Dividends flow as NGC turns around

By Nick Stride

Friday 27th February 2004

NGC Holdings' restructuring began paying dividends in the December first half as the company delivered a profit 24% higher than analysts' consensus forecast.

Chief executive Phil James hinted the $50.7 million gain would have been better still were it not for issues such as the timing of cost recoveries and higher provisioning in the gas business.

Taking out the discontinued generation and retail electricity businesses, ebit (earnings before interest and tax) was flat at $73.2 million. James said the 2002 first half had been a particularly good one.

The highlight of the latest half was the LPG business, where ebit rose 23% to $10.2 million, on increased demand and higher prices.

The lowlight was gas trading, where ebit fell 30% to $21.9 million.

Reduced supply from the Maui field showed through in an 18% fall in sales, to 32.8 petajoules.

James said he was "cautiously confident" discussions on future supply from Maui would be completed by the end of March.

Ebit from the new metering arm fell slightly, to $9.9 million. James said the division's profit would have started growing by the time NGC next reports.

NGC gave guidance that the first half would account for 70% of full-year earnings, implying a $72 million 2004 profit.

The interim dividend more than doubled, to 8.5c.

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