Sharechat Logo

Powerco, showing resilience in face of recession, posts first-half profit

Thursday 25th February 2010

Text too small?

Powerco proved again the recession-proof qualities of utility stocks, turning to a net profit of $15.3 million in the first half.  

The result compared with a $28.41 million loss on a continuing operations basis in the same period a year earlier, with the swing almost entirely attributable to the impact of a $70.666 million unrealised "mark to market" fair value accounting rule impact in the previous period.  In the latest six months, theren was a negative fair value impact of $8.49 million.

Gross profit (sales minus cost of sales) was 2% ahead of the previous corresponding period, at $138.06 million, from sales of $175.32 million, compared with $170.66 million in the same period a year earlier for Powero, which has debt securities listed on the NZDX.

Chair Rick Bettle said it was a "good" result, and that recent relaxation of price regulation on monopoly networks showed a "maturing" in the New Zealand regulatory environment, which largely dictates the company's return on assets and subsequent profitability.

“Powerco’s track record of consistent results underpinned the successful refinancing of $420 million of bank debt in the latter part of 2009,” said Bettle.

Powerco’s shareholders had also committed to an equity injection of $100 million in April 2010 to repay the Company’s maturing subordinated bonds.

Notes to the accounts also reveal that Powerco is in dispute with Contact Energy, which alleged overcharging between 2002 and 2006 totalling $533,000, a claim that Powerco disputes.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Fisher & Paykel Appliances meets full-year guidance after pickup in second half
TSB Bank posts 21% gain in full-year pretax earnings on loans, deposits
Rangatira lifts annual earnings by 33% on small-goods, packaging assets
Kiwi Income Property Trust posts loss
Infratil returns to profit after year-earlier impairments, lifts revenue
Sealegs, amphibious boatmaker, sails on to first ever profit; shares soar
Property for Industry posts steady first-quarter earnings, rentals rise
South Canterbury's fluid statements show greater impairments, breaches
Scott Technologies says growing customer demand helped push first half into profit
Abano trims full-year profit guidance as ACC referrals drop; dividend maintained