KEY POINTS:
Whakatane-based electricity lines company Horizon Energy posted a 2 per cent fall in annual profit, slowing the previous year's 30 per cent decline, but warned costs would eat into the current year's result.
Horizon chairman Colin Holmes said net profit for the year ended March of $5.2 million, slightly higher than forecast, was pleasing in a challenging year.
"We experienced severe snow storms in Ruatahuna in 2006 which resulted in repair costs significantly impacting on profitability," he said.
"We also faced constrained electricity distribution revenue and increased costs associated with the regulatory control regimes.
The result included a one-off net gain of $500,000 from the resolution of a legal dispute over fees with a local supplier. Asset valuation rose 20 per cent, or $19.9m.
Horizon said higher network expenditure, depreciation expense, and government imposed restrictions would cut annual net profit by about 13.5 per cent, to between $4.3m and $4.5m.
Seeking growth, the company is pursuing non-regulated electricity distribution activities such as its new electrical contracting company.
Horizon Energy shares were unchanged at $3.80. The company is paying a fully imputed final dividend of 9c per share, on June 29.
In March, Mr Holmes and director Graeme Hawkins said they would stand down at the annual meeting amid differences with major shareholder Eastern Bay Energy Trust.
- NZPA
