Sustainable Economic Performance
At TrustPower our economic goal is to produce steadily growing profitability over the long term. This allows us to provide our shareholders with increased returns without the risks associated with rapid growth.
How we have performed
Our underlying profitability is consistent with last year. However we consider this to be a good result given the challenging economic climate. We have made good progress on last year’s major challenge with a number of projects progressing through resource consent and Environment Court processes. We recently announced the commencement of Stage 1 of the Mahinerangi Wind Farm.
Options for growth
The viability of generation development projects is affected by a number of variables including foreign exchange rates, forecast electricity prices and regulation. The variables can move quickly so it is important to be able to proceed with a project rapidly if and when these variables become favourable.
During the year we raised $140 million from a senior bond issue. This has left us with $429 million of undrawn bank debt facilities as at 31 March 2010. Even though we have reduced these facilities by $80 million we still have satisfactory funding capacity to commit to new projects when conditions support investment.
The year ahead
Our aim for the coming year is to provide another year of earnings growth in line with our economic goal. Major challenges for us in the coming year include the completion of the Mahinerangi Wind Farm Stage 1 construction on time and to budget and responding to increased retail competition.