King Country Energy announces solid annual result

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Thursday, 2 June 2011

King Country Energy announces solid annual result

Electricity generator and retailer, King Country Energy, has announced its fully audited annual result for the year ending 31 March 2011.

The Company’s consolidated profit after tax was $4.4 million for the year, compared with a $1.6 million result for the previous financial year.

Earnings before interest, tax, depreciation, amortisation, fair value movements of financial instruments and asset impairments (EBITDAF) were $8.5 million, compared with a $6.2 million result for the previous financial year.

King Country Energy Chairman, Brian Gurney, said the year ending 31 March 2011 produced solid results following the previous year of consolidation.

“This past financial year has produced a number of achievements for King Country Energy and the result is very healthy, reflecting the positive changes made in the business over the past two years.

“The Company remains well-positioned with a solid business model, good operating cashflows and a strong platform for growth,” said Mr Gurney.

The Company’s operating revenue remained steady at $33 million. Operating expenses, including wholesale electricity costs, decreased 3% on the previous year. This decrease was primarily driven by a reduction in electricity volumes purchased during the year, coupled with the previous years’ operating expenses including a one-off $0.5 million adjustment for asset impairment.

“The New Zealand electricity market continues to be volatile. However, King Country Energy maintains a hedge policy which largely mitigates our exposure to the market and its volatility. The strength of our financial result shows that our risk management strategies and operating processes are effective,” explained Mr Gurney.

Mr Gurney noted King Country Energy continued its conservative financial policies throughout the year, maintained a strong balance sheet that is debt free, and experienced strong positive operating cashflows.

The Group’s operating cashflow was $6.1 million for the year to 31 March 2011 and the year-end cash position in the Group’s balance sheet was also $6.1 million.

During the financial year, King Country Energy’s total electricity retail volume decreased by 4% to 229 GWh. The company’s total customer numbers remained steady over the year at 19,000 connections.

Of the Company’s total retail volume, 117 GWh was generated through its own hydro generation scheme -a 2.5% drop from last year. The Company cited low hydrology within certain periods and limited storage ability as the causes of the decrease in generation.

In the medium term, King Country Energy remains focused on minimising exposure to the hedge market and exploring opportunities to add to its generation portfolio.

The Company announced a recommendation for an unimputed final dividend of 12 cents per share, payable on 5 August 2011. This, combined with the fully imputed interim dividend of 12 cents per share, provides a total gross return of 29.14 cents per share for the financial year ended 31 March 2011. The final dividend provides shareholders with a gross return of 9%, based on the share price of $3.25 at year-end.

For more information about King Country Energy, visit: www.kce.co.nz.

-ENDS

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