Transpower pylons at Mangatawhiri. Photo / Brett Phibbs
Transpower, the state-owned electricity grid company, will pay a $205 million final dividend after opting to use more debt to fund the upgrade of its network and posting an 8 per cent increase in annual profit.
Net profit rose to $84.8 million in the 12 months ended June 30, from
$78.5 million a year earlier, the Wellington-based company said. The year-earlier result included a $19.7 million impairment on its North Island Grid Upgrade land portfolio. Operating revenue rose to $794.2 million from $737.2 million.
The final dividend brings Transpower's payments to the Crown to $306 million, or more than three times net profit, after the SOE reviewed its capital structure and resumed payments to the government following a seven-year hiatus. Moody's Investors Service cut Transpower's debt rating to A1 from Aa3 last year, "given the company's willingness to weaken credit metrics in favor of shareholder distributions."
Transpower is planning to spend $3 billion over the next five years to upgrade the national grid, which is groaning under increased demand and capacity bottlenecks. Total liabilities rose 32 per cent to $3.4 billion in the latest year, as debt due in more than 12 months jumped 83 per cent to $2.4 billion.
Chairman Mark Verbiest said the level of dividend reflects the capital restructure and next year's payment will be lower.
