Mighty River Power Increases Dividend Pay-Out Ratio

NEWS RELEASE

23 November 2012

Mighty River Power Increases Dividend Pay-Out Ratio

Mighty River Power’s Board today announced a change to the Company’s dividend policy; increasing the dividend pay-out ratio from 75% to between 90–110% of net profit after tax, after adjusting for the impact of NZ IFRS fair value movements of financial instruments net of tax each year and any accounting impairments.

The change to the policy was noted in Mighty River Power’s Statement of Corporate Intent, which is agreed with the shareholder annually and sets out the Board’s overall intentions and business objectives for the period 1 July 2013 to 30 June 2015.

Chair of Mighty River Power, Joan Withers, said the policy had been at 75% since 2010 due to the need to retain sufficient earnings to support the Company’s more than $1 billion domestic geothermal capital expenditure programme over the last five years. Mighty River Power is now adjusting to the current outlook for New Zealand electricity supply and demand with less operating cash flow now allocated to new domestic projects and higher dividend flows to owners.

“The Board has gained confidence to increase the dividend pay-out ratio due to the successful execution of our geothermal strategy. In October we saw the first cash returns from our international investment through the GeoGlobal Energy (GGE) Fund and our Ngatamariki Power Station, near Taupo, is due for completion in mid-2013,” said Mrs Withers.

The dividends declared by the Company will be subject to working capital requirements, the medium term asset investment programme and a sustainable financial structure for the Group, having regard to the Company’s long term credit rating. Mighty River Power has a BBB+ rating assigned by Standard and Poor’s, which was re-affirmed in October 2012.

Mighty River Power’s full dividend policy is available on the Company’s website at: http://www.mightyriver.co.nz/Results/Financial-Information/Dividend-Policy.aspx

Mighty River Power’s Statement of Corporate Intent 2013 - 2015 is available on the Company’s website at: http://www.mightyriver.co.nz/About-Us/Governance/Governance-Documents/Statement-of-Corporate-Intent.aspx

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About Mighty River Power
Mighty River Power is one of New Zealand’s largest electricity companies – with its core business based on reliable, low fuel-cost electricity generation complemented by sales to businesses and homes, which account for about 18% of New Zealand’s total electricity consumption.

The Company operates nine hydro power stations, four geothermal plants and a multi-unit gas-fired station. More than 90% of its electricity production is from renewable sources. Mighty River Power sells electricity through multiple channels and retail brands, including Mercury Energy, GLO-BUG, Bosco Connect and Tiny Mighty Power. Mighty River Power also has investments in international geothermal projects.

ENDS

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