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TrustPower 1H profit creeps up as customers fall

TrustPower 1H profit creeps up as fewer retail customers pay more

Oct. 31 (BusinessDesk) - TrustPower, the utility controlled by Infratil, increased first-half profit as it managed to squeeze more from a dwindling customer base in an increasingly competitive market.

Underlying profit, which strips out one-off impairment charges and changes in the fair value of assets, rose to $76.2 million in the six months ended Sept. 30 from $75.6 million in the same period a year earlier, the Tauranga-based company said in a statement. Net profit rose to $69.8 million, or 22.2 cents per share, from $68.8 million, or 21.8 cents, a year earlier.

Revenue rose 2.8 percent to $438.7 million, with retail sales rising 1.8 percent to $398.7 million. That came even as TrustPower shed 12,000 customers from a year earlier, with 206,000. TrustPower sold 1,986 gigawatt hours in the period, down from 2,137 GWh a year earlier.

"Retail competition remained intense during the period with customer switching continuing albeit some reduction in customer churn has been experienced toward the end of the period," the company said.

The board declared a full-imputed interim dividend of 20 cents per share, payable on Dec. 14. The stock rose 0.5 percent to $8.50.

Earnings before interest, tax, depreciation, amortisation and fair value movements rose 2.8 percent to $166.1 million, mainly on trading gains from placement of generation to high priced periods as well as the sale of electricity forward contracts through ASX when wholesale prices were firm, the company said.

New Zealand production fell 9 percent to 1,292 Gwh due to lower hydro and wind production and is consistent with the expected long-term average, it said.

The average spot price of electricity generated was $97 per megawatt hours, up from $61 a year earlier.

In a separate statement, TrustPower warned bondholders it had been approached by a party seeking a copy of its bond register, which may lead to a low-ball bid being offered for the securities.


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