MCY Mercury NZ ( MRP Mighty River Power)

[Snoopy]

Financial Year	EBITDAF	less Adjustment	less DA	less I	times 0.72= Normalised NPAT	eps
2013	$391m	-($16.4m + $4.2m)	$150m	$57m	$147.1m	10.5cps
2014	$504m		$161m	$84m	$186.5m	13.3cps
2015	$482m	$17m/0.72	$170m	$99m	$136.4m	9.7cps
2016	$493m	$13m/0.72	$182m	$97m	$141.1m	10.1cps
2017	$523m	$5m	$189m	$95m	$168.5m	12.0cps

Notes:

1/ 'eps' figures based on 1,400m share being on issue
2/ FY2013 earnings modified by adding back IPO costs and loss on sale of German Geothermal Asset.
3/ FY2015 and FY2016 earnings reduced by property/land sale profits (adjusted to reflect that non-core property land sales are not generally taxable.)
4/ FY2017 result adjusted to remove profit on carbon credit sales.

Conclusion: Pass Test

Further Note: I have put up these results in tabular form so that you can see the working, and an interesting point that is evident from it. If you take the best year (FY2014) and the last reported year (FY2017), then the $18m fall in profit should be read in context with the $28m increase in depreciation charge over the two years. IOW leave out the depreciation (which is dubious in these power generating assets anyway) and the FY2017 result was actually the best of the lot ( I guess this is why management like to use EBITDAF when reporting their results?). Quite impressive nevertheless.

SNOOPY

PS Eagle eyed readers will notice that some earnings figures have changed from when I did them two years ago.

1/ I previously made a different adjustment in FY2013 to reflect an impairment charge that was never included in EBITDAF to start with. I also did not adjust for the two factors that I did adjust for in this year's analysis. (my mistake)
2/ In FY2015 I assumed that the profits on the property sale I adjusted for was taxable. I have now changed my mind and decided it was probably not taxable.

Financial Year	EBITDAF	less Adjustment	less DA	less I	times 0.72= Normalised NPAT	eps
2016	$493m	($13m/0.72 - $2m)	$182m	$97m	$142.5m	10.2cps
2017	$523m	($5m-$2m)	$189m	$95m	$169.9m	12.1cps
2018	$561m	$2m	$197m	$91m	$195.1m	13.9cps
2019	$505m	-$1m	$204m	$75m	$163.4m	11.7cps
2020	$494m	-$1m	$214m	$54m	$162.7m	11.6cps

Notes:

1/ 'eps' figures based on 1,400m share being on issue
2/ Underlying FY2016 earnings reduced by property/land sale profits (adjusted to reflect that non-core property land sales are not generally taxable). (AR2016 p10,54) and increased by Property Plant and Equipment sale losses (AR2016 p71).
3/ Underlying FY2017 result adjusted to remove profit on carbon credit sales (p60 AR2017) and increased by Property Plant and Equipment sale losses (AR2017 p31).
4/ Underlying FY2018 result reduced by a $2m Property Plant and Equipment sale gain (AR2018 p29).
5/ Underlying FY2019 result increased by a $1m Property Plant and Equipment sale loss (AR2019 p90).
6/ Underlying FY2020 result increased by a $1m Property Plant and Equipment sale loss (AR2020 p67).

CONCLUSION: There is only one underlying profit drop here, from FY2018 to FY2019 (The 2019 to 2020 profit drop is within the error bounds of a rounding error) => Pass Test

SNOOPY