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

 

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news