SP AusNet Profit Falls 23% on Writedown for Meters

By Angela Macdonald-Smith

Nov. 20 (Bloomberg) -- SP AusNet, the Australian electricity and gas distributor majority owned by Singapore Power Ltd., said first-half profit fell 23 percent after a charge for the replacement of meters in Victoria state.

Net income dropped to A$92.2 million ($59 million) in the six months ended Sept. 30, from A$119.6 million a year earlier, Melbourne-based SP AusNet said today in a statement. Sales rose 8.9 percent to A$635.5 million.

SP AusNet took a A$30.3 million after-tax charge on meters that will need to be replaced under a Victorian government program to roll out so-called smart meters that allow utilities to vary prices through the day depending on demand. The company added about 5,500 customers to its network in the half, while cooler winter weather boosted volumes.

``SP AusNet is on target to meet underlying net profit after tax guidance for the full year after adjusting for the impairment to meters,'' the company said in its statement to the Australian stock exchange. Second-half margins and profit are expected to be lower because of lower seasonal demand, it said.

The profit is lower than estimates of A$115.4 million by Credit Suisse Group and A$113.6 million by JPMorgan Chase & Co., who didn't mention one-time charges in separate reports before the earnings announcement. SP Ausnet said profit excluding one- time items gained 2.4 percent to A$122.5 million.

SP AusNet, 51 percent owned by Singapore Power, yesterday fell 1.3 percent to A$1.17 in Sydney trading.

Earnings before interest, tax, depreciation and amortization rose 11 percent to A$405.2 million. The company declared a first-half dividend to 5.927 cents, up 2.6 percent from a year earlier.

Given the deteriorating economy, SP AusNet is increasingly focusing on ``underlying fundamentals and credit metrics to ensure it continues to be able to access capital markets to fund growth at competitive rates,'' the company said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net