Our operating environment was unpredictable

Ken Forrest - Managing director
“I can say with confidence and pride, that regardless of position within the Company, individually and collectively our people all work directly or indirectly towards the common goal of providing an electricity supply to every customer, 24 hours a day for 365 days of the year.”
Ken Forrest – Managing Director

Managing Director's report

For the year, our objectives were certain but our operating environment was unpredictable – the economic climate, a reduction in delivered electricity and extreme weather events all impacted on our results.

The two constants of our business are to increase shareholder value and provide a reliable supply to those connected to our network. But sometimes the latter is beyond our best endeavours.

During the year (as highlighted) several extreme weather events impacted on our ability to maintain supply. Exceptional storms, heavy rain and consequential flooding uprooted trees over lines, washed out poles, and caused slips which engulfed our lines and access. The restoration of supply was frequently inhibited by roads blocked by trees and flood waters.

Regardless of the circumstances and the extremities of the weather, our staff were there. Helicopters, boats, 4WDs, and the sheer determination of our skilled staff were all essential ingredients in the restoration of supply and our teams in the field were supported by those back in Blenheim.

Our customers knew of some of the difficulties our staff had to encounter and appreciated their efforts. The reality is that there was nothing more that could have been done in the restoration of supply. Our team did their very best in extreme conditions; coping with the adversities of nature is our business.

I can say with confidence and pride, that regardless of position within the Company, individually and collectively our people all work directly or indirectly towards the common goal of providing an electricity supply to every customer, 24 hours a day for 365 days of the year.

Marlborough Lines has quality assets, systems and a strong balance sheet and is in a sound position going forward. But in all aspects of our operations continual improvement has to be an ever-present goal. We also remain alive to investment opportunities consistent with our core operations to enhance the value of our business for our shareholder.

Because of the uncertainties and evolving complexities of Commerce Commission regulation in relation to future pricing, we also need to maintain a close interest in our regulatory environment to ensure the interests of Marlborough Lines and its customers are not disadvantaged.

In the coming year we can look forward to these challenges with confidence. That we do so is testimony to the abilities of our Directorate, the support of our shareholder, and the efforts of our staff whose considerable endeavours I am pleased to acknowledge.

Regardless of the circumstances we will be there for our customers.

Ken Forrest Signature

K J (Ken) Forrest
Managing Director

 

 

Our summarised scorecard:

Target Result

Achieve a Parent pre-tax pre-discount profit of $16.843m

Achieved $16.169m

No serious lost time injuries

Achieved

Increase shareholder value

Achieved an increase of $6.025

Increase shareholder dividend

Achieved an increase from $1.7m to $1.75

Reduce total customer minutes of lost supply

Result was an increase of 90.3% because of extreme event

Have all five urban 33kV/11kV substations operating with zero noise

Achieved

Maintain our international accreditation for systems management, environment, safety and health

Achieved

Achieve increase in surveyed customer satisfaction

Achieved increase from 94% to 96

Graph

The mild winter, wet summer and the economic recession all combined to reduce total delivered energy over the previous year.


Graph

Despite having about 40% fewer electricity connections, the Otago network distributes more electricity than the Marlborough network due to the presence of New Zealand’s largest gold mining operation at Macraes Flat.


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The larger comparative regulatory value of the Marlborough network reflects higher levels of capital expenditure necessitated by growth in customer demand.


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Non-domestic electricity consumption as a proportion of total consumption has increased significantly in the last ten years and primarily has been driven by the wine industry.


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Although non-domestic consumption comprises 59% of our delivered energy, only 15% of our customer connections are non-domestic.