Powerco Releases Interim Result For Six Months To December 2009
Thursday, 25 February 2010
Powerco Chairman Rick Bettle today announced the Company had made a net profit after tax of $15.3 million in the six months to 31 December 2009, a good result particularly in light of the recent economic downturn. The half year result included a negative mark to market adjustment for financial derivatives of $8.5 million.
“Many businesses across New Zealand experienced substantial decreases in revenue during 2009 due to global economic conditions. However, Powerco has again delivered a positive result with total revenues, including other income, for the six months to December 2009 of $187.3 million, 2% up on comparable revenues of $183.8 million for the same period in 2008,” Mr Bettle said.
Powerco’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the six month period ended 31 December 2009 of $113.7 million was 4.5% below the prior corresponding period ($118.0 million). The decrease was primarily due to the impact of the Commerce Commission’s decision in January 2009 to reduce gas prices by approximately 11% and increased costs related to regulatory and corporate activities.
Mr Bettle said Powerco’s regulatory outlook had also improved in the latter part of 2009 with the Commerce Commission making changes to the electricity revenue threshold.
“While Powerco’s electricity revenue threshold had previously been set at CPI-2%, the Commerce Commission changes allow Powerco’s notional electricity revenue to track at CPI, effective 1 April 2010.”
“We see the Commerce Commission’s lifting of the electricity revenue threshold as a sign that New Zealand’s regulatory environment is maturing, reflecting the need for ongoing investment in our assets. ”
“Powerco has been very active in the regulatory area and continues working constructively with the Commerce Commission to develop a new framework for regulated electricity businesses. The aim of which is to ensure an adequate balance between the needs of consumers and the needs of infrastructure providers so that we can continue to develop our networks to underpin future growth in New Zealand’s economy in a sustainable and predictable manner.”
Mr Bettle said Powerco’s stable earnings history, credit strength and positive outlook underpinned recent debt refinancing activities.
“Powerco’s track record of consistent results underpinned the successful refinancing of $420 million of bank debt in the latter part of 2009.”
Mr Bettle said Powerco’s shareholders had also committed to an equity injection of $100 million in April 2010 to repay the Company’s maturing subordinated bonds.
“The equity injection planned for April this year is a further step in the Board’s strategy to improve the credit quality of the business.”
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