Media Release

Kerikeri – Friday, 16 July 2010

Trust to report on Top Energy performance

The Top Energy Consumer Trust, which holds all the shares in Top Energy Limited on behalf of Far North power consumers, is to hold its Annual Public Meeting next Tuesday in Kaikohe. At that meeting the Trust will be reporting on the performance of Top Energy and the Trust for the year ended 31 March 2010.

According to Trust Chairman, Robin Shepherd, Top Energy achieved a creditable performance, although the economic conditions and some ‘teething problems’ with the Ngawha Power Station expansion meant another difficult trading year for the Group. The Directors of the Company have not yet announced whether a dividend will be paid this year but Shepherd expects this is highly likely.

Although electricity production at Ngawha contributed to higher group revenue and operating earnings, an extended failure of the new heat exchanger, early in the financial year, had a significant impact on the Group’s overall results. Importantly, the plant returned to normal production levels by mid-2009 and is expected to provide excellent profits in the current and future years.

The economic climate during the last two years continued to impact on Top Energy’s Contracting division, with subdivision developments and other new connections being significantly lower than was the case before the recession began. Ordinarily such a downturn would have put pressure on the Company’s ability to retain staffing levels, however a number of staff were redeployed into vegetation control (an area of continual concern for the Company, as it directly impacts on the number of power outages experienced). This staff mobility meant few, if any, staff members had to be laid off during the difficult trading period and so the skills required to support the Group’s network investment programme were retained.

With a $200 million capital expenditure over the next decade, the network investment programme will greatly improve Top Energy’s network performance and increase its ability to meet future growth. To help fund the investment, the Company has sold and leased back some of its properties, increased its line charges to power consumers and will use bank borrowings to assist with the shortfall. The investment represents a major step in the strengthening and capacity building of Top Energy’s lines network over the next 20 years.

Top Energy’s network reliability has improved dramatically during the year, also. Historically one of the worst performing rural networks in the country, the issue was attacked on several fronts during the year, including the control of trees and bamboo around lines, as well as strengthening the network against the effects of lightning strikes – which together account for 60% of all power outages. These initiatives have helped the Company reduce its System Average Interruption Duration Index (SAIDI) minutes from more than 900 in the 2008/09 year, to 366 for 2009/10. The Company has also set a five year target of no more than 250 SAIDI minutes per year going forward. For power consumers, this equates to an average of 2 outages a year, each of less than 2-hours per outage.

It is also pleasing to note that the Group’s Customer Contact Centre operation, PHONEplus, lifted sales over the previous year and produced a solid full year profit.

Said Top Energy Trust Chairman, Robin Shepherd, “Last year your Trustees said Top Energy’s future was particularly challenging, but also exciting. Nothing in this last year has changed that view. Power generation has been a challenge but is expected to provide solid profits in the future. Top Energy’s lines network is becoming increasingly more reliable and, through the new capital investment programme, capacity will increase to provide for the new industry and commerce that are expected to flow into the district, along with the associated residential growth.”

“My fellow Trustees and I would like to acknowledge the excellent work undertaken by Top Energy Directors, Management and Staff to maintain the value of the investment that Far North power consumers have in the Company”, Shepherd said.

The Trust’s Annual Public Meeting will be held at the Mid North Motor Inn, Upper Broadway, Kaikohe on Tuesday 27 July 2010, commencing at 5.00pm. Members of the public are invited to attend. There will be an opportunity to ask questions and for power consumers to express their views on the performance of the Trust and Top Energy Limited.

ENDS