Electricorp $331M profit

Press, 8 June 1989, Page 31

Electricorp $331M profit

The Electricity Corporation yesterday announced a $331,276,000 after tax profit for the year ended March 31, compared with a $141,216,000 profit the previous year. The chairman, Mr John Fernyhough, said Electricorp’s final result was achieved after extraordinary items of $21,698,000 (nil in the corresponding period). That total represented Electricorp’s provision for the

change in company tax rates from 28 per cent to 33 per cent, he said. Turnover increased to $1,455 billion from $1,326 billion, while profit before tax rose to $492,566,000 ($196,134,000 last year). Tax cropped profit by $139,592,000 ($54,918,000) to a before extraordinaries total of $352,974,000 ($141,216,000). Mr Fernyhough said the return on ordinary shareholders’ funds was up from 4% last year to 11%

after provision had been made for the preference dividend. Electricorp's result was particularly pleasing given the flat state of the economy over the last year, the drawn out gas price negotiations and the substantial borrowing programme the company had undertaken to repay its Government obligations, he said. The result had also been achieved in a year when the company’s pric-

ing policies had been aimed at holding average wholesale prices and not increasing them. Electricorp had managed to hold costs down with real unit costs falling by 18%, Mr Fernyhough said. The company also contained its capital expenditure programme within budget and made major progress on commissioning Ohaaki, refurbishing Arapuni and continuing work on the Clyde power station.

Electricorp had recently announced plans to reduce its prices and those reductions were a response to improved productivity, cost cuts and a more competitive deregulated generation industry, he said. The company had recommended a $52 million dividend to be paid in July in addition to the interim dividend of SI46M already paid. No preference dividend would be payable for the past year, he said.