Power network operator Spark Infrastructure has recorded a $96.7 million full-year loss and warned its shareholders it will likely have to start paying tax soon.
The owner of electricity networks in Victoria, South Australia and NSW reported a one per cent increase in total income for the 12 months to December 31 but registered a loss from a $88.6 million net profit in 2017.
A federal court decision on February 7 related to tax payable by Victoria Power Networks effectively means Spark will have to start paying taxes from this year.
"In the absence of a successful appeal, Spark Infrastructure will pay tax from 2019 onwards," the company said, adding that it may need to restate tax losses and recognise a potential tax liability of $65 million to $70 million for all years up to and including 31 December 2018.
Spark also noted a downgrade in dividend payout for 2019 "to at least 15.0 cents per share" which it said was "more closely aligned with the five-year regulatory periods of our businesses".
"While this reduction is of course disappointing, we have confidence in the robustness of our investment businesses and their continued outstanding performance," chairman Doug McTaggart said.
Chief executive officer Rick Francis said regulatory decisions were likely to put pressure on revenues and operating cashflows of the business after 2020.
Spark said operating cash flow was down 3.3 per cent for the company's SA Power Networks, was up 1.6 per cent for the Victoria Power Networks and surged more than 200 per cent for TransGrid in NSW from $10.9 million to $33 million.
"An impairment of $270 million to the carrying value of SA Power Networks has been recorded reflecting, in part, the regulatory decisions and tax litigation outcome as at 31 December 2018," the company said.
Mr Francis said Spark had a strategy to "become a leader in delivering essential service infrastructure" and was aiming for capital growth and continuing distributions to shareholders.
"We aim to do this by growing and diversifying our portfolio through disciplined acquisitions and/or building sustainable businesses arising out of the technology, climate and customer-driven transformation occurring across the energy sector," Mr Francis said.
The company said it will pay an unfranked final dividend of 8 cents per share, up from 7.63 cents a year ago.
SPARK FULL-YEAR LOSS
* Full-year net loss of $96.7m after $88.6m profit in pcp
* Total income up 1 pct to $287.9m
* Final distribution up 0.37 cents to 8 cents per share, unfranked.
