• Full Year Revenue improvement from Ngawha generation
  • Generation expansion approved by Board and shareholder
  • Record year for safety – zero LTIs

Strong performance from the Ngawha geothermal power station in the 2017/2018 financial year further underlined the approval by the Company’s Board and Shareholder for expansion of the station. The expansion will more than double its generating capacity.

The $176 million project to add more generation capacity (28MW) at the Ngawha site will be the largest capital project in the history of Top Energy.

Chairman Richard Krogh said the Ngawha expansion would play a key role in Top Energy’s future and make a considerable contribution to the Far North community.

“Over the long term, we expect the larger Ngawha to reshape the Company’s revenue and balance sheet and add value to the Far North economy for decades to come,” he said.

Commissioning of the station will improve the security of the electricity supply and significantly reduce Northland’s reliance on the National Grid, which transports power from the south.

It is projected that 90% of the time, excess power from Ngawha will be exported on to the National Grid, to be used by consumers south of the Top Energy network.

As well as gaining resource consent approvals in July 2017, the project received Major Transaction approval from the Top Energy Consumer Trust and the Top Energy Board in November 2017. Initial construction got underway in late 2017.

Top Energy Chief Executive Russell Shaw said while the 2017/2018 financial year had been challenging, progress had been made on a number of fronts as well as the Ngawha project.

“Safety at work has been a big focus for us and our industry. We are very pleased to report no lost-time injuries during the 12-month period, a first for Top Energy,” he said.

The largest non-line investment for the Network, of $10m, was approved to deploy an additional 9MW of diesel generation as an economic alternative to improve security of supply and reliability to consumers in the Kaitaia region. This will be delivered over the next two years.

Financial results for FY2017/2018

The increase in generation from Ngawha was the primary driver of improved revenue, up 3.1% as higher wholesale spot prices were experienced and supported by plant availability that exceeded targets. Earnings before interest, tax, depreciation, and amortisation (EBITDA) was up by 0.7% to over $34 million.

The Group reported a Net Profit after Tax (NPAT) of $5.7m for the year, a reduction of $6.3m compared to last year.

NPAT was impacted by increases in depreciation and fair value adjustments on financial assets. Depreciation costs increased by $1.5m largely due to the increased value of generation assets, revalued at 31 March 2017. A $1.5m negative movement in fair value adjustments on financial assets, comprising interest rates swaps, electricity contracts and forward foreign exchange contracts was recorded, compared to a $6.4m gain in the prior year.

Offsetting these impacts, transmission charges, employee expenses and finance costs decreased, the latter due to lower overall debt costs. However, total debt at year end was up $11.3m, mainly due to the investment in the Ngawha expansion, the interest cost of which will be capitalised during the period of construction.

While the Group’s performance against its Statement of Corporate Intent (SCI) financial targets were achieved or exceeded, the Network quality target for average interruptions to customers (SAIDI) was not achieved, due to three major outage events occurring during the year and several ex-cyclones brushing past. However, the SAIDI of 483 minutes still remained below the regulatory cap.

 

For more information contact

Philippa White

021 2418740