Transpower Increases Profit, Pays No Dividend

Transpower releases 2009/10 annual results

Transpower New Zealand today released its annual financial report for the 2009/2010 year.

The surplus after tax and before net changes in fair value gain/ (loss) for the year ended 30 June 2010 was $142.4 million, an increase of $6.6 million from 2008/2009.

The principal reasons for the rise are an increase in transmission revenue, recognition of the remaining cross border lease income in advance and a reduction in the cost of HVDC reserve charges.

These gains were offset by an increased impairment in respect of the North Island Grid Upgrade property purchased by Transpower.

The increase in transmission revenue this year reflects the commissioning of new investments in the grid, such as the Drury switching station and the second Otahuhu substation; the refurbishment and replacement of existing assets, and enhancements to the System Operator and telecommunications capabilities.

Chairman Wayne Brown said that the focus over the last year has been on delivering the projects which are part of the major $3.8 billion investment programme to secure the National Grid.

“Our three major projects - the North Island Grid Upgrade Project, the HVDC Pole 3 project and the North Auckland and Northland project – are now in construction at a cost of nearly $2 billion. Over the last year, we also secured approvals for six new projects estimated to cost over $350 million, in addition to the $203 million we spent on replacement and refurbishment.”

“In addition to new transmission upgrades, we also have a number of technology initiatives underway to make the grid operate more intelligently, and to enable us to get more capacity from existing assets. Demand-side initiatives, where businesses can voluntarily reduce their electricity usage at certain times, are an important component of this, and will help us defer investment in new assets as well as providing headroom to meet demand during construction of grid upgrades.”

“To support our major investment programme, we are also focused on building our workforce capability to ensure we have enough skilled and qualified engineers to build our planned projects. As part of this drive, we have substantially increased our graduate development programme. Eighteen graduates were recruited this year, bringing the total number of graduate engineers employed to 39,” he said.

Given the need to fund the extensive capital works programme, no dividend will be paid to the Government this year. However, dividend payments are expected to recommence from 2012/13, after the peak of the investment cycle has passed.

“The last 12 months has seen Transpower embark on its major build programme and I am confident that Transpower is well placed to meet the challenges that a major construction programme inevitably brings,” Wayne Brown said.

ends

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