Powerco achieves solid financial results for the year to 31 March 2017
Powerco today reported improved earnings and underlying profitability, but a fall in net profit after tax because of unrealised losses on financial instruments for the 12 months to 31 March 2017.
• Revenue increased 2.1% from $457.2 million to $466.7 million
• Net profit fell 9.2% from $64.4 million to $58.5 million
• EBITDAF rose 0.4% from $253.3 million to $254.2 million
• Adjusted Profit before taxation increased 8.2% from $82.8 million to $89.6 million
Powerco Chairman John Loughlin said the results reflected the Company’s resilience, stability and ongoing focus on performance improvement as it continued to meet the electricity and gas needs of its 442,000 customers.
He said FY17 had been a positive year for the Company:
• Powerco invested $201.8 million in developing and maintaining its electricity and gas networks, an increase of 16.8% (2016: $172.8 million)
• Powerco completed 12,713 projects (2016: 11,441)
• A record 2,075 residential customers were connected to natural gas
During the year Powerco participated in the GRESB Infrastructure Survey. This is a global benchmarking of environmental, social and governance performance across companies in North America, Europe and Australasia. Powerco ranked first in the Energy Transmission and Distribution category and eighth overall out of the 134 companies that participated.
“This demonstrates the high standards we set for our operations,” Mr Loughlin said.
As an electricity utility, Powerco also had an important role in supporting New Zealanders who wished to install photovoltaic panels or purchase electric vehicles (EVs).
“In the past year we continued to support the development of a corridor of EV charging stations within our network in partnership with ChargeNet NZ and various local councils. It is proposed that the number of EV chargers in our network area triple to 21 by FY2020 to allow for a network of EV charging stations throughout the North Island.
“We are joining the future too. Chief Executive Nigel Barbour has announced that by 2019 at least 30% of Powerco’s corporate vehicle fleet will be electric. Another 29 New Zealand CEOs have taken up the challenge, so that across all the companies this initiative will represent 1,450 vehicles and will be a 75% increase in the total number of EVs on New Zealand roads,” Mr Loughlin said.
Earnings before Interest, Taxation, Depreciation, Amortisation and Financial Instruments (EBITDAF)
EBITDAF for the 12 month period ended 31 March 2017 was $254.2 million, an increase of 0.4% (2016: $253.3 million).
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 0.4% and 8.2% year-on-year improvement respectively.
The following table shows Profit before Taxation with Other Gains and Losses for 2017 and 2016 removed. The variance of $6.8 million is attributable to the increase in EBITDAF ($0.9 million), and decreases in disposal of fixed assets ($4.2 million), finance costs ($1.3 million) and depreciation and amortisation ($0.4 million).
Net Profit after Tax (NPAT)
The Company made a net profit after tax of $58.5 million in the 12 months to 31 March 2017 compared with $64.4 million for the 12 months ended 31 March 2016. This reduction in Net Profit after Tax is because of losses on unrealised valuations of financial instruments. The results reflect the company’s resilience, stability and ongoing focus on performance improvement.
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