Tauranga-based power generator TrustPower posted a 95 per cent drop in full-year after-tax profit to $1.3 million because of the dry winter.
TrustPower's shares have gained 10 per cent in the last 10 days on the back of a positive broker's report that the company was set to reap the benefits of rising electricity prices.
Trustpower said it would pay an unimputed 10 cents per share dividend to shareholders on August 16.
A large drop in TrustPower's own generation and an increase in supply plus the acquisition of new customers meant the company had to buy electricity during last winter at prices "far in excess of the selling price" to make up a shortfall.
Generation output for the first half of the year was down 17 per cent, and down 13 per cent overall on 10-year averages.
At September 30 2001, TrustPower reported an unaudited half year after-tax loss of $12.2 million reflecting the effects of the adverse trading. At the time the directors stated the adverse trading was isolated to a specific period and they had an expectation of a return to normal profitability.
TrustPower's result before tax and unusual items was a $5.18 million deficit, from its previous $33.70 million surplus.
"The combination of an increased customer base and higher prices, particularly for larger industrial customers, resulted in sales revenue for the year of $596.8 million up 19 per cent.
"Significant additional market share has been established and maintained in Wellington, Christchurch, Timaru, and Dunedin," the company said.
The $1.3 million profit included the proceeds of $6.7 million on the sale of abouty 20,000 customers in the Northland, Auckland and Thames Valley areas to Mighty River Power.
The result also included a $640,000 loss on its joint venture metering company with Cadmus Technology, POS Power Ltd.
TrustPower completed a major review of its risk management strategy during the year to protect it from extreme events such as last winter's drought.
ABN Amro said in a report this month that TrustPower's geographical spread of generators protected it to some degree from drought conditions. It has hydro stations in the east and west of both islands and a wind farm at Tararua.
While the larger generators must produce generation on demand, TrustPower dispatches most of its generation specifically to meet peak demand.
ABN Amro also said TrustPower has heavily hedged to avoid the problems it faced last winter.
TrustPower said today it was also considering the issue of between $50 million and $100 million in retail capital bonds.
- NZPA
Trustpower year profit down 95 per cent after poor winter
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