It’s not yet delivering the growth of a lifetime, however.

Shareholder return for FY26 was 13.9%, ahead of its five-year average of 13.1% but lower than its 10-year run rate of 17.3%.

And while AI helped One NZ cut costs and introduce new services, contributing to earnings growth for the telco (more below), it was not enough to counterbalance wider market forces as the telco’s independent valuation – a key metric in the Morrison-managed Infratil universe – reduced by 10% or $326.8 million to $3.39 billion.

One NZ’s valuation decrease was pinned on the soft economy, increased competition and the falling market cap of its “closest comparator”, Spark.

Increased earnings

Infratil’s share of operating earnings from companies in its stable increased 11% to $984.4m for the year to March, near the top end of its guidance range ($960m to $1.0b).

And it forecast another bump next year, saying its clip of the ticket (or proportionate operational ebitdaf – earnings before interest, tax, depreciation, amortisation and fair value adjustments) would increase 21% on a like-for-like basis.

Shares were down 3.8% to $15.37 in late-morning trading, easing off their all-time high. The stock is up 38% over the past year.

Its full-year dividend increased to 20.9 cents per share (cps) from the year-ago 20.5cps, in line with analyst expectations.

It reported a parent surplus of $550m versus its year-ago $295m loss.

Some $600m in assets were divested during the year, which the firm says will be invested in higher-growth opportunities.

The total value of Infratil’s assets increased 13% from $18.3b to $20.6b.

However, the valuation growth of offshore assets was not enough for Infratil’s manager, Morrison, to claim an incentive fee, which hit $346.9m last year as CDC’s valuation went through the roof.

“Instead, a negative $18 million will be carried forward into the FY27 fee calculation and netted off future positive fees,” the company said.

Morrison’s separate management fee increased from the year-ago $109.3m to $122.6m.

With the partially-owned companies in the infrastructure investor’s portfolio reporting separately, and largely known quantities, there was analyst focus on the 99.9%-owned One NZ.

Forsyth Barr had picked the telco would have operating earnings of $598m. In the event it chipped in $607.4m to proportionate ebitdaf from its year-ago $604m.

In mobile phone plans, average postpaid revenue per user per month increased 3% from the year-ago $35.50 to $36.60. Forbarr noted increases to consumer mobile pricing in April.

Infratil forecasts One NZ ebitdaf of between $600m and $640m for FY27.

For the third year in a row, the fully-owned One NZ’s profit contribution easily outstripped the 49.9%-owned CDC, the second-largest earnings generator with its $220.4m contribution (from $173.9m last year).

The telco’s profits – a contrast to under-pressure rival Spark – are helping to fund expansion elsewhere. One NZ’s cash distribution to Infratil doubled to $180m.

ForBarr had been looking for signs of another asset sale (One NZ earlier sold its cell-tower network’s passive assets).

There was no explicit mention of a sale, but Infratil did highlight the performance of One NZ’s recently created EonFibre unit (which includes the Wellington and Christchurch cable networks inherited with the telco’s purchase of TelstraClear, plus more recent “carrier grade” fibre connections for mobile backhaul and data centre direct connections).

Infratil’s investor presentation says EronFibre delivered around $65m ebitdaf in its first full year of operation.

It adds: “EonFibre is gaining traction as a wholesale bandwidth provider, with good data centre demand and a material hyperscaler subsea contract in Q4 FY26.”

AI sentiment runs hot and cold

CDC has had a boom start to FY2027, with its 555MW contract – Australasia’s largest ever data centre deal – with an unnamed tech giant.

It came as Amazon (in whole) and Microsoft (in part) have both backed away from Overseas Investment Office-approved plans to build their own data centres in favour of “co-locating” with existing players (widely assumed to include CDC).

“CDC is now a global-scale data centre operator with over one gigawatt of capacity contracted and is forecasting its ebitdaf will grow more than 150% to over A$1 billion [$1.22b) in FY28,” Infratil said in management commentary with its earnings (reiterating a CDC forecast first given in April as the data centre company’s).

In the March quarter, CDC’s independent valuation was increased by 7.2%, (or 3.2% and A$250m, allowing for a A$250m contribution from Infratil) to a fresh all-time high of A$15b, valuing Infratil’s stake at $7.5b.

But the firm also acknowledged volatility in sentiment about AI over the past 18 months.

“At the end of FY25, we experienced the noise of potential changes to American renewable energy policy and uncertainty about data centre demand following the release of the Deep Seek AI model,” chairwoman Alison Gerry wrote in the 2026 Annual Report released today.

The Chinese makers of DeepSeek were starved of Nvidia’s latest chips, forcing them to make more efficient AI software. Some analysts saw it as a glimpse of a future where all AI software was better written, negating or at least reducing the need for data centres stuffed with servers running powerful new Nvidia chips.

“Negative AI sentiment, along with expectations of longer-dated growth and rising rates, drive the share price lower,” Gerry continued.

“Positive outcomes through the first half of FY26 were then eroded when AI bubble concerns resurfaced and the Middle East conflict drove broader uncertainty,” Gerry continued. The sentiment swing buffeted Infratil’s shares once more before they rebounded sharply to their recent record high.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.