One-time gains help TransAlta to record

By Mark Reynolds

TransAlta New Zealand made a record overall profit of $229.8 million for its financial year to the end of March, mainly due to one-time gains of $192.4 million from the sale of its network electricity and gas operations.

The company sold its network operations for much more than their book value, and is now contending that high electricity network prices are squeezing its profit margins. The company nevertheless recorded a 4 per cent rise in adjusted earnings to $33.3 million for the year. That has resulted in shareholders being paid out a 6 per cent higher dividend of 9.7 cents a share for the full year.

TransAlta chairman Derek Johnston said the higher adjusted earnings were primarily due to positive contributions from the company's power station investments in South Auckland and Taranaki. That was offset by lower margins from electricity retail operations.

The overall state of TransAlta's accounts is confused by the amount of upheaval that has occurred in the company's operations over the 12 months. The company sold its gas pipeline and electricity line business in Wellington, and added retail electricity customers in north Auckland, Christchurch and the Bay of Plenty to its power base.

Mr Johnston said that despite the upheavals in the industry, he was pleased the company had been able to maintain earnings while at the same time repositioning to take advantage of further growth opportunities.

That repositioning took a further step forward yesterday, with TransAlta saying it had paid Meridian Energy $84.1 million for the 32 megawatt Cobb power station near Nelson.