27 Mar 2012

Mighty River Power profit falls ahead of partial sale

7:54 pm on 27 March 2012

State-owned electricity generator Mighty River Power, in line to be partially sold by the New Zealand Government, says its profit has fallen.

The company posted a net profit of $17.6 million for the half-year ended in December, down from just over $92 million in the previous half. It blames the drop on a global fall in interest rates.

Stripping out more than $100 million in unrealised changes in fair values and other accounting changes, Mighty River says underlying profit rose 14% to $101.7 million.

But earnings were up because Mighty River Power made more money by raising prices and supplying more electricity to each customer.

Revenue rose 18% to $729 million, which Mighty River chief executive Doug Heffernan says reflects a lift in geothermal and gas-fired generation and higher wholesale power prices due to lower lake levels in the South Island.

Gross earnings rose 9% to $255 million, which Mr Heffernan says is a solid result given flat demand for power.

Mighty River has lifted its full-year earnings forecast to between $460 million to $475 million.

The Government plans to sell up to 49% of the company by the end of next year.

Mighty River, which supplies electricity through several different companies including Mercury Energy, says it can't comment on the sale plan at this stage.

Mighty River will pay the Government a dividend of $74.8 million - 16% higher than last year.