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More profit than power for state-owned energy companies

Energy companies are producing just as much profit as power, with Genesis Energy and Mighty River Power joining Transpower in reporting stronger profits today, although Meridian has seen its profit fall.

In the first six months of the financial year, Genesis Energy’s net profit after tax increased from $31 million in 2007 to $49 million and Mighty River Power’s ebitdaf soared from $175.1 million to $234.5 million.

Transpower also saw its profit rise by 27%, but Meridian energy bucked the trend, with its half year net underlying profit falling 14.9% to $85 million.

However, the future does look a little brighter for Meridian, with the company’s earnings on the rise thanks to an unprecedented inflow into its hydro lakes.

When two unrealised charges are taken into account, Meridian's bottom line result for the half year was a net loss of $20.5 million, compared to a net profit of $93.7 million in the corresponding period a year ago.

Meanwhile, operating revenue at Genesis Energy increased to $1.045 billion from $934 million in 2007.

Genesis Energy chairman Brian Corban says the first half financial performance was achieved in an electricity generation environment of high thermal output in the first quarter at comparatively high wholesale prices, followed by lower generation volumes and lower wholesale prices in the second quarter, as national hydro storage recovered from the ‘dry’ winter.

Finally, Meridian Energy has benefited from increased geothermal generation capacity and the flexibility of its expanded co-generation plant at Southdown, which have significantly improved generation productivity and efficiency.

Mighty River Power’s ebitdaf for the half year were $234.5 million compared to $175.1 million in 2007. The company also recorded record six month sales of $741.3 million, up from $578.4 million last year.

Chief executive Doug Heffernan says the company expects that its existing asset base will continue to provide strong operating results in the near future, which would help underpin the company’s generation development programme at Nga Awa Purua and Ngatamariki.

“Creation of low cost renewable electricity capacity remains our priority and will be our primary contribution to assisting New Zealand meet the challenging economic conditions in the drive to improve national productivity.”

More by Robert Smith

Comments and questions

What? State-owned? Bringing profits?? Under National in post-Labour era??? No! Where is Lockwood Smith? He knows what to do...