Trustpower looking to spin off Australian hydro generation assets

Trustpower will undertake a strategic review of Australian hydro generation 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 New South Wales government to own and operate a portfolio of renewable generation assets including hydro generators at Hume, Burrinjuck and Keepit, with a view to selling these assets in the future. Trustpower acquired these assets in 2014.

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

Separately, Tilt Renewables said its goal is 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 general meeting. It currently has A$1.2 billion of assets under management.

Regarding performances so far this year it said year-to-date production in July 2017 is 29 percent lower on the year and approximately 20 percent below the long-term average. The prior period benefited from strong wind speeds in May and July 2016, it said.

Trustpower shares last traded down 0.5 percent at $5.49 but have gained 16.5 percent so far this year. Tilt last traded down 3.3% at $2.07 and have shed 10 percent so far this year.

(BusinessDesk)