Mighty River board readies for scrutiny

Mighty River Power's Whakamaru Dam, one of its stations on the Waikato River. Photo / Alan Gibson

Shareholders in the newly-floated Mighty River Power will have the opportunity to put its board and management under the spotlight over the company's poor performance on the share market at today's annual meeting in Auckland.

Shares in the state-controlled energy company have failed to fire, despite a strong start when they listed on the NZX on May 10.

The shares were issued at $2.50 each and hit $2.73 on their first day but have since struggled to perform.

They hit a post-float low of $2.15 last month, despite the presence of a $50 million company share buyback.

Uncertainty over the future of the Tiwai Pt aluminium smelter - which uses about 14 per cent of New Zealand's power supply - has weighed on the stock and the Labour-Greens plan to intervene in the electricity generation market remained a long-term negative.

Mighty River's poor share price performance compares with ongoing strength in its far larger competitor, Meridian, which listed at a premium last month and which has largely retained its post-float gains.

Meridian instalment receipts - issued at $1.00, last traded at $1.11 while Mighty River was at $2.19.

The company's poor showing on the market is despite a strong financial performance in the year just past.

Mighty River's net profit was $114.8 million in the year ended June 30, up from $67.7 million a year earlier and well ahead of its prospectus in April when it forecast a profit of $94.8 million.

The company's capital expenditure requirement for this year has been assessed at just $125 million to $175 million, against $200 million in the offer documents.

The Government sold 49 per cent of Mighty River Power in a share float in May as part of its so called "mixed ownership model" of partial privatisations that will include the smallest of the state's generators, Genesis, next year.