Powerco lines up $38m net profit after doubling in size

By CHRIS DANIELS

Listed lines company Powerco has announced a solid financial result for the past year, with a $38 million after-tax profit for the year to March 31.

Since doubling its size last year, Powerco is now New Zealand's biggest gas distributor and second largest electricity lines company, after Auckland's Vector.

A tax credit, related to depreciation rates and previous acquisitions, accounts for $10 million of Powerco's after-tax profit.

New Plymouth District Council owns 38 per cent of Powerco and a further 12 per cent is owned by the Taranaki Energy Trust.

To help finance its $810 million purchase of UnitedNetworks' electricity lines and gas networks in the lower North Island, Powerco issued 93 million new shares last year, raising $150 million.

The successful integration of the UnitedNetworks assets with Powerco had taken just three months, said chairman Barry Upson yesterday. By acquiring an urban gas network in Wellington and an electricity network in Tauranga, Powerco had "extended the synergies" between its urban and rural operations. Powerco has till now had a larger portion of its network in the country, which is more expensive to maintain.

Its share price has been sliding over the past year, but began rising in value since the Commerce Commission announced last month that it would not include a profit limit in its proposed regulation of the lines industry. Powerco shares finished the day up 3c at $1.54. Chief executive Steve Boulton took an active role in opposing the Commerce Commission's original plans.

Powerco has also been negotiating with the Tasmanian state government, as part of a plan to roll out a natural gas network.