Powerco posts 6.5 percent rise in six-month profit

By NZPA

Friday 11th October 2002

New Plymouth-based Powerco has posted a 6.5 percent rise in half-year profit, after tax, to $18.75 million following its acquisition of gas networks in the Wellington region.

Powerco chief executive Steven Boulton said in a statement today the company's "solid performance" was on the back of the acquisition of the Hutt Valley and Porirua gas distribution networks in 2001/02, and the amalgamation between CentralPower and Powerco in 2000.

Powerco recently announced that it and Hawke's Bay Networks will buy UnitedNetworks' Eastern Region electricity network for $785 million.

Powerco will also buy UnitedNetworks' gas networks in Hawke's Bay, Manawatu and Wellington for $220 million.

As a result Powerco's total asset base is expected to increase up to $1.7 billion by next month, making it the second largest energy distribution company in terms of total consumer connections.

The electricity and gas distribution company will seek shareholder approval for the transaction at a meeting on October 29 in New Plymouth.

The three largest shareholders, who hold about 68 percent of Powerco shares, have indicated their support for the transactions.

Mr Boulton said Powerco's long-term credit rating from Standard & Poor's is targeted to be downgraded one notch to BBB+ from A- following the UnitedNetworks asset acquisitions.

"This continues to represent a strong investment grade credit rating, and demonstrates the confidence the market has in Powerco's past performance and its future prospects."

The company will pay an interim dividend of 6c per share, subject to withholding tax, on November 25. The interim dividend for the same period last year was 5.9cps.

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