NZ: Mighty River Power reports flat earnings and remained focus on geothermal

Alexander Richter 22 Feb 2010

New Zealand's state owned Mighty River Power reports flat earnings for the last 6 months, but expects significant benefits from commissioned 90 MW Kawerau geothermal plant.

In news on the financial results for the first 5 months to December 31, New Zealand’s State-owned electricity generator and retailer Mighty River Power has turned in historically flat underlying earnings of $85.5 million, reflecting less favourable wholesale market conditions and increased retail and generation asset maintenance costs.

Net profit after tax more than doubled to $73.9 million ($30.7 million in the previous corresponding period), but that figure fails to reflect the negative impact in the previous period of international accounting rules on the fair value of financial instruments, which created a $118.8 million negative impact. By comparison, there was a charge of only $1.5 million from fair value changes in the six months under review, reflecting more stable interest rates.

The results, so the article, reflect that so far the company hasn´t seen the significant benefit from its addition of new customers, or the production at the 90 MW Kawerau geothermal plant, which was commissioned in mid-2008.

The company’s geothermal performance was “excellent” and retail growth despite increased competition was encouraging.

Chief executive Doug Heffernan said geothermal exploration and development grew over the period.

He said its joint venture with Tauhara North No.2 Trust in constructing the 140MW Nga Purua Geothermal Station was progressing and resource consent applications for the $400 million Ngatamariki Geothermal Power Station had been lodged.

“Our success in geothermal is also being noticed internationally as we support our global geothermal partner GeoGlobal Energy (GGE) in its business developments in both Chile and the US.

“Our efforts in geothermal development within New Zealand over the past ten years mean that we are now highly regarded as a partner offshore and we are being sought after as a preferred investor.

“This is providing the opportunity for us to create a globally influential, iconic Kiwi business in green energy.”

Mr Heffernan said the company would remain focused on geothermal energy.

At this stage, offshore initiatives were all “greenfields” and were not expected to require substantial capital expenditure in the near future.”

All $ amounts are New Zeland dollars. 1 NZD = 0.70 US$

Source: (Businesswire), New Business Review