Infratil Stock

[Foreign Language] Good afternoon, and welcome to Infratil's 32nd Annual Shareholder Meeting. I'm Alison Gerry, your Board Chair. I can confirm that a quorum of shareholders is present and declare the meeting open. The minutes from our last annual meeting have been approved, and I'll take the Notice of Meeting for today's meeting as read.

I'll start today's agenda with a brief overview of Infratil's progress in delivering value to shareholders in the areas the Board has been focused on. Infratil's CEO, Jason Boyes, will then provide his view on how Infratil and its portfolio companies are performing and the outlook from here. We'll then have an opportunity to put shareholder questions before moving to the formal resolutions and voting. Following the meeting, directors will be able to meet with all the shareholders that are here today over afternoon tea.

Today's meeting is a hybrid format and we welcome those shareholders who have joined us here in the room in Wellington as well as those who have joined us online.

This slide shows the virtual meeting platform. The boxes indicate where to take to get a voting card and how to ask a question. But if you need any help, you can also call the number displayed in the blue bar at the top of the platform.

So I'd like to introduce the rest of the Board to you. Joining me today in the room, we have Jason Boyes, Jason is Infratil's Chief Executive, and he is seeking reelection today. Andrew Clark, Andrew has joined us from Melbourne and Andrew is a member of the Audit and Risk Committee. Paul Gough, Paul has traveled from London and is our longest-serving director, and he's a member of the Manager Engagement Committee. Kirsty Mactaggart, Kirsty is the Chair of the Manager Engagement Committee and is a member of the Audit and Risk Committee. Peter Springford, Peter is a member of the Manager Engagement Committee and is retiring from the Board today after almost a decade, and we'd like to acknowledge his contribution in materially enhancing Infratil's growth. Peter has been a strong steward of shareholder capital, and we're very grateful he's agreed to remain as an adviser to the Board for a few more months as we welcome our new directors.

Then we have Anne Urlwin, Anne is the Chair of the Audit and Risk Committee. She is seeking reelection at today's meeting. We've announced 2 director appointments as part of our succession planning. Brad Banducci is here from Sydney and is joining the Board today, and he's -- you're going to hear from him shortly when he gives us his election talk. Unfortunately, our other new director, Tiffany Fuller, could not join us from Melbourne due to another long-standing Board commitment. Tiffany will officially join the Infratil Board after today's meeting and will seek election next year but Tiffany brings extensive experience in corporate finance and investment banking.

We have other members of the Infratil team with us today, including Andrew Carroll, who recently has moved from Chief Financial Officer to the new role of Chief Operating Officer. This role was created because of Infratil's growth, and Andy is also a Director of One New Zealand.

Matthew Ross, who recently was appointed Chief Financial Officer from Deputy Financial Officer; and Matt is also a Director of Wellington Airport. Lee Coker, who has been appointed Head of Infratil Investment and Corporate Development. We have Brendan Kevany, our Company Secretary, and we have representatives from our auditors, KPMG, and our legal provider and Chapman Tripp.

The financial results were released back in May, so I'm going to provide a brief recap. Infratil delivered a strong performance in the financial year to the end of March, and this was underpinned by an 11% uplift in earnings to almost $1 billion. The valuation of our asset portfolio grew by 13% from $18 billion to more than $20 billion, and we lifted the dividend to $0.209 per share, up 2% on the prior year. These results underpin one of Infratil strengths, our geographic and sector diversity. Although our New Zealand businesses were largely constrained by ongoing softness in the domestic economy, but Longroad Energy and CDC are enjoying exceptional demand in their markets and sectors. The substantial investment we've been channeling into those 2 businesses is beginning to deliver a strong trajectory of future growth.

Infratil's strength lies in our commitment to active management, strategic clarity and long-term value creation. And during the year, we set 4 medium-term objectives, which are shown on your screen. These objectives were a response to Infratil's growing scale and maturity and the new challenges and opportunities this growth brings as we continue to drive shareholder value. And Jason will talk about our progress against these objectives in more detail.

I do want to underline that we're very focused on the type and scale of assets needed in Infratil's portfolio to drive ongoing outperformance and growth. This year, you've seen significant progress in refining the portfolio, and this has been a substantial program of work with more to follow. This slide is a summary of the dashboard of the more specific activity the Board is monitoring closely.

First and foremost, our cornerstone goal is to deliver shareholders 11% to 15% returns per annum after fees and taxes over a 10-year period. And this is based on share price growth and assuming that the dividends are reinvested. Our performance against this measure is 17% per annum in the decade to the end of FY '26. On a 1-year basis, your return was just under 14%. And this was a very pleasing outcome when you consider the impact market concerns about AI investment and the Middle East conflict had on global markets throughout the financial year. These themes are continuing in the current financial year and underpin the importance of back-end quality assets while remaining disciplined in the allocation of shareholder capital. And we're very cognizant of asset and sector concentration risk, particularly with CDC's strong growth.

We have, therefore, spent time stress testing CDC's valuation to ensure we have a great understanding of this and how to mitigate it. CDC also secured a public investment credit rating from Moody's ratings in April, and this provides further support as well as a competitive advantage. In December, Infratil's inaugural BBB+ credit rating from S&P Global Ratings also recognized the strength, quality and resilience of our businesses. This has provided a welcome benefit in the form of greater funding flexibility and savings on our borrowing program. It also means we have very clear credit metrics to operate to.

Another measure that we follow closely is our calculated net asset value or NAV per share after fees. Market views on value can differ from the independent or market-based valuations we use for portfolio companies. And this means, for example, the Infratil share price can lag our NAV per share where Infratil's valuations incorporate growth that is longer dated than equity markets are willing to value. And we saw this effect amplified across FY '25 and FY '26 with approximately a 25% discount to our assessed NAV. And market volatility was a significant driver of this discount. That discount has closed to about 15% at more recent share price levels, and we'll keep working to reduce this by helping our portfolio companies realize their growth opportunities and by communicating our insights on future value to the market. This communication is carried out through an extensive investor relations program, ranging from newsletters, which we send out to you through our growing schedule of global engagement with institutional investors.

At the same time, we're implementing initiatives to help investors better understand our business. And these have included publishing valuation and fee models and continuing to enhance our disclosures. New reporting on CDC's future contractor capacity is a great example of the latter.

ESG reporting is another focus because decisions grounded in responsible stewardship, a part of creating long-term value and managing risk. We ranked first globally in our sector and one ESG reporting providers' infrastructure asset assessment, and we were recognized as the top regional leader for our Asia Pacific by another ratings provider.

I've already touched on portfolio strategy, and we'll leave Jason to go into more detail. However, I would note that portfolio company relationships and resourcing and an area that we are paying close attention to. For example, greater collaboration between portfolio companies is an area where we see the potential to unlock more synergies and value. And you've seen an example of this announced in the last week with Contact Energy and CDC exploring a New Zealand data center opportunity.

One of the Board's key roles is to monitor the performance of our day-to-day manager, Morrison. While the people working for Infratil and Morrison employees, the Board retains oversight and makes key decisions on the strategic direction of the business. And this includes driving strong performance from Morrison with the evolving mix of qualitative and quantitative measures I've talked about. Infratil draws on the global expertise that Morrison is growing across multiple infrastructure sectors. And this growth supports Infratil as well as Morrison's other clients and investment funds. And this global exposure is becoming increasingly important for Infratil as we seek larger and new sector investment opportunities.

During July, Morrison announced a new strategic partnership with Sumitomo Mitsui Trust Bank. And we've had a few investors ask what does this mean for Infratil? The simple answer is it does not change Morrison's management of Infratil or Morrison's investment in asset management responsibilities. As Morrison's largest client by assets under management, we feel we're very well positioned. Infratil management sees all ideas being germinated at Morrison and the Infratil Board sees relevant opportunities. This means we aren't excluded or limited for choice.

Infratil may choose to invest on our own or alongside other Morrison clients as we did with the original investment in CDC and Longroad Energy. Morrison may also undertake transactions for other funds and clients that Infratil has elected not to participate in. The challenge for Infratil is more about balancing opportunities with our current priorities and the returns that we are seeking. There's a healthy attention in our relationship with Morrison and the management model encourages outperformance with incentive fees.

In the recent financial year, Morrison did not achieve the required incentive fee hurdle of 12% asset valuation growth on non-New Zealand assets and instead, a negative $18 million amount will be carried forward into the FY '27 fee calculation and netted off against positive fees. The Board has recently commissioned an independent benchmarking report from PwC to review the fee model as well. And a summary of that report will be available on our website. The report found that shareholders get great value under our agreements with Morrison. The 12% hurdle for outperformance is a high bar compared to other similar investment managers. And as this chart shows from the benchmarking report, Infratil has performed extremely well for a very long time.

More importantly, we believe the portfolio today is as well positioned as it's ever been to continue delivering strong returns to shareholders. These may be uncertain times, but they're also exciting times for ideas that matter.

So I'll hand over to Jason now to tell you how we intend to continue to deliver that outperformance. Thank you.

Great. [Foreign Language]. Pleasure to see you here this afternoon. Thank you for braving the cold weather, and I hope you're staying warm at home online. Let me pick up where Alison left off at this -- at 31 March, really this year, I mean market volatility meant FY '26 was not quite the steadier year we had hoped for, Liberation Day, et cetera. However, since then, CDC's announcement of Australasia's largest ever data center contract in early May, more than made up for that. And that's the end of that graph here where you can see it spiking up. It was a transformational outcome and the share price reflected that with a significant increase. Alison talked about 17% 10-year return.

But if you calculated our 1-year returns at mid-August, so taking that into account, the returns are almost 30% and our 10-year returns within 20%. So that's 20% shareholder return compound for 10 years, which is a fantastic track record, obviously. The strong increase in value reflects the rapid increase in earnings that CDC is now forecasting with that contract in place.

CDC's EBITDAF, that's our preferred measure of earnings for the current financial year is expected to be between $680 million and $720 million. That's up from about $390 million last year. The following year, it is expected to rise to more than AUD 1 billion, so a massive acceleration. And then once CDC has built and is invoicing its 1 gigawatt and 1,000 megawatts of contracted capacity that will grow to about $2 billion on an annualized basis. So it's an incredibly fast-growing business now. And those are substantial numbers.

And as this slide shows, CDC's data centers are substantial infrastructure. This is at Eastern crank. This year, CDC in Sydney. CDC expects to spend AUD 3.8 billion to AUD 4.2 billion in capital expenditure to build more data center capacity, excluding land, massive numbers. And in the recent June quarter, it added another 90 megawatts of operating capacity and doubled the capacity under construction to 810 megawatts, and that's really building to fulfill those large contracts that we've now reviewed.

It's very important, though, and CDC is very focused on maintaining its social license to operate. It locates its campuses, as you can see in this photo, in industrial areas and invest in electricity network infrastructure, such as substations for its large-scale campuses and always has. Infratil also has extensive sector expertise in renewable energy, as you all know in the room here, development that CDC can draw upon to power its data centers. CDC is also a leader in minimizing water use. It's closed liquid cooling system has been installed across CDC-built facilities for more than 18 years. We first invested in CDC 10 years ago, actually, in 2016, and we're now well ahead of the investment case written early last year to lift our CDC shareholding to 49.7%, if you remember. So that contract brings us right to the end of that investment case. So we're in good shape. June's independent valuation put our share of CDC at more than AUD 9 billion valuation, up from $7 billion a year ago, underscoring that.

It's not all CDC, though. Our investment in Longroad Energy in the United States also began in 2016. So they're both 10 years old this year. This is some streams in Arizona. Like CDC, Longroad is starting to come of age. Electricity demand is surging in the U.S. Growth of between 30% to 40% is predicted by 2040, driven by data centers, but also electrification and reshoring of manufacturing. Longroad is responding by increasing its development cadence that's how much it builds every year to more than 2 gigawatts per annum. Near term, this is underpinned by their acquisition of a massive 2.8 gigawatts early-stage project that is making its way through its approvals.

To give you a sense, it's probably twice as big as everything you can see on this picture here. And to give you another sense for comparison, New Zealand's installed generation capacity is about 11 gigawatts. So they're building 20-odd-percent of that every year at Longroad.

Regulatory support mechanisms for solar investment are in place until 2030, so we will still and even longer for batteries. And at the same time, strong power demand and prices have offset higher delivery costs, maintaining attractive development returns in that market. Solar and battery storage remain the lowest cost sources of new generation in many markets in the U.S., and we've agreed to provide a number -- a further USD 300 million of equity to Longroad to help accelerate its growth from here.

Longroad is also seeing the positive effects of data center demand, as I mentioned. It is close to completing a 400-megawatt project to supply a meta data center but almost more interesting, it's established a team to develop further data center opportunities on its solar farms. So their initial work has identified up to 10 gigawatts. That's a stupidly big number in a lot of ways when you think CDC is at 1 gigawatt now. So 10 gigawatts of their existing and future development sites may also be suitable for data center development.

So you can imagine and out in the desert here, there's lots of spaces for data centers that could be powered by those solar panels, for example. It's early days, but this could drive additional returns above Longroad's existing renewable generation plans and Longroad is considering what form this might take, including whether to partner with an established data center operator, I know one, they could partner with. While the U.S. market remains attractive, some Asian and European markets have seen development returns compress. So project delivery and platform costs have increased along with complexity in time periods.

So in Europe for Galileo, our European renewable energy business. This has been a reduction in valuation this year, as I mentioned in the annual report and a shift in its focus to fewer nearer-term projects in a smaller number of markets, so a focused strategy.

In Asia, Gearing Energy is managing its prioritization of markets and opportunities carefully as well. Government approval for its large Indonesian solar project is also taking longer than we'd hoped for. So a lot of work going on in those businesses while the U.S. is really taking off.

Alison mentioned this before, but for a long time, we wondered if CDC should expand offshore to capture some of the oversales growth we see there. I just talked about in the U.S. But instead, we're seeing oversized overseas demand coming to Australasia, I mentioned those contracts before and much of that demand has been focused in Australia. But last week, we announced that 2 of our portfolio companies, Contact Energy, and CDC are exploring how they might satisfy that demand in Taranaki. Contact Energy brings existing network infrastructure in Stratford and existing renewable energy generation, and a substantial pipeline of new renewable energy projects as well, which could be relevant for that project. And then CDC obviously brings globally recognized data center expertise and sustainability credentials that sort of partnership, we think, makes great sense. And if the team can make the pieces fall into place, I think it really will meet our goal of delivering infrastructure ideas that matter, both for that region and I think, the country.

So turning to the strategic objectives that we set last year and that Alison mentioned, I think we've made solid progress delivering against those objectives throughout the year. On the first one, while we always make an investment decision with a view to holding an asset for the long term and our track record speaks to that, I think.

Our growth has driven us to refine our current portfolio more over the last couple of years. This means we are divesting those businesses unlikely to scale or deliver meaningful returns under our ownership. So today, we are more than $600 million towards our initial target of $1 billion of investments seem to come in billions in this speech on. This has come from the sale of our stakes in Fortysouth, if you remember, RetireAustralia and our property business and the sale process is underway for our radiology business in Australia, Qscan as well.

Importantly, I think looking ahead, we expect to continue refining the portfolio in the medium term. Another goal onto the next objective is to balance our operating cash flows and dividends in the medium term are pretty important, sign of the sustainability of the business. Income from our portfolio companies began to increase in the last financial year, and that narrowed our operating cash flow deficit after cash dividends to $90 million from -- I think it was $120 million in FY '25. So we are getting there, and we feel like we're on track to close the gap completely. One New Zealand and Wellington Airport play an important role as cash flow generators, always have. And with optimization of those businesses expected to continue to drive distributions both businesses have been pretty resilient despite weak macroeconomic conditions and sector challenges.

And then importantly, to really finish the job on closing that gap, we expect CDC and Longroad to generate sufficient returns to fund their own investment, but also distributions to Infratil. So watch this over the next 18 to 24 months, I think.

Next objective, the growth of CDC and Longroad is also helping meet our objective of diversifying our shareholder base. Wider ownership beyond New Zealand we believe will benefit all investors over time by deepening the pool of potential investors and liquidity in the stock. And over the last year, were included in the S&P ASX200, which has boosted offshore trading in several more Australia-based analysts have initiated coverage as well. So now about a dozen analysts published research on Infratil, which is a really important way to get investors interested. We do have more work to do on helping investors understand our model and having fewer portfolio companies. What I mentioned before, will help with that, we think.

And then lastly, we're always scanning for new infrastructure businesses is really the blue one that's on the screen there. But for now, we believe our strongest opportunities are adjacent to our existing data center and renewable businesses. Longroad's exploration of data center opportunity is a prime example of where we're spending most of our time looking for new investment ideas at the moment.

Let's have a look at portfolio composition. The blue is digital infrastructure, and this chart shows that the growth and composition of our portfolio over the decade. And our core investment themes haven't really changed that much in that time. We continue to see the strongest opportunities in data centers and renewable energy, as I said before, we think they can help meet our target returns in a way that is reflected in the share price is important for us as shareholders, that is at scale, and that growth can be supported by internally generated cash flows, which is important as well. CDC size in our portfolio, it's a big chunk of that blue. It means that some investors do ask and they should when we might sell it to reduce any potential concentration risk.

Our view at the moment is that we remain comfortable with this position and scale in the portfolio today. Approximately half of CDC's valuation as relatively low risk comprising lengthy leases of mostly new cutting edge data centers to some of the world's most creditworthy customers. So that's not going to let you down that part of the valuation.

The rest is growth. And we constantly monitor the growth prospects of data centers around the world. They are at that kind of picks and shovels layer of today's digital world, housing the compute capacity that enables the cloud and AI services we hear a lot about. Infratil had portfolio concentration and our high conviction investments in the past. It's actually how we drive value.

Our focus is on sifting through the noise around AI, and there's a lot of it to understand what really matters for our existing businesses. We do that every day. And we're in a good position to do that. We see demand and customer behavior firsthand at CDC, right? We're at the edge of that. And then we see the implications for energy demand through Longroad Energy and our other energy businesses. And then we're seeing the practical applications as well as that of AI at scale and like One NZ or our teleradiology businesses. So cross-referencing all that, we think gives us a good picture of where CDC's trajectory will go.

Just a bit of a sidebar. These guys here. This image is a timely reminder of our philosophy to invest wisely in ideas that matter and taking a long-term approach to creating value. It was posted online just the other week to Mark Morrison's founding back in 1988 that features the Infratil Board at the time, including Lloyd Morrison, second from the left there. Looking happy at 1 of Trustpower's original wind farms around 20 years ago. Wind farms were, by no means, mainstream infrastructure back at that time, look at those turbines, my goodness. Now they are, though, and we see data centers becoming mainstream infrastructure in the same way.

From those early days, the push from Lloyd was for Infratil to be brave and ambitious. And we're still aspiring to do that and to do things that haven't been done before, and we're constantly looking for new ways to add shareholder value, but this involves taking calculated risk and backing our view of the future, as I just described.

While there is a lot of AI hype that needs to be screened out, it is clear we are still in the midst arguably near the beginning of one of the largest technological developments and infrastructure build-outs we're likely to see in our lifetimes. I think it's pretty clear AI is going to be transformational just like railroads, electricity and the Internet have before. And it will be hugely important to a country's ability to innovate in the future as well, which I think would have got Lloyd smiling as well. You get a chocolate fish, if you can name the guy on the furthest left, I didn't know him. So you can come and see me afterwards and claim that, if you like.

Let's just look ahead to finish up. As Alison said, prior years of investment are beginning to produce a significant step up in returns. This year, we've guided to a 21% increase in proportionate operational EBITDAF from FY '26. That's on a like-for-like basis at the midpoint, excluding corporate costs because that brings in the share price, which we don't really control.

Looking further ahead, as I said, CDC and Longroad are, we think, 2 hugely exciting businesses with lots of opportunity. We need to focus on helping them maximize and execute the opportunities in front of them to the best of our ability, and that's what's going to drive value for all of us. Infratil is well positioned to support that growth. and our divestments are adding extra capacity to strengthen the balance sheet as well. But at the same time, we need to keep an eye on the future and identify the next large-scale growth businesses. We're continuing to drive operational performance across the portfolio, and there's always plenty to be done doing all of that at the same time. Things may not happen as quickly or as predictably as we'd like, but maintaining our capital discipline throughout that as important as ever.

I think we all feel as a Board and certainly as a management team, we are in a great position and have a great fortune to have fantastic investment opportunities in front of us. For an active investor like Infratil, there is a choice, though, having those choices are what really matters when it comes to creating shareholder value for the long term.

So thank you for your attention. I'll hand you back to you, Alison.

Thank you, Jason. We'll now move to shareholder questions on our updates and the financial results. There'll be an opportunity later in the meeting to ask questions about today's resolutions. So in this part of the meeting, if we could keep our questions about the company update and our financial results.

So let's start with written questions received ahead of the meeting and then move to questions in the room, and then we will follow with online questions. So our first question submitted comes from shareholders, Brian and Theresa and they ask, when are we going to get an increased dividend in relation to the share price?

So dividends is something that we discuss at length at the Board and we have seen the dividend incrementally growing broadly in line with inflation, but we don't have a formal dividend policy. And that's because our focus is very much on delivering value for shareholders through share price growth. So my advice to shareholders who do want to have a higher dividend is potentially to sell small portions of your shares and create the dividend that you would like to see.

Okay. So that was the only 1 that we have submitted online? Are they -- sorry, before yes, we're going to move to questions in the room. So if you would like to wait for a microphone to come to you, clearly state your name, and then please ask your questions.

Yes, Michael Shroff, shareholder. I guess this is a question Jason might like to answer as the face of the company. So these data centers now maybe today or certainly in the future, data centers are going to become a lightning rod for protest, not just from Waco Greenies, but from ordinary citizens who happen to be living in the vicinity of data centers. So maybe you could say a bit about how Infratil is looking to -- I know you said something already, but maybe you could flesh it out. And I'm also interested in what Brad would have to say, if anything, from what the state of players like over in Australia.

And it might be we get Jason to comment on Australia, too, because today was Brad's first day sitting around the Board table. So I don't expect him to be an expert on social license in Australia just yet, but feel free to ask him next year. But Jason, can you cover these.

Yes. Thank you for the question, mate. I'm just going to call us but -- it's a really important one. I think both as people who work here and the shareholders to make sure we're doing a good job, continuing to do a good job with all our development activity. Actually, we've had protesters at a lot of renewable energy development sites over many years for the business as well.

So I think we're well used to the types of things you need to do in order to make sure that things -- I put it as being a good neighbor, to be honest, but the things that you're doing around your developments in line with certainly best practices and beyond it. The key for CDC, I think, to think about is where we're building the data centers to something you raised about the neighbors. I think being outside residential areas being in industrial areas as much as you can, having buffer zones around them are really important ways to develop and it's very similar actually for the solar and battery projects you could see on the screen, right, you're building a long way away from people so that you don't have neighbor issues.

But the team, I think, are at the edge of what a very good data center looks like as well with their closed loop water calling system is a real calling card of that business even globally. But they will continue to need to improve their design as well and be receptive to feedback, and we should expect that to happen. I think we're seeing it happen all around the world though.

So from a customer perspective, they are all trying to build good data centers and be good corporate citizens as well. So I'm not so worried from a demand or investment perspective that that's going to mean New Zealand or Australia are disadvantage relative to the rest of the world for this investment. I think the trick for CDC is to make sure it's as current as we can be and what the best way to build these data centers is and our experience in some areas, that water, we're ahead of the game and with a very strong development set of expertise within CDC, plenty of expertise to adjust designs and incorporate the kind of latest and greatest sort of what's needed for these facilities in the future.

When I zoom back from that, it still is critical infrastructure for a country. Countries in the future will really struggle without this infrastructure available. It's very economically important for jurisdiction to have this. So I think our approach is more trying to make sure we're solving all the problems that people are raising in a reasonable way. And the last of those pieces is really the energy pieces and that is to make sure that you're able to bring energy on. So it's not taking energy away from other critical uses. And one of our advantages, that's what we do for a day job as well at Infratil making sure we're getting the time and all those things lined up, will be important, but you can be assured that we're very focused on it.

Environment in Australia, others might be -- it's the same as here and the same as in the U.S., right? These things rightly get a lot of focus the big infrastructure investments, and they take up a lot of space and a lot of money. The good thing for us, I think, in New Zealand is the New Zealand were to benefit from everything CDC is learning in that jurisdiction and bring it here.

Hi. My name is Jim Coyle. I'm a shareholder. And my question sort of fits into the renewable bucket. My wife and I watched a fascinating interview on -- I think it was YouTube last night with -- on the spin-off, Tim Grosser was being interviewed, and he was extolling the potential for generating energy in the Taupo Volcanic Zone area. And so my question is about is there some interest from Infratil in that. We're talking about what was described as a super critical geothermal potential that could change everything.

So yes, the question is -- are you guys aware of that? Is that something that you could be potentially investing in and exploring in the future because it sounds really exciting. So we're talking about New Zealand being 1 of the 3 places on the planet where there's a plume of hot magma sufficiently close to the surface to mine basically.

Geothermal is a really interesting technology [indiscernible] talks about. We're currently exposed to that in a couple of ways. One, through our investment in Contact Energy, which was the largest geothermal generators in the world actually, and they're definitely focused on the potential for that and maybe some geothermal could power a data center in Stratford, for example. So we're definitely focused on it. We also have through our Clearvision venture capital investments in the U.S. focused on next-generation geothermal scanning technology that uses RADAR to find geothermal resource in a much more reliable way than it used to be in the past. So I would say, yes, we are very interested.

The scalability of geothermal, I think, is the question on most people's minds on what time frame. How quickly will it get to a scale that would displace something like solar and battery. I think our current view is it's very good in particular locations, but that in a lot of places, solar will continue to be the fastest and cheapest way to develop.

Any more questions in the room?

Brian Busby, I'm a shareholder. Have the fires in Europe had any effect on Galileo. I know they haven't been specifically in Italy, but they are certainly very fierce. So I've just come back from the U.K., and it's one of the hottest summers I can ever remember.

Yes. It's crazy hot, isn't it? I haven't heard of anything actually specifically for Galileo, no. Thank you.

38 degrees in London last week. So yes, very hot. It looks as if we don't have any more questions in the room. So Mark, can you read out questions which have been submitted online?

We have a question from David Langford. Is Infratil's long-term goal to be a predominantly data center and solar cell owner?

Okay. Look, I think we often get asked about the concentration risk in that portfolio because CDC is performing so well and differently, meaning that they have an increased portion of our portfolio. And I think you might have also heard from Jason, that this is a once-in-a-lifetime potential investment opportunity. So we're very comfortable with our investment in CDC so it's the data center piece and also very comfortable with our renewables investments, particularly Longroad, but Galileo, Gurin and our smaller Mint Renewables business in Australia.

That doesn't mean to say that we're not looking at lots of other ideas. And it's a shame we can't publish those ideas and show you how many things we have considered. And today, we had our Board meeting this morning, and even there were many ideas that we talked about as well. So when we have more insight into other investments will bring them to you. But at this stage, I think it's fair to say that the real drivers of shareholder value are going to come from Longroad and CDC. Anything further, Jason?

No, I think it's possible to extrapolate in a straight line to that, but the world really doesn't work that way. And we continue to look at millions of options here.

Question from Stephen Maine. Having announced the appointment of Tiffany Fuller and Brad Banducci to the Board on 18th of June. Why have we waited until the day after the meeting for Tiffany to take up our appointment effectively removing the opportunity for shareholders to give here a mandate and leaving here serving for a year without voting support from shareholders. A Board commitment is now excuse. You don't have to physically attend the AGM to run for election.

Right. Thank you for your question. It is really disappointing to Tiffany and to the Infratil Board that she can't be with us today. She had a long-standing Board commitment in Australia. And so we did consult with the New Zealand Shareholders Association to ask advice on how best should we do this? Should we have her stand for election today, but not have shareholders have the ability to ask her questions and we were advised that it probably makes more sense to have Tiffany join the Board from tomorrow and have her stand for election and be able to answer questions next year.

Next question, Mark.

We have a question from Phil Cuneo. What contingency plans does Infratil have in place for when the AI bubble boosts?

Yes. Well, if you could let me know the date that would be really helpful. But because of the concentration risk, we do talk about, well, what there is, for example, a significant pullback in the valuation of CDC. And what would that mean for CDC's credit metrics, its ability to fund itself in the future? And what would that mean for Infratil and our own credit metrics? And so we have done stress testing exercises on theoretical scenarios so that we know that we have sufficient liquidity to be able to support volatility that comes through from sentiment in the AI space.

A similar question from Peter Calero. Sometime over the next several years, is there a danger of overbuild in data centers. I heard one U.S. commentator recently saying the U.S., many datas will ultimately be turned into pickleball courts. How will we know it is time to sell data centers just as we got out of Tilt Renewables?

Yes, very interesting. I don't know if pickleball was going to be the best fit. But Jason, any thoughts on that.

The answer is potentially yes. I think on overbuild, but the question is where and will that affect our business. I think I can only really point back to the remarks we made in our opening, right? We're building data centers that are leased out for long periods of time to the most creditworthy counterparties in the world, and that's more than half the valuation of CDC, which if you step back from it, is not a particularly bubbly or challenging valuation, I didn't think, overall.

So I'm not worried so much about CDC's data centers and the enormous amount of cash flow that comes out of that business if it just stopped with the contracts we have announced today, it's $2 billion and the cash flow, along with the work Alison mentioned around the balance sheet work that we've done about to write out any volatility, I think, will leave us in very good position with very high-quality, long-term assets.

I think a lot of the overbuild if there's an overbuild happening would be happening somewhere in the U.S. for a shorter type of data center that probably isn't going to be that relevant to the kind of long-term leased infrastructure we've got in Australia. I think we still keep a lot of an eye on what is the demand outlook for the output of these facilities. And if somebody is saying they're going to build them in space, and I think everything on the ground is probably going to be used up before we put one in space. So all of these things that we're looking at for the long-term demand, I think, are what gives us confidence that the type of infrastructure we are building will have a place in most scenarios.

Great. Is there any other question, Mark?

A question from Kaushik Patel. I'd like to know if there's any valuation hit expected from our One New Zealand value carried in the box as we've seen a large sector lost value in New Zealand. So if we write off, if any, and the timing being affected by the CDC valuations that might grow and hence, fees kick in to our advisers, Morrison. Can you also elaborate on One NZ's business and carrying market value?

Andy, do you want to have a go that we have Andy as a Director of One NZ and recently was our CFO. Do you want to put them -- I don't know if you can put the questions on the screen here too, Mark, so that -- you'll see the...

So the One NZ carrying value is something that is [indiscernible] year. And you look at forward earnings, and we remain very comfortable in the outlook for One NZ. Independent valuation is something slightly different and the market forms its own view on One NZ's value relative to the independent valuation. The performance of MNOs in New Zealand is not all the same, but we remain very comfortable in the outlook for One NZ.

Thanks, Andy. Any other question, Mark?

Lindsay Breeze. Are airlines willing to use Wellington Airport for wide-body jets?

I might answer that question because I'm on the board of Air New Zealand. I think they're talking about long haul, though, aren't they? Look, Matt Clark, our CEO of Wellington Airport with the work that they have done on the runway, where they have extended it through RESA, the safety mechanism that if you're taking off, you might see at the end of the runway, I think, does give them the theoretical ability to have wide-body jets come to Wellington, but an airline does need to see demand before they are willing to commit to that schedule. But I think it's a very positive development that Wellington Airport has executed. Next question?

Question from Anne here. Thank you for outlining our ESG considerations. Does Infratil ensure it avoids exposure to illegally occupied Palestine territories or has Infratil considered utilizing United Nations backed principles for responsible investment?

Look, we take our sustainability and ESG program very seriously. And we have an exclusion list of investment areas where we have no interest investing in. But I might actually, we've got our Chief Sustainability exec here, Louise Tong in the front row. So we might ask Louise to comment on the...

Thank you for the question. I always love getting a sustainability question. You'll see the exclusion policy on the website on Infratil's website. And it does say that we invest in geopolitically stable regions. So I think that would probably preclude Palestine and Israel and the several areas around that region. And the question on PRI, so Morrison, who manages Infratil's investments has been a signatory to PRI, which means Morrison commits to integrating ESG factors into its investment process. So Morrison has been a signatory to that framework since 2010.

Great. Thanks, Louise. Is there another question, Mark?

I got a question, it might be one for Matt. On Page 34 of the annual report, it would appear that in the total equity and liabilities figure of $18.1 billion, the figure of $8.5 billion in equity is $1.1 billion less than the $9.6 billion reported as liabilities. Can you explain how this is good management of Infratil?

I will hand over to Matt, our CFO.

Thanks for the question. I've understood that correctly. It's that our equity is a positive number. And even if it is outweighed by liabilities, that means that we have assets that are by far in excess of our liabilities. Yes.

Great.

That's great answer the question. So I think we're comfortable in that position.

You can always contact us at the e-mail address on the Infratil website, if you'd like further information. Any further question, Mark?

We have a question from Peter Claro. In his presentation, Jason, our CEO, compared data centers to railroads. Most of the railroad investors went broke because they overbuilt. Is that what Jason sees happening to the data center world in the end? And is railroad comparison the right one?

Maybe no. I don't tend to get broke on this one. Good point though.

Next question.

A question from Dominic Lane. There is a significant outage -- sorry, there was a significant advantage at One New Zealand service early in the year that highlighted the lack of redundancy in the network. Has this been addressed?

Andy, yes, it has been addressed. Next question.

Question from Derek Gale. Does CDC actually own the service or just the premises? If the former, how is the depreciation handled, especially in light of cheaper Chinese production?

Just the buildings, not the service. Yes.

Next question.

There are no more questions.

Great. Thank you. So given there are no more questions, we will now move to the formal part of the meeting. My fellow directors and I intend to vote all discretionary proxies that we have received and for which we are permitted to cast a vote in favor of the resolutions as set out in your notice of meeting. For those of you in the room, you should have received your voting card when you registered. But if you haven't, put your hand up and someone will come and assist you. 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 the eligible votes cast by shareholders.

The first set of resolutions for shareholders is to consider the election and reelection of directors. The listing rules require that directors stand for election at the first Annual Meeting after their appointment. And accordingly, Brad Banducci is standing for election. As I mentioned earlier, Tiffany Fuller can't be here today. So she is going to stand for election at our next annual meeting. The listing rules also 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, Anne Urlwin and Jason Boyes retire, and being eligible, offer themselves for reelection. Jason is standing for reelection a year earlier than necessary.

And as we explained in the notice of meeting, this is because we wanted to balance out the number of directors standing for reelection in any one meeting. So the first resolution is the election of Brad Banducci as a director. The Board unanimously supports his election. Brad's credentials are outlined in your notice of meeting. I'd now like to invite Brad to address the meeting.

Thank you, Alison, and terrific to be here with you. My name is Brad Banducci, and I joined the Infratil Board as an Independent Director a month ago. For reasons that Alison has outlined, I'm now standing for formal election to the Board. A little bit about me and why I believe I can help you make a positive contribution to the ongoing growth and performance of Infratil. If one thing stands out in my career, it is the breadth of experiences I've been lucky enough to have. I spent the first 14 years of my work in Korea with the Boston Consulting Group, working for them in Sydney, Chicago and Auckland.

And I actually did the performance and efficiency order for the New Zealand Dairy Board in '93 and '98 and got to travel the world and engage with all of their customers. And I have to say it's very nice to be back in Wellington actually because I had some very happy times working here. After being with the Boston Consulting Group, I then spent 5 years working in venture capital and private equity. The first few years, we're doing a technology start-up of fintech in the early 2000s that we ultimately IPO-ed in 2019 in Australia. And I got to see the challenges of scaling up a very small business.

I then moved on to be the CEO of Cellarmasters, which was a roll-up of wine assets in Australia and New Zealand bought by a company called Archer Capital, and I joined them, became the CEO and got to experience the difference between how you scale a business versus found a business. That brought me to Woolworths, where Woolworths actually bought the business Cellarmasters. And I spent 11 very happy years, I must say, working at Woolworths and being part of the team of Woolworths and Countdown as we try to make a difference to the communities that we served.

Learns a lot about issues of rights to operate reputation and things that, hopefully, those experiences stand me in good stead as I joined the Infratil Board.

In terms of other skills I bring to the Board, I'm a very curious person. I am used to dealing with complexity -- and I do love operations. I don't think I can never quite fit Peter Springford's operational shoes, but I will certainly do my best. Finally, on a personal note, I am pleased to be able to report I'm married to a Kiwi, although I live in Australia. I have 2 very strong world New Zealand Kiwi daughters. And until a year ago, I was a wine grower in Bendigo in Central Otago. So in conclusion, if elected to the Board, you can rest assured of my commitment in some modest way to help Infratil achieve its very exciting potential. Thank you very much.

Thank you, Brad. So we did receive a question from the New Zealand Shareholders Association asking why Brad's most recent role at Ticketek wasn't included in your notice of meeting?

And the simple answer is that it was a private company, and he held that role for a very short period of time. But the Infratil Board's focus is on the skills gained across the span of Brad's career, particularly at Woolworths. And as he said, we were very keen to add the operational expertise around the board table given that Peter is leaving us. We can also assure shareholders that we undertook diligent processes with our recent director appointments. So I now propose that Brad Banducci be elected as a Director of the company.

Are there any other matters or questions concerning the motion relating to Brad's election? Any questions in the room? No. Thank you. Mark, are there any questions online?

We have a question from Stephen Mayne. Why didn't the notice a meeting disclose Brad Banducci, as CEO of Ticketek for 13 months until May this year? And could you comment on whether that experience will make him a better Infratil Director. Also could Brad, please detail is full relationship history with Key Morrison personnel. And after a few weeks on the Infratil Board, what is his view about whether independent shareholders would benefit from internalizing the management arrangements. Finally, when is he going to be buying some Infratil shares?

Okay. Lots of questions in that question. I might just -- the first part, I think we've already covered off why we didn't include the Ticketek experience because of private company, and we didn't really think it was relevant to the reasons as to why we want to be sitting around the Infratil Board table. I might also take the question around whether Brad has a view on internalizing the management agreement. I think, again, on your first meeting, it's probably best answered by me and my fellow directors, it's -- we are asked this many times because we have seen some companies internalize their management agreement. But in my chair speech, I think I also referenced the benchmarking report, which we have undertaken, which has clearly shown that shareholders are getting a fantastic result from our management agreement that we have with our external manager, Morrison.

We really like the fact that while there are perhaps about 20 dedicated Morrison executives who work full time on Infratil with many of them in the room today. There is 200 other Morrison executives that we can tap into as we need to. But the nice thing is that when we don't -- when we're really happy with our portfolio, and we're not necessarily looking to do in thing particularly new, those Morrison executives can work for other clients, which keeps them very focused on the opportunities in the marketplace. So we talk about the internalization as an option but it's certainly not something that is jumping out as a great solution for Infratil or its shareholders. But Brad, I might ask you to comment on some of the other aspects.

Thank you, Alison. And good to hear from you, Stephen. I learned a lot, as you always do in my 15 months at Ticketek Entertainment Group, it was with Silver Lake as the key private equity firm. The primary thing I really got the opportunity to do was go very deep on technology and a very large business like Woolworths, there are many layers between you and where the work is done. I got to really get hands on the tool, which I think is key right now. We all need to be engaging with the power of Gen AI, whether we like it philosophically or ethically or not and can see what it can unlock within the context of a business, and that was something I got to do over the last 15 months. The other reason I took the role is after 35 years, it was nice to do something completely different and just refresh myself. So it was a very good opportunity. In terms of Infratil shares, if we weren't in a blackout period, I'd be buying shares. So will let my actions in the future speak for themselves. I think the performance this year has been very strong as I know that both Jason and Alison have spoken to.

Great. Thank you. Are there any other questions online, Mark?

There are no more questions.

Thank you. So if we could 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.

So Resolution 2 is for the reelection of Anne Urlwin as a Director. The Board unanimously supports her reelection and its credentials are outlined in the Notice of Meeting. And I'd now like to invite Anne to address the meeting.

Thank you, Alison, and good afternoon, shareholders. Thank you for the opportunity to address you today to seek your support from my election as an Independent Director on the Board of your company. It was certainly a privilege to join the Infratil Board in January 2023, and I have chaired the Audit and Risk Committee since my appointment. I've certainly appreciated being part and contributing to a company that invests in ideas that matter. Those fitting the brief infrastructure characteristics and attractive global thematics, transformative assets that do matter to society, both now, but importantly, into the future. Renewable energy and digital infrastructure, including the AI-driven convergence between those 2, as Jason has spoken to health care and mobility in the form of airports.

But a bit about me. Firstly, similar to Brad, I'm curious about people, about businesses and what might be those ideas that matter in the future. that represent investment opportunities for Infratil that enable it to continue to deliver returns to you as shareholders, meeting that target of portfolio returns of 11% to 15% per annum over a 15-year rolling period.

My chartered accountancy background enables me to get down into the detail when necessary and my corporate sector executive roles in earlier years enhanced my ability to unpick complexity.

I have been incredibly unfortunate having been a professional director for a number of years, incredibly fortunate in terms of the governance roles that I've had, many of which have been with high-performing New Zealand companies in earlier years, including Tilt Renewables, Chorus, Somerset and Meridian Energy. My previous non-listed company experience includes as a former Director of Queenstown Airport and as Chair of National Commercial Construction Group, Naila Love.

In terms of my current roles, I'm currently the Chair of Precinct Properties here in New Zealand, the Audit Committee Chair of Vector in the energy sector, and I chair the Safety and Sustainability Committee of infrastructure services company, Ventia. These governance roles give me a Trans-Tasman perspective that is relevant to Infratil's diverse portfolio. I have a passion for sustainability and its focus on long-term value creation while also meeting society's expectations.

And as we've touched on here already today, sustainability is a key component of Infratil's social license to operate as well as its access to capital to deliver the long-term value to investors.

Being a director of your company is both a responsibility as well as a privilege. I hope the brief details are provided here today demonstrate my experience and focus on effective governance, financial performance and delivering returns to you. I confirm that I have the time, energy and commitment needed to support Infratil and to represent shareholders' interest into the future. I therefore seek your support for my election as a Director of Infratil. So thank you for the opportunity to address the meeting. I'm certainly happy to answer any questions you may have of me and look forward to meeting many of you after the formal part of the meeting. Thank you.

Thank you Anne. I now propose that Anne Urlwin be reelected as a Director of Infratil. Are there any matters for discussion or questions concerning the motion relating to Anne's reelection.

Mark, are there any questions online?

There are no questions.

Great. Okay. So if we could mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 2 on the voting card.

So Resolution 3 is for the reelection of Jason Boyes as a Director. The Board unanimously supports his reelection. Jason's credentials are outlined in your Notice of Meeting. And I'd now like to invite Jason to address the meeting.

Thank you, Alison. It's my pleasure to be -- put myself forward for reelection this year as a member of the Board. So slightly unusual structure, not all chief executives are also members of the Board of Directors of their companies. I think as I've said in the past, I think that's a real strength of the Infratil model. It's certainly been the way here since it was established from Lloyd to Marco to me.

I think the real strength of it is being able to work as a team, this team here to -- and be in the same whacker, I think I put it last time, but certainly in the same boat as our fellow directors as we wrestle with some really tricky issues that like the ones we've talked about today, is it important to be in CDC for the long term as renewable energy, an important part to be in? Are we looking after shareholders' money as best we can? And that for me personally is there is an I come and do this job every day as I take taking care of your money prudently but with an eye on the types of growth that I think we're expected to generate, I think we have the opportunity to generate incredibly seriously.

So I would be grateful and very happy to be reelected as a director to continue the work here with the rest of the team, but I'm happy to answer any other questions you might have on my background as well that you don't know already. Thank you.

-- thank you, Jason. I now propose that Jason Boyes be reelected as a Director of Infratil. Are there any matters for discussion or questions concerning this motion? None in the room. Mark, are there any questions online?

There are no questions.

Great. 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.

So Resolution 4 is to provide the Board with the option to pay all or part of the third installment of the FY '25 annual incentive fee, which could be payable in May 2027 by issuing shares to Morrison instead of paying cash.

Resolution 4 is not seeking shareholder approval to pay the fee. The fee, if payable, as an existing obligation under the management agreement. But what the resolution deals with -- resolution deals is how Infratil pays the fee. And at present, if the fees become payable, they can only be paid in cash. If Resolution 4 has passed, the Board then has the option to pay all or some of the fee using Infratil shares if the Board chooses to do so. And if the Board chooses to do that, the price at which shares would be issued as 98% of the average market price at that time. Now we don't know today if the Board would exercise the option to pay the fee by issuing Infratil shares. That is a decision that the Board will need to make at that time based on what the Board believes is in the best interest of Infratil and its shareholders have in regard to market conditions and Infratil circumstances at that time.

Are there any matters for discussion or questions concerning this motion? We have a question.

Frank Pearson. And I'll sit down if you consider $75 million jump change. So it's about $75 million. But first of all, can I take Jason up on his picture, 2004, not '80, '90, whatever it was. Yes, 2004, David Kegel, Dave Newman, Chairman. Yes. But going to leave -- I missed the chocolate fish. I can't back in -- last year, you were telling us the asset value was much higher than the share price as you do year in and year out. In the end, you ended up issuing shares in the $10-ish at about 2/3 of the price now. So essentially, instead of getting $80 million, Morrison & Co got $120 million of value for the management fee. At the same time, you're paying dividends to people, and I'm sure I'll get somebody yelling at me now.

You're paying dividends to people which are unimputed, so taxable. If we assume that's 20% average, if you cut the dividend and pay cash you'd be saving about -- shareholders about $75 million, $80 million a year. I just don't understand the policies that are in place. Sorry.

So when we decide to either pay Morrison in shares or cash, it does really come back to our own opportunities for that cash. So I think when we decided to issue shares, we felt that the cash could be better used elsewhere in the portfolio.

I think with what share price it was in FY '25 versus now, is not really relevant because I think what is relevant is the 2% discount that we give to Morrison, which is set in the management agreement, which also equates to the 2% discount in the DRP that is available to shareholders. But always happy to have alternative views put forward. Any comments?

Just on the dividend point. I take your point, and we've talked to a lot as a Board, I think about the dividend policy and what the right thing to do there is. I think we're confident that the right balance is to maintain but not strongly grow it because of the large proportion, I think, of the shareholder base that still expects that dividend. And I think we felt that if you say cut the dividend to pay management fees, you would see -- I'm not sure the share price would have gone to $15. I think that would be the worry we're thinking about for all shareholders is that you would get a reaction in the share price that outweighs the $20 million, $30 million kind of gap between your $75 million and your $120 million that you talked about there. But it is a balancing act. And I think it perfectly finds you to continue to raise it at these forums. Thank you.

Yes. I need to point out Madam Chairman that you to a question earlier about the risks of being concentrated and you said you had sufficient liquidity I think that was the expression? Yes, sufficient liquidity. Well, if you have sufficient liquidity, why are you...

So I think you'll notice that at the end of FY '26, we paid Morrison in that cash. So when no shares issued. So it was -- when you say last year, that was at the end of -- that was in May 2025. At the moment, we have said we do have about more than $1 billion of available liquidity and that isn't necessarily cash sitting on the balance sheet, but that is an undrawn facility is available to us. We also have our 9% fitting in Contact Energy, which is sort of -- could be used for liquidity if we chose to.

Here we have another question?

I'm just wondering if there are any other pros or cons? And I'd also like to say that as shareholders, we're quite happy to get non-imputed dividends, yes.

I mean that is a balancing act. We actually think it isn't the best. So what happens is there is a subvention payment from Wellington Airport and also from One NZ and that is more tax effective for the company and, therefore, beneficial for shareholders. And that is one of the key reasons why we don't have imputation credits to attach to our dividends.

Mark, any more or any questions? And any more questions in the room? Any more?

Yes. Look, I think we've covered them really. I think we have covered them. I mean, dividends are very -- I think some people, as I mentioned earlier, hold their shares on an online platform where you can easily sell and the transaction costs are very small. And so you can make your own dividends, but that isn't available for all shareholders. We think it is important to pay a small dividend. I think we've increased it by 2% this year because that is important for a number of retail shareholders in particular. We have recently done about 20 meetings with institutional shareholders. And actually, none of them raised the issue around dividends. So they seem very comfortable that we are paying a small but growing dividend to shareholders.

Mark, any questions online?

We've had 2 or 3 similar questions, which I'll paraphrase. It's again around the review of the management contract and comparing it with other managers and also whether you've had discussions with any of the large shareholders around internalization?

Right. Thank you. I think what has been really helpful is that the Board has undertaken this benchmarking exercise by PwC, and we have now an executive summary of that benchmarking exercise on our website. And it's a good comparison of the management agreement that we have with Morrison versus other listed infrastructure companies. And you'll actually see that the hurdle rate is the highest, I think, in the comparative group. And shareholders get a lot of value from that very high hurdle range. Morrison earns no performance fees if on the non-New Zealand assets the performance is below 12%. Above 12%, 20% of the outperformance is paid to Morrison as an incentive fee. But that structure -- although it is more than 30 years old is we think, at the moment, delivering great value to shareholders.

So we do consider that question. And you will have noticed, I'm sure many of you are long-time shareholders that we had undertaken different benchmarking exercises over the last sort of 10 years. I think this is probably our third or fourth our benchmarking exercise.

We also recognize, however, that the management agreement is complicated. So we are sort of balancing the complexity of the management agreement with that real advantage of having that high hurdle rate on non-New Zealand assets. And also noting that there is no performance fees paid to Morrison on New Zealand assets.

And we also think that as an interesting point to note, we used to be concerned that, that might bias Morrison to not recommend investments in New Zealand. However, as you know, we have invested, first of all, buying the first half of Vodafone and then buying the second half and now fully own One New Zealand, which is a fantastic portfolio company.

There was another part of that question, I think, around internalizing the management agreement. I think I addressed that when Stephen Maine was asking his question of Brad.

Any other questions online?

There are no more questions.

Great. Thank you. So if you could please mark your voting card in the way you wish to vote by ticking for against or abstain next to Resolution 4 on the voting card.

The final resolution for shareholders to consider today is the remuneration of 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. So I now propose that the directors are authorized to set the remuneration of the auditor, and I'd like to ask are there any questions for the Board concerning this motion.

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

We have a question from Stephen Maine. What is the history of KPMG's relationship with Infratil and Morrison? When was the external audit last tendered? And when is it next plan to be tendered? And could the Audit Chair please comment on how Infratil has responded to the recent regulations around confidentiality breaches in KPMG, Sydney's audit division to assist with tenders to win new clients.

Great. So I'll just hand over to Anne Urlwin, our Chair of our Audit and Risk Committee to answer those questions.

And thank you for the question, Mr. Mayne. So as a committee, the Audit and Risk Committee reviews auditor independence and audit quality annually. And while KPMG has been Infratil's group auditor for an extended period of time, I actually think it's back to about between 2001. Infratil is primarily a holding company and rather than an operating business in and of itself. And most of the audit work as well as, of course, most of the financial results are actually undertaken within the portfolio companies. And a number of those portfolio companies have moved to have KPMG as their auditor in recent years. So there isn't that long tenure there. Not all of them have KPMG as their auditor.

So one of the key requirements we have, of course, is that the lead audit partner is rotated at least every 5 years. So that provides fresh perspective and independent challenge. But we also have a range of other independent assurance providers because KPMG, of course, is prohibited from providing a range of services that could create an actual or perceived conflict so they can't undertake any internal audit work, any management consulting services, any evaluation services. So we get those services provided by other independent assurance providers.

For example, PwC as Infratil's global tax adviser and EY provide assurance over climate disclosures, but importantly, and I think this is a key component of Infratil as a holding company rather than an operating business. Infratil appoints independent valuers to assess the values of most of our portfolio companies with those valuers selected from a panel and those valuers are required to rotate every 3 years.

So for the moment, the committee certainly remain satisfied with both the quality of the audit services provided by KPMG and their independence, but we do, of course, continue to keep the audit relationship under regular review. I think we have all noted with concern what the issues have been arise, they've been reported in the Australian media in relation to KPMG and we have had very proactive engagement, including proactive reaching out by KPMG at the most senior level here in New Zealand to provide that assurance to Infratil and also to its portfolio companies, particularly those in Australia that do utilize KPMG as the auditor that, firstly, none of that personnel at KPMG that have been referred to publicly in Australia are involved in the delivery of any audit services to the Infratil Group. And there is no indication that similar behaviors that are being reported in the Australian media have occurred as part of the Infratil group audit.

We will, of course, keep everything under review, and we will continue to monitor the independence and the performance of KPMG as Infratil's auditor.

Thanks, Anne. And Mark, can I check if there are any other questions online?

There are no further 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 5 on your voting card.

So ladies and gentlemen, our registry MUFG, will now move through the room with ballot boxes to collect your voting cards. And this concludes the business of the meeting.

For those in the room, I'd like to invite you to join directors to have some refreshments. Thank you very much. [Foreign Language]. And I'd also like to say that the results of the polls will be announced through the market later today or tomorrow. Thank you.

[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.