Recent media reports have focused on Power and Water’s financial performance for the last financial year. The following is designed to provide accurate context and clarity to this reporting.

An increase in our net profit of more than 7%

Reports that Power and Water recorded a consolidated net loss after tax of $200 million last financial year do not paint an accurate picture of our actual performance.

Our underlying net profit after tax was $23 million, an increase of 7.5% when compared with the previous year. Our revenues were also up, largely powered by the strong performance of our gas business.

This result enabled us to deliver a $9 million dividend to the taxpayer through the Northern Territory Government and is a fairer representation of our performance across the year.

The consolidated result that has been reported includes the value of our assets based on the current value of future cash flows.

Our transition to the National Electricity Rules has changed the estimate of those future cash flows and, as a result, the value of those assets has been lowered by $243 million, which has impacted our consolidated result.

Power and Water’s accounts requires all asset to be revalued annually based upon the current value of future cash flows. This does, and will continue to, result in significant asset revaluations due to changes in economic conditions or, as in 2018-19, changes to the regulatory returns as determined by the AER.

However, while this revaluing of our assets is a necessary accounting input, it should not be viewed as a more important figure or detract from our net profit or ‘cash’ result.

Our overall debt position

Power and Water’s overall debt has remained largely stable over the past fouryears, largely because we have not materially increased our borrowings over that time. For instance, Power and Water’s total debt in 2016 was $1.10 billion.

Our financial position and performance are monitored closely as part of the Government’s Government Owned Corporation’s framework. We have more than $3.3 billion in assets on our balance sheet and an overall equity position of more than $1.3 billion.

Importantly, the Corporation is forecast to make profits over the next four years as reported in the Statement of Corporate Intent 2018-19.

A modest increase in employee expenses

Reporting that our employee expenses increased by $1.6 million might be accurate, but it does not tell the whole story.

Our employee expenses increased by just 1.5% across the year, a result that reflects increased rates of pay delivered by the current enterprise bargaining agreement offset by a reduction in the number of full-time equivalent employees.

Further detail can be read in our 2018-19 Annual Report here.

Contact: Media unit
Phone: 0401 117 599