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Pulse returns to FY profit on jump in sales, accounting adjustment

Thursday 14th June 2012

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Pulse Utilities, the electricity retailer that operates under the Just Energy brand, returned to profit as sales jumped more than 50 percent and the retailer recognised an adjustment to the value of electricity price derivatives.

Profit was $163,000 in the 12 months ended March 31, compared to a loss of $7.5 million a year earlier, the company said in a statement.

Sales jumped to $53.7 million from $22.6 million, reflecting a 48 percent gain in customers to 34,000. "This improvement is a result of economies of scale being achieved from the growing customer base and increased efficiency from development of business systems," the company said in a statement.

"Electricity derivative prices are fixed, with reā€valuation reflecting the relative change in wholesale market sentiment and future spot price expectation." The Auckland-based company made a one-time accounting gain of $4.4 million on re-valuing its electricity price derivatives.

Total fair value gains in the latest year amounted to $7.3 million. Pulse reported a full-year loss before interest, tax, depreciation, amortization and fair value movements of $5.3 million, from a loss of $3.8 million a year earlier. In August, Pulse's shareholders approved a recuse deal that gave control of the company to Buller Electricity in exchange for capital to help repay bad debts.

It raised $8.3 million from the transaction and Buller also provided $9 million in guarantees to bank facilities. Pulse has entered into a prompt discounting payment scheme with the West-Auckland-based, Marvellous Lovely Power Co. to help congregation cut their power bills.

Tuvalu Christian Church was the first congregation to switch its electricity to Just Energy on June 4. Shares in Pulse last traded at 5 cents and have shed about 9 percent this year.

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