- Underlying operating profitability (EBITDAF) exceeds last year driven by both Network and Generation businesses
- Significant advances on the Ngawha OEC4 expansion project
- Zero Loss Time Injuries (LTI) – for the 3rd year running
The 2020 financial year was a most successful one for the community-owned company.
Chairman Richard Krogh says the successes spanned three key areas of profitability, safety and the Ngawha expansion.
“The challenges came in the form of significant storms this year, undermining gains in network reliability in previous years, and the Covid-19 lockdown which affected all parts of the business.”
Once again, the financial year has been dominated by the project to increase the generation capacity at Ngawha.
Mr Krogh says much of the year was taken up with civil works, preparing the power station site, and construction of the geothermal pipelines to and from the power station. Early in the New Year, parts of the plant were shipped from various locations around the world.
“While the advent of Covid-19 created some uncertainty in relation to some of the later shipments, all essential items have now been received.
“The focus now is on getting the parts of the plant assembled and the fluid supply and the power delivery lines built. Progress is such that the new station will be commissioned at the end of 2020, ahead of schedule,” he says.
Top Energy Chief Executive Russell Shaw says building on the excellent health and safety successes achieved in recent years, a mental health initiative was launched to improve everyone’s awareness of the impact of mental health on a person’s home life and their safety at work. The initiative was well-received by staff. The year ended with zero lost time injuries for a third successive year.
Regarding network reliability, which is measured by average interruptions to customers, Mr Shaw says that although better than regulatory targets, “we were unable to achieve the company target”. The final result was 366 minutes per customer, an increase of 15 minutes over the previous year.
Financial Results for FY2019/20
Earnings before interest, tax, depreciation, amortisation and fair value movement of financial assets (EBITDAF) was $47.3m, 7% higher than last year and reflective of a $1.5m decrease in expenses.
Network financial performance remained strong this year. Revenue grew by 2.1%, despite overall electricity consumption reducing by 1.6%.
Generation revenue was $1.7m lower, following the prior year which experienced higher spot prices combined with slightly lower plant availability at 95.7%, due to the need to replace turbine bearings during the year.
Revenue was 2.1% higher for the Group and expenses were reduced by 4.6%, contributing to the strong EBITDAF result.
The Group reported a Net Profit after Tax (NPAT) of $5.1m an improvement against the Net Loss in FY2019 of $15.8m.
Prudent risk management and forward planning of the Ngawha expansion project includes several hedge contracts, at prices which are at, or better than, the values used in the original business case for the project.
The fair value adjustment on financial assets was a loss of $15.3m arising from the Group’s hedging strategy. This included the impact of Covid-19 which caused a further reduction in interest rates, partly offset by lower wholesale energy prices, due to the sudden drop in national demand. Energy prices also dropped due to suddenly lower national demand.
The revaluation of the generation assets provided a $3.3m post-tax loss that was recorded through other comprehensive income, resulting in a decrease to the revaluation reserve. The generation asset value is expected to increase to over $450m following the commissioning of OEC4 in late 2020.
For more information contact: Philippa White, 021 2418740
Top Energy, which is owned by the people of the Far North, is committed to providing a reliable and resilient electricity network which keeps abreast of evolving technologies such as localised generation, solar power, and microgrids. Over the last decade its $170 million investment programme has involved substantial improvements to the network which now has an asset value of $250 million – up from $128 million when the programme started in 2009. This investment programme will continue. Over the next decade, the Group will invest a further $350 million to ensure our customers continue to receive a high quality and secure supply of power through local generation and a resilient network.