Annual result 2016

14 July 2016

Christchurch-based electricity distribution company, Orion New Zealand Limited, has delivered another year of strong results, with a solid operating and net profit, amidst the challenges of the rebuild.

Orion today announced that it had made a $53m profit after tax in 2016, $4.6m above the company’s statement of intent target.

Orion’s profit is $29m down on the previous year, however last year’s profit was inflated by $24m for a one-off quake insurance settlement and this year’s is down by $5m to recognise a new impairment expense to now recognise that one-off capital contributions from developers reduce Orion’s future revenues.

“Adjusting for these differences, this year’s profit is virtually the same as last year’s,” said Orion Chief Executive, Rob Jamieson.

“Our sound financial performance demonstrates the balance we keep between keeping costs under control and continued investment in our network.  Our continued objective is to support the region’s recovery and rebuild through a resilient and reliable network and this result means we can do that with confidence.

“Our capital expenditure was $92m this year, up $5m on last year, as we continue to build capacity and resilience into our network post quakes. While our borrowings have increased to around $230m, we expect that we’ll return to more normal levels of capital expenditure by 2018, so our debt will remain within prudent levels.”

The company’s assets are now valued at over $1.1 billion.

“This past year has been of enormous significance, with the completion of some major projects that will support both the recovery of the region and its future growth.

“Our northern loop cable project is one that was critical to providing the region with a robust, dependable and cost-effective power supply – now and into the future.

“While our core business is providing a robust and reliable electricity network, we are also committed to understanding and supporting emerging technologies such as solar, batteries and electric vehicles.  EVs, for example, are a fantastic opportunity to sustainably reduce carbon emissions by exploiting New Zealand’s high levels of renewable generation.  We have added several hybrid EVs to our vehicle fleet, we have twelve EV charging stations at our head office and we are looking to roll out further EV charging stations throughout our region with industry partners this year.

At a community level, we continue to proudly sponsor Community Energy Action. Our ongoing support for CEA recognises the real difference that well-insulated and energy-efficient homes makes to the health and well-being of people in our community. We’re also pleased to have helped fund a Canterbury District Health Board study last year, which showed how warmer, healthier homes lead to far fewer nights spent in hospital due to illness.”

The company paid $153m to its shareholders during the year – the Christchurch City Holdings Limited and the Selwyn District Council. This included:

  • $90m via a planned one-off share buy-back and
  • $63m via fully-imputed dividends – $15m ahead of its statement of intent target and $7m up on the previous year.