More power and sales will boost MRP's stocks

JASON KRUPP
Last updated 07:32 30/01/2013

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Mighty River Power's fourth-quarter sales report is likely to bolster the investment case for the firm's sharemarket float, with sales volumes and generation up.

The state-owned enterprise reported a 12 per cent rise in electricity sales volumes yesterday to 1272 gigawatt hours in the three months ending December compared with the same period last year.

That was even as total electricity consumption in New Zealand rose by a 0.7 per cent to 10,038GWh in the same period.

The firm said the gain was largely from a 22 per cent rise in volumes from business customers to 682GWh, with end market prices largely consistent with a year ago at $110.53 a MWh.

Total retail electricity purchase costs fell 27 per cent in the period to $61.14 a MWh.

On the generation side of the business, MRP produced 1731GWh hours of power in the period, up 5 per cent compared with last year.

The average wholesale price dropped 23 per cent year on year to $66.25 per MWh because of a glut of power from South Island hydro lakes. However, wholesale sales figures exceeded retail purchase costs, which could flow through to the firm's bottom line and add momentum to its upcoming listing on the New Zealand sharemarket.

MRP's full-year results are due on February 21. The firm previously reported flat underlying earnings for the year ended June 2012 of $162.7 million.

Under the mixed-ownership model, the Government will sell a 49 per cent stake in the country's fourth biggest power producer between March and June.

The initial public offering is subject to a challenge in the Supreme Court this week, with the Maori Council looking to overturn a High Court ruling that dismissed its bid to halt the sale of state assets.

James Smalley, an adviser at Hamilton Hindin Greene, said MRP was potentially more attractive than other energy companies as its hydro-generation assets were on the Waikato River, a less temperamental water catchment than the hydro lakes in the South Island.

MIGHTY RIVER POWER Operations:

New Zealand's fourth biggest power producer

92 per cent of electricity from renewable sources

Eight hydro lakes on the Waikato River

Four geothermal plants in the North Island

One gas-fired plant in Auckland

Earnings for year ended June 30, 2012:

Underlying profits of $162.7 million Dividend payment to Crown of $119.8m

Float:

49 per cent of MRP to be sold

Company valued at $3.6 billion

IPO expected before July

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- Taranaki Daily News

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