Ann: HALFYR: MRP: Forecast dividend unaffected by dry conditions

• Release Date: 24/02/15 08:50
• Summary: HALFYR: MRP: Forecast dividend unaffected by dry conditions
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					MRP
24/02/2015 08:50
HALFYR
PRICE SENSITIVE
REL: 0850 HRS Mighty River Power Limited (NS)

HALFYR: MRP: Forecast dividend unaffected by dry conditions

Mighty River Power's financial results for HY2015 reflect low rainfall over
the period and non-cash impacts from the Company's decision announced in
December to exit international geothermal development options.
The Company remains on track for a full-year ordinary dividend of 14 cents
per share, in addition to a 5 cent special dividend paid in December 2014.

FINANCIAL HIGHLIGHTS:

- HY2015 EBITDAF of $258 million, down $12 million on prior comparable period
(pcp) due to lower hydro generation and commercial sales
- Net profit after tax (NPAT) of $8 million, down $116 million on pcp largely
due to non-cash impact from the previously-announced decision to exit
international geothermal development options
- Underlying earnings of $90 million, down $15 million, reflecting lower
EBITDAF and higher interest and depreciation costs following the
commissioning of Ngatamariki geothermal station
- FY2015 ordinary dividend forecast unchanged at 14 cents per share, up 4% on
FY2014
- Updated FY2015 EBITDAF guidance range of $480 million to $500 million,
reflecting lower-than-average rainfall

FINANCIAL RESULTS

EBITDAF for the six months to 31 December 2014 was $258 million, down $12
million on pcp largely due to lower hydro generation and the continuation of
the Company's approach of not renewing commercial contracts at low yields,
said Mighty River Power Chair, Joan Withers.

NPAT was $8 million, with the Company's exit from geothermal development in
Chile and Germany the primary driver of the $116 million lower result
compared with pcp. This difference to pcp includes non-cash impairments ($83
million) along with the favourable fair value movements of $20 million
recognised in the previous half year.

"As announced in December, following a rigorous review, we decided to exit
international geothermal development options. The accounting implications of
that is a key factor flowing through to the financial results for the period.

"We have taken some firm decisions about investment criteria and capital
management over the past six months, and Mighty River Power is now clearly
focused on delivering against the strategic priorities we outlined at the
Annual Shareholders' Meeting in November - driving efficiencies in our core
business, building on Mighty River Power's commercial strengths and
developing longer-term growth opportunities."

Mrs Withers said the interim EBITDAF result underlined the strength of Mighty
River Power's business and supports the deliberate decisions made to optimise
the Company's electricity generation and sales mix through a period of
intense competition and adverse North Island hydrology. Reliable base-load
geothermal generation made up 40% of total generation, adding resilience to
the Company's operating earnings through this period.

CEO, Fraser Whineray, said hydro generation was constrained by lower
rainfall. "Over the interim period inflows to the Waikato River catchment
were 18% below average and this has extended into the New Year, with
hydrology post 31 December more than 40% below average." However, total
generation was up more than 4% on pcp to 3,404 GWh - largely due to utilising
committed higher cost natural gas at the Southdown power station, which
offset lower hydro output.

"We have deliberately continued to reduce commercial sales renewals in a
low-yield environment. This has provided the Company with greater flexibility
to capture wholesale market opportunities."

Mr Whineray said it was encouraging to see thermal capacity being replaced by
renewables in New Zealand's electricity market along with a lift in national
demand. A more balanced supply-demand situation has contributed to the recent
improvement in ASX electricity futures prices across all maturities, while
strong competitive pressures remained on retail prices. These outcomes
reflect a well-functioning electricity market.

DIVIDEND AND GUIDANCE

Mighty River Power maintained strong cash flows through the interim period -
supporting the forecast ordinary dividend of 14 cents for FY2015, up 4% on
the previous financial year, Mrs Withers said. In line with this forecast and
the Company's dividend policy, the Board today declared a fully imputed
interim dividend of 5.6 cents per share, to be paid on 31 March.

The Company paid a special dividend of 5 cents per share (worth $69 million)
to shareholders in December 2014, which was confirmed as part of Mighty River
Power's ongoing capital management. Since listing in May 2013, Mighty River
Power has paid dividends of 31.3 cents per share, and more than 95,000
eligible holders will also receive a 1-for-25 loyalty bonus share transfer
from the Crown in May 2015.

With the low rainfall post balance date, Mrs Withers said the Board had
issued updated earnings guidance with FY2015 EBITDAF to be in the range of
$480 million to $500 million. This guidance is subject to any material
adverse events, significant one-off expenses or other unforeseeable
circumstances.

STRATEGIC PRIORITIES

With regard to strategic priorities, Mr Whineray said the Company was "very
focused on our customers and providing offers that deliver value to them".

"Since the beginning of the New Year we have confirmed no increase in
headline energy pricing for our residential customers on 1 April 2015.
Further, through our hi-tech GLOBUG service, we are matching the flexibility
of pre-pay electricity with the offer of market-leading pricing for nearly
half a million Community Services Card holders."

The Company's metering business, Metrix, is well underway with preparation
for the roll-out of 'smart' meters in partnership with Trustpower while also
considering other growth opportunities.

Mr Whineray said Mighty River Power was pleased to have confirmed a 52-year
agreement with Tuwharetoa Maori Trust Board in December 2014 around the
storage of water in Lake Taupo. The Company was also encouraged by the
support building for the widespread adoption of plug-in electric vehicles in
New Zealand.

The Company had also concluded a sale of geothermal assets in Germany this
month and a sale process of the assets in Chile was underway, he said.

"New Zealand's renewable electricity is a competitive advantage for the
country. We believe this can be greatly leveraged over the long-term,
delivering even better environmental outcomes and greater economic resilience
by reducing New Zealand's reliance on imported fossil fuels that are
expensive for Kiwi consumers."

Attached are the following documents in relation to Mighty River Power's
financial results for the six months ended 31 December 2014:

-NZX Appendix 1
-News Release
-Financial commentary
-Analyst and Media presentation
-Interim financial statements and notes for the period ended 31 December 2014

-Auditor's Review Report
-ASX Listing Rule 4.2A.2A Directors' declaration
-NZX Appendix 7 in relation to Mighty River Power's interim dividend

ENDS
End CA:00261039 For:MRP    Type:HALFYR     Time:2015-02-24 08:50:39