At the annual meeting held on 27 July 2004, Barry Upson, the Company Chairman, informed the market based on certain assumptions, that the Company would not become a cash taxpayer until the 2010 financial year. This is approximately 2-3 years earlier than original forecasts due to the announcement made by the major shareholder about their intention to test the market for the sale of their shares.

This timing was based on the Company earning the 2004 level of EBITDA (earnings before interest, taxation, depreciation and amortisation) growing at the rate of 1.5 into the future.

Mr Upson advised that when the Company does pay cash tax its dividend could reduce but tax imputation credits would then be available, leaving tax-paying shareholders in a cash neutral position.

The October 2002 Prospectus and Investment Statement issued by the Company, contained a statement that forecast dividends will increase by approximately CPI post the 16 cent per share dividend forecast and paid for the 2004 year. Mr Upson advised that the Board has not changed from this position.

Powerco is New Zealand’s second largest electricity and largest gas distribution utility with around 400,000 consumers connected to its networks. Powerco’s electricity networks are in Tauranga, Thames, Coromandel, Eastern and Southern Waikato, Taranaki, Wanganui, Rangitikei, Manawatu and the Wairarapa. Its gas pipeline networks are in Taranaki, Hutt Valley, Porirua, Wellington, Horowhenua, Manawatu and the Hawke’s Bay.