$744,000 profit for power company

Ruapehu Bulletin, Volume 12, Issue 571, 31 January 1995, Page 5

$744,000 profit for power company

Trust to look for new generation projects for investment

A pre-tax profit of $744,000 for the first six months of the current financial year has been recorded by King Country Energy. Chairman Ken Street says this compares with a $117,000 loss during the same period last year. Mr Street said the sixmonthly result represented

a return on shareholders' funds of 4.12 per cent which, when annualised, was slightly above the 8.0 per cent target in the company 's statement of corporate intent. Net profit after tax , at 2. 87 per cent for six months also represented a slightly higher annualised figure than the 5.3 per cent return target in

the statement of corporate intent. Total income for the period was $7,237,482. At this stage the directors recommended that profits be retained and invested in further generation should a suitable project be identified. Some of the cash surplus will be used to complete

major capital projects, such as the upgrading of the Piriaka Power Station and the installation of new ripple relays throughout the company' s supply area. Both projects were seen to improve company performance in the medium term. Mr Street said the directors had monitored the increasing merger and takeo-

ver activity within the electricity industry with interest. While he agreed that in some cases there were synergies to be enjoyed or management efficiencies to be gained, he believed the acrimony resulting from the hostiletakeoveractions and expenditure of some power eompanies could only be seen as insulting to the customer. "More than a million dollars has been spent on takeover advertising in total by the two Auckland power eompanies, which has to come from somewhere. The electricity consumer will pay in the end," Mr Street says. Reporting on the company' s performance for the six months ended 30 September, Mr Street said total electricity saies by the company were up half a per cent on the same time last year, although domestic saies dropped by about two per cent. Turti to Page 8

$744,000 profit for power company

FROMPAGE5 Heavy rain in the Taupo catchment and excellent reliability of the company' s power stations at Kuratau and Piriaka meant King Country Energy had to purchase a million units less from ECNZ that normal. The company also saved $300,000 on its electricity costs by astute purchasing on the spot electricity supply market, he said. He said heavy rain, unusual winds, lightning and an increasing possum population had resulted in a disappointing reliability performance but a greater emphasis on preventative maintenance should reverse this trend. Load continued to grow in the Turangi, National Park and Ohakune areas, reflecting the increasing investment in mountain related activities. The Turoa Ski Resort cable carried 20 per cent more electricity that its design capacity during the winter. In contrast load decreases were observed in Taumarunui . Mr Street said major projects completed during the period included the installation of a new ripple control plant at National Park and 27 1 0 new ripple relays, and the laying of a new 1 1 ,000 volt cable to complete a ring supply to the Ruapehu Alpine Lifts area at Whakapapa. Much work had been done on the public consultation and technical studies for the proposed Piriaka Power Station upgrading and a resource consent application would be filed shortly. Mr Street said the directors were pleased with the level of support received for the current corporate objectives from the trustee shareholders.