Trustpower had again shown its business model could handle anything the wholesale market could throw at it, Forsyth Barr broker Peter Young said yesterday.
The company produced a strong first-half operating profit of $155 million, up 13% on the previous corresponding period.
While there was no special dividend, TrustPower boosted its ordinary dividend to 19 cents a share, up 2 cents a share more than the final dividend last year.
"The results underline TrustPower's resilience to varying wholesale market conditions and its ability to produce good results."
The main largest single reason for the increase was a full six months of contribution from the Snowtown wind farm, which started operation in the first half of last year, Mr Young said.
A reduction in market fees of $3.6 million had also helped.
A general increase in customer numbers, and therefore mass market sales, had also been a key to the improvement.
The second quarter of the reporting period saw a significant drop in hydro output, but that was no surprise given the very strong hydro performance in the second quarter last year that "saved" TrustPower's first half in 2009, he said.
Wind product was up slightly.
The rapid change that occurred in the wholesale market in 2008 was evident in the average price of generation and purchases.
The increase in mass market sales (5.1% in the first half), driven both from an increase in customer numbers (4.6%) and an increase in usage, had been a significant factor in the first-half profit, Mr Young said.
Forsyth Barr had revised its full-year forecasts upwards following the strong result.
Operating earnings were now forecast at $282 million, up $12 million.
"The main driver of the increase has been adjusting upwards our retail price assumption and increasing the expected usage of power per customer.
"TrustPower remains a strong performing investment.
"It continues to generate strong earnings and has proven itself to be resilient to varying wholesale market conditions," Mr Young said.
