Mighty River Power lifts dividend pay-out ratio

Nov 23, 2012 - New Zealand state-owned Mighty River Power Ltd on Friday said it had increased its dividend pay-out ratio to between 90% and 110% of net profit after tax and adjustment for fair value fluctuations of financial instruments and potential accounting impairments.

Since 2010, the company's pay-out ratio had been at 75% as it had to retain earnings to back its plus-NZD-1-billion (USD 899m/EUR 697m) domestic geothermal capital spending programme over the last five years, chair Joan Withers said. "The Board has gained confidence to increase the dividend pay-out ratio due to the successful execution of our geothermal strategy," she said. In October, Mighty River Power, which generates electricity mainly from hydro and geothermal renewable sources, received the first cash returns from its international investment via the GeoGlobal Energy Fund and its Ngatamariki power station is expected to be completed in the middle of next year, Withers added.

The new dividend policy is included in the company's statement of corporate intent, which details the board's plans for the July 1, 2013-June 30, 2015 period and is agreed with its shareholder each year.

(NZD 1.0 = USD 0.818/EUR 0.634)

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