Bay of Plenty-based Trustpower continues to face flat power demand and earnings in New Zealand, but is pleased with the progress of its moves into new markets Auckland, Hamilton and Wellington, and its Australian strategy, says chief executive Vince Hawksworth.
"We're relatively happy with how our electricity, gas and telco play is working out," said Mr Hawkworth, who was commenting following the company's annual general meeting late last week.
The company undertook a major rebranding exercise during the year to provide a fresh look to support the growth of its multi-utility product and service offering.
Mr Hawksworth said that 54 per cent of its new customers were taking at least two products. "But we need to work hard in the new markets we've entered."
The company's major challenge - in common with other energy generator/retailers - continues to be relatively flat demand for power and over-capacity. Quarterly power consumption statistics for the June quarter reflected the unseasonably hot first half of the year, said Mr Hawksworth.
"July has been cooler and that will tend to lend itself to higher consumer demand," he said. "So we're expecting higher residential demand, but still relatively flat wholesale pricing."
In the wholesale market, prices are under pressure because of ample generation supply.
Trustpower chairman Dr Bruce Harker told the annual general meeting New Zealand generation production was 9 per cent below the long run average.
"All electricity retailers regardless of size, or whether they own generation or not, can purchase contracts and make a competitive retail price offer to customers," he said.
"And as importantly, anyone can be an electricity retailer."
However, Dr Harker said that Trustpower had continued to make good progress on its growth agenda over the 2014 financial year.
Total energy accounts increased to 238,000 at March 2014 (including 14,000 gas accounts) from 206,000 as at March 31, 2013 (nil gas accounts).
"While the retail market remained highly competitive ... Trustpower continued to experience lower levels of customer churn than the market overall," said Dr Harker.
In Australia, the construction of the 270MW Snowtown Stage 2 wind farm in South Australia is close to completion and Trustpower has completed the $72 million purchase of the assets of Green State Power with an aggregate capacity of 14.1 MW. The company has four other development approval applications in progress aimed at meeting the Australian Renewable Energy Target.
"Despite, or perhaps almost more because of, the scrapping of the carbon tax in Australia, the Renewable Energy Target is in our view likely to be supported as the main mechanism to do the heavy lifting in reducing the carbon intensity of Australia's electricity generation sector," said Dr Harker.
Trustpower Results (Financial Year Ending 31 March)
Consolidated profit after tax: $115.1 million (down 7 per cent on 2012-13).
Earnings: $277.4 million (before interest, tax, depreciation, amortisation, fair value movements of financial instruments and asset impairments) (down 6 per cent on 2012-13).