EBITDA & Net Surplus After Tax

Transcription

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2 Your Directors

3 EBITDA & Net Surplus After Tax 250 EBITDAF & Net Surplus After Tax 200 $M's EBITDAF Operating Surplus

4 Funding Debt Facilities drawn to NZD 774m at 30 June 08 No bank refinancing due until July 2009 $55m bonds mature in December 2008

5 Gearing 50% Debt to Debt + Equity 40% 30% 20% 10% 0% Actual Forecast

6 Current Developments Snowtown 98 MW, Wind, South Australia A$210m A$60-70m equity and earnings exposed to currency movements Ten year power sales contract Waipori enhancement, 6 MW Hydro, Dunedin - A low environmental impact new hydro development - successfully won a slot in the Projects Mechanism to encourage early renewable project commitment - Carbon credits earned over first five years - Credit pricing up on investment case - now successfully commissioned

7 The New Zealand Market New Zealand well positioned for a world with carbon pricing In TrustPower s view performing better than central planning with a single monopoly supplier Price capping interventions - seductive short term appeal but damages commercial drivers for good contracting and risk management by participants The moral hazard is real Partial privatisation of SOEs needed to sustain the investment climate

8 First Quarter 2009 FY A very dry 3 months for TrustPower and the country 22%, 130 GWh below long term expected levels and at the level of an outlier event Previously advised 2009 impact estimated at $15-20m at the EBITDAF level Update - the quarter ended at the more favourable end of this range Review of risk management policy settings and our pursuit of learnings from the 2008 experience underway

9 General Governance Directors automated share purchase plan Purchase programme executed at arms length within 20 days of HY and FY results announcements Most of post tax director fees recycled into share ownership Overtime a meaningful commitment is expected to grow which reinforces alignment of directors with shareholders Seventh Director Hope to confirm shortly

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11 Summary of the Years Events Operating Surplus $98.1m EBITDAF grew 6% to $208m Generation output up 4% to 2,018 GWh Tararua Stage 3 completed on time and 3% under budget ($174m) Deep Stream hydro now commissioned ($25m) Snowtown Stage 1 nearly completed (AU $208m) Wairau (72 MW) and Arnold (46 MW) hydro consents awaiting decisions Mahinerangi and Kairewa Downs wind farm (440 MW) consents awaiting decisions Snowtown Stage 2 (up to 212 MW) and Myponga (48 MW) permitted awaiting investment decisions TrustPower retail top service in national survey TrustPower recognised as 2007 Australasian Top Company for Leaders

12 Results Operating Surplus $ millions $100.0 $80.0 $60.0 $40.0 $20.0 $61.8 $73.2 $81.4 $97.4 $98.1 $- 03/04 04/05 05/06 06/07 07/08 Prior Years not adjusted for IFRS

13 Results $ millions $2,500 $2,000 $1,500 $1,000 $500 $0 Total Assets $2,350 $2,060 $1,381 $1,350 $1,435 03/04 04/05 05/06 06/07 07/08 Prior Years not adjusted for IFRS

14 Results Dividends Cents per Share /04 04/05 05/06 06/07 07/08

15 Results Generation Output Units (millions) /04 04/05 05/06 06/07 07/08

16 First Quarter 2008 Characterised by : Low generation volumes - down 130 GWh or 22% High spot prices ave $245 / MWh, last year $64 / MWh Higher demand than 2007 particularly South Island Insufficient generation + hedges to match demand therefore purchased off market at high prices Financial impact at the lower end of $15m - $20m EBITDAF

17 TrustPower Generation last 12 Months Versus Long Term Expectations Total Generation Production versus Long Term Expected Average GWh Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Actual LTEA

18 Generation Developments Tararua Wind Farm Stage 3 93 MW comprising 31 V90 Vestas turbines Completed capital cost $174m Experienced blade and bearing faults being repaired or replaced under warranty 1 million project carbon credits with about half now sold internationally

19 Tararua Wind Farm Stage 3

20 Generation Developments Snowtown Wind Farm South Australia 99 MW comprising 47 s88 Suzlon turbines Expected capital cost of AU $208m 10 year power purchase agreement on 90% of output All turbines running by end of August

21 Snowtown Wind Farm Stage 1

22 Snowtown Wind Farm Stage 1

23 Generation Developments Deep Stream Hydro 6 MW (2 stations) high head hydro in Otago Significant dam construction and 7km of canals Capital cost of $25m Now commissioned and fully operational Turbines NZ designed and built Substantial project delays from imported components, severe weather and component defects.

24 Deep Stream Hydro

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26 Generation Project Options Myponga Wind Farm SA (48 MW) Snowtown Wind Farm SA Stage 2 + (212 MW) Mahinerangi Wind Farm Otago (200 MW) Kairewa Downs Wind Farm Southland (240 MW) Wairau Hydro Marlborough (72 MW) Arnold Hydro West Coast (46 MW) Numerous wind and hydro developments at early investigation stage

27 TrustPower s renewable energy options could double generation capacity Australian Renewables Wind Development Wind Options New Zealand Renewables Resource Consenting SI Hydro SI Wind Current Generation Capacity SI Hydro NI Hydro NI Wind Capacity MW

28 New Zealand Regulatory Environment Climate Change Bill tabled in Parliament in December 07. Enactment of legislation dependent on multi-party support. Reasonable chance it won t be passed ahead of Election in November. Key aspects of the legislation as currently proposed: Emissions Trading Scheme electricity sector included from January Year moratorium on base load fossil fuel thermal generation except as required to maintain security of supply. Policy target of 90% renewable generation by 2025.

29 Electricity Commission Market Design Review Key take-aways: No major change to industry structure proposed. EC key concern is sufficiency of competition in retail market. EC s key steps to promoting competition: Improving retailer ability to manage nodal pricing risk through: Development of transmission hedges Supporting transmission investment Lower customer search and switching costs through: Further promotion and improvement of power-switch service

30 Our Customers Strategically grow market share as new generation developments are commissioned Build further loyalty with FRIENDS and FRIENDS EXTRA Grow KINECT telecommunications brand Support Community activities Maintain top customer service standing

31 Looking Forward Maintain strong Balance Sheet during market upheaval Continue to provide steady value and dividend growth Invest in high earning generation assets Support and maximise carbon market opportunities Strategically grow retail market share Enhance the TrustPower investor and retail brand Continue to meet shareholder expectations

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