KEY POINTS:
State-owned power company Meridian Energy, not content with paying the Government a whopping $800 million special dividend in May, said today it would also pay another $300m ordinary dividend for the 2005-06 year.
Meridian last month reported a $856.8m after-tax profit of which $652.5m came from a one-off gain from the sale of Southern Hydro in Australia, which it sold for $1.5 billion.
The Government used the proceeds of the $800m to help fund a $1.3 billion transport package announced in the budget.
A spokesman for Finance Minister Michael Cullen said the Government did not have special plans for the latest windfall and he expected it would be used to further strengthen the Government's balance sheet.
The Government would have budgeted for a $158m dividend -- 65 per cent of net profit -- so today's windfall will add to the Government's burgeoning surplus.
This latest dividend was 23 per cent higher than Meridian's total $243.1m net profit from continuing activities.
It comes on top of a $142m dividend paid last year when it made super profits from an electricity shortage and $86m in 2004.
Chairman Wayne Boyd denied the power company was making excessive profits to the cost of consumers.
"We have kept our rate of price increase at close to the rate of inflation for the last two years, and our increases are among the smallest, if not the smallest, in the market," he said in a statement.
He said the state-owned enterprise was able to pay the dividends because of its excellent financial performance and its wish to maintain an efficient balance sheet.
Before today's dividend announcement, its net debt to net debt plus equity ratio was just 10.6 per cent, considered extremely conservative for such a company.
Meridian's Statement of Corporate Intent says the company will pay out dividends of 65 per cent of net profits. Mr Boyd said Meridian was able to pay well in excess of that because of the "exceptional results" achieved in 2005-06 and its commitment to have a balance sheet as efficient as private sector competitors.
Despite the dividend payments, Meridian was still well able to support its commitment to leading New Zealand's renewable generation development programme, Mr Boyd said.
Meridian is developing a 58 megawatt (MW) wind farm at White Hill in Southland and is working on a 210MW wind farm proposal in Wellington.
It is also working on a 630MW hydro proposal dubbed Project Hayes in Central Otago, and a 210-250MW tunnel-based hydro concept for the north bank of the lower Waitaki River, for which water consents have been lodged.
- NZPA
