Meridian Energy plans to pay significantly more in dividends than its reported net profit.
The Government-owned power company expects to pay $268.4 million in dividends in the year ending June 2014 and $294.9 million in the following year.
That means Meridian expects to pay $80.5 million more in dividends in the year ending June 2014 than its expected profit, and $83.9 million more than profit the following year.
Chief executive Mark Binns says this doesn't mean Meridian Energy will be skimping on maintenance of its assets.
He says all the reinvestment in the business is allowed for in the stay in business capital expenditure which will be in the region of $65 million - $70 million.
He says about $233 million in depreciation will be taken off the operating earnings to give a net profit.
Meridian is forecasting a net profit of $187.9 million in 2014 and $211 million in 2015.
But Mr Binns says the company's cash flow is substantially higher.
He says because the market is reasonably flat Meridian does not foresee having to build any other projects in the next five years.
Mr Binns says that means Meridian will generate a significant amount of cash which it can then pay out in dividends.
Meridian's dividend policy is to pay out, on average and over time, between 70% - 80% of free cashflow, depending on its capital spending needs, maintaining its BBB+ credit rating from Standard & Poor's and other risks such as drought.
The sale of up to 49% of Meridian opens on 30 September.