13th May 2016 07:48
LONDON (Alliance News) - Jersey Electricity PLC on Friday proposed an increased interim dividend for its first half, despite its pretax profit dipping on higher cost of sales and expenses.
For the six months ended March 31, the Jersey-based electricity provider reported a pretax profit of GBP7.9 million from GBP8.0 million for the same period a year earlier, after cost of sales rose to GBP36.6 million from GBP35.7 million and operating expenses were up GBP400,000 to GBP11.9 million.
The cost of sales rise came from additional costs in the non-energy business units where it is manufacturing a N1 subsea cable, whilst an increase in depreciation charges and pension costs drove up expenses.
This offset an increase in revenue to GBP57.0 million from GBP55.8 million, Jersey Electricity said, and noted that earnings per share fell to 20.65 pence from 20.75p.
Jersey Electricity said it was proposing an interim divined of 5.50p per share from 5.25p per share.
However, Jersey Electricity noted that the upcoming UK referendum on the European Union could cause further volatility in foreign exchange markets and impact its longer-term tariff planning strategy.
"Our electricity purchases are materially hedged for the period 2016 to 2019. As these are contractually denominated in the Euro we enter into foreign currency contracts to eliminate a large percentage of exposure to aid tariff planning," said Jersey Electricity in a statement.
"We have seen significant volatility in foreign exchange in the last six months against the Euro largely associated with the impending UK vote as to whether to remain within the EU, which is why we seek to largely eliminate exposure," the company added.
Shares in Jersey Electricity were untraded on Friday having last traded at 464.00p.
By Hannah Boland; [email protected]; @Hannaheboland
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