Endeavour Energy Annual Performance Report - Parliament of New ...

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MANAGEMENT
DISCUSSION & ANALYSIS
Financial results*
2009–10
Result
2010–11
SCI
2010–11
Result
Variation
to SCI
Earnings before interest, tax, depreciation and
amortisation (EBITDA) ($m) 589.0 654.8 711.6 56.8
Earnings before interest and tax (EBIT) ($m) 439.3 488.4 546.9 58.5
Operating profit before tax ($m) 251.6 290.9 354.3 63.4
Operating profit after tax ($m) 179.0 243.6 244.7 1.1
Dividend ($m) 142.6 163.1 156.8 -6.3
Special Dividend ($m) 0.0 863.7 863.7 0.0
Total Distribution
(Dividend + Income Tax Expense) ($m) 215.3 1074.1 1130.1 56.0
Return on assets (%) 9.5 9.9 10.8 0.9
Return on equity (%) 17.3 20.9 20.5 -0.4
Capital Expenditure ($m) 417.4 509.0 496.4 -12.6
*Excludes the impact of the gain on sale of Retail net assets.
Balance sheet
Endeavour Energy’s total assets
increased by $218.5 million
compared to the previous year. The
major contributing factors included
an increase of $436.2 million in
property, plant and equipment
resulting from increased capital
expenditure and system asset
valuation outcomes. This was
partly offset by reductions in
trade and other receivables
($100.0 million), estimated revenue
from unread meters ($78.6 million)
and emission rights ($11.7 million),
primarily resulting from the sale
of Retail assets.
Return on assets, calculated as EBIT
(excluding the gain on sale of Retail
net assets) divided by the average
asset base, increased from 9.5% in
2009–10 to 10.8% at 30 June 2011.
EBIT increased by 24.5% while
average assets increased by 9.2%
as compared to the prior year.
Total liabilities increased by
$139.1 million compared to the
previous year driven by an increase
in borrowings (inclusive of discounts/
premiums) of $203.2 million, primarily
due to the need to fund the capital
expenditure program. This was
partly offset by a reduction in trade
and other payables in the amount of
$87.5 million primarily resulting from
the sale of Retail net assets.
Return on equity, calculated as
profit after tax (excluding the gain
on sale of retail net assets) divided
by average equity, was 20.5%.
This result increased from the
2009–10 outcome of 17.3%, with a
36.7% increase in profit after tax
compared to an increase of 15.6%
in average equity.
Cash flows
Cash and cash equivalents at the
end of the financial year decreased
by $27.1 million compared to the
prior year. Net cash flows provided
by operating activities for the year
were $353.5 million, a decrease of
$46.9 million compared to 2009–10.
This decrease was primarily driven
by the sale of Retail net assets
on 1 March 2011, following which
retail business cash flows were no
longer realised.
Net cash flows from investing
activities for the year were
$433.9 million, a significant increase
of $841.7 million compared to the
prior year, primarily driven by net
proceeds from the sale of Retail net
assets amounting to $928.7 million.
Net cash flows used in financing
activities for the year were
$814.5 million, an increase of
$840.4 million compared to 2009–10
result, primarily due to payment
of the special dividend from the
sale of Retail net assets amounting
to $863.7 million.
Unused credit facilities as at
30 June 2011 totalled $650.8 million.
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