Mighty River earnings flat ahead of float

State-owned electricity generator and retailer Mighty River Power has reported flat underlying earnings for the year to June 30.

Tuesday's announcement of a tax-paid profit of $162.7 million, just $500,000 above that achieved the previous year, comes ahead of the government's proposed float of up to 49 per cent in the state-owned enterprise.

MRP is now free from regulatory restrictions that prevent the issuing of a prospectus in the lead-up to a major announcement, such as a profit disclosure, and the MRP accounts show the company spent $3.8 million in the latest year preparing for a possible sale.

Prime Minister John Key indicated on Monday the government remains determined to launch the MRP initial public offering, the first of up to five sales of minority stakes in government-owned energy companies and the national airline, Air New Zealand.

That's despite a Waitangi Tribunal report last week that called on the government to halt the process while a settlement is reached with Maori over legitimate claims to proprietary rights and interests in fresh water under the Treaty of Waitangi.

While a decision to proceed is likely to spark a Maori Council bid to block the sale in the courts, the government appears increasingly confident that grounds for an injunction are slender and could be overturned, allowing the sale to proceed before Christmas.

Otherwise, no MRP float is likely until after the company reports its half-year profit, scheduled for late February, 2013.

Earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments was up 4 per cent to $461m, assisted by the sale of $7m of carbon credits and an accounting gain of $18m on the sale of a 10 per cent stake in the Nga Awa Purua geothermal power station to MRP's Maori joint venture partner.

MRP declared a final dividend to the Crown of $45m, taking total dividends for the financial year to $119.8m, an increase of 8.5 per cent on the previous year.

Like its sector peers, the company was affected by low rainfall in South Island hydro catchments during the year, particularly owing to an "exacerbated wholesale price differential between the North and South Islands during the last quarter".

NZN