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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news