Gas company profits explode

By Duncan Bridgeman

Friday 20th August 2004

After a dramatic three years that included huge losses, capital restructuring and asset sales, NGC transformed from ugly duckling into sharemarket darling almost overnight.

Its performance has earned it a silver medal by returning a massive 80.3% to shareholders last year and 51.6% over three years.

Chief executive Phil James acknowledged the current heat in the energy sector was timely for the company but stressed NGC had worked hard to reposition itself after the horrors of 2001.

"We stripped down and basically started from a clean slate.

"Once we got the infrastructure in place we could then start to benefit from the market position that we have."

The company sold all its electricity generation and retail assets to concentrate on gas processing, wholesaling, transmission and distribution.

LPG sales are the only area where it operates in the retail market.

One of its target growth areas is in energy metering technology, for both electricity and gas.

James said NGC had three basic strategies get the right mix of business, capture full value through efficient operation and cost management and build a strong culture and capability.

The company was due to report its full-year result after the deadline for this article but the market had already factored in a strong result, one likely to better initial management guidance of $72 million.

James said the company has made a number of small but significant investments in metering technology.

NGC, along with the rest of the industry players, has closed future supply arrangements with the dwindling Maui gas field and is ready for new exploration, he said.

"We're willing and able to participate now."

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