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Powerco 2015 Annual Results

Friday, May 29, 2015

Powerco achieves solid financial results for the year to 31 March 2015.

Powerco lifts annual earnings and operational performance; net profit after taxation falls on the back of lower unrealised gains on financial instruments.

HIGHLIGHTS:

• Revenue rises 7.3% from $415.4 million to $445.9 million
• Net profit falls 19.7% from $91.8 million to $73.7 million
• EBITDAF rises 9.7% from $227.1 million to $249.2 million
• Adjusted Profit before taxation rises 16.9% from $69.2 million to $80.9 million

Powerco, New Zealand’s second largest electricity and gas distribution utility with around 430,000 consumers connected to its networks, today reported for the 12 months to 31 March 2015 improved earnings and underlying profitability but a fall in net profit after tax on the back of lower unrealised gains on financial instruments and an increase in taxation expense.

Powerco Chairman John Loughlin said:

“FY15 was another year of reliable performance where Powerco continued to focus on engaging with its 430,000 consumers and ensuring its gas and electricity networks provide a reliable supply for the communities it serves.”

Mr Loughlin went on to note that for Powerco’s customers, “FY15 was an extremely positive year with:

• $170.9 million invested in maintaining, renewing and developing Powerco’s electricity and gas networks, an increase of 7.3% (2014: $159.2 million);
• A record number of 8,532 scheduled maintenance, renewal and development projects being completed (2014: 8,390);
• Powerco continuing to look for efficiency gains to share with its customers.”

Turning to Powerco’s 2015 financial results announcement:

Revenue:

Total revenue was $445.9 million, a 7.3% increase on 2014’s $415.4 million. Strong residential connection and commercial growth, higher pass-through costs (primarily transmission) and more normal weather patterns have all contributed to this increase. Price increases directly attributable to our electricity and gas networks accounted for $6.7 million (1.6%).  The increase in revenue also included pass-through costs $10.2 million (2.5%), volume and ICP growth $7.8 million (1.9%) and customer contributions to capital work $6.1 million (1.5%).

Earnings before Interest, Taxation, Depreciation, Amortisation and Financial Instruments (EBITDAF):

EBITDAF for the 12 month period ended 31 March 2015 was $249.2 million, an increase of 9.7% (2014: $227.1 million). The improvement due not only to the revenue increases detailed above but the company being able to hold expenses to the levels achieved in 2014.

Underlying Performance of the Company:

Powerco is of the opinion that both EBITDAF and Profit before Taxation adjusted to remove the impact of unrealised gains and losses are better measures of the business performance of the company showing a 16.9% and 1.6% year-on-year improvement respectively.

Following is a table showing Profit before Taxation with Other Gains and Losses for 2015 and 2014 removed:

 

2015

2014

Variance

Variance

 

$m

$m

$m

%

Profit before Taxation

93.7

88.3

5.4

-

Remove other (gains) losses

(12.8)

           (19.1)

  6.3

-

Underlying Profitability

80.9

69.2

              11.7

              16.9%

Net Profit After Tax (NPAT):

The company made a net profit after tax of $73.7 million in the 12 months to 31 March 2015 compared to $91.8 million for the 12 months ended 31 March 2014. This reduction in Net Profit after Tax is due to much smaller gains on unrealised valuations of financial instruments and an increase in taxation expense. The results reflect the company’s resilience, stability and on-going focus on performance improvement. The company is continuing its focus on being a reliable partner delivering New Zealand’s energy future.

Click here for the financial results.

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