Powerco posts profit of $33m

By CHRIS DANIELS energy writer

Powerlines and gas company Powerco has announced a profit of $33 million for the past year.

Powerco, the electricity lines company for Taranaki, the Central North Island, Manawatu and the Wairarapa, is New Zealand's third-largest power and gas utility, with 155,000 electricity and 48,000 gas connections.

Its previous seven-month profit, following Powerco's birth, equated to a pro forma 12-month profit of $29.9 million.

Chairman Barry Upson said Powerco had several growth opportunities, and directors were aware of other lines companies "reviewing their shareholding and operational position".

Powerco is 47 per cent owned by the New Plymouth District Council. A further 20 per cent is owned by community trusts.

Shareholders will be paid a final dividend of 7.2 cents a share for the year to March 31.

This takes their full-year dividend payout to 13.1 cents a share, fully imputed.

Despite the good profit, Powerco's return on investment of 4 per cent is well below the national average of 9 per cent, as calculated by accountants PricewaterhouseCoopers in a recent survey of all New Zealand lines companies.

Powerco used yesterday's profit announcement as an opportunity to again publicise its opinion on potential Government regulation of electricity lines monopolies.

It has argued for any regulation to be applied across the whole industry, making power retailers and generators also subject to rules covering the lines companies

"If there was one earnest desire of the board, it would be to see retailers become more transparent in the operation of their businesses," said Upson.

"Retailers should have to conform to a set of information disclosure requirements, similar to the one applying to lines companies, to share information with consumers."

The Commerce Commission has recently completed an audit of all the lines companies, to see if they are correctly valuing their assets.

The audit came after criticism that the companies were over-valuing their assets to justify over-charging customers.

Powerco came out of the process well, the approved value of its assets increasing by slightly under 1 per cent.

Last week, Powerco announced a capital bond issue of up to $100 million.

Money raised will be used to refinance gas networks in the Hutt Valley and Porirua basin, which it bought in July last year.

Upson said bonds would be offered to investors in early May, subject to shareholder approval.