Mighty River Power is on track to pay higher dividends next year but analysts say it remains in the shadow of longer-term uncertainty hanging over the industry.
The company says it is on track to lift its total dividend by more than 8 per cent to 13c a share in the 2014 financial year based on continued cost-cutting and getting the benefit from its newest geothermal power station near Taupo.
Its net profit for the 2013 financial year exceeded its prospectus forecast by 21 per cent at $114.8 million while underlying earnings were up 13 per cent to $179.5 million.
Investors initially welcomed the news with shares bouncing up 4c to $2.23, before sinking to close at $2.17, just a cent above its all-time low and still well down on the $2.50 issue price.
An analyst for Hamilton Hindin Greene, James Smalley, said the result was "very solid" but the radical electricity market changes promised by Labour and the Greens if they are elected to government next year "hung like the sword of Damocles" over MRP and the rest of the electricity sector.