Infratil’s AI infrastructure bet gains momentum with higher FY27 guidance

AI infrastructure now dominates Infratil’s portfolio

Artificial intelligence has moved from investment theme to portfolio organising principle for Infratil Limited (NZX:IFT; ASX:IFT). At its investor day in Sydney, the infrastructure investor said AI infrastructure accounted for NZ$16 billion, or 73%, of its approximately NZ$22 billion total asset value, putting data centres, power and connectivity at the centre of its next growth phase.

The immediate financial result is a modest but material guidance lift. Infratil increased FY27 proportionate operational EBITDAF guidance to NZ$1.32 billion-NZ$1.42 billion, from NZ$1.30 billion-NZ$1.40 billion. The company said guidance for its other operating businesses was unchanged, making the upgrade principally a reflection of CDC Data Centres’ stronger outlook.

CDC expands contracted earnings runway

CDC lifted its FY27 EBITDAF guidance to A$710 million-A$750 million, up from A$680 million-A$720 million. The increase reflects a further 70MW of contracts expected to be delivered across late FY27 and early FY28, alongside operating cost savings and non-recurring managed services.

The Australasian data-centre operator now has 350MW of deployed capacity and 1.1GW under contract. Those contracts are expected to generate A$2.2 billion of annualised EBITDAF when fully deployed. CDC’s contract book remains heavily weighted towards investment-grade customers, with more than 90% of revenue covered by investment-grade contracts and a weighted average lease expiry of 28.7 years including options. The scale-up comes with a substantial funding requirement: FY27 capital expenditure guidance is A$3.8 billion-A$4.2 billion, excluding land.

Longroad raises 2029 renewable targets

Longroad Energy is also increasing the pace of its US expansion. The renewable energy platform raised its target for operating capacity at the end of 2029 to 14.3GW, from 11.5GW, and lifted its run-rate EBITDA target to US$1.2 billion from US$800 million. It expects to develop about 2.5GW a year between 2027 and 2029, supported by a 36GW development platform and 3.1GW of signed power purchase agreements.

The Amargosa acquisition adds a 2.8GW solar and battery-storage project in Nevada, while Longroad is examining the use of existing solar sites for data-centre co-location. It has identified more than 10GW of potential digital-infrastructure opportunities, including five immediately actionable campuses with possible grid connections in 2029-30. The opportunity is substantial, but the presentation also identified regulatory uncertainty, rising construction costs and interconnection queues as constraints.

Capital and management capacity are being expanded

Infratil said its balance sheet had NZ$1.386 billion of pro-forma available liquidity as at September, supported by refinancing, bond issuance, operating cash flows and planned divestments. The company is targeting comfortable headroom above 2.5 times stressed leverage and said further hybrid issuance could support its BBB+ credit rating. Its next 12 months include the remaining US$220 million Longroad commitment, portfolio investments and continued sales of sub-scale holdings, including the Qscan radiology business.

Its investment manager Morrison also announced a strategic partnership with Sumitomo Mitsui Trust Bank. SuMiTB will commit US$500 million to Morrison’s unlisted funds, collaborate on more than US$1.5 billion of capital raising in each other’s home markets, and subscribe for a 15% equity stake in Morrison. Morrison said the partnership would not change how it manages Infratil, the management agreement or the existing team.

One NZ supplies cash flow and connectivity optionality

One NZ retained FY27 guidance of NZ$600 million-NZ$640 million EBITDAF and NZ$235 million-NZ$265 million of capital expenditure, excluding spectrum. The telco said its simplification programme remained on track, with 52 AI solutions live in FY26 and early productivity gains in software development and network fault diagnosis.

EonFibre, separated from One NZ, produced FY26 EBITDAF of NZ$64 million and is benefiting from demand for high-capacity fibre, data-centre traffic and hyperscaler connectivity. A proposed 50/50 radio-access-network joint venture with 2degrees could improve infrastructure efficiency, but remains subject to conditions including clearance from the New Zealand Commerce Commission and is expected to complete in the first half of 2027.

Execution now matters more than the theme

Infratil’s revised strategy divides the portfolio into sufficient cash generators, scaled growth engines and future options in emerging sectors, while retaining a target of 11%-15% annual portfolio returns over a rolling 10-year period. That framework gives the company room to pursue adjacent opportunities in power, fibre, GPU infrastructure and sovereign compute without abandoning its emphasis on contracted or visible cash flows.

The harder question is whether the portfolio can convert a compelling AI demand story into returns without allowing construction, funding, permitting and customer-activation risks to outrun earnings. CDC’s delivery schedule, Longroad’s external capital raise and the regulatory path for One NZ’s RAN-sharing proposal will provide the next tests.