MCY Mercury NZ ( MRP Mighty River Power)

[Aaron]

Can anyone explain why MRP is paying out in dividends 3-4x what they are earning, despite having massive debt. It would appear they are borrowing not for expansion, but to pay dividends.I think paying dividends while owing money makes little sense, as you are borrowing, paying interest, just to pay dividends.Mainly to the Govt as they are major shareholders.

Friday afternoon should be working but I will have a crack.
2015 Cashflow Statement page 29 of the annual report. Operating Cashflow +$309mill; Capital Investments -$103mill; Divs -$260mill $54 mill shortfall $65mill extra borrowings leaves a $11 million increase in cash. One way to look at it is they borrowed 52% for capital investments (54mill/103mill) and paid the dividends out of operating cashflow.
I think with infrastructure companies you hope they aren't skimping on maintenance to pay out big dividends a la Kiwirail. Hopefully we aren't like sir Michael Faye & David Richwhite happy to take what they can get and let the taxpayer pay for it (f**king ars***les)