Channel Infrastructure NZ Limited Analysis

Overview

Channel Infrastructure is New Zealand’s leading independent fuel infrastructure company, based at Marsden Point, in Northland. Channel Infrastructure primarily acts as an import terminal for the fuel needed to power New Zealand’s economy. On behalf of its customers, the company receives, stores, tests and distributes transport fuels safely, reliably, and efficiently to the Northland and Auckland markets.

Performance

The following information was extracted from Channel Infrastructure NZ Limited's Half Year Results, released on 26 August 2025:

Channel Infrastructure delivers another strong financial result

Channel Infrastructure NZ Limited (Channel or Channel Infrastructure) (NZX: CHI), New Zealand’s largest fuel import terminal business, has today released its financial results for the six months ended 30 June 2025 (HY25).

Highlights

• Strong safety track record maintained

• Growth in EBITDA, despite loss of legacy Wiri lease revenue, reflected increases in contracted revenue, PPI escalation and cost discipline

• Throughput of 1.7 billion litres reflected relatively stable jet, petrol and diesel demand. Jet fuel demand is in line with Channel’s guidance on the outlook for jet demand for FY25 and consistent with Air New Zealand’s well-signalled aircraft availability issues

• Announced today a nine-year extension to the additional storage contract1 originally announced in 2022 generating ~$50 million of additional revenue over nine-year contract extension term (pre-PPI indexation), commencing in Q1 2028. Extension requires growth capital expenditure investment of $20 - $26 million across 2026 to 2030

• Z Energy jet storage project is now projected to be completed early (H2 2026 v Q1 2027 previously) with the project more than 50% completed and tracking within budget

• Seadra is progressing work on its proposed Marsden Point biorefinery project with a final investment decision expected in 2026

• Released updated Capital Allocation Framework in May, with increased dividend payout ratio of 7090% of Normalised Free Cash Flow

• The Board has concluded its review of the target leverage range and will broaden the target range to BBB/BBB+ (currently equivalent to a leverage ratio of between 3x and 4.5x Net Debt/EBITDA) to accommodate growth

• The Board has determined Channel will undertake an ASX Foreign Exempt listing in 2026 as a natural progression for the Company. Channel will also be added to the FTSE Global Small Cap index with effect from September 2025

• FY25 Guidance unchanged

• The Board has declared an interim dividend of 6.25 cents per share and has introduced a Dividend Reinvestment Plan that will be offered for the interim dividend with a 1% discount