Mighty River Power tips earnings boost

Photo / The Daily Post

Deferral of maintenance has enabled state-owned Mighty River Power to lift its expected earnings for the latest financial year from earlier estimates.

The company today said its guidance for earnings before net interest expense, income tax, depreciation, amortisation and financial instruments (ebitdaf) in the year to June 30, 2011 was between $435 million and $450 million.

That is well up from $327.8m a year earlier but still below the record $447.1m in the year to June 2009.

In March, Mighty River had said it was expecting full year ebitdaf of $420m to $435m, while in October last year its estimate had been for $391m.

Mighty River chief financial officer William Meek said today's revised forecast included decisions to defer some maintenance on existing geothermal fields and hydro plants to the next financial year, along with positive gains in some business areas.

For the six months to the end of December Mighty River's ebitdaf was $233.6m, up 22 percent on a year earlier, with the improvement driven by increased generation, primarily from additional geothermal capacity.

The fall in ebitdaf between the June 2009 and June 2010 years was attributed to higher operating expenses associated with maintenance work, drought in Waikato which cut hydro generation, and low wholesale electricity prices.

- NZPA