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Horizon Energy profit rises 52%

Friday 21st November 2008

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Horizon Energy, the power company controlled by the Eastern Bay of Plenty Energy Trust, posted a 52% gain in first-half profit on network revenue and a one-time gain from the settlement of a dispute.

Profit rose to $3.8 million in the six months ended September 30, from $2.5 million a year earlier, the company said in a statement.

Horizon, which is 77.29% owned by the community trust, said the result included a net $500,000 reduction in the fair value of interest rate derivatives. The effect of the devaluation will be felt in full year earnings, which are now likely to be at the lower end of the company's $5.7 million to $6.0 million forecast.

"The reduction in value reflects substantial reductions in wholesale interest rates arising from the turmoil in global financial markets," Chairman Rob Tait said.

The company also said it will abandon discussions with potential merger partners that had been initiated by the trust. It had received "a number of non-binding proposals" from other power networks though the trust had decided not to proceed, the company said.

It will pay an interim dividend of 12.5 cents a share, including 4 cents made up of the arbitration award received by the Company. That amounts to 82% of net profit after tax.

Horizon hired Ajay Anand as chief executive in the first half. The shares trade infrequently, changing hands at $3.15 on November 12 and falling a mild 8% this year.

By Jonathan Underhill

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