"Big four" power companies to report this week:

Monday 22nd February 2010

The four largest electricity generator-retailers will all report their half year results this week, with MightyRiverPower starting proceedings this afternoon, followed by Contact Energy tomorrow.

Meridian and Genesis Energy are set to report on Wednesday, with Genesis the only major producer not planning a profit briefing in a new climate promoting listed company-style disclosure and transparency.

NZX-listed TrustPower is on a March 31 balance date and is not due to report for some time.

While Contact has given no profit guidance owing to volatility in the wholesale electricity market and fierce retail competition, broker Forsyth Barr is picking a better first half for the only electricity company with true national retail spread.

The 2009/10 first-half would be "better than the awful" first half to Dec. 31, 2008, says ForBarr. "Better wholesale market conditions will offset gas price cost increases to produce a positive result."

The broker is forecasting earnings before interest and tax of $168 million, up 14.5%.

Meanwhile, Contact added spice to tomorrow's update by announcing a joint venture with a Maori incorporation. Taheke 8C, a family-affiliated owner of Maori land with connections to the Ngati Pikiao iwi.

Taheke owns land over a geothermal steamfield on the shores of Lake Rotoiti, which has yet to be assessed for its commercial potential. An exploration programme is planned over the next two years.

As a greenfields opportunity, it can be expected to require a higher long run marginal cost of wholesale electricity to sustain an investment than the current crop of "brownfields" geothermal developments currently under construction or consenting by both Contact and MRP.

"This is a genuine joint venture, with both parties actively participating in the development," said Contact managing director David Baldwin.

Businesswire.co.nz

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