workloads with other organizations around the world. But I think the strong the strong economic returns and the value that we've been able to negotiate here is a direct reflection of the differentiated model, the trust that is required in terms of counterparty risk to deliver and the knowledge, experience of the particular technologies that need to be deployed, which we've built up over 20-odd years in the liquid cooling and high-performance computing space.

And customers will pay more for confidence, for certainty, predictability and Australia is an increasingly attractive location when you think about all of the other major characteristics, which are important, which is penetration of renewable energy, which is the sort of safe and secure nature of our location, particularly post recent events in the Middle East, our Five Eyes alignment, rule of law, stable government, et cetera, et cetera. So there's lots of things that feed into what customers will be prepared to pay, but we definitely have to be very competitive globally. We are very competitive globally.

But the token economics, the economics of an accelerating AI world where demand far outstrips supply for intelligence generation today means that the profits that can be made by these organizations are so attractive that the relativity of the cost of the data center to the overall technology stack to deliver is quite a modest portion when you look at the entire economic model around token economics, et cetera. So we're very, very comfortable. This is a great contract in terms of returns.

And notwithstanding the scale, just even if it was a smaller scale, it will be still very, very healthy. And so the scale only makes us more excited. But again, reaffirms CDC's credentials as a trusted partner in every way that you think about it and Australia being a very, very trusted, trusted geography in a world that is getting increasingly geopolitically unbalanced. So I believe that those -- this momentum will continue for a long period of time as will the healthy economic returns because everyone is making healthy economic returns in this space given the demand and supply ratio.

Your next question comes from Phil Campbell with UBS.

Just a couple of questions from me as well. David, I just wanted to check the independent valuation for CDC and the Moody's rating, do both of those take into account this contract?

Sure, Phil. So in terms of the independent valuation, the last published valuation was 31 March, which Infratil released to market in early April. The sites that are part of this contract were included in that valuation, but they were included as uncontracted because they were uncontracted at that point, which would mean that there would be -- you can expect for the next valuation, there would be a compression of discount rate attached to these sites. So it was included, yes, but in an earlier uncontracted phase.

In terms of Moody's, they have our existing forecast with them. They are aware of the contract. We've briefed them on it. They -- the last published opinion they had had these sites being developed in it, but not a specific contract because at that point, it had not been signed. That was in April and that Moody's have all of the details and indeed have our detailed funding plan as well. So we don't anticipate any concerns on that front.

Okay. Great. Second question was just on what's going on with the New Zealand business. I'm assuming that's just some sort of tax issue that's going on there. We shouldn't view that as kind of some separation of the New Zealand business from CDC.

No, Phil, that separation was done, and it's a structural separation just for reasons of efficiency. So from a balance sheet efficiency perspective and a gearing perspective, the ability to separately fund the Australian and New Zealand business, it makes more sense to have the 2 structurally separated. So you should not read into that, that there is any change in our strategy or ambition and growth in New Zealand. It's simply an operational and capital efficiency move that we've made.

Your next question comes from Owen Birrell with RBC.

Just I wanted to get a bit of a sense on this contract. I mean one of the things that we've constantly heard is that CDC provides a varying level of redundancy to its customers based on their requirements. I'm just wanting to get a sense as to, I guess, how high end this contract is. Are you able to give us a sense as to what the redundancy requirements are around such a large volume of your capacity?

I think we do have the ability to provide due to the granular modular design architecture, we do have the ability to offer varying levels of redundancy, resilience and customers are increasingly looking at those advantages for different types of workloads. However, this particular contract, this is the same as just about every other contract that we have. We're guaranteeing 100% uptime. We're doing all the maintenance concurrently. So it's right at the high end of resilience, redundancy availability.

Okay. So fairly consistent with the broader base is what you're saying?

Absolutely, absolutely.

Excellent. And just another question regarding the CapEx guidance. You provided that CapEx guidance ex land. But obviously, the growth profile of your business is going to obviously require a lot more land as we move forward. Just wondering if you could give us a sense as to how you think about land, whether you buy or lease and give us a sense of, I guess, the OpEx or CapEx requirements around this degree of expansion.

You're spot on. We're going to require more land, more power commitments, et cetera, to continue the velocity of growth that we're enjoying today and to ensure that we see -- we capture our share of the market going forward. In terms of numbers, we sort of play it by year, but we've already -- we've still got 1.6 gigawatts of land and power that we already own to work through. So we've got a significant amount of capacity and the cost of land, et cetera, is very geographically dependent. So in terms of guidance, David, we budget for how much...

Yes, sure. Owen, thanks for the question. The reason just adding to everything that Greg has said there that from a guidance perspective, we exclude land is the transactions are binary, of course. They're high in value but low in volume. So from a guidance perspective, we can manage that on a case-by-case basis as acquisitions happen, but felt that it was more useful for the market to see what our pure growth CapEx is from a guidance perspective, excluding land, and then we will manage land from a guidance perspective on a case-by-case basis.

Yes. No, I understand that. And that's actually a very useful way to provide that information. But just in terms of just, I guess, what the cost of the land underneath that as we try to model CDC as a whole, if there's any sense of guidance you can provide?

What I would say without giving a specific number is it very significantly based on where the land is. It sounds like an obvious thing, but which city you're in and indeed, whether you're in the region or the city. So it's probably best not to give a view of land cost because it is extremely variable. But what I would say is, of course, if there's anything significant that happens, we would talk to that and the location and the cost of that acquisition.

Your next question comes from Suraj Nebhani with Citi.

And just a couple of quick questions. Firstly, just following on from Owen's question on the land piece. Maybe, David, can you give a sense of -- if you think about the overall project cost, you highlighted mid-teens per megawatt. What proportion does land make typically in terms of the project costs overall?

Sure. The answer is it's a small proportion relative to the total project cost because of the technology and the capital investment that goes into constructing a data center. So it is a small component. I can't put a percentage around it because it will depend where the site is, what state, what city and whether it's regional or city-based. But you should assume it's a smaller part of the equation when it comes to the total CapEx for either a campus or a particular footprint.

Are we talking less than 5% just sort of very big round numbers or less than 10% -- probably not...

The variability is too high, but it is small.

Yes, not material to...

Yes. Yes. And the second one was -- thanks for the new disclosure on the ICT megawatts as well. That's helpful. Can you just talk to -- so I think the numbers in the presentation, I'm just trying to reconcile them with prior disclosures. So I think Greg mentioned 1.6 gigawatts of additional capacity. So does that mean that this contract total takes you to 1.3 out of the 2.9 contracted. So that implies obviously a lower PUE than what was applicable previously. So just trying to understand that.

We think about the capacity, we're moving the language to be IT capacity, which is what we're working towards delivering because that's what our customers think in rather than the PE element or component and that should make your life easier. But also, please keep in mind, as per my update recently, there is a significant technological evolution happening with GPU infrastructure, which is great because more and more electrons can be dedicated to revenue-generating IT equipment and less and less over time to mechanical cooling support. So that means the numbers that we're saying to you today could actually even become better over time. But that's -- we're thinking in that normally around that 1.2, 1.3 general PUE sort of range when we talk about the difference between IT load that we are working towards delivering for our customers and the total energy capacity to the pipeline.

Got it. And yes, just to follow up on that point. So the 1.6 number in the presentation, that's on a previous disclosure basis, right? So the IT load would be whatever the PU is 1.3 or lower, adjusting that 1.6 down. Is that the right way to think of it?

You're right. That's totally built.

Your next question comes from Conor O'Prey with Canaccord Genuity.

Maybe a question on the pipeline, the 1.6, 1.7 gigawatts you've got and maybe how you're positioned to respond to RFPs and tenders over the next sort of 12 to 18 months given that this contract seems to pick up a lot of your sort of projects that are under construction, where are you sort of sat? Do you need to sort of reload there a little bit for a period? Or do you feel like you can be active in market winning new contracts from here on?

Conor, we're definitely active in market because -- we still have pockets of capacity, obviously, much smaller volumes than what we're talking about with this contract. And we're bringing on new capacity all of the time. And so we are definitely in the market and talking to customers at scale customers around end of '26, '27, '28 and '29. Obviously, the conversations and the capacity gets bigger as you move through those financial years. But we're definitely up and about when it comes to chasing customers, having great conversations, and we're building in every geography that we operate in over and above the requirements for this particular contract.

Your final question comes from Howard Slynn with Citi.

It's actually Suraj Amas from Citi. Howard just raised for me. Just 2 quick questions. First one, just in terms of pricing, that looks extremely strong, right? What are you seeing in terms of escalators looking ahead? Because just conscious, I think Digital Realty was calling out pretty strong escalators of 3% plus as well. Is that what you're seeing as well in this contract?

We have healthy escalation built in over the full life of the contract, which in relative terms is consistent with what you're hearing, but we don't go into specifics on a contract-by-contract basis.

Got it. And second one, Greg, you sort of mentioned this in the last response that you're building across multiple sites, right? I think you've been pretty positive on Perth opening up as well. I'm just wondering whether this contract is talking to Perth as well? Or is it just still Sydney and Melbourne?

Currently, this particular contract is on existing sites. But unfortunately, we can't go into specifics of the locations.

All right. And last one, just in terms of the future, it sounds like we're talking about May, there's still at scale large contracts, right? Given those are yet to be built, how quickly do you think you can deliver the large-scale contract?

Sorry, the question how quickly can we deliver additional capacity or how quickly?

Let's say, it sounds like you're still -- you're in discussions for the large contracts, right? I'm just wondering how quickly you can actually turn on additional capacity, right? I know you have the land and the power given the other kitten stuff, how quickly can we think about other stuff?

We've definitely got the capacity to deliver large scale in the hundreds of megawatts additionally between now and financial year '29. In fact, we're probably going to be a little bit more bullish than that in our thinking, but people should be comfortable that we certainly are not tapped out in terms of delivery or execution capability, and we will be like we always have, trying to develop and execute, contract and deliver our entire pipeline as quickly as possible because that's what we've always done.

There are no further questions at this time. I'll now hand back to Mr. Boyes for closing remarks.

Thank you, Ashley, and thank you, Greg and David, for all that this morning. Congratulations again on a massive achievement. Thank you, everyone, for listening. We'll talk to you again at our results in May.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

[Foreign Language] Hey, everybody. Welcome to Infratil's Half Year Results Presentation for Financial Year 2026. I'm Jason Boyes, the Chief Executive of Infratil. And I'm here with my partner in crime, Andy Carroll, the CFO. Welcome, Andy.

Good morning.

We're going to talk through the presentation that's been released to the NZX and ASX this morning, along with other materials for our half. And then there'll be questions as usual -- time for questions as usual at the end. So let's get into it.

Excellent to be speaking to you today on the half just gone and how we feel about the half and further ahead. In short, we feel good with recent contract wins and progress on our strategic initiatives, and strong demand for more data centers and power to run them. The portfolio is extremely well positioned for growth, including the big guns CDC and Longroad and also Gurin and potentially Kao poised to join that acceleration. Those big guns have driven the half also with their strong contracted growth starting to come through in earnings with more to come.

And when New Zealand has done a good job too in a challenging domestic environment. So with that introduction, let's go to the highlights, which should be on your screen now.

Actually, not too much new news in the announcements today, but one at top here announcing signing to sell our stake in FortySouth, our towers business, and our old New Zealand bus property in Halsey Street there in Auckland.

That's in line with our strategic objective to sell a billion of assets that we feel can't scale to be meaningful in the portfolio, alongside the sale of RetireAustralia that we announced earlier in the year. We're over halfway towards our target with a strategic review of our investment in Qscan already announced that would finish the job, and that we expect to progress in the next half.

Secondly, on this slide I want to call out, Andy will talk to the numbers more shortly. Some puts and takes as usual between different assets in the portfolio, but pleasing growth overall, that 7% increase and proportionate operational EBITDAF compared to the same half last year, in line with expectations.

I think when we look at the other key things that happened in the half, digital and renewable energy thematics are stronger than ever as data and electricity demand continues to accelerate across multiple markets. You've got that 140 megawatts of contracting that CDC is announced in the half actually since our Investor Day in September event and Longroad has continued to push ahead with an exceptional volatility in its market, commencing construction of a further nearly 1 gigawatt of capacity, talk about our move on Contact Energy that we've already announced and the strong sustainability results.

Later, I might hand to Andy for some highlights on the financial side.

Yes. Good morning, again. So this is a new slide just summarizing 3 key financial metrics and a quick snapshot. In terms of highlights, operational proportionate EBITDAF continues to grow with one around 60% that you can see CDC and Longroad are growing strongly.

Proportionate CapEx of over $1 billion reflects continued material investment, particularly within our growth engines of CDC and Longroad. And our asset valuation has now reached $19 billion, materially up on the first half last year with a significant transaction-based uplift in CDC's valuation. Value increases in the last 6 months have been more modest with nearer-term growth effectively captured in last year's uplift.

Thank you, Andy. Let's go through that portfolio. Let's start with the big one, CDC, a good result up on the previous comparable half as another 50 megawatts or so of -- in construction reached operations and starting to be billing.

The big news in the period, as I said before, since our Investor Day in September has been 140 megawatts of new contracts announced. The large AI contract still the limelight, but CDC isn't a one trick pony and is seeing strong growth across all its customer segments with wins in government, critical infrastructure and cloud as well. So don't forget those.

Looking at the half and its ability to win and be relevant in these new contract discussions, CDC's flexible infrastructure deserves a callout. It's proving beneficial, being able to scale efficiently as computing weight and density increases and also permitting and social license issues that are faced by data centers that use significant water. Remember, CDC is calling with a closed loop liquid cooling system. So that is, as we've talked about in the past, still very relevant.

Looking ahead, those contract wins I mentioned, underpin our targeted doubling of EBITDAF by 2027. And expect to see a further step-up in EBITDAF from the following year as the full impact -- full year impact of those contracts come through, so that momentum carries through. We mentioned at our Investor Day that the timing of those new contracts mean CDC was tracking towards the lower end of the guidance range this year, which is confirmed here as well.

Looking further ahead, with the strong demand I mentioned, CDC is engaged in multiple opportunities with existing and new customers for significant additional capacity. So we see further growth from here. This is going to be supported by the existing significant build program we talked about on this slide, still 450 megawatts coming to completion.

Expansion opportunities for intensification of current and planned developments essentially squeezing more megawatts into the same building envelope. That's part of that flexible infrastructure I talked about before. And of course, CDC is already deep and diverse pipeline of potential data center sites.

CDC is accelerating its own investment to prepare for and meet that demand with CapEx guidance increased $300 million to $400 million to the AUD 1.9 billion and AUD 2.2 billion we have on this slide for this year. And we expect the CDC equity raise, we've talked about for a while now to take place in the next half. AUD 250 is Infratil's share and that will reinforce CDC's significant debt capacity to complete its planned growth.

All those data centers need power, and that's where Longroad is seeing strong demand. A strong half of delivery, though from Longroad through the exceptional volatility of the tax reforms we talked about at the full year, with EBITDAF more than doubling versus the same period last year as over 1 gigawatt of new projects came online. They are on track to reach their target of 5.5 gigawatts of operating and under construction projects by the end of this financial year. And also in the half, they signed revenue arrangements for a further 200 megawatts of future projects to that demand that we talk about starting to come through.

The U.S. tax credit reforms that dominated the discussions at our full year results, as I said, are nearly complete or 1.3 gigawatts of the 2025 projects are qualified for tax credits, with a further 6 gigawatts qualified that could meet the in-service date of 2029 required to get access to those credits, which is essentially equivalent to our 1.5 gigawatt per annum target out to that date. We're looking to qualify more than another 2 gigawatts of projects between now and when the qualification window closes next year.

Looking further ahead then, we are shifting Longroad's guidance up $10 million to that $120 million to $130 million we mentioned here, that's U.S. dollars, largely from the Serrano project coming on earlier than forecast this year.

In the next half, we see another solar project Sun Pond coming online and a further 400 megawatts of construction set to commence.

Looking further ahead, as I've alluded to, demand signals remain really strong, what Longroad described as a generational growth opportunity at our Investor Day. That's driven by data centers, of course, but also reshored manufacturing in the U.S. and their pipeline is well placed to address that demand and the business is well positioned to execute on its 1.5 gigawatts per annum target over the next 3 years.

And even though achieving that will be a lot of work in itself, we do see the potential for upside beyond this, as momentum in the market and the business continues to build ahead of the solar and wind tax credits running off in 2030.

I'll hand back to you, Andy.

Thank you. 1, so the team is doing a really good job of delivering in challenging market conditions with the market-leading offering. So you'll see revenue is up $14 million from the prior period, but strong growth in mobile in procurement and other offsetting declines in fixed. The standout on the slide is the continued growth in mobile revenues with notable growth in consumer postpaid connections in postpaid ARPUs overall. All -- and SpaceX have been valuable differentiators.

Handset sales showed good growth, reflecting improved trading momentum in strong mobile activation. Key elements within wholesale and Eon are progressing well, with One NZ taking strong share of MVNO growth from onboarding and growing connections with a couple of new partnerships announced recently.

The challenging areas remain challenging, enterprise and fixed. It is the One NZ in team covered at our Investor Day. While the enterprise pipeline is stronger with good wins on the back of this basic offering, like the Department of Conservation, we continue to see aggressive competitor discounting.

EBITDAF performance for the first half is down relative to the prior period and that reflects the circa $25 million of discretionary OpEx spend on strategic initiatives that I talked about at the full year, but cash flow has improved and is an area of continued focus.

Moving to outlook. There is no change in either of our EBITDAF or CapEx guidance, so that's confirmed today. We are expecting a stronger financial performance in the second half as talked to at our Investor Day, reflecting seasonal trading and the benefit of first half price increases flowing through to the second half.

In terms of strategic programs of work, T-One is progressing very well with Phase 1 prepaid complete. SpaceX is also performing very well, more than 6 million texts have been sent, and it's delivering great coverage, productivity and health and safety benefits. And now we're looking at base voice calling.

Our confidence in the AI opportunity is growing with benefits being realized across many areas. This has included AI for network reliability, cybersecurity, detecting schemes and fraud and improving customer service.

For those of you still running around with old handsets, hopefully no, not too many on this call. Another reminder of 3G shutdown from the end of 2025. That closure will provide through the simplification and cost benefits and free up network capacity.

Medium term, we continue to note our intention to continue to grow EBITDA margins to the mid-30s, with reduced capital intensity and improved cash generation. And you'll see on the bottom right there, the very smart new premises that the team moved into 10 days ago. So that should be great for customers and staff in Auckland, on time and under fit our budget. So a nice job team. Back to you, Jason.

Thanks, Andy. Yes, nothing worse than getting the 3G come up on your phone. I won't miss that in future. Let's stick with New Zealand for a bit and turn to Wellington Airport. These results have been out for a while. So only a quick comment on track performance with the team working hard to offset economic and domestic capacity headwinds upon one intended in Wellington.

Good lift in international shows demand is there for capacity, though, and the headwinds will abate eventually and they're getting ready for that with the car park and terminal upgrades and the EMIS being installed.

Always working on expanding international further ever since I've known Matlack, that's been top of his mind. I've announced this MoU with Guangzhou, which the base force China Southern, and I hope to see a China Southern tail and Wellington at some stage once the EMIS is in place.

Diagnostic Imaging, a bit of a mixed bag here in New Zealand, a difficult half with a lower-than-expected margin mix of scans coming through, which means their guidance is coming back a little bit to be flat year-on-year. Improvement initiatives are underway, including a new clinic coming in Dunedin across the Tasmania Qscan, double-digit growth in guidance unchanged, so a good performance there.

Also happy to announce today that both our New Zealand and Australian businesses are collaborating to separate and consolidate their teleradiology businesses into a new stand-alone business. So this is literally radiologists in front of computers reading scans that are taken elsewhere, maybe urgent scans from hospitals or overflow work from bricks-and-mortar businesses. So that's been consolidated into a new single business.

We expect more efficiency and growth with a dedicated focused team and immediate scale in the space through this consolidation. Being less capital intense, these businesses tend to trade on higher multiples as well. Quite a lot of work I know between the teams to get to the stage and looking to complete the establishment of that by the end of the year.

On to renewables, back to them for a second. On Contact Energy, we were pleased to acquire TECT's 4.9% stake recently with a mixture of cash and fiduciaries shares, increasing our overall stake to 14.3%. This fits our strategy of seeking scaled cash flow-generating businesses, while also giving us more financial flexibility as a relatively liquid-listed holding.

We like context outlook too with synergies from integrating Manawa to be realized in interesting development options ahead. What about Gurin, you're going to do this, Andy?

Yes. Thank you. As given the nature of the business, there's not a lot of news relative to the update that aside provided in September. You can see that the first solar plant in the Philippines is beginning to make a revenue contribution and Gurin has recently bought a wind and solar project in South Korea from a European developer.

For Vanda, the key milestone remains approval of the export license by the Indonesian government. The team is right into detailed planning work with RFPs for the construction of the project assets currently in market. And we're targeting a final investment decision for this project around the middle of the next calendar year.

Thanks, Jason.

Nice one. Turning to Europe. Galileo is never getting a tricky market. There's an update here. But demand across the market is still affected by the war and a large data center build-out is not arriving as quickly there as it has in other markets. I would say that the medium-term outlook is as strong as anywhere. That will arrive. But in the meantime, the team is allocating its capital carefully to the most meaningful projects it has like this offshore wind one mentioned here, and they've got other interesting wind projects in battery and also some modest build like this, the first project in SLE.

And lastly, or at least next to Europe, Kao Data. Although data center build out is more modest in Europe than, say, the U.S., demand has increased really markedly, since last financial year, which we talked about in May and in a much more tightly constrained market than the U.S. So an increase in demand with not a lot of supply is creating quite an interesting environment.

Kao Data is well placed with over 20 megawatts of near-term capacity and interest from a number of parties that would see all that capacity contracted. This would be an exciting step change for the business and unlock debt capacity for further growth.

On that positive note, go to the numbers.

Thank you. Right, a few numbers. So proportion of EBITDAF, $514 million for the half, that's up 7% on the prior period. You'll see most of the uplift comes from CDC and Longroad, reflecting the growth of the operating assets. Proportionate development EBITDAF was up 15% on the prior period, which reflects the growth of our development platforms. Proportionate CapEx was down slightly, but there's still very material CapEx spend occurring.

A quick bridge on independent valuations. I touched on this earlier. It's been relatively modest growth in the last 6 months following a material uplift in CDC's transaction-based independent valuation in the previous period. The biggest movements relate to CDC, but part of that reflecting our additional investment. Manawa and Contact swap positions with some uplift in the Contact valuation plus $180 million of cash proceeds, which isn't reflected here.

Longroad is up $160 million across the period with some of the drivers noted in our disclosures today. And on the downside, we've noted -- we've reflected our RetireAustralia sale price in this bridge and the decrease in RHCNZ's latest valuation performed by a new valuer and reflecting a range of factors, again, as covered in the disclosures today.

Funding capacity. This is an update of the graph that we showed at Investor Day with the announced divestments bar growing. We have material funding capacity available to us.

Dividends. We are declaring a partially imputed interim dividend of NZD 0.725. We are signaling an intention for an uplift in the final dividend to deliver annualized dividend growth of circa 2% per annum, subject to the usual provisos. We continue to operate the DRP with a 2% discount.

And I will also stop to ref guidance. We've summarized a few changes in EBITDAF guidance here, which we have touched on as we've run through the peak today. To recap, as we signaled at Investor Day, we expect CDC to land at the lower end of FY '26 guidance. So we've tightened the range to reflect that.

Longroad guidance is up, largely reflecting the early delivery of Serrano. RHCNZ guidance is revised downward, which Jason touched on and corporate guidance. Corporate cost guidance has increased reflecting a mathematical impact of an uplift in Infratil share price on management fees.

In net terms, we remain within our previous guidance range before we adjust for the divestments of RetireAustralia and FortySouth. So taking all of that into account, we've got an updated range of $960 million to $1 billion.

We're tightening up our expected proportionate development expenditure range by $5 million. So the revised range is now $85 million to $100 million. And on CapEx guidance, the net effects of an uplift in CDC's guidance and removing our divestments leaves our proportionate CapEx guidance range unchanged at $2.2 billion to $2.6 billion.

Funding and liquidity usual update on the facilities and quality position. The one thing that's new is that we've made slight change in the leverage metric that we're reporting. So we've moved to a loan-to-value metric, which we think is more relevant than our previous measure. And as I've noted a few times we're in a strong financial position with considerable flexibility to support further growth.

Back to you. Thanks, Jason.

Thanks, Andy. Let's finish up. First, here's an updated view of the 3 pillars of the portfolio. We introduced at our full year results in May with RetireAustralia and FortySouth removed know that those sales are still conditional and to complete. And if you remember that sort of pillar approach led us to these 4 medium-term strategic objectives, which are set out here.

Most progress in the half on divestments, as we've said, but directionally, at least also on our operating cash flow, and these 4 KPIs continue to be our focus.

Next, sustainability. Where our work is turning up in tangible results with strong GRESB as we call them, outcomes. These are the people who rate private real asset businesses for their sustainability work. Infratil's management score was the first out of 135 peers and One NZ performed well winning medium-sized Company of the Year at Global Sustainability Awards.

This flows through importantly to global listed indices some of which are here with our Sustainalytics rating among the best in the world, and we're also committed to progressing our SBTi target, and we'll continue to report on that as we have here.

So let me wrap-up and we can go to some questions. With increased investment in Contact, strong progress on divestments, growing operating cash flow, as I've said, that is all underpinning Infratil having significant financial flexibility to invest for future growth.

Longroad and CDC both have strong contracted growth profiles, with material earnings expected. You can see that in this half starting to come through as development sites convert to operations that will support distributions from them in the future, hence my first point.

AI represents significant upside potential from that already attractive growth. And Longroad and CDC are well positioned to capture that through strong track records, deep pipelines and financial flexibility. As I've said, CDC has multiple opportunities with existing and new customers for significant additional capacity, while Longroad could push beyond, it's 1.5 gigawatt per annum target in the future.

Gurin is poised to join its scale as we have reported and maybe Kao is well positioned as well. We're a high conviction on these opportunities. And I said at the outset, we feel good about them. But we'll continue ways to position the portfolio for long-term growth, scanning as we always do for attractive new growth pillars as well.

So I'll finish there and go to questions, please. Harmony?

Your first question comes from Eric Choi from Barrenjoey.

Maybe I have 2, if that's all right. Just a long-winded first 1 on CDC. You've got a qualitative comment in there at the run rate for FY '28, it's pretty good. I was just wondering, if there's kind of multiple ways to triangulate maybe even a potential $900 million-plus [ EBITDAF ] outcome. If we think about the Investor Day, Greg was saying the growth trajectory will continue beyond FY '27 and then in FY '27, you're going to grow EBITDA kind of $270 million. If you just annualize your 140 megawatts of recent contracts that's left with a $100 million benefit by itself. And if you look at your kind of CapEx bill, you'll have sort of 825 megawatts growth and maybe that 600 megawatts IT low, but even kind of assuming a sub [ $2 billion ] per megawatt number could suggest $900 million as well. So all kind of points at [ $9 million ], plus. Sorry, Jason. Is that ballpark?

I think I'm following you. Yes, yes, I think I following you. I'm just running that through. The -- I think -- how do I put it? I think $900 million is possible. And I think the way you're constructing the maths is sensible. But it's not by no means in the bag, right? We -- that would require additional contracts, which we're working on. And we'll be updating on where we've got to on all of that, certainly by the full year. But I think the way you're constructing the math is sensible. A couple of maybe comments just listening to you now.

In terms of the EBITDA per megawatt, I think it is sensible to be conservative overall, but around that because what you see, I think, going forward, and it's maybe a little bit missed to date is the densification that we're seeing with new contracts coming through means that your ROIC on some of those contracts is exceptionally good, even with a lower per megawatt kind of assumption around it. So if you're tracking for an EBITDA number, then I think some conservatism is sensible.

We are very IRR and ROIC driven, so you can be assured that we're driving to exactly the same underwriting standards we've talked about in the past that kind of mid-teens plus. That's possible -- one way that's possible in this environment is that very strong densification we're seeing squeezing more megawatts into the same space. Does that help?

Got you. It's very, very helpful. Actually, can I do one more then, maybe just a segue from your comment on maintaining returns. But obviously, the new information is a bunch of the Neocloud deals being signed in the sector. So just listening to what Firmus has to say, they're sort of saying they've got a gigawatt plus commitment to CDC. So I just wonder if -- if you can tell us or give some color on how their rights of first refusals work at Firmus and Neocloud terms, at least as good as hyperscaler terms and maybe hyperscale is a view very favorably by wind. I just wonder how lenders view Neocloud versus hyperscalers as well?

I can give maybe some general comments. I don't like talking about individual customers, although on that particular one, Firmus. So the committed, committed is $40 million, but I think we're very clear on that on the CDC side. But having said that, Greg is personally very keen to lean in for the Australian company, he's founded to support other Australian companies like Firmus develop what he thinks could be an important export industry in the future, and I think Firmus agree. So they'll be leaning in to try and support their growth in the way. I think Firmus is describing to you having just listened to what you've said there.

But having said that, as I said before, we and CDC haven't changed our spots on how we underwrite the type of contractual profile we need to see underlying customer mix, et cetera, is all still very important that we've got very comfortable with the contract we signed. That sort of stuff doesn't been overnight. The usual due diligence is done. Firmus has a good track record, in particular, of providing these services globally and the underlying customer mix. They already announced themselves and NVIDIA is there, all goes to support the credit profile that we look at.

And I expect going on to the second part of your question, we are the debt providers are, we don't have insight into their particular debt arrangements. But as part of our kind of scanning for AI bubble type stuff, one of the big things we are focused on is underwriting standards for credit in the space.

And what we have seen so far suggest actually very sensible underwriting, where you're seeing underwriting of debt shorter than useful life, shorter than contracts from creditworthy counterparties and payback periods, all still looking reasonably robust. Now we don't see the whole market, but that is I guess, a comment on exactly what we're looking for to assure ourselves that underwriting standards aren't slipping and people are getting ahead of themselves, which we haven't seen yet.

Your next question comes from Ben Crozier from Forsyth Barr.

Just a couple of questions for me. First, just on the densification you're talking about on the data center side of things. So what exactly does that look like? Can you guys sort of give a little more example, is it going through to some of the older data centers built 10 years ago and up in the megawatts. So what's sort of required from that point of view?

Or is it just sort of the ones in the pipeline saying you're looking at them now and saying maybe they could be more megawatts than what you have sort of indicated previously?

At the moment, the latter, yes. So it's stuff in the pipeline that's been built, yes. Yes. Yes. Greg would say all of the infrastructure can scale, et cetera, et cetera, but we're not banking any of that in yet.

And then just on sort of free cash flow. If we look at both Wellington Airport and One NZ, sort of free cash flow was below what you've had as distributions back to inventory over the last sort of 12 months particularly in this first half for One NZ. What do you think a sustainable level of cash flow coming out of these entities? Is that what you've distributed now and that these companies have to grow to that level? Or is it, you're just looking at these as the moment you've got a bit of a mismatch as you've alluded to at the current level, and this is just a reallocation of capital, sort of levering up those entities? Or do you think that, say, One NZ and Wellington over time can grow to this current level?

Yes, I understand the question. Do you want to cover it, Andy?

Yes. Thanks, Ben. I mean we are looking for growth from both in terms of the recipe to get there, that medium-term guidance or outlook that we've talked about for one is material to that. Wellington Airport volumes, pricing, yes, we're -- again, we're expecting more from Wellington Airport through time.

And then if you look at the other assets, we can you reasonably expect a material uplift in operating earnings at the CDCs and the Longroads, probably more the CDCs, but we've seen the operating earnings grow in this period. So that's the sort of medium-term picture if that helps.

Yes. That's pretty clear. And maybe just last one on One NZ. Obviously, mobile growth is still pretty solid, but it is becoming a bit more reliant on price growth in the connections were slightly down year-on-year. Do you think over the next few years, you can stabilize that market share, you obviously been a little bit under pressure from just 2 degrees discounting. Is there things you're actually doing in market to sort of improve market share, increasing marketing or anything?

Yes. I mean that's always the aspiration that there is a balancing act. Isn't there between price increases in market share. I think the team is doing a really good job of managing that balance. Would we like to see more prepaid growth? Yes, we would. Now with those customers and the new stack, we think we've got greater flexibility in terms of how pricing constructs are created. So watch out for that, but it's a continuing area of focus. But I think the team is doing a really good job in a challenging market.

Is it all price? Or is there a mix? Sorry to ask a question?

Yes, that's right. So thank you. So there is mix in some of the growth in consumer postpaid has come from prepaid. So I think we would say the quality of the mobile revenues are improving through time.

Your next question comes from Phil Campbell from UBS.

Just a few questions for me. Just on CDC, just talking to a number of the Australian data center operators recently. They're kind of indicating there's been like an inflection in demand, quite a substantial increase in the demand in the last 3 or 4 months, which is kind of what you're alluding to as well. So I was just wanting to get your view, Jason, on kind of what's driving that? You did say it was across the board, but I was just interested in getting your views on what's changed in the last 3 or 4 months has actually driven that?

Then the second question was just on the Neoclouds. You kind of alluded to a little bit, but I'd just be interested in kind of what you include in your contracts to try and mitigate any kind of credit risk around some of these smaller or newer players? And also to what extent kind of NVIDIA plays a role on that.

And then just the last question on Longroad. I just noticed that there was a bankruptcy of a reasonably large solar developer in the U.S. I know at the Investor Day, we were kind of talking with the guys and that we're expecting a number of the smaller guys to probably find difficulties there. But was it going to be an opportunity for Longroad? But I was just interested in your views, if you had any intelligence as to what's gone on there. And again, I'm assuming there's kind of an opportunity for Longroad?

Thanks, Phil. Take those in turn. So inflection in demand, it feels consistent with what we were communicating at the full year actually, which if you recall, was that the demand we were seeing in June hadn't really gone away, but it had shifted to where it was coming from.

So while go back all the way last year, hyperscale was doing all the work. In May, we were seeing more or less the same demand, very strong, but coming from multiple pockets and you can sort of see that happening globally as well through different people, building the infrastructure that is largely going back to all the same uses, whether it's your Open AIs or Meta or other uses like that.

So I think it has been very strong since that period we're talking about in May and quite an inflection after that kind of period earlier in the year, while the market was transitioning to where it had been 12 months before to the state we're in now.

So very positive. And I think the good thing from a data center operator perspective is you're able to have, as I put in this presentation, multiple concurrent conversations with multiple people, so that if one falls away, there's -- there are multiple people who you can still talk to about.

None of it's in the bag, I would say, the demand is good. But a lot of the workload is globally oriented. So this is a key moment for CDC's business, Australia and New Zealand as countries, I think, to get on the front foot to get its fair share of it. And you can see CDC trying to do its best there with accelerating CapEx giving us pipeline in order, cranking its infrastructure to provide as much capacity near term as it can possibly be provisioned to do because that is still the key definer of whether contracts can be won your time to market. So that's a little bit of color on demand, I think still strong as we felt in May.

On credit risk, it's difficult to go into detail on specific contracts or even generally given that we've only announced one. So -- but I would say that we haven't changed our underwriting standards. And key things for us are underlying customer mix.

Obviously, an NVIDIA being there as a customer, in particular, is obviously material to an underwriting case. And more broadly from a CDC perspective, there's definitely a desire to help Australia get on the map here, but that -- building that relationship with NVIDIA is a key strategic plan for us as the key player in the space for a long period of time. So all of that goes into the mix.

I think the densification is probably a little bit overlooked as well, as I said to Eric, Neocloud tend to deploy a much higher density. So your capital employed or capital risk is quite a different equation as well. All of that then goes into the next to come up with an underwriting case that we can support.

Last one, smaller platforms in the U.S., M&A has got really busy in the U.S. renewable market for sure. People are selling interesting projects, smaller developers coming to the market under stress and knowing there's an opportunity and not a 1 million buyers either. So the team is very active.

We're quite active on quite a big portfolio, which we lost to someone else. So the team will pivot to something else, but I definitely think those opportunities are coming up in this next period, partly what we're saying there's the kind of potential for upside here even if it's still early days in the business -- and the market is building momentum towards that 2030 date. I think that's covered at all hopefully.

Your next question comes from Grant Swanepoel from Jarden.

A couple of quick ones. Your proportional EBITDA, you're saying that it's broadly unchanged at related adjustments. Over the last 3 months, translational currencies have moved against New Zealand by about 5%. What is your outlook for New Zealand dollars in terms of what you've got in your forecast?

Andy?

Well, I think we've noted the exchange rates, Grant.

What do we have?

Okay. So actually, it's a softer outlook to EBITDA in New Zealand dollar terms or in high currency terms, if the translation covers softer outlook.

It's a very modest sum.

Second question, just on your now at half pregnant stake more half pregnant if there is such a thing on Contact at 14-odd-percen. Can you give -- where will you be able to give some sort of color when this thing isn't just cash?

I think the options are all there in terms of whether it becomes a core part of the portfolio, as you say, a proxy for cash. We don't have a strong view or need to form that view now. I don't think the tick stake was a little bit their timing, their ability to -- and willingness to transact on terms that were particularly attractive to us in terms of their mix of shares and cash. So I wouldn't read too much more into that other than it being slightly opportunistic. And we haven't really formed firm views either way in terms of proximity cash or a strategic long-term holding and don't really need to yet.

But I do think it's not sustainable or a whole 15% of a listed company for ages. We do have the synergies that are going to come through over the next year or so. I think once those are all fully priced in, then you're probably in a situation where you had to make it a stronger call. But then that feels, I don't know, 6 to 12 months away, in my mind depending on what happens to the market price.

So while we're in that period, we'll keep forming our views and seeing how the rest of the portfolio evolves, what happens to other cash flow-generating assets. But in that sort of time period, I suspect we do need to make a call, as you see.

Your next question comes from Paul Mason from Evans & Partners.

Just 1 on CDC. I was just wondering if you could make some comments on the power position of the business because you got like about 2.5 gigawatts, including future build in the presentation.

Like how much line of sight do you have over that 1.6 future build in terms of the power being secured already? And do you have like short or medium-term time frame, so like any that's not fully firmed to get secured as well?

Yes. The question, I have the complete breakdown. I mean, it doesn't really go on the pipeline until we have line of sight on the power. So we'd have line of sight on it. The key point is when it's deliverable, as you're alluding to. And near-term delivery is pretty constrained in both those key markets, and the team are working pretty hard to get as much on as soon as you can in that kind of next 12- to 24-month period because that's where a lot of the demand sits.

I don't have the exact numbers. But yes, you couldn't turn on 1.6 gigawatts of power and all those sites today, tomorrow or next year, for sure, it is for delivery in a staged way over those periods, Paul.

Your next question comes from Stephen Hudson from Macquarie Securities.

Just a couple from me. I just wondered if you could give any sort of feel for what you're seeing in the stabilized data center pricing space. So cap rates around stabilized data center transactions? And then just a further one on CDC. Just on the independent valuation, whether or not the current independent valuation includes Marsden Park densification benefits and fully incorporates the West Australia campus as well?

On the first one, we are quite interested in the space funnily enough. So I don't know, 6.5% cap rate for good quality, stellar outcome, people would be pushing for a tad under 6%, which you can see in the old portfolio around the world, but difficult to get as a bit of guidance. The densification now is not in the independent -- the 30 September independent valuation. I'm pretty sure. Andy is nodding here next to me. So yes, that's still to come.

And West Australia campus as well that doesn't look as if it's in there.

A little bit, just a little bit.

And maybe, Andy, straight to you, the March recut, is that the most likely timing for the independent valuation term corporate at least those 2 factors, last impact densification in West Australia.

Potentially, I mean, management will need to take a view of it before the independent valuer takes it into account size, I'll put it in that potentially [indiscernible]. I think you're alluding CDC, March valuation or maybe December.

Okay. I'll sneak in one more. I think you've indicated that it may be useful for Infratil to secure a credit rating over time. You've obviously had a significant improvement in your parent operating cash flow position. I think you're sort of traveling at about $160 million. Is that sort of job done or do you think you need to see more improvement there to secure an investment-grade credit rating? And I guess, part B to that, what do you also need to see on the liquidity front?

Andy?

Yes. It's something we have turned our mind to Stephen. Part of the answer depends what methodology you pursue, and there are various options. But it's fair to say the metrics that we think are most relevant are beginning to tune up or have already turned up.

Yes, I think that's right. And you can see one of them and the change Andy has made and how we're presenting gearing in this pack now run. So that's -- that is one of the measures we think is the more relevant one for what you're talking about.

Your next question comes from Suraj Nebhani from Citi.

Just a follow-up to 1 of the earlier questions initially. On the secured power of the 1.6 gigawatt pipeline, is it possible to make some comments, Jason, on that? How much is secured already?

As I said, we have a line of sight to all of it. Really, the key is timing, though, in this environment. Yes, when can you get it on. And that's a combination of work with -- what I was trying to say is work with the utilities, but also work on our side of the line in terms of densification and other things we can do on our side. So the team's been great, I think, at getting big watches of power on in good time frames and continuing to be successful of that as a key differentiator for them.

And then maybe just a related question on the partnership that you've announced recently with Firmus. Obviously, Firmus have been in the press talking about much bigger numbers. Like is it fair to say that Infratil has capacity in the current book to fulfill all of that? Or do you need to grow the business a bit more?

I think you'd be looking to grow the business a bit more for all of that capacity. Not all of it will need to be where this first workload is and even may have talked about there he's talking about Firmus. Tasmania site, for example, would be a growth.

So CDC is leaning into that relationship because we think it's an important one, particularly with NVIDIA there. But we need to run through our normal underwriting standard as well, and we're looking to at a CDC level, achieve a -- continue to achieve a very attractive mix of customers. So not all of our pipeline is going to go to Firmus or any Neocloud, there will be an attractive mix. So again expansion would be implied in that I agree with that.

And then in the back, there were some comments around CDC where you talked about the run rate impact of development completions into FY '28. Is that similar to the numbers that were being discussed, I guess, early on, the $900 million in response to one of the first questions?

I think -- no, just continuing the full year impact of contracts that come online to hit our 660 or whatever it's going to be in FY '27, isn't going to get you all the way to $900 million. The -- I think the -- but it will get you beyond the $660 million say where we land. So I'm just saying there's momentum through there. To be clear on the $900 million, what I was agreeing with Eric, it's -- it's possible, but not in the bag, we will be needed to sign further contracts, which obviously we're working on. And then so you want have a chance to hit that. And then it would depend on exactly when those contracts convert to billing as well.

So a few things need to fall our way for $900 million to turn up as actual. And to be double clear, we're not changing guidance at that point. We're just sort of talking theoretically about how the maths could work, yes.

Of course. And just one final one on CDC. I'll jump off then is on the CapEx side. The CapEx has gone up this period. Is that a function of just putting more capacity to work and not an increase in cost per megawatt?

No, definitely not an increase in cost per megawatt. It's additional capacity and fitting out for new contracts that we've announced in the period.

Your next question comes from Grant Swanepoel from Jarden.

I'm sorry, that's a glitch.

No, fair enough. Back to you, Harmony. Anyone left.

[Operator Instructions] Your next question comes from Wade Gardiner from Craigs Investment Partners.

Just giving away from data centers for a second, separation of the teleradiology business within Qscan and RHCNZ, does it have the potential to be material? And how does that affect the strategic review and sale of Qscan?

We think it's -- it doesn't detract from the strategic reviews, the strategic reviews going ahead. Telerad is an faster-growing, higher multiple vertical for sure than bricks and mortars. And there's been an opportunity for both the doctor owners, remember we own it with them and for us to grab a position to scale in an interesting market through doing this ahead of the strategic review essentially is how you should think about it.

Could it grow to be material? It would be a long road to doing it, but it could given the dynamics much more scalable and not a lot of capital intensity required. To give you a sense of the size, sort of roughly $10 million of EBITDA going across and maybe a couple of million or more of extra OpEx in terms of setting it up and running it as a stand-alone business, from which it should grow from. So yes, that could give you a feel for it.

Right. So that would essentially lower the value of what you're selling?

Yes. Yes, although arguably, hopefully, on a total basis, you'll have a higher multiple on the EBITDA. So you should be up.

There are no further questions at this time. I'll now hand back to Mr. Boyes for closing remarks.

Thank you, Harmony. Thanks, everyone, for the questions and the attention. Really, just on a final note, as I said at the outset, we feel really good with where the portfolio is at. With those contract wins at CDC, I don't think our valuation for their business is now particularly challenging.

And nor as Longroad, obviously under pressure through that period with a strong demand ahead and the business is well positioned to win new contracts and accelerate for further growth from here on top of already attractive contracted profiles. That stuff isn't in the bag. It needs to land and we need to win it, but we feel good about our prospects of doing that. So I'll finish there. Thank you for Andy and I and see your around.

Thanks, everyone.

[Foreign Language] Welcome to Infratil's 31st Annual Shareholder Meeting. I can confirm that we have a quorum and declare the meeting of shareholders properly constituted.

As in previous years, shareholders were given the option to join today's meeting in person or online. And in addition to those in the room today, I'm very pleased to welcome those of you participating online.

On the screen is a picture of the virtual meeting platform, and the boxes show where to click to get a voting card, how to ask a question. But if you need any help, you can call the number displayed in the blue bar at the top of the platform. I also advise the meeting that members of the press and non-shareholders may be present. At the completion of the meeting, those who are here in the room with us today can join directors and management for refreshments.

But before we progress to the business of the meeting, I'd like to introduce you to your directors. So I'm Alison Gerry. I'm the Chair of the Board, and I'm an Independent Director. I'm a member of the Audit and Risk Committee and the Management Engagement Committee, which we refer to as the MEC, and I'm seeking reelection at today's meeting.

Jason Boyes is a non-independent Director and is also our Chief Executive. Kirsty Mactaggart is an Independent Director. Kirsty is the Chair of the MEC and a member of the Audit and Risk Committee, and Kirsty is also seeking reelection at today's meeting. Andrew Clark joins us from Melbourne. Andrew is an Independent Director and a member of the Audit and Risk Committee, and Andrew is also seeking reelection at today's meeting. Paul Gough joins us from London and is an Independent Director and a member of the MEC. And Anne Urlwin is an Independent Director; and Anne is the Chair of the Audit and Risk Committee. Peter Springford is an Independent Director and a member of the MEC. And unfortunately, due to a ski accident, Peter is joining us online today. We also have Andrew Carroll, our Chief Financial Officer; Matt Ross, our Deputy Chief Financial Officer; and Brendan Kevany, our Company Secretary, in the room today. Ed Louden and Gavin Silva join us from KPMG, our auditors.

We also have directors and managers from our businesses here today. Jason Boyes is also a Director of CDC and Longroad Energy; Andrew Carroll is a Director of One NZ; and Matthew Ross is the Director of Wellington Airport.

Now moving to the meeting proper. I will take the notice of meeting as read. Proxies have been lodged by 883 shareholders, holding 262,025,785 shares, and this represents 26.7% of the ordinary issued capital, excluding our treasury shares.

I can also advise that the Board has confirmed the minutes of the last annual meeting held on the 22nd of August 2024 as a true and correct record of that meeting.

But before we move on to the formal matters, I'd like to take a moment to reflect on the year that's been. The past year is a testament to the resilience of our portfolio. Our commitment to look past short-term turbulence and keep sight of the opportunities ahead is delivering for our shareholders, and we're confident in our strategy and optimistic about what's ahead.

That's not to say we haven't faced challenges, and it's a theme of this year's annual report: Navigating beyond the noise. It's fair to say that the world has felt increasingly uncertain. We saw volatility emerge from questions around AI growth and data center demand, followed by shifts in U.S. budget and renewable energy legislation.

Closer to home, a telco competitor also lost confidence of some investors.

In a portfolio as diverse as Infratil's, encountering 1 or 2 events is not unusual, but this year, we faced 3 in quick succession, and each touched our largest investments. These moments of volatility remind us that while we remain focused on long-term value, we must also be agile and transparent. When market sentiment diverges from our view of underlying value, we respond through increased disclosure, active management and a disciplined approach.

Our share price recovery is reassuring. But as we scale, and particularly with the current, more concentrated portfolio, we can expect episodes of volatility. But I want to be clear, the current vintage of Infratil assets is one of the strongest we've seen.

We know many shareholders have been attracted to Infratil because of our investment in CDC and with good reason, it's a very high-quality business. But my message to those investors is that Infratil is more than any single asset. Infratil is an enduring platform that has invested wisely in ideas that matter for over 30 years, and our long-term performance speaks for itself. We've consistently met our target return of 11% to 15% per annum over a 10-year period.

And that's not luck or one-off success. It's more than picking 1 or 2 investments that are good. Our secret sauce is a disciplined and consistent approach. It's identifying thematic opportunities, backing exceptional management teams and our Manager, Morrison, executing with focus and intent.

The real strength of Infratil lies in our ability to evolve, spot what's next and to act decisively. That's what sets us apart. That's what gives us confidence in the road ahead.

Looking back on FY 2025 and the period since, 4 milestones stand out. First, we acquired an additional stake in CDC, and this move strengthens our governance position, giving Infratil a majority of directors on the CDC Board. And we think this is a meaningful step in shaping the future of one of our most strategic assets. Secondly, we completed the merger of Contact Energy and Manawa Energy. And third, Infratil was included in the ASX 200 index, a significant recognition of our scale and performance and the first of our FY 2026 strategic KPIs to be achieved. And finally, we announced the sale of RetireAustralia. It was fantastic to do.

This marks the beginning of our disciplined divestment program based on businesses that are unlikely to scale under our ownership. Each of these milestones reflect our commitment to active management, strategic clarity and long-term value creation.

While the Board and manager have always been clear on our strategic priorities, this year, we've taken steps to sharpen this clarity, and we've added structure, enhanced the transparency and have begun communicating these priorities more directly with shareholders.

We're also formalizing key elements of our investment approach that we believe are critical to sustaining future performance as we scale. And this codification isn't just about consistency, it's about accelerating learning. Newer businesses benefit from the experience of our more mature ones, and that's vital as we grow. And we call this framework the Infratil Way. It includes our approach to portfolio company remuneration, Board performance reviews and sustainability practices. And more work is underway to embed these principles and unlock synergies through greater collaboration between portfolio companies where it makes sense to do so. This is about building a platform that not only performs, but stands the test of time.

While today is our formal annual meeting, it's not the only time we meet shareholders. And Infratil remains one of the few NZX-listed issuers that continues to run an annual retail road show. And this year, we held 13 meetings in 12 cities and towns throughout New Zealand, and we met over 1,500 shareholders. Alongside this, and together with other directors, I've met about 20 institutional investors in recent weeks. And these conversations have been invaluable. A consistent theme has emerged. Shareholders are asking for greater levels of disclosure, more consistency in how we report, clearer information on independent valuations and ways to make Infratil's complexity easier to understand, particularly for the marginal buyer.

This is a journey, and we know there's more to do. Our strategic KPIs have been set with this in mind to reduce complexity and provide clear markets that our shareholders can track over time.

I'm pleased to report that our manager, Morrison, continues to deliver strong performance. And there's a healthy tension between Morrison and Infratil, the kind that fosters constructive challenge and sharpens decision-making. We work well together, and the alignment between us is very strong. We remain focused on delivering value for shareholders, and that includes continuing to look at our fees. Our consistent view is that the current arrangements, which include high hurdles, no incentive fees on New Zealand assets and the FY 2023 changes to allow for offsetting continues to serve shareholders well. But we've also reviewed, together with Morrison, costs that are charged under the management agreement, and we've removed about $4 million of annual costs.

I'm proud to cheer a high-functioning and well-balanced Board. We've got strong capabilities and skills sitting around the Board table, and we constantly challenge ourselves to make sure we're making the best decisions on behalf of the shareholders we represent. This year, we undertook an external Board evaluation and pleasingly, Propero found that Infratil's Board is operating at the 90th percentile of their database.

Shortly, we'll come to the formal part of the meeting where I cover the reelection of Kirsty, Andrew and myself, but I'd like to just touch briefly on Board succession. We believe that it's important for Infratil to have an independent Chair. And while there are various views on Board tenure, we understand that after 12 years, independence questions will be raised. And as such, and if reelected, I expect my next term will be my last. And if that is the case, I would expect to retire at the ASM in 2028.

The Board is actively engaged on Chair succession to ensure that we have a smooth and orderly transition, and an announcement will be made of a decision regarding my retirement or an appointment of a replacement Chair is finalized.

Peter Springford has also confirmed that he will retire at the end of his current term at the 2026 ASM and will not stand for reelection. The Board is currently recruiting a director to join before Peter retires.

I'd like to conclude by reiterating my key message from previous years. We remain focused on investing in ideas that matter through consistency of approach, discipline and a continued focus on execution.

So with that context, I'd like to now invite Jason to speak to how we're executing on these priorities and positioning Infratil for continued success.

Thank you, Alison. [Foreign Language]. Hello, everyone. Nice to see you here today. As Alison said, I'll now look ahead, I think, to what we're trying to achieve over the next year. As she highlighted, the past year has tested markets and our portfolio in equal measure. But against that backdrop, we have made strong progress on the strategic priorities she outlined. And at the same time, our portfolio delivered operating performance towards the upper end of guidance with proportionate operating EBITDAF, as we measure it, up 9% over that year. That momentum has carried on into the current year with a strong outlook for this financial year 2026 and guidance for a further 9% increase. I'd like it to be 10%, but 9% is good enough. And while it's still early in the year, the portfolio is still, so far, tracking in line with those expectations.

That's a testament, as Alison said, to the resilience of our assets and to the discipline of our long-term investment approach. That consistency really has enabled us to look through the noise, stay focused on the fundamentals and position the portfolio for sustainable growth. And while some challenges remain, we've adapted quickly.

At our annual results in May and in agreement with the Board, we outlined 4 key priorities to guide Infratil's medium-term strategy. These priorities reflect the scale we've achieved, growing from a market capitalization of just $2.6 billion in 2020 to nearly $12 billion today. It's a significant shift and one we hope to continue over the medium term, but with that growth comes the need for deliberate choices.

How do we manage concentration in a significant asset like CDC that's grown -- that driven that growth? Where do we focus our capital to truly move the needle in the future at that scale? And how do we build a shareholder base that can support us into the future, all questions that we talked about as a Board. Managing scale and growth is, I think, a real high-quality challenge and problem, but it requires a lot of discipline and foresight, which is where the 4 priorities that we talked about and they came from.

We've actually made good progress across all the 4 priorities, as Alison said, and I want to give you an update on each of them today. So just to remind you, the 4 priorities are: Identify and scale our next growth platforms beyond CDC and Longroad; divest businesses, as Alison said, that are unlikely to scale under our ownership and reinvest that capital; number three is balance Infratil's operating cash flow and dividends; and then number four is, as I said, continuing to broaden our shareholder base to support future growth and scale.

So let's take each of those in turn. If you can skip ahead. Yes, here we go. So CDC and Longroad have been extraordinary performers for Infratil, as everyone here knows. And together, they now represent about half of our portfolio value and have delivered strong earnings growth as well. We remain confident in their continued growth. But as Alison said, the strength is the portfolio, and to maintain that portfolio in balance and to continue to drive returns over the longer term, we need to build the next generation of growth platforms. And we're making good progress on that.

One we talk about often in this context is Gurin Energy. That's our Southeast Asian renewable energy development platform. And it's now positioned for material expansion through a project they call Project Vanda, which is a huge solar farm development, about a USD 2 billion to USD 3 billion CapEx project selling power into Singapore. And it's received conditional approval from the Singapore authorities. And more than 90% of the land required for it has already been secured. And while that project is still highly conditional, it's a really high priority project for us. We expect it would require about USD 500 million of equity and create about the same amount in value if that project can be brought to fruition, which for all of us is about $1 a share, right? So really material.

We are targeting a final investment decision in late 2025, and financial close in the first half of 2026 at the moment, and that could slip a little bit, but that gives you an idea. But the really big portfolio point here is delivering on scale opportunities like this will allow CDC to maintain its current weight in the portfolio, about 40%, even as it continues to grow. So the strategy is really to grow other businesses rather than necessarily get rid of parts of CDC at this stage. And that will help us address concerns about concentration risk within the portfolio.

Looking ahead, we expect to share more detail about Project Vanda at our Annual Investor Day in Sydney in September. And on new opportunities, not yet in the portfolio that we think could be the next CDC, Longroad or Gurin for Infratil in the future as well. So look out for that.

Priority 2 was to committing to optimizing our use of capital by divesting businesses that are unlikely to scale under our ownership and reinvesting those proceeds into more scalable opportunities. Our goal is to realize $1 billion or more over the next 2 or 3 years from doing just that. For a growth business like Infratil, each investment really needs the potential to scale to $1 billion or more, so $1 a share, over a 3 to 5 period, or that business, that investment is unlikely to be meaningful for you and I as shareholders. So over time, we also expect to shift our portfolio so that a greater share of our operating cash flows come from a smaller number of larger businesses, which should have the effect of improving the stability of those cash flows, which tends to be what you get from bigger businesses, but also reducing complexity and simplifying the portfolio for new investors who may want to come on board.

As Alison mentioned, the first step in this divestment program was the sale of RetireAustralia announced a couple of weeks ago. This is a quality business, as we've talked about over the years in these forums, but one that has become too small to move the dial for Infratil shareholders. When we first invested, I was surprised at this. $215 million, we invested in December 2014. It was on New Year's Eve. I remember that part. But our market capitalization was $1.6 billion when we invested in that. And now, as I say, we're nearly $12 billion. So even with positive changes we've made to the business, RetireAustralia no longer has the scale to deliver meaningful returns for our shareholders without requiring significant additional capital from us.

The sale price reflects an equity value below our carrying value. However, when viewed in the context of our broader portfolio objectives, as I've outlined, we believe this is actually the right step.

The expected sale proceeds, which is about AUD 300 million, will preserve nearly all the contributed capital when you factor in both the capital invested and the distributions we've received. So in effect, we've got our money back. And I think that's what investing in infrastructure should really look like. Some downside protection, so that even when a business doesn't scale as intended like that one, we can get our money back. Further work towards the $1 billion target is well advanced, and we expect to continue to make further announcements on other divestments before the end of the year.

Pillar 3 is balancing operating cash flow at the Infratil level. What we're talking about here is ensuring that the distributions we receive out of our portfolio companies cover both our fixed annual costs and our dividend. Right now, we cover our costs, but not the full dividend, and we want that balance to become sustainable over time. We expect to close that gap over the next 2 or 3 years as CDC and Longroad, in particular, complete their current accelerated build program. So those projects will start paying cash back to their businesses, which should flow up to us. And also as One New Zealand's free cash flow continues to grow as they finish their elevated CapEx and reinvestment programs internally and actually, they're trading pretty well as well.

As I noted earlier, the trading performance of our portfolio overall has been in line with expectations, which will help support that path back to balance as well. And also proceeds from divestments will pay down debt, just less interest, and that will also strengthen our position. So keep an eye on that. I think this long-term sustainability of the dividend is something we're trying to demonstrate through doing that.

Final point is broadening our shareholder base to match the scale of the company that actually we are today and that we expect to continue to build. A key milestone in doing that was include -- our inclusion in the ASX 200 index last month, which generates strong interest from new investors and expanded our reach in Australia because for fund managers in Australia, that is your benchmark. So suddenly, they have to take a view on whether you own you, which is a really important step for us.

We've always had strong support from retail investors, thankfully, and we hope and expect that to continue. But as Infratil grows and our portfolio becomes more global as well, we expect increased interest from offshore institutional investors that will help strengthen and diversify our shareholder base. And getting that mix right of local and global investors is a priority and actually beneficial from -- for everyone. If we can manage it thoughtfully, it should mean that broader perspectives are being brought on the value of the portfolio. It should improve liquidity, which should make it easier for all investors to adjust their holdings when needed at better pricing, particularly at the scale we're going to be.

So to finish, the strategy that we outlined in May is well underway. We're building the next generation of growth platforms. We're divesting smaller assets, simplifying our portfolio and investing into bigger opportunities that will drive future shareholder returns at scale. We're positioning to balance cash flows and dividends, and we're broadening our investor base to support our future growth. The opportunities ahead are significant. And our disciplined capital approach to capital allocation remains as important as ever. Infratil's success, as Alison said, has come from a combination of patience, which we've needed a lot of this year, conviction and action, sort of knowing when to stay the course and when to move decisively. The steps we have taken this year and the ones we expect to take ahead are about ensuring we have the right portfolio, the right scale and the right momentum to keep delivering for our shareholders.

So I'll finish there. Thank you for your continued support. I look forward to answering your questions during the Q&A section or afterwards and sharing more at our Investor Day in Sydney in September. Now I hand it back to you.

Thank you, Jason. So there's now an opportunity for discussion of the annual report for the year ending 31 March 2025. And I'll first going to take questions or comments from those of you in the room, and then we'll go to questions which might be submitted online. Where a question relates to one of our businesses, I might call on the Director or management rep present to provide a response. For the questions submitted online, management will collate the questions. And if there are multiple questions on the same topic, we might aggregate them. So if you wish to comment or raise a question in the room, would you also just mind waiting for a microphone to be brought to you and then clearly state your name. So let's go to questions in the room.

Yes, we have one. Over here, Sharon. Rose is there. So competition who can get the microphone there first.

My name's [indiscernible]. I was just wondering what your megawatt breakeven point is on your portfolio -- across the portfolio. And I wonder if you could say a bit more about establishing a international shareholder mix.

I might hand the megawatt one?

Do you mind explaining what do you mean by megawatt?

Yes. For our data center business or our...

Your [indiscernible]

Oh, yes. And not including return on capital?

And return on capital...

Return on capital. Yes, I can -- I can have a go at that. It's a little bit different in different markets, but I mean the U.S. is our biggest market. So shall I talk about the U.S. maybe?

Yes.

Yes, we do. It's quite different in different markets. But to say -- so I can have a go at in Asia as well, which is probably different again. The unsubsidized LCOE, levelized cost of energy, in the U.S. for our solar projects is, I think, roughly in the 60s, 65 would be a pretty normal U.S. levelized cost of energy with a sort of 8% to 10% return on equity, I think, is roughly where you can kind of break even.

You would be writing -- the subsidies in the U.S. worth about $20 a thing. So actually, the unsubsidized will be closer to $80, sorry, post-subsidy, you're in 60s, you'd be $80 to get to an unsubsidized LCOE broadly across the state. It's so different, right? Maine, there's no sun; California, there's a lot. So just to give you a feel for it.

In Southeast Asia, capacity factors are a bit lower because of the basically smog, but your CapEx costs are so much cheaper. So solar panel are about half the price in Southeast Asia compared to the U.S. And that is, by far and away, your largest capital cost. So there, I would expect LCOE, your breakeven point, probably on an unsubsidized basis to be closer to $50, $60 level, I would guess roughly in U.S. dollar terms.

And I don't -- the Europe would probably be somewhere in between. You've got higher labor costs, but cheaper panels. So I don't know if that gives you kind of what you need or whether you have a follow-up to that, anything you were thinking of.

Yes. The gas pricing...

Yes, gas is about 90 -- 80, 90. So you're still a little bit cheaper than gas depending on the input gas costs at any given time, but you are a lot faster in the U.S. with solar.

So the question really is, on an unsubsidized basis, so when all the tax credits running out in Longroad, is it all going to be taken by gas? Or is solar going to have a future role is essentially, I think, what you were wondering, yes. And so the current view would be that unsubsidized solar will be a little bit cheaper than gas, but it will be -- it's quite a lot faster. So you can build sort of 500 to 800 megawatts of solar in about 18 months. For a gas turbine, takes you 3 to 5 years. So I think the view in the market would be they'll both be a part of the solution in an unsubsidized world. And I can't remember the second question, so yes.

Our international investor mix.

Yes, our international investor mix. You could talk about it. I mean I can have a go at it.

Yes. How about I've just pulled up some stats and then I might hand over to Jason because we're certainly getting a lot of inbound interest subsequent to our inclusion in the ASX 200 index, which has been fantastic. Suddenly, it is on international investors' radar. But if -- and I'm sure many of you have been long-term shareholders of Infratil, which has been fantastic.

Over time, say, if I compare the last 2 years, we have seen a reduction in the percentage of retail in New Zealand shareholders. That's come down from about 44% to 39%. So still predominantly the largest group of investors is New Zealand retail, which is fantastic because New Zealand retail is usually very supportive and sticky. We've got institutional investors here in New Zealand, and they have come down a little bit from, say, I've got 29% to 27%, but still a strong growth.

And then the interest outside of New Zealand has been our offshore institutional investors, and we've sort of seen them grow from 24% to 30%. And some of that movement took place when we raised our $1.2 billion in -- when was it? March last year, I forget -- which was a time where we saw some newer investors join the shareholder base. But Jason, you might like to -- you've been doing a lot of traveling and starting to meet many more investors.

When we used to do that offshore marketing 2 years ago, the constant issue was liquidity. And so their ability to sell their stock if they bought it quickly. And because we weren't in a number of indices, it was quite low. And then from the meetings I did in the U.S. last week and earlier in the year, our inclusion in the ASX 200 has increased our liquidity markedly. It would be up 5x from what it used to be per day. And so now that isn't a barrier. And so we're kind of in this transition really where we have a number by number of offshore investors.

We have a lot more than we used to, but they're all still sitting at a kind of a small shareholding watching to then be convinced to come in, but that's facilitated by this index inclusion that I talked about because that means your liquidity is up. So there's -- we're never satisfied at Infratil about many things, right? And this is another one where we hope to go from those little kernels of a start with this index inclusion to growing. Basically, you sort of want 3 or 4 of them at scale to make a meaningful difference to the shape of your register over time. So that's something you can continue to ask us about. It is a strategic priority for us.

Great. Thank you. Do we have any other questions in the room? Yes, we have one at the back, right.

[ Corrine Ivanka ], shareholder. Did I hear you say that the value of all your portfolios is $12 billion?

That's our market capitalization today, yes.

But that's not net of debt, is it?

Yes, yes, that's net of debt.

It's net of data. Okay. But your recent divestments, you have sold off and just getting your money back?

That was just RetireAustralia, which is a subscale one exactly.

So on Page 115 of your report, I see that the management fees have gone from $214 million in '24 to $456 million in 2025. Can you explain that, please?

I'll take that question. So the management agreement has been in place for about 30 years, and it is very complicated. So we totally understand that it is -- it takes quite a lot of effort to understand the different parts to it. But Infratil pays our external manager, Morrison, a fee based on our market cap plus debt to manage our assets. And generally, that fee, I think, is about 0.8% and costs Infratil about $100 million. Then if Morrison performs and chooses to invest in fantastic sectors or companies, there is an opportunity for the manager to earn performance fees outside of New Zealand. So performance incentive fees are only paid on non-New Zealand assets. And if there is a return above our 12% hurdle, then Morrison will be paid 20% of that and 80% of that value goes to shareholders.

Now we did have a large uptick in the independent valuation of CDC last year, and that came through from an independent valuation, and that was one of the key drivers of the large fee, which you have mentioned. So about $350 million is attributable to the performance fee, which we pay Morrison, and that is because the value of CDC has changed so markedly.

The only thing I would say is that, that number goes through our accounts. However, we do pay that fee over a 3-year period. So we pay 1/3 straight after the financial year, we'll pay a 1/3 a year later and 1/3 2 years later. And if the value of the portfolio goes down through that time, that fee is adjusted. Does that help?

A little bit. Theoretically, though, the value is what you're holding at the moment with this independent. But those -- that asset that you divested at just getting your money back, will that be reflected back in their fees? Because I mean this has gone over double. These fees have doubled. I mean if they doubled again next year, it would be $800 million. I mean, there has to be some sort of a cap. Surely, there's a cap.

Well, I mean it's an interesting question for shareholders. Do you want your returns to be kept? I want Morrison to produce fantastic performance. But your point about is it going to be -- will the sale of RetireAustralia be reflected in the fee to Morrison? It is. And in our press release, we said that yes, we have made a 0 return over the life of holding RetireAustralia. But in the past, we have paid some performance fees to Morrison, and there is going to be -- we call it a negative incentive fee of $21 million, which will be offset next year against that annual fee.

I'll be very interested to see what they I get next.

Yes. Thank you. Any more questions in the room? If not, we might -- yes, sorry, we have.

I'd be interested to hear your views on how you see the revenue growth derived from CDC and AI, which is what's underneath it all for data centers. Yes, I use AI every day, but I pay hardly anything to use it. And Gemini and ChatGPT and all these things have very low fees, incredible performance, a wonderful product, but I just struggle to see where the money is going to be for the operators in that space and how the data centers will continue to make so much. And will companies like Microsoft just be able to charge a whole lot more for AI when you can get access to it today for the same fees? Would have been the case in the past.

So Jason is on the CDC Board. I may ask that question of him because I'm sure that's something that the CDC Board has discussed at length.

Yes, it's a great question. And just because the mic got there late, if you didn't hear online, it was a question about what's the economic sustainability of the revenue growth that CDC is getting and expects to be from AI over time, given that a lot of these products are -- the free ones are quite good, and the ones you pay, not a lot more are exceptional.

I think it's just a big question for your Microsoft stock as for your data center stocks. Our approach at Infratil with CDC for a long period of time is to prioritize customers with the highest credit quality and the longest term contracts we can get our hands on. So a traditional sort of contract that we would sign with one of those large counterparties would be 15 years long. So in that -- and a typical payback period for a data center on these projects is 6 to 8 years. So -- and we hope to continue that kind of structure in the future. If we can, then I think we're in a pretty good position, right? So we'll have all our money back. We'll have made a pretty good return. And all these things -- and Greg's focus is on building these data centers that will be able to be upgraded relatively cheaply for whatever the new technology is in the future.

Can you see a world where they just stop doing AI? I don't think so. They're going to have to be in the game, right? But could growth rates slow? Yes, I think so. And our approach really is to make sure our data centers are the best place to get the renewals at that time for the capital that we've put in place. But the key really is to not sell that capacity on 5-year contracts or 3-year contracts. The longest contract you can get is the way to create the best sustainable value for us as infrastructure investors. And then your view on the sustainability of it will be just as good as mine, but I think it's definitely a question mark. For Infratil, that's our approach anyway.

Okay. Any more questions? We have one down here. The microphone is coming.

Barbara O'Connor from the New Zealand Shareholders Association, but also a shareholder in my own right. Thank you for the very succinct presentations. I really enjoyed them.

I have 2 questions. One, as a retail investor in New Zealand, I wonder, and I see the growth in the international investors. What are the chances of having imputation credits again for New Zealand shareholders?

It's a very good question and what we discuss at length. And we are not generating sufficient imputation credits to be able to impute our dividend. And theoretically, one might say, well, therefore, why would you pay a dividend? Because financial theory says that probably doesn't make the best sense. However, when we've spoken to our retail shareholders and even our institutional shareholders, they still like the discipline of Infratil paying a dividend, but we certainly note that it is probably unlikely to be fully imputed in the near-term future.

Sorry about that. My second question is really related to the structure of Infratil as an investment company with, I think, now that you've got rid of RetireAustralia, there might be 14 significant companies. And I guess I'm interested to know what the relationship is between the auditors of those companies with the lead auditor for Infratil.

Great. Look, I might hand this question over to Anne Urlwin, who's the Chair of our Audit and Risk Committee. And Anne might like to give us a little bit of color of how KPMG, who is the auditor for Infratil, operates with our portfolio company auditors. Sometimes they are also KPMG, sometimes they are different parties.

Yes, thank you, and thank you very much for the question. And we do actually have KPMG here in the room as well. But -- so KPMG as Infratil, the holding company's auditors have been in post since about 2004. And under that contractual arrangement, of course, they are required to rotate the lead partners every 5 years. So that does happen. But the audit of the Infratil as a holding company is actually quite a small part of the overall audit. KPMG are not the auditors of every portfolio company, but where they are, the auditors, in some cases, they've only become the auditors in more recent years.

So that's a relationship that does seem to work well. I think it does generate some efficiencies in terms of KPMG being able to provide the sign-off on the Infratil accounts where they can get that sign-off from the portfolio audit firms as well.

But we do, as an Audit and Risk Committee, of course, turn our mind to the performance of KPMG each year to their independence and to their fee structures. But the -- as I say, the holding company audit being the Infratil audit is actually quite a small component of the overall audit fee paid right across the group.

So where would we find that information about the other auditors?

Some of it will be in the annual report, but of course, not all of it because we're only dealing -- because the annual report will only include where we have consolidated in those financial entities into Infratil's accounts. And there are some investments that we have that are not consolidated in.

Perhaps just one more point of clarity is that we also use independent valuers to value our portfolio companies as that independent valuation is often a key component of the incentive fee. And those independent valuers come from an approved panel, which is approved by the Audit and Risk Committee, and their term is only for 3 years. So we do get very good rotation in the independent valuers.

Any further questions in the room? Yes, we have one here.

David Lee, shareholder. Per my reading of it, data centers, at least in the U.S. running NVIDIA chips, have greatly increased energy consumption, simply due to the capacity of the chips. And as the whole market expands, there could well be a limitation on the data centers from electricity supply. Given that your 2 biggest investments are data centers and electricity, do you have a strategy or see a need to protect your data center electricity supply by building your own generating facilities?

Okay. I can answer that. I do think so. So we're mainly in Australia, right, for data centers. And I think the environment there will require you to -- we should be ready in case this happens, to be adding new electrons for new data centers over the next, I don't know, 2- to 5-year period in Australia, I think that could become requirement. So luckily, we know a lot about adding renewable energy and energy within Morrison and Infratil. And that's one of the kind of capabilities that CDC will be working to build internally over that time period. We've got time. The team has done quite well investing in access to power for the big campuses we've got across Sydney and Melbourne, sort of 1.5 gigawatts all added up. So I'm not so worried about that, but we do expect it to grow.

And we do believe sustainable long-term versions of these data center businesses should be finding ways to add electrons to the system to continue to grow in the future. Just as important, actually in data centers is water usage and transitioning to technology that doesn't use water. Luckily, for us in CDC, it's already done that. So we've done half the sustainable job, but I think you're exactly right, thinking ahead, 3 to 5 years on data centers.

Thank you, Jason. Any more questions in the room?

I'm a shareholder. My question is who are the clients of CDC? And my worry is, would -- let's say if they get used to using our data centers, what if after 10 years they decide, okay, there is so much a contract cost, let us also build a data center, and then we lose our business again. So it's about stickiness of the sales. We don't want our sales to go, how to protect our sales.

So CDC is quite focused on the 4 large Western hyperscalers and the ecosystem around them and government customers. So we have about 120, 130 customers. So it's actually quite a tight offering. What's the stickiness of the customers? So in the government set of customers, our proposition is our high security and resiliency, which is higher than anyone else's across our entire portfolio. We're basically built for those customers to meet their requirements. So it's hard for them to move.

Also, once they're in your data center, this is common for all data center businesses around the world, they start interconnecting with each other directly within the building, which makes it again, more problematic for them to move. So as long as we continue to serve those customers very well in the future, basically built the business for them, then we feel quite confident that will continue to be a good place for them to use in the future. Certainly, that's our intention.

There's a group -- a bunch of the hyperscale work, so Microsoft, Amazons or whatever, who are servicing those customers. And the legal requirements in Australia are such that if you want to service those customers, you need to be in the same environment as them. So that kind of part of revenue, if you like, should be as sticky, to use your word as the first part.

And then we are really competing for general AI growth as you put it, and other general cloud workloads. For those, I think that is going to be a more competitive environment. And what we watch as a management team and when we're thinking about our investment in CDC is who's building speculatively in Australia. Is any of that happening? Are you going to be in a situation where the market is oversupplied? Because if you were, then there's room for your customers to be stolen but through some sort of price competition.

And we don't see that happening in Australia because the growth is strong and the capital cost of building one of these things are so high that it's quite a brave person to go build a data center and hope you're going to win a customer off someone in 2030 or something like that. But that's the key metric really to watch. I think these contracts are 15 years long. So this is a 15-year away problem. But you would want to be careful that there wasn't a big oversupply happening in the market that would put yourself under kind of re-leasing competition in the future. That's the way we think about it. But we're quite fortunate with the very long lease terms that CDC has managed to achieve so far.

And with that core base of customers that we're basically specialized at serving that the stickiness of our customers has been very high. Greg says we've never lost a customer. Actually, we did lose one rack once back in 1994. I think he hunted them down and got them again. But so -- but we've got very, very little turnover so far, touch wood.

Great. One more question, and then we -- at the back of the room, and then we might move to questions online to let them have a chance, and we can always come back.

Yes, Michael Trough, shareholder. A clarification. I was under the impression that these data centers suck up water resources and cause decertification. And I just heard you say that there's a technology, which means you can bypass that whole problem? Is that what you're telling us?

Yes, that's right. So there are 2 ways to cool your data centers using water. One is to evaporate the water, and through that evaporation, achieve the cooling effect. That is -- doesn't use as much power, obviously, because we're using the evaporation effect, but you do use water. We don't have those data centers. So -- but a lot are built that way.

Our data centers, we chill the water using air conditioners basically, and it runs around a loop through a heat exchanger. So it will go through the data hall, heat up, go on to the roof, go through the chillers and then just goes round around. So you use water once when you fill up your pipe and your head of tanks, and then you're just using the same water going around, around in a closed loop, ours is a closed loop. So yes, we don't use any water once they're filled up. It doesn't evaporate, which is the issue with some data centers. Yes. But it uses more power. So you use, I don't know, 10% to 15% more power, rechilling it rather than it evaporating. So there's a bit of a trade-off. Yes.

Great. Lots of interest in CDC, which makes very good sense. So we're going to move to some questions online, and we have Mark Flesher reading out some of the questions for us. Mark? Okay.

We have a question from shareholder, Ali Price. It might be one for Matt Ross. What is the total performance fee related to RetireAustralia throughout the life of that investment?

Yes. I wonder if we -- do we have Matt? Where is Matt? Matt, do you have the answer to that question?

Thanks, Mark. Thanks, Alison. So over the full 11.5 years that we have owned RetireAustralia, the total negative fee, once we do the final calculations, will be about $90 million. So that includes the $21 million that Alison mentioned for this year. And of that, $66 million would be offset against fees that would have otherwise been paid to Morrison.

Great. Thank you. Mark, do we have any more questions online?

There are no further questions.

Great. Okay. So how about we have -- are there any questions? We'll come back to the -- I was worried we're going to have like 20 questions online. So any questions in the room before we go to our formal resolutions? One down the back. Okay. Lucky last.

Can you tell me what percentage of Infratil is owned by Morrison?

Yes. I think it is -- and I'll get my Company Secretary to check this, but it's about 5.5% when we collate all of the interests that Morrison has, for example, all of the key executives and any sort of Morrison Holdings. But Brendan, is there an...

[indiscernible] so 3.7%...

Right. So the manager, I'm sure you can't hear that, but it was 3.7% is the holding of the manager, Morrison. But when you include related parties, that number increases to 5.5%.

Just one other question. If the Board desired, could they change the manager?

Yes, we could. And that is also set in the management agreement. We would have to give 5 years notice to the manager. And so it is always better to resolve any differences of opinion between ourselves rather than to sort of increase that level of uncertainty. And we have made some adjustments with the manager. For example, this last year, we both agreed that it made good sense to take the $4 million of annual costs out of the fees that were paid to Morrison even though technically under the management agreement, they were due to the manager. Also, at the end of FY 2023, we made some adjustments so that we could offset different buckets in the management agreement, again, because we thought that just made best sense for shareholders.

Okay. So if there are no more questions or comments, we're going to move to the formal part of the meeting.

My fellow Directors and I intend to vote all discretionary proxies that we have received and which we are permitted to cast a vote in favor of the resolutions as set out in your Notice of Meeting.

And for those of you in the room, you should have received your voting card when you registered, but please put your hand up if you need someone to come and assist you and give you a card.

Each resolution set out in the notice of meeting is to be considered as an ordinary resolution and must be approved by a simple majority of eligible votes cast by shareholders.

So the first set of resolutions for shareholders to consider is the reelection of directors. The listing rules require that directors must not hold office past the third annual meeting following the Director's appointment or 3 years, whichever is longer. And accordingly, Kirsty Mactaggart, Andrew Clark and myself retire, and being eligible, offer ourselves for reelection.

So I'm going to hand over to Kirsty Mactaggart to chair the meeting for the resolution regarding my reelection.

Thank you, Chair. The first resolution is the reelection of Alison Gerry as a director. The Board unanimously supports her reelection. Alison's credentials are outlined in the notice of meeting. I would now like to address -- I invite Alison to address the meeting. Thank you, Alison.

So I'm putting myself forward for reelection on the basis that I can make a positive contribution to Infratil. I feel I have the relevant skills, appropriate experience and importantly, the capacity to help Infratil achieve its many goals and objectives.

I joined the Infratil Board in 2014, and for the first 8 years, I chaired the Audit and Risk Committee. And then since 2022, I have been Chair of the Board.

In my executive career, I've worked in finance, treasury and risk roles for more than 20 years. And under our Board skills matrix, my strengths are in investing, corporate governance and financial expertise.

For the last 18 years, I've been really fortunate to have had a career in governance in New Zealand with many high-performing New Zealand companies, such as Kiwibank, Sharesies, Wellington Airport and Spark, many which are highly relevant when I consider Infratil's diverse portfolio. And currently, I'm a Director of Air New Zealand and the ANZ Banking Group.

Having broad governance experience gives me a deep understanding of how companies can make a positive difference, delivering great outcomes for shareholders, stakeholders and our people. As Chair, I'm committed to ensuring that we maintain a highly capable Board with diverse skills and perspectives. And this culture of thoughtful challenge has served us very well and will be essential as we navigate future opportunities and risks.

So I humbly seek your support for my reelection. I'm up for the challenges ahead, and I'm committed to working hard on your behalf. [Foreign Language].

Thank you, Alison. And I propose that Alison Gerry be reelected as a director of the company. Are there any matters for discussion or questions concerning the motion relating to Alison's reelection?

Mark, can I check if there are any questions online, please?

There are no questions online. Thank you.

Thank you. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 1 on the voting card.

Thank you. I'll now hand back to Alison to continue to chair the meeting. Thanks.

Thanks, Kirsty. A little bit of up and down because now we're up to Resolution 2, which is the reelection of Kirsty Mactaggart as a Director. The Board unanimously supports Kirsty's reelection. Her credentials are outlined in the Notice of Meeting. And now I'd like to invite Kirsty to address the meeting.

Thank you, Chair. Good afternoon. I am Kirsty Mactaggart. Thank you to everybody for attending in person and online and for considering me for reelection to the Infratil Board today.

I joined the Board back in March 2019. And it's been a privilege to have served 2 full terms, and I would be honored with your support to serve you for a further 3 years.

I am a member of all the Board committees, and I also chair the Management Engagement Committee.

Before joining the Infratil Board, I had over 25 years of global financial experience as a Managing Director at Citibank and as a Head of Capital Markets at Fidelity. And I was also based in London, Hong Kong and Singapore. Prior to that, I was a chartered accountant with KPMG in Scotland. I've been living full-time in New Zealand since 2018.

I believe my finance background and market experience as both a banker and as an investor are highly relevant to support and govern Infratil's continued growth. My experience at Fidelity, one of the world's largest investors, helps me to review our existing portfolio and future strategy to continue to deliver outperformance to our growing and diverse shareholder base. I also use my experience as a banking professional at Citibank to review the many transactions that are presented to the Board, to ask the right questions of the manager, to ensure any new investments are the right portfolio fit, are thoroughly diligenced, appropriately structured and fairly priced prior to being approved, and if not, declined by the Board.

My experience has also supported my role as a Chair of the MEC to ensure that shareholders are getting the best performance from our manager, Morrison. This committee is quite unique to Infratil as a result of having an external manager. The MEC meets formally a minimum of 4 times a year, often more. The agenda varies, but it always covers Infratil's priority and resourcing from Morrison and checks for any conflicts with any other Morrison clients.

I am confident Infratil is in an excellent position with ongoing support from you, our shareholders, our Chair and our Board and the manager to continue to deliver on our targeted 11% to 15% return.

I believe I have the right skills, experience, network and importantly, focus and commitment to add value to your Board, and would be honored with your support to continue to work hard as an Independent Director to protect and generate value for you. Thank you.

Thank you, Kirsty. So I now propose that Kirsty Mactaggart be reelected as a Director of Infratil. Are there measures or discussion or questions concerning this motion?

Mark, can I check if there are any questions online?

There are no questions online, Chair.

Great. Thank you. So please mark your voting cards in the way you wish to vote by marking for, against or abstain next to Resolution 2 on the voting card.

So Resolution 3 is for the reelection of Andrew Clark as a director. The Board unanimously supports Andrew's reelection. His credentials are outlined in the Notice of Meeting, and I'd like to now invite Andrew to address the meeting.

Thank you, Alison. [Foreign Language] and afternoon, everyone. It's been a privilege to serve you as an Independent Director and as a member of the Audit and Risk Committee for the past 3 years. I remain as passionate about Infratil's prospects as I did when I joined in 2022.

I feel my broad industry experience and portfolio and business strategy and relevant geographies is a helpful addition to the Board. I spent over 30 years working at the Boston Consulting Group, which is a global strategy consultancy, working for 15 years in New Zealand and Australia, including as CEO, and for 15 years in Asia, including 8 years in Indonesia and 7 years in Singapore.

My extensive network of contacts in Asia and in Australia are helpful, I think, for Infratil in the context of us having investments in those geographies.

I now live in Melbourne, but I'm a proud Kiwi despite any inadvertent twang I may have picked up along the way. I remain optimistic about Infratil's outlook and growth options, as you can see from my enthusiasm for Infratil shares. And I will continue to dedicate my time and passion, and all the investment of my time needed to contribute to Infratil in the future.

And so I humbly request your support to reelect me as an Independent Director to serve you for the next 3 years. Thank you for your support.

Thank you, Andrew. I now propose that Andrew Clark be reelected as a director of Infratil. Are there matters for discussion or questions concerning this motion?

Mark, are there any questions submitted online?

There are no questions.

Great. Thank you. So please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 3 on the voting card.

Resolution 4. Resolution 4 is to provide the Board with the option to pay all or part of the third installment of the FY 2024 annual incentive fee, which could be payable in May 2026 by issuing shares to Morrison instead of paying cash.

Resolution 4 is not seeking shareholder approval to pay the fee. The fee, if payable, is an existing obligation under the management agreement. But what the resolution deals with is how Infratil pays the fee.

So at present, if the fees become payable, they can only be paid in cash. If Resolution 4 is passed, the Board will also have the option to pay some or all of the fee using Infratil shares if the Board chooses to do so. And if the Board does choose to do that, the price at which the shares are going to be issued is 98% of the average market price at that time.

Now we don't know today if the Board would decide to use that option to pay the fee by having Infratil issue shares. That is a decision that the Board will need to make at that time based on what is the best interest of Infratil and its shareholders, having regards to market conditions and Infratil's circumstances at that time.

Are there any questions for discussion or questions concerning the motion? Yes, I think we have 2 perhaps.

David Lee, shareholder. You said that the share price struck would be 98% of the average, but you didn't say an average over what time period?

Sure. I think it's...

5 day.

5 day ESOP. Yes.

Okay. And my real question is, what is the benefit, the upside and downside to Infratil, to its shareholders in paying either way?

Yes. So we have paid some of the fee to Morrison over the last 31 years. Only -- we've only used this option, I think, 3 times. And when we make that decision, so it's generally because we have better opportunities for the cash. So it may be that we have some investment opportunities at CDC or any of our portfolio entities that we would like to invest in. And we think that is better use of our money rather than using our money to pay Morrison. But at the same time, we take into account where is the share price trading. For example, what is the discount to NAV?

We also look at market conditions. We look at our own balance sheet and cash reserves. And another consideration is what level of shareholder does Morrison have at the moment. So there's a number of factors that we take into account. But generally, it relates to better uses of that money.

And we had another question here.

Lawrie Wright, shareholder. I don't understand how this process works. So if you decided to pay Morrison in shares instead of cash, does that dilute the value of our shares?

Yes, there is a small dilution element involved because we don't neutralize that issue of shares. But it is -- last year, I think we calculated it and Kirsty, was it...

It was less...

Less than 1%. It was like 0.54%. So we think, again, that is a factor to consider, but we don't think it makes a meaningful difference to every other shareholder.

Yes. We have one at the back of the room, Sharon.

So you've done this 2 or 3 times before?

Yes.

And what percentages on those occasions? And how much in dollar value was given in shares?

So last year -- I suppose there's another factor involved that I also should have mentioned is that we -- I sit down as Chair of Infratil with Kirsty as Chair of the Management Engagement Committee, with Paul Newfield, who is the CEO of Morrison. And we also asked him what's his capacity or what's Morrison's capacity to absorb those shares because we don't want him to turn around and sell them like tomorrow because that's not in shareholders' best interests.

So he commits a level of shares that he will keep for the next 12 months. But last year, we also -- this is why we have Resolution 4 and 5. They limit the amount of shares, which we can issue to Morrison. So last year, we had approval from shareholders to pay up to 86 million of the fee in scrip, and we decided to issue 80 million. So we used almost the full capacity.

$56 million from 2025. Theoretically, what could happen with that fee?

So I think we will have calculated -- we're just going to get one of the team here to calculate that. If we pass, for example, Resolution 4 and Resolution 5, that theoretically gives us an ability -- Andrew or Brendan, it might be. I think it is close to -- I think it's close to -- we have to calculate that. I think...

It's in the notice of meeting.

It's in the notice of meeting. Okay. We're just finding it. We have set out those amounts in the notice of meeting. But given that last year's fee, the FY 2025 fee calculated was a very large number. It could be that we issue that theoretically, we have a large number, which we theoretically could pay to Morrison in scrip. But again, whether the Board would decide to do that depends on how much capacity Morrison has to accept those shares and not sell them. And also what does Infratil's balance sheet look like. But I think we might circle back and just to add up those numbers in the notice of meeting.

So could we hit those numbers in due course?

Well, apparently, it's in the notice of meeting under Resolution 4 and 5.

$146 million, in total.

$146 million in total, is the number.

And this could happen year on year on year, at diluting the shareholding...

By a very small portion, yes, that is correct. $140 million, we could -- under the -- if these resolutions 4 and 5 are passed, the Board would have the ability to pay up to $145 million of any fee owing to Morrison in scrip instead of cash.

And the total shares -- I mean, the total money paid to Morrison last year was $400 million?

Remember that's the -- that was the calculation of the fee, but it was actually paid over 3 years. So there's a slight difference between what was paid in total versus what was reported in the annual account because we report the full fee that is calculated, but then we split that into 3 tranches. So Anne, do you want to add anything on that?

Yes, in the notice of meeting, you can -- we've got there the thirds, fourth, as Alison has talked about, because it is payable over 3 years. So in terms of the FY '25 annual incentive fee, it could be 3 installments of $115 million. And in terms of the FY '24 pay as installment, it's $29.7 million. So that's where the $140 million is coming from, but that is the maximum that the Board could determine to pay in scrip.

For that $400 million that is paid out, how much time would Morrison put into the business compared with, say, the Board?

Yes. And that's something that is discussed in-depth at our Management Engagement Committee, which Kirsty chairs. And I might just pass to Kirsty to perhaps just give you some color on how we get comfortable that we are getting value for the fees that are payable to Morrison because that is a chief consideration of that committee.

Sure. I'd probably start by saying that Morrison has grown alongside Infratil. So when I joined, it really was just New Zealand, and I think we had a Sydney office. We now have 2 offices in New Zealand with the Wellington HQ and an Auckland office; Sydney office; Singapore office; London office; and New York office. And Morrison now have over 200 employees. We take resources from Morrison, both at the Infratil level for company support. So we've added a lot of resource to the finance function, the treasury function, Investor Relations function, the sustainability function, for example. So that's one side for Morrison.

We also have resource dedicated, they call the asset management teams at each individual company. And then we have further resource that's drumming up new ideas what's going to be next. So we have deep research. Now not all the 200 employees at Morrison will work for Infratil, but we have a huge number of people working for Infratil within the Morrison team, very few of which shareholders probably see. So we've had a lot of resource added certainly in my tenure over the last 6 years on resource from Morrison, but it's something that's top of the list at the MEC every time we meet is to make sure we've got enough resource and skills dedicated to Infratil.

And perhaps one more point just to bring us all back is that, I agree, you can get very caught up on the dollar values of fees. And I think I've said at previous AGMs. I like the fact we're paying large fees because that means we are having outsized performance. But from a shareholder perspective, our target returns to shareholders, our benchmark is at between 11% and 15% after all fees and after taxes. So total return to shareholders after all of these fees are paid. And we have been very proud to have beaten that benchmark for the 10-year benchmark, which is a rolling benchmark, which we are targeting. And I think over the life of Infratil, we're also well above that 11% to 15% range. So when we consider fees, we do make sure that it is in the scheme of meeting our target returns.

Any more questions for this resolution?

Yes. So first of all, I would like to highlight one thing that I can see that for the other 3 resolutions, against were less than 3%; here, the against is 10%. So there is a bit of a concern, which is visible.

So now I have basically 2 questions. First question is why are we giving Morrison only 5 -- ESOP only based on 5 days? Because those 5 days, market price can be suddenly low because of macro things. So why aren't we putting it for a longer period, like last 6-month average price? And when you say that Morrison has given us a commitment, so why don't we ask them to have some lock-in period that whatever the shares they will buy, they will have to hold it for 5 years. Why I think there's a bit of a -- so this doesn't look like an inside information, but this looks like an insider anticipation.

So as a retail investor, I have only annual report. And I see that my net asset value is 16 and stock price trading at 12, so I see that information only once in a year. Let's say, if you put it in a quarter, I get only 4 times in a year, the chance to see what is the difference between a book value and a market price. But Morrison -- since Morrison is putting their employees and since Morrison works with the Infratil, they have a bit of an anticipation of what can happen with the company's growth. So I see there is a real advantage that Morrison has over a retail investor and even other fund investors. Don't you think so?

The Infratil Board makes the decision whether we think it makes sense to pay part of that fee to Morrison in scrip. So Morrison has very little to do with that conversation, except for saying how much they can accept and not sell for a 12-month period. In actual reality, we haven't seen Morrison ever be a seller. So we don't have an agreement with them that they have to hold for 5 years, but we certainly haven't seen any selling from Morrison.

In terms of the 5-day period, that is prescriptive and has been set in the management agreement since 1994. So I think that is what we have to live with. But we also make sure that when we make that agreement to pay Morrison, if that's what the decision is from the Infratil Board, it's also to make sure we don't have any inside information. So if we had any inside information, we would definitely be forced to pay that fee in cash.

My second question is, I think Kirsty said that Morrison has around 200 people working for us, and around like she said that main expertises like treasury, finance, risk, but those are not the things that are invented in the last 20 years. These are like 300 years old concepts. So these -- so if -- my first impression was Morrison was helping us by having some data centers expertise like how AI works, something that nobody knows in the world. But if treasury, risk, finance, everybody knows since the last 500 years. So why should they be given ESOP on that? We can -- we should be paying them more cash than ESOP. Don't you think so?

Yes. There's a lot of aspects of Morrison that we probably haven't articulated as well as we could have. For example, the biggest skill they bring is finding fantastic ideas to invest in, and that demonstration of what are the pipelines of new ideas is something we're probably going to highlight at our Investor Day.

Jason, any comments on whether you think you're getting enough support from Morrison for your role as Chief Executive?

Yes, definitely. I mean I think Kirsty was talking about the expertise that's been added in her time as the business has scaled. But clearly, Morrison's core capability is identifying good investments and then building differentiated capability around long-term themes, which have been data centers in our case. We're probably one of the earliest managers in the world to invest in data centers and infrastructure, and we're experiencing the benefit of that as Infratil shareholders over the last 10 years, certainly in the last 5, in particular, where the growth has accelerated.

It's been the same in renewables. Morrison started investing in renewable energy 30 years ago, right, with Manawa, very long-term theme. There will be very few managers around the world that have been investing in renewable energy for 30 years. And the amount of -- the depth of capability we have in that, I think, is incredibly differentiating for us as Infratil shareholders. And then the power of the platform, and this is what Kirsty is referring to, is finding the next thing, right, beyond data centers and renewables. Infratil had 0 data centers 10 years ago, and now it's our biggest asset. And you could actually go back through our 30-year history, and you'll see that cycle repeat.

So part of what we should be taking into account as shareholders as is, are we investing enough in finding the next thing beyond that to keep this going for another 30 years, I think, which is partly what Kirsty was talking about as well. And if you've got 200 people and all they do is invest in infrastructure, I think you're giving yourself the best shot of doing that.

Great. Yes, at the back.

The $145 million fee is paid in shares. Any idea what Infratil's shareholding will be in -- sorry, Morrison's shareholding will be in Infratil? What...

It would be still very small, like below -- it's 3.7% at the moment. And I imagine it would be...

Less than 1%.

Like less than 1%. Yes, it's like how many -- we've got, yes, 12 billion of say, market cap, and we would be issuing $145 million, so it's a very small portion. There's lots of zeros in that.

But feel free to vote as you would like to. So I think we will move to the voting cards. And so if you can please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 4 on the voting card.

So let's move to Resolution 5. Resolution 5, very similar to Resolution 4, and it is to provide the Board with the option to pay all or part of the second installment of the FY '25 annual incentive fee, which also could be payable in May 2026 by issuing shares to Morrison instead of paying cash.

So again, this isn't asking shareholders to approve the payment. It is an existing obligation if the fee is payable under the management agreement. But what the resolution deals with is how Infratil will pay that fee. So similarly, we don't know today if the Board would exercise the option to pay the fee by having Infratil issue shares. That is the decision that the Board will need to make at that time.

So this is a similar resolution. But are there any matters for discussion or questions regarding this motion? And perhaps we go to online because I'm not sure, Mark, if we had any online for Resolution 4 and 5.

Actually, we had one question on Resolution 4 from Tim Hunter, which was why are the shares issued at a discount?

Yes. Thank you. So the shares are issued at 98% of market value because that aligns with the dividend reinvestment scheme for all shareholders, which is also at a 2% discount. So they are both aligned. And that also is in the management agreement.

So any other questions in the room on Resolution 5. Yes?

So now here, we are actually giving option, scrip option. So how will we decide the option price for the investor -- how -- what will be the strike price for the Morrison?

Yes. It's actually not an option. It's like a choice. It's a choice to be able to pay any payable fee to Morrison either through issuing shares or by paying cash. So there aren't any like equity options involved, if that's what you referred to.

Then I'm sorry. I think I understood the question wrongly.

So any other questions relating to Resolution 5? Mark, are there any questions on Resolution 5 online.

There are no questions. Thank you.

Great. So if you could please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 5 on the voting card.

Resolution 6. Resolution 6 is to increase the maximum aggregate remuneration pool available for payment to all nonexecutive directors for each financial year commencing on or after the 1st of April 2025 by $121,500 from $1,525,500 to $1,647,000 per annum plus GST or VAT as appropriate.

Are there any questions for the Board concerning this motion?

Mark, can I check if there are any questions online?

There are no questions.

Okay. Thank you. If you could mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 5 on your voting card -- oh, that should be Resolution 6.

So final one, Resolution 7, the auditor remuneration. So the final resolution for shareholders to consider is the remuneration of the Infratil's auditor, KPMG. KPMG are automatically reappointed as auditors under the Companies Act. However, the meeting is required to authorize directors to set the audit fee, and I now propose that directors are authorized to fix the remuneration of the auditor. Are there any questions for the Board concerning this motion? Yes?

Phillip Olson, How long has KPMG been auditors for?

Yes. KPMG have been an auditor of Infratil for -- since 2004. However, I think we referred to the relationship with Infratil and other auditors that are involved in the process in an earlier question. And it is something that shareholders raise with us. Why don't you, for example, rotate auditors. And it is quite challenging in New Zealand because we also use PwC for all of our global tax advice. So in effect, if we were going to put the audit out to the market, we will probably only have 2 parties to choose from. And I'm sure they're both fantastic choices, but there is risk involved in changing auditors.

And when we look at the risk, we probably think that our process around appointing independent valuers, which is linked to how we pay incentive fees, is possibly more risky than having KPMG as the long-term auditors of Infratil. I'd also note that the partner involved in the audit at Infratil who works for KPMG is rotated every 5 years. And even though they're the same firm, it often brings fresh thinking, different ways of doing things. So we do, in effect, have every 5 years, another look at how we engage with our auditors.

Mark, can I check if there are any questions online?

There are no questions, Alison.

Okay. Thank you. And please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 7 on your voting card.

And ladies and gentlemen, our registry, MUFG, will now move through the room with ballot boxes to collect your voting cards.

So that concludes the business of the meeting. Thank you so much for your attendance and interest and your great questions. We will be announcing the results of the poll and closing the meeting through the market later today or tomorrow. [Foreign Language].