Positive outlook for 3i Infrastructure

29th Sep 2015 08:04

(ShareCast News) - Three new investments and proposed regulation changes are being seen as positive news for 3i Infrastructure.The FTSE 250 listed investment company posted a trading update ahead of its half-year close on Tuesday and highlighted that the value of Elenia at 30 September is expected to benefit from proposed changes to the regulated allowed return for electricity distribution companies in Finland.It's expected that will offset the group's investment in the India Fund which was weak largely due to further depreciation of the rupee against the sterling.The company also completed three news investments for a total of £187m, which were funded from the £381m sale of Eversholt Rail earlier this year.It included £111m for a 50% interest in Danish company ESVAGT, a provider of emergency rescue and response vessels and related services to the offshore energy sector.It also invested £53m for a 45% stake in Oiltanking Terneuzen in the Netherlands and Oiltanking Ghent in Belgium, and £23m for a 50% interest in the West of Duddons Sands Offshore Transmission Owner project in the UK.Portfolio income is expected to increase in the second half of the financial as these new investments start to bring in some returns.Chairman of 3i Infrastructure Peter Sedgwick said it's been a busy six months for the company, and the outlook is positive."Supported by our outlook for the company's European portfolio, including the new investments completed in the period, as well as by significant realised capital profits, we remain on track to deliver a full year dividend for FY2016 of 7.25 pence per share and to grow this progressively beyond FY2016."RBC Capital Markets viewed the update as positive."We believe 3IN's investment managers have done well in managing the Eversholt sale proceeds, balancing between reinvesting £187m into three attractive assets by H1-end (underlining its ability to access these market segments) and returning £150m of special dividends to shareholders."Whilst 3IN has already invested slightly more than our forecast, their commentary suggests that more opportunities may arise, potentially even in H2."Shares in 3i Infrastructure dipped 0.28p at 0842 BST to 166.72p per share.