Trustpower posts modest half year profit

Tauranga-based power company Trustpower has reported a smaller first-half profit than last year’s bumper result as hydro lake levels and wholesale prices returned to normal.

The net profit for the six months ended September was $64.9 million, compared with $79.3m the year before.

Revenue was marginally higher at $512m, while expenses rose almost 6 percent to $382m, as its cost of generating power rose.

Trustpower offers broadband and gas on top of electricity and has growing numbers of customers buying two or more services.

Chief executive Vince Hawksworth said the diverse offering to customers was working and offering a more secure earnings base.

“Our numbers are also telling us that customers are more satisfied and less likely to leave when they purchase more than just electricity from us,” he said.

About 80 percent of new customers who join Trustpower purchase more than one product.

He said the company keeps looking at further services to offer such as mobile phones, and changing technologies such as solar panels, battery storage, and energy management systems were all future options.

The company last year took over small central North Island retailer King Country Energy, and Mr Hawksworth said he thought there would be more rationalisation among retailers.

However, he has little sympathy for complaints from small retailers such as Flick Electric, which sells to consumers at wholesale spot rates. It’s accused big power companies, such as Trustpower, of taking advantage of low lake levels, reduced gas supplies, and a reliance on expensive coal generation to ramp up prices.

“They would say that wouldn’t they, but you didn’t hear them complaining when prices were down at really low levels … it comes down to risk management and we do that for our customers,” Mr Hawksworth said.

Trustpower has a network of small scale hydro stations spread around the country. Last year it sold three in Australia, the proceeds of which will be used to pay a special 25 cents a share dividend.

It has reaffirmed its forecast for a full year underlying profit of between $215-$235m.

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