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Trustpower raises earnings guidance again

NZ Newswire logoNZ Newswire 12/10/2017 Paul McBeth

file. © Justin Paget/Getty Images file. Trustpower has raised annual earnings guidance for a third time this financial year, with strong wholesale electricity prices on both sides of the Tasman boosting the outlook.

The Tauranga-based company forecasts earnings before interest, tax, depreciation, amortisation and fair value adjustments to be between $255 million and $270m in the year ending March 31, 2018, up from a previous forecast of $225m to $245m.

Trustpower's New Zealand generation climbed 16 per cent to 729 gigawatt hours in the September quarter from a year earlier, largely due to its North Island hydro-plants.

The average spot price generated more than doubled to $98 per megawatt hours.

"The increased forecast has been driven by the favourable trading conditions in the year as well as a recalibration of the expected Australian generation determined as part of the current strategic review," chief financial officer Kevin Palmer said.

"Trustpower now expects its Australian ebitdaf to be in line with FY17."

The electricity generator-retailer has already upgraded earnings guidance twice this year, citing favourable trading conditions and hired Forsyth Barr to look at spinning out its Australian hydro generation assets.

Listed infrastructure investor Infratil holds a controlling stake in Trustpower and Friday's increased earnings guidance feeds into the shareholder's own accounts.

Infratil now sees ebitdaf of between $485m and $525m in the year ending March 31, 2018, up from a previous forecast of $460m to $500m.

Trustpower shares last traded at $5.67 and have gained 20 per cent so far this year, while Infratil was at $3.11, up 13 per cent this year.

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