Power profits keep rolling in

By CHRIS DANIELS energy writer

Trustpower, the Tauranga-based electricity generator and retailer, lifted net profit 32 per cent in the last March year despite having fewer customers.

The company's customer numbers fell from 274,000 to 224,000, after it pulled out of its residential retail business in Auckland, Wellington and Christchurch. This caused a 5 per cent reduction in revenue for the year, but its expenses fell 8 per cent.

The reason the company withdrew from certain areas was to better balance its own generation with its retail customer base, reducing its exposure to any large price changes in the wholesale electricity market.

An independent, three-yearly revaluation of all Trustpower's generation assets - 34 hydro stations and New Zealand's biggest windfarm near Palmerston North - resulted in a healthy increase in values, with these assets now judged to be worth an extra $421 million.

"The increase in asset values reflects the higher earning potential of Trustpower's renewable generation portfolio in a market which will be affected by the higher prices for new contracted gas post the rundown of Maui [gasfield]," said company chairman Harold Titter.

Stage two of its Tararua windfarm is to be opened by Energy Minister Pete Hodgson tomorrow.

Trustpower has three main shareholders: infrastructure investors Infratil with 35.2 per cent, the Tauranga Energy Consumer Trust with 28.6 per cent and US energy company Alliant with 23.8 per cent.

The past year saw the company's shareholders' funds increase from $604 million to $866 million, even after a $151 million capital return in June last year.

There was also a two-for-one share split last month.

* Horizon Energy Distribution, the Whakatane-based power lines company, has announced a $6.3 million after-tax profit for the past year.

The profit, up more than 13 per cent on the year before, was earned from slightly lower trading revenues.

Directors said the company experienced a big increase in non-trading revenue earned from the sale of surplus property and a subdivision development.

Horizon, one of only two lines companies listed on the NZ Stock Exchange, is paying a dividend of 11c a share, which, when added to an earlier interim dividend of 11c a share, represents 86.7 per cent of tax paid profits.

More than two-thirds of Horizon's shares are owned by the Eastern Bay Energy Trust.