LOSS OF £3888

Ashburton Guardian, Volume 66, Issue 191, 27 May 1946, Page 2

LOSS OF £3BBB

POWER BOARD’S PAST YEAR RESERVES NOT TOUCHED Operations of tire Ashburton Electric Power Board during the past year, its 23rd, resulted in a loss of £3BBB, mainly on account of heavy damage .to the reticulation system on two occasions through storms. It was found possible, however, to meet the abnormal expenditure involved without recourse to the reserve fund held for such contingencies. These points were made clear to members by the annual report of the engineer-secretary, Mr H. G. Kemp, tabled at this morning’s meeting of the board. Revenue showed a small decrease, explained Mr Kemp, but this was much less than had been anticipated. Sales of electricity produced £79,710, showing a decrease of £3lB compared with the previous year’s total of £80,028, and an increase of £lllO over the estimate of £78,000. A loss of revenue through the closing of military camps and completion of the main irrigation race had been estimated at £3OOO and actually cost £2875. On the other hand, a substantial increase, greater than was expected, of £2,478, in domestic service, made a big improvement in the final position. Trading had been estimated to show a profit of £9OO, while the actual amount was £899. This showed a decrease of £77 compared with last year’s profit of £976. The total revenue was therefore £80,609, compared with £81,004 received last year. Expenditure far. exceeded the estimate, due very largely to the greatly increased maintenance costs due to storm damage; The total expenditure reached £84,496, compared with the estimate of £75,700, an increase of £8796, and, compared with last year’s total. £74,257, an increase of £10,240. The loss on the year’s working was therefore £3BBB.

“While this is regrettable,” added Mr. Kemp, “it is pleasing to know that the board’s financial position was sufficiently strong to take such severe expenditure without recourse to the reserves held lor such contingencies.”

Revenue Variation

Reveiue under the various heads in the power fund this year, with the variations from last year in parem theses, was as follows: Domestic service £49,763 (increase of £2487), commercial £ll,Bßl (decrease £771), power £14,676 (decrease £2104), public lighting £1572 (increase £116), sundries £lBlB (decrease £46), trading £899 (decrease £89); total, £80,609 (decrease £395). Expenditure was spread as follows: Bulk power Expenditure was. spread as follows: Bulk power £33,856. (increase £2088), distribution maintenance £15,887 (increase £6471), administration and general £5830 (increase £561), interest £14,182 (decrease £100), sinking fund £13,460 (increase £716). renewals £1272 (increase £504); total, £84,496 (increase £10,240). The trading department had a busy year, with the turnover at £20,419, an increase of £2310 on the previous 12 months, and gross profit at £2589, an advance of £143. Increased working costs, however, reduced the net profit to £899, which is £77 lower than in 19145.

Comment on Estimates

“The period during which the closing of military camps and the losing of the P.W.D. demand has adversely affected revenue, has now practically passed,” added Mr Kemp. “Present indications are that revenue should increase substantially during the year, mainly in domestic service. Assuming a revenue of £39,950 from the sale of current and sundries, and £9OO again from trading profit, .a total revenue of £84,850 is anticipated. “Bulk power is increasing steadily and the cost for the year is estimated at £35,860, an increase of £2004. Capital charges will probably increase by £1748 to £29,400, the increases including £464 of interest and £1,285 of sinking funds. A' proportion of the increase is due to the accelerated rate of loan expenditure. “Working expenses due to the heavy storm damage and increased maintenance, reached the record total of £21,717 last year. Allowing for the continuation of heavy maintenance expenditure, this item should decrease by over £3OOO to £18,600. Renewals are again estimated at £IOOO. The total expenditure is therefore estimated at £84,860, and the. year’s accounts should.come out about square.”