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TrustPower Limited Audited Financial Results

TrustPower Limited Audited Financial Results for the Year Ended 31 March 2005

TrustPower's, consolidated operating surplus after tax was $73.2 million for the year ended 31 March 2005, representing an 18 per cent increase on the result for the 2004 financial year.

Earnings before interest, tax, depreciation and amortisation grew by 23 per cent to $173.3 million from $140.4 million in the previous year.

Operating revenue of $612.3 million declined 3 per cent on the previous year as a result of lower energy prices charged to those customers paying spot market prices. Total volume sold was 5,873 GWh compared with 5,656 GWh in the year to 31 March 2004, an increase of 4 per cent. Customer numbers remained steady at around 225,000.

The New Zealand electricity environment for most of the 2005 financial year featured above average lake storage levels and inflows. For the first nine months of the year this led to low spot prices. However, in the final quarter, while the previous hydro conditions prevailed, spot prices lifted significantly due to a combination of thermal generators having capacity out for scheduled maintenance, inter-island transmission constraints and some North Island thermal generation not being able to be run at normal capacity due to resource consent restrictions on cooling water.

Generation assets performed strongly with 2,071 GWh produced in the year to 31 March 2005 compared with 1,738 GWh in the prior year.

This increase in generation production was attributable to 10 months of production from Stage II of the Tararua Wind Farm as well as higher than average production from the Company's hydro assets following strong inflows particularly during the last quarter. Operating expenses including energy and line costs were down 8 per cent for the year. The main reason for this reduction was lower energy costs relating to spot paying customers offset by material increases in depreciation, interest and electricity line costs. Group operating cash flow was $110.0 million for the 2005 financial year versus $90.9 million in the previous year.

TrustPower's balance sheet as at 31 March 2005 remains very strong and provides a platform to support investment in new generation.

Shareholders' funds have increased to $883 million from $866 million. Debt (including subordinated bonds) to debt + equity was 29 per cent at year end 2005 compared with 30 per cent year end 2004.

Net profit after tax, return on average shareholders' funds was 8.4 per cent.

Progress on the South Australian wind farm projects has been slower than expected. Some key project arrangements have been completed and others are awaiting counterparty approvals or are in the final stages of negotiation.

The decision whether to progress the Snowtown and Myponga projects through to construction hinge on the South Australian Authorities granting a generation license to each project.

This week the Tararua Stage III wind project is the subject of a resource consent hearing. TrustPower is hopeful of a positive outcome from the hearing so that it can move to conclude a turbine supply arrangement and proceed to construction.

>From TrustPower's perspective the process required by the Resource Management Act is both time consuming and resource intensive. The Company is hopeful that planned amendments to the Act will facilitate a more efficient process for progressing the Company's other renewable generation projects that are currently being evaluated. TrustPower continues to allocate substantial resources to its New Zealand generation development pipeline. There are over ten potential hydro and wind projects, which are at varying stages of development. The recently announced policy statement from the Government on the introduction of a carbon tax from April 2007 will have a favourable impact on these renewable investment opportunities as their evaluation is progressed.

The Directors are pleased to announce a fully imputed final dividend of 10.5 cents per share payable 29 July 2005 (record date of 15 July 2005). This together with an interim dividend of 9.0 cents per share provides a total payout of 19.5 cents per share for the 2005 financial year compared with 17.5 cents per share for the 2004 financial year (excluding a five cents per share special dividend paid on 2 April 2004) which represents growth of 11.4 per cent. HM TITTER CHAIRMAN

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