Mighty River Power FY2015 Results Transcript

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EDITED TRANSCRIPT MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation EVENT DATE/TIME: AUGUST 27, 2015 / 11:00PM GMT

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

CORPORATE PARTICIPANTS Fraser Whineray Mighty River Power Limited - Chief Executive William Meek Mighty River Power Limited - CFO

CONFERENCE CALL PARTICIPANTS Grant Swanepoel Craigs Investment Partners - Analyst Andrew Harvey-Green Forsyth Barr - Analyst Wade Gardiner UBS - Analyst Nevill Gluyas First NZ Capital - Analyst Matt Henry Goldman Sachs - Analyst Stephen Hudson Macquarie Securities - Analyst Najib MohiShareholder

PRESENTATION

Fraser Whineray - Mighty River Power Limited - Chief Executive Good morning everyone, (spoken in Maori). Thank you very much for coming, it's great to have you here and I'm very pleased to take everyone through the results that have already been put on the NZX on behalf of the Company. With me of course, well known to you, is William Meek, the Chief Financial Officer and we also have members of the management team here as well. Starting on my left here, we've got Matthew Olde; Toni Laming, this will be the first set of results of annual results for the half year GM Strategy & Communications; Marlene Strawson, GM People & Safety; James Munro, GM Customer. Just behind there is Nick Clarke who is the new GM Geothermal who joins us from Spark and started about four or five weeks ago; Phil Gibson, GM Wholesale Hydro; and Tony Nagel who is GM Corporate Affairs.

So welcome. We'll rip straight into it. There's the disclaimer which says everything you hear is not necessarily true and then I'll take you through, on the agenda, I'll take you through the highlights and market dynamics. William will cover off operational update and financials and then I'll rejoin to talk about business and strategy update and the outlook, including guidance.

So it's been a reasonably challenging year hydrologically and also it's been very fierce in the competitive space on the mass markets as well. But we've, through that, made some pretty clear decisions and drawn a line on a couple of key strategic issues. You'll be well aware of those, they largely related to the international geothermal in mid-December, that we're not going to commit any more capital to international geothermal development and indeed we're in the process of some arrangements there. We also made a decision to shut Southdown in March and we've relaunched GLOBUG in February to make that more attractive as a product of choice. So there's been a number of very clear decisions which have contributed to an interesting year.

The lowest hydrogeneration since the Company was formed, just under 3400GWh against the long run average of 4000. That meant that EBITDAF alone from that impact was around NZD50 million, but we're only down 4% on EBITDAF to NZD482 million against our original guidance of NZD495 million to NZD520 million and we were within our revised guidance of NZD480 million to NZD500 million.

The total declared dividends include ordinary dividends of NZD0.14 per share as we were up there and specials of NZD0.075. The NZD0.05 that we declared just before Christmas at the ASM was largely relating to FY14 and the NZD0.025 fully imputed we've declared today, largely represents payout of all free cash flow from FY15. Our guidance for FY16 is NZD490 million to NZD515 million.

We've included a few more statistics here in terms of safety. It starts with transparency and so we note there where we have had serious harm, there were two incidents in each of 2011 and 2013 in the red bar and our focus is on not just achieving zero harm, but making sure there isn't serious harm. So we've got good progress, the severity is well down, we've gone from in green there, seven LTIs to five LTIs and we've had a number of reasonably frustrating low severity incidents in offices in particular, which have pushed that blue bar larger.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation Great work that happens across the sector, particularly through the StayLive forum and that will include things like investigating other large companies' incidents or near misses on behalf of each other. We share information about risks which may be common to our generation plant with each other and we also share statistics and ways of doing things. So that is very important and the generation sector as a whole is very focused on this. I think consistently you would have seen in all of the results from the large generator retailers, you'll see safety feature pretty near the front of the pack in terms of what they talk to.

In terms of the highlights, the energy margin, EBITDAF impact, underlying earnings, free cash flow all down. Capital expenditure was up slightly and the total declared ordinary dividend was also up slightly. As we've mentioned the special of NZD0.05 in December and the NZD0.025 to be paid in September. Most of the declines were due to the hydrological impact we mentioned and that was offset by land or property sales, effectively, either pending or happening.

One of the other key impacts going against us was the decline in the commercial book. We've been running a multiple year strategy because we felt that the yields available in commercial industrial space were below where they were at value and now we're seeing a really dynamic move in the market over the last couple of months around supply and capacity, we're starting to see that tighten in the ASX curve and so then you start to see a bit of value come back through those segments. Those are multiyear cycles, so if you're looking for year-on-year movements and growth which can be fabricated, but it's actually better to go and sell C&I when yields were high, rather than C&I when yields were low. We do run a multiyear strategy in that way, which makes sense. Just to note, the CapEx there was slightly up; that was due to two wells, one at Ngatamariki and one at Kawerau.

So dividend highlights, we talked through most of this already. You can see the grey bar with the specials and our outlook for NZD0.143 for an ordinary dividend for FY16 which lifts it by 2% to make it progressive. Since listing, we've had capital returns of NZD638 million and we'll probably move on from listing comments going forward because we're sort of getting well down the track from that now, but it's just a worthwhile benchmark to note how much has come back by way of dividends and also the NZD50 million buyback that was executed at a GWAP of NZD2.135 in the preceding financial year. We still hold that as treasury stock.

To the market dynamics, it is intense and competitive for a subscale market like New Zealand with 21 retailers and I think 27 retail brands. So customer churn remains high at 19%. We have an advantageous customer churn relative to that and we're increasingly focused on loyalty. Everyone's finding their own paths, whether you're a start-up retailer or a larger generator retailer which is vertically integrated, everyone's trying to find their different niches for customers to attract and retain and reduce churn and increase loyalty and yield for them. So we had nine new retail brands over the last two years and that is just a phenomenal number, as I said, for a subscale market.

The ASX Futures market is selling strong liquidity and if you're an independent retailer, you can get access to hedges through the ASX Futures market which will cover 24,000 customers in one day. So if any independent retailer thinks, or independent generator is struggling to either place contracts or purchase contracts to support their hedge management and they need to it faster than 24 megawatts across four years for a day, then I'd be astonished. So we think the ASX Futures is a very important platform for enabling both independent generators, which are often forgotten, and independent retailers to participate.

You can see there the impact of retail pricing for the end user overall has been low to declining for energy, in the blue bars, in the last year and it's the lines component that has contributed to retail overall prices increasing.

In terms of demand, the chart shows little bits of demand incremented over a range of sectors of the economy. Tiwai was relatively flat, but the others all had an incremental improvement, whether this was due to record high inflation, some dry conditions in particular parts of the country, there's a range of drivers for that. We expect that demand will continue to grow, probably in the range of 1% to 2% for the near term.

The demand growth we did see, which is 2.7%, was the highest rate since 2005 and if we normalise for temperature, that comes back to about 2%. There may be other industrials, you've heard of New Zealand Steel in the last couple of days which are feeling a bit shaky in New Zealand and some of those do consume large amounts of electricity.

We've seen Norske reduce the paper line, a while ago that was 1% of national demand by itself, but if the last six months has shown anything, is that supply and demand are dynamic in New Zealand, so reductions in demand from the likes of an industrial don't necessarily mean long term changes to how the sector operates. Of course, Meridian signed a variation of its Tiwai contract. That was partly backed by agreements with other power generators, with Meridian having to do some of the heavy lifting, as it were, itself.

Supply, this chart here on page 11, for those that are on the phones, shows the average rolling 12 month Otahuhu price in black, going across the top and where percentage storages are for Taupo, which is us and nationally for the whole country. So Lake Taupo inflows were 85% of average and that was very a low inflow sequence for us. National inflows were on average for financial 2015 and so the South Island, again, for several years running now, has done better than average in terms of its inflows. I think one of the key things here though is, and we'll talk about it more in the next slide shortly, is that the market, the black line, failed to respond

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation in March and April to declining national hydrology going through autumn. That was a little surprising going into it, but then I think there are some drivers why we think that's reasonably temporary.

So on this next chart here, which will be your slide 12, we see that the blue dots to the bottom left of that chart, that is March and April. So you can see against national storage on the X-axis which is below average, the March and April wholesale spot prices were below where you'd expect them to be. That was probably driven by a number of reasons, some temporary drivers in particular companies, prospectus PFI forecasts, the desire to re-contract Tiwai and also just simply the capacity in the market that hadn't been withdrawn at that point. But generally what we expect to see going forward is that where there is a lower than average national storage, we'd expect to see those dots moving up in terms of price. One thing that's very pleasing is when there's higher than average national storage, is that now there's a lot of fuel flexibility which doesn't mean those thermal plants are forced to run and depressing the wholesale price. So on both sides of the curve whether you've got high national storage or low national storage, we'd expect to see the curve improve now with increased fuel flexibility and a reduction in thermal capacity.

What did that wholesale market do? Well the end user sales prices are pretty important for commercial industrial sector and that's kind of a proxy where the ASX futures market comes in. We could see in January and February of this year when we talked to you all about the half year, we had seen a definite change because of the increased fuel flexibility in terms of not turning thermal plant on and we saw some very good wholesale prices. In fact, January had the highest wholesale prices since the market had begun. So we felt that the energy supply, not necessarily capacity, but energy oversupply was over. So you saw the Futures market climb. Then what happened is we saw those low wholesale prices in March and April and then everyone felt a bit more comfortable about dry-year risk and then we saw the orange bars there where the Futures markets came off quite a lot. Then subsequent to that, we've seen a whole bunch of thermal plant closures and those Futures prices recover.

They've lifted NZD6/MWH since June 30 in the 2017 contract.

That's ultimately what those wholesale market dynamics flow through to in terms of ASX pricing and we see this as a very positive development and a very dynamic development in the sector. In fact, my Chair in the media discussion earlier just here said the first few pages of my board report this month read like a fast-moving thriller and that's because over the last five weeks there has been a lot of activity which all needed to be told in terms of the market dynamics, so significant changes there.

So then of course everyone starts to look forward against those announcements and by 2019, 1500 megawatts and about 5000GWh of thermal fuel commitments have been removed from the New Zealand market relative to 2013. So what we've got here is a chart. The blue line is about winter energy margin and the reason why there's a black line there of the minimum winter energy margin is the risk based approach through the hydrological volatility in the New Zealand electricity system. So it says you need a little bit of a buffer to be able to cover for that situation as a country. The blue line is what's currently published by the system operator and the green and grey marks there are related to our own modifications to that line based on 2015 to 2016, you're seeing Otahuhu close and Southdown come out and in 2018 to 2019, you're seeing Huntly come out.

Depending on demand, grey being no demand growth and green being system operator scheduled demand growth, which is about 1% to 1.5% across that period in the chart, you can see where it sits relative to winter energy margin or the desired winter energy margin of just under 15% here. So everyone will be looking at that, everyone will be thinking about what their choices are for managing their own portfolio and also whether or not they want to try to even build something. But I think it's really important to just come back to a couple of the core dynamics of the Mighty River Power portfolio.

With the largest renewable play in the North Island, with the largest peaking system in the North Island, we're very close to a lot of load physically and also from a transmission perspective. We've got uncorrelated hydro inflows because our weather falls as rain, not as snow, which it does in the South Island, and we also have more than 40% of our generation being completely weather-independent.

We do like to see some volatility, because we have an extremely flexible hydro gear in the North Island. As I said, it's the biggest peak in the North Island. So the opportunities that arise from a slightly choppier spot market are something that we're well positioned for.

Right, now I'll hand over to William for the operational update.

William Meek - Mighty River Power Limited - CFO Thanks Fraser. Welcome to those attending here at Mighty River. Welcome to those on the phone. I'll take us through the operational update and we'll dance quickly through a summary of the financials.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation We'll start at the customer end of the business -- electricity sales. Fraser's touched on the market. It's certainly competitive out there. A lot of new retailers; a lot of innovation occurring. We certainly are playing our role in that space through GEM, through GLOBUG, through some of our digital and new offers we're rolling through over the last few months.

So customers numbers relatively flat over the year. Built up the first half and fell back slightly in the second half. GLOBUG very successful; around 30,000 customers now so up 9,000 by the end of the financial year so we're very proud of that product in terms of what it's doing for our consumers and that growing market presence.

Business sales – Fraser's touched on the commercial industrial end of the market; quite significant reductions there so over 700GWh down so that's around 10% of the generation portfolio, so certainly a wind-back there in those sales we'll touch on that shortly. But average prices, physical prices -- fixed energy holding relatively flat at around NZD11/MWh. That roll down in the CNI market and across the CFD book in terms of energy margin, which is running around NZD700 million, about NZD10 million for FY15.

Moving to the generation business -- as Fraser said, hydrology this year was again poor, the lowest generation we've seen in our operating history as Mighty River. Just over 3300GWh. That's about 12% from an inflow perspective so a two year stretch very, very poor against the historical record going back to 1927.

The geothermal plant performing particularly well, up 99GWh, reflecting a really good performance at Ngatamariki and at Kawerau so we're very pleased there with the performance of those plants.

One of the features of geothermal was when you're budgeting for 95% availability -- which doesn't leave you many days of the year you can't be running -- there's not a lot of headroom on the upside but there's certainly some headroom on the downside. So very pleased to see those plants running reliably.

Again, at Nga Awa Purua despite the challenges in terms of the turbine, the team there keeping that unit hot for the last 18 months, so very pleased to see that new turbine installed five days early for the three week outage and now operating at 135 megawatts, so a great outcome.

Southdown -- Southdown certainly generated more this year at around 460GWh, some of that for a tolling arrangement, and again as we announced back in March, that graph there will fall to zero from the end of this calendar year. So we're well on the way in terms of the sale process there at Southdown.

Touching on the portfolio, so this is really looking at the combination of both generation sales and then customer sales, so you can see here on the right-hand side bars are pretty much equal. So a pretty square position despite lower than normal hydrology so down over 600GWh on mean -- on level.

Again very similar pricing over the last three years in that NZD70 range so the market's been relatively stable. That doesn't really play to the strengths of a flexible hydro system. So we prefer volatility but our relatively stayed prices very encouraging to see the step up on ASX pricing on the back of quite significant thermal rationalisation announcements over the last couple of months.

Moving forward to the LWAP/GWAP ratios -- these are quite important so this really reflects the average price you're receiving for your generation portfolio against what you're having to buy the power for, for your customer commitments.

New Zealand runs a nodal pricing model so the prices are different across the country. So when we have wet conditions or above average hydrology conditions like we have had more recently, you're getting more power transferred from the South Island to the North. That typically means South Island prices are lower than North Island.

Buying power therefore in the South Island is cheaper than it would normally be, and on a 7000 gigawatt hour portfolio, every percentage point movement in this ratio's worth about NZD5 million.

We do have, certainly, some levers in terms of controlling that, but certainly how wet or dry it is in the South Island that's not something we control. So again, on a normal basis we'd expect that ratio to be running about 1.03 and so the last few years we've been doing better. A lower ratio means you're getting a better outcome between your sales price for generation and your relative purchase cost for your customer load.

This nice shiny bit of chromium, that's the NZD11 million piece of gear which has gone into Nga Awa Purua. You can see a very small stage 1 (technical difficulty) over the ones that particularly were cut off. So they were missing for 18 months while the station was operating, so again as I said, very happy to have that plant back up to full output from a few weeks ago.

Running through the financial highlights for the year -- so EBITDA down NZD22 million on the prior period. Again, low hydrology in the NPAT in terms of the CNI volumes feeding through there.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

Operating spend is flat so again happy to hold costs, again noting that costs are down NZD30 million from where they were prior to the IPO, again very happy to hold the line there.

NZD130 million of non-cash impairments, most of those relating to offshore geothermal and some to Southdown so we'll talk more fully about those.

Free cash flow still strong at NZD230 million so that's on the back of an operating cash flow of NZD309 million and stay-in-business CapEx of just under NZD80 million for FY15.

Dividends for the year -- the Company's actually paid dividends close to NZD300 million for FY15, made up of ordinary dividends of NZD0.14 which met our guidance at the beginning of the year and particularly two specials of NZD0.05 and NZD0.025.

The NZD0.05 dividend really related to performance for the prior period, so the NZD0.165 dividend, which is NZD0.14 plus NZD0.025, takes us to 100% of free cash flow, where free cash flow is operating cash flow less stay-in-business CapEx. The Company has paid out 100% of its free cash in FY15.

Just looking at EBITDAF bridge between this year and last year -- really a lot of action happening there in the blue box around energy margin. Looking at the generation portfolio -- slightly ahead despite poorer inflow conditions. Higher prices feeding through to better generation outcomes. Obviously higher prices in generation mean worse outcomes on the retail side of the business so you're seeing -- you see the customer sales book impacted by those higher price costs, but also lower volumes in the customer sales segment.

Other revenue up NZD18 million on the back of those land sales, but operating expenditure holding flat at NZD1 million higher than a year before, giving us NZD482 million EBITDA for the full year.

Operating costs -- again noting down NZD30 million from where we were in 2013. Flat really year-on-year. There was a reclassification in this year so we're relatively unique in that we do have a metering business inside Mighty River Power. The costs of running that metering business is treated generally as OpEx. Metrix was managing for third party contracts on behalf of Mercury.

We've moved those up from the OpEx line into energy margin. We're trying to effectively give a clear indication of what the true costs of metering are for the Group, given we have an internal metering unit. Through the accounting consolidation process, those internal transfer charges are eliminated. Mercury paying Metrix revenue it's an inside transaction so just reclassifying back to show the effects of those third-party contracts embedded inside the Metrix business.

Certainly an ongoing focus on efficiency and costs across the organisation, procurement being a particular area. We have a reasonably large drilling program picking up at the end of this year. Drilling is not a cheap exercise so certainly a lot of focus around those. Maintenance contracts across both hydro and geothermal fleet remains a key focus and certainly around procurement for major capital or maintenance projects. Again a very, very close focus on how and when we're undertaking those activities.

We haven't got a process of vendor rationalisation so that is seeing the number of vendors inside the Firm drop and so again, looking for very large framework agreements to procure services on an ongoing basis.

Next year costs are up slightly on the back of just maintenance timing and also the start of that drilling campaign, so we do have a well repair scheduled at Rotokawa which lifts costs slightly for the next financial year.

Underlying earnings -- again bringing that. We've talked to EBITDA which is in the blue box. Depreciation and amortisation's up slightly on the back of last year's revaluation and a full year of depreciation at Ngatamariki so that wasn't fully commissioned until partway through that year.

Equity accounted earnings -- now we're seeing an improvement of NZD4 million. Again that's related to the receipt of some interest insurance proceeds relating to the previous year. Net interest showing a decrease related to NZD6 million of capitalised interest in the FY14 year and again the higher interest costs associated with the NZD300 million capital bond, which was pushed out in July last year.

Tax -- tax slightly down again as a consequence of those reductions in earnings, giving an underlying earnings number of NZD145 million for FY15.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation On cash flow -- again showing really the resilience of the business under pretty trying conditions, fell just NZD8 million on the prior year. So that cash flow definitely enabling the payment of the special of NZD0.025 today, and again a note there around the capital bonds, NZD300 million placed in July flowing through financing activities.

CapEx -- if this graph were extended back pre-2012. You'd see much higher CapEx numbers on the back of the last geothermal program Mighty River Power has already executed. So again CapEx relatively low at NZD110 million for last year, up slightly on the year before at just NZD93 million.

Around NZD80 million stay-in-business so that's CapEx just to keep the lights on inside the generation and retail metering businesses, new investments sitting at NZD31 million. Most of that being smart metering.

Our guidance is in line with where we were last year for stay-in-business at around NZD80 million with very minimal committed growth CapEx, mostly in Metrix of NZD10 million for the coming year.

Just touching on two of the major decisions last year -- one announced around international geothermal, so we exit from international geothermal development. That resulted in non-cash impairments released at the half year of NZD83 million, and then a decision to exit Southdown in March triggering a further NZD44 million reduction in the carrying values of those assets as they were held for sale.

That station now currently running through a marketing arrangement. We'd hope to have that plant sold before we hit the end of the year. Obviously good for potential buyers to come in and see the plant running. From January next year that won't be possible so a preference certainly to be able to execute a sale before the end of this year.

Just a note there around the FX translation reserve loss, that is a carve-out on our guidance around Chile, so it's just a product of accounting. The graph on FX losses which will remain on balance sheet until such time as those assets are disposed of, but they sit around NZD10 million and are non-cash.

Funding profile for the bankers in the room, really nothing happening this year. In 2016 we've got a wholesale bond maturing in October 2016 so that takes us into the next financial year, and we've got a revolving bank loan there which automatically extends.

Again, quite a long duration of funding, net debt sitting at just south of NZD1.1 billion. Obviously the capital bond sitting way up there in the back at 2045 so a very long-dated debt. I note there, interest rates, very high interest rates as a consequence of long-dated swaps put in place back in 2008. So just flagging you're looking at a NZD20 million uptick in production and interest costs from the middle of 2018.

On capital management, currently maintaining a standalone rating of bbb, one notch uplift for majority crown ownership. Again in the band, in the bbb band from 2 to 2.8. We sit at the bottom of the range so we certainly have a reasonable degree of balance sheet flexibility.

Again the dividend policy reflecting full distribution pre-cash and no borrowing to fund dividends at this time. Our capital bond obviously gives us some extra headroom with equity credit for the first 10 years and we're sitting on NZD24 million of treasury shares with a buyback currently registered with the NZX for a further NZD15 million.

Handing back to Fraser.

Fraser Whineray - Mighty River Power Limited - Chief Executive Thanks, William. So just turning now to business strategy and update. We're on page 31.

Increasingly the market has been working from the customer back rather than the electron forward which is comments I made last calendar year. And that's a big focus because there's a lot of value in reducing churn and having loyal customers, whether it's for reducing costs of churn, costs of acquisition but also ideally higher yields by offering something of value to them.

So loyalty is an important aspect of that, rather than offering programs which lead to disloyalty, and so there's certainly a change in the market underway on that front.

Yes, we led out the market on fixed price contracts some time ago for mass market users and they have been enjoying us absorbing some lines company charges in recent times for that and we got a good fixed proportion of our book and that did reduce churn there as well.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation Behaviour-based segmentation and targeting offers via digital channels, lowering the costs of interaction with customers is very important. You've got some offers on the smartphone pictures on the right of that slide 31 there, NZD150 for NZD100, so NZD150 of power for NZD100. You get the NZD150 of power in about three or four months' time but you pay the NZD100 today.

And the other one below that is one day free. Now, the perceived value of one day's power is actually pretty high but the actual cost of it isn't, it's just because people get a bill once a month. And so those things have already led to measurable increases in customer satisfaction, even for the customers that didn't take them up.

Even if they got offered the opportunity of doing it but they didn't take it up, they all felt happier with the brand and the proposition that they'd been asked. And indeed that was even talked about by I think Duncan Garner who was talking to Sue Chetwin of the Consumer magazine recently on the radio.

Digital engagement is very important for also lowering costs and making life simpler for our customers. So now we have an increase in customers paying electronically though as you start to get closer towards 100% admittedly it is a bit harder to get those people out of certain habits, and we've made a significant lift in the number of people receiving their bills online from last year, which is now over half.

We've had no increase in headline prices for energy, for residential electricity and gas for three years now. And as I mentioned earlier, we have for a portion of our book absorbed lines increases for 35% of the customers on fixed price contracts. A lot of people were using their good energy monitor; again, it helps them understand their choices for using their electricity and takes the mystery out of the bill which arrives a month later when you've been completely unconscious of your electricity consumption until that point in time.

And you might wonder why I'm so keen on electric vehicles. Well, I can tell you, you actually do finally understand what electricity costs when you're driving a car because it's NZD0.30 a litre and you actually are aware that you're using electricity when you're driving a car, unlike the 60 times you've used electricity in a day around your home.

GLOBUG. This has been the fastest-growing retailer since we relaunched it in February. We modified the systems. We've put in an app to make top-up payments easier and we've been offering certain enticements and also doing some above-the-line advertising.

We were very pleased with the response we got to this for above-the-line advertising and the number of calls coming in for it. So rather than having it framed as a product which is you don't have a decent credit record and we're going to offer you power on this, it's more about saying if you go on this then life will be better.

Our Achilles heel was the price point which we dropped in February for about 18,000 customers and now we've grown our book to about 30,000. And that is widely supported by budgeting agencies, it's been out in some Housing New Zealand material, the Federation of Family Budgeting Services, the Salvation Army. They like it because their client at those budgeting agencies don't turn up with a NZD400 bill that they can't pay, and that's when the lights go out.

But if you're on top of your power game and your only minimum top-up is NZD20 then you can keep the lights on and it reduces those bad debts. So we're looking forward to that continuing to grow but we think it's also giving real credibility to a segment as well as competitors' products in that space also give credibility to Sigma.

We're the largest player.

Generation, going 100% renewable from January 1 once, as William mentioned, we retire Southdown. That's quite significant for the Company. It's a bit different, it rolls off the tongue a bit differently to say we're about 95% renewable to we're 100% renewable because 100% is 100%. And so we're looking forward to that, and as I mentioned earlier we've got some great assets with the baseload geothermal and the Waikato hydro scheme to manage portfolio from there.

We've also done some other work, importantly, on the hydro scheme as part of the ongoing refurbishment. The Whakamaru we talked about that upgrade previously that will take the station from 100 megawatts to 120 megawatts at peaking and lift efficiency in terms of converting water into electricity. Those turbines were put in when the station was built over 50 years ago and with computer techniques you can get much better turbine design now, with all respect absolutely to the people that built them originally without the aid of computers.

Karapiro, which is the picture shown in the slide there, that is -- we've refurbished one of the three units there. It's got a slightly different turbine configuration, it's called a Kaplan turbine rather than a Francis turbine. That's been quite complicated to refurbish that unit because it's the first one of those types that we've been working on as part of the refurbishment and we're looking forward to having it back in shortly.

We have more than 100, probably close to 200 consent conditions on the hydro scheme. We've got more than 1000 across our geothermal plants and in hydro we achieved full compliance for the second year running from the Waikato Regional Council. That means you're compliant on every aspect of those regional consents, and that's flow rates, ramp rates and a whole number of other things. So we're very pleased with that, that represents a lot of diligent work from the teams there.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

We've talked about Southdown's closure and we've also talked about the other features of the remaining Mighty River Power portfolio of baseload geothermal in the Waikato hydro scheme in that context that will run post-Southdown.

In Metrix, that still is getting a big lift on the customer focus for certainly the 20 customers we do have, retailers and lines companies. And we did terminate that Trustpower contract before commencement of services. The system changes interfacing from seven to 29 networks and delays and concerns over system stability saw us to reconsider that contract and its viability and that's why we terminated it, which was announced just after the end of June 30.

So that was a reasonably challenging decision to make but ultimately one that's focused on the interests of our 100,000 shareholders. So Metrix will continue to work on its core business, its core customer service propositions and we'll see what other opportunities arise for that down the track.

Longer-dated stuff in terms of water and electric vehicles, you'll recall we signed a 52-year operating easement with Tuwharetoa Maori Trust Board over Lake Taupo and that will help align our goals with Tuwharetoa and then work with a broader goal of making Waikato the world's best catchment. There's a lot of opportunities in water in the Waikato and water storage and we -- but there's a lot of consensus that needs to be achieved to get those goals realised.

Waikato is a very complex and intricate catchment, it's very delicately balanced. There's water that actually comes diverted through Genesis turbines all the way through to the drinking water that we're enjoying here today. That water would have otherwise gone down the Whanganui River and out to the Tasman Sea. So it's very finely-balanced and it's really important that enough people understand the opportunities that are available but certainly the risks if water gets changed or the way water changes flowing down that stream.

Electric vehicles, I mentioned that earlier. We're trying to push and accelerate this change to electric vehicle uptake in New Zealand. As a famous New Zealander once said, it won't happen overnight but it will happen, and this definitely will happen because of the benefits to the consumer, the fleet owners and to the country are great.

In terms of how much electricity, if you're interested, of what a car uses in a year to drive 12,000 kilometres, it's about 3000 units, or 3MWh. And an average household might use 8MWh. So it's three-eighths of the household -- my household. I've got two now, William's got one, Lucia's got one and of course Mighty River Power has been converting its fleet.

We've been working with a broad range of car suppliers, we've got a retail offering for off-peak charging, we've been working with lines companies, officials, et cetera to try and increase the awareness of New Zealand's largest green growth opportunity. I'll say slightly cynically, we can have as many farmers' markets and grow them as we like but that actually isn't going to make a difference to New Zealand's greenhouse gas emissions. We really do need to focus on the big ones, and in New Zealand it's cars and cows. And so let's focus on those cars.

The most important thing there is we're changing the conversation about the sector because it's actually pushing the renewable advantage of New Zealand's electricity system to the front and in being something that's recognised as different about New Zealand and how it can be leveraged much more astutely for the economy.

Transmission pricing methodology. This has been going for some time, since 2012, and in our latest submission we see some concerns with the attribution to mass market customers by using the retrospective allocation across sunk grid assets and reallocating those to the upper North Island for essentially the favour of Tiwai and Meridian.

So we think that should be prospective. Retrospective allocation of charges is always a concerning regulatory feature but the cost imposts on Mighty River Power of the current proposal is substantially down from where it was at the prospectus. Transpower got through its requested changes in terms of South Island charging to dollars a megawatt hour rather than dollars a megawatt, and we think that will change some of the cost benefit analysis for further changes to the TPM. So we look forward to seeing, mid-June, the recommendation from the electricity authority but there's plenty of water to flow under that bridge yet.

So just framing -- this is a slide we put up at the ASM, we think about things through the customer lens, the country lens and the Company lens and try to ensure that what we're working on aligns with all three of those. There's operates, or operate well, build on the strengths that we've got and think about some long-term opportunities as well.

This slide here simply packages the announcements -- key ones we've made during the year that you'll already be familiar with and puts them into that context. So as you can see there's been quite a few clear decisions made.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation The next slide actually is a picture of the Arapuni Swing Bridge, which is one of the longest swing bridges in the southern hemisphere I think, at about 120 metres and you get a great view of the power station there. It's part of the Waikato River Trails, and you can see some walkers going across there and you can also ride there as well.

So if you've got family that's bored in Auckland for a weekend then go and enjoy the Waikato River Trails; we've been sponsoring them since 2004 and there are many -- wide range of tracks for all capabilities there. So there you go, bit of free tourism for the Waikato River Trails.

2016 outlook and guidance: we've got EBITDAF guidance for FY16, NZD490 million to NZD515 million and subject to a range of things shown there. The NZD490 million to NZD515 million shows a recovery of hydrology to not just 4000GWh, which is the average, but 4150GWh because we started the lake at a higher average position on July 1 than we ordinarily would, and that was because of quite a late run of inflows in the six weeks to eight weeks leading up to June 30. So we're expecting that in -- that's about 150GWh, which is about 35cm of Lake Taupo.

We've got a lower level of non-core property divestment in 2016 which had some positive effects in 2015. Flat year-on-year operating expenditure. As William mentioned, we've got some additional well repair work, which goes into OpEx in 2017 as we run a drilling campaign.

William also touched on some things which may impact the EBITDAF line relating to Chile, namely the foreign exchange translation reserve losses. So if we do sell Chile, you may see some impacts there but know that they are non-cash and we've clearly signalled that possibility in advance.

Our ordinary dividend guidance up 2% to NZD0.143 per share, within our dividend policy range.

So we've got some key lifts there from year to year. 2015 was at NZD482 million. You get an increase in hydrology, a normalisation of our LWAP/GWAP ratios which William touched on, slightly less property and less benefit from the C&I sales, which as I said, in commercial and industrial sales we run a multi-year view on where we see value and trade and position the book around that.

So thanks very much, we're happy to take any questions.

QUESTION AND ANSWER

Operator We'll now begin the question and answer question. (Operator instructions). Grant Swanepoel, Craigs.

Fraser Whineray - Mighty River Power Limited - Chief Executive Morning Grant.

Grant Swanepoel - Craigs Investment Partners - Analyst Good morning team. Just in terms of the non-core asset sales, do you expect them to be NZD4 million or NZD5 million down on what you did this year? Or is it a bigger number than that?

As you were pointing that the forward curve is lifting back to more normalised -- or better levels, should we be expecting a bit more C&I placement into the market over FY16? And then just finally, your view on the capacity shortage in FY19; it seems to be shared by your peers.

Around 300MW to 400MW shortage, particularly if Huntly closes the coal units. Do you have any small-sized hydro or other assets that you would consider building ahead of that capacity shortage, and what would it cost if you did? Or, would even consider reversing the shutdown of Southdown and mothballing that for potential usage in that period? Thanks.

Fraser Whineray - Mighty River Power Limited - Chief Executive

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation Okay, so I think there were three questions. I'll let William answer the first one about non-core sales. I'll give two and three a go.

Our C&I renewals has been -- our success rate on renewals has been low. We've been pricing where we think it should be, of course there's been probably more competitive offers coming in.

So with the increase in C&I pricing we expect that we will increase our success rate on renewals and new business and C&I going forward across FY16. So you expect that to come up.

In terms of the shortage that exists on paper in FY19, the only things we have consented -- no, we don't have small-scale hydro or additions to put another thing in the middle of the hydro scheme. The good folks that surveyed that pretty much got every metre of hit out of it, unless we were prepared to put one at Hooker Falls, and the consent for that would be improbable. So no, we don't have any more of those. The consented generation we do have is in Turitea and Puketoi in wind farms at the current time.

In terms of reversing the Southdowns decision, we made -- we ran a proper sales process for that last year unsuccessfully and then made a decision to shut it and based on all the other announcements, no we're not intending to change that decision at this time and as William said, run the sales process through to the end of the year.

William Meek - Mighty River Power Limited - CFO So Grant, on non-core land sales this year, it was NZD17 million in terms of P&L impact and next year -- this year it's budgeted to be NZD7 million.

Grant Swanepoel - Craigs Investment Partners - Analyst Thanks very much.

William Meek - Mighty River Power Limited - CFO Just reflecting Fraser's comments on Southdown, we announced first in March, we were reasonably proud therefore to lead the stampede as (inaudible) ensues.

Grant Swanepoel - Craigs Investment Partners - Analyst Well done.

Operator Andrew Harvey-Green, Forsyth Barr.

Andrew Harvey-Green - Forsyth Barr - Analyst Morning guys, a couple of questions from me. First one, I guess just around that 2019 situation. To what extent do you have capacity within the hydro to flex that and take advantage of the peaking going forward, and would you consider changing the use of that hydro plant post-2019?

Fraser Whineray - Mighty River Power Limited - Chief Executive Yes, so is there talk about the peaking nature of the hydro scheme? On average, the hydro scheme runs at 45% utilisation against 1038MW, or thereabouts, capacity.

So, because if you took 1038MW and timed it by 8,500 hours a year you'd have more than twice the current output of the hydro scheme, so it's about getting rain in.

That was -- it's been built with huge amounts of spare capacity and, as it stands today, every day we're ramping that thing up and down constantly to look to extract a GWAP premium for the generation from the hydro assets.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation And so we think the value of that premium that we can get from those assets depends on volatility in the market, and so if the market does -- the wholesale market does become more volatile, we'd expect to extract a bigger GWAP for those. But I think we -- it just means that the value of that peaking capacity goes up in a post2018/2019 scenario compared to where it stands today.

Andrew Harvey-Green - Forsyth Barr - Analyst OK. And a second question was just around demand growth. Let me just -- I had the Vector call just before yours and they were busy talking about demand continuing to fall and residential demand growth over the last ten years on a -- with their adjusted basis being down 7%, which is a wee bit of a different message compared to what you're telling us. I'm just wondering if you had any comments on that? Is what Vector's seeing a particular Auckland issue, as opposed to what we're seeing elsewhere?

Fraser Whineray - Mighty River Power Limited - Chief Executive Yes, look, Vector's only one network in a relatively warm part of the country with a lot of old housing stock which is getting a lot of money pumped into it to finally renovate those old villas and bungalows and reinsulate them, plus it's getting a lot of new builds, which tend to be of a higher quality housing stock as well. Auckland also has a wealth profile which is now different substantially from the rest of the country, which will afford them to upgrade those fridges and appliances and things and hopefully go all the way to purchasing an electric car as well, Andrew. Or two.

That would reverse it by 3MWh for the Vector network. So we put on our slides what we saw as the broad category of sectors or growth, which is on slide 10, and we expect things to be in the 1% to 2% going forward. It has shot away this year, but there's also been record migration and a few other features which might have pushed it higher that what we'd expect to see.

The key thing I would also add is that it is a very dynamic supply/demand balance as we've seen, and so even if demand did go up or went down, I think in terms of how the core market works, putting new builds aside, it should respond appropriately and get wholesale prices and ASX prices in the right place.

Andrew Harvey-Green - Forsyth Barr - Analyst Okay and a final question from me was just around the Chile divestment, and you talk about FX translation reserves of NZD10 million and then also remediation charges potentially. Are those remediation costs included within that NZD10 million, just to be clear, and it's not -- are you able to give us some sort of sense of what that might be?

William Meek - Mighty River Power Limited - CFO They're separate to the accounting adjustment. We're still in negotiation with a number of parties around the transfer and sale of those assets to them so that process needs to be run to ground. If the sale was ultimately incomplete, then some works will need to take place on the site, particularly at Tolhuaca to make those wells safe and abandoned. Those are not reflected currently in those numbers.

The entities themselves actually have quite significant tax assets; they've got accumulated losses, they've got VAT receipts, which potentially are valuable to a potential purchaser. The challenge they have at the moment is they've also got attached geothermal liabilities in them, so for someone who's not a geothermal company, they are pretty hard to deal with because they're just sitting there, so I have got no idea what there liabilities are, so the separation of the abandonment costs and then the realisation of those tax assets -- our view is the actual difference between those two is actually relatively small.

Fraser Whineray - Mighty River Power Limited - Chief Executive Yes. Andrew Harvey-Green - Forsyth Barr - Analyst OK. And timing, just finally, timing for having that all resolved, roughly?

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

William Meek - Mighty River Power Limited - CFO If the sale's going to conclude it'll be within the next few months, and if that's not the case we'll be moving to actually undertake works.

Andrew Harvey-Green - Forsyth Barr - Analyst OK, thank you.

Operator Wade Gardiner, UBS. Wade Gardiner - UBS - Analyst Hi guys. Just in terms of your -- the comments you made in opposition to the TPM changes and to the extent to which it helps Tiwai remain; you know, the changes that they had were I think about NZD11/MWh for Tiwai. To what extent is your opposition to it shooting yourself in the foot? In other words, do you oppose that -- that they shut down?

Fraser Whineray - Mighty River Power Limited - Chief Executive Well, we're in -- all our assets and most of our load are from Taupo North so I think there's other people that are more incentivised to -- as has been shown -- to deal to keep Tiwai there. Look, there's a real problem in the arrangements that were struck with Tiwai back before Meridian's listing, is the permanent right to put the contract and that's quite an insidious overhang, in terms of the industry getting on with things. So look, if Tiwai wants to commit to New Zealand and Southland, then do it, and if not, then maybe they should probably move on. So I think -- they've got to go at some point, whether it's 2030 or 2035 or 2020, I don't know. If they want to be -- if they want to get some charity, I think they need to be explicit about it. My view is that I'm not sure why Auckland customers for sunk transmission assets should be footing the bill for Tiwai and Meridian shareholders.

Wade Gardiner - UBS - Analyst OK, but, I mean, then contract is what the contract is and the fact that you might fare better than the others doesn't mean that you won't fare badly out of them leaving.

Fraser Whineray - Mighty River Power Limited - Chief Executive I think I'd just point out that the cost of that issue in the contract is not neutral today, it actually has an impact on daily activity in terms of -- so at some point, is it actually better that they're actually gone so you remove the uncertainty, because the uncertainty does price into the market.

William Meek - Mighty River Power Limited - CFO Why don't you reflect back to Grant's first question around the hole in 2019 with the exit of Huntly, in any case, that emergent gap there under a demand growth scenario would be pretty much swallowed Tiwai existing. In that regard, it can't go before 2018 in any case, less than a year from that, effectively I've got a hole big enough to swallow Tiwai's demand decrease, which takes the horrible overhang from the market away. At the end of the day, there's only one company that makes that decision, it's Rio and we'll see what happens.

Wade Gardiner - UBS - Analyst Okay.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

William Meek - Mighty River Power Limited - CFO But accordingly -- and I think there's a clear door there near the end of this decade.

Operator The following question comes from the line of Nevill Gluyas from First NZ Capital. Your line is open, please go ahead.

Nevill Gluyas - First NZ Capital - Analyst Morning team; three questions from me. Just some thoughts about mass market price and guidance, obviously the forward curve going up, just wondered if you want to give some colour about where you could see that moving. I imagine we might still see another little wave of line cost increases. Just some thoughts about whether or not metrics EBITDAF growth is static for now. Also just a clarification, when the Genesis swaption you guys have actually expires. I think it's December 31 this year, 2016 sorry.

Fraser Whineray - Mighty River Power Limited - Chief Executive Best market guidance, we're not going to issue guidance on anything to do with retail prices. We look at each of those across the brands and the products. The GLOBUG got a price decrease in February this year and we've held mass market energy prices flat for three years. So I think the main impact you'll see with the ASX curve adjustment is more likely to be on the C&I side rather than necessarily correlating with the mass market side. Because if you look at the last five years of where C&I and mass market pricing has been, you'll see that the C&I has been through a bit of a trough and then come back up. So we'll continue to look at that on a case-bycase basis, but won't be giving any guidance today as to which way we'll go. Again, as I say, it will depend on brands and locations and things.

With metrics, yes, the EBITDAF format's materially in the interests for the shape of the entire Company, that's flat. That's a fairly safe place to be and the Genesis swaption has another year to run.

Nevill Gluyas - First NZ Capital - Analyst Thank you.

Operator The following question comes from the line of Matt Henry from Goldman Sachs, your line is open, please go ahead.

Matt Henry - Goldman Sachs - Analyst Morning guys, or afternoon I guess now. Just a couple of follow-up questions really from Nevill. Firstly your fixed price level volume price was stable year on year but obviously you averaged out through reducing C&I load. Are you able to give us any sort of color on what the underlying per megawatt hour changes were for both residential and C&I and what the impact of GLOBUG was and also I guess what the expectation is for 2016?

William Meek - Mighty River Power Limited - CFO You can see that bridge on EBITDA has got a price impact of NZD17 million, so that wraps up all those impacts inside that question. Looking forward, you've got some countervailing, you've still got some small unwind and then you've got the opportunity to effectively reenter the C&I market and re-contract at high yield, so we need to run that one to ground and we'll see how the market responds. We're seeing quite a sharp response in ASX, wholesale prices are still quite soft, so 2016 is definitely being influenced by above-average hydrology despite strong demand growth. So hard to call those effects at this point.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

Matt Henry - Goldman Sachs - Analyst Okay and then sorry, just on the swaption question, I guess with the closure of Southdown and a roll off of the swaption in a year's time, do you feel any sort of need to reposition your book or look for further sizeable coverage?

Fraser Whineray - Mighty River Power Limited - Chief Executive We've been repositioning the book for that long sort of multiyear C&I point we've been making for some time now, moving from quite a short book to a long book and that's what -- we've published that data over time. So ultimately when you don't have the covered call of Southdown, which comes with quite a premium to hold that obviously, then you have to think about how, what you'll need, exposure to the market will be over time. But in terms of being able to buy and sell energy, since we have plenty of peaking capacity and the Waikato hydro scheme, we look to the Futures market and other derivatives over the counter to manage that position. So the core strategy is still buy low and sell high and you've just got to run into seasonal periods and into year periods actually, to give effect to that. So yes, it will ultimately have an impact on where the portfolio gets to and we considered all that in the decisions around Southdown, both in the sale prices last year and to close it in March.

Matt Henry - Goldman Sachs - Analyst Sure and of course the market's probably tightened up quite significantly since then, so I presume that process may be ongoing.

Fraser Whineray - Mighty River Power Limited - Chief Executive What process, the portfolio management?

Matt Henry - Goldman Sachs - Analyst Yes. Fraser Whineray - Mighty River Power Limited - Chief Executive Yes, absolutely, it's always ongoing, it's absolutely influenced by what actions happened with other parties with respect to their generation gear, both planned and unplanned and their sales positions.

Matt Henry - Goldman Sachs - Analyst Okay, thanks.

Operator The following question comes from the line of Stephen Hudson from Macquarie Securities. Your line is open, please go ahead.

Stephen Hudson - Macquarie Securities - Analyst Just a couple of questions from me, just in terms of the 2016 guidance, it sounds like you're sort of steering towards an LWAP/GWAP of about 1.03, the sort of long term average. I just wanted to confirm that was the case. Just on your geothermal volume that you've baked into that guidance, can we just assume a flat volume there on 2015 or slight rise? Then just on the dividend, I think your existing policy is to pay out 70% to 85% of free cash flow. Can you confirm that you'll be able to impute the dividend fully across that range? And then an associated question, I'm just interested in what you see the priorities for the remaining 15% to 30% of free cash flow, what those priorities are over the next two to three years.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

Fraser Whineray - Mighty River Power Limited - Chief Executive Okay, hopefully we've got all four of those. So yes, 1.03 is about the right number. Secondly, geothermal should be a slight uptick, though we did have the outage for, which William referred to earlier, NAP outage finished about two weeks ago, but nonetheless should be an update from the increased rating of the plant with the new turbine. So the third one was on the dividend.

William Meek - Mighty River Power Limited - CFO Dividend situation, so ordinary dividends should be fully imputed, yes. Priorities for free cash flow, I mean you're dealing with 15% under a normal scenario of total debt. Gearing, where it is we're happy with, so in the absence of other growth opportunities, there's only one other place it can go, dividend.

Stephen Hudson - Macquarie Securities - Analyst Okay, so you can impute up to that full 85%. I guess your guidance at the moment is to pay just the 70% ordinary dividend, but there's no problems imputing up to the full 85%.

Fraser Whineray - Mighty River Power Limited - Chief Executive Yes and vary, yes.

Stephen Hudson - Macquarie Securities - Analyst Good, thanks guys.

Operator We have one question remaining from the line of [Najib Mohi], who is a private investor. Your line is open, please go ahead.

Najib Mohi Shareholder Morning guys, just a question on the guidance basically, you've got the variability of NZD25 million, just wondering whether that is to do with the uncertainty regarding retail margins.

Fraser Whineray - Mighty River Power Limited - Chief Executive We give a range because the range isn't designed to deal with hydrological impacts, it's designed to deal with a number of either wholesale market or operating cost impacts, rather than putting a specific point on it. If hydrology is strong or as in the case of FY15 low, we'll certainly be looking to reset guidance for that normal process. So it's not, we haven't put a NZD25 million in the range which is the same range we started with last year, to deal with uncertainty around retail margins specifically, no, it encompasses a whole range of variables in the Company.

Najib Mohi Shareholder Right, okay. The other one was could you put some color on the timing of the Whakamaru refurbishment, the 20MW increase in capacity? What is the impact -Fraser Whineray - Mighty River Power Limited - Chief Executive

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

Yes, the 20MW, there's 40 units there, they get a 5MW uptick each and we're doing one a year, so I think it goes all the way through to 2019 or thereabouts.

Najib Mohi Shareholder So 5MW through to 2019 is it?

Fraser Whineray - Mighty River Power Limited - Chief Executive Yes, per unit.

Najib Mohi Shareholder Okay, thanks.

Fraser Whineray - Mighty River Power Limited - Chief Executive So there's no more water going down the pen stock so it's not 20MW times 45% capacity factor. You'll get a little bit of efficiency upgrade, but it's mainly capacity.

Najib Mohi Shareholder Right, yes, okay, thanks.

Operator It appears there are no further questions at this time. I will now hand the call back to you, Fraser Whineray, for any additional or final closing remarks?

Fraser Whineray - Mighty River Power Limited - Chief Executive Thank you. Are there any further questions from the floor here? Maybe we'll cover them over a cup of tea later. Well thank you very much for all those who have attended by phone and also particularly those that have come along in person and to my management team who is here with me as well. It's great to have you along here, very pleased to present that robust result and look forward to catching up with some of you in subsequent conversations over the next couple of days. So enjoy your Friday and I look forward to seeing you again. Thanks.

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AUGUST 27, 2015 / 11:00PM GMT, MRP.NZ - Preliminary 2015 Mighty River Power Ltd Earnings Presentation

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