Sharechat Logo

TrustPower pushes margins, sheds customers for 16% earnings rise

Friday 11th May 2012

Text too small?

TrustPower, the utility controlled by Infratil, boosted underlying annual profit 16 percent, achieving wider margins while shedding customers in a tight retail market.

Underlying earnings, which strip out one-off impairment charges and changes in the fair value of assets, rose to $135.5 million in the 12 months ended March 31, from $116.5 million a year earlier, the company said in a statement. Net profit rose to $131.7 million, or 41.8 cents per share, from $112.4 million, or 35.6 cents per share.

Total revenue rose 5.4 percent to $807.1 million, with a 5.6 percent gain in electricity revenue to $763.6 million. That was even as its customer numbers fell to 209,000 as at March 31 from 221,000 a year earlier.

"While retail market remains highly competitive, TrustPower continues to experience lower levels of customer churn than the market," the company said. "Over the last four months of the financial year, TrustPower refrained from actively acquiring customers to ensure a seamless transition for the replacement of its core customer billing and information system."

The company sold 3,960 Gigawatt Hours of electricity in New Zealand, down from 4,033 GWh a year earlier. It boosted generation production 13 percent to 2,582 GWh.

"TrustPower expects that electricity prices will become more volatile over time and consequently generation capacity which is able to meet peak demand will become more valuable," it said.

With many of its hydro generation assets near peak capacity, it has embarked on a review to "identify potential enhancement opportunities that can increase peaking capacity in the short to medium term."

Last week, TrustPower finalised conditional agreements to expand its 100 megawatt Snowtown Wind Farm in South Australia, and entered into a long-term supply arrangement with Contact Energy's majority shareholder, Origin Energy of Australia.

TrustPower's board declared a final dividend of 20 cents per share, taking the annual payout to 40 cents, up from an annual 38 cents in 2011.

The company has $108.5 million of subordinated bonds maturing in September, and it expects to make an offer to roll-over the debt with existing holders at its maturity in combination with a retail market offer.

The shares rose 0.3 percent to $7.72 in trading today, and have gained 7 percent this year.

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

TrustPower, Ngai Tahu Holdings may invest $106M in Ruataniwha water scheme
TrustPower generated less energy for fewer customers in the first quarter
Transpower to pay government special div of $65.7M from d-cyphaTrade sale
Transpower sells derivatives trading unit d-cyphaTrade to ASX for A$55 mln
TrustPower pays $13.7 million for Energy Direct NZ to widen customer base
TrustPower FY earnings fall 6 percent on dwindling customers, thinner margins; shares gain
TrustPower sets interest rate on seven- year bonds
TrustPower looks to raise $125M in bond sale
Transpower runs $30 million over budget on North Island upgrade
TrustPower