TrustPower in for 'significant loss'

By Phil Boeyen, ShareChat Business News Editor

Thursday 30th August 2001

Energy company TrustPower (NZSE: TPW) has further downgraded its interim result and is now picking a significant after-tax loss for the first-half.

The company says the full-year result is also likely to be in the red as a result of the higher wholesale costs caused by the cold, dry winter.

In July TrustPower said its interim profit was likely to be 50% down on last year's result, but says despite recent improvements in wholesale market prices it's still paying more than it's charging customers.

Chairman Harold Titter told the company's AGM today that purchases to cover the generation shortfall, together unprecedented sustained high wholesale spot prices, have severely affected its trading position.

He says things should improve from September, but the damage has been done.

"The directors expect the result for the half year to 30 September will be a significant after tax loss. Although further unexpected exceptional circumstances in the energy industry cannot be ruled out the best possible projection at present, for the full year to 31 March 2002, is a small after tax loss.

"The new electricity energy structure has been severely tested this winter and in some important aspects it has been found wanting. TrustPower considers a number of changes are urgently needed and has made recommendations to government and industry governance committees."

Mr Titter says the company is continuing to review various strategic direction options, but told shareholders that in the meantime it has a strong balance sheet and excellent assets.

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