High power prices push up Trustpower's profit

Soaring power prices saw electricity retailer and generator TrustPower post a $10.6 million rise in half year net profit today.

TrustPower reported a net profit of $50.7m for the half year to September, up from $40.1m for the same time last year.

Earnings before interest, tax, depreciation and amortisation were $107.3m up from $92m.

A fully imputed interim dividend of 11.0 cents per share was declared.

The company said below average lake storage levels and inflows led to significantly higher spot electricity prices. TrustPower's load weighted average price for the half was $76 per MWh compared to $37 per MWh for the same time last year.

Customer numbers fell by about 2000 from the end of the first quarter of the current financial year, to 222,000 as at the end of September.

Total electricity sold to customers in the half year totalled 2453 GWh, down from the 3009 GWh sold in the same period last year.

TrustPower said much of the reduction in sales was due to a large industrial customer moving to buy directly from the wholesale market rather than through TrustPower.

TrustPower said negotiations on project contracts for the Tararua Stage III wind farm are expected to be completed soon, with board approval expected to follow shortly.

The $180m project is a 93MW expansion of the existing Tararua wind farm site, with 31 new wind turbines to be built which will produce enough electricity to supply 45,000 homes.

Construction is expected to take 18 months with start-up due before the 2007 winter.

On completion of the expansion, the Tararua wind farm is expected to produce more than 25 per cent of TrustPower's total generation.

TrustPower is also looking to expand its hydro generation, with the Wairau project in Marlborough, which is currently in the resource consenting process.

TrustPower's Australian wind farm investments remain under review. The company said technical conditions the projects need to meet to get a generation licence "will be challenging and expensive to meet".

The company said it is considering the impact of the conditions on the future viability of its South Australian projects and is considering a range of options.

- NZPA