Mighty River Power Profits Flat As Spending To Keep Customers Rises

Mighty River Power says its costs rose $7 million in the second half of 2015 as it battled to keep customers amid "intense" competition.

The Auckland-based power company, which is 51 per cent owned by the Government, reported earnings before income tax, depreciation, amortisation, change in fair value of financial instruments (EBITDAF) of $257 million for the six months to December 31, $1m lower than the same period a year earlier.

While production from its hydroelectricity stations in the Waikato River were up on the second half of 2014, the company said wholesale prices were slightly lower and the company increased spending on customer offers.

Chairwoman Joan Withers said Mighty River Power has seen "intense competition and intense pricing pressure both leading up to and within the period" being reported on Tuesday.

Mighty River Power owns the Mercury retail brand. Its products include the Globug, a prepaid electricity plan.

Chief executive Fraser Whineray said the intensity of competition pushed up its operating costs by $7m in the first six months of the financial year, however the company believed the second half spending would be lower, with operational spending roughly the same as in the year to June 30, 2015.

Source Stuff.co.nz