SPAusNet – BT

SP Ausnet delivers on stable returns

SP AUSNET offers predictable and stable returns, managing director Nino Ficca said yesterday.

‘We’ve delivered what we’ve said,’ Mr Ficca said during a briefing on the FY2008 results of the 51 per cent Singapore Power unit.

He was responding to a question on the performance of the stock since it listed in December 2005 in Australia and Singapore, and which, except for a brief period last year, has languished below its IPO price.

SP Ausnet has traded at an average of $1.57, according to Bloomberg. It’s IPO price was $1.75 and A$1.38.

Senior managers of SP Ausnet, which owns and operates power transmission networks in Australia’s Victoria state, are in Singapore this week to meet investors.

Mr Ficca noted that stock markets have been volatile but ‘this is very predictable and stable … our track record speaks for itself’.

Distribution since listing, including next month’s payout of the FY2008 final dividend, will total 26 Australian cents (34 Singapore cents).

It announced a final distribution of 5.788 Australian cents, taking the full-year 2008 distribution to 11.564 Australian cents. Singapore shareholders will receive 11.264 cents less a withholding tax of 0.3 per cent, said Lucinda Kerr of SP Ausnet’s investor relations.

‘We’re not a capital growth stock. It’s more of a distribution yield stock,’ said Ms Kerr, referring to the predictability of the company’s cash flow and its regulated revenue.

For the next three years, 90 per cent of SP Ausnet’s total revenue is assured as it has locked in 100 per cent of regulated revenue.

For current FY2009, SP Ausnet has again guided for 2.5 per cent growth in dividends.

The firm has reaffirmed guidance given earlier this year and expects revenue and earnings before interest tax, depreciation and amortisation growth of about 8 per cent. Net profit after tax is expected to be in line with that previously, due to increased interest charges.

SP Ausnet posted a full-year net profit of A$157.5 million for the period ended March 31, down 11.7 per cent because of costs related to the scrapped Alinta deal from its parent Singapore Power. Earnings per share was 2.54 Australian cents.

SP Ausnet’s stock closed one cent higher at S$1.63 yesterday.

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