Mighty River Power, the first of the state-owned power companies to be partially privatised last year, said 2015 earnings will be at the lower end of guidance, reflecting a lack of water in the catchment of the Waikato River, where it runs nine hydroelectric stations.
Chief financial officer William Meek told shareholders at the Auckland-based company's annual meeting that full-year earnings before interest, tax, depreciation and fair value changes would be within the range it gave in August of $495 million to $520 million, "with a bias to the lower end of the range due to the continuation of a long trend of drier than normal conditions in the Waikato catchment."
That compares with Ebitdaf of $504 million in 2014, when the company commissioned its new geothermal plant at Ngatamariki, cut operating costs by $30 million and avoided one-time expenditure it faced in 2013.
Chair Joan Withers said the guidance "reflects assumptions on additional hydro and geothermal production and continued pressure on retail electricity pricing."
"While we have a high degree of resilience in our business portfolio, there are some elements outside management control - such as hydrology and regulatory change - that could have a significant positive or negative impact on earnings," she said.
