Chairman Greg Martin said in Auckland this morning that excluding the generation sales (Taranaki Combined Cycle and Cobb), and adjusted on the basis of continuing business, earnings had actually increased 22% from NZ$67.1 million to NZ$81.8 million.
“This very satisfactory performance demonstrates that NGC is achieving the benefits of its strategic repositioning program of the last two years. NGC has focused very strongly on value creation by exiting non-core activities, improving its market positions and enhancing its capital structure.”
The second half of the year brought resolution to a number of historic uncertainties around NGC’s gas supply position, including the allocation of remaining Maui gas reserves and resolution of the Kapuni indemnity contract. In addition, NGC had been successful in securing new entitlements to gas from the Pohokura field and from its own “gas-gathering initiatives”.
“Together, the successful repositioning program and renewed business certainty have strongly positioned NGC for growth.”
Martin said NGC was actively pursuing growth opportunities, particularly in the area of electricity and gas infrastructure. “NGC is seeking to identify mutually beneficial growth opportunities with other energy infrastructure-focused companies. Discussions are ongoing, and as yet inconclusive.”
Company spokesman Keith FitzPatrick told EnergyReview.Net it was public knowledge that NGC and (Auckland-based) Vector and (New Plymouth-headquartered) Powerco had been talking - “but you’re unlikely to get any more details than that today”.
ERN last week reported that potential merger talks between Powerco and NGC could soon be back on the table now the uncertainty regarding Powerco ownership was resolved through Brisbane-based Prime Infrastructure taking a 53.65% stake in the company.
NGC chief executive Phil James said that as well as reinforcing its gas entitlements portfolio, NGC was progressing its gas gathering strategy involving both processing capacity upgrades and the construction of new infrastructure; introducing innovative energy metering technology; strengthening its LPG delivery capabilities in an expanding market and preparing its gas transportation systems for future market requirements.
NGC had also been talking with government and industry regarding an open-access regime to cater for less flexible gas supply arrangements post-Maui, including the opening of the Maui pipeline to third party gas.
Although the gas market was tight, gas transportation volumes were higher and the New Zealand LPG market grew by 8%. LPG produced and sold by NGC through its Kapuni gas treatment plant and On gas retail business increased by 16% to 80,756 tonnes; while wholesale and domestic tolling volumes by NGC’s 60.25%-owned subsidiary Liquigas increased by 15% to 95,325 tonnes.
Total natural gas sales declined by approximately 19% to 58.9 PJ, due to significant reductions in sales for electricity generation - the result of the Maui redetermination - and for petrochemical production, due primarily to the ending of contracts to supply Kapuni gas to Methanex. Maui gas supply constraints also dampened sales by NGC to industrial customers.
Last February’s devastating North Island floods cost NGC over NZ$2.6 million in unexpected costs to repair its flood-damaged gas transmission pipeline over the Pohangina River in the Manawatu.
Martin said the final, fully imputed dividend of 10.5c per share would be paid on September 13, bringing the total dividend payment for the year to 19c per share.
