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Mighty River Power results fall

Mighty River Power, the final major power company to post its annual results, has made the best of extremely challenging hydro conditions in the year to 30 June 2010.The company emphasised underlying earnings after tax of $139.6m and ebitdaf of $327.8m &n

Nina Fowler
Tue, 31 Aug 2010

Mighty River Power, the final major power company to post its annual results, has made the best of extremely challenging hydro conditions in the year to 30 June 2010.

The company emphasised underlying earnings after tax of $139.6m and ebitdaf of $327.8m – both close to growth targets projected in May.

This compares to underlying earnings last year of $211.7m and epitdaf of $251m.

“Last year’s result really represented an alignment of all the stars for Mighty River Power,” chairwoman Joan Withers told media during a briefing this morning.

In 2009, the company enjoyed record inflows into the Waikato catchment and was able to generate at high levels at a time when electricity spot prices were high.

This year’s results reflected a "rather different hydrology story", she said.

Severe drought in the Waikato depleted hydro storage and forced a cut to hydro production in April, when spot prices reached their highest point over the year.

Meridian, in comparison, reaped the benefits of excellent hydro conditions in the South Island.

But Mighty River offset its reduced hydro generation with increased geothermal and co-generation production and a boost in retail numbers.

The opening of the 140MW Nga Awa Purua geothermal station, a joint venture with partners Tauhara North No. 2 Trust, helped drive geothermal generation up 20% to 1562 gigawatt hours.

Geothermal now comprises 27% of Mighty River Power’s generation and, after a full year of Nga Awa Purua production and repairs to the Kawerau plant, is expected to increase further.

Retail business, through Mercury Energy and Bosco Connect, grew this year by 30,000 customers to 412,000 and 21% of market share – adding about $20m to sales.

The company’s 2010 net profit after tax was $84.6m, compared to the record 2009 result of $159.6m, and contained negative after tax accounting adjustments of $54.9m, including $24.2m of impairments associated with unsuccessful developments.

Performance against key Statement of Corporate shows a return on capital employed of 8.2 percent versus a target of 8.5 percent, resulting from lower EBITDAF, and a return on average equity employed slightly above target at 9.7 percent.

The company will pay a final dividend to the government of $30.6m.

Ms Withers said Mighty River was “well positioned” to achieve its post-2010 objectives.

Nina Fowler
Tue, 31 Aug 2010
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Mighty River Power results fall
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