Genesis Energy ready for partial sale

Genesis Energy chairwoman Dame Jenny Shipley says the state-owned enterprise is ready for partial sale but is coy on whether she will be leading the company on the sharemarket.

Shipley has been under fire from market figures given her board roles in the failed construction company Mainzeal, its parent company Richina and Seniors Money International, the owner of a home equity release company which is also under financial pressure.

Speaking at the release of Genesis' half year result, she said her future as chairwoman was up to the Government, which still owns all of the company.

"We're always here at the behest of our shareholders - this is true of any company whether it's a government-owned company or not. I've always been judged my results in my career and I expect to be judged by my results in the future."

Net profit at Genesis for the six months was up 85 per cent to $71 million as the company benefited from lower interest and depreciation costs, and low wholesale electricity purchase prices.

Asked whether her presence on the Genesis board could affect market perception of the company and its eventual sale price she said: "As a director one always pays attention to the best interests of the company and the best interests of shareholders. I think this result speaks for itself - we have an excellent board that I and others have recruited over the last three years, it is absolutely a standard that you would expect of a listed company."

Asked whether she would consider stepping down she reiterated that she should be judged on results.

"This is a strong half-year result - this company has moved from being a good company to being an excellent company since I've been involved in it along with my fellow directors and (chief executive) Albert (Brantley) and his senior management team and I would simply ask that people judge the performance of this company on its results."

Prime Minister John Key has said there is nothing "at this point that would suggest she should no longer chair a state-owned enterprise".

The Genesis result was achieved despite weak consumer demand which meant total revenue for the period fell 7 per cent to $1.03 billion, but total operating expenses fell more, down 9 per cent to $835 million.

Genesis will return to paying dividends this year after two years spent absorbing the cost of buying the Tekapo A and B hydro power stations. It will pay an interim dividend of $57 million and says it will pay the same for the second half of the year.

The cost of repairing canals leading to the power stations has increased from the estimated $125 million to between $145 million and $155 million.

Shipley said Genesis was "extremely well prepared" to be partially listed.

Mighty River Power will be first to be partly sold, depending on a judgement on Maori Council court action, due for release this week.

- By Grant Bradley of the New Zealand Herald

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