29 Jan 2004
TrustPower announces it has continued to experience satisfactory trading during its third quarter to 31 December 2003.
For the nine months ended 31 December 2003 the Company has produced an unaudited after tax surplus of $52.7 million (2002 $39.2m) achieved from total revenue of $504.5 million (2002 $467.0m).
The result which includes previously reported net non-recurring gains of nearly $4.0 million, from the sale of customers and meters, represents a strong performance for the last quarter on reduced sales revenue and generation output compared to the previous year. Electricity sales volume for the nine months was 4,279 GWh (2002 5,011 GWh) and generation delivered output of 1,366 GWh (2002 1,356 GWh). The generation output for the previous period does not include the Cobb scheme acquired in March 2003.
The Company has also announced a proposed return of about $85 million of capital to shareholders. Shareholder and legal approvals will be sought during the last quarter of this financial year with the intention of making the return during the first quarter of next financial year.
A new ten year unsecured subordinated bond was offered to the market earlier this month. The interest rate on the bond is 8.5 per cent with a maturity of 15 March 2014. The intention is to raise approximately a further $50 million to develop new generation capacity and achieve a more efficient capital structure. This increased use of debt funding reflects the maturing nature of the electricity industry and TrustPower's anticipation of solid earnings and investment opportunities going forward.
Excellent progress is being made on the development of the Tararua Wind Farm Stage II with the first turbines now fully commissioned. This new generation development will add 55 more turbines to the existing 48 and in total produce enough electricity to power about 33,000 average homes. The expected cost of the development will be up to $60 million.
Just prior to Christmas, the South Australia Government granted TrustPower permission to build a 35 MW wind farm at Myponga, 50 kilometres south of Adelaide. In addition, permission is being sought for a 70 MW wind farm on the Barunga Range 170 kilometres north of Adelaide. Consideration will be given to progressing these developments over the next few months.
The recent unplanned outage of the transmission link between the North and South Island caused wholesale prices in the North Island to reach $1.00 /kWh on occasions (normally five cents /kWh). TrustPower's approach to wholesale purchase management recognises risks on a regional basis. Hedges and the Company's North Island generation covered requirements during this period.
The Directors are pleased with the Company's performance for the nine months. Firming wholesale prices are allowing the Company to achieve a more satisfactory return on assets and to increase its efforts to bring on line new generation projects.
© Copyright Infratil