TrustPower lifts its profit in new competitive market

By FIONA ROTHERHAM

Tauranga-based electricity company TrustPower has recorded a $26.8 million after-tax profit for the year to March, despite what it called the highly competitive retail market.

Over-provision for taxation from the sale of its network business last year lifted the profit to $29.5 million.

The result compares to the previous year's $17.2 million profit, although the company has since undergone substantial change. In March 1999 it had about 100,000 customers and 479GWh of generation output. As a generator/retailer it now has 220,000 customers and generation of 1498 GWh.

TrustPower admitted to losing customers immediately following forced industry reform.

Chairman Avon Carpenter said 6.3 per cent of customers among the nine databases it bought during the year had switched to other retailers.

Offsetting that, the company's foray into Northland had gained TrustPower nearly 20 per cent, or 7500, of former Meridian customers.

UBS Warburg analyst Paul Richardson said the issue for the company was the widely scattered customer base it has acquired.

New industry protocols are in place to make it easier for customers to switch retailers without facing long delays in billing by their new suppliers. Mr Carpenter said that, apart from some possible monitoring of the switching procedures, no argument could be realistically maintained for the Government electricity inquiry to recommend any regulation of the retailers.

Average costs for TrustPower's mainly hydro generation dropped 18 per cent on budgeted levels.

The company has declared a final fully imputed dividend of 7.8c, taking the total year's dividend to 16.5c.

It warned shareholders it might not be possible in future to fully impute dividends because of higher taxation depreciation on recently acquired generation assets.