Sharechat Logo

TrustPower

By Dan Stratful

Friday 16th December 2011

Text too small?

TrustPower (NZX: TPW ) has grown to become New Zealand's fifth largest electricity generator and retailer with 36 small to medium size Hydro Generating Stations and two Wind Farms, with a further Wind Farm in South Australia.

TPW produces electricity from renewable sources and its power stations provide electricity to around 218,000 New Zealand households. TPW’s shares are tightly held with Infratil holding 50.5% and the Tauranga Energy Consumer Trust holding 33%, with the remaining 16.5% free-floating on the market.  

For investors looking to invest in the energy sector, TPW is an alternative to Contact Energy and investors may soon have more energy companies to consider, should several state-owned electricity assets be sold-down and listed on the NZX.

Electricity companies are finding the retail sales part of their business extremely intense at the moment, as customers weigh up the various options and switch electricity providers at historically high levels. TPW saw its electricity customers decrease from 221,000 to 218,000 in the first half of the year ending 31 March 2012 and first half net profit of $68.8 million was a 15% increase on the prior period.

The company’s total New Zealand generation production of 1,414 GWh in the first half was up 15% due to higher hydro and wind production and a 56 GWh contribution from the Mahinerangi Wind Farm which was commissioned during the period.

Average wholesale prices were firmer than the prior period as South Island hydro storage levels fell below long term averages in the second quarter. TPW continues to make progress on a range of growth options in New Zealand and Australia and reports that it is well positioned to pursue further developments in renewable generation.

Status: HOLD

TPW’s shares today traded at $7.07

For sharemarket and fixed income trading enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, dan.stratful@irg.co.nz
**A disclosure statement is available, on request and free of charge.


Disclaimer
In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals, risk profile or asset allocation. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).

DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.



  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 pushes margins, sheds customers for 16% earnings rise