Unsettled weather drives cut in Trustpower earnings guide

Trustpower has cut its earnings guidance for the March 2022 year. Photo / Bay of Plenty Times.

Trustpower has cut its earnings guidance for the March year due to unfavourable weather.

Tauranga-based Trustpower is in the throes of selling its retail business to Mercury NZ for $441m.

Trustpower said it had cut its operating EBITDAF guidance range to $205m to $220m - excluding the costs of selling the retail business of $9.0m and assuming the retail business is held for the whole year, down from a previous guidance of $210m - $225m.

The company - soon to be renamed Manawa Energy - said recent market, hydrological, and other factors had put some downward pressure on earnings over the second half.

There had been unsettled weather, including a very dry January period, and there had been expected delays in work on its Waipori scheme outage.

"This has resulted in a delay in return-to-service of about four weeks but does not materially impact the capital cost of the outage," Trustpower said.

"A predominance of low wind volumes and hydro inflows across the start of the calendar year have coincided with high prices," it said.

Trustpower said the operational activities required to separate the retail business from retained operations were on track, in preparation for settlement of the transaction with Mercury, which is now expected to be in the second quarter of this year.

Key conditions of the sale - Commerce Commission approval and Trustpower shareholder approval - have been met.

Shares in Trustpower last traded at $7.01, having dropped by 16 per cent over the last 12 months.