Mighty River Power's withdrawal from its geothermal operations overseas is largely behind a 93 per cent plunge in net profit in the half year to December 31.

The power company's net profit fell from $116 million in the prior comparable period to $8 million.

Earnings before tax also fell to $258 million, down $12 million due to lower hydro generation during a dry early summer and a fall in commercial sales.

Underlying earnings were also hit. They were $90 million, down $15 million, reflecting lower earnings before earnings before interest, tax, depreciation, amortisation and financial instruments (EBITDAF) and higher interest and depreciation costs following the commissioning of Ngatamariki geothermal station.

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However the company says its dividend forecast for the full year would be unchanged at 14 cents per share.

In updated guidance it says full year pre-tax earnings will be the range of $480 million to $500 million, reflecting lower-than-average rainfall in its Waikato River catchment.

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The company's exit from geothermal development in Chile and Germany resulted in non-cash impairments ($83 million) along with the favourable fair value movements of $20 million recognised in the previous half year.

"As announced in December, following a rigorous review, we decided to exit international geothermal development options. The accounting implications of that is a key factor flowing through to the financial results for the period," said chairwoman Joan Withers.

Mighty River Power maintained strong cash flows through the interim period - supporting the forecast ordinary dividend of 14 cents for the full year and today declared a fully imputed interim dividend of 5.6 cents per share, to be paid on March 31.

MRP shares last traded at $3.37.

Contact Energy last week announced it was investigating overseas geothermal ventures to spend an estimated $1 billion in surplus cash over the next five years.


See Mighty River's latest investor presentation here: