Orion posts $46.8m net profit for 2010

12 July 2010

Christchurch-based electricity distribution network company Orion New Zealand Limited has announced a $46.8m net profit after tax for the year ended 31 March 2010, $4.1m above its statement of intent target.
 
Net profit was $3.1m below Orion’s 2009 result, largely due to subdued economic conditions which brought a drop of $5.1m in revenues from new customers connecting to the network.
 
Orion’s solid financial performance in 2010 was largely due to ongoing prudent network investment and a commitment to provide customers with a secure and cost-effective electricity supply, says Orion chief executive officer Roger Sutton.

“We’ve built a stronger and more innovative network that gives our customers a secure power supply and – through the use of load management and price incentives – more control over their power bills. The lines prices that we charge electricity retailers to deliver energy to Canterbury customers are consistently below the industry’s average and Orion has one of the most reliable electricity networks in the country,” Mr Sutton adds.

“We plan to spend an average of $45m each year for the next 10 years to continue to strengthen central Canterbury’s electricity network. Our major projects will increase network capacity in Christchurch city as it grows, and we’re also upgrading our network in rural areas which now use twice as much electricity as a decade ago.”

The company spent more than $34m in 2009/10 on projects to connect new customers, reinforce the network and replace ageing equipment.

Orion continued to work closely with national grid owner Transpower and neighbouring electricity network companies throughout the year to ensure reliability of supply to the region. “We see enormous benefits in electricity networks working together to manage and reduce peak load on a regional basis,” Mr Sutton says. To this end Orion developed a regional load management system which reduced transmission peaks in the upper South Island by about 30MW during the 2009 winter and saved the region’s customers $3m of Transpower charges.

“Our financial performance this year and our continuing high network reliability show that we are working hard for the community,” Mr Sutton says.

During the year Orion paid fully imputed ordinary dividends of $37m to its ultimate shareholders – Christchurch City Council (89.3%) and Selwyn District Council (10.7%). This has brought total tax-free distributions to shareholders since corporatisation in 1993 to around $980m – money that has been invested back into the local community.

Orion has set a target for profit after tax of $48.6m for the year ending 31 March 2011.

For more information, please contact:

Roger Sutton
Chief Executive Officer
03 363 9846 or 027 433 3632


View the Orion 2010 annual report to find detailed financial performance figures and commentary.