MCY - Mercury NZ - Aussie Stock Forums

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  1. #1

    Post MCY - Mercury NZ

    Mighty River Power Limited (MYT) is one of New Zealand’s largest electricity companies – with its core business based on reliable, low fuel-cost electricity generation complemented by sales to homes and businesses.


  2. #2
    Mmmmmm 2nd breakfast Knobby22's Avatar
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    Oct 2004

    Default Re: MYT - Mighty River Power

    Looks interesting.
    Former NZ state owned enterprise. 4.8% dividend expected first year. Does geothermal.

  3. #3

    Default Re: MYT - Mighty River Power

    It's an NZ electricity company with a substantial hydro-electric scheme (a very typical multiple dammed catchment arrangement although the headwater storage is somewhat limited), several geothermal plants and a gas-fired plant as well.

    I haven't bought, but I'm interested. I like businesses that I understand, and for me at least this is about as good as it gets in terms of understanding the business.

    Generation output is 61% hydro, 31% geothermal and 8% gas.

    Geothermal capacity is 387MW and all fairly new - year 2000 or later.

    Hydro capacity is 1048 MW from 9 plants. They are fairly old, age ranges from 1929 to 1970, but that shouldn't be a problem with a hydro plant as long as it's been properly maintained.

    Gas-fired capacity is 175 MW from a single plant. About 70% of that capacity operates in combined cycle mode (reasonably fuel efficient) and the rest is from a single open cycle gas turbine (relatively fuel inefficient). I wouldn't expect this plant to be too great in an economic sense due to small scale and age, but location in Auckland gives it an additional role as voltage support for the local area. That plus the reality that MRP doesn't really want to run it as a baseload plant anyway - it's largely for mitigating rainfall risk into the hydro catchment, means that it ought to be good enough (economically and technically) for the purpose.

    Might have to have a further look at this one from a financial perspective....

  4. #4

    Default Re: MYT - Mighty River Power

    you may need to watch out the NZ government has bill out currently they can regulate price on power
    so you not free to charge what you like...

    I dont like that sort of business...it's not free market enterprise you at the mercy of the current ministers...
    not saying you cant make money out of it but I prefer my business to charge what the hell ever they want and let competition dictate price rather than some bureaucrats making the call
    "cash - a call option with no expiration date, an option on every asset class, with no strike price.” Warren Buffett

  5. #5
    Mmmmmm 2nd breakfast Knobby22's Avatar
    Join Date
    Oct 2004

    Default Re: MYT - Mighty River Power

    My experience in Victoria suggests that they will cut back on maintenance, capture the regulator and make some real money. Then something big will go wrong.

    The problem is that did happen already in New Zealand from memory. Auckland lost power for a week! So maybe everyone will be on the ball a bit more.

    PS actually 5 weeks in 1988..

    One of my work colleagues used to work for that company and said his job was to maintain the power line that failed. When it failed (due to lack of maintenance) there was no one left in the country who could fix it and they had to send out a special team from Australia. Engineers should run this sort of company, not accountants.

  6. #6

    Default Re: MYT - Mighty River Power

    Just to put the 1998 Auckland power outage into perspective:

    - It was a "lines" problem, the responsibility of the local company which at the time was owned by the Auckland council. Certainly, lack of maintenance was to blame but this should be sheeted home to previous as well as (then) current local administrations.

    - Power distribution is now the business of "lines" companies in NZ which, with a few minor exceptions, are debarred from power generation and/or retailing.

    - Mighty River Power is a so called "gentailer", generating and retailing electricity and/or gas. Following the float, it is still owned 51% by the NZ govt which proclaims its intention to retain that control. Indeed, it would be politically "difficult" to renege on that promise.

    - In my view, the biggest threat to the company as an investment is the possibility of over-regulation and/or re-nationalisation should the Labour/Greens Opposition win power at next year's general election.

  7. #7
    Mmmmmm 2nd breakfast Knobby22's Avatar
    Join Date
    Oct 2004

    Default Re: MYT - Mighty River Power

    Thanks Oldblue.

  8. #8

    Default Re: MYT - Mighty River Power

    Just noticed these on ASX today...somehow reminds me a little of Pacific hydro -all they need is a few wind turbines to make them even more so.Have NZ got a renewable energy target?
    No franking credits with this one? I hold Erm power which also has some similarities, with their gas fired stations.

  9. #9

    Default Re: MYT - Mighty River Power

    I don't know about a target but 69% of NZ's electricity comes from renewable sources - hydro, geothermal and wind.

    MYT's own number is 90%, mainly from Hydro but with a bit of geothermal.

  10. #10

    Default Re: MYT - Mighty River Power

    Someones keen ~ looking forward to 28 Aug 2015 financial results.
    Forgive me I'm dyslexic.

  11. #11

    Default Re: MCY - Mighty River Power

    On July 29th, 2016, Mighty River Power Limited changed its ASX code from MYT to MCY.

  12. #12

    Default Re: MCY - Mercury NZ

    On August 2nd, 2016, Mighty River Power Limited changed its name to Mercury NZ Limited.

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