20 July 2015

Mighty River Power Quarterly Operational Update
Three months ended 30 June 2015

QUARTERLY HIGHLIGHTS
• Electricity demand up 2.5% reflecting growth across all sectors
• Annual hydro generation down 170GWh compared to FY2014 - lowest in the Company's history
• Flat energy price for the quarter, slightly down year on year

COMMENTARY TREND OF DEMAND GROWTH CONTINUES; ASX PRICES FALL
Demand for electricity increased 2.5% during the three months to 30 June 2015 compared with the same period last year. After adjusting for lower temperatures, demand for the quarter is estimated to have increased 1.8%, reflecting growth across all sectors (dairy processing 0.6%, rural 0.5%, urban 0.4%, industrial 0.1%, and South Island irrigation 0.01%). The trend of thermal capacity rationalisation continued with the confirmation from Genesis on 29 June that it would be permanently retiring a second 250MW Hunty coal/gas unit.

Despite these trends, ASX futures prices were down by $18.25/MWh for FY2016 and $6.73/MWh for FY2017 since the end of March reflecting a recovery in national hydro storage during the fourth quarter of FY2015, decreased perceived dry-year risk priced into future years, and the on-going speculation about the level of future demand from Tiwai Point aluminium smelter.

HYDRO UP 6% FOR THE PERIOD, BUT DOWN 170GWh FOR THE FULL YEAR
Hydro production was 864GWh for the period, up 6% on pcp, with inflows for the quarter being 112% of average - the first quarter in two years that there has been inflows at or above average into the Waikato catchment. Despite higher inflows for Q4, inflows for FY2015 were just 85% of average and hydro generation for the FY2015 year was the lowest in the Company's history.

Total generation for the quarter was up 147GWh on pcp, with geothermal generation increasing by 54GWh to 723GWh. This was mainly due to higher production from both Nga Awa Purua and Ngatamariki - with increased fuel availability at Ngatamariki from a new well commissioned in October 2014. The increase on pcp at Nga Awa Purua was due to the two outages in FY2014 associated with stabilising the plant ahead of a planned outage in July/August 2015 for the rotor replacement, that will increase production at the plant.

Gas-fired generation from Southdown was up 44GWh on pcp, largely reflecting the Company's virtual peaker contract, and the use of take-or-pay gas ahead of the station's closure on 31 December 2015.

ENERGY PRICES FLAT FOR THE QUARTER, SLIGHTLY DOWN YEAR ON YEAR
The average electricity sales price to residential and commercial customers for the quarter was $122.22/MWh, which was consistent with pcp. The price reduced slightly from $117.70/MWh in FY2014 to $117.21/MWh in FY2015, as the Company continues to absorb annual increases in line charges for the one third of its customers on two and three year fixed-price contracts.

Mighty River Power will release its financial results for the 12 months ended 30 June 2015 on 28 August 2015

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