Trustpower shareholders are in for a windfall as it sells its retail arm, but the company is warning of some cash flow pressure ahead.
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The company intends to declare a one-off special dividend of 35 cents per share, subject to the completion of its retail business sale to Mercury Energy for $441 million.
It announced earlier this month that substantial conditions of the sale had been met, with it set to be finalised on 1 May.
Once completed, Trustpower will be renamed Manawa Energy.
In a market update this morning, company said cash flow pressures were expected as it had accelerated spend on developing a pipeline of potential new generation projects.
It has also increased short-term capital expenditure due to its hydro improvement programme, maintenance and a renewed focus on preventative works to improve reliability.
The company expects capital expenditure to be between $45m and $55m in 2023.
The company also expected pressures from the risk to avoided cost of transmission (ACOT) revenues from 2024 onwards, based on the Electricity Authority's changes to the transmission pricing methodology.
The Electricity Authority said it will consult on ACOT later this year.
Trustpower expects underlying profit to be in the range of $140m to $160m in 2023, assuming wholesale prices are in line with current forward pricing, average hydrological conditions and there are no adverse events.
