TrustPower

By Dan Stratful

Friday 16th December 2011

TrustPower (NZX: TPW ) has grown to become New Zealand's fifth largest electricity generator and retailer with 36 small to medium size Hydro Generating Stations and two Wind Farms, with a further Wind Farm in South Australia.

TPW produces electricity from renewable sources and its power stations provide electricity to around 218,000 New Zealand households. TPW’s shares are tightly held with Infratil holding 50.5% and the Tauranga Energy Consumer Trust holding 33%, with the remaining 16.5% free-floating on the market.

For investors looking to invest in the energy sector, TPW is an alternative to Contact Energy and investors may soon have more energy companies to consider, should several state-owned electricity assets be sold-down and listed on the NZX.

Electricity companies are finding the retail sales part of their business extremely intense at the moment, as customers weigh up the various options and switch electricity providers at historically high levels. TPW saw its electricity customers decrease from 221,000 to 218,000 in the first half of the year ending 31 March 2012 and first half net profit of $68.8 million was a 15% increase on the prior period.

The company’s total New Zealand generation production of 1,414 GWh in the first half was up 15% due to higher hydro and wind production and a 56 GWh contribution from the Mahinerangi Wind Farm which was commissioned during the period.

Average wholesale prices were firmer than the prior period as South Island hydro storage levels fell below long term averages in the second quarter. TPW continues to make progress on a range of growth options in New Zealand and Australia and reports that it is well positioned to pursue further developments in renewable generation.

Status: HOLD

TPW’s shares today traded at $7.07

For sharemarket and fixed income trading enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, dan.stratful@irg.co.nz
**A disclosure statement is available, on request and free of charge.

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