Transpower New Zealand today released its annual results for the 2014/15 financial year.
Earnings before interest, tax, depreciation, amortisation, impairments, asset write-offs, and changes in the fair value of financial instruments (EBITDAIF) were $763.9 million, an increase of $47.4 million (+6.6%). The increase was driven by increased revenue and lower operating costs.
Transmission revenue increased $43.7 million to $984.2 million (+4.6%) on the prior period following the completion of our major capital build programme. Operating expenses declined by 1.9% to $281.6 million, reflecting tight cost control and initial gains from a number of business improvement and efficiency initiatives being implemented across the company.
Net profit after tax, before net changes in the fair value of financial instruments, was $194.6 million, an increase of $10.7 million (+5.8%) on the prior period. The total dividend to be paid to the Crown for the 2014/15 financial year is $188 million.
Chairman Mark Verbiest said that the company had performed strongly over the past twelve months, both financially and operationally.
“Reliability on the grid was the best performance achieved in the last ten years and the grid managed well through a number of extreme weather events throughout the year. This is due, in part, to the major investments undertaken over the last five years that have built resilience and redundancy into the grid, as well as continual improvements in our asset management practices.”
“With this major investment programme now complete, electricity consumers saw a reduction in AC transmission prices from 1 April – on average, a 3.6% reduction across the country,” he said.
“A significant milestone this year was the completion of our first regulatory control period. Our base capital expenditure programme delivered commissioned assets of almost $966 million – 97% of the regulatory allowance. Operating expenditure over the regulatory period was below our allowance due to a continual focus on reducing costs in our day-to-day operations.”
“We also completed the regulatory reset for our next five-year regulatory control period (RCP2), which started on 1 April 2015. This period brings a more challenging operating environment for our transmission business with a lower allowable rate of return, challenging efficiency targets and more comprehensive and complex incentive arrangements.”
“Our focus on transformation programmes and implementing operational efficiencies should place us in a good position to meet these challenges. However, the changes to our regulatory and operating environment are likely to result in our financial performance in 2015/16 being lower than 2014/2015. We are focused on maintaining our ability to deliver reliable transmission services to our customers at an appropriate price point, while strengthening our financial position in the long term.
Transpower’s full annual report will not be available until tabled in Parliament later this year. Our financial accounts are available at https://www.transpower.co.nz/news/transpower-releases-201415-annual-result.
For further information, please contact:
Rebecca Wilson, Corporate Communications Manager, 04 590 6695 or 021 578 608