MightyRiverPower predicts 20% earnings lift

Friday 8th October 2010

State-owned electricity generator MightyRiverPower is predicting a 20% bounceback in earnings in the financial year to June 2011, after a 27% slump last year owing largely to the impact of drought on its Waikato hydro-generation units.

In a statement released on the NZX platform today, chief executive Doug Heffernan said MRP expected earnings before interest, tax, depreciation, amortisation and financial instruments to rise to $391 million, from $327.8 million last year and $447.1 million in the previous year, when record net earnings were declared.

The 2010/11 forecast suggests an “underlying” net profit in a range around $175 million, compared with $139.6 million last year and $211.7 million in 2007/08.

MRP has added substantial geothermal generation capacity in the last year.

“Due to hydro generation making up the majority of the company’s generation portfolio, earnings can vary over a large range depending on hydrological and market conditions,” Heffernan said.

“However, this estimate is based on mean hydrology and, at the end of the first quarter of the financial year, the company is comfortable that it still represents a reasonable estimate of the year end outcome.”

SOEs have not traditionally given public earnings forecasts and the move reflects ministerial directives to move financial disclosure by state-owned businesses to public listed company standards.

Businesswire.co.nz

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