Transpower today announced its financial results for the six months ended 31 December 2011.
The earnings before net changes in the fair value of financial instruments and debt, was $77.1 million for the first six months of the financial year 2011/12 (December 2010: $80.4 million), a decrease of $3.3 million (4 per cent).
Operating revenue increased by 5 per cent to $378.9 million (December 2010: $360.1 million).
Operating expenses increased by 6 per cent to $136.5 million (December 2010: $129.3 million). The principal increases were in maintenance expenditure on the grid, which rose to $49.4 million (December 2010: $46.9 million).
Depreciation, amortisation and write-offs increased by 19 per cent to $90.0 million (December 2010: $75.5 million). This increase reflected the depreciation charges from newly commissioned assets and a one-off depreciation adjustment of $6.0 million following an independent external review of assets lives in June 2011.
After changes in the fair value of financial instruments, Transpower recorded a net loss of $51.5 million (December 2010: $92.3 million profit). The changes in fair value of financial instruments predominantly result from fluctuations in market interest rates. The fair value movements are non-cash in nature and therefore do not reflect the underlying operating performance of the business.
Capital expenditure was $424.0 million (December 2010: $234.0 million). The substantial increase reflected the significant reinvestment programme underway.
Transpower Chairman Mark Verbiest said that reinvestment was required, following a long period of low investment.
“We are seeking to extract greater and more cost effective capacity from our existing grid, and where possible, minimise the need to build new lines. However, there is still a need to upgrade and maintain existing assets, replace outdated equipment, and put in place new technology platforms to operate the power system.”
Transpower will recommence dividend payments to the Crown in March 2012. It will pay an interim dividend of $110.0 million.
“This is our first dividend payment since the 2004/05 financial year. During that time, the operating surplus has been reinvested into our significant capital programme”, said Mr Verbiest.
Transpower's full half year accounts will be published once they are tabled in Parliament in March 2012.