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Power generator Manawa Energy has reported a strong first-half profit boosted by the sale of TrustPower's retail business, amid an otherwise challenging year.
The generating arm of TrustPower was relaunched on 2 May the day following the sale of the retail arm to power company Mercury for $441 million, resulting in a gain of $348.8m.
Key numbers for the six months ended September compared with a year ago:
- Net profit $390.8m vs $115m +239 percent
- Revenue from continuing operations $232.7m vs $291.2m -20 percent
- Net profit from continuing operations $41m vs $113.3m - 64 percent
- Underlying profit $35m vs $59m -41 percent
- Interim dividend 7.5 cents a share vs 17 cps
"Alongside getting our new systems and processes up and running, we've been focused on enhancing and optimising our existing portfolio of hydro-generation assets, and cranking up our pipeline of solar and wind generation options," Manawa chief executive David Prentice said.
"While we have made good progress on a number of fronts, it has been a challenging last six months."
He said the first quarter saw high prices and low hydro inflows, while the second half experienced strong hydro inflows but low prices.
The company also raised capital through $150m bond in the second quarter, which was oversubscribed.
Prentice said Manawa's revenue streams were largely insulated from the high inflationary environment with wholesale pricing or inflation-indexed contracts in place, although new development projects would be subject to cost inflation.
"However, this is largely offset by projected increases in forward wholesale electricity prices which underpin and support our investment thesis," Prentice said.
Manawa expected to make significant investments over the next two-to-three years in such things as improvements to existing assets, dam safety, and new development options.
Non-development spending was expected to peak in FY24 and taper off to a new business-as-usual level of $22m-$32m from FY26 onwards.
Manawa expected to pay a full year dividend of 16 cents per share subject to the second half performance being in line with expectations.
It confirmed its existing underlying profit in a range of $127.5m-$140m, provided prices and volumes remained in line with expectations.
