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Oz operations help lift Trustpower profit

NZ Newswire logoNZ Newswire 14/05/2017 Paul McBeth

Trustpower has lifted annual profit 37 per cent as the electricity generator-retailer's earnings were bolstered by strong hydro production and favourable prices in Australia, and a full-year contribution from King Country Energy.

Net profit rose to $94 million in the 12 months ended March 31 from $68.5m a year earlier, the Tauranga-based company said on Monday.

Trustpower has carved out its Australian windfarms into separately listed Tilt Renewables, and the year-earlier figures have been adjusted to reflect the change.

Earnings before interest, tax, depreciation, amortisation and changes in the fair value of financial instruments rose 5 per cent to $218m, including a $17m demerger cost.

That met Trustpower's guidance for ebitdaf to be at the top of the forecast range of $215m-to-$235m, excluding the demerger cost. It has the same forecast range for 2018 earnings.

"The year was characterised by strong generation volumes, particularly in Australia where the increased volume was also associated with very high spot prices," chief executive Vince Hawksworth said.

"While wholesale prices in New Zealand remained well below long-run average, the increased volumes nonetheless drove a very positive uplift in profitability."

Trustpower's Australian hydro stations boosted production 41 per cent to 359 gigawatt hours while spot prices were up 81 per cent, helping drive a 154 per cent increase in ebitdaf from that unit to $32m. New Zealand production climbed 27 per cent to 2017 GWh, although a 13 per cent fall in spot prices meant ebitdaf only rose 13 per cent to $169m.

The retail division posted a 20 per cent drop in ebitdaf to $45m as margins were squeezed by increased competition.

The board declared a final dividend of 17 cents per share, payable on June 9, taking the total return for the year to 33 cents.

The shares last traded at $5.02 and have increased 5.98 per cent so far this year.

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