Monday 8th November 2021
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Trustpower Limited (NZX: TPW ) has delivered a strong half year result ahead of its impending sale of the mass market retail business to Mercury NZ Limited (Mercury Energy), with two of the three conditions now met and the final condition expected before the financial year is over.
Net profit after tax climbed to $115.1 million, up from $33.6 million the previous year, largely due to a non-cash fair value gain on financial instruments. Underlying earnings which exclude fair value gain on financial instruments were $59 million for the six months to 30 September 2021, up from $52.7 million in the prior period driven largely by higher generation volumes and wholesale prices.
Announcing its interim financials, Trustpower chair Paul Ridley-Smith said the company’s results reflect a wellperforming bundled retail business and sound management of its 27 generation schemes across New Zealand, enabling the business to deliver consistent returns for investors.
Trustpower shareholders approved the sale of its retail business to Mercury Energy at its Annual Shareholder Meeting on 22 September, and Mercury Energy had also been given the green light from the Commerce Commission, which said the $441 million deal would not substantially lessen competition. The final condition of sale is the completion of the Tauranga Energy Consumer Trust (TECT) restructure, subject to a High Court hearing scheduled for 15-17 November 2021.
Chief executive David Prentice said there had been considerable effort within the company to prepare the business for sale. Despite this, and the impact of COVID-19 lockdowns, Trustpower delivered an 11 per cent increase in total combined (discontinued and continuing) operating earnings (EBITDAF) of $122.2 million, rising from $110.4 million in the prior period.
The company has remained focused on its customers with a rise in customer connections and continued high levels of customer service. Operating earnings (EBITDAF) from discontinued retail operations were $15.8 million, down from $18.3 million in the prior period. This decrease included a reduction in revenue of ~$2.6 million resulting from the removal of the prompt payment discount structure, a cost of $1.1 million relating to the retail sale, and increased gas costs which Trustpower largely absorbed. Trustpower’s telco customer numbers reached 114,000, up 8,000 or 7 percent on the same time last year, including a new milestone of 10,000 mobile connections. All key retail metrics including fibre and mobile connections, products per customer and digital uptake, showed positive momentum.
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