Transpower pays $295M dividend to government as profit soars on asset sale
Transpower, the state-owned national electricity grid operator, will pay the government almost $295 million in dividends for this year after annual profit more than tripled.
The Wellington-based company, which isn't among SOEs slated for partial privatisation, will pay a final dividend of $137 million to the government, adding to its special dividend of $65.7 million declared in June and an interim return of $92 million.
The $294.7 million annual payment is in line with the company's statement of corporate intent target, and reflects 83 percent of Transpower's $343.4 million net cash flow. That's down from the 93 percent of net cash flow paid out in the 2012 financial year, when it paid out $306 million. Transpower's dividends are expected to average between 65 percent and 75 percent of free cash flow, which deducts maintenance capital expenditure.
Net profit climbed to $263.7 million in the 12 months ended June 30 from $84.8 million a year earlier, including a $66.3 million gain from the sale of its d-cyphaTrade unit in May. Stripping out changes in the value of financial instruments, earnings rose to $269 million from $167 million.
Revenue rose 17 percent to $918.4 million, with a 19 percent boost in transmission revenue to $860.7 million, reflecting the commission of the North Island grid upgrade and Cook Strait HVDC Pole 3 projects.
Earnings before interest, tax, depreciation, amortisation, impairments and changes in fair value (EBITDAIF) rose 26 percent to $623.1 million. That margin of earnings rose 4.6 percentage points to 67.8 percent, and was ahead of the 67.1 percent forecast in Transpower's statement of corporate intent.
"The most important change we've achieved at Transpower these last few years has been start to think, and behave, like a service company," chairman Mark Verbiest said. "Decisions on how we operate and maintain the transmission network are now driven by the impact on customers, not just our assets, and it is this focus that has brought us the strong improvement in performance over the last year."
The company will look to cut capital and operating expenditures on the grid, he said.