30 Aug 2011

Mighty River Power generates more profit

2:07 pm on 30 August 2011

An increase in generation has helped the publicly-owned power firm, Mighty River Power boost its full year profit by half.

The electricity generator and retailer made $127.1 million in the year to June, an increase of 50% compared with the previous year.

Excluding one-off items, underlying profit rose 16% to $162.2 million due to a full year contribution from its 140 megawatt Nga Awa Purua geothermal station, and deferring maintenance on some plants.

While hydro power contributes two-thirds of Mighty River's generation, chief executive, Doug Heffernan says cost-effective geothermal has displaced its rivals' more expensive thermal generation, boosting earnings.

Customer numbers fell 5% to 392,000, but Mr Heffernan says residential sales volumes rose.

"Part of that is getting higher consumption customers in the South Island which helps the portfolio," he says, adding that the company has also been successful in managing bad debt.

Mr Heffernan says retail price rises are dependent on what energy network companies charge when they set prices next year.

The company will pay its owner, the Government, a dividend of $45.7 million, taking its yearly total to $110 million - 28% higher than last year.