King Country Energy announces interim result

5 November 2012

KCE announces interim result

KCE today announced its interim result for the six months ended 30 September 2012.

Consolidated earnings before tax and derivatives were $5.3 million for the period, a 20% increase on the prior period in the last financial year.

Reported earnings before interest, tax, depreciation, amortisation and fair value movements on financial instruments (EBITDAF) was $8.2 million for the period, a 44% increase on the prior period. The company also reported an ordinary net profit after tax (NPAT) attributable to shareholders of $1.3 million.

Net operating cash flow recorded for the six months ended 30 September 2011 was $5.3 million.

KCE Chairman, Brian Gurney, said the business continued to perform solidly through a period of variable hydrology and wholesale electricity prices.

“This year we have seen generation output slightly below expectations due to variable inflows and volatility in wholesale electricity spot prices, which occurred throughout the winter.

“We continue to focus on optimising storage within our hydro portfolio and to take advantage of peak spot price opportunities,” continued Mr Gurney.

KCE’s retail sales volume for the first six months of the year was 122 GWh, a 4% increase on the prior period. This increase was mainly due to a cooler winter than last year, which resulted in increased customer demand.

KCE Chief Executive, Rob Foster, explained that KCE continues to focus on customer retention and supporting community initiatives in the region.

“Due to influences such as the Electricity Authority’s “What’s My Number?” campaign, we are seeing a heightened customer awareness of the competitive nature of our industry. To counter that, we are taking a personal approach to winning back customers who have switched in recent months. Plus we are targeting new commercial customers in select markets throughout the wider region.

“Additionally, as a major player in the King Country region, we believe it is important to maintain our corporate social responsibility by supporting key community initiatives that benefit the health and wellbeing of children and families. In 2012 we entered into a sponsorship arrangement with King Country Rugby Union, which broadened our sponsorship base and added to our support of Netball Waikato, Books in Homes and the Waitomo, Turangi and Otorohanga Sports Awards,” he said.

KCE has declared an unimputed, interim cash dividend of 14 cents per share, a 2 cent increase on the prior period. The dividend will have a record date of 3 December 2012 and a payment date of 7 December 2012.

The company also announced for the first time its intention to provide full year earnings guidance and expects that the full year EBITDAF will be in the range of $14 million to $15 million.

Mr Gurney said, “It is pleasing to announce the dividend amount, which is the first increase for a number of years. This positive result reflects the impact of our recent Mangahao hydro scheme acquisition, as well as our review of the dividend policy to pay a target of 80% of free cash flow.

“The Board is enthusiastic about the second half of the year and has confidence we can deliver on our earnings guidance.”

ENDS

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