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

 


MightyRiverPower ekes out 3.7% earnings gain on cost-cutting

MightyRiverPower ekes out 3.7% earnings gain on cost-cutting measures, affirms annual guidance

By Paul McBeth

Feb. 26 (BusinessDesk) - MightyRiverPower, the first state-owned power company partially privatised last year, increased first-half earnings 3.7 percent as it clamped down on costs amid poor hydro conditions, while affirming its annual growth target.

Earnings before interest, tax, depreciation, amortisation, and fair value adjustments (EBITDAF) rose to $269.6 million in the six months ended Dec. 31 from $260.1 million a year earlier, and is on track to reach its annual forecast of $498 million, the Auckland-based company said in a statement. Revenue dropped 12 percent to $840.8 million with significantly lower hydro levels sapping generation.

Net profit climbed 64 percent to $123.7 million on lower operating costs and one-off gains in the value of financial instruments. Operating costs fell 24 percent to $107.8 million, with permanent savings achieved in maintenance costs, professional fees and administration expenses.

“MightyRiverPower has responded to the competitive dynamics in the market and is showing new levels of efficiency and performance,” chair Joan Withers said. “On the cost side we have remained sharply-focused on operating expenditure and achieving company-wide gains in effectiveness and efficiencies.”

The board declared an interim dividend of 5.2 cents per share, payable on March 31 with a March 12 record date, up from 4.8 cents a year earlier. The shares were unchanged at $2.04 yesterday, and dropped 18 percent from their $2.50 offer price when the company was floated in May last year.

The company’s total generation fell to 3,258 gigawatts per hour from 3,700 GWh a year earlier due to a 25 percent slump in hydro generation, offset by a lift in geothermal. The total average price was $55.98 per megawatt hour, down from $65.74/MWh. In last year’s offer document MightyRiverPower forecast an average price of between $65 and $75/MWh for the 2014 financial year with generation of 7,060 GWh.

Chief executive Doug Heffernan said the company reduced its low-margin commercial sales, and was reviewing its portfolio, including the role of its Southdown power station in the face of weak demand.

MightyRiverPower cut its forecast capital expenditure to between $95 million and $120 million this year from a range of $125 million to $175 million flagged at its annual meeting as it looks to contain costs and scale back its push into international geothermal growth initiatives.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news