Northpower’s 2006 Annual Report announcement

Thursday 13th July 2006

Northpower’s 2006 Annual Report announcement

Northpower is pleased to report on a year in which targets were achieved and considerable resource was committed to the ongoing development of the Northland owned business.

Northpower’s net profit for the financial year ending 31st March 2006 was $11.9m, and in line with an improving trend of increased profits over recent years. The Board also declared a final dividend of $4.2m to be paid to the Northpower Electric Power Trust.

Northpower’s financial success directly benefits the people of Whangarei and Kaipara, with all profits from across the North Island office locations being returned to the region, every year.

Chairman, Warren Moyes, said the profit was achieved in addition to the company providing a $6.1m ‘Line Charge Holiday’ to customers during February this year.

“Since 1993, Northpower has returned $113 million to the community. We are happy knowing that our consumers benefit from lower than average line prices, ever improving network reliability and the ownership of a growing business,” Mr Moyes said.

The Company’s operating revenue increased substantially on last year from $105.1m to $125.9m, with the Contracting division contributing $18.6 million to the increase.

“Northpower Contracting became the largest distribution contractor in New Zealand this year and now accounts for 69.9% of total company revenue. The Contracting division has been at the core of our growth with the expansion into parts of the central North Island proving very successful. We now have contracting capabilities in Whangarei, Dargaville, Maungaturoto, North Shore, East Tamaki, Hamilton, Rotorua, Tauranga and Wellington,” he said.

Northpower’s Network division performed well, growing revenue by 7% and achieving its financial targets. Northpower continued to provide Northland customers and owners with the most value from their electricity network. Capital expenditure coupled with the investment in new technologies has seen the network infrastructure keep pace with load growth.

SAIDI (the measure of the average number of minutes customers are without power in a year, due to faults or planned outages) came in under target and the Company worked hard to ensure the network remained reliable. This result saw network reliability targets in line with the trend of improved performance over the last 13 years.

“Our prices are well below the average industry price for electricity delivery in New Zealand. We remain one of only three lines companies permitted by the Commerce Commission to increase lines charges by the maximum factor of CPI +1%, due to low prices and high productivity,” Mr Moyes said.

During the year Northpower’s staff numbers soared to 653 this year with the recruitment of over 120 employees across all Northpower locations. Northpower’s Trade Coach programme proved effective in coping with the influx and ensured work quality and safety standards remained high.

The Company invested over $1million into safety over the past year and is proud to report that it achieved a workplace safety milestone, completing over one million hours of work with no lost time injuries in the last 12 months. Northpower was also awarded the 2006 Electricity Engineers Association Industry Safety Award earlier this year.

“Northpower is committed to growing a sustainable business based upon sound commercial principles that provide increasing benefits to our Northland owners and network users. We are focused on being cost effective while providing a safe, reliable, hassle-free service.” Mr Moyes said.

ENDS

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