28th August 2012
Financial Results 12 Months ended 30 June 2012
Presented by: Doug Heffernan Chief Executive
William Meek Chief Financial Officer
FINANCIAL RESULTS
Disclaimer > The information in this presentation was prepared by Mighty River Power Limited with due care and attention with every effort made to ensure its accuracy. > Due to Securities Act restrictions the company is not presently in a position to provide forward looking financial information nor to answer questions about its activities or prospects. This presentation does not constitute financial advice.
Page 2
FINANCIAL RESULTS
Agenda 2012 Highlights Market Dynamics Operational Update Financial Update Business Update Summary Appendix
4 6 12 21 33 39 42
Page 3
FINANCIAL RESULTS
2012 Highlights Financial performance > EBITDAF increased 4% to $461 million in line with increased guidance > NPAT decreased to $68 million, reflecting significant non-cash changes in fair value of financial instruments > Underlying earnings flat at $163 million reflecting increased operational earnings offset by increased depreciation and lower reported equity accounted earnings > Declared total dividends up 9% to $120 million reflecting current dividend policy Operational performance > FPVV electricity sales prices and volumes to customers both increased 5% > Hydro generation down 2% reflecting lower inflows into the Waikato catchment in the last quarter, but still 294GWh above annual average > Flexible portfolio able to take advantage of higher wholesale prices Portfolio developments > Development of 82MW Ngatamariki geothermal plant on track for commissioning in mid-2013 > Energy Source‟s John L Featherstone plant operating since March 2012 with a 99% capacity factor in it‟s first full quarter Capital structure > Extended liquidity headroom to $510 million > BBB+ Standard & Poor‟s credit rating, with Stable outlook Page 4
FINANCIAL RESULTS
2012 Financials 800
700
685 655
$million
600
500 443
461
400
FY2011
362
FY2012 293
300
264
277
233
220
200
162163 127
110120
93
100
68 26
0 Energy Margin
% change $m change
5% $30m
Operating Expenditure
(14%) ($32m)
EBITDAF
Fair Value Adjustments
4% $18m
(263%) ($67m)
NPAT
(47%) ($59m)
Underlying Earnings
Operating Cash Flow
0.3% $0.5m
(5%) ($16m)
Capital Total declared Expenditure dividend
64% $142m
9% $9m Page 5
FINANCIAL RESULTS
2012 Market Dynamics
Page 6
MARKET DYNAMICS
Demand Electricity Consumption
> Consumption broadly flat in the last five years reflecting
45,000 40,000
> fluctuating demand from Tiwai > weak economic conditions > Christchurch earthquake
5,246
4,098
4,947
5,350
5,247
34,138
34,241
34,239
34,075
33,822
2008
2009
2010 Financial year
2011
2012
30,000 GWh
> Excluding Tiwai demand continued to be relatively flat in FY2012 at 33,822GWh > Tiwai decreased consumption by 103GWh over the year mainly in the second half
35,000
25,000 20,000 15,000 10,000 5,000 0
National Consumption
Tiwai Consumption
Page 7
MARKET DYNAMICS
Demand > Residential households account for 33% of total national electricity consumption by volume (GWh) and 87% by Individual Connection Points (ICPs) > Retail churn within ICPs, which are predominately residential, remains high but recently levelled out Monthly Total Consumer Retail Switching (ICPs)
Electricity Consumption by Sector (2011) 5%
60,000
25%
50,000
20%
20% 40,000
15%
30,000
ICP Retail Switching
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
0% Jul-09
0 Jan-09
5%
Jul-08
10,000 Jul-07
18%
10%
20,000
Jan-08
33%
% Churn
24% Agriculture, forestry and fishing Residential Commerical(including Transport) Basic Metals (Including Tiwai) Industrial Page 8
MARKET DYNAMICS
Supply > Above average inflows into the Waikato Catchment in the first nine months, lower than average in the last quarter > Record low South Island hydrology during the year > Nationally, low cost hydro generation was replaced with higher cost gas and coal production > Hydro generation down 13% to 21,848GWh > Thermal (coal & gas) generation was up 29% to 11,631GWh Taupo Storage 600
500
500
400
400
Jul 12
Jun 12
May 12
Apr 12
Mar 12
Feb 12
Jan 12
Actual
Dec 11
Jul 11
Average
Aug 11
Jun 12
May 12
Apr 12
Mar 12
Feb 12
Jan 12
0
Dec 11
0 Nov 11
100 Oct 11
100 Sep 11
200
Aug 11
200
Nov 11
300
Oct 11
300
Sep 11
GWh
600
Jul 11
GWh
Waikato Inflows
Note: Average for Waikato inflows calculated since 1927 and average for storage since 1999 when Might y River Power began operating the Waikato Hydro system
MARKET DYNAMICS
Wholesale prices > Despite a record dry spell in the South Island wholesale price increases were relatively modest compared to dry spell in 2008 > Since 2008, renewables have displaced thermal capacity, leaving more thermal capacity able to respond to dry conditions > Increased competition between thermal plants, led to higher availability of lower priced hedge contracts than in 2008 by these plants Average Wholesale Price (WKM) 120 103 100 83
$/ MWh
80 60
55
56 48
40 20 0 2008
2009
2010 Financial year
2011
2012 Page 10
MARKET DYNAMICS
North Island – South Island differential Spread (OTA-BEN)
> transmission capacity restrictions > South Island reserve offers
40 20
0 $/MWh
> Wholesale price spread given the record low South Island hydrology in the last nine months of the year > Spread significant in the fourth quarter given
-20 -40 -60 -80 Jun 12
May 12
Apr 12
Mar 12
Feb 12
Jan 12
Dec 11
Nov 11
Oct 11
Sep 11
Aug 11
Average Wholesale Price 250 200 150 100 50
OTA
Jun 12
May 12
Apr 12
Mar 12
Feb 12
Jan 12
Dec 11
Nov 11
Oct 11
Sep 11
Aug 11
0 Jul 11
$/ MWh
Transmission upgrades > Transpower is increasing the northward and southward capacity of the HVDC interisland link > Expansion will mean less reserve market pressures
Jul 11
-100
BEN Page 11
FINANCIAL RESULTS
Operational Update
Page 12
OPERATIONAL UPDATE
Electricity Generation > 1,597MW in operation (1,464MW by equity share), 82MW geothermal station under construction > Diversified and flexible portfolio annual production increased by 3% to 7,068GWh > 61% hydro –peaking capacity with limited storage in Taupo lake; mainly rain fed (not snow fed) > 31% geothermal – high availability, low fuel cost renewable base-load – „premium‟ renewable > 8% gas-fired – can take advantage of wholesale market opportunities and provides dry-year cover Total Generation 8,000 6,833
7,068
7,000 6,129 5,812
6,000 5,292 GWh
5,000 Biomass 4,000
Gas-fired Hydro
3,000
Geothermal 2,000 1,000 0 2008
2009
2010 Financial year
Note: Sold last of biomass operations in July 2010
2011
2012 Page 13
OPERATIONAL UPDATE
Electricity Generation Hydro
5,000 4,500
> Hydro generation down 2% from FY2011 but still 294GWh above annual average
Historical Average from FY2000
4,000 3,500
2,148
GWh
3,000
2,036
> Used Southdownâ€&#x;s flexibility to take advantage of high wholesale prices
H2
> Geothermal base load generation had average availability factor of 95%
2,500
2,000
4,350 3,730
3,651
1,500 1,000
2,220
2,258
FY2011
FY2012
> 2 April sold 10% interest in Nga Awa Purua (30GWh reduction in generation per quarter)
H1
500 0 FY2008
FY2009 FY2010 Geothermal
Gas-fired
1200
2,500 2,193
2,186 1000
2,000
800
1,562 1,500
GWh
GWh
1,303
1,000
600
1,094 281
H2
273
308
H1
FY2011
FY2012
400 505
500
443
200
504
0
0 FY2008
FY2009
FY2010
FY2011
FY2012
FY2008
FY2009
FY2010
Page 14
OPERATIONAL UPDATE
Generation Plant Operations
%
Hydro Availability 100 90 80 70 60 50 40 30 20 10 0
92%
92%
87%
88%
> Increased planned outages in FY2012 as lifecycle work continues on hydro stations namely Ohakuri and Arapuni
85%
> Transformer and gas turbine failures at Southdown in FY2012 > Geothermal availability 99.7% in the last quarter 2008
2009
2010 2011 Financial Year
2012 Gas-fired Availability
Geothermal Availability 96%
91%
93%
95%
2010 Financial Year
2011
2012
%
94%
%
100 90 80 70 60 50 40 30 20 10 0
2008
2009
100 90 80 70 60 50 40 30 20 10 0
95%
2008
97%
2009
88%
89%
2010 Financial Year
2011
84%
2012 Page 15
OPERATIONAL UPDATE
Electricity Sales > Physical sales (FPVV) volumes increased 5% to 5,021GWh, reflecting a strong increase in commercial volumes > Contract to move approx 5,000 of Meridian‟s Christchurch pre-pay customers to GLO-BUG by the end of September > FY2012 debt write-offs $3.6 million (2011: $3.8 million) – represents $9 per customer > Continued success of 3 year fixed plan with more than 84,000 customers on this tariff plan (2011: 68,000) Physical and Financial sales 12,000 10,000 8,000 GWh
1,397 6,000
1,919
2,113
757
539
810
2,022
2,106
1,997
2,245
2,124
2,411
640 2,027
2,012
2,105
2,240
4,000
1,212 Spot Sale CFDs - ASX & Energy Hedge Market
1,755
1,929
2,223
2,387
2,612
2,652
2,609
2008
2009
2010 Financial Year
2011
2012
Sale CFDs - Inter-generator Sale CFDs - End-user
2,000
Business FPVV Residential FPVV
0
Page 16
OPERATIONAL UPDATE
Electricity Sales > Residential volumes fell back slightly to FY10 levels > 14% lift in business sales volumes to 2,412GWh
> Medium business segment experienced the highest growth and the average contract term for new business has grown from 2.0 to 2.7 years in FY2012 Residential volume 2,700
2,612
2,500
Business volume 2,700
2,609
2,500
2,387
2,223
2,412 2,245
2,300 GWh
GWh
2,300
2,652
2,100 1,900
2,124 2,100 1,929
1,900 1,755
1,700
1,700 1,500
1,500 2008
2009
2010 2011 Financial Year
2012
2008
2009
2010 2011 Financial Year
2012
Page 17
OPERATIONAL UPDATE
Contracts for Difference > Only major change, VAS contract increased by 300GWh in January 2012 (buy and sell-side Inter-generator CFD) 2,000
Buy CFD - Inter-generator
1,000 1,395
1,673 1,192
1,098
1,240
Buy CFD - End User 0
GWh
Buy CFD - ASX and Energy Hedge Market -1,000
(2,027)
(2,240)
(2,022)
(2,106)
(1,997)
Sell CFDs - Industrial Users
Sell CFDs - Inter-generator -2,000 (539)
(640)
(810)
(757)
(1212)
Sell CFD - ASX and Energy Hedge Market
-3,000 Net CFD position
-4,000 2008
2009
2010 Financial Year
2011
2012 Page 18
OPERATIONAL UPDATE
Net Position adjusted for volume profile and generation locations > Vertically integrated portfolio largely square through the year, slightly short in the fourth quarter due to elevated South Island prices and slightly reduced hydrology > adjusted short position: 221GWh, unadjusted short position: 34GWh
> VAS increased by 300GWh in January 2012 and exercised 51GWh of swaption in the fourth quarter 4,000
100 90
2,000
474 467 165
1,000 GWh
1,298
731
716
711
499 129
435 181
489 44
502 249
1,165
1,204
1,344
1,318
480
1,091
1,503
460 119
453 119
482 198
1,124
1,178
990
692
0 -1,000
80 70 60 50
(1,762)
(1,453)
(1,605)
(1,569)
(1,671)
(1,339)
(1,373)
(1,746)
$/MWh
3,000
40 30
(960)
-2,000
(1,190)
(1,056)
(1,087)
(1,079)
(1,448)
(1,199)
(1,647)
-3,000
20 10
-4,000
0 Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Q3 12
Hydro Generation
Gas-fired Generation
Geothermal Generation
Total Buy Contracts
FPVV Sales
Total Sell Contracts
Adjusted Net Position
Whakamaru Average Spot Price
Q4 12
Page 19
FINANCIAL RESULTS
Financial Update
Page 20
FINANCIAL UPDATE
Change in Segment Reporting > “Wholesale” and “Retail” segments have been combined in a new segment called “Energy Markets” > The “Other segment” includes metering, upstream gas and international geothermal developments > The “Unallocated” includes other corporate support services and other elimination adjustments Year ended 30 June $million
2012
2011 (new disclosure)
2011 (old disclosure)
Wholesale
336.5
Retail
133.7
Energy Markets
499.0
470.1
Other Segments
0.7
2.8
(27.1)
Unallocated
(38.2)
(29.9)
-
EBITDAF
461.5
443.1
443.1
Page 21
FINANCIAL UPDATE
Income Statement Year ended 30 June $ million Energy Margin
2012
2011
$m change
% change
684 .6
654 .7
29 .9
4 .6%
41 .3
21 .2
20 .1
94.8%
(264 .4)
(232 .9)
(31 .5)
13 .5%
461 .5
443 .1
18 .4
4 .2%
(158 .4)
(145 .4)
(13 .0)
8 .9%
(92 .8)
(25 .6)
(67 .2)
262 .5%
(4 .0)
(19 .8)
15 .8
(79 .8%)
Equity accounted earnings of interest in jointly controlled entities and associates
(24 .8)
5 .0
(29 .8)
(596.0%)
EBIT
181 .5
257 .2
(75 .7)
(29 .4%)
Net interest expense
(72 .6)
(71 .8)
(0 .8)
1 .1%
Income tax expense
(41 .3)
(58 .4)
17 .1
(29 .3%)
Net profit after tax
67 .7
127 .1
(59 .4)
(46 .7%)
162 .7
162 .2
0 .5
0 .3%
Other income Operating expenses EBITDAF
Depreciation and amortisation Change in fair value of financial instruments Impairments
Underlying earnings after tax
Page 22
FINANCIAL UPDATE
Operating earnings (EBITDAF) > > > >
Generation and Sales changes largely due to higher wholesale prices Fuel cost increased due to higher Southdown generation Contracts decreased due to net short position and higher wholesale prices One-off contribution from the 10% sale of Nga Awa Purua ($8 million) and sale of emission units ($7 million)
800 231.5
700
23.1
22.3
156.2
$ million
600 500
20.1
443.1
31.6
461.5
400
Increase Decrease
300 200 100 0 EBITDAF FY11
Generation
Fuel cost
Contracts
Sales
Other income
Operating Expenses
EBITDAF FY12
Page 23
FINANCIAL UPDATE
Operating Expenses > Maintenance expenses up $16 million > Costs at Southdown of $12 million, mainly relating to transformer and gas turbine failures > Lifecycle work of hydro plants
> Other expenses up $10 million mainly reflecting costs arising from early termination of a long-term contract, higher professional fees and insurance costs > $3.8 million borne on preparation for potential listing 270 10.8
265
264.4
260 255 15.9
$ million
250
1.4
1.8
1.5
245 Increase Decrease
240 235
232.9
230 225 220 215 Operating Expenses FY11
Maintenance expenses
Sales & Marketing
International Geothermal
Employee Expenses
Other
Operating Expenses FY12
Page 24
FINANCIAL UPDATE
EBITDAF to NPAT > Depreciation and amortisation increased by $13 million reflecting increased asset valuations in FY2011 and amortisation of intangible assets > Change in fair value of financial instruments was $118 million, only $13 million in H2 > $93 million relate to Mighty River Power > $25 million relate to associate companies and jointly controlled entities 500
461.5
158.4
450 400
$ million
350 118.5
300 250
4
200
0.9
Increase Decrease
72.6
150 41.3
100
67.7
50 0 EBITDAF FY12
Depreciation & amortisation
Change in fair value of financial instruments
Impairments
Equity Accounted Earnings (excluding fair value adjustments)
Net interest
Income tax
NPAT FY12
Page 25
FINANCIAL UPDATE
Fair value of financial instruments > To manage risk and provide certainty, a significant portion of our debt is hedged so the cost of funds is insensitive to movements in interest rates > Under Accounting Standards financial instruments are required to be valued at the end of each reporting period > Movements in the non-hedge accounted derivatives are recognised in the income statement > Change in fair value of financial instruments was $118 million, only $13 million in H2, relating to Mighty River Power and its related international investment companies
5.0
4.0 30/06/2012
3.0
31/12/2011 2.0
30/06/2011
1.0 0.0 Jun 11 Mar 12 Dec 12 Sep 13 Jun 14 Mar 15 Dec 15 Sep 16 Jun 17 Mar 18 Dec 18 Sep 19 Jun 20 Mar 21 Dec 21 Sep 22 Jun 23 Mar 24 Dec 24 Sep 25 Jun 26
NZD Swap Rates(%)
6.0
Page 26
FINANCIAL UPDATE
Capital Expenditure > Ngatamariki 82MW geothermal development > $287 million spent to date > $203 million of which occurred in FY2012
> $74 million of geothermal capital expenditure relates to GGE (2011: $83 million) $388m
400 350 300
$287m 20
$million
250
$289m 17 13 7
Other new investment* $220m 280
200 150
$362m 9 5
35 7
231
38 6
Wind 274
Hydro Gas-fired Geothermal (including GGE)
225
Reinvestment
119 100 50 33
26
2008
2009
0
* Includes smart meters
66
57
2010 Financial Year
2011
73
2012
Page 27
FINANCIAL UPDATE
Consolidated Cash Flow > Net interest increased $8 million reflecting higher debt levels partly offset by less capitalised interest > Investment outflows include Ngatamariki and further deployment of GGE commitment > Gain on sale from Nga Awa Purua and emission credit sale included as investing cash flow $ million
FY2012
FY2011
$m change
% change
Net cash receipts
423 .4
431 .9
(8 .5)
(2 .0)
Net interest paid
(83 .5)
(76 .0)
(7 .5)
9 .8
Taxes paid
(62 .9)
(63 .0)
0.1
(0.2)
Net operating cash flow
277 .0
292 .8
(15 .8)
(5 .4)
Investing cash flow
(291 .6)
(202 .4)
(89 .2)
44 .1
Financing cash flow
27 .8
(68 .8)
96 .6
(140 .4)
Net increase in cash
13 .2
21 .6
(8 .4)
(38.9)
Page 28
FINANCIAL UPDATE
Funding Profile > > > >
Average debt maturity profile of 5.0 years Over FY2012, our debt was hedged 97% through the swap book $50 million increase in existing facilities in September 2011 $200 million commercial paper programme established February 2012, of which $100 million of notes issued as at 30 June 2012 > $200 million three-year bank facilities raised in March 2012 sufficient to cover repayment of $200 million retail bond which matures in May 2013 Debt Maturities as at 30 June 2012 300 250
$m
200 60 150
300
250 100
200
200 140
50 0
Drawn Facilities Undrawn Facilities
163 120
58 39 30 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Financial Year Note: Undrawn facilities excludes commercial paper programme
Page 29
FINANCIAL UPDATE
Balance Sheet > Upwards revaluations of $417 million in FY2011 and $170 million in FY2012 > Increase in current liabilities due to commercial paper programme ($200 million) and retail bond maturing in May 2013 ($200 million) > Increased receivables and payables due to higher wholesale power prices
$ million
FY2012
FY2011
$m change
% change
3,014.2
2,906.5
107.7
3.7%
394.3
271.7
122.6
45.1%
Non-current assets
5,483.1
5,104.9
378.2
7.4%
Total assets
5,877.4
5,376.6
500.8
9.3%
642.1
225.5
416.6
184.7%
Non-current liabilities
2,221.1
2,244.6
(23.5)
(1.0%)
Total liabilities
2,863.2
2,470.0
393.2
15.9%
TOTAL NET ASSETS
3,014.2
2,906.5
107.7
3.7%
SHAREHOLDERS’ EQUITY Total shareholders’ equity ASSETS Current assets
LIABILITIES Current liabilities
Page 30
FINANCIAL UPDATE
Financial Ratios > Standard & Poorâ€&#x;s credit rating: BBB+/Stable/A2 > Rating reaffirmed in April 2012 30 June 2012 Net debt ($m)
1,115.6
30 June 2011 975.8
Equity/total assets (%)
51.3%
54.1%
Net debt/net debt+equity (%)
27.0%
25.1%
Interest (net) cover (times)
6.4x
6.2x
FFO/interest expense (times)
4.1x
4.8x
25.0x
30.9x
FFO/debt (times)
Page 31
FINANCIAL RESULTS
Business Update
Page 32
BUSINESS UPDATE
Health and Safety > The health, safety and well-being of our people is an absolute priority > Total Recordable Injury Frequency rate down 28% due to a focused plan to enhance an existing strong Health and Safety culture > Raising near miss reporting is important as more reports lead to more learnings and less future injuries > Achieved one year Employee Lost Time Injury (LTI) free > Strong participation in StayLive generation safety group which focuses on sharing information and collaboration on key initiatives to lift standards across the industry Near Miss Incident Frequency Rate
Total Recorded Injury Frequency Rate 2.5
2.18
2.34
12.0 9.70
10.0
2.0
8.0 1.5
1.28 0.92
1.0
6.0
4.90
4.65
2009
2010
4.05
4.0
0.5
2.0
0.0
0.0 2009
2010
2011
Financial Year
2012
2011
2012
Financial Year
Page 33
BUSINESS UPDATE
Domestic Development > 82MW Ngatamariki geothermal power station on track for commissioning mid-2013 > Staged commissioning of the four units beginning after the project is connected to the grid late 2012 > Power output from first two units in third quarter FY2013 > Five of the seven wells have now been drilled for the project > Challenges with the drilling of the second and third injection wells utilised a significant portion of the contingency within the estimated $466 million project cost > Prudent to increase budget contingency by $18 million to be used if drilling of an additional well is needed > In the event additional contingency is utilised real LRMC remains less than $80/MWh
Page 34
BUSINESS UPDATE
Domestic Development > Reviewed development pipeline to ensure a focused effort on the most economic opportunities > Progressing geothermal and wind development options to ensure readiness when market conditions support investment economics Geothermal > Te ia a Tutea (Taheke field) – development agreements with land owners signed in November with exploration expected in 2013 Wind > Turitea wind farm achieved final consent in September 2011 – up to 60 turbines and 180MW > Puketoi wind farm achieved consent (subject to appeal) in June 2012 – up to 53 turbines and 310MW > Consents includes transmission line linking the two projects together
Page 35
BUSINESS UPDATE
International Development > Since establishment of the GGE Fund, secured investment opportunities greater than expected with US$225 million of Mighty River Powerâ€&#x;s capital deployed > GGE is currently seeking further capital to advance the development of its projects > Mighty River Power is working with GGE and will consider contributing further capital alongside new investors > Key GGE developments over 2012 and to date include: > Energy Sourceâ€&#x;s John L Featherstone plant (49.9MW) operational in March 2012. For the last quarter run at a capacity factor of 99% and post construction refinancing underway > Completion of two geothermal wells at Tolhuaca, one producing enough high temperature steam to generate 12MW > Hudson Ranch II signed a 15-year power purchase agreement, drilling to start in September > In Germany acquired four concessions in November 2011 and surface testing and planning underway
Page 36
BUSINESS UPDATE
Water > Treaty of Waitangi issues are a matter for the Crown > Variation 6 increased the water volume for abstraction (primarily dairy irrigation) from the Waikato River > long-term average of 4,000GWh still expected
> Waikato Regional Council to consider whether there should be a 5 year review of consents > Requirement for an “effects greater than anticipated� test to be satisfied
Page 37
FINANCIAL RESULTS
Summary
Page 38
SUMMARY
FY2013 to date > Inflows into the South Island reservoirs improved from lows experienced in 2012
> South Island storage remains 28% below historical averages > Solid inflows into the Waikato catchment at 21% above historical averages and 10% above pcp > Current storage at 348GWh, in line with historical averages > Customer growth experienced in the second half of FY2012 has continued
Page 39
SUMMARY
5 Year Summary Net Profit After Tax – 5 year CAGR (-12%)
EBITDAF – 5 year CAGR 11% 500 400
180
461
160
160
127
140
328
305
120
300 $m
$m
443
447
111
100
200
85 68
80 60 40
100
20
0 2008
2009
2010
2011
0
2012
2008
2009
Financial Year Underlying Earnings – 5 year CAGR 5% 250
2012
Total Dividend – 5 year CAGR 21%
212 162
200
163
140
150*
150
$m
$m
136
2011
250
200 150
2010
Financial Year
100
100 50
50
110
120
2011
2012
87 56
80
0
0 2008
2009
2010
2011
2012
Financial Year
2008
2009
2010
Financial Year
1.
Impacted by fair value accounting of our interest rate swaps
2.
Generation assets revalued by over $2 billion over the last five years which has increased depreciation charges
3.
A special dividend of $150 million was also declared in FY2009
Page 40
FINANCIAL RESULTS
Appendix
Page 41
FINANCIAL RESULTS
Operating Information FY2012 vs FY2011 Twelve months ended 30 June 2012
Electricity Sales FPVV sales to customers
Twelve months ended 30 June 2011
VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
$115.48
5,021
$110.09
4,776
- Residential customers
2,609
2,652
- Commercial customers
2,412
2,124
FPVV purchases from market
5,323
5,089
Spot customer purchases
2,035
2,136
Total NZEM Purchases Electricity Customers (number)
$94.68
7,358
386,000
$56.76
7,226
392,000
Contracts for Difference - Buy CfD
1,708
1,263
- Sell CfD
3,224
2,947
- Net Sell CfD
1,516
1,684
1.
VWAP is volume weighted average energy only price sold to FPVV customers after lines, metering and fees Page 42
FINANCIAL RESULTS
Operating Information FY2012 vs FY2011 Twelve months ended 30 June 2012 VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
$87.89
4,294
$52.87
4,368
$100.97
589
$119.90
273
- Geothermal (consolidated)3
$82.11
1,946
$47.38
1,956
- Geothermal (equity accounted)4
$81.80
239
$48.96
236
Total
$87.18
7,068
$53.832
6,833
Electricity Generation - Hydro
- Gas
LWAP/GWAP5 Gas Purchases 6
3. 4. 5. 6.
1.09
1.05
$/GJ
PJ
$/GJ
PJ
- Retail purchases
$8.73
1.1
$8.15
1.05
- Generation purchases
$8.18
5.47
$7.97
2.97
Carbon Emissions (‘000 tonnes CO2e)
1. 2.
Twelve months ended 30 June 2011
628
VWAP is volume weighted average energy only price sold to FPVV customers after lines, metering and fees Reflects the Electricity Authority’s decision to reset prices to around $3,200/MWh in the Auckland region. This ruling is currently under appeal Includes share of Nga Awa Purua generation Tuaropaki Power Company (Mokai) equity share Load weighted and generation weighted average price. This ratio gives an indication of electricity purchase costs compared to the sales price of the electricity produced Prices exclude fixed transmission charges
502
Page 43
FINANCIAL RESULTS
Operating Information H2 2012 vs H2 2011 Six months ended 30 June 2012
Electricity Sales FPVV sales to customers
Six months ended 30 June 2011
VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
$117.45
2,466
$111.74
2,247
- Residential customers
1,202
1,207
- Commercial customers
1,264
1,040
FPVV purchases from market
2,609
2,403
Spot customer purchases
1,040
1,025
Total NZEM Purchases Electricity Customers (number)
$106.06
3,649
386,000
$54.79
3,428
392,000
Contracts for Difference - Buy CfD
1,017
807
- Sell CfD
1,699
1,458
682
651
- Net Sell CfD
1. 2.
VWAP is volume weighted average energy only price sold to FPVV customers after lines, metering and fees CFD for the six months ended 31 December 2011 have been restated to reflect current methodology of including open AXS positions Page 44
FINANCIAL RESULTS
Operating Information H2 2012 vs H2 2011 Six months ended 30 June 2012 VWAP1 ($/MWh)
Volume (GWh)
VWAP1 ($/MWh)
Volume (GWh)
$95.37
2,036
$52.22
2,159
$110.25
281
$168.892
69
- Geothermal (consolidated)3
$89.47
965
$41.84
979
- Geothermal (equity accounted)4
$90.24
122
$44.36
121
Total
$94.74
3,404
$50.90
3,329
Electricity Generation - Hydro
- Gas
LWAP/GWAP5 Gas Purchases 6
3. 4. 5. 6.
1.12
1.08
$/GJ
PJ
$/GJ
PJ
- Retail purchases
$8.72
0.49
$8.46
0.43
- Generation purchases
$8.25
2.63
8.47
0.93
Carbon Emissions (‘000 tonnes CO2e)
1. 2.
Six months ended 30 June 2011
300
217
VWAP is volume weighted average energy only price sold to FPVV customers after lines, metering and fees Reflects the Electricity Authority’s decision to reset prices to around $3,200/MWh in the Auckland region. This ruling is currently under appeal Includes share of Nga Awa Purua generation Tuaropaki Power Company (Mokai) equity share Load weighted and generation weighted average price. This ratio gives an indication of electricity purchase costs compared to the sales price of the electricity produced Prices exclude fixed transmission charges Page 45
FINANCIAL UPDATE
Income Statement – H2 2012 vs H2 2011 Year ended 30 June $ million
H2 2012
H2 2011
327.7
313.9
28.6
11.1
(149.3)
(115.7)
207.0
209.5
(85.2)
(77.7)
- Change in fair value of financial instruments
(7.1)
(19.8)
- Impairments
(1.3)
(16.3)
- Equity accounted earnings of interest in jointly controlled entities and associates
(5.3)
(3.6)
108.1
92.0
- Net interest expense
(35.6)
(38.2)
- Income tax expense
(22.5)
(19.6)
Net profit after tax
50.1
34.2
Underlying Net profit after tax
61.0
72.8
Energy Margin - Other income - Operating expenses EBITDAF - Depreciation and amortisation
EBIT
Page 46
FINANCIAL RESULTS
NPAT to Underlying Earnings FY2012 vs FY2011 $ million NPAT - Change in fair value of financial instruments - Change in fair value of financial instruments of associate companies - Change in fair value of financial instruments of jointly controlled entities - Impairments
- Income tax expense on adjustments - Impact of tax legislative changes Underlying Earnings
FY2012
FY2011
$m change
% change
67.7
127.1
(59.4)
(46.7)
92.8
25.6
67.2
262.5
1.5
1.4
0.1
7.1
24.2
2.0
22.2
1,110.0
4.0
19.8
(15.8)
(79.8)
(27.5)
(12.9)
(14.6)
113.2
-
(0.8)
0.8
(100.0)
162.7
162.2
0.5
0.3
Page 47
FINANCIAL RESULTS
NPAT to Underlying Earnings H2 2012 vs H2 2011 $ million
H2 FY2012
H2 FY2011
50.1
34.2
- Change in fair value of financial instruments
7.1
19.8
- Change in fair value of financial instruments of associate companies
1.9
1.6
- Change in fair value of financial instruments of jointly controlled entities
3.6
11.8
-Impairments
1.3
16.3
(2.8)
(10.1)
-
(0.8)
61.0
72.8
NPAT
- Income tax expense on adjustments - Impact of tax legislative changes Underlying Earnings
Page 48