Trustpower weighs Aussie hydro-generation assets

Trustpower will undertake a strategic review of Australian hydrogeneration assets as it continues to focus on its core New Zealand business, with a decision expected by the end of this year.

Trustpower spun out its wind and solar generation facilities into separately listed Tilt Renewables in October 2016 and since then has focused its strategy on the New Zealand business, while ensuring New Zealand and Australian assets are “efficient, cost effective, and fit for purpose”, the Tauranga-based company said in release to the stock exchange.

It has appointed Forsyth Barr to assist with the review process and “we will update the market with any material results of the strategic review, and currently expect any decisions regarding the assets to be finalised by the end of the 2017 calendar year”, it said.

In July 2013, Green State Power was set up by the NSW government to own and operate a portfolio of renewable generation assets, includ- ing hydro generators at Hume, Burrinjuck and Keepit, with a view to selling these assets later. Trustpower acquired the assets in 2014.

Generation earnings before interest, tax, depreciation, amortisation and fair value adjustments (ebitdaf) from the Australian business were $31.6 million in the year to March 31, 2017, versus $12.3m in the prior year. New Zealand’s generation ebidaf was $168.7m versus $149.6m.

Separately, Tilt Renewables said it aimed to more than double assets under management by 2020 through investment to assist the clean energy transition in New Zealand and Australia, in speech notes for its annual meeting. It has A$1.2 billion ($1.3b) of assets under management.

So far this year, it said year-to-date production in July 2017 was 29 per cent lower on the year and approximately 20 per cent below the long-term average. The prior period benefited from strong wind speeds in May and July 2016, it said.

Trustpower shares closed down 4c yesterday at $5.48.