About Us  |   Advertise  |   Contact Us  |   Terms & Conditions  |   RSS Feeds Other Sites:   sharetrader.co.nz  |   stockguru.co.nz
 
sharemarket
NZX 50 Index 3225.14 1.70
S&P/ASX 200 4818.10 3.90
Dow Jones Industrials 10611.80 44.50

Margin pressure rising for New Zealand electricity retailers, Fitch says

Monday 8th February 2010

Text too small?

Electricity retailers will experience pressure on their profit margins in 2010, thanks to higher wholesale electricity prices, transmission system upgrade costs, and investment in new generation capacity, says Fitch Ratings in its latest outlook for the New Zealand electricity sector. 

"Over the longer term, Fitch expects wholesale electricity price changes to be driven by underlying increases in the capital cost of new generation and fuel costs, particularly with the depletion of the Maui gas field, offset by the downward pressure of a more efficient market as the transmission network is upgraded," the international credit rating agency says. 

Fitch keeps its ratings outlook for local power companies "broadly negative" in the short term, especially for South Island generators such as Meridian Energy, Contact Energy and TrustPower, who are constrained because of weaknesses in the Cook Strait cable connecting the grid between the two islands. 

Hurdles in approving new generation proposals also remained "a key issue", especially for wind and hydro projects, although Fitch believes Resource Management Act reforms should help to address the issue. 

The greatest single impact for the sector is the Electricity Amendment Bill, which is not due for enactment before year's end. 

As previously indicated, Fitch believes the reforms will have both positive and negative impacts for electricity producers, but that these cannot be fully judged before the reforms are in place. 

 

 

 

Businesswire.co.nz

Related News

MARKET CLOSE: NZ shares slip; Warehouse down after result, PGC gains
Strategic Finance in receivership
Sumitomo moves to take 20% of Nufarm, gaining Australasian farm chemicals
NZ food innovation initiative aims to fast-track new product commercialisation
Weekly Diary for Monday 15th March 2010
Accommodation providers experience best month ever in January
NZ retail sales rose in January, led by vehicles; core sales weaker than forecast
Pyne Gould's MARAC gains admission to government's extended Retail Deposit Guarantee Scheme:
Steam still coming out of house sales: REINZ
Perpetual Portfolio Management adds to its team


Printable version   Bookmark and Share
 
Previous News
Sharemarket News By Email
AM Update (daily) - View sample
News Alerts - View sample
After the Bell (daily) - View sample

More info - RSS feeds - Unsubscribe/Update

Stock Quote
Exchange:
Stock Code:
Don't know the stock code? Search by keyword:
Keyword:
At a Glance
NZX 50 Index 3225.14 1.70
S&P/ASX 200 4818.10 3.90
Dow Jones Industrials 10611.80 44.50
Comment & Analysis

As a bouncy young Minister in 1992, Simon Upton dismembered the Department of Scientific and Industrial Research and created the Crown Research Institutes, to various shrieks of heresy and with perhaps too much the idea they should act like private companies. In 2010, today’s somewhat backroom-y Science Minister, Wayne Mapp, has presided [...]
Pattrick Smellie  More »

Pattrick Smellie
  forex centre
cfd centre
options centre
NZX 15 Index
AIA 1.97 0.03
APT 0.76 0.01
CEN 6.08 -0.05
FBU 8.15 0.04
FPH 3.28 -0.03
FRE 3.10 -0.01
GMT 1.02 0.00
IFT 1.67 0.01
KIP 1.02 0.00
NZO 1.57 0.00
RYM 2.07 -0.02
SKC 3.22 -0.03
SKT 5.09 0.03
TEL 2.24 -0.01
VCT 2.06 -0.01

More market prices »

NZX Announcements

© Copyright 2010 Tarawera Publishing Limited. All Rights Reserved.