Hydro Tasmania has fulfilled its pledge to rebound strongly in the 2016-17 financial year.

In the wake of the 2015-16 energy supply challenge, the business promised to rebuild storages, restore profitability and reduce debt. It has achieved all three goals.

Hydro Tasmania’s underlying result for 2016-17 was a profit of $20.1 million, before tax, fair value adjustments and revaluations. The result was significantly better than originally forecast.

In 2016-17, Hydro Tasmania also reduced net debt by $89 million to $733 million.

Water storages are very securely placed ahead of summer, at almost 48 per cent. The business comfortably exceeded its storage target of 30 per cent at the end of June 2017, and has already exceeded the next target of 40 per cent by the start of summer.

The Chairman of Hydro Tasmania, Grant Every-Burns, said the business is well-placed to help lock in Tasmanian energy security, achieve the lowest possible power prices, and support Australia’s transition to a low-carbon economy through the Battery of the Nation initiative.

“Hydro Tasmania spent 2016-17 rebounding strongly from past challenges and developing a strong new plan for Tasmania and Australia’s energy future,” Mr Every-Burns said.

“As well as delivering on our financial commitments, we’ve supported the work of the Tasmanian Energy Security Taskforce and Public Accounts Committee,” he said.

The CEO of Hydro Tasmania, Steve Davy, said the business has sought new ways to contribute to the Tasmanian community - mindful that Hydro’s connection and duty towards Tasmania goes well beyond that of most other businesses.

“We’ve sought to listen and communicate more effectively with our most important customers – the people of Tasmania,” Mr Davy said.

“And we’ve forged an ambitious but achievable vision to help lock-in Tasmanian energy security, give Tasmanians the lowest possible power prices, and lead Australia through its challenging energy transition, by making Tasmania the Battery of the Nation.

“We know Tasmanians want secure and affordable electricity, and want it sourced as cleanly and sustainably as possible. As Australia’s largest generator of renewable energy, the needs and priorities of Tasmania shape everything we do,” he said.

In May this year, Hydro Tasmania took swift action to help protect many Tasmanian businesses from soaring prices on the mainland. The move is expected to reduce the cost of wholesale electricity by about 20 per cent and cost Hydro Tasmania up to $15 million in foregone revenue in 2017-18. The business still expects to record a strong annual result.

The accounting loss of $222.6m was due to unfavourable movements in the fair value of Hydro Tasmania’s sales contracts for electricity derivatives in Tasmania - driven by increases in the market price of electricity. Operating cash flows were $100m higher than last year because of the strong underlying result and positive movements in working capital.

The State Budget projects no Hydro Tasmania dividends until the 2019–20 financial year.

Hydro Tasmania reports its underlying result year-on-year, allowing comparison of a consistent set of figures (see the table below).

Click table to enlarge

Hydro Tasmania recorded an after-tax accounting loss of $222.6m. That result was an accounting loss of $205m in 2015/16, and a profit of $136.6m in 2014/15.

Hydro Tasmania’s 2016-17 annual report is tabled in State Parliament today and is available here.

Ends.

Released for Hydro Tasmania by Rowan Dix, (03) 62305330 / 0409 722359 / media@hydro.com.au.