Power company Genesis Energy says it could be ready for a sharemarket float within four to five months of getting the green light from the Government.
Genesis yesterday posted a steady operating profit, up $6 million to $196m for the six months till the end of December, even though revenues fell 7 per cent.
The company said its profit was "solid", during a time of increased competition for customers and when one of its big power stations, Huntly's gas-fired plant, unit 5, was out of action for 38 days for a planned refurbishment. The 400- megawatt plant is now back in action.
It is aiming to deliver consistent profits and dividends, year-to-year, no matter what the weather, with a more balanced mix of power stations, including hydro and gas-fired plants.
Genesis yesterday announced it was paying the Government a $57m dividend for the half year. It expected to double that payout for the June full year to $114m.
On assets worth about $2 billion, the gross dividend yield would be equal to about 7.8 per cent and a net yield of 5.5 per cent.
Genesis had not paid a dividend for two years while it absorbed the costs of buying the Tekapo A and B power stations in the South Island.
Despite a dive in wholesale electricity market prices and a 5 per cent fall in its own generation, Genesis still managed to lift operating profits 3 per cent to $196m.
Chairwoman Dame Jenny Shipley said the half-year result was a "very strong one" .
"We are extremely well prepared as a board and senior executive team to deliver an IPO [initial public offering] in a very timely fashion if they [the government] want to do that," she said.
Though fellow state-owned Mighty River Power is expected to be part-sold by the Government by the middle of the year, Genesis said it could be ready to float within "four or five months from go, to delivery" she said.
Genesis chief executive Albert Brantley said: "We may not be listed yet, but . . . we run our company as though we are listed."
Meanwhile, given high storage levels in South Island hydro power lakes and flat demand, Genesis expected lower wholesale electricity prices to continue in the near term.
Despite wholesale prices down 19 per cent in the December half year, Genesis put through "modest" price rises for retail customers, in Wellington, Auckland and Christchurch during the half year. That was partly due to higher energy charges, but mainly reflecting the pass-through of higher transmission costs from grid company Transpower and lines companies.
If wholesale prices stayed low, retail power prices would flatten out, Genesis said.
Of accusations earlier this week, by the Domestic Energy Users Network, of price gouging of "captive consumers" by power companies, Brantley said household power prices removed the risk of charges moving up sharply if there was a drought and a shortage of hydro power. But people could not expect a benefit when there was lots of rain and low wholesale prices.
Brantley said there was no generation glut, though Genesis recently shut down one old coal-fired plant at Huntly and is expecting to shut another at the end of 2014.
"People need to be careful about getting complacent with that, because you need to look at what happens when you get a dry year or what happens when a major plant goes out," he said.
SHIPLEY NOT FAZED BY FUROR OVER MAINZEAL
Dame Jenny Shipley rejects any suggestion that her role as chairwoman of collapsed construction company Mainzeal could affect her ability to chair Genesis energy to a sharemarket float.
Shipley was chairwoman of Mainzeal Property and Construction, which collapsed into receivership this month, owing subcontractors hundreds of thousands of dollars, and with the loss of 200 jobs.
"One always pays attention to the best interest of the company and shareholders and this [Genesis result] speaks for itself," she said, after Genesis posted a $196 million operating profit for the December half year.
"We have an excellent board that I and others have recruited over the last few years."
The board was at a standard that could be expected in a listed company and Shipley said she was a director on other listed company boards. The management team wouldmatch any other listed company.
When asked if she would step down if investors would not accept her as chair of a listed company, Shipley said Genesis had moved from a "good company to an excellent one".
"Judge on results."
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