Powerco 2016 Annual Results
Powerco achieves solid financial results for the year to 31 March 2016.
Powerco today reported improved earnings and underlying profitability, but a fall in net profit after tax on the back of lower unrealised gains on financial instruments for the 12 months to 31 March 2016.
- Revenue increased 2.5% from $445.9 million to $457.1 million
- Net profit fell 12.5% from $73.7 million to $64.4 million
- EBITDAF rose 1.6% from $249.2 million to $253.3 million
- Adjusted profit before taxation increased 2.3% from $80.9 million to $82.8 million
Powerco Chairman John Loughlin said the Company had another year of reliable performance and continued to focus on meeting the energy needs of its 436,000 customers.
He said FY16 had been a positive year:
- Powerco won “Environmental Initiative of the Year” at the Deloitte Energy Excellence Awards, and won the Electricity Engineers’ Association Public Safety Award
- Powerco invested $182.6 million in developing and maintaining its electricity and gas networks, an increase of 6.9% (2015: $170.9 million)
- Powerco completed a record number of 11,441 projects (2015: 8,532)
“We are planning for and taking the opportunities new technologies present to transform our networks and enable our customers to access the benefits of smart technologies such as electric vehicles, home energy management systems and rooftop solar. In collaboration with ChargeNet, we installed our first public electric vehicle fast charging stations early in 2016, including the first on a state highway in New Zealand.”
Earnings before Interest, Taxation, Depreciation, Amortisation and Financial Instruments (EBITDAF)
EBITDAF for the 12 month period ended 31 March 2016 was $253.3 million, an increase of 1.6% (2015: $249.2 million).
This positive result was achieved despite a challenging regulatory reset for Powerco’s electricity business where the weighted average cost of capital (WACC) reduced by 18%. The positive revenue performance was mainly driven by strong customer growth and higher electricity volumes ($6.9m).
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 performance of the company showing a 2.3% and 1.6% year-on-year improvement respectively.
The following table shows Profit before Taxation with other gains and losses for 2016 and 2015 removed. The variance of $1.9 million is attributable to the increase in EBITDAF ($4.0 million), offset by increases in both depreciation and amortisation ($0.4 million), disposal of fixed assets ($0.4 million) and finance costs ($1.3 million).
Net Profit After Tax (NPAT)
The Company made a net profit after tax of $64.4 million in the 12 months to 31 March 2016 compared to $73.7 million for the 12 months ended 31 March 2015. This reduction in Net Profit after Tax is due to much smaller
gains on unrealised valuations of financial instruments. The results reflect the company’s resilience, stability and on-going focus on performance improvement.
2016 2015 VARIANCE VARIANCE
$ MILLION $ MILLION $ MILLION %
Profit Before Taxation 84.6 93.7 (9.1)
Remove other (gains)/losses (1.8) (12.8) 11.0
Underlying profitability 82.8 80.9 1.9 2.3%
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