Saturday, 29 November 2014

Announcement

HALFYR: HED: Horizon Energy Announces Six Month Result

09 Nov 2012 09:10NZX
9 November 2012

HORIZON ENERGY ANNOUNCES SIX MONTH RESULT

NZX listed electricity distribution Company Horizon Energy Distribution
Limited has announced an unaudited net profit after tax of $2.5 million for
the six months ending
30 September 2012.  This result compares to a net profit after tax of $3.03
million for the six months to 30 September 2011.

Horizon Energy Chairman, Mr Rob Tait says "the after tax profit for the half
year has been impacted by due diligence and operating costs associated with
the 1 September 2012 acquisition of Aquaheat New Zealand Limited of $0.7
million post tax.  Under the current accounting standards costs associated
with an acquisition must be expensed in the year incurred and not capitalised
as part of the assets purchased.  Accounting losses arising from the mark to
market value of the Company''s interest rate derivatives of $0.35 million post
tax (last year $0.47 million post tax) also contributed to this half year
result.

The Company is now forecasting a year end profit of around $4.3 million which
is significantly down from the previous year''s result of $6.4 million. The
full year forecast reflects not only the Aquaheat acquisition costs, but
operating losses forecast for the remainder of the year and other transition
and restructure costs for this new wholly owned subsidiary.  Horizon Energy
and Aquaheat management are implementing plans to reposition the business to
perform profitably over the next 12 months.

The Company''s electrical contracting subsidiaries, Horizon and Stewart Browne
Group Limited have achieved good results despite the challenging business
climate; they are both expected to meet their respective financial forecasts.

During the six months to 30 September 2012 the network operation performed
well and the Company remains within the quality thresholds set by the
Commerce Commission.  The Company remains on track to achieve its capital and
maintenance expenditure for the year to support the operation of a safe,
efficient and reliable network.

The revised draft decision to reset the default price-quality path announced
by the Commerce Commission remains an area of significant concern.  The
decision, if finalised in its present form, will have a significant adverse
impact on the Company''s future earnings which may compromise investment in
the core network infrastructure.  It appears that the Commerce Commission
will persist with methodology that does not use current business specific
data and relies on macro assumptions to determine allowable returns.  We
continue to make submissions requesting the Commerce Commission to reconsider
their position before final decisions are published on 30 November 2012.

In light of the regulatory risk and demands for continued investment in the
core network, a fully imputed interim dividend of 6 cents per share will be
paid on 13 December 2012 to shareholders recorded on the register at 5.00pm
on 3 December 2012.  This is less than what has been paid in previous years,
however, is considered by the Directors as prudent given the regulatory and
business challenges faced by the Company.

Attachments:
HED FY13 Interim Financial Results
NZSX Appendix 7

For further information please call:

Robert Tait
Chairman
Horizon Energy Distribution Limited
+64 7 5711566
+64 21 812577

Ajay Anand
Chief Executive Officer
Horizon Energy Distribution Limited
+64 7 306 2901
+64 21 272 7956

BACKGROUND
Horizon Energy conveys electricity from generating stations and the national
grid to the homes and businesses of more than 24,600 consumers in the Eastern
Bay of Plenty. Horizon Energy''s core business is operating an electricity
distribution network comprising of some 2,300 kilometres of lines over 8,400
square kilometres in the Eastern Bay of Plenty.

END
End CA:00229531 For:HED    Type:HALFYR     Time:2012-11-09 09:10:57
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