Friday 13th May 2011
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TrustPower has reported a flat underlying annual profit in what it regards as a competitive environment, and is of the view that electricity prices will be more volatile in future.
The company, part owned by Infratil Ltd and Tauranga Energy Consumer Trust, reported a $112.4 million profit after tax for the year ended March 31, down 6 percent on last year. The profit last year had a $12.4 million accounting item relating to gains on financial instruments.
Earnings before tax were $116.5 million, little changed from $116.8 million last year, and earnings before interest, tax, depreciation, amortisation, fair value movements of financial instruments and asset impairments were $274.4 million from $273.9 million last year.
"The current New Zealand hydro storage position should ensure a comfortable level of electricity supply to meet demand over the 2011 winter," TrustPower said.
But TrustPower said it 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.
The company is looking at ways of increasing the peaking capacity of its hydro generation assets.
TrustPower is paying a final dividend of 20 cents per share on June 10. This takes the total payout for the 2011 financial year to 39 cents per share, up from 38 cents the previous year.
Infratil has argued that since it invested in TrustPower in 1994 the company has increased earnings by 297% and has increased generation by 35%.
"While it is too early to make predictions about the 2012 financial year, it is worth noting that the company is well positioned to meet its customers' needs and to pursue further development of electricity generation assets when it is economically justifiable," TrustPower said today.
The company is also working on using its water resources for irrigation.
It has completed the development of a pumping facility to supply water from the Rakaia River using its Highbank hydro generation scheme in a joint venture between Barhill Chertsey Irrigation Ltd and Electricity Ashburton.
This first stage has cost around $15 million and will enable reliable irrigation of approximately 8000-10,000 hectares of land.
Further stages of irrigation development will require changes to the way in which the Lake Coleridge storage and the existing hydro generation scheme is operated.
"To achieve this outcome the existing water conservation order for the Rakaia River will require some minor variations. Consultation on this process is currently under way," the company said.
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