Transpower announces half-year results

27 February 2019

Transpower New Zealand today released its financial results for the six months ending 31 December 2018.

Net profit after tax, before net changes in the fair value of financial instruments, was $105.3million, a 12 per cent decrease on $120.2 million from the prior period. This was largely due to a decrease in regulated transmission revenue, driven by lower prices. Transmission revenue declined 7 per cent to $489.2 million (2017: $525.5 million).

The Board has declared an interim dividend of $66 million, representing 40 per cent of the full-year dividend forecast in the 2018/19 Statement of Corporate Intent.

Chair of Transpower’s Board, Pip Dunphy, said the Board is pleased with the strong first half results for the 2019 financial year both in terms of performance and returns to shareholders.

Chief Executive Alison Andrew said the organisation has performed well over the last six months.

"We continue to drive business-wide efficiencies through targeted opportunities to reduce Transpower's existing or future operating and capital costs. After a successful first year in 18/19, our two-year transformation programme is on track to deliver benefits of $33.5 million by the end of the financial year.

Capital expenditure was $130.4 million for the first half of the year, up 7 per cent from the same time last year (2017: $122.1 million) which is in line with our approved capital programme." She said.

Transpower submitted its third regulatory control period proposal to the Commerce Commission in November, setting out its vision for the national grid between 2020 – 2025. The proposal, which has been shaped with the input and guidance from our customers and stakeholders, is mainly focused on sustaining and maintaining the grid with a continued focus on efficiency and cost control.

Chair Pip Dunphy says Transpower will continue to take an active role in discussions about New Zealand’s energy future, with grid-supplied electricity being crucial to enabling the decarbonisation of New Zealand’s economy.

"Our forecasts of strong electricity demand growth over coming decades alongside changing generation create new challenges matching our infrastructure to need over time. We have the potential need for a significant programme of replacing aging wires, with cost and investment implications over time. We are focused on understanding the ability for technology and innovation to assist in avoiding, delaying or reducing this investment.

Transpower is on track to ensure it’s a modern and efficient national grid operator, and is making good progress to understand the issues and challenges that are facing the energy sector. We look forward to working in partnership with our stakeholders and customers to find solutions in an uncertain future."

For further information, please contact:

Laura Ackland Senior Corporate Communications Advisor on 04 590 6721 or 027 565 3783.