MIIF – BT

MIIF Q1 profit more than doubles to $23.4m

MACQUARIE International Infrastructure Fund (MIIF) yesterday reported a net profit attributable to equity holders of $23.4 million for the first quarter ended March 31, 2009 – more than twice the $9.2 million figure a year ago.

The increased takings resulted from higher investment income, a higher foreign exchange gain and lower operating expenses.

‘We have seen markets, especially for our patronage assets in China and Europe, worsen through the start of 2009,’ said the CEO of MIIF’s manager, John Stuart.

The amount of debt held in some of MIIF’s businesses may be unsustainable amid tight European debt markets, and these businesses may have to tackle the situation in the short term, he said. ‘As a result, we are likely to see some pressure on MIIF’s investment income over the remainder of the year.’

MIIF amended its dividend policy late last year, retaining surplus cash to repay corporate-level debt. It said it hoped to fully repay this debt by end-2009.

In Q1, however, standalone company borrowings rose from $20 million at Dec 31, 2008 to $50.1 million at March 31. The increase was largely due to a temporary $30 million drawdown for MIIF’s 2008 final dividend and an equity investment.

At April 30, 2009, the borrowings stood at $35 million. MIIF expects this to fall when it receives distributions from its Chinese port and expressway businesses in Q3 2009.

‘If debt markets remain challenging, it may be necessary for borrowing levels within certain businesses to be reduced,’ MIIF said. If these businesses amortise certain debt facilities ahead of maturity, ‘receipts from the underlying businesses would be reduced with a commensurate effect on MIIF’s ability to make distributions to shareholders’.

MIIF units lost two cents yesterday to close at 38.5 cents.

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