Dry conditions in the North Island resulted in Mighty River Power reporting in April its lowest monthly hydro production on record, the company said yesterday.
In a June quarterly operational update, Mighty River, which was partially sold down by the Government earlier this year, said overall electricity generation was down 16% on the previous corresponding period (pcp), and down 9% for the 12 months to June.
The falls were largely as a result of reduced hydro production due to lower-than-average inflows into the Waikato catchments. The company started the quarter with 33% storage in April. There was an improvement in inflows into the catchments later in the quarter - which was expected for that time of the year - but storage at the end of the financial year was 79%.
Electricity sales to customers fell 3% in the quarter on the pcp, driven by lower volumes to commercial customers. However, sales for the year to June were up 5%, the company said.
Business volumes in the quarter reflected strong growth with medium-sized commercial customers. That was offset by a fall in sales to small and large commercial customers. The average price received from customers in the quarter was $126.76 a MWh and $117.28 a MWh for the year.
Forsyth Barr broker Peter Young said the one minor surprise in the data released yesterday was positive.
Line losses were less than expected, which meant Mighty River did not have to buy as much electricity as expected to meet its sales.
That was likely to lift Forsyth Barr's operating profit forecast slightly by around $3 million from $386 million versus the prospectus forecast of $383 million.
''Everyone in the market is assuming prospectus outperformance of $3 million to $8 million.
''I have yet to speak to the company but if my line losses assumption needs tweaking, there is a small potential valuation impact.''
Any revaluation would be around 5c a share and not enough to change Mr Young's recommendation from hold. The current target share price was $2.35 and Mighty River last traded at $2.40.
