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Trustpower reports six month profit of $65 million

Trustpower’s half year result came in at $64.9 million, down on the equivalent period last year, but up on 2016. The company has revised its guidance for the current financial year to be in the range of $215- $235 million on an EBITDAF basis. The guidance assumes average hydrology and current forward wholesale electricity prices.

Trustpower chief executive Vince Hawksworth told Bay of Plenty Business News that the figures reflected the impact of selling out of its Australian hydro interests, effectively from the beginning of the current financial year.

“Last year we had an incredibly good run of fortune with respect to the hydro inflows,” said Hawksworth.

“When you back out the exceptionally high hydro inflows last year and high prices, this year, hydro inflows are still higher than the long term average,” he said.

For the half year, generation volumes were up 70 GWh, six per cent higher than long run averages but 12 percent below the highly favourable levels of the previous half year period.

Trustpower six months results to September 2018

• Operating earnings (EBITDAF) of $129.6 million, down 15%
• Underlying earnings after tax of $64.7 million, down $17.6 million or 21%
• Fully imputed interim dividend of 17 cents and unimputed special dividend of 25 cents payable on
7 December 2018

Wholesale prices also trended closer to long run averages, resulting in Trustpower’s generation performance being lower than HY2018, but higher than HY2017.

Hawksworth said growth in the number of electricity connections had been relatively flat, the electricity end of the market had been incredibly competitive, but growth of the bundled customers of telco connections had been good.

Telco connections up

Trustpower’s telco customer numbers reached 91,000, up 11,000 or 14 percent on the same time last year.

Total utility accounts reached 399,000, up 2000 from 31 March 2018, while customers with two or more products rose two percent to 102,000.

Hawksworth noted the majority of Trustpower electricity customers were outside the Bay of Plenty.

Overall retail revenues of $487.4 million were in line with the same period last year.

However, retail earnings were slightly down due to investment in capability.

Chair Paul Ridley-Smith said the company’s results reflected a strong retail business, sound management of its 27 generation schemes across New Zealand and its commitment to delivering long-term sustainable value for investors.

Operational highlights included the refurbishment of two generators at the Coleridge Scheme, and the successful migration of 13,000 new customers with 17,000 electricity connections over to Trustpower following the acquisition of the King Country Energy Limited retail business.

Trustpower now has New Zealand’s fourth- largest fixed-line internet service provider customer base.

Netflix has rated Trustpower the best performing network in New Zealand for the last 10 months in a row.

Hawksworth said the proof that Trustpower was delivering a high-quality value add service was the increase in telco connections of five percent over the last six months.

“Our loyal and strong customer base is taking more products from our offering,” he said.

About Trustpower

Tauranga-headquartered Trustpower is New Zealand’s fifth-largest electricity generator and fourth largest energy retailer by market share, with approximately 12 percent electricity retail market share.

It operates a multi-product retail business, including electricity, gas and telecommunications products with approximately 270,000 electricity connections, 38,000 gas connections and 91,000 telecommunications connections.

“More existing electricity customers are taking up our broadband service and about 80 per cent of new customers are now purchasing more than one product.

“Trustpower’s bundled proposition has allowed us to form a new market segment that provides more value to customers and is less competitive than the separate electricity and telecommunications markets.

“Our multi-product retail business strategy bundling life’s essential utilities including power, gas, internet and phone, continues to succeed and we intend to build on this.”

Hawksworth also said the company would be looking for opportunities such as its consolidation of King Country Energy.

The expected increase in the use of electricity by the transport and other sectors could lead to further investment opportunities in generating plant, he said.

“We will always be looking to those small incremental projects that stack up and that could be across a number of technologies.”

Trustpower has also recently announced that it has secured the ability to provide wireless broadband and mobile services to their customers after entering into an agreement with Spark.

GM markets Craig Neustroski said Trustpower had been seeking access to mobile services for some time, and was delighted to have secured a wholesale supply arrangement with Spark.

“Mobile is increasingly important to our customers, and the ability to offer it as part of our household services bundle is exciting.”

David Porter
David Porter
Editor, Bay of Plenty Business News. Email: editor@bopbusinessnews.co.nz

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