MRP mighty river power limited (ns)

Ann: FLLYR: MRP: Financial Results for the 12 mon

  1. lightbulb Created with Sketch. 2
    • Release Date: 28/08/12 10:43
    • Summary: FLLYR: MRP: Financial Results for the 12 months ended 30 June 2012
    • Price Sensitive: No
    • Download Document  8.81KB
    					
    
    MRP
    28/08/2012 08:43
    FLLYR
    
    REL: 0843 HRS Mighty River Power Limited
    
    FLLYR: MRP: Financial Results for the 12 months ended 30 June 2012
    
    MIGHTY RIVER POWER REPORTS EBITDAF AND DIVIDEND GROWTH
    
    Financial results for the year ended 30 June 2012
    
    Highlights
    
    o EBITDAF up 4% to $461 million, in line with the Company's guidance
    o Electricity sales prices and volumes to customers both increased 5%,
    offsetting the effects of 2% lower hydro generation
    o Net Profit After Tax decreased to $68 million, reflecting significant
    change in non-cash fair value of financial instruments
    o Underlying Earnings at $163 million consistent with FY2011
    o Declared total dividend up 9% from the previous year to $120 million
    Mighty River Power's Chair, Joan Withers, today said the Company had reported
    a 4% increase in EBITDAF on the previous year, in line with the revised
    guidance, raised following the half-year results. The uplift was achieved,
    despite a decrease in hydro generation, and was supported by 5% gains in both
    electricity sales prices and volumes to customers.
    
    Mrs Withers said Mighty River Power's Board of Directors was pleased to
    continue the trend of dividend growth by approving a final dividend of $45
    million to the Crown, taking the total dividend declared for the year to $120
    million - up 9% on the previous year.
    
    Financial Results
    
    EBITDAF increased 4% on the previous year (up from $443 million in FY2011 to
    $461 million in FY2012).  Contributions also came from one-off gains during
    the year: Revenue of $7 million from the sale of carbon credits, and the
    accounting gain of $8 million from the sale of a 10% stake in Nga Awa Purua?.
     Improved EBITDAF absorbed a 14% ($32 million) increase in operating
    expenses, mainly reflecting increased maintenance costs of $16 million (the
    majority of which occurred in the second half of the year). Other cost
    increases were due to the early termination of a long-term contract in the
    last quarter of the year, and expenses of $3.8 million borne by the Company
    during the year, relating to the preparation for a potential listing.
    
    Net Profit After Tax was reported at $68 million (2011: $127 million), mainly
    reflecting a significant fall in interest rates in the first half of the
    year, which resulted in the recognition of an adverse change in the non-cash
    fair value of financial instruments of $118 million ($13 million of which
    came in the second half of the year). Given the long-term nature of
    generation assets, a significant portion of the Company's exposure to
    interest rate changes on its debt, both domestically and through its
    international interests, is managed through the use of interest rate
    derivatives, meaning the average cost of funds is largely insensitive to
    interest rate changes. Given Mighty River Power and its related
    international investment companies do not hedge account; these financial
    instruments are fair valued at the end of each reporting period with the
    change recognised in the income statement.
    
    Underlying Earnings, which adjusts for the effects of significant one-off
    items and the change in fair value financial instruments, were consistent
    with FY2011 ($162 million in FY2011 to $163 million in FY2012).
    
    Mrs Withers said the Underlying Earnings demonstrated a strong operating
    performance, with the Company's flexible generation and contract portfolio
    responding well to changing market conditions, but this was partly offset by
    a $13 million increase in Depreciation and Amortisation from upward
    revaluations of the Company's assets in prior periods.
    
    Operating Performance
    Retail (FPVV?) sales volumes increased 5% on the prior comparable period.
    The uplift in volumes was achieved through an increase in sales to business
    customers - up 14% on FY2011 to 2,412GWh - and through Mercury Energy's focus
    on acquiring and retaining higher-volume residential customers as it expands
    into areas south of Auckland.
    
    The average retail (FPVV) sales price increased 5% on the previous year from
    $110.09/MWh in FY2011 to $115.48/MWh in FY2012.
    
    Wholesale purchase costs for the full year increased from $56.76/MWh in
    FY2011 to $94.68/MWh in FY2012. Mighty River Power was negatively impacted by
    the exacerbated wholesale price differential between the North and South
    Islands during the last quarter, due to high South Island reserve offers from
    other generators and limited North-South Island transmission capacity (in
    advance of the HVDC upgrade).
    
    The Company benefited from above-average inflows into its Waikato River
    catchments during the first three quarters of the year, following above
    average volumes in FY2011.  This pattern was in contrast to the record low
    inflows experienced by competitors' South Island hydro stations throughout
    the year.
    
    Mighty River Power's Chief Executive, Doug Heffernan, said the Company had a
    strong performance in the first half of the year, but due to adverse impacts
    in the last quarter, hydro generation was down 2% on the previous year.
    
    "We increased the use of our gas-fired plant by 116% year-on-year in response
    to higher wholesale prices in the market, and geothermal generation remained
    firm with 95% availability across our stations," said Mr Heffernan.
    
    Domestic & International Development
    
    Mighty River Power's development of the 82MW Ngatamariki geothermal plant
    remains on track for commissioning in mid-2013, with three injection wells
    and two production wells now drilled.  However, some challenges with drilling
    the second and third injection wells were experienced, which utilised a
    significant portion of the contingency within the estimated $466 million
    project cost. As a consequence, the Company has increased the contingency by
    $18 million, to allow for the possibility that an additional well may need to
    be drilled.  Even with the additional contingency, the real long-run marginal
    cost remains below $80/MWh.
    
    Mighty River Power has currently committed US$250 million to its
    international geothermal developments via the GGE Fund?, with US$225 million
    of Mighty River Power's capital already deployed.  GGE is currently seeking
    further capital to advance the development of its projects.  Mighty River
    Power is working with GGE and will consider contributing further capital
    alongside new investors.
    
    In May 2012, the 49.9MW Energy Source's John L Featherstone plant (previously
    known as Hudson Ranch Power I) on the Salton Sea reservoir in California was
    formally opened and became the first of the GGE Fund's international
    geothermal investments to move into commercial operation.  The plant achieved
    a 99% capacity factor in its first full quarter of operation and
    post-construction project refinancing is underway.
    
    Funding & Debt Maturities
    
    Mrs Withers said Standard & Poor's had re-affirmed the Company's long-term
    credit rating at BBB+/Stable in April 2012 and at 30 June 2012, total debt
    facilities were $1,560 million, compared with $1,310 million at 30 June 2011.
    
    Mighty River Power extended its liquidity headroom to $510 million during the
    year by increasing an existing facility by $50 million in September 2011 and
    establishing a $200 million Commercial Paper Programme in February 2012, of
    which $100 million of short-term notes were issued at 30 June 2012.  In
    addition, the Company raised $200 million of bank facilities in March 2012,
    which is sufficient to repay its retail bond which matures in May 2013.  The
    average maturity of the debt facilities as at 30 June 2012 was 5 years.
    
    Performance to Date FY2013
    
    Since 30 June 2012, inflows into competitors' South Island hydro reservoirs
    have improved from the lows experienced earlier in 2012.  However, South
    Island hydro storage remains 28% below the historical average. Contrasting
    this, Mighty River Power has seen solid inflows into the Waikato catchment
    10% above the prior comparable period. Given the improvement in national
    hydro storage, national wholesale prices in the financial year to date have
    fallen. Storage at Lake Taupo at the end of August, at 348GWh, is in line
    with averages for the time of year.
    
    As at 31 July 2012, customer numbers were 388,000, up 2,000 from 386,000 at
    the end of June 2012 and up 5,000 from the half year (383,000).
    
    Following long-term flow testing, GGE recently announced the completion of
    the most productive geothermal well in South America at the Tolhuaca field in
    Southern Chile, producing high-temperature steam sufficient to generate 12MW
    of electrical energy.  GGE manages the fund through which Mighty River Power
    currently invests in offshore geothermal projects.
    
    Mighty River Power was awarded Overall Energy Company of the Year at the
    Deloitte Energy Excellence Awards, held in August 2012.  The Company also won
    the awards for Innovation in Electricity (GLO-BUG) and Energy Executive of
    the Year (Doug Heffernan), and was named a finalist in an additional two
    categories at the event; Retailer of the Year (Tiny Mighty Power) and
    Environmental Excellence.
    
    ENDS
    End CA:00226528 For:MRP    Type:FLLYR      Time:2012-08-28 08:43:14
    				
 
Add to My Watchlist
What is My Watchlist?
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.