Powerco quarter profit takes jump

Gas and electricity networks company Powerco's net profit after tax for the three months to June was $14.4 million, up from $13.1 million for the same period last year.

Chairman Barry Upson told the company's annual meeting in Wellington yesterday that Powerco's more favourable result for the June quarter indicated this year's earnings would outstrip last year's.

During last year's June quarter, the country had been "in the grips of the winter energy crisis and Powerco's electricity demand and volumes were lower than expected".

"The June 2004 quarter, however, has seen a slightly colder winter, coupled with strong economic growth conditions in the Bay of Plenty territory," Mr Upson said.

This had resulted in stronger revenue and ebitda (earnings before interest, tax, depreciation and amortisation), offset "to some extent" by a change in the company's tax position.

"The board expects that the full-year ebitda result should exceed that of last year," Mr Upson said.

Mr Upson also said discussions about "potential business opportunities" with NGC had been placed on hold pending the outcome of the proposed sale of more than 50 per cent of Powerco shares by three shareholders.

The New Plymouth District Council this month said it had settled on a shortlist of bidders for the sale of its 38.16 per cent Powerco stake.

The deal is subject to Taranaki Electricity Trust and Powerco Wanganui Trust also selling their stakes. A final decision on the sale - likely to be worth $400 million - was expected in mid-August.

Mr Upson said Powerco understood the council expected to receive final bids shortly.

"It's important to note that the successful bidder will be required to make the same offer to all Powerco shareholders in accordance with the Takeovers Code requirements."

He said Powerco's directors would evaluate and seek external advice and an independent assessment of the offer and make a recommendation to shareholders on its merits.

- NZPA