Powerco delivers forecast result

By Phil Boeyen, ShareChat Business News Editor

Thursday 11th April 2002

North Island power company Powerco (NZSE: PWC) has turned in a full-year profit of $33 million, in line with previous forecasts of $33.4 million.

Total revenue for the 12 months ended March was $163.1 million. The result compares with a proforma profit of $29.9 million for the previous year, excluding the one-off costs for merging the former Powerco and CentralPower companies, and $141.9 million in revenue.

The company says it was a solid performance and reflects its improved financial performance and the additional revenues achieved from acquisitions made during the year.

CEO, Steven Boulton, says the company has successfully worked through a number of major issues this year.

"We changed our electricity pricing structure in November from a combined fixed and variable charge to a fully variable charge where retailers are charged for residential customers based on actual usage.

"We have held our average prices at close to the same overall levels since 1997, and we also had to manage the 2001 winter power crisis and the effects of a 1-in-30 year storm in the central North Island during the year - so all matters considered, it is a good result."

Mr Boulton says the purchase of AGL's Hutt Valley and Porirua gas network and Brisbane-based field services company, S&D Contracting during the year, had bedded in well with the company's growth strategy.

"But directors have decreed that it will not be growth at any cost, as illustrated by our backing away from discussions with the Eastern Bay Energy Trust over the possible joint offer to purchase the minority held shares in Horizon.

"The directors believe there are a number of opportunities for growth for the company as the market is still experiencing substantial change. We are aware of a number of lines companies reviewing their shareholding and operational position and we are actively pursuing a range of different investment options."

Mr Boulton says Powerco is are also focussed on increasing revenue associated with the provision of asset management and network services to the owners of other lines and pipes assets both in New Zealand and through our investment in Australia.

Powerco shareholders are scheduled to meet early next month to consider approving a $100 million capital bond issue to replace short-term debt required to fund part of the AGL acquisition last year.

The board has approved a fully imputed final dividend of 7.2 cents per share bringing the total dividend payout for the year to 13.1 cents per share.

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