There are COVID-19 concerns and strains at Victorian electricity and gas distributor AusNet.
While the utility yesterday revealed that it had lifted its full-year payout on an improved profit result in 2019-20, it warned that it was looking at lower payouts for this financial year.
Directors told investors that disruption from the COVID-19 pandemic will weigh on shareholder returns over the next 14 months.
Dividends are expected to be in the range of 9.0 to 9.5 cents a share franked at 40% for 2020-21, down from the 10.2 cents a share paid for 2019-20 and back to levels for 2018-19.
(Shareholders will receive a final dividend of 5.1 cents a share for 2020-21, 50% franked, bringing the full-year payout to 10.2 cents a share compared to 9.72 cents a year ago at 42.5% franking.).
Ausnet said the extent of this impact will depend on the duration and severity of the pandemic, the impact of government or regulatory interventions, and the number of customers who take advantage of the support program.
“Recently, we have seen the unprecedented events of the global COVID-19 pandemic unfold in Australia,” managing director Tony Narvaez said in yesterday’s results filing.
“We understand this is a challenging time for our customers and maintain a strong commitment to delivering energy reliably and safely, which is of critical importance during this period.”
“This guidance for the dividends) is based on our current best estimate of financial impacts from customer support measures and having regard to the current environment, our investment pipeline, and expected lower regulated revenues from our upcoming regulatory resets,” the company said in Tuesday’s release.
“Dividends will continue to be determined subject to prevailing market conditions and financial performance and having regard to operating cashflows after servicing interest, tax, maintenance CAPEX and a portion of growth CAPEX.”
The utility on Tuesday reported a 14.5% increase in full-year profit to $290.7 million as revenue jumped 6.2% to $1.98 billion on higher regulated revenues and customer contributions.
This is despite “a range of challenges” that included extreme bushfire and weather events and “ongoing uncertainties and changes in the energy landscape”.
AusNet Services is 31.1% owned by Singapore Power, 19.9% owned by State Grid of China, and 49% publicly owned and listed on the ASX.
As well, the company says it is planning some major investments in the next couple of years and will need to conserve cash to help meet the cost of those.
The shares rose 2% to $2.
