Mighty River Power is pinning a “solid” interim result of $73.9 million net profit on a diversified generation strategy and geothermal development.
It expects another “solid performance” for its full year result although forecasting a lower result than last year.
The state-owned power generator reported an above-expected ebitdaf (earnings before net interest expense, income tax, depreciation, amortisation and financial instruments) of $191.2 million.
However, ebitdaf was down from $234.5 million in the same period last year, which the company described as one of "exceptional climatic and trading conditions".
Last year the company experienced record in-flows over a 90-day period.
Net profit after tax was $73.9 million for the six months to December 2009 - up $43.2 million on last year.
The company said adverse movements in the fair value of financial instruments in the previous year impacted NPAT significantly, including a $118.8 million accounting charge due to fair value movements on derivatives (mostly interest rates).
In a statement this afternoon, Mighty River said interest rates fluctuated in the six months to December 2009, but resulted in minimal movement compared to the end of the financial year.
Revenue of $521.8 million was down only slightly compared to $581.1 million in the same period last year. Mighty River said this reflected lower wholesale prices due to improved national hydro conditions.
Total generation was down by 534GWh on the previous period, to 2953GWh, due to lesser inflows from the Waikato catchment but in line with expectations.
Net debt, at $842.3 million, was up by $292.2 million on the same period in 2008 - largely due to the $150 million special dividend paid to the government, along with the capital expenditure in 2009 on Nga Awa Purua.
Chairwoman Joan Withers said dividends were calculated after NPAT and therefore "entirely appropriate". Some of the special dividend also came from the sale of Marsden B.
She said the result signalled a return to “business as usual” after exceptional conditions last year. The company’s geothermal performance was “excellent” and retail growth despite increased competition was encouraging.
Chief executive Doug Heffernan said geothermal exploration and development grew over the period.
He said its joint venture with Tauhara North No.2 Trust in constructing the 140MW Nga Purua Geothermal Station was progressing and resource consent applications for the $400 million Ngatamariki Geothermal Power Station had been lodged.
“Our success in geothermal is also being noticed internationally as we support our global geothermal partner GeoGlobal Energy (GGE) in its business developments in both Chile and the US.
“Our efforts in geothermal development within New Zealand over the past ten years mean that we are now highly regarded as a partner offshore and we are being sought after as a preferred investor.
“This is providing the opportunity for us to create a globally influential, iconic Kiwi business in green energy.”
Mr Heffernan said the company would remain focused on geothermal energy.
Mercury Energy gained 18,000 customers for the period to December 2009, bringing total customers to 400,000. Marketing has concentrated on the South Island.
Mighty River said over the next six months, hydro production levels – now grading below plan because of a dry summer – will influence the company’s fortunes, along with production from Nga Awa Purua in the last quarter.
South Island storage conditions had been favourable, so the company was able to buy from the wholesale market rather than using Taupo storage, it said.
Mon, 22 Feb 2010