Increased MRP dividend announced

Mighty River Power will pay an increased dividend of 13.5 cents a share after this morning reporting a sharp increase in operating earnings and a $97 million lift in full year profit to $212 million.

The partially privatised former state owned enterprise said its result was above initial public offering forecasts of early last year.

It said earnings from its expanded range of geothermal power stations, which make up about 42 per cent of MRP's generation, contributed to the result and it was able to benefit from its differentiated retail brands amid intense competition.

The lift in earnings came in spite of the year to June being marked by the worst hydro inflows into the Waikato River hydro catchment in the company's history.

Operating earnings (EBITDAF) grew 29 per cent to $504 million.

Significant one-off and non-cash impacts in the previous year, relating to costs and significant impairments from taking direct control of international geothermal investments in Chile and the United States largely accounted for the boost in year-on-year lift in net profit.

After adjusting for these impacts, underlying earnings were up 3 per cent or $5 million.

Mighty River Power chairwoman Joan Withers said generation from low cash cost renewables provided the foundation for delivering above the IPO forecasts.

Chief executive Doug Heffernan said the company's differentiated retail electricity brands performed well as competition continued to intensify across all residential and business segments.

He said the rate of switching from retailer Mercury Energy was 2 per cent lower than the market average.

Withers said the performance against the IPO forecasts, along with lower capital expenditure in the past financial year meant that the board saw it as appropriate to declare an increased final dividend of a fully imputed 8.3 cents (up 0.5 cents on the IPO forecast) to be paid to shareholders on September 30.

The company expects earnings in the 2015 financial year to be in the range of $495 million to $520 million -- subject to any adverse events, significant one-off expenses or other unforeseeable circumstances including hydrological conditions.

Mighty River Power shares listed at $2.50 last year and yesterday closed at 2.37.5c. They have traded as low as $1.94.5c in the past 12 months.

 

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