Trustpower have reported an uplift in their half year performance as the final hurdle toward the sale of the retail arm of the business to Mercury Energy slides into view.
The Tauranga-based company will be changing the name of their generation arm of the company to Manawa Energy, once the sale is approved.
Two of the three conditions for the retail sale to Mercury have already been met.
Trustpower shareholders approved the sale of its retail business to Mercury at its Annual Shareholder Meeting on September 22 and Mercury Energy has also been given the green light from the Commerce Commission, which said the $441 million deal would not substantially lessen competition.
The final condition of sale is the completion of the Tauranga Energy Consumer Trust restructure, the subject of a High Court hearing this month.
The upheaval has had no impact on profits. Net profit after tax climbed by 243 per cent, up to $115.1 million from $33.6 million the previous year, largely due to a non-cash fair value gain on financial instruments.
Underlying earnings, which exclude fair value gain on financial instruments were $59 million for the six months to 30 September 2021, up from $52.7 million in the prior period driven largely by higher generation volumes and wholesale prices.
Trustpower are also reporting total operating earnings of $122.2 million, up 11 per cent; operating earnings from continuing operations of $106.4 million, up 16 per cent; operating earnings from discontinued operations of $15.8 million, down 14 per cent and generation volumes of 1000 GWh.
Announcing its interim financials, Trustpower chair Paul Ridley-Smith says the company’s results reflect a well-performing bundled retail business and sound management of its 27 generation schemes across New Zealand, enabling the business to deliver consistent returns for investors.
Paul says Trustpower remains focused on its current business while building the capability to prosper under their new moniker of Manawa Energy.
He says that looking forward, Manawa Energy will be focused on developing new renewable generation, to meet New Zealand’s climate targets as well as continuing to provide service to its existing customer base.
A dedicated team has been formed to investigate options with a specific interest in wind and solar energy, says Paul
Two wind and two solar utility-scale generation options across the North and South Islands have been procured, although these projects are in the early stages of maturity.
“With electricity demand set to grow by 50 to 70 per cent over the next 30 years from electrification of transport and industry the potential for Manawa Energy is huge and the business is well poised to take advantage of the opportunities the market presents.”
Chief executive David Prentice says there have been considerable effort within the company to prepare the business for sale but despite this have found financial success.
“Energy only retailing is intensely competitive given current wholesale prices,” says David.
“Our multi-product retail business strategy bundling life’s essential utilities including power, gas, internet and phone has been a tremendous success delivering greater returns and longer customer tenure.
The High Court hearing regarding the TECT restructure, the final hurdle toward the sale of Trustpower’s retail business to Mercury, is scheduled for November 15-17 2021.