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Investing.com -- 3i (LON:III) Infrastructure Plc reported income ahead of expectations for the period from October to March, with the company’s portfolio demonstrating strong earnings momentum.
The company remains on track to meet its full-year 2025 dividend target of 12.65p per share, which is expected to be covered approximately 2.5 times by net income.
Total (EPA:TTEF) income and net cash income for the period reached £273 million, a large increase from the previous year, bolstered by distributions from refinancing activities.
Three major refinancing deals were completed during the period, all on more favorable terms than had been factored into the company’s September 2024 valuation.
TCR secured a €450 million refinancing package, consisting of €250 million in new term debt and a €200 million revolving credit facility. This enabled a €73 million distribution to 3i Infrastructure.
Additionally, Oystercatcher’s refinancing efforts resulted in a €114 million distribution, while Future Biogas expanded its debt facilities, providing additional financial flexibility for future growth initiatives.
The company’s portfolio assets continued to perform well overall. TCR, which specializes in ground support equipment leasing, expanded its reach to 22 additional airports over the year, increasing its global footprint to 234 airports.
Infinis, a leader in renewable energy, exceeded expectations with higher-than-forecast captured methane output and made progress on its solar energy projects, with 150MW of capacity now moving into the construction phase.
Telecommunications assets GCX and Tampnet posted revenue growth driven by heightened demand for subsea cable capacity, while DNS:NET achieved stronger-than-anticipated network penetration and average revenue per user.
However, some portfolio segments faced challenges. SRL, which provides portable traffic light solutions, saw a slowdown in activity from local authorities and fiber installation projects, with competitive pressures also impacting rental rates.
Ionisos, which operates in the sterilization sector, reported softer performance in its non-core industrial division, compounded by unplanned downtime at certain sites. Despite these setbacks, Ionisos’ core healthcare business remained stable.
On the balance sheet, the company reported reduced debt levels. As of March 31, expected drawings on its £900 million multi-currency revolving credit facility stood at €310 million, marking a reduction of €406 million since the beginning of the period. The company’s cash balance was approximately £4 million.
Despite ongoing market uncertainties, 3i Infrastructure’s portfolio continues to exhibit strong growth, supported by successful refinancing transactions that indicate a favorable debt market environment.
The company’s shares currently trade at a roughly 15% discount to net asset value, a valuation that RBC Capital Markets believes is unjustified given the strong operational performance and the demonstrated ability to sell assets at a premium, as flagged by the recent Valorem transaction.