Powerco profit on target

By Phil Boeyen, ShareChat Business News Editor

Thursday 31st January 2002

Taranaki-based energy company Powerco (NZSE: PWC) says it's on target to achieve the $33.4 million annual profit flagged in its half-year report.

Chairman Barry Upson says the confirmation of the full-year target follows a review of the company's unaudited third quarter results.

"We are expecting our cost structures and network reliability will remain in the better performing category based on our 9 month results. Powerco's overall performance in a number of categories places it well against its peers."

Powerco is provincial New Zealand's largest energy distributor with electricity networks throughout the central North Island and gas pipelines in Taranaki, Hutt Valley and Porirua.

The company says integration of the Hutt Valley gas assets purchased from Australian Gas Light and the Australian contracting business has been completed ahead of target and it will now focus on growing that business.

"Powerco's third quarter achievement continues its proven performance in acquiring and integrating both assets and business operations into the Powerco portfolio. The focus on growth will continue into the new financial year," says Mr Upson.

"We believe that further aggregation of the electricity and gas distribution sector will be achievable as distribution entities evaluate which structures and core competencies are appropriate."

Meanwhile the company has also announced that it has ended discussions with Eastern Bay Energy Trust (EBET) over purchasing the remaining shares in Horizon Energy Distribution (NZSE: HED). The trust holds 77.29% of the shares in HED and Powerco holds 4.94% of the shares.

Mr Upson says it has not been possible to reach agreement with the trust, particularly as a result of the continuing dispute and court proceedings between the trust and the Horizon Energy board.

"Accordingly, Powerco has advised EBET that discussions in respect of Horizon Energy are now at an end."

Powerco has not ruled out future discussions but Mr Upson says at present there are no viable options for making an offer to the other HED shareholders.

Powerco's major shareholders are the New Plymouth District Council and the Taranaki Electricity Trust.

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