Trustpower raises earnings guidance as Pohukura outage, low hydro elevates prices
By Paul McBeth
Oct. 15 (BusinessDesk) - Trustpower raised its forecast for annual earnings as it benefits from elevated wholesale
electricity prices due to the Pohokura gas field outage and low hydro lake storage.
The company expects earnings before interest, tax, depreciation, amortisation and fair value adjustments will be $215
million to $235 million in the year ending March 31, up from its initial guidance of $205 million-to-$225 million.
That's still down from the $267 million reported in March 2018, a year bolstered by favourable hydro generation, firm
winter wholesale prices and a retail strategy of bundling utility services.
Trustpower doesn't expect the favourable conditions of the past quarter to last, saying it anticipated normal trading
for the rest of the year.
"The current trading conditions are experiencing highly volatile and elevated prices due to a gas field outage and low
hydrology," it said.
The Pohokura gas field outage is expected to last until November and its shutdown has combined with low hydro lake
storage to push wholesale prices to a 13-month high last week. Genesis Energy ramped up production at its dual-fuel
Rankine units at Huntly as a result.
Trustpower's second-quarter generation of 595-gigawatt hours was down from the abnormally higher 729GWh a year earlier
and above the long-run average, while the average spot price of $88/megawatt hours compared to $101/MWh a year earlier.
The company had 270,000 electricity connections at the end of the quarter, 91,000 telecommunications customers, and
38,000 gas connections, Those 399,000 utility accounts were up from 300,000 a year earlier. Of that, 102,000 customers
took two or more services from Trustpower. Customer churn was 20 percent in the year-to-date figures against a total
market churn of 22 percent.
The shares last traded at $6.08, and have increased 1.7 percent so far this year.
(BusinessDesk)
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