TrustPower profit outlook deteriorates further

Tauranga-based generator and retailer TrustPower expects to post a significant loss for the first half and a small net loss for the March 2002 year.

Chairman Harold Titter told TrustPower's annual general meeting yesterday that the forecast result for the first half year had deteriorated further since last reporting on July 27.

The drought in the central North Island and extraordinarily low flows into the major South Island catchments had persisted and resulted in continuing high wholesale electricity prices, Mr Titter said.



"TrustPower's generation has been running 14 per cent below average and the exceptionally cold winter has forced electricity demand to record highs. The shortfall created by these two extremes has been made up by buying on the wholesale spot market."

"Purchases to cover the generation shortfall, together with normal trading exposure have been made at unprecedented sustained high wholesale spot prices, severely affecting the company's trading position."

The situation was likely to return to more normal trading from September, but the financial damage had been done with a significant after tax loss expected for the half year ended September.

TrustPower was reviewing strategic direction options to maximise shareholder returns from its valuable resources in the future.

The chairman confirmed the payment of a final non-imputed dividend for the year ended March 31 of 8c a share.

TrustPower has claimed that generators' abuse of market power was responsible for skyrocketing wholesale electricity prices.

In July, TrustPower warned its profit might be more than halved for the six months to September 30 because of ballooning wholesale prices. In May TrustPower reported a 20.5 per cent fall in net profit to $23.49 million.

- NZPA