NEWS RELEASE 23 February 2016 NZX: MRP
ASX: MYT
Strong operating performance confirms interim dividend Mighty River Power today announced steady operating earnings (EBITDAF) of $257 million for the six months ended 31 December 2015, supported by a strong operating performance and successful customer loyalty initiatives. The Company has declared an interim dividend of a fully-imputed 5.7 cents per share, up 2%, to be paid to Mighty River Power’s 95,000 owners on 31 March. Chief Executive, Fraser Whineray, said pricing and competitive pressure remained intense during the period, in a market 1 that is among the most competitive in the world . National electricity demand has continued to lift (up 1.4% on the prior period) and the broader industry dynamic is positive with an improvement in ASX electricity futures prices. Highlights in the first half included increasing Mercury customer satisfaction and increased output from geothermal generation. Safety performance also improved with a reduction to one lost-time injury during the period, although above the Company’s goal of ‘zero-harm’. Other significant milestones included the closure of the Southdown gas-fired power station in Auckland from 31 December. “We have now gone beyond 100% renewable electricity with our recent move into solar,” he said. Mighty River Power – unaudited financial results for the six months ended 31 December 2015
HY2016
HY2015
Change on HY2015
257
258
(1)
Net profit after tax ($m)
74
8
66
Underlying earnings after tax ($m)
89
90
(1)
Interim dividend (cents per share)
5.7
5.6
0.1
EBITDAF ($m)
EBITDAF of $257 million was down $1 million on the prior period, with increases in hydro production (up 26%) and geothermal (up 5%) offset by lower generation yields, reflecting subdued wholesale electricity prices, and competitive pressure on energy pricing to residential and business customers. Net profit after tax (NPAT) of $74 million compares with $8 million in the prior period, with the difference due to lower noncash impairments. The Company recognised an additional impairment of $18 million, which includes the permanent sealing of exploratory geothermal wells in Chile, along with a partial impairment reversal of $1 million from the closure of Southdown. The competitive market was also reflected in higher operating costs (up $7 million), as the Company invested more intensively during the first half of the financial year in brand promotions and loyalty initiatives. These included growth in the pre-pay segment with GLOBUG and the introduction of free Good Energy Days that had a measured positive impact on customer satisfaction. Mr Whineray said Mercury’s social media community was the largest in the sector and the number of customers engaging with the Company’s brands though digital channels continued to increase through the half year. At the same time, the proportion of customers rating as ‘highly satisfied’ has climbed above 65%, with the Company targeting further improvement in this measure.