26 Oct 2006
TrustPower's unaudited after tax surplus for the six months to 30 September 2006 was $57.5 million, compared with $50.7 million for the same period last year. Earnings before Interest, Tax, Depreciation and Amortisation ("EBITDA") were $114.2 million versus $107.3 million for the prior period.
During July and August the trading environment saw a continuance of conditions experienced in the first quarter of the 2007 financial year. Lake storage levels and inflows were below average leading to higher wholesale electricity prices. However, good inflows into the South Island lakes during September have seen storage levels move closer to long term average and consequently wholesale electricity prices reduced significantly over the course of the month.
TrustPower's own generation assets produced 1,082 GWh during the first half versus 999 GWh in the prior period. TrustPower's hydro generation storage catchments remain at satisfactory levels which together with purchase contracts the Company has in place, leaves the Company adequately positioned to meet customer demand over the remainder of this financial year.
Customer numbers have remained steady at around 220,000. Total electricity sold to customers in the first half of the 2007 financial year totalled 2,414 GWh compared with 2,453 GWh sold in the prior period.
The Company's balance sheet remains strong. Debt to debt plus equity was 28 per cent as at 30 September 2006 compared with 27 per cent at the same time last year.
Progress on the 93 MW Tararua Stage III expansion remains on schedule and on budget. Civil work and turbine foundations are nearing completion and the first shipment of towers and turbines is expected to arrive at site shortly. Target final commissioning date of the thirty one 3 MW wind turbines, is July 2007.
The 5 MW Deep Stream hydro enhancement project is now underway and remains on schedule for completion in October 2007.
The 72 MW Wairau hydro generation project resource consent hearing process in Marlborough continues to progress slowly, with a ruling expected towards the end of the year.
The resource consent application for the up to 46 MW Arnold hydro generation development on the West Coast is expected to be notified next month with submissions due by the end of the year. A resource consent hearing is expected to be scheduled for April / May 2007.
At the end of September TrustPower announced that it would withdraw its resource consent application for a 300 MW wind farm near Lake Mahinerangi in Otago and would submit a revised resource consent application for a 200 MW wind farm. TrustPower had originally applied to the Dunedin City, Clutha District and Otago Regional Councils for Resource Consents to build the proposed 300 MW wind farm on a mix of private and Dunedin City Council owned land. After listening to concerns about environmental impact in relation to tussock and water supplies involving the land owned by Dunedin City, TrustPower has now decided to apply only for consents related to developing the wind farm on private land, for which it already has signed landowner agreements. As a result of the changes, TrustPower will withdraw its Resource Consent application to the Dunedin City Council, and submit revised Resource Consent applications for a 200 MW wind farm to the Clutha District and Otago Regional Councils. The revised applications, along with assessments of environmental effect, are expected to be lodged by the end of November.
The Company continues to progress landowner arrangements and feasibility studies on a number of other wind and hydro generation projects in New Zealand.
Taking the trading result into account, the Directors have declared an interim dividend of 13.0 cents per share (11.0 cents per share last year). The dividend will be payable on 12 January 2007 to all Shareholders on the register at 5 January 2007. This dividend will be fully imputed and a supplementary dividend will be paid to non-resident shareholders.
The first half result is pleasing. At this stage the Directors are confident that a good financial outcome for the full year is achievable.
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