Bumper profit crop for power SOEs

By Nick Stride

Friday 19th October 2001

The dry winter weather has been kind to the taxpayer, netting the government $265.2 million in dividends from the four state-owned power companies.

Combined June-year profits from generator/retailers Meridian Energy, Mighty River Power, and Genesis Power rose by $26% to $244.1 million but national grid operator Transpower slipped to $79.7 million, from $110.3 million a year ago.

Meridian posted a $125.1 million net profit and will pay a $81.5 million ordinary dividend and a $100 million special dividend.

Chairman Francis Small said that, contrary to expectations, Meridian didn't make "extra profits" from the winter power price rises "because we did not have the water to produce power over and above what we had already pre-sold."

Genesis' profit rose by 6% to $59.9 million and its dividend payment more than doubled to $23.9 million.

Mighty River Power did best with a 43% profit rise, to $59.1 million. But it dropped its dividend, which last year came to $20.6 million. Mighty River chief executive Doug Heffernan took the opportunity to release his company's submission to the government's post-winter sector review. It disagrees with those who feel the wholesale electricity market failed to perform properly, allowing some generator/retailers to make big profits and capture swathes of market share from operators who were caught "long retailing."

"The design of the wholesale market is not flawed," the submission said. "It is our belief the market delivered an appropriate outcome during a very testing time. Security of supply was maintained throughout the winter."

State-owned air navigation services provider Airways Corporation reported a $2 million "economic value-added group profit" for the June year after absorbing $2.4 million of bad debts from the Tasman Pacific collapse.

Comments from our readers

No comments yet