Unison reports solid $18.5 million profit result on an electricity network transformed for the future

Hawke’s Bay consumer-owned lines company Unison today announced an $18.5 million after tax profit as it leads New Zealand in building an electricity network for the future.

Announcing the result, Chairman Kevin Atkinson said Unison achieved a solid result, despite the impact of the global financial crisis and was now advancing its smart grid initiative with confidence.

“Unison started the new decade with a bold direction for business growth and enhanced customer service moving from a traditional provider of electricity distribution, to a provider of energy and infrastructure solutions,” Mr Atkinson said.

Unison Group Chief Executive Ken Sutherland said the company’s smart grid initiative was a vehicle to encourage far greater participation across the New Zealand industry.

“While many players in our sector remain challenged by their current business model, this year we hope through proving our credentials and demonstrating the benefits of our smart grid, we will take others with us. 

“We want the electricity distribution industry to share in the benefits because an excellent customer experience is what New Zealanders deserve,” Mr Sutherland said.

The $18.5 million profit for the year ending March 31, 2011, compares to the $18.9 million record result last year.

The company announced an $8 million dividend to its shareholder, the Hawke’s Bay Power Consumer’s Trust.  Last year the dividend was $8.76 million, reflecting the record result.

Mr Atkinson said Unison was leading Hawke’s Bay, Taupo and Rotorua forward in technology, innovation and communications, which were all key drivers for improving growth and productivity to support a stronger local economy.

“Through our Smart Grid Initiative we are investing in our future and creating benefits to be enjoyed by generations to come. Our new direction will see Unison deliver greater value, choice and reliability to the customer,” Mr Atkinson said.

Unison was now gearing itself for the next stage of its smart grid, which included a full scale deployment of network monitoring, automation technologies, smart meters, distributed generation, and high speed communications, supported by cutting edge information systems. 

Mr Sutherland said this next stage involves engaging even more closely with customers and their communities as Unison begins to deliver these solutions to their homes and connect them to the smart grid.

In review – 2010 was a year of solid performance.

Unison had leveraged the synergies of its fibre, contracting and transformer manufacturing subsidiaries, to be in a strong financial position.

UnisonFibre produced steady growth, with over 140km of fibre being built across Hawke’s Bay, Taupo and Rotorua to enable business, healthcare and education providers to enjoy a more reliable and faster service.

Unison was now expanding its fibre network to meet market demand for superior, ultra-fast services and was strongly positioned to deliver even more for business opening the door to greater competition and opportunity.

Unison Contracting Services Ltd diversified in to the civil engineering, fibre and vegetation sectors to support Unison’s core electricity business and the subsidary was now a major local employer with over 130 staff.

ETEL, Unison’s distribution transformer manufacturing business, performed well.  While the New Zealand market was relatively flat, ETEL experienced solid growth in the Australian market that saw the company supplying transformers into Queensland, Victoria and Tasmania. 

Network performance and reliability, even in the face of four major weather events, highlighted the Company’s investment to improve and maintain its assets.

Financial Performance

•  $18.5 million profit result, down slightly on last year’s record $18.9 million
• Revenue continued to grow, increasing $7.5 million over last year (up 4.8%).
• Group borrowings increased $12.5 million to $240.6 million, reflecting continued investment in the network
•  Network infrastructure investment saw total Group assets increase by $23.4 million to $627.2 million. 

·         Shareholders’ funds were impacted by a downward revaluation of land and buildings, reflecting current market conditions and unrealised losses on financial derivatives.  However, Unison’s gearing remains robust with shareholders’ funds over total assets at 46%.

• Dividend pay out $8 million.

Hawke’s Bay Power Consumers’ Trust Chairman, John Newland commended Unison’s success for the year.

“We commend the directors, management and all employees for their achievements over the past year. 

“The Company is responding very capably in changing times and conditions within the electricity sector, and there will be ongoing challenges and opportunities ahead.” 

Shareholder value improved to $289.2 million, an increase of $4.0 million, or 1.4% over last year.

“The Trustees will continue to support initiatives that will improve Unison’s business to meet the needs of consumers and which also enhance the value returns to the shareholders,” said Mr Newland.  

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For more information please contact:
Danny Gough
Unison Customer Relations Manager
Ph 021 739 461