3i Infrastructure (3iN) has issued a performance update for the three months ended 31 January 2025 in which it says that its portfolio is performing well, with attractive growth opportunities, and that recent realisations demonstrate value creation potential. Its managers Scott Moseley and Bernardo Sottomayor, say that they continue to see good earnings momentum in the portfolio, driven by 3IN’s strategic focus on prioritising growth investments in its existing portfolio companies. Adding that transactions in the private markets demonstrate continued demand for high-quality infrastructure companies and the potential latent value within 3IN’s portfolio. During the period, the managers completed the sale of 3IN’s stake in Valorem at a 31% premium to the pre-transaction valuation, providing further evidence of this dynamic. They say that 3IN is on track to deliver its dividend target for the year, which is expected to be fully covered by income.

Key highlights are as follows:

• Valorem sale: On 31 January 2025, 3IN completed the previously announced sale of its 33% stake in Valorem for net proceeds of €309m, generating a 21% gross annual IRR and 3.6x gross money multiple.
• TCR continues to perform well, with numerous new contract wins and an accelerated expansion of its geographical footprint. On 15 January 2025, TCR was selected to provide a centralised all-electric Ground Support Equipment pool at JFK International Airport New Terminal One. This represents a step-change in its presence in North America and a strong platform for further expansion into this largely untapped market.
• Global Cloud Xchange (‘GCX’) is also continuing to perform well, particularly on its core Europe-Middle East and Middle East-Asia routes. In December 2024, GCX committed to invest $34m (funded from the company’s own resources) to acquire new capacity on the India-Asia-Xpress and India-Europe-Xpress cable systems, adding strategically important reach to GCX’s network, within attractive growth markets. The sales pipeline for GCX’s capacity remains strong, driven by the increasing need for subsea fibre capacity and premium pricing dynamics in GCX’s core geographies.
• Future Biogas (‘FB’): In January 2025, FB completed the construction of the Gonerby Moor site and connection to the gas grid, further increasing the operational scale of the company. The company has a 15-year offtake agreement with AstraZeneca for the green gas produced at this site. The managersn say that Business performance continues to be strong, supported by higher gas prices and strong production volumes, adding that FB has a good pipeline of future growth opportunities which will continue to add value to the business.
• DNS:NET’s focus remains on increasing penetration rates and Average Revenue Per User. It has outperformed the managers’ revised investment case on those metrics during the Period. However, given the ongoing challenges across the sector, the managers retain a cautious outlook for the time being. On 14 January 2025, 3IN completed an equity injection of €24m to continue to fund the fibre roll-out.
• As flagged in the half-year update, Ionisos is experiencing some softness in its non-core industrial segment, and SRL continues to experience softer than expected trading in the Period.
• 3IN’s other portfolio companies are performing ahead or in line with expectations set in September 2024.
• Income in line with expectations: Total income and non-income cash in the three months to 31 December 2024 was £58m, 18% higher than the prior year.
• FY25 dividend target: The Company is on track to deliver the FY25 dividend target of 12.65 pence per share, up 6.3% from FY24, which is expected to be covered by net income.
• Balance sheet: At 31 January 2025, 3IN had available liquidity of £466m, after the receipt of proceeds from the Valorem sale. This includes a cash balance of £266m, and undrawn commitments of £200m available under its £900m RCF.