Northpower's Annual Report 2005

Northpower Limited

Press Release
For Immediate Release
Friday July 14th 2005

Northpower is pleased to announce a net profit for the financial year ending 31st March 2005 of $11.8m - up 16.7% on last year’s result. The Board has also declared a final dividend of $4,094,650 to be paid to the Northpower Electric Power Trust.

Chairman, Warren Moyes, said “the result was achieved in addition to the Company providing a $6.1m Line Charge Holiday to customers during February 2005 and the Company has the second lowest average price for electricity delivery in NZ”. The financial performance was above expectations due to additional network income from the very high level of subdivision activity and very strong growth from the contracting business.

Northpower’s operating revenue increased by $26.1m on last year to $105.1m. The contracting business contributed $23.1 million of the increase and now accounts for 66% of total revenue.

In the last 3 years, Northpower’s contracting business revenue has grown 251% from $27.6 million to $69.4 million. During the year full time employees increased by more than 100 to 565. New field centres were established in Murapara, Hamilton and Wellington to complement the existing centres in Whangarei, Dargaville, Maungaturoto, North Shore, East Tamaki, Tauranga and Rotorua.

Capital expenditure on the network has kept pace with load growth and asset condition and will continue at similar levels for several years. The strong growth of the contracting business is expected to continue. Several of Northpower Contracting’s existing clients have increasing capital programs and the overall demand for competent contractors remains high. Northpower’s key value of providing “hassle free service” is creating market and operational advantages for the business.

Northpower is one of only three lines companies permitted by the Commerce Commission to increase prices by the maximum factor of CPI +1% (equivalent to 3.29%) due to our high productivity and low prices. The actual price increase for the 2004/5 year was 2.4%, which kept Northpower well within its regulated price threshold.

Network Reliability once again improved significantly on the previous year to give the best performance ever. The result is much better than the Company’s targets and the quality thresholds set by the Commerce Commission. The trend since 1996 shows a significant improvement in Network reliability.

“Northpower is committed to growing a sustainable business based upon sound commercial principles that provide increasing benefits to its Northland owners and network users. We are focused on being cost effective while providing a safe, reliable, hassle free service.” Mr Moyes said.

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