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Six months ended 31 December 2014 – Mighty River Power

Mighty River Power · Feb 24, 2015 · 45 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Six months ended 31 December 2014 – Mighty River Power – slide 1
    24 February 2015 Financial Results Six months ended 31 December 2014 Presented by: Fraser Whineray William Meek Chief Executive Chief Financial Officer MIGHTY RIVER POWER FINANCIAL RESULTS
  2. Six months ended 31 December 2014 – Mighty River Power – slide 2
    FINANCIAL RESULTS Agenda Highlights 4 Market Dynamics 8 Operational Update 13 Financial Update 17 Business & Strategy Update 25 Outlook 33 Appendix 37 MIGHTY RIVER POWER FINANCIAL RESULTS 3
  3. Six months ended 31 December 2014 – Mighty River Power – slide 3
    HIGHLIGHTS Active management optimising value over time MIGHTY RIVER POWER FINANCIAL RESULTS 4
  4. Six months ended 31 December 2014 – Mighty River Power – slide 4
    HIGHLIGHTS Health and safety Goal continues to be zero-harm extensive TOTAL RECORDABLE INJURY engagement with contractors and FREQUENCY RATE (TRIFR) subcontractors (rolling 12 month, per 100,000 hours; includes contractors) no…
  5. Six months ended 31 December 2014 – Mighty River Power – slide 5
    HIGHLIGHTS HY2015 vs HY2014 400 HY2014 350 HY2015 300 m 250 200 150 100 50 0 Energy Margin EBITDAF NPAT Underlying Earnings Free Cash Flow Capital Expenditure Total Declared Dividend Energy Margin, EBITDAF and…
  6. Six months ended 31 December 2014 – Mighty River Power – slide 6
    HIGHLIGHTS Dividend HY2015 fully imputed dividend up 8% to DIVIDEND PER SHARE Interim 5.6 cents per share Final Special Guidance maintained of 14 cents per share 20 FY2015 fully imputed dividend 18 new dividend policy targets…
  7. Six months ended 31 December 2014 – Mighty River Power – slide 7
    FINANCIAL RESULTS Market Dynamics MIGHTY RIVER POWER FINANCIAL RESULTS 8
  8. Six months ended 31 December 2014 – Mighty River Power – slide 8
    MARKET DYNAMICS Supply Taupo inflows 82% of average, national inflows 101% of average over the last two calendar years Since period end Taupo inflows only 57% of average, national inflows 81% of average NATIONAL AND TAUPO STORAGE…
  9. Six months ended 31 December 2014 – Mighty River Power – slide 9
    MARKET DYNAMICS Demand & Supply balance National demand up 2% on pcp, back to 2011 levels Likely Tiwai will continue with 572MW Reduction of 4,000GWh thermal fuel commitments across industry has restored the balance of energy demand…
  10. Six months ended 31 December 2014 – Mighty River Power – slide 10
    MARKET DYNAMICS Demand & Supply balance impacting wholesale prices January 2015 demonstrated significantly higher spot prices compared to other years with similar hydrology JANUARY SPOT PRICE VS NATIONAL STORAGE 120 WKM Average…
  11. Six months ended 31 December 2014 – Mighty River Power – slide 11
    MARKET DYNAMICS Wholesale prices ASX prices have responded to below average hydro storage (near-term) and reduced thermal fuel commitments (across the curve) FY2016 ASX prices up 4.79/MWh (up 6%) since 30 June 2014 reflecting…
  12. Six months ended 31 December 2014 – Mighty River Power – slide 12
    FINANCIAL RESULTS Operational Update MIGHTY RIVER POWER FINANCIAL RESULTS 13
  13. Six months ended 31 December 2014 – Mighty River Power – slide 13
    OPERATIONAL UPDATE Electricity sales RESIDENTIAL SALES (FPVV) Residential sales up 26GWh reflecting 1,500 higher ICPs and higher national demand 1,450 Business sales (FPVV) down 200GWh and 1,400 GWh 1,350 Industrial sales…
  14. Six months ended 31 December 2014 – Mighty River Power – slide 14
    OPERATIONAL UPDATE Electricity generation Generation 146GWh higher than HY2014 hydro 412GWh (19%) less than average and 94GWh (5%) less than HY2014 given 18% below average inflows and decision to optimise water ahead of seasonally…
  15. Six months ended 31 December 2014 – Mighty River Power – slide 15
    OPERATIONAL UPDATE LWAP/GWAP LWAP/GWAP ratio of the cost of electricity purchased (LWAP) relative to price received for generation (GWAP) HY2015 LWAP/GWAP higher than peers but impacted by less North Island/South Island separation,…
  16. Six months ended 31 December 2014 – Mighty River Power – slide 16
    FINANCIAL RESULTS Financial Update MIGHTY RIVER POWER FINANCIAL RESULTS 17
  17. Six months ended 31 December 2014 – Mighty River Power – slide 17
    FINANCIAL UPDATE Financial highlights MIGHTY RIVER POWER FINANCIAL RESULTS 18
  18. Six months ended 31 December 2014 – Mighty River Power – slide 18
    FINANCIAL UPDATE EBITDAF (HY2015 vs HY2014) Energy Margin down 19m 94GWh less hydro generation and 468GWh less commercial sales (FPVV and CFD) Higher fuel cost reflecting higher wholesale prices and more thermal generation (used…
  19. Six months ended 31 December 2014 – Mighty River Power – slide 19
    FINANCIAL UPDATE Operating expenditure (HY2015 vs HY2014) In FY2014 focus on efficiency and effectiveness OPERATING EXPENDITURE delivered 20m of permanent cost savings 120 Since year-end additional permanent cost savings found…
  20. Six months ended 31 December 2014 – Mighty River Power – slide 20
    FINANCIAL UPDATE Underlying earnings and NPAT (HY2015 vs HY2014) Underlying earnings down 15m reflecting lower EBITDAF, in addition to higher depreciation, interest following the commissioning of Ngatamariki NPAT relative to prior…
  21. Six months ended 31 December 2014 – Mighty River Power – slide 21
    FINANCIAL UPDATE Accounting implications of international geothermal development exit Non-cash Impairments of 83m full write-down Chilean assets (impairment of 56m) sale of Germany complete (impairment of 13m) review of US…
  22. Six months ended 31 December 2014 – Mighty River Power – slide 22
    FINANCIAL UPDATE Consolidated cash flow Continued strong cash flow with operating cash flow of 176m timing benefit from change in Vectors line billing cycle and lower cash taxes Six months Six months ended ended 31 31 Twelve…
  23. Six months ended 31 December 2014 – Mighty River Power – slide 23
    FINANCIAL UPDATE Capital expenditure Capital expenditure of 56m (HY2014: 51m) new investment of 14m (HY2014: 23m) includes smart metering spend* stay-in-business of 42m (HY2014: 28m) reflects successful completion of Ngatamariki and…
  24. Six months ended 31 December 2014 – Mighty River Power – slide 24
    FINANCIAL RESULTS Business & Strategy Update MIGHTY RIVER POWER FINANCIAL RESULTS 25
  25. Six months ended 31 December 2014 – Mighty River Power – slide 25
    BUSINESS AND STRATEGY UPDATE Customer Passing on the benefits of strong competition no increase in headline energy prices for residential electricity and gas customers in April 2015 reward for loyalty customers who commit for 2…
  26. Six months ended 31 December 2014 – Mighty River Power – slide 26
    BUSINESS AND STRATEGY UPDATE Driving efficiencies Work on Whakamaru hydro to begin in Q4 FY2015 expand capacity by 20MW and 5% increase in water efficiency Southdown reconfiguration to a simpler, fast- start mode completed…
  27. Six months ended 31 December 2014 – Mighty River Power – slide 27
    BUSINESS AND STRATEGY UPDATE Exit geothermal development options In December announced exit of Chile and Germany, alongside no further development capital in US International geothermal development options now not in line with…
  28. Six months ended 31 December 2014 – Mighty River Power – slide 28
    BUSINESS AND STRATEGY UPDATE GLOBUG a smart platform for growth Home-grown pre-pay technology lowers disconnection rates and bad debts GLOBUG online and app based self service Lower cost of electricity for customers eliminates late…
  29. Six months ended 31 December 2014 – Mighty River Power – slide 29
    BUSINESS AND STRATEGY UPDATE Metrix ramping up smart meter deployment Smart meter deployment gains momentum 367,000 meters now installed 25,000 meters installed in HY2015, up from 10,000 in HY2014 compliance deadline of 1 April…
  30. Six months ended 31 December 2014 – Mighty River Power – slide 30
    BUSINESS AND STRATEGY UPDATE Long-term opportunities to yield value over time Water Tuwharetoa Maori Trust Board and Mighty River Power reached long-term partnership agreement over future of Lake Taupo Electric Vehicles (EVs)…
  31. Six months ended 31 December 2014 – Mighty River Power – slide 31
    BUSINESS AND STRATEGY UPDATE Regulation and Legal Transmission Pricing Methodology (TPM) Decision in 2015 challenging given process delays options paper, expected shortly, will canvas wider set of options - not limited to beneficiary…
  32. Six months ended 31 December 2014 – Mighty River Power – slide 32
    FINANCIAL RESULTS Outlook MIGHTY RIVER POWER FINANCIAL RESULTS 33
  33. Six months ended 31 December 2014 – Mighty River Power – slide 33
    OUTLOOK FY2015 guidance and outlook Maintained strong cash flow supporting the FY2015 dividend guidance of 14 cents per share Following dry conditions 445GWh (worth 35m) reduction in hydro production forecast partly offset by…
  34. Six months ended 31 December 2014 – Mighty River Power – slide 34
    OUTLOOK Fresh thinking Customer, Company, Country MIGHTY RIVER POWER FINANCIAL RESULTS 35
  35. Six months ended 31 December 2014 – Mighty River Power – slide 35
    FINANCIAL RESULTS Questions MIGHTY RIVER POWER FINANCIAL RESULTS 36
  36. Six months ended 31 December 2014 – Mighty River Power – slide 36
    FINANCIAL RESULTS Appendix MIGHTY RIVER POWER FINANCIAL RESULTS 37
  37. Six months ended 31 December 2014 – Mighty River Power – slide 37
    APPENDIX Operating information Six months ended Six months ended Twelve months ended 31 December 2014 31 December 2013 30 June 2014 VWAP1 Volume VWAP1 Volume VWAP1 Volume Electricity Sales (/MWh) (GWh) (/MWh) (GWh) (/MWh) (GWh)…
  38. Six months ended 31 December 2014 – Mighty River Power – slide 38
    APPENDIX Operating information Six months ended Six months ended Twelve months ended 31 December 2014 31 December 2013 30 June 2014 VWAP Volume VWAP Volume VWAP Volume Electricity Generation (/MWh) (GWh) (/MWh) (GWh) (/MWh) (GWh)…
  39. Six months ended 31 December 2014 – Mighty River Power – slide 39
    APPENDIX Contracts for Difference Six months Six months Twelve Six months Six months Six months ended ended months ended ended ended 31 December 31 December ended 30 31 December 31 December 31 December 2014 2013 June 2014 2012 2011…
  40. Six months ended 31 December 2014 – Mighty River Power – slide 40
    APPENDIX Balance sheet As at As at As at 30 June m 31 December 2014 31 December 2013 m change % change 2014 SHAREHOLDERS EQUITY Total shareholders 3,010 3,185 (175) (5.5) 3,219 equity ASSETS Current assets 270 273 (3) (1.1) 292…
  41. Six months ended 31 December 2014 – Mighty River Power – slide 41
    APPENDIX Funding profile and ratios DEBT MATURITIES AS AT 31 DECEMBER 2014 Undrawn Bank Facilities Domestic Capital Bond Domestic Wholesale Bonds US Private Placement 400 300 200 100 0 2015 2016 2017 2018 2019 2020 2021…
  42. Six months ended 31 December 2014 – Mighty River Power – slide 42
    APPENDIX Non-GAAP measure: Energy margin Energy Margin provides a measure that, unlike sales or total revenue, accounts for the variability or the wholesale spot market and the broadly offsetting impact of wholesale prices on the cost…
  43. Six months ended 31 December 2014 – Mighty River Power – slide 43
    APPENDIX Non-GAAP measure: Free Cash Flow Free Cash Flow is a measure that the Company uses to evaluate the levels of cash available for debt repayments, growth capital expenditure and dividends Six months Six months Twelve ended…
  44. Six months ended 31 December 2014 – Mighty River Power – slide 44
    APPENDIX Non-GAAP measure: Net Debt Net Debt is reported in the financial statements and is a measure commonly used by investors As at As at 31 December 31 December As at m 2014 2013 30 June 2014 Current borrowings at carrying…
  45. Six months ended 31 December 2014 – Mighty River Power – slide 45
    APPENDIX Non-GAAP measure: EBITDAF, Underlying Earnings and Net Debt EBITDAF is reported in the financial statements and is a measure that allows comparison across the electricity industry Underlying Earnings is reported in the…

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