1 Sep 2010

Mighty River looks to geothermal expansion

9:31 am on 1 September 2010

Mighty River Power says it will begin prospecting more locations in the North Island this year in a bid to expand its future geothermal capability

Mighty River's profit of $85 million in the full year to June was down by nearly half from the record $159.6 million it made the previous year, because of the effect of the Waikato drought on hydro production.

Once tax adjustments are stripped out, underlying earnings fell by a third to $139.6 million. The company will pay the Government a final dividend of just over $30 million.

Chief executive Doug Heffernan says he expects geothermal power to contribute more than 40% of the company's total generation this year, as it benefits from a full year of operation.

Geothermal generation rose after the opening of the Nga Awa Purua station, the world's largest, near Taupo in May.

He says the company will start prospecting more geothermal areas in the central North Island, and continue to expand its investments overseas. It's also hoping consent will be granted this year for a new windfarm near Palmerston North.

Mighty River attracted 30,000 new customers during the year, taking its market share to 21% - but that cost an extra $9 million in sales and marketing.

Mr Heffernan says he expects competition to remain fierce this year, and although Mighty River expects to spend a similar amount to attract and retain customers, he believes growth will slow.