The company now expects that by entering into tax consolidation with effect from 1 July 2002, a 'one off' income tax benefit of around $21 million will be booked into the current year's results.

Envestra has previously advised the market that earnings for 2002/03 were expected to be an improvement on the after tax loss of $12.3 million for the year ended 30 June 2002.

The precise impact on the 2002/03 tax expense under the Tax Consolidation regime is yet to be determined. However the company expects to report a Profit after Tax in excess of $10 million for the year to June 2003.

The change in profit follows the implementation of new guidelines which recognise the benefit to Envestra of resetting the tax values of some of its assets.

The "Tax Consolidation" legislation is a series of four Acts of Parliament passed earlier this year by the Commonwealth Government, and companies are now able to elect to enter the "Consolidation regime" with effect from 1 July 2002.

"The effect of participating in the new regime will vary according to a company's particular circumstances. However, as reported previously, the transitional arrangements within the new legislation allow Envestra to increase the tax values of certain of its assets," said Envestra's managing director, Ian Little.