The AMP Capital Core Infrastructure Fund allows investors to gain access to unlisted infrastructure. This kind of investment is generally hard for investors to access due to the large capital outlay required.
Performance and activity
The Dexus Core Infrastructure Fund (DCIF) has underperformed its benchmark over the past month. The Fund has outperformed its benchmark over a ten-year basis. The listed component of DCIF returned -4.38% for August, underperforming the MSCI World ex AU Accumulation Hedged AUD Index return of -1.85%*. * Past performance is not a reliable indicator of future performance.
Unlisted infrastructure
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ConGlobal (formerly ITS ConGlobal), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), Royal Adelaide Hospital (RAH), Dexus Diversified Infrastructure Trust, InfraBridge Global Infrastructure Fund and InfraBridge Global Infrastructure Fund II.
Australia Pacific Airports Corporation (APAC)
Melbourne Airport continued to observe strong passenger traffic for August 2023, with both international and domestic volumes exceeding 90% of FY19 (pre-pandemic) figures. International passenger volumes rose to approximately 90% of pre-pandemic levels with further growth expected from the welcomed return of Chinese group travel for the first time since the start of the pandemic ahead of China’s 8-day national “Golden Week” holiday period which, commences in late September. Domestic passenger volumes represented approximately 91% of pre-pandemic levels as Melbourne Airport begins preparations for a busy September domestic travel schedule ahead of the Victorian school holidays and the AFL Grand Final.
Melbourne Airport is pleased to welcome back LATAM, South America’s largest airline, with the first direct flight touching down at the airport in early September 2023. LATAM’s return enables Melbourne Airport to connect Victoria directly to the South American continent with flights initially operating three times a week. Furthermore, the return boosts Melbourne Airport’s overall international capacity to 97% of pre-pandemic levels with the airport expecting a complete rebound to 100% by the end of 2023.
In Melbourne Airport’s Business Park, construction has commenced on a new Toll Group healthcare facility which will provide state of the art pharmaceutical storage offerings in Victoria. The facility will be Toll Group’s largest healthcare facility in Victoria and is expected to warehouse and distribute medical supplies. Toll will lease the healthcare facility from Melbourne Airport with the at least 10-year lease expected to commence in 2024.
Port Hedland International Airport (PHIA)
For the month of July 2023, passenger volumes tracked slightly behind budget, though exceeded the prior corresponding period (PCP) by 4%, reflecting the continued solid performance from FY23.
EBITDA tracked 3% adverse to budget due to higher operating expenses. Aeronautical revenues were 1% higher than budget with lower passenger charges offset by higher than budgeted landing charges. Non-aeronautical revenues tracked 5% favourable to budget, primarily due to higher-than-expected hire car income and parking income. Staff costs tracked 54% adverse to budget due to staff performance-based remuneration recognised for the month.
Pleasingly, the terminal redevelopment project is now complete, with the terminal officially reopened on the 22nd of September 2023. The launch was well attended by key stakeholders from across the Port Hedland community.
Powerco.
Powerco’s YTD (for the 4 months to July 2023) earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF) tracked slightly behind budget due to lower-thanexpected gas consumption and connection volumes. This is a result of warmer weather currently being experienced in New Zealand, which has seen lower gas consumption compared to prior periods. YTD revenue from customer-initiated works was lower than budget as the demand mix continues to shift from smaller residential customers to larger industrial customers, which points to the observation that the reduction in connection volumes is related to the broader slow-down in the new home-build sector across New Zealand.
In early August, the New Zealand Ministry of Business, Innovation and Employment released a gas transition plan issues paper, seeking written responses from the community by November. The paper explores the importance of balancing emissions reductions and legislated targets with the key role that fossil fuel plays in New Zealand’s energy mix. The paper also identifies flexibility in regulatory frameworks to enable investment and pricing/cost allocation for decarbonisation, which aligns with Powerco’s position on gas transition. New Zealand’s Gas Transition Plan is due to be announced later this calendar year or early next year, and Powerco intends to use the updated Gas Transition Plan to refine their gas strategy.
In late August, Powerco hosted an awards night with employees and contractors to celebrate the conclusion of the business’ 5-year Customised Price-Quality Path program. The evening was an opportunity to not only recognise the people responsible for the successful delivery of the program, but also to highlight examples of positive culture and initiatives across Powerco’s contractors and staff and share best practice learnings from successful projects.
ConGlobal (formerly ITS ConGlobal)
ConGlobal’s YTD July adjusted EBITDA tracked 25% behind the PCP because of lower volumes received and the changing mix of container types.
The Depot business unit’s YTD adjusted EBITDA tracked 23% behind budget, which reflected the cyclical impact of consumer spending on container volumes and mix of container types. Despite growth in container volumes, containers received by the Depot business are increasingly empty. Loaded containers command a higher price due to the greater difficulty in storing and handling them. With a weak outlook for U.S consumer spending and continued rebalancing of consumer demand from goods towards services following the surge in spending on goods during the COVID-19 pandemic, the trend from loaded to unloaded containers is expected to continue.
The Intermodal business unit’s YTD EBITDA was 12% lower than the PCP. However, operational performance continues to be strong with the revenue per lift outperforming the PCP by 13% and tracking 4% ahead of the budget, which is a solid outcome as the ConGlobal management team continues to focus on improving operational efficiency.
What is AMP Capital Core Infrastructure A AMP Capital Core Infrastructure A is an Managed Funds investment product that is benchmarked against Global Infrastructure Index and sits inside the Property - Global Listed Infrastructure Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The AMP Capital Core Infrastructure A has Assets Under Management of 854.04 M with a management fee of 1.21%, a performance fee of 15.00% and a buy/sell spread fee of 0.07%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the AMP Capital Core Infrastructure A has returned 1.48% in the last month. The previous three years have returned 2.71% annualised and 6.6% each year since inception, which is when the AMP Capital Core Infrastructure A first started.
How is risk measured in this investment product? There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since AMP Capital Core Infrastructure A first started, the Sharpe ratio is NA with an annualised volatility of 6.6%. The maximum drawdown of the investment product in the last 12 months is -2.76% and -11.97% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product? Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The AMP Capital Core Infrastructure A has a 12-month excess return when compared to the Property - Global Listed Infrastructure Index of -10.62% and -1.7% since inception.
Does the investment product produce Alpha over its Peers? Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. AMP Capital Core Infrastructure A has produced Alpha over the Property - Global Listed Infrastructure Index of NA% in the last 12 months and NA% since inception.
What are similar investment products? For a full list of investment products in the Property - Global Listed Infrastructure Index category, you can click here for the Peer Investment Report.
What level of diversification will AMP Capital Core Infrastructure A provide? AMP Capital Core Infrastructure A has a correlation coefficient of 0.85 and a beta of 0.49 when compared to the Property - Global Listed Infrastructure Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers? For a full quantitative report on AMP Capital Core Infrastructure A and its peer investments, you can click here for the Peer Investment Report.
How do I compare the AMP Capital Core Infrastructure A with the Global Infrastructure Index? For a full quantitative report on AMP Capital Core Infrastructure A compared to the Global Infrastructure Index, you can click here.
Can I sort and compare the AMP Capital Core Infrastructure A to do my own analysis? To sort and compare the AMP Capital Core Infrastructure A financial metrics, please refer to the table above.
Has the AMP Capital Core Infrastructure A been independently verified by SMSF Mate? This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in AMP Capital Core Infrastructure A? If you or your self managed super fund would like to invest in the AMP Capital Core Infrastructure A please contact 33 Alfred Street, Sydney via phone +61 2 8048 8162 or via email askamp@amp.com.au.
How do I get in contact with the AMP Capital Core Infrastructure A? If you would like to get in contact with the AMP Capital Core Infrastructure A manager, please call +61 2 8048 8162.
Comments from SMSF Mates SMSF Mate does not receive commissions or kickbacks from the AMP Capital Core Infrastructure A. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - July 31, 2023 Performance and activity
The Dexus Core Infrastructure Fund (DCIF) has underperformed its benchmark over the past month. The Fund has outperformed its benchmark over a ten-year basis.
The listed component of DCIF returned -0.06% for July, underperforming the MSCI World ex AU Accumulation Hedged AUD Index return of 2.84%*.
Unlisted infrastructure
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ConGlobal (formerly ITS ConGlobal), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), Royal Adelaide Hospital (RAH), Dexus Diversified Infrastructure Trust, InfraBridge Global Infrastructure Fund and InfraBridge Global Infrastructure Fund II.
Australia Pacific Airports Corporation (APAC)
Melbourne Airport continued to observe strong passenger performance for the month of July 2023. International passenger volumes soared to 92% of FY19 (pre-pandemic) figures, attributable to strong arrival traffic from China, India, and United Kingdom. Further growth is expected from China as Melbourne Airport welcomes China’s recent announcement to remove all restrictions on group travel to Australia, effective immediately. This is further buoyed by Tourism Australia commencing tourism campaigns in China from next month to encourage travellers to return to Australia. Domestic passenger volumes reached 90% of pre-pandemic figures as Melbourne Airport recorded two million domestic passengers for the first time since the COVID-19 pandemic.
In August 2023, Melbourne Airport installed three new portable noise monitors, which supplement the existing six monitors located in nearby suburbs to the Airport by Airservices Australia. The monitors will provide local residents with more accurate data on aircraft noise and were installed in direct response to community feedback obtained during the public exhibition of the airport’s Third Runway project last year. The monitors are relocatable and can be moved to other destinations to capture noise data as required.
Port Hedland International Airport (PHIA)
YTD (for the 12 months to June 2023) passenger volumes exceeded the budget and the prior corresponding period (PCP) by 15%. Pleasingly, the total FY23 passenger volumes represent the highest passenger volumes at PHIA on record, a testament to the airport’s resilience following the COVID-19 disruptions.
YTD EBITDA reflected the strong passenger performance, tracking 11% favourable to the budget. On a YTD basis, aeronautical revenues outperformed the budget by 9%, with the higher than budgeted passenger volumes slightly offset by higher-thanexpected load factors, which impacted aircraft landing fees. Nonaeronautical revenues tracked 4% favourable to budget, primarily due to higher-than-expected hire car income and higher lease income. The terminal redevelopment continues with the final stage underway. The official terminal opening is planned for September 2023.
Powerco
Powerco’s earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF) tracked 2.6% favourable to budget for the month of June, driven predominantly by strong contributions from the electricity revenue segment. Customer contribution revenues outperformed the budget by 1.2% which was an improvement from the prior month and reflects the shift in the demand mix from smaller, residential works to larger higher value jobs driven by decarbonisation focused industrial customers.
At the end of June, Powerco’s CEO, James Kilty, presented at the Electricity Engineers Association (EEA) Conference which focused on a pathway for ‘Delivering a Net Zero Carbon Energy Future’. The presentation explored the critical role that electrification plays for New Zealand to reduce its reliance on non-renewable energy sources and increase the proportion of energy derived from renewable sources. A link to the full presentation can be found here Pleasingly, Powerco has been named a finalist in three categories for the 2023 New Zealand Energy Excellence Awards. The categories include: Network Initiative of the Year (on account of the successful $1.27 billion customised price-path investment delivery), Well-being Award and Young Energy Professional of the Year. The nominations are a positive indication of Powerco’s leading position in New Zealand’s energy distribution market.
ConGlobal (formerly ITS ConGlobal)
ConGlobal’s YTD June 2023 adjusted EBITDA was 25% lower than the PCP and tracked 25% adverse to the budget as a result of lower intermodal and storage volumes observed.
The Depot business unit’s YTD adjusted EBITDA tracked 23% behind the budget due to lower-than-expected performance across several storage segments relative to forecast. Despite the strong growth in overall container volumes, the continued weakening of consumer demand reduced the volume of loaded containers, which command a higher price due to the greater difficulty in storing them. The trend in the changing mix of containers from loaded to unloaded is expected to continue.
The Intermodal business unit’s YTD June adjusted EBITDA tracked 33% behind budget. However, operational performance continues to be strong with the revenue per lift growing 13% year-over-year and tracking 5% favourable to budget. The challenged performance was predominantly driven by a decline in billable lifts. While the easing of railway and port congestion were positive developments, slowing consumer demand for goods and a competitive freight environment weighed on the sector. Earlier in the year, ConGlobal successfully won an Intermodal terminal contract in Logistics Park Chicago, operating for one of the Class I railroads. With the contract commencing in July 2023, the management team expects the delivery of an EBITDA uplift in Q4 2023.
London Luton Airport (LLA)
LLA continues to observe strong operational and financial performance, reflecting the airport’s resilient recovery from the difficult operating conditions caused by COVID-19. YTD (for the seven months to July 2023) passenger volumes reached approximately 90% of pre-pandemic levels. Pleasingly, this result reflected an 11% outperformance to budget.
YTD revenue exceeded the budget by 16%, attributable to the strong passenger volumes and better yield performance. YTD operating expenses tracked slightly adverse to budget due to higher concession fees arising from the improved passenger levels. Notwithstanding this, LLA’s YTD EBITDA continues to be strong, outperforming budget by 36%. LLA’s EBITDA outperformance is expected to continue throughout H2 2023.
Royal Adelaide Hospital (RAH)
The project is operating well, with strong relationships in place between the State of South Australia, Celsus, RAH directors and the Operators, Downer and DXC Technology. Abatements are low and operating performance is very good.
Our Social Infrastructure team has been working with the RAH management team to finalise a number of ESG initiatives for the project. We also undertook a site visit and tour of RAH in early July 2023. This was an excellent opportunity for the DCIF team to meet with key management personnel from the project and observe the critical operations at RAH.
SA Schools
SA Schools continues to operate well. Relationships are very good between Dexus, the State of South Australia, Downer and the Schools.
Operational performance is measured against 294 KPIs. For the 12 months to 28 May 2023, 99.99% of the service fee was received from the State, and of the 0.01% abatement, 100% was passed through to the subcontractor. We are pleased to note that the temporary accommodation at the John Hartley School was completed by the State on 31 July 2023. Staff and students are now using the temporary accommodation whilst our Social Infrastructure team manages the insurance claim process for the rebuild of the permanent building, which was destroyed by fire and is expected to be complete in approximately 12 months’ time.
AquaTower
All plants continued to operate well over the quarter. For the seven months to 31 July 2023, treated water volumes outperformed the budget by 3.2%.
Our Social Infrastructure team is currently planning for our next quarterly meeting with the water authority, GWM Water, and the operator of the plants, TRILITY, in mid-August 2023.
Australian National University (ANU) Purpose Built Student Accommodation (PBSA) The ANU PBSA’s Semester 2 2023 occupancy is nearing 100%.
Demand was very strong with twice the number of applications received than beds available for letting. The ANU is currently managing a waitlist of students who will be offered a room in our PBSA facilities should one become available throughout the course of the semester. We also worked together with the ANU to set the rents for 2024, which will increase in line with the Consumer Price Index. The marketing of the rooms for the 2024 academic year will commence in September and the team is well progressed with plans to open the applications.
Macarthur Wind Farm
The repair and maintenance works conducted on the electrical switchgears and converters, along with high wind speed, have resulted in material improvements to Macarthur’s production levels in comparison to May and June. Pleasingly, the July performance exceeded the asset’s 5-year average production level. The asset continues to receive its scheduled payments from AGL in full under the fixed price contract.
Auckland South Corrections Facility (ASCF)
The project continues to perform well both financially and operationally. Operational performance is measured against 52 KPIs. For the 12 months to 30 June 2023, 99.59% of the service fee was received from the New Zealand Crown, and of the 0.41% abatement, 100% was passed through to the subcontractor.
A site inspection of the asset was held in July 2023 with the Board undertaking a work, health and safety inspection of the control facility.
Global listed infrastructure
The listed component of DCIF returned -0.06% for July, underperforming the MSCI World ex AU Accumulation Hedged AUD Index return of 2.84%.
Utilities
Water provided a positive return. Diversified utilities, integrated regulated and transmission & distribution provided a negative return.
Infrastructure
Rail, toll roads and ports provided a positive return. Airports and communications infrastructure provided a negative return.
Performance Commentary - June 30, 2023 The Dexus Core Infrastructure Fund (DCIF) has outperformed its benchmark over the past month. The Fund has outperformed its benchmark over a ten-year basis.
The listed component of DCIF returned 0.85% for June, underperforming the MSCI World ex AU Accumulation Hedged AUD Index return of 5.59%*.
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ConGlobal (formerly ITS ConGlobal), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), Royal Adelaide Hospital (RAH), Dexus Diversified Infrastructure Trust, InfraBridge Global Infrastructure Fund and InfraBridge Global Infrastructure Fund II.
Performance Commentary - May 31, 2023 The Dexus Core Infrastructure Fund (DCIF) has underperformed its benchmark over the past month. The Fund has outperformed its benchmark over a ten-year basis, and since inception.
The listed component of DCIF returned -5.93% for May, slightly underperforming the Dow Jones Brookfield Global Infrastructure Net Accumulation Index Hedged AUD return of -5.85%*
Unlisted infrastructure
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ITS ConGlobal (ITSC), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), Royal Adelaide Hospital (RAH), Dexus Diversified Infrastructure Trust2 , InfraBridge Global Infrastructure Fund and InfraBridge Global Infrastructure Fund II.
Australia Pacific Airports Corporation (APAC) Melbourne Airport continues to perform well financially and operationally, with total passenger volumes in May 2023 reaching approximately 90% of FY19 (pre-COVID) levels. International passenger volumes soared to circa. 88% of pre-COVID levels, attributable to international traffic more than doubling (+117%) over the last 12 months (to May 2023). The domestic passenger segment continues to perform strongly too, with May 2023 figures representing circa. 93% of FY19 volumes.
Pleasingly, Melbourne Airport achieved a new post-pandemic record for monthly aircraft traffic movements for the month of May 2023. In addition, Melbourne Airport welcomed direct flights between Melbourne and Hanoi launched by Vietnam Airlines in June 2023. This new service operates twice weekly and complements Vietnam Airlines’ existing flights between Melbourne and Ho Chi Minh City.
Year to date (YTD) (for the ten months to April 2023) earnings before interest, tax, depreciation and amortisation (EBITDA) outperformed the budget by 5%. Aviation revenue tracked slightly ahead of budget, attributable to the solid domestic passenger performance and improved load factors. Ground transport revenue exceeded the budget by 9%, driven by strong performance from the car parking segment. Retail and property revenue results tracked in line with the budget.
Performance Commentary - April 30, 2023 The Dexus Core Infrastructure Fund (DCIF) has outperformed its benchmark over the past month. The Fund has outperformed its benchmark over a ten-year basis, and since inception.
The listed component of DCIF returned 2.32% for April, outperforming the MSCI World ex AU Accumulation Hedged AUD Index return of 1.61%*.
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ITS ConGlobal (ITSC), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), Royal Adelaide Hospital (acquisition completed in early May 2023), Dexus Diversified Infrastructure Trust2 , InfraBridge Global Infrastructure Fund and InfraBridge Global Infrastructure Fund II.
Performance Commentary - March 31, 2023 The Core Infrastructure Fund (CIF) has outperformed its benchmark over the past month. The Fund has outperformed its benchmark over a ten-year basis, and since inception.
The listed component of CIF returned 2.33% for March*, underperforming the MSCI World ex AU Accumulation Hedged AUD Index return of 2.52%*.
Unlisted infrastructure
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ITS ConGlobal (ITSC), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), AMP Capital Diversified Infrastructure Trust, DigitalBridge Global Infrastructure Fund and DigitalBridge Global Infrastructure Fund II.
Australia Pacific Airports Corporation (APAC)
Melbourne Airport was named the Best Airport in Australia/Pacific at the 2023 Skytrax awards, replicating the accolades received in 2020 and 2021. The airport’s team was also awarded Best Airport staff in Australia/Pacific. This is a fantastic achievement for Melbourne Airport and is indicative of the airport’s commitment towards providing the best transit experience for all travellers.
Melbourne Airport continues to deliver strong passenger performance, with total passenger volumes in March 2023 returning to almost 88% of FY19 (pre-Covid) levels. International traveller figures soared to 80% of pre-pandemic volumes and were 9% higher than February 2023 numbers. This strong recovery is attributable to increasing international capacity as March 2023 saw the return of Cebu Pacific flights to Manila, the re-launch of Qantas services to Tokyo Haneda airport, Emirates resuming third daily flights to Dubai and an increase in flights to mainland China following the return of major Chinese carriers to Melbourne Airport. The domestic passenger segment also continues to perform strongly with the March 2023 volumes tracking 20% higher than February 2023 figures.
Year to date (YTD) (for the eight months to February 2023) earnings before interest, tax, depreciation and amortisation (EBITDA) exceeded budget by 3%, reflecting the stronger than expected international passenger performance. Aviation revenue tracked 3% ahead of budget with higher international passengers offsetting the slightly lower than expected domestic passenger volumes. International passengers attract a higher passenger charge under the aeronautical services agreement than domestic passengers. Retail revenue was 11% above budget, driven primarily by the higher than forecast international passenger numbers which benefited duty free revenues and other Terminal 2 retailers. Ground transport revenue was 3% below budget. Property revenue remained in line with forecast. Operating costs were 1% favourable to the budget with increased ground transport and technology supplier costs offset by lower corporate, cleaning and reactive maintenance costs.
Port Hedland International Airport (PHIA) YTD (for the seven months to 31 January 2023) passenger volumes were 16% favourable to budget and 19% above the prior corresponding period (PCP). While the December 2022 and January 2023 passenger volumes were slightly lower than the FY23 average due to seasonal fluctuations at PHIA, the two months tracked well ahead of the PCP, with January 2023 passenger figures being 32% higher than the PCP.
YTD EBITDA reflected the strong passenger performance, outperforming the budget by 17%. On a YTD basis, aeronautical revenues tracked 11% ahead of the budget, with the higher than budgeted passenger volumes slightly offset by lower-thanexpected aircraft tonnage landed. Passenger numbers have been particularly strong in each month of the financial year to date. Nonaeronautical revenues were 7% above the budget, primarily due to higher-than-expected hire car income and food and beverage retail turnover.
The terminal redevelopment continues to progress with Stage 2 (expanded departures hall, security screening point and back-ofhouse offices) completed in late March 2023. The final stage of the terminal development which will include works to improve the current departures hall and café area are on track to be completed during June 2023.
Powerco Powerco’s YTD (for the 11 months to February 2023) earnings before interest, tax, depreciation, amortisation and financial movements (EBITDAF) tracked 3.0% behind budget as storm activity has increased maintenance and System Operations and Network Support (SONS) operational expenditure. YTD customer contribution revenue tracked 8.7% favourable to the budget due to strong customer demand from earlier in the year. However, YTD operating expenditure tracked 4.1% unfavourable to the budget as a result of elevated maintenance spend and SONS costs related to storm rectification works.
Powerco has successfully completed the business’ 5-year customised price path (CPP) program of work to enhance the resilience and reliability of the network. The successful delivery of the material step-up in the network capital expenditure program over the past 5 years puts Powerco in a strong position compared to peers to deliver the capital expenditure needed over the next 10 years under the business’ 2023 Asset Management Plan. The completion of the CPP program highlights the need for ongoing large-scale investment to ensure the continued resilience and reliability of the electricity network.
Powerco recently published the business’ 2023 Asset Management Plan which sets the direction for the future of the electricity network over the next decade. Electrification will play a central role in New Zealand meeting its decarbonisation targets and Powerco’s Asset Management Plan includes a meaningful step change in the forecast capital expenditure required to help the nation realise its decarbonisation ambitions.
Performance Commentary - February 28, 2023 The Core Infrastructure Fund (CIF) has underperformed its benchmark over the past month. The Fund has outperformed its benchmark over a ten-year basis and since inception.
The listed component of CIF returned -5.05% for February, underperforming the MSCI World ex AU Accumulation Hedged AUD Index return of -1.63%.
Unlisted infrastructure
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ITS ConGlobal (ITSC), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), AMP Capital Diversified Infrastructure Trust, DigitalBridge Global Infrastructure Fund and DigitalBridge Global Infrastructure Fund II.
Australia Pacific Airports Corporation (APAC)
Melbourne Airport continues to welcome back domestic and international passengers, with the total passenger volumes for the month of February 2023 representing 81% of February 2019 (preCOVID) volumes. Domestic passenger numbers reflected 84% of pre-COVID volumes and international passenger figures represented 74% of pre-COVID volumes. Pleasingly, travellers from India, New Zealand, China, the United Kingdom and Malaysia formed a substantial proportion of international arrivals for the month, attributable to Melbourne Airport’s recent success in securing more flights and increasing capacity to and from those respective countries.
APAC’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the month of January 2023 were 10% higher than the forecast. Aviation revenue exceeded the forecast, attributable to solid international passenger performance.
International passengers led a stronger than expected retail revenue performance, outperforming the forecast by 33%. Ground transport improved from December 2022 levels, however, was unfavourably impacted by slightly lower domestic travel.
Meanwhile, property results were in line with forecast. Pleasingly, international capacity increased to 75% of pre-COVID levels in January 2023, attributable to the return of Chinese airlines, including China Eastern Airlines, Air China and China Southern Airlines, and the increasing frequency of flights to China following the reopening of its borders.
Port Hedland International Airport (PHIA)
PHIA continued to see strong passenger volume performance for the seven months to 31 January 2023 (YTD). The YTD passenger volumes outperformed the budget by 16%. Passenger volumes were strong in the month of January, tracking 29% favourable to the budget and 32% above the prior corresponding period (PCP).
YTD EBITDA was 17% higher than the budget reflecting the strong passenger performance. Aeronautical revenues were 11% higher than the budget, with the higher than budgeted passenger volumes slightly offset by lower-than-expected aircraft tonnage landed, as airline operators continue to manage yield. Higher-than-expected hire car income and deferred rental abatement during the terminal redevelopment improved the YTD non-aeronautical revenues, resulting in an outperformance of 7% above the budget. YTD total expenses tracked 6% favourable to the budget, predominantly due to lower operating and screening costs.
The terminal redevelopment continues to progress well with Stage 2 (the upgrade of the existing check-in area, back of house offices and security screening points) on track for completion in midMarch. Completion of the entire program of works remains on schedule for completion in June 2023.
Powerco
Earnings before interest, tax, depreciation, amortisation, and financial movements (EBITDAF) for the 10 months to January 2023 (YTD) tracked slightly behind budget. This was primarily driven by lower gas and electricity revenues, and electricity corrective maintenance expenditure. These impacts were slightly offset by management actively pursuing cost savings in system operations and business support costs. The majority of maintenance overspend was driven by reactive spending in response to the recent storm activities. YTD capital expenditure (capex) tracked 6.7% favourable to the budget, largely attributable to renewals capex though partially offset by non-network spending below capex targets.
Cyclone Hale impacts resulted in an overspend in reactive maintenance, further exacerbated by Cyclone Gabrielle. Despite this, Powerco’s Customised Price-Quality Path project delivery remained on track. Powerco management have been working to mitigate the level of overspend by actively reducing noncritical spend in other parts of the business. Planned maintenance works are scheduled to be deferred to allow crews to focus on cyclone related priorities with additional resources planned to be made available for recovery related works.
Whilst Cyclone Gabrielle’s impacts will challenge Powerco’s reliability metrics, the Powerco team was well prepared, taking learnings from Cyclone Dovi (experienced at the same time last year) to put forward a proactive management plan before the storm hit the network. This included mobilising a Crisis Management Team and providing daily reports to the board with detailed outage information. Other New Zealand electric distribution network operators are also likely to miss reliability targets and are aligned on collective opposition to any unreasonable penalties from the Commerce Commission. This position has been communicated to the Council of Energy Regulators and dialogue with the Commerce Commission on these issues has commenced.
ITS ConGlobal (ITSC)
ITSC’s January 2023 monthly revenue tracked 9% higher than the PCP. YTD adjusted EBITDA tracked 25% above the PCP, however, was below target. This is due to “loaded” containers exiting ITSC’s depots, given the observed shift and return towards a more normalised supply chain environment.
The Intermodal business is continuing to stabilise to a degree, albeit is still tracking behind budget due to lower-than-expected volumes and productivity challenges. January intermodal volumes were 10% adverse to the budget and 11% lower than the PCP as US buying patterns are reverting to more normalised levels and congestion in certain regions has further limited volumes. However, the impact has been partially offset by decreases in labour costs as a result of the lower volumes. The ITSC management team are monitoring and adjusting labour hours to account for lower volumes while still maintaining service expectations. It is expected that lower and more stable volumes may help improve productivity though this effect will take time and is not immediate.
There is strong momentum in ITSC’s commercial depot pipeline with a number of depot related projects gaining traction. ITSC management and the asset management team will continue to progress and advance these projects over the course of 2023.
London Luton Airport (LLA)
YTD (for the two months to 28 February 2023) passenger volumes reflected 87% of 2019 levels, tracking 19% favourable to the budget and 93% higher than the PCP, signalling LLA’s strong and continuing recovery from the pandemic.
YTD EBITDA outperformed the budget by 33% and was 96% higher than the PCP mostly due to higher passenger levels and favourable timing variance on some operational expenditures. LLA’s Development Consent Order application was submitted on 27 February 2023, marking a major milestone in the Airport’s growth strategy. If accepted, this planning application will allow LLA to increase its capacity from 18 million passengers per annum to 32 million passengers per annum.
The Luton Direct Air-Rail Transit (DART) system commenced operations on 10 March 2023, signalling another major milestone for the Airport. The DART facilitates a seamless c. 30 minutes journey between London St Pancras Station and the Airport terminal, significantly improving the passenger experience.
Customer experience has continued to maintain very high standards at LLA, with an overall ASQ score of 4.0 (out of 5) for February 2023, reflecting the success of various initiatives.
Importantly, statistics from measures which look at whether customers felt safe and secure, confident to travel and relaxed all scored very highly and close to 100%.
SA Schools
SA Schools continues to perform well. Operational performance is measured against 294 KPIs. For the 12 months to 28 February 2023, 99.98% of the service fee was received from the State of South Australia; and of the 0.02% abatement, 100% was passed through to the subcontractor.
AquaTower
All plants continued to operate well during February 2023. Production in February and for the calendar year to date was similar to 2022 levels.
For the 12 months to 28 February 2023, no abatements were levied on AquaTower, with each plant meeting all contractual water quality parameters.
Australian National University (ANU) Purpose Built Student Accommodation (PBSA)
Semester 1, 2023 started on 20 February 2023 with the teaching semester now underway. The Semester 1 2023 occupancy letup reached 99% at the start of March. The unoccupied 1% was a result of student application preferences not aligning with available room types. Notwithstanding this, there has been very strong demand for on-campus PBSA at the ANU with the total number of applications exceeding the number of available beds. The AMP Capital student accommodation asset management team expects to fill the remaining available beds over the course of the first few weeks of the semester. The newly acquired Yukeembruk residence is at 99.5% occupancy, which is a fantastic result and reflects the success of joint initiatives between the ANU and the AMP Capital asset management team. International student visas granted by the Department of Home Affairs during January 2023 remained well above 2019 levels, and contributed to the strong letup.
Macarthur Wind Farm
Macarthur’s production in January 2023 saw continued improvements from prior months despite the impacts from maintenance activities and convertor issues. Focused discussions with counterparties are underway on replacing convertors in the near term to restore Macarthur’s production. Notwithstanding this, the asset continues to receive its scheduled payments in full from AGL under its fixed contract.
Auckland South Corrections Facility (ASCF)
The project continues to perform well both financially and operationally.
Operational performance is measured against 52 KPIs. For the 12 months to 31 December 2022, 99.87% of the service fee was received from the New Zealand State; and of the 0.13% abatement, 100% was passed through to the subcontractor.
Discussions with the NZ Department of Corrections continue to progress on the review of the current performance regime, which will form part of an ongoing wider contract reset exercise.
Performance Commentary - January 31, 2023 The Core Infrastructure Fund (CIF) has outperformed its benchmark over the past month. The Fund has outperformed its benchmark over a seven and ten-year basis and since inception. The listed component of CIF returned 3.49% for January, underperforming the MSCI World ex AU Accumulation Hedged AUD Index return of 6.23%.
Unlisted infrastructure
The unlisted component of the portfolio comprises Australia Pacific Airports Corporation (APAC) (Melbourne and Launceston Airports), Powerco, AquaTower, SA Schools, Port Hedland International Airport (PHIA), ITS ConGlobal (ITSC), London Luton Airport (LLA), Australian National University Student Accommodation (ANU), Macarthur Wind Farm, Auckland South Corrections Facility (ASCF), AMP Capital Diversified Infrastructure Trust, AMP Capital Global Infrastructure Fund and AMP Capital Global Infrastructure Fund II.
Australia Pacific Airports Corporation (APAC)
Melbourne Airport’s total passenger numbers for the month of January 2023 rose to the highest levels observed in three years and were more than double the volumes recorded in January 2022. International traveller figures were 7% higher than December 2022 and represented 76% of January 2019 (pre-COVID) volumes.
Domestic passenger numbers represented 86% of pre-COVID volumes and were 1% higher than December 2022. Pleasingly, Melbourne Airport continues to welcome back mainland Chinese carriers, with six mainland Chinese carriers resuming services to Victoria throughout January since the easing of China’s border restrictions.
APAC’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the month of December 2022 were 5% higher than forecast. Aviation revenue was slightly higher than forecast, driven by international passenger performance. International passengers led a stronger than expected retail revenue performance, outperforming the forecast by 21%. Ground transport was adversely impacted by slightly lower domestic travel. Meanwhile, property results were on forecast.
Melbourne Airport also saw increases to international capacity throughout December 2022, with notable additions including Thai Airways increasing the frequency of flights to Bangkok to twice daily, and Garuda commencing flights to Bali.
Port Hedland International Airport (PHIA)
PHIA continued to see strong passenger volume performance for the 6 months to 31 December 2022 (Year-to-date or YTD). The YTD passenger volumes tracked 14% favourable to the budget and were 16% higher the prior corresponding period (PCP). Passenger volumes were strong in the month of December, tracking 9% favourable to the budget.
The YTD EBITDA was 16% higher than the budget and reflected the strong passenger performance. Aeronautical revenues were 9% above budget, with the higher than budgeted passenger volumes slightly offset by lower-than-expected aircraft tonnage landed, as airline operators continue to manage yield. YTD nonaeronautical revenues outperformed the budget by 7%, primarily attributable to higher-than-expected hire care income. YTD total expenses tracked 6% favourable to budget, predominantly due to lower operating and screening costs.
PHIA’s terminal redevelopment continues to progress well with Stage 2 on track for completion in mid-March. The entire program of works remains on schedule for completion in June 2023.
Powerco
Earnings before interest, tax, depreciation, amortisation, and financial movements (EBITDAF) tracked in line with the budget for the 9 months to December 2022 (YTD), driven by strong levels of customer-initiated works (CIW). Repair and maintenance operational expenditure was above budget, due to the reactive spend required in response to recent storm activities, though was offset by the stronger CIW revenue. YTD capital expenditure is 11.4% favourable to the budget resulting from the increased stormrelated repairs. Delivery of major projects continued to be on track in December.
Positively, Powerco’s Unplanned System Average Incident Duration Index (SAIDI) for December tracked within the monthly target. However, January’s unplanned SAIDI exceeded the target allowance due to Cyclone Hale and it is likely that Powerco will exceed its annual unplanned SAIDI cap due to the recent storm activities. The AMP Capital asset management team will continue working with Powerco management to drive initiatives to control unplanned SAIDI while also preparing for consultation with the Commerce Commission.
The Powerco management team have internally developed a financial model which enables the team to efficiently analyse new opportunities for contracted asset investments. The majority of these opportunities have very similar commercial, legal and financial structures. The financial model supports the Powerco management team with the development of a consistent transaction and investment framework.
ITS ConGlobal (ITSC)
ITSC’s December 2022 YTD adjusted EBITDA is tracking 68% above the PCP and 38% favourable to the budget.
The Depot business continues to produce strong financial results with YTD adjusted EBITDA tracking 77% above the budget and 100% higher than the PCP. The results were driven by higher storage and handling volumes and new business wins.
Furthermore, strong financial momentum continues to flow through from new business and contract wins in 2021 and 2022. There continues to be a robust commercial pipeline of depot opportunities that the asset management team and the ITSC management team are actively pursuing.
The Intermodal business continues to stabilise, albeit is still tracking behind budget due to lower-than-expected volumes and productivity challenges. The YTD intermodal volumes were 9% unfavourable to the budget and 17% lower than the PCP as U.S. buying patterns are reverting to more normalised levels and congestion in certain regions has further limited volumes. However, the impact has been partially offset by decreases in labour costs due to the lower volumes. The ITSC management team is monitoring and adjusting labour hours to account for lower volumes while still maintaining service expectations. It is expected that lower and more stable volumes may help improve productivity though this effect will take time and is not immediate.
The asset management team and ITSC management team have finalised re-negotiating or exiting the 17 underperforming intermodal contracts. A 12-month run rate is expected for the recontracted terminals to reach financial targets, given that the contracts were re-negotiated recently.
London Luton Airport (LLA)
LLA’s January 2023 passenger volumes reflected 85% of 2019 levels, tracking 17% ahead of the budget and 120% higher than the PCP. Positively, this signals LLA’s continuing recovery from the difficult operating environment resulting from the COVID-19 pandemic.
LLA’s January EBITDA exceeded the budget by 56% and was 246% higher than the PCP due to strong passenger performance and favourable timing on operational expenditure. The Luton Direct Air-Rail Transit (DART) system has received Stage 2 Authorisation from the Department for Transport to open late Q1 2023. This is a key milestone, and the Luton DART will allow a seamless circa 30 minutes journey between London St Pancras Station and the Airport terminal, significantly improving the passenger experience.
Customer experience has continued to maintain very high standards at LLA, with an overall ASQ score of 4.2 (out of 5) for January 2023, reflecting the success of various initiatives. Importantly, statistics from measures which look at whether customers felt safe and secure, confident to travel and relaxed all scored very highly and close to 100%.
SA Schools
SA Schools continues to perform well. Operational performance is measured against 294 KPIs. For the 12 months to 30 November 2022, 99.98% of the service fee was received from the State of South Australia; and of the 0.02% abatement, 100% was passed through to the subcontractor.
Over the recent summer holidays, the AMP Capital asset management team and Spotless undertook a significant amount of works to improve the grounds and gardens across the schools.
AquaTower
All plants continued to operate well during January 2023. Production for the month was similar to the levels of water treated in January 2022.
For the 12 months to 31 January 2023, no abatements were levied on AquaTower, with each plant meeting all contractual water quality parameters.
Australian National University (ANU) Purpose Built Student Accommodation (PBSA)
The Semester 1, 2023 occupancy letup continued with momentum through January 2023, with the ANU making academic and accommodation offers to students. Demand for on-campus PBSA at the ANU continues to be very strong with the number of applications received exceeding the number of available beds. Occupancy is expected to reach 100% by the time Semester 1 commences on 20 February 2023.
The ANU named the newly acquired SA8 building to Yukeembruk, with consultation from the region’s First Nations People. Yukeembruk has been well received by students with application preferences reflecting strong interest and uptake of the new residence.
In January 2023, the Chinese Government announced that Chinese students are required to complete their tertiary studies in person (as opposed to online) at their respective overseas universities. Demand for high-quality PBSA across Australia is expected to increase following the announcement. Coinciding with this, there has been a resurgence in flights between the Chinese mainland and Sydney and Melbourne. This is also expected to improve the availability and cost of flights in the near term for returning international students.
Macarthur Wind Farm
While Macarthur’s recent production has been slightly lower than anticipated due to maintenance activities and converter issues, the asset saw production improvements in December 2022. The asset continues to receive its scheduled payments in full from AGL under its fixed contract.
Health and safety performance continues to be strong with zero lost time injuries and no medical treatment incidents.
Auckland South Corrections Facility (ASCF)
The project continues to perform well both financially and operationally.
Operational performance is measured against 52 KPIs. For the 12 months to 31 December 2022, 99.87% of the service fee was received from the New Zealand State; and of the 0.13% abatement, 100% was passed through to the subcontractor. The Board met on site in early February 2023 and undertook a work health and safety walk of the facility. The site did not sustain any damages following the recent floods and cyclone in Auckland. Discussions with the NZ Department of Corrections continue on the review of the current performance regime, which will form part of an ongoing wider contract reset exercise.
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