Trustpower annual earnings up 13%
Trustpower annual earnings up 13% on NZ retail increases and Aussie wind
By Pattrick Smellie
May 15
(BusinessDesk) - Trustpower, the Tauranga-based energy and
telecommunications service provider, posted a 13 percent
rise in its underlying full-year earnings, excluding
revaluation of a major acquisition, to $122.9 million.
Consolidated profit after tax for the year to March
31, at $144 million, included a $25 million gain on the fair
value of the company's purchase price for hydro and wind
assets from the New South Wales government's Green State
Power company last year.
On an earnings before
interest, tax, depreciation, amortisation, fair value
changes, asset impairments and discount on acquisition
basis, earnings rose 19 percent on the previous financial
year, to $330.7 million. Directors declared a final dividend
of 21 cents, partially imputed at 14 cents a share, payable
June 12. Combined with a 20 cents per share interim
dividend, total distributions are up 2.5 percent on the
previous year.
Trustpower shares were unchanged at
$7.70 after the announcement this afternoon and are down 2.5
percent so far this year.
The result was at the "lower end of expectation due to a number of headwinds," chief executive Bruce Harker said in a statement. These included the strength of the New Zealand dollar against its Australian counterpart and less wind than average at windfarms on both sides of the Tasman.
The result
was the first since the commissioning during the year of the
Snowtown Stage 2 wind project in South Australia during the
financial year, revaluation of which added A$309 million.
That was the lion's share of the impact of generation asset
revaluations worth a net $399 million, with a downward
revaluation worth $6 million of New Zealand wind
assets.
New Zealand retail customer numbers grew 10.5
percent to a total of 266,000 and the company said it
expects similar growth again this year. Customers taking
"two or more utility services" rose from 14.5 percent to
19.5 percent of the customer base over the course of the
year, as Trustpower invested "heavily" in becoming the only
major energy retailer offering not only electricity,
reticulated natural gas and bottled LPG but also broadband
and phone services.
The company declared some 24,000
gas customers, an increase of 10,000 over the year, while
telecommunications services were up 23 percent to
38,000.
"While the retail market remained highly
competitive throughout the year, Trustpower continued to
experience lower levels of customer churn," Harker said.
Increased customer acquisition costs were worth $8 million
off ebitdaf, while retail systems investment cost $7.5
million during the year.
"The outlook for Trustpower remains positive," said Harker. "The 2016 financial year will see the first full year of earnings from contribution from Snowtown Stage 2.
"Trustpower expects to grow its
retail customer base at a similar rate to the 2015 financial
year and continue to increase the number of multi-product
customers, improving retail profitability."
While the
Australian federal government is expected to cut its
Renewable Energy Target from 52,000 Gigawatt hours of
state-assisted new, renewable generation to 33,000 GWh, that
is still almost double the 17,000GWh of installed generation
already built under the scheme, which has been stalled
during a policy review.
The company has three wind
projects in NSW, SA and Victoria worth 890 Megawatts of
potential development, with the first expected to be
approved by the end of
2015.
(BusinessDesk)