Lift in income fails to Spark power group profit
POWER network operator Spark Infrastructure has recorded a $96.7 million fullyear loss and warned its shareholders it will likely have to start paying tax soon.
The owner of electricity networks in Victoria, South Australia and NSW reported a one per cent increase in total income for the 12 months to December 31 but registered a loss from a $88.6 million net profit in 2017.
A federal court decision on February 7 related to tax payable by Victoria Power Networks effectively means Spark will have to start paying taxes from this year. “In the absence of a successful appeal, Spark Infrastructure will pay tax from 2019 onwards,” the company said, adding that it may need to restate tax losses and recognise a potential tax liability of $65 million to $70 million for all years up to and including 31 December 2018.
Spark also noted a downgrade in dividend payout for 2019 “to at least 15.0 cents per share”.
“While this reduction is of course disappointing, we have confidence in the robustness of our investment businesses and their continued outstanding performance,” chairman Doug McTaggart said.
Chief executive officer Rick Francis said regulatory decisions were likely to put pressure on revenues and operating cashflows of the business after 2020.
Spark said operating cash flow was down 3.3 per cent for the company’s SA Power Networks, was up 1.6 per cent for the Victoria Power Networks and surged more than 200 per cent for TransGrid in NSW from $10.9 million to $33 million.
“An impairment of $270 million to the carrying value of SA Power Networks has been recorded reflecting, in part, the regulatory decisions and tax litigation outcome as at 31 December 2018,” the company said.