KCE annual result announcement

Monday, 17 June 2013

KCE annual result announcement

Electricity generator and retailer, King Country Energy Limited (KCE), has announced its fully audited annual result for the year ending 31 March 2013.

The Company’s consolidated profit after tax was $2.2 million for the year, compared with a $5.3 million result for the previous financial year.

Earnings before interest, tax, depreciation, amortisation, fair value movements of financial instruments and asset impairments (EBITDAF) were $13.5 million, compared with a $11.1 million result for the previous financial year.

KCE Chairman, Brian Gurney, said the year ending 31 March 2013 was a challenging year.

“KCE’s past financial year has proved to be one marked by some very positive achievements while operating under extremely challenging conditions.

“Most notably the completion of the Mangahao acquisition significantly increased revenue and earnings for the business and reduced KCE’s reliance on the wholesale electricity hedge market.

“The final quarter of the year, however, was disappointing as extreme drought conditions led to significantly reduced production from our hydro stations, and required the company to acquire some electricity on the wholesale spot market at higher prices than anticipated. Having 100% ownership of Mangahao station during this period partially alleviated the negative effects of the drought,” he explained.

KCE’s EBITDAF result showed a positive increase on the past financial year, although lower than anticipated due to the drought. The increase was as a result of the Company’s Mangahao acquisition. EBITDAF adjusted for the Mangahao acquisition was equivalent to the previous financial year.

KCE’s operating revenue increased significantly to $42.4 million compared to $32.4 million for the previous financial year, primarily due to the Mangahao acquisition. Operating expenses, including wholesale electricity costs, increased 42.9% on the previous year.

This increase was primarily driven by an increase in electricity volumes purchased during the year.

Mr Gurney said KCE remains well-positioned with a solid business model and good operating cashflows, which enable it to compete in the challenging retail electricity market. Mr Gurney noted KCE continued its conservative financial policies throughout the year, maintained a strong balance sheet, and increased its dividend payments supported by solid cashflows.

The Group’s operating cashflow was $11.0 million for the year to 31 March 2013 and the year-end debt position in the Group’s balance sheet was $25 million.

During the financial year, KCE’s total electricity retail sales volume increased by 3% to 207 GWh. The company’s total customer numbers declined during the year from 18,000 to 17,500 connections as a result of retail competition.

Of the Company’s total retail volume, 166 GWh was generated through its own hydro generation schemes, an increase from last year due to the Mangahao acquisition. This was 11% lower than expected primarily due to the extreme summer drought conditions.

The final dividend of 13 cents per share plus imputation credits of 2.7 cents per share will be paid on Monday 5 August 2013 to all shareholders on the register as at 5pm on Monday 29 July 2013.

This, combined with the interim dividend of 14 cents per share, provides a total gross return of 29.7 cents per share for the financial year ended 31 March 2013, an increase of 23.8% (5.7 cents per share) on the previous period.

For more information about KCE, visit: www.kce.co.nz.

ends

© Scoop Media