Valuation Might river power is a geothermal power producer which can be compare to RPG except they pay big dividend (3% yield) and have a very strong balance sheet. They also plan to 15-20% growth a year over the next 5 years. Investment of more than $1 billion in geothermal developments over the past five years –Kawerau, Nga Awa Purua, and offshore geothermal.
The government has said it will sell up to 49 percent of Mighty River Power in a share float in the third quarter this year. Analysts have said the sale, the first in a programme over the next three years, might raise as much as NZ$1.5 billion, valuing the company at NZ$3 billion.
Might river power forecasts to make EBITDA in 2013 of around $600MM. So they are valued at 5 times EBITDA of next year and they have a very strong balance sheet, paid very big dividend and plan 15-20% a year gowth over the next 5 years.
So maybe now you understand why your 10 times EBITDA doesn't make sense at all. RPG is a lot more risky, less healthy balance sheet and is a lot risker geopilitically because they focus mainly on 1 country.
Enel green power which produce more than 50% of its electricity with geothermal and is around the same size as might river is valued at 4 times EBITDA of next year.
So I will flush your 10 times EBITDA in the toilet and stuck with my 3-4 times FCF which valued RPG at around 30 cents for SJT1&2 plus the bottom unit. then you will have some growth with Geysers... So 25-30 cents should be the bottom here.