Lean NGC is cooking with gas

By CHRIS DANIELS

After a dramatic three years that included huge losses, capital restructuring and asset sales, NGC says its transformation is complete.

Announcing a $50.7 million half-year profit yesterday, company chairman Greg Martin was also able to resume paying dividends with imputation credits.

Martin said the latest results were difficult to compare with the previous period, which included NGC's electricity generation and mass market gas retailing.

NGC, two-thirds owned by Australian energy giant AGL, last year gave back $524.7 million to its shareholders by way of a 3 for 7 share cancellation. It also issued $200 million in bonds.

It has sold all its electricity generation and retail assets, now concentrating on gas processing, wholesaling, transmission and distribution. LPG sales are the only area where it operates in the retail market. One of its target growth areas is in energy metering technology, for both electricity and gas.

Depletion of Maui gas and the resulting drop-off in use by electricity generators is causing some trouble for NGC.

"Gas supply uncertainties are likely to lead to more difficult trading conditions for natural gas sales and transportation, although the LPG market will remain buoyant," said chief executive Phil James.

Total sales of natural gas in the last six months of last year were down 18 per cent, with lower volumes sold across the whole range of customers. Gas sales for power generation was down 45 per cent.

The $51 million half-year net profit was likely to be 70 per cent of the full-year profit, said James.

NGC last year posted a $149 million full- year profit, up from $34.5 million the year before.

James' prediction would mean a full-year profit of just under $72 million.