3i Infrastructure ends third quarter slightly ahead of expectations

Infrastructure investor 3i Infrastructure reported total income and non-income cash of £49m at the end of its third quarter on Friday, slightly ahead of expectations.

The FTSE 250 company said it was on track to deliver its 2024 financial year dividend target of 11.9p per share, representing a 6.7% increase from 2023, which was expected to be fully covered by net income.

As of 31 December, the firm had drawn €640m (£555m) from its £900m revolving credit facility, and held a cash balance of £75m.

The net debt position stood at £480m, which was subsequently reduced by a £55m payment for the interim dividend in January.

One of the major highlights in the quarter was the successful sale of its 25% stake in Attero in November, which yielded net sale proceeds of €214m, representing a significant 31% increase in valuation.

The funds were used to partially repay the company's revolving credit facility.

It said its portfolio continued to perform well, as TCR exceeded earnings expectations and expanded its global presence with significant commercial project wins.

In a notable development, TCR signed an agreement in January 2024 to acquire KLM Royal Dutch Airlines' equipment services subsidiary, KES.

ESVAGT, another portfolio company, reported high utilisation rates and day rates across all segments.

In January, ESVAGT secured a new 15-year contract with Vestas for an additional service operation vessel in the North Sea, further strengthening its position.

ESVAGT's total contract backlog now exceeded €1.5bn, with a substantial portion related to offshore wind projects.

3i Infrastructure said its investment in Future Biogas continued to grow, with an additional £30m investment to acquire two anaerobic digestion plants.

Future Biogas also secured £40m of undrawn debt facilities to support future expansion.

Tampnet meanwhile maintained a strong performance, focusing on new installations and digitisation projects in the North Sea and the Gulf of Mexico.

The company's carrier infrastructure project, Norfest, was now ready for service and aimed to provide unique fibre access to the Norwegian data centre market.

Valorem experienced robust electricity generation, exceeding expectations.

The company successfully completed the sale of a minority stake in its French operational portfolio, reflecting the strong demand for its projects and raising capital for future wind and solar projects.

3i Infrastructure also said that DNS:NET's management team, led by the new CEO, was finalising its revised rollout plan, with further updates expected at the full-year results announcement.

“Building on a strong first-half of the financial year, we are pleased to report that performance continues to be ahead of our expectations,” said Scott Moseley and Bernardo Sottomayor, managing partners and co-heads of European infrastructure at the company’s investment manager, 3i Investments.

“As such, we anticipate exceeding our target return for the year once again.

“Our strategy remains consistent as we prioritise supporting the growth of our existing portfolio companies where we are seeing a number of attractive opportunities, and we will apply proceeds from any divestments to reduce outstanding balances on 3iN's revolving credit facility.”

At 0854 GMT, shares in 3i Infrastructure were down 0.39% at 320.75p.

Reporting by Josh White for Sharecast.com.