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2016-17 Queensland Energy GOC Profits and Dividend Fact Sheet

September 30, 2017

Late Friday afternoon and just prior to a weekend full of Grand final football 132 reports were tabled in Parliament.  Among these were the CS Energy, Stanwell, Powerlink and the newly created Energy Queensland annual reports for 2016-17. (As a side note this practice has to stop as it deliberately seeks to undermine transparency and accountability of State Government by taking key interest items out of the news cycle, a tale for another day).

I have provided below an update on ‘Net Profits after Tax’ and dividends paid to the Queensland Government from Queensland Energy GOCs.  This follows my earlier discussion of whether GOC dividends amount to taxation by stealth.

Pleasingly for 2016-17 we have seen a move away from extracting 100 per cent of after tax profits as a dividend for some GOCs which occurred in 2014-15 and 2015-16.  For example in 2016-17:

  • For Stanwell $100 million was retained for Burdekin Hydro-electric power plant; and
  • For Powerlink $150 million was retained for the potential development of transmission infrastructure to support renewable energy generation in Northern Queensland

However a 100 per cent dividend (a whopping $881 million) for the newly created Energy Queensland continued (previously Ergon and Energex).  I have previously expressed concern over the sustainability of this practice as it is akin to the running down of a business.

In summary for the 2016-17 financial year a total $1.466 billion was paid as dividends to the shareholding State Government.  This is consistent with and the upside of the State Government's commitment to retain 'income generating assets' in public ownership.  The flip side of course is the income they are generating is earned from Queensland household and business electricity bills.

Quotes from annual reports include:

CS Energy: CS Energy recording a net profit after tax of $282.6 million …….. and has provided for a dividend payment of $122.9 million, which reflects the positive underlying financial performance of the business.

Stanwell: The business delivered a net profit after tax of $375.2 million in 2016/17. This enables the business to return a total dividend to shareholders of $260.6 million. The total dividend excludes the retention of $100.0 million as an investment towards the cost
of developing the Burdekin Hydro-electric power plant,  On 2 June 2017, the Queensland Government announced its Powering North Queensland Plan that includes a $100.0 million reinvestment of Stanwell dividends to help fund a proposed hydro-electric power station at Burdekin Falls Dam.

Powerlink: Powerlink’s underlying dividend policy is to distribute 100 per cent of Net Pro t After Tax, which was $351.2 million for 2016/17. The final declared dividend for the year was $201.2 million, which recognised the Queensland Government’s decision for Powerlink to retain $150 million for the potential development of transmission infrastructure to support renewable energy generation in Northern Queensland.

Energy Queensland: Overall the strength of our financial performance across the Energy Queensland Group, with the increased focus on the efficiency and effectiveness across the Group’s operations and the strength of our revenue position, delivered a consolidated Net Profit After Tax of $881 million.  Energy Queensland will pay a dividend of 100% of the profit result to the Queensland Government in the coming year

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Great post Nick. Very informative.



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