Ann: FLLYR: MRP: Mighty River Power 2015 Full Year Financial...

• Release Date: 28/08/15 08:30
• Summary: FLLYR: MRP: Mighty River Power 2015 Full Year Financial Results
• Price Sensitive: No
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					MRP
28/08/2015 08:30
FLLYR
PRICE SENSITIVE
REL: 0830 HRS Mighty River Power Limited (NS)

FLLYR: MRP: Mighty River Power 2015 Full Year Financial Results

Strong cash flow supports special dividend, while operating earnings ease on
record low hydro output

Operating earnings (EBITDAF) were down by 4% (or $22 million) compared with
the prior year. This was driven by record low hydro generation at 17% below
average, due to reduced Waikato catchment inflows. The financial impact of
lower hydro production was $52 million compared with long-term average
conditions.

Mr Whineray said the business performance relied on astute management of the
Company's electricity sales and generation portfolio, together with
operational efficiency gains and cost savings. Through the year there had
also been an increasing focus on customers.

The Company's total electricity generation for the year was up 4% on FY2014,
with base-load geothermal accounting for 42% of total production, and a
year-on-year increase in high-cost gas-fired generation from 2% to 7% of the
total. The increase in gas-fired generation was largely as a result of
committed output from Southdown ahead of the station's closure in December
2015. After this closure, Mighty River Power's generation will be from 100%
renewable resources.

Net profit after tax (NPAT) of $47 million was $165 million lower than the
previous financial year, reflecting non-cash impairments. As reported in the
Company's Interim Results in February, the primary driver of the difference
was the $83 million impairment relating to international geothermal. The
value of the Southdown thermal plant was also written-down by $44 million at
the full year. After adjusting for these impacts, underlying earnings were
down 22% or $40 million on FY2014, reflecting the low hydro inflows.

A focus on financial and operating discipline controlled costs across the
business. Since listing in 2013, this has delivered a reduction of about $30
million in annual operating costs.

Mighty River Power Chair, Joan Withers, said the financial results
highlighted a resilient business with strong cash flows. Mrs Withers said the
Board was pleased to be returning a total of $296 million to Mighty River
Power's owners for the year ended 30 June 2015, representing a 59%
year-on-year lift in cash returns. This has been achieved through the
delivery of a forecast 4% improvement in ordinary dividend to 14 cents per
share along with a special dividend of 5 cents per share paid in December
(both fully imputed). The Board today declared an additional special dividend
of a fully-imputed 2.5 cents per share.

"It should be a very positive signal to our 100,000 owners about the
underlying strength of Mighty River Power, when we are able to achieve our
forecast dividend increase in a year of intense market competition and the
lowest-ever hydro generation for the Company."

Mrs Withers said the decisive actions taken earlier in the financial year
were important to provide a strong base for the business.

"These included our decision in December to exit international geothermal
development and, in March, the announcement that the Southdown plant would be
closed given its relative high cost of generation. Although these have had
non-cash accounting impacts in the reporting period, they are important in
shaping our business for the future."

Mr Whineray said the Company's health and safety focus is on "zero-harm".
"This focus extends beyond the Company to working collaboratively with others
in the industry to lift our performance through the StayLive programme."
There were no serious-harm incidents during the year involving employees,
contractors or visitors on the Company's sites. The total number of lost-time
injuries was down year-on-year from seven to five.

"Delivering value to our customers and rewarding loyalty have been key areas
of focus in a highly-competitive market."

Mr Whineray said the Company's GLOBUG brand is currently the fastest-growing
retailer, following the enhanced pricing that allows customers on this
pre-pay service to access rates that are among the lowest in the market.
GLOBUG has achieved 50% growth since December to nearly 30,000 customers.

Mr Whineray said the Company's commitment to hold flat headline energy prices
for our residential customers over the past three years meant that the 35% of
customers on fixed-price contracts had the additional benefit of Mighty River
Power absorbing the increases in regulated delivery charges from local lines
and transmission companies.

Another example of customer service innovation, Mercury Energy's free online
energy management application, GEM (Good Energy Monitor), has helped
customers save a total of about $3.5 million over the past two years and has
measurably improved loyalty.

Mr Whineray said several important value drivers for the sector provide a
positive outlook. "Retail innovation across the sector continues to
accelerate, substantially enabled by the roll-out of "smart" meters
nationally. There has also been a reset of the forecast energy supply and
demand balance. National electricity demand was up 3% year-on-year, and was
broad-based demand growth across all sectors," he said.

DIVIDEND AND GUIDANCE

The Mighty River Power Board today declared a fully-imputed final dividend of
8.4 cents per share for the financial year, to be paid on 30 September 2015
along with the fully-imputed special dividend of 2.5 cents per share. Mrs
Withers said the special dividend of approximately $34 million was part of
the ongoing focus on capital management, while retaining balance sheet
flexibility.

She said the Board was strongly focused on capital management initiatives
that support the Company's investment grade credit rating (BBB+), while
providing sufficient headroom and flexibility for growth when these
opportunities arise.

EBITDAF for the year ending 30 June 2016 is forecast to be in the range of
$490 million to $515 million, subject to any material adverse events,
significant one-off expenses or other unforeseeable circumstances. The
dividend guidance has been issued at 14.3 cents per share.

ENDS

For further information

David Glendining
Head of Communications
0272 105 337

Anna Hirst
Head of Investor Relations
0275 173 470
End CA:00269216 For:MRP    Type:FLLYR      Time:2015-08-28 08:30:13