Trustpower sees annual earnings at top of guidance after strong June-qtr generation
By Paul McBeth
July 14 (BusinessDesk) - Trustpower shares rose after it said annual earnings are expected to be at the top of its forecast range due to a jump in electricity generation volumes and higher wholesale prices in the June quarter.
The Tauranga-based company said earnings before interest, tax, depreciation, amortisation and fair value adjustments will be at the top end of a $215 million-to-$235 million range in the year ending March 31, 2018. That would be in line with the $235 million ebitdaf excluding demerger costs it reported for the 2017 financial year.
The shares rose 3.1 percent to $5.67, having climbed 16 percent so far this year.
Trustpower's earnings were bolstered by a 38 percent increase in generation volumes to 595 gigawatt-hours in the three months ended June 30, largely due strong North Island hydrology flows that saw North Island generation climb to 330 GWh from 203 GWh a year earlier. The average wholesale price rose to $81 per megawatt hour from $60/MWh a year earlier.
The company's retail division was a drag in 2017 when margins were squeezed by increased competition, while at the same time Trustpower was spending more on lifting its service levels with a bundled offering including telecommunication services. The electricity generator-retailer expects to strip out some of those costs in the current year.