MightyRiverPower, the first state-owned power company partially privatised last year, has increased first-half earnings 3.7 per cent as it clamps down on costs amid poor hydro conditions.
Earnings before interest, tax, depreciation, amortisation, and fair value adjustments rose to $NZ269.6 million ($A251.02 million) in the six months ended December 31, from $NZ260.1m a year earlier, and is on track to reach its annual forecast of $NZ498m, it said on Wednesday.
Revenue dropped 12 per cent to $NZ840.8m with significantly lower hydro levels sapping generation.
Net profit climbed 64 per cent to $NZ123.7m on lower operating costs and one-off gains in the value of financial instruments.
Operating costs fell 24 per cent to $NZ107.8m, with permanent savings achieved in maintenance costs, professional fees and administration expenses.
"MightyRiverPower has responded to the competitive dynamics in the market and is showing new levels of efficiency and performance," chairwoman Joan Withers said.
"On the cost side, we have remained sharply-focused on operating expenditure and achieving company-wide gains in effectiveness and efficiencies."
The board declared an interim dividend of 5.2 NZ cents per share, up from 4.8 NZ cents a year earlier.
The shares were unchanged at $NZ2.04 on Tuesday, and dropped 18 per cent from their $NZ2.50 offer price when the company was floated in May last year.
The company's total generation fell to 3258 gigawatts per hour from 3700GWh a year earlier due to a 25 per cent slump in hydro generation, offset by a lift in geothermal.
The total average price was $NZ55.98 per megawatt hour, down from $NZ65.74/MWh.
In last year's offer document MightyRiverPower forecast an average price of between $NZ65 and $NZ75/MWh for the 2014 financial year with generation of 7060 GWh.
Chief executive Doug Heffernan says the company reduced its low-margin commercial sales, and was reviewing its portfolio, including the role of its Southdown power station in the face of weak demand.
MightyRiverPower cut its forecast capital expenditure to between $NZ95m and $NZ120m this year from a range of $NZ125m to $NZ175m flagged at its annual meeting as it looks to contain costs and scale back its push into international geothermal growth initiatives.
