This has resulted in a profit after tax of $79.4 million, well ahead of last year’s result, but without a corresponding gain in cash flow. The underlying profit figure of $19.5 million better reflects our operating result.

As a consequence we will not pay a dividend to the Government in the 2007/08 year.

Our people

Hydro Tasmania’s overall performance and its capacity to rise to the many challenges faced during the year are the result of the high level of technical expertise, commitment and professionalism of its people. In a year of significant changes both internally and externally, our people were the key to achieving success and helping to make the business more efficient.

A measure of their views and how they see the business is the annual staff survey, which this year was conducted in March. It found a marginal improvement in the level of overall engagement. This result continues to put Hydro Tasmania in the category of better performing businesses nationally.

Hydro Tasmania continued to put considerable time and effort toward achieving its safety vision of ‘no harm to anyone at any time’. While incident reporting has improved, the increase in our principal safety measure, the Lost Time Injury Frequency Rate, from 1.3 per million hours worked to 4.1 was disappointing. Our aim is to reduce this to below 2 over the next 12 months. On a more positive note, the downward trend in the severity rate of injuries continued.

A major internal initiative during the year was the reorganisation of our business to better position Hydro Tasmania to achieve its strategic objectives. This has provided significant new opportunities for our staff. However, there has been some disruption and the changes have resulted in some redundancies. We have put in place processes and systems to support those affected with the aim of completing the changes by December 2007.

During 2006, Hydro Tasmania moved to introduce two separate employee salary agreements - one for staff of Hydro Tasmania Consulting, the other to cover all remaining staff – to recognise the different challenges faced by Consulting compared to the rest of the business. These were endorsed in September and October respectively following secret ballots of staff, and despite a campaign by unions against them which included a one-day strike by some union members in October.
All parties are now working collaboratively to implement the agreements.

Hydro Tasmania continued to develop its people and emerging leaders through targeted programs and supported various events and charities through a corporate sponsorship program.

Achievements

Hydro Tasmania has continued to invest strongly in its assets, build better relationships with customers and, through its joint venture vehicle Roaring 40s, seek renewable energy opportunities in Australia and overseas.

We successfully completed extensive asset upgrading and refurbishment at Gordon and Tungatinah power stations as part of a $54.2 million statewide capital program.

One significant event at the end of the reporting period was the sale of the Bell Bay Power Station site and the gas turbines to Alinta. This also resulted in Hydro Tasmania being relieved of the pipeline capacity agreement obligations from March 2009. The sale was a positive outcome for the business that will provide an initial direct cash benefit of $30 million and additional savings of $89 million.

During the year the Corporation also signed two energy agreements with major industrial customers - Zinifex and Australian Paper - to provide certainty to their Tasmanian operations into the future.