MightyRiverPower pays $74.8M interim dividend, lifts guidance

Tuesday 27th March 2012

MightyRiverPower, the first state-owned energy company slated for partial sale, posted a 14 percent gain in first-half underlying earnings, lifted its interim dividend to $74.8 million, and raised its full-year guidance.

Underlying earnings, which strip out non-cash fair value movements, rose to $101.7 million in the six months ended Dec. 31, from $89.4 million a year earlier, the Auckland-based company said in a statement. Sales rose 18 percent to $729 million.

The government plans to sell down its holding in the power company to just over 50 percent in an initial public offering of shares that will trade on the NZX. MRP will be the first of four state energy company sales along with the partial sale of the company’s majority holding in Air New Zealand, a sale programme it hopes will raise as much as $7 billion.

Operating earnings rose 9 percent to $254.5 million. MightyRiverPower lifted its full-year guidance for operating earnings to a range of $460 million to $475 million, up from an earlier forecast of $430 million to $450 million.

Chairwoman Joan Withers said the increase reflects increased production from geothermal plants and hydroelectric stations in the Waikato River catchment at a time when low water levels in the South Island are lifting wholesale prices.

Production rose 4 percent to 3,664 Gigawatt hours in the first-half against what chief executive Doug Heffernan called “the backdrop of a domestic electricity market with higher than historical churn and nil growth in demand.

The overall increase in output in the first half mainly reflected increased use of gas-fired generation, while geothermal production was “just above” the record level of the year-earlier half.

Generation yields rose more than $20 per Megawatt hour to an average $80.16 per MWh, reflecting stronger prices in the wholesale market.

Net profit tumbled 81 percent to $17.6 million as the company recognised non-cash movements on derivatives of $106 million. Of that, $103.7 million was on interest rate derivatives, which fell in value due to declining wholesale interest rates in the first half, it said.

The gain in operating earnings was mainly driven by a 4.5 percent increase in the weighted average price received from residential and commercial customers and a $7 million one-time gain from the sale of Projects to Reduce Emissions (PRE) credits from its Nga Awa Purua geothermal joint venture, the company said.

Cashflow rose 22 percent to $185.4 million in the first half. Operating expenses dropped 1.8 percent to $115 million, reflecting scheduling of maintenance projects.

Total debt rose 7 percent from a year earlier to $1.06 billion at the BBB+ rated company. It has total debt facilities of $1.36 billion with an average duration of 5.9 years.

The SOE pays dividends amounting to 75 percent of net profit after tax after adjusting for the impact of fair value movements. It paid out $64.7 million in the first half of the previous year.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

No comments yet