Trustpower posts 16pc gain in first-half profit

Wind turbines at one of Trust Power's wind farms near Palmerston North Photo/Mark Mitchell

Trustpower, the energy company controlled by Infratil, posted a 16 percent gain in first-half profit after lifting retail electricity sales and said it is seeking more wind farm opportunities in Australia.

Profit rose to $89.2 million, or 28.5 cents a share, in the six months ended Sept. 30, from $77.2 million, or 24.6 cents, a year earlier, the Tauranga-based utility said in a statement. Sales rose 21 percent to $504.9 million.

Trustpower has been increasing leverage as it invests in the Australian market, where it is anticipating the federal government's repeal of its carbon tax will boost demand for renewable energy, which is likely to be favoured under that nation's Renewable Energy Targets scheme. Its 270 megawatt Snowtown Stage 2 wind farm was officially opened yesterday, adding to the hydro power stations and wind farm assets of Green State Power it acquired from the New South Wales state government this year for A$72.2 million.

The Snowtown Wind Farm in South Australia produced 578 GWh of electricity in the first half, up from 193 GWh a year earlier, helped by the contribution from Snowtown Stage 2 starting in July. Trustpower said it has applications for almost 1,300 MW over four wind projects located in Victoria, New South Wales and South Australia are currently awaiting regulatory approvals.

"The outcome of the Australian government's review of the renewal energy target remains uncertain but there appears to be growing support for the view that a bipartisan agreement may be successfully concluded which should provide greater investor certainty for future investments in renewable energy," chairman Bruce Harker said in the statement.

New Zealand electricity production of 1,225 GWh was unchanged from a year earlier, as North Island wind production fell 9 percent and while South Island hydro production rose 8 percent.

The volume of retail electricity sold rose 12 percent to 2,051 GWh in the first half. It had 255,000 accounts in the first half, including 21,000 gas accounts, the company said. Telecommunications customers rose to 35,000.

"While the retail energy market remained highly competitive throughout the period, Trustpower continued to experience lower levels of customer churn than the market overall," it said.

Net profit included fair value losses on financial instruments of $4.4 million, compared to a year-earlier gain of $10 million. Earnings before interest, tax, depreciation, amortisation, fair value movements of financial instruments and asset impairments rose 13 percent to $173 million.

Gearing rose to 45 percent at Sept. 30 from 43 percent at March 31, as the company increased borrowing to complete Snowtown Stage 2 and acquire the Green State Power assets. The company said is plans to refinance $75 million of bonds maturing in December with a similar bond offer.

Trustpower will pay a first-half dividend of 20 cents a share on Dec. 12, with a record date of Nov. 28.

The shares rose 0.3 percent to $7.52 and have gained 15 per cent this year.

See TrustPower's financial statements here: