3i Infrastructure, the listed UK infrastructure investment vehicle, saw strong income generation during the period 1 April to 29 September 2011 according to a pre-close trading update issued by the firm today ahead of half-yearly results to be announced in early November.
The firm said its portfolio had generated income of £36.7 million (€42.5 million; $57.2 million) during the period, allowing it to meet its target interim dividend distribution. This compares with income generation of £69.3 million during the year to March 2011, which was more than double the income generated in the previous year.
In addition, the firm delivered realisation proceeds of £91.2 million during the period. The realisations included the £55.5 million sale of a junior debt holding in broadcasting network NGW Arqiva and the “full repayment at par” of a junior debt holding in utility Thames Water. The firm now has a cash balance of £310 million, up from £248 million at the end of June this year.
However, the firm said a 23 percent fall in the share price of energy giant Adani Power during the period – “reflecting falls in the Indian equity markets and specifically the quoted power sector” – had impacted the value of the company’s share of the $1.2 billion 3i India Infrastructure Fund. In addition, the unhedged fund saw foreign exchange losses in the period as sterling appreciated by 7 percent against the rupee.
Furthermore, the firm said that declines in junior debt market pricing over the last two months meant that the mark-to-market value of its holding in French telecoms firm Telediffusion de France had declined by £6.6 million since 1 April.
Following the announcement, broker Oriel Securities said it was adjusting its net asset value (NAV) estimate for 3i Infrastructure down slightly to 116p-118.5p from 117p-120p. 3i Infrastructure said it would report on its six-month results to 30 September – including its NAV at that date – in early November.
3i Infrastructure listed on the London Stock Exchange in March 2007, raising £703 million in an initial public offering. It then raised an additional £115 million through a placing and open offer in July 2008.
3i Infrastructure is a wholly owned subsidiary of 3i Group, the London-based international investor in private equity, infrastructure and debt management.