Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


MRP increases dividends up to 110% of profit

MRP increases dividends up to 110% of profit

By Pattrick Smellie

Nov 23 (BusinessDesk) - State-owned electricity company MightyRiverPower is raising its dividend policy from 75 percent of earnings to between 90 percent and 110 percent, saying it has fewer investment needs in the near future, and sweetening its attraction for investors in its partial privatisation.

The government plans to offer up to 49 percent of the Auckland-based firm, which owns the Mercury Energy brand and a string of hydro and geothermal power plants in the central North Island, for sale in the second quarter of next year.

That assumes court action by three Maori bodies, led by the New Zealand Maori Council, fails to block the sale in the courts and that market conditions are judged appropriate for the first of three SOE power company floats.

The Maori Council's challenge to the government's decision to proceed with the sale will be heard in the High Court in Wellington next week, with Crown advisers expecting an appeal if the council's case is unsuccessful.

The dividend policy change was announced in the company's latest Statement of Corporate Intent for the years 2013 to 2015 and will apply to after tax profit, adjusted for the impact of changes in the fair value in financial instruments and any accounting impairments.

Non-cash impacts of changes in the value of financial instruments typically creates volatility in reported earnings which does not reflect underlying performance.

The 75 percent dividend payout ratio had been in place since 2010 while MRP committed more than $1 billion in capital to a series of geothermal developments both in New Zealand and offshore over the last five years.

However, demand for electricity has been static for the last three years, with no significant load growth forecast in the immediate future.

"MRP 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," said chair Joan Withers in a statement.

By comparison, NZX-listed Contact Energy - formerly state-owned - targets an 80 percent payout ratio "over time," according to the company website, although chairman Grant King indicated at this year's annual meeting that higher capital returns to shareholders were also on the cards because it had few capital needs in the immediate future.

Withers said "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 Withers.

Dividends would be subject to working capital requirements, the medium term asset investment programme and a sustainable financial structure for the group, in term with the company's BBB+ credit rating, which was reaffirmed last month by Standard & Poor's.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Fairfax Moves To Create Modern Newsroom

Fairfax Media New Zealand continues its newsroom transformation this week, with a proposal to further organise its editorial operations into focused, local teams and specialist national topic areas. More>>

ALSO:

Dairy: Fonterra Forecast For 2015/16 Season

Fonterra Co-operative Group Limited has today reduced its forecast Farmgate Milk Price for the 2014/15 season to $4.40 per kgMS. Along with its previously announced forecast dividend range of 20-30 cents per share, the change amounts to a forecast ... More>>

ALSO:

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>


BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news