MACQUARIE KOREA INFRASTRUCTURE FUND · Securities may not be offered or sold in the United States...
Transcript of MACQUARIE KOREA INFRASTRUCTURE FUND · Securities may not be offered or sold in the United States...
MACQUARIE KOREA INFRASTRUCTURE FUND
May 2013
General Presentation
2
DISCLAIMER
This presentation is not an offer or invitation for subscription or purchase of or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in Macquarie Korea Infrastructure Fund (“MKIF”), the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser after reading investment prospectus, if necessary.
MKIF and Macquarie Korea Asset Management Co., Ltd.(“MKAM”) are not authorised deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia) and their obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MKIF/ MKAM.
Information, including forecast financial information, in this presentation should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities or other instruments in MKIF. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts by their very nature, are subject to uncertainty and contingencies many of which are outside the control of MKIF. Past performance and results are not a reliable indication of future performance.
Based on the performance of the fund, loss of principal may incur and such losses will be vested to investors.
This presentation is not an offer for sale of the securities of MKIF in the United States or in any jurisdiction where any offer, sale or solicitation in respect of such securities is not permitted. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, or in any jurisdiction where such offer or sale is not permitted. MKIF does not intend to register any portion of any contemplated offering in the United States or to conduct a public offering of securities in the United States
Not for distribution in the United States or in any jurisdiction where any offer, sale or solicitation in respect of the contemplated securities is not permitted.
This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any securities will only be available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire any securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
FORWARD LOOKING STATEMENT
This presentation contains forward-looking statements, in particular, under the heading “Business Overview”. All forward-looking statements are our management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
IMPORTANT NOTICE
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CONTENTS
1
Highlights
Financial results
5
6
2 Business Overview
MKIF history
Share information
Corporate structure
Portfolio
Landmark assets
10
11
12
13
14
Key Results
Long-term concession period
Government revenue support
Debt profile
Distribution
Conclusion
15
16
17
18
19
3
Financial position statements
Profit and loss statements
Cashflow statements
Busan New Port Phase 2-3
Portfolio
Operating performance by asset
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22
23
24
25
26
Minimum revenue guarantee summary
Management fees
Macquarie Funds Group
Macquarie worldwide investments
Macquarie Infrastructure and real assets (MIRA)’s competitive advantage
MIRA infrastructure overview
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28
29
30
31
32
Appendices
Underlying asset performance
Newly opened assets
7
8
Key Results
1
HIGHLIGHTS
5
Solid financial and traffic results
- On a non-consolidated basis, MKIF’s revenue and net income decreased by 0.9% and 0.7%, respectively, compared to the previous corresponding period (“pcp”), mainly due to the decrease in loan interest resulting from the divestment of Daegu 4th Beltway East completed on 27 June 2012
- Underlying traffic volume and revenue grew by 2.6% and 7.2%, respectively, on pcp1
- Weighted average daily traffic for the four newly opened assets2 reached 73%³ of the Concession Agreement Forecasts
Outlook on Busan New Port, 2-3, remains cautiously optimistic
- Total volume for the Quarter was approximately 0.3 million TEUs, largely in line with the management expectation adjusted for the seasonality, and the estimated volume for the year remains at 1.6 million TEUs
- Volume migration from the Busan Old Port continues with the New Port’s market share of container volume in Busan area reaching 60% as of March 2013
- Overall, Busan’s volume grew by slightly over 2.8% in the Quarter compared to pcp
- Cash management remains priority during the ramp-up phase
Remains financially healthy with a conservative debt position
- Proportional cash balance of KRW 221.1 billion including MKIF cash of KRW 25.8 billion
- Continued de-gearing of asset level debt with average maturity of 8.4 years
- No external debt refinancing required until May 2016
- Proportionately consolidated gearing4 of 41% with 65% of interest obligations fixed5
- MKIF domestic credit rating remains AA (Stable)6
1. On a weighted average basis based on revenue size of each asset and the MKIF’s equity interest in each concession company 2. Yongin-Seoul Expressway, Seoul-Chuncheon Expressway, Seoul Subway Line 9 and Incheon Grand Bridge 3. On a weighted average basis based on total commitment amount and average daily traffic 4. Gearing = Proportionately consolidated MKIF Net Debt / (Proportionately consolidated MKIF Net Debt + MKIF market capital (3-month average)) 5. Hedging (Fixed) = Proportionately consolidated MKIF net debt adjusted for fixed debt / Proportionately consolidated MKIF net debt 6. Rated by NICE Investors Service on 29 March 2013
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FINANCIAL RESULTS
6
(Unit: KRW mn) Non-consolidated financial information
FY2012 1Q 2013 1Q 2012 % change
Revenue 205,749 42,585 42,968
Interest income 171,912 42,585 42,968
Gain on sale of investment 33,1511 - -
Other income 686 - -
Expense 51,626 12,880 13,053
Management fee 27,786 7,577 6,434
Interest expense 19,828 4,698 6,007
Other expense 4,012 605 612
Net income 154,123 29,705 29,915
Normalised Net income 120,972 29,705 29,915
1. One-off gain from the sale of equity in Daegu 4th Expressway East
0.9%
0.7%
UNDERLYING ASSET PERFORMANCE
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TRAFFIC VOLUME GROWTH1
2.6%
TRAFFIC REVENUE GROWTH1
7.2%
PORTFOLIO AGE2
6.6 years
1. On a weighted average basis based on revenue size of each asset and the MKIF’s equity interest in each concession company 2. Operation period of each concession company on a weighted average basis based on respective commitment amount
% of MKIF Portfolio Average daily traffic volume Average daily traffic revenue
Vehicles/day % change on pcp KRW thousand/day % change on pcp
Incheon International Airport Expressway 6.6% 49,686 2.1% 328,318 4.4%
Baekyang Tunnel 0.2% 70,350 2.2% 50,382 1.9%
Gwangju Second Beltway, Section 3-1 4.9% 31,571 (11.0%) 33,336 6.5%
Gwangju Second Beltway, Section 1 11.4% 37,053 4.9% 39,011 6.5%
Woomyunsan Tunnel 1.2% 23,769 (3.4% ) 51,360 (3.6%)
Cheonan-Nonsan Expressway 16.1% 41,446 2.5% 345,004 6.4%
Soojungsan Tunnel 6.5% 42,198 2.2% 30,763 1.6%
Machang Bridge 6.8% 14,634 (1.7%) 32,100 19.3%
Yongin-Seoul Expressway 8.1% 65,103 5.2% 116,624 16.8%
Seoul-Chuncheon Expressway 8.2% 33,566 (1.2%) 212,040 2.2%
Seoul Subway Line 9 Section1 4.5% 235,632 11.4% 189,998 19.8%
Incheon Grand Bridge 9.9% 27,784 6.1% 145,315 9.5%
Weighted average growth rate 2.6% 7.2%
TRAFFIC PERFORMANCE –1Q 2013 OVER 1Q 2012
-
50,000
100,000
150,000
200,000
250,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2009 Q4
2010 Q1
Q2 Q3 Q4 2011 Q1
Q2 Q3 Q4 2012 Q1
Q2 Q3 Q4 2013 Q1
YSE (LHS) SCE (LHS) IGB (LHS) SM9 (RHS)
NEWLY OPENED ASSETS1
8 8
1. Transportation assets opened since 2009 2. During 1st quarter 2013, on a weighted average basis based on total commitment amount and average daily traffic 3. Weighted average daily traffic during 1st quarter 2013 over 1st quarter 2012
Asset Operation
commencement
Traffic volume growth on
pcp
Traffic revenue
growth on pcp
% of CA forecast traffic
volume
Yongin-Seoul Expressway (YSE)
01-Jul-09 5.2% 16.8% 71.5%
Seoul-Chuncheon Expressway (SCE)
15-Jul-09 (1.2%) 2.2% 67.5%
Seoul Subway Line 9, Section 1 (SM9)
24-Jul-09 11.4% 19.8% 105.6%
Incheon Grand Bridge (IGB)
19-Oct-09 6.1% 9.5% 62.5%
QUARTERLY TREND OF TRAFFIC VOLUME 1Q 2013 TRAFFIC PERFORMANCE
% OF PORTFOLIO
31%
% OF CA FORECAST TRAFFIC VOLUME2
73%
TRAFFIC VOLUME GROWTH3
5%
Vehicles/day Initial boarding/day
BUSINESS OVERVIEW
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MKIF HISTORY
1. Private Participation in Infrastructure Act (PPI Act) defines infrastructure sectors including roads, railways, ports, energy, airport, communication, water resources, etc. 2. A wholly owned subsidiary of Macquarie Infrastructure and Real Assets (Europe) Limited, a member of Macquarie Group (voting share basis)
Market Leader
Promulgated PPI Act
Establishment Listing
A key component in Korean government’s initiative to expand Infrastructure in Korea, introduced strong government supports to private participation in investment
Asian economic crisis Identified the attractive opportunities available
Active fund raising and deal participation
Capital raising of KRW 1.26tn until the listing Captured attractive asset portfolio underpinned by
significant government revenue protections
Capital raising of KRW 582.5 bn through IPO Dual listed on KRX and LSE
MANDATE To invest in infrastructure assets in
Korea as defined under PPI Act1
INVESTMENTS 13 assets, KRW1.66tn
(11 toll roads, 1 subway &1 port)
OBJECTIVE To create value through active
capital/portfolio management and to provide stable distributions
ASSET MANAGER Macquarie Korea Asset Management Co., Ltd.2
Late 90s 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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SHARE INFORMATION
1. Based on the share price as of 31 March 2013 2. Calculated based on the exchange rate as at 31 March 2013 3. 3-month average daily turnover as of 31 March 2013 4. As at 31 December 2012 5. Source: Financial Supervisory Service (Over 5% holders and MKAM’s affiliates as of 31 March 2013)
TOP SHAREHOLDERS5
1. Hanwha Life Insurance 13.1%
2. Shinhan Financial Group 7.2%
3. Newton Investment Management 7.1%
4. Kyobo Life Insurance 6.1%
* Macquarie Group 3.8%
SHAREHOLDER BASE4
EXCHANGE KRX -088980.KS /
LSE – MKIF.LI
MARKET CAP1 KRW 2.2 trillion (US$ 2.0 billion)2
DAILY VOLUME3 618,356 shares (US$ 3.7 million)2
57.0% 22.2%
20.8%
Domestic Retail
International investors
Domestic institutions
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– External fund manager – Managed under Macquarie’s global
policies and procedures
MKAM Management Agreement
MKIF
Tax through vehicle
OPERATING – 13 assets
Toll roads (11) Subway (1) Port (1)
Active manager of the invested companies through management participation
Corporate tax exempted when MKIF distributes more than 90% of its profits available for dividends
Invests in the form of: Equity Subordinated debt Senior debt
Receives: Interest income Dividend
CORPORATE STRUCTURE
As of 31 March 2013
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PORTFOLIO1
As of 31 March 2013
Portfolio Composition by Asset Portfolio Composition by Phase and Type
35.4%
Mature 11.6%
53.0%
Senior debt 14.3%
Equity 34.2%
Sub debt 51.5%
Growth
Ramp up
4.9% 6.8%
8.2%
6.5%
16.1%
1.2%
11.4%
6.6%
8.1%
9.9%
4.5%
15.6%
Port 15.6%
Subway 4.5%
Toll-road 79.9%
Yongin-Seoul Expressway
Incheon Grand Bridge
Seoul Subway Line 9, Section 1
Seoul-Chuncheon Expressway
Machang Bridge
Busan New Port Phase 2-3
Gwangju 2nd Beltway, Section 1
Gwangju 2nd Beltway, Section 3-1
Incheon International Airport Expressway
Woomyunsan Tunnel
Cheonan-Nonsan Expressway
Soojungsan Tunnel
0.2%
Baekyang Tunnel
1. Based on commitment amount
Well balanced and diversified into essential infrastructure assets
Predominantly toll-roads
Relatively young portfolio with average age of 6.6 years
Ratio of central and local government involvement is 65:35
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LANDMARK ASSETS
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LONG-TERM CONCESSION PERIOD
CONCESSION TERM VS. GOVERNMENT REVENUE SUPPORT PERIOD
Revenue Support1,2 Concession Term 3 Early Termination Support1,4
Weighted Average Concession Term
23 years
Weighted Average Revenue Support 11 years
Present
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045
(L)Kwangju 2nd Beltway, Section 1
(L)Baekyang Tunnel
Relevant Authority (C) Central government (L) Local government
(C)Busan New Port Phase 2-3
(C)Yongin-Seoul Expressway
(C)Incheon Grand Bridge
(L)Seoul Subway Line 9, Section 1
(C)Seoul Chuncheon Expressway
(L)Machang Bridge
(L)Soojungsan Tunnel
(C)Cheonan Nonsan Expressway
(L)Woomyunsan Tunnel
(L)Kwangju 2nd Beltway, Section 3
(C)Incheon International Airport Expressway
1. Revenue support and termination payment provisions vary for each concession 2. Revenue support until at least 2019 with weighted average support remaining of about 11 years (excluding Busan New Port Phase 2-3) 3. Concessions last at least until 2025 with weighted average life remaining of about 23 years 4. Concession companies have the right to receive payments if the relevant concession agreement is terminated prior to expiration of the concession term, including termination due to events attributable to
the concession company or the government body or for events of force majeure
As of 31 March 2013
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Revenue Cap1
MRG1
Forecast Revenues2
Government bodies compensate the shortfall
Relevant government authorities extract the excess portion
Actual Revenue
1. MRG and revenue caps vary across assets 2. Forecast revenues set out in the Concession Agreement 3. In three of 12 MRG assets, no revenue guarantee applies if actual revenue are below 50% of the toll revenue forecast
Revenue
GOVERNMENT REVENUE SUPPORT
MRG and Revenue support for 12 of MKIF’s 13 assets3
Inflation-linked revenue support
MRG line tracking the forecast revenue line (typically 80~90% below forecast revenue)
Korea sovereign rating as of March 2013:
− S&P : A+ (Stable)
− Moody’s : AA3 (Stable)
Details for the government revenue support by each asset attached – Slide 27
Conceptual Diagram
MINIMUM REVENUE SUPPORT MECHANISM
300
600
900
1,200
1,500
2014 2019 2024 2029 2034 2039 2044
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DEBT PROFILE
1. Proportionately consolidated cash balance (including MKIF cash balance of KRW 25.8bn) 2. Weighted average amortising maturity of the underlying asset level external debt 3. Gearing = Proportionately consolidated MKIF Net Debt / (Proportionately consolidated MKIF Net Debt + MKIF market capital (3-month average)) 4. Hedging (Fixed) = Proportionately consolidated MKIF net debt adjusted for fixed debt / Proportionately consolidated MKIF net debt 5. Outstanding debt balance based on amortisation schedule of asset level external debt on a proportionate equity shareholding basis. Excludes MKIF level corporate loan balance
OUTSTANDING DEBT BALANCE 5
GEARING3 41%
INTEREST RATE HEDGE4 65% until end of Mar 2014
AMORTISING MATURITY2 8.4 years
CASH1 KRW 221.1bn
As of 31 March 2013
(KRW bn)
DISTRIBUTION
18 18
DECLARATION/ PAYMENT
Semi-annual: As end of June and December
2012 DISTRIBUTION KRW 480 per share1
DISTRIBUTION FLOOR
Higher of taxable income or 100% of distributable accounting income – to maintain tax exempt status
CASH YIELD Circa 7.0%2
1. Composed of (i) a dividend of KRW465 per share and (ii) a distribution in excess of profits of KRW15 per share (Deduction from the retained earnings). Total of KRW480 per share will be accounted as distribution income in calculating dividend income tax and tax payable under Korean law. Investors are advised to consult their own tax advisor for the appropriate tax treatment of the distribution
2. Based on the share price as of 31 December 2012 and 2012 distribution
0
100
200
300
400
500
600 Second Half
First Half
230 220 200
220 220
2006 2007 2008
122
230
Stock distribution
230
2009
160
420 440
582
390
2010
160
DISTRIBUTION HISTORY ( PER SHARE, POST-LISTING )
2011
165
184
344
2012
220
165
330 260
480
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CONCLUSION
REDUCED CAPITAL RISKS Minimum Revenue Guarantee (MRG) provided to12 out 13 underlying assets
Underlying revenues are fully inflation-adjusted
EMBEDDED GROWTH POTENTIAL
Real and inflation-linked natural underlying revenue growth
Capital restructuring opportunities
Re-rating of assets
Growth through new investments
HEALTHY FINANCIALS
Sound balance sheet position
Conservative gearing with solid debt profile
Stability of operating cashflows supported by predictable cost basis
MACQUARIE MANAGED FUND Global leader managing A$97 billion1 of assets under management across 25 countries
Management fees aligned with shareholders’ interests
STRONG MARKET PRESENCE #1 infrastructure management and advisory platform
Unrivalled brand recognition and track record in the infrastructure space in Korea
1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at 31 December 2012 for the majority of assets
APPENDICES
3
21
FINANCIAL POSITION STATEMENTS Non-consolidated – as at 31 March 2013 and 31 December 2012
CAPITAL INJECTION INTO MKIF INVESTMENTS
(Unit: KRW mn)
Asset Item 1Q 2013
Soojungsan Tunnel Senior Debt (1,799)
Total (1,799)
31 March 2013 31 December 2012
Assets
Invested Assets 1,694,304 1,691,108
Cash & deposits 25,822 20,815
Loans 1,094,231 1,096,042
Equity securities 574,251 574,251
Others 386,191 364,175
Interest receivable 375,387 351,646
Other receivables 2,947 4,458
Deferred costs, net 7,857 8,071
Total Assets 2,080,495 2,055,283
Liabilities
Accounts Payable 1 1
Management fee payable 7,577 7,455
Long-term debt 166,419 84,944
Bonds 249,200 249,156
Other liabilities 1,579 1,534
Total Liabilities 424,776 343,090
Shareholders’ Equity
Share Capital 1,670,986 1,670,986
Retained Earnings (15,267) 41,207
Total Shareholders’ Equity 1,655,719 1,712,193
Total Liabilities and Shareholders’ Equity 2,080,495 2,055,283
* Excludes Baekyang Tunnel loan amortisation of KRW 12mil
22
PROFIT AND LOSS STATEMENTS Non-consolidated – 3 months to 31 March 2013
(Unit: KRW mn)
1Q 2013 1Q 2012
Revenue 42,585 42,968
Interest Income 42,585 42,968
Gain (Loss) on sale of investment - -
Expenses 12,880 13,053
Management fees 7,577 6,434
Custodian fees 82 83
Administrator fees 51 52
Interest expenses 4,698 6,007
Other expenses 472 477
Net Profits 29,705 29,915
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CASHFLOW STATEMENTS Non-consolidated - 12 Months to 31 December 2012
(Unit: KRW mn)
2012 2011
Cashflows from operating activities:
Cash inflows from operating activities 200,405 133,130
Sale of investment 91,159 20,550
Collection of other loans receivable 45,827 14,530
Interest and other income 63,419 98,050
Cash outflows from operating activities: (33,869) (100,096)
Investments (4,720) (74,355)
Fees and expenses (29,148) (25,741)
Net cash provided by (used in) operating activities 166,537 33,034
Cashflows from financing activities:
Repayment of long-term debt (180,000) (250,000)
Drawdown from long-term debt 74,500 55,443
Proceeds from Bond - 250,000
Distributions paid (127,612) (115,679)
Interest expense (13,403) (6,552)
Borrowing related costs (100) (3,592)
Bond issue cost - (1,126)
Net cash provided by (used in) financing activities (246,615) (71,506)
Net increase (decrease) in cash and deposits (80,078) (38,472)
Cash and deposits at beginning of the period 100,893 139,365
Cash and deposits at end of the period 20,815 100,893
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BUSAN NEW PORT PHASE 2-3
Project Company BNCT Co., Ltd.
Relevant Authority Ministry of Oceans and Fisheries
Concession Term 29 years 3 months from completion of construction (24 Dec 2011 – 23 Mar 2041)
Construction Period 48 months (Dec 2007 ~ Dec 2011)
Operation commencement 2 January 2012
MKIF Investment Total of KRW 259.4bn
- 30% Equity ( KRW 66.4bn)
- 100% Sub debt ( KRW 193bn)
% of MKIF Portfolio 15.6%
Construction completed on time and on budget, commencing operation in January 2012
The key operational highlights for 1Q 2013 include:
- Total volume for the Quarter was approximately 0.3 million TEUs, largely in line with the management expectation adjusted for the seasonality, and the estimated volume for the year remains at 1.6 million TEUs
- Volume migration from the Busan Old Port continues with the New Port’s market share of container volume in Busan area reaching 60% as of March 2013
- Overall, Busan’s volume grew by slightly over 2.8% in the Quarter compared to pcp
- Cash management remains priority during the ramp-up phase
Gaduk-do, Busan City
PORTFOLIO1
25
1. Based on commitment amount 2. Includes KRW 3.2bn working capital facility
MKIF COMMITMENT AND DEBT INTEREST RATE
As of 31 March 2013
(KRW bn, %)
Name Abbrv Equity Ownership(%) Subordinated debt
Interest rate(%)
Senior debt
Interest rate (%)
Total
Baekyang Tunnel BYTL 1.2 100.0 - 1.5 15.0 2.7
Gwangju Second Beltway, Section 1 KBICL 13.1 100.0 35.22 20.0 142.0 10.0 190.3
Incheon International Airport Expressway NAHC 58.2 24.1 51.7 13.9 - 109.9
Soojungsan Tunnel SICL 47.1 100.0 19.3 20.0 41.4 8.5 107.8
Cheonan-Nonsan Expressway CNEC 87.8 60.0 182.2 20.0 - 270.0
Woomyunsan Tunnel WIC 10.7 36.0 9.6 20.0 - 20.3
Gwangju Second Beltway, Section 3-1 KRRC 28.9 75.0 - 52.1 7.85 81.0
Machang Bridge MCB 33.8 70.0 79.0 11.4 - 112.8
Yongin-Seoul Expressway YSE 57.8 35.0 77.0 15.0 - 134.8
Seoul-Chuncheon Expressway SCE 48.6 15.0 87.4 11.6 - 136.0
Seoul Subway Line 9 Section 1 SM9 40.9 24.5 33.5 15.0 - 74.4
Incheon Grand Bridge IGB 74.5 41.0 89.4 9.3 - 163.9
Busan New Port Phase 2-3 BNP 66.4 30.0 193.0 12.0 - 259.4
Total 569.0 857.3 237.0 1,663.3
Percentage(%) 34.2% 51.5% 14.3% 100%
Assets Operating Revenue2 OPEX EBITDA Net Debt3 EBITDA
margin Net Debt
to EBITDA Operating Revenue2 OPEX EBITDA Net Debt3 EBITDA
margin Net Debt
to EBITDA
Gwangju Second Beltway, Section 14 14,552 (4,862) 9,690 (1,606) 67% (0.2x) 30,553 (4,431) 26,122 (1,584) 85% (0.1x)
Gwangju Second Beltway, Section 3-1 18,331 (3,965) 14,367 (1,775) 78% (0.1x) 17,131 (5,798) 11,333 (2,279) 66% (0.2x)
Soojungsan Tunnel4 11,417 (3,909) 7,509 (13,362) 66% (1.8x) 23,966 (3,740) 20,226 (16,219) 84% (0.8x)
Baekyang Tunnel4 21,396 (4,229) 17,166 136,005 80% 7.9x 23,259 (3,722) 19,537 142,812 84% 7.3x
Incheon International Airport Expressway 199,138 (21,008) 178,130 152,424 89% 0.9x 187,868 (19,060) 168,808 237,679 90% 1.4x
Cheonan-Nonsan Expressway 186,395 (25,721) 160,675 96,612 86% 0.6x 180,093 (23,936) 156,157 185,402 87% 1.2x
Woomyunsan Tunnel4 19,869 (3,966) 15,903 76,640 80% 4.8x 21,015 (3,787) 17,228 86,162 82% 5.0x
Machang Bridge 23,144 (5,047) 18,098 226,747 78% 12.5x 23,178 (4,495) 18,684 221,412 81% 11.9x
Yongin-Seoul Expressway 41,502 (10,393) 31,109 357,281 75% 11.5x 37,161 (9,673) 27,487 351,953 74% 12.8x
Seoul-Chuncheon Expressway 106,717 (20,607) 86,110 810,605 81% 11.8x 106,608 (30,402) 76,206 831,035 71% 10.9x
Seoul Subway Line 9 Section 1 121,339 (81,337) 40,002 472,127 33% 9.4x 93,308 (76,538) 16,771 442,397 18% 26.4x
Incheon Grand Bridge 68,711 (15,802) 52,909 576,818 77% 10.9x 59,743 (16,265) 43,478 584,276 73% 13.4x
Busan New Port Phase 2-35 23,429 (41,024) (17,596) (475,628) (75%) (27.0x) N/A N/A N/A N/A N/A N/A
Proportionate average6 332,729 (74,563) 258,166 999,646 78% 3.9x 344,102 (73,073) 271,030 1,073,609 79% 4.0x
26
OPERATING PERFORMANCE BY ASSET1
12 Months to 31 December 2012
2012 2011
1. Management estimated, unaudited figures. Actual results may vary 2. Revenue compensation and other compensations from the relevant government authority are reflected on cash basis 3. Excludes Shareholders loans 4. All or part of MRG portion of operating revenue receivable for 2011 were not paid, resulting in significantly decreased operating revenue compared to prior year 5. Busan New Port Phase 2-3 commenced operation 2 January 2012. Negative Net Debt to EBITDA margin reflects cash deficiency due to ramp-up period 6. On a proportionate average basis based on MKIF’s equity interest in each concession company. Daegu 4th Beltway East (divested in June 2012) and Busan New Port Phase 2-3 (operation commenced in
January 2012) excluded from the proportionate average for FY 2011 and FY 2012
(Unit: KRW million)
27
MINIMUM REVENUE GUARANTEE SUMMARY
Asset Relevant Authority Concession
Term Concession Term
Remaining Revenue Guarantee
Duration Revenue Guarantee Duration Remaining
Revenue Guarantee Threshold1
Revenue Cap Threshold1,2 Remarks
Baekyang Tunnel Busan
Metropolitan City 25 12 25 12 90% 110%
Gwangju 2nd Beltway, Section 1 Gwangju
Metropolitan City 28 16 28 16 85% 115%
Incheon International Airport Expressway MOLIT7 30 18 20 8 80% 110% Partial revenue sharing in excess of 80% to 110% level
Soojungsan Tunnel4 Busan Metropolitan City
25 14 25 14 90% 110%
Cheonan-Nonsan Expressway MOLIT 30 20 20 10 82% 110% Partial revenue sharing in excess of 82% to 110% level
Woomyunsan Tunnel Seoul
Metropolitan City 30 21 30 21 79%3 110%
All revenue sharing excess of 79% to 85% and excess 110%/ Partial revenue sharing excess of 90% to 110%
Gwangju 2nd Beltway, Section 3-1 Gwangju
Metropolitan City 30 22 30 22 90% 110%
Machang Bridge GSND8 30 25 30 25 75.78% 120%
Yongin-Seoul Expressway5 MOLIT 30 26 10 6 70% 130%
Seoul-Chuncheon Expressway5 MOLIT 30 26 15 11 80%/70%/60% 120%/130%/140% Change by every five year
Seoul Subway Line 9, Section 15 Seoul Metropolitan City
30 26 15 11 90%/80%/70% 110%/120%/130% Change by every five year
Incheon Grand Bridge MOLIT 30 27 15 12 80% 120%
Busan New Port Phase 2-3 MOF9 29 28 N/A N/A
Weighted average6 29 23 17 11
1. % of annual concession agreement projected revenue 2. Relevant government authorities are entitled to receive the portion exceeding the threshold 3. 79% up to 2023 and 78% from 2024 to 2034 4. In toll revenue below 90%, Busan City Government is obliged to compensate 91.5% of the shortfall amount 5. No revenue guarantee applies if actual revenue are below 50 % of the toll revenue forecast 6. Weighted by investment commitment 7. MOLIT (Ministry of Land, Infrastructure and Transport) 8. GSND (Gyeongsang Namdo (Provincial) government) 9. MOF (Ministry of Oceans and Fisheries)
As of 31 March 2013
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Management fee calculated quarterly basis as:
Base Fee
1.25% pa falling to 1.10%1 of Net Investment Value (NIV) of MKIF; plus (+)
1.15% pa falling to 1.05%1 per annum of Commitment2 of MKIF
Performance Fee
20% sharing in cumulative total returns3 over 8% pa
Net Investment Value for any quarter equals:
The average market capitalisation of MKIF over all trading days in each calculation; plus (+)
The amount of any external borrowings by MKIF; less (-)
Cash or cash equivalent held by MKIF
1. For NIV +Commitment in excess of KRW 1.5 trillion 2. Commitments means all amounts that MKIF has firmly committed for future investment contributions 3. Total return to shareholders reflects both distributions from MKIF to its shareholders and share price performance over each calculation
Manager’s interests aligned with shareholders
No performance – no performance fees
Underperformance carried forward
MANAGEMENT FEES
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MACQUARIE FUNDS GROUP
A$343bn AUM1
~1,400 21 Staff1 Countries worldwide1
Macquarie Investment
Management (“MIM”)
Securities investment management across:
Fixed interest and currencies Equities, including infrastructure securities
Private markets Hedge funds
Multi-asset allocation solutions ‘Best of breed’ external managers
Macquarie Specialised Investment
Solutions (“MSIS”)
Fund and equity-based solutions including:
Fund linked products Capital protected investments
Retirement and annuity solutions Agriculture
Infrastructure debt
Macquarie Infrastructure and Real Assets (“MIRA”)
Alternative asset management including:
Infrastructure Real Estate Agriculture
Energy Operations
Legal and Compliance
Distribution
1. All numbers as at 31 March 2013
30
114 portfolio businesses, ~300 properties and ~3.6 million hectares of farmland1
MACQUARIE WORLDWIDE INVESTMENTS
1. As at 31 March 2013. Represents portfolio businesses which Macquarie Infrastructure and Real Assets manages on behalf of investors with various direct percentage stakes held in each. Portfolio businesses shown on the map are representative and not exhaustive. In some instances they represent the operations of a single business where it has operations across different countries
South Africa Kelvin Power Station Umoya Energy Cookhouse Kathu Bakwena Platinum Corridor N3 Toll Concessions Trans African Concessions
USA AMC REIT Chicago Skyway Dulles Greenway Indiana Toll Road Elizabeth River Tunnels AIR-serv (tyre inflation) Harley Marine Services Icon Parking Penn Terminals Smarte Carte Airport Services (fixed
base operations) Total Terminals International
(Hanjin Pacific Corporation)
Global Tower Partners Aquarion Company Puget Energy
District Energy Duquesne Light Hawaii Gas Broadrock Renewables MIC Solar International-Matex Tank Terminals Leaf River Gas Storage Waste Industries WCA Waste
Canada Autoroute 25 Fraser Surrey Docks Halterm Limited (port) Mexico Decarred (highways)
Mareña Renovables (wind farms) Telecommunication Towers
Portfolio Concesionaria Universidad
Politécnica Macquarie Mexico REIT
UK Bristol Airport Airwave Arqiva Red Bee Media CLP Envirogas
(MEIF Renewables) Energy Power Resources
(MEIF Renewables) Thames Water M6 Toll Condor Group (ferry services) Moto (motorway services) National Car Parks Wightlink (ferry services) Baglan Bay Power Station Sutton Bridge Power Station Belgium Brussels Airport Denmark Copenhagen Airports
China Hua Nan Expressway Changshu Xinghua Port Star King (China) Food Group MWREF (Retail Malls) Shenyang Water Treatment Co. Zhejiang Wanna Environment Protection Longtan Tianyu Terminal Plaza 353
France Pisto SAS (oil storage and
distribution) EPR France (MEIF
Renewables, wind farm) RES (MEIF Renewables,
wind farm) Trois Sources & Lomont
Windfarms Compteurs Farnier (Techem, water metering) Autoroutes Paris-Rhin-
Rhône Germany
TanQuid (tank storage business)
GWE (Techem) Techem (submetering) Thyssengas Open Grid Europe Warnow Tunnel
Spain Asset Energia Solar
(MEIF Renewables) Solpex Energia Solar
(MEIF Renewables) Itevelesa (vehicle inspections)
Czech Republic Ceske Radiokomunikace Czech Gas Networks Sweden EPR Sweden (MEIF Renewables,
wind farm) Varmevarden Arlanda Express Russia Brunswick Rail GSR Energy Investments Russian Towers OGK-5
New Zealand Retirement Care New Zealand
Japan Hanjin Pacific Corporation (Tokyo, Osaka)
United Arab Emirates ICAD Effluent Treatment Plant Al Ain Industrial City Industrial City of Abu Dhabi
Puerto Rico (USA) Global Tower
Partners
Australia Hobart International Airport 3P Learning Regis Group (aged care) MREEFs Paraway Pastoral (17 farms) Lawson Grains (4 farms) Melro Dairy (1 farm)
South Korea C&M (Cable TV) North East Chemical Youngduk Wind Power Kangnam City Gas Baekyang Tunnel Cheonan-Nonsan Expressway Gwangju 2nd Beltway Section 1 Gwangju 2nd Beltway Section 3-1 Incheon Grand Bridge Incheon International Airport Expressway Machang Bridge Seoul Chuncheon Expressway Soojungsan Tunnel Woomyunsan Tunnel Yongin-Seoul Expressway Seoul Subway Line 9, Section 1 Busan New Port Phase 2-3 Hanjin Pacific Corporation (ports) Macquarie NPS REIT Macquarie NPS REIT No. 2
India Viom Networks
Adhunik Power and Natural Resources MB Power (Madhya Pradesh) Soham Renewable Energy
GMR Airports (Delhi and Hyderabad airports) Ashoka Concessions
Brazil Cruzeiro do Sul Grãos
(1 farm)
Roads & Rail Renewable Energy
Other Transport Services
Real Estate Communications Airports Other Real Assets
Energy Utilities Waste Agriculture
Taiwan Taiwan Broadband Communications Miaoli Windpower
Hanjin Pacific Corporation (Kaohsiung)
Nigeria
Lekki Concession Company
Poland DCT Gdansk
(container terminal) TanQuid (tank
storage business)
31
EXTENSIVE EXPERIENCE
PROPRIETARY INVESTMENT FLOW
EFFECTIVE ASSET MANAGEMENT
— MIRA has over 17 years global infrastructure investment experience — A$97 billion¹ of assets under management across 25 countries
— Access to the proprietary investment sourcing capability of the Macquarie Group
STRONG ALIGNMENT
— Local expertise, knowledge and relationships across 28 offices globally
— Macquarie and staff investment of ~A$1.9 billion2 in MIRA-managed funds
MACQUARIE INFRASTRUCTURE AND REAL ASSETS (MIRA)’S COMPETITIVE ADVANTAGE
A global leader in managing infrastructure and real assets for over 17 years
1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at 31 December 2012 for the majority of assets 2. As at 31 March 2013. Staff investment is ~A$0.2 billion
32
MIRA INFRASTRUCTURE OVERVIEW
1996 March 2013
Funds / Vehicles Unlisted No. - 26
Listed No. 2 4
Portfolio Businesses No. 4 101
Assets under Management A$b 1.6 911
Equity under Management Unlisted A$b - 292
Listed A$b 0.6 62
1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at 31 December 2012 for the majority of assets 2. Listed funds – market capitalisation plus fully underwritten or committed future capital raisings. Unlisted funds – committed capital less any called capital returned to investors. Invested capital for
other MIRA businesses. For jointly managed funds, amount is representative of Macquarie’s economic ownership of the JV manager. Adjustments have been made where MIRA managed funds have invested in other MIRA managed funds