At its annual meeting in Wellington last Friday, Powerco outlined its 2002-03 financial results and indulged in a little crystal-ball gazing for the immediate future.
Powerco, New Zealand's largest gas reticulator and second largest electricity lines company, announced an above forecast net profit of $NZ38.1 million for the March 2003 year and an annual dividend of 14 cents per share. It also announced a $NZ13.1 million after-tax profit for the first 2003-04 quarter, which was a little below budget because of the recently-ended national power savings campaign and relatively warm weather.
Company chief executive Steven Boulton said Powerco was still on track for a $NZ53.6 million profit and a 16-cent dividend for the March 2004 year.
Other highlights of the past year included almost doubling in size through the acquisition of electricity and gas network assets from UnitedNetworks Limited (UNL) for $NZ804 million; raising of $NZ150 million of new equity through a rights issue with support from major investors; and a capital bond issue of $NZ100 million.
Success across the Tasman included being awarded an $A34 million contract by the Tasmanian State government to build, own and operate a gas distribution network in Tasmania,
Boulton said gas distribution in Tasmania was a significant opportunity for profitable growth for Powerco, building a gas network over the coming 18 months to initially serve around 23 large industrial and commercial users.
Powerco also expected sales growth by winning other customers located in the vicinity of the gas pipelines' routes. The state government had recognised the key nature of this work with an $A8 million contribution to assist Powerco set up and resource the new operation. Powerco was starting negotiations on a second-stage development of the network to service up to 100,000 residential users. "We foresee sustainable returns from this business, along with growth in the value of our network assets over time," said Boulton.
Powerco Australian Holdings was established as an electricity lines network contractor in Queensland last year and had since acquired three other contracting businesses that had been integrated into this subsidiary company, with a strong presence in fast-growing regions of south eastern Queensland.
Powerco Australia also did specialist AS3000 contract work on large industrial sites and Boulton said its presence in a growing market offered further business opportunities.
