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Mighty River Power lifts expected earnings - corrected

Thursday 7th July 2011

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Deferral of maintenance has enabled state-owned Mighty River Power to lift its expected earnings for the latest financial year from earlier estimates.

The company today said its guidance for earnings before net interest expense, income tax, depreciation, amortisation and financial instruments (ebitdaf) in the year to June 30, 2011 was between $435 million and $450 million.

That is well up from $327.8m a year earlier but still below the record $447.1m in the year to June 2009.

In March, Mighty River had said it was expecting full year ebitdaf of $420m to $435m, while in October last year its estimate had been for $391m.

Mighty River chief financial officer William Meek said today's revised forecast included decisions to defer some maintenance on existing geothermal fields and hydro plants to the next financial year, along with positive gains in some business areas.

The adjustment to the maintenance programme was due to rearranging time-flexible works to fit with planned outages, he said.

Mighty River's geothermal generation had also been above plan due to better than performance from the Nga Awa Purua station in its first year of operation.

Other gains could be attributed to positive trading and increased hydro output due to wet conditions in the Waikato catchment, Meek said.

For the six months to the end of December Mighty River's ebitdaf was $233.6m, up 22 percent on a year earlier, with the improvement driven by increased generation, primarily from additional geothermal capacity.

The fall in ebitdaf between the June 2009 and June 2010 years was attributed to higher operating expenses associated with maintenance work, drought in Waikato which cut hydro generation, and low wholesale electricity prices.


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