Infratil posts 13.9% TSR led by CDC contract and Longroad Energy growth

CDC’s 555MW contract propels Infratil to record highs

Infratil Limited (NZX:IFT, ASX:IFT) closed FY26 with a bang, delivering a total shareholder return (TSR) of 13.9% and an 11% lift in proportionate operational EBITDAF to NZ$989 million. The standout was CDC Data Centres, which announced Australasia’s largest ever data centre contract, a colossal 555 megawatts (MW) deal, in May 2026. This contract alone pushed Infratil’s share price above $15, trimming the discount to net asset value (NAV) to around 10% from a previous 25%.

CDC’s growth is underpinned by soaring demand for AI and cloud infrastructure, with over 1GW of contracted capacity now on its books. The company forecasts EBITDAF to surge more than 150% to over A$1 billion in FY28, with a fully deployed 1GW expected to generate around A$2 billion in annualised EBITDAF. The business benefits from a high-quality tenant base, including Australian government agencies, and cutting-edge, energy-efficient cooling technologies that minimise water use, a critical differentiator in a water-scarce region.

Longroad Energy’s solar and storage portfolio powers ahead

Longroad Energy, Infratil’s US renewables platform, posted a staggering 170% increase in EBITDAF to US$121 million in FY26, driven by the commissioning of the 434MW Serrano solar and battery project and expansion of its operating capacity to 3.5GW. With a further 2GW under construction and a development pipeline exceeding 6GW, Longroad is targeting a US$1 billion run-rate EBITDAF by 2029/30.

The US electricity market is on the cusp of a major expansion, with demand forecast to rise 30-50% by 2040, driven by electrification, data centre growth, and manufacturing reshoring. Infratil has committed an additional US$300 million in equity to accelerate Longroad’s growth, including a recent acquisition of a large ~2.8GW solar and battery project, pending regulatory approvals.

Portfolio refinement and divestments sharpen focus on scale

Infratil continues to streamline its portfolio, divesting over NZ$600 million of assets during FY26, including RetireAustralia, Manawa Energy, and Infratil Infrastructure Property. A sale process is underway for Australian medical imaging provider Qscan, while a NZ$495 million stake in Contact Energy was sold post balance date to fund growth initiatives.

This divestment strategy is part of a medium-term plan to unlock more than NZ$1 billion in proceeds, redeploying capital into scalable, high-return platforms like CDC and Longroad Energy. The company’s net asset value per share rose 5% to NZ$16.26, supported by strong portfolio valuations despite some softness in New Zealand telecoms and healthcare assets.

Resilient core assets and growing cash flow

New Zealand’s One NZ telecommunications business showed resilience, growing free cash flow and doubling distributions to Infratil to approximately NZ$180 million despite a soft domestic economy and competitive pressures. Wellington International Airport also posted a 2% EBITDAF increase, supported by international passenger growth and infrastructure investments such as a runway safety upgrade enabling long-haul flights to Asia.

Australian medical imaging providers Qscan and RHCNZ delivered mixed results, with Qscan achieving double-digit EBITDAF growth and RHCNZ facing margin pressures amid inflation and competition. The newly formed Anytime Radiology platform, combining teleradiology services from Qscan and RHCNZ, is positioned to benefit from rising demand and AI-driven efficiencies.

Financial strength and governance underpin future growth

Infratil secured an inaugural BBB+ credit rating from S&P Global Ratings in December 2025, enhancing its access to global debt markets and reducing financing costs. The company completed a refinancing of its core bank facilities in May 2026, increasing committed facilities to approximately NZ$2.1 billion with improved covenant flexibility and extended maturities.

The Board, chaired by Alison Gerry, comprises six independent directors and one non-independent CEO, Jason Boyes. Corporate governance practices align with the NZX Code, emphasising transparency, risk management, and sustainability. Sustainability remains integral, with portfolio companies advancing science-based targets and reporting improvements in ESG ratings, including inclusion in the Dow Jones Best in Class Australia Index.

What to watch next

Infratil’s FY27 guidance targets a 21% increase in proportionate operational EBITDAF to NZ$1.3–1.4 billion, driven by CDC’s ramp-up and Longroad’s accelerated construction pipeline. The market will be monitoring progress on regulatory approvals for Longroad’s large-scale projects in the US and Gurīn Energy’s cross-border solar initiative from Indonesia to Singapore, which faces delays in Indonesian export licensing.

Meanwhile, the company’s ongoing divestment programme and potential new investments in integrated power and data centre solutions could reshape the portfolio’s growth profile. How equity markets continue to price AI infrastructure demand and geopolitical risks, including the Middle East conflict, will also be crucial for Infratil’s valuation and capital allocation decisions.