Meridian posts record first-half earnings

Meridian Energy reported a 39 per cent increase in first-half profit, boosted by improved generation and sustained high prices in October and November.

The country's biggest power generator had a net profit of $152 million in the six months through December, from $109 million a year earlier. Earnings before interest, tax, depreciation, amortisation and changes in financial instruments rose 18 per cent to a record $389 million, from $329 million a year earlier.

Meridian, which operates the country's biggest hydro dams on the South Island and some of its largest wind farms, benefited late last year when maintenance work at the Pohokura gas field reduced supplies just as hydro storage was also declining and other generators had plants shut for maintenance.

It has also benefited from the Tiwai Point aluminium smelter – its largest single customer – restarting its fourth potline after a six-year break and from the expansion of its generation business in Australia early last year.

"Good hydro storage has seen our New Zealand generation volumes increase 10 per cent on the prior period, supporting higher contracted sales," chief executive Neal Barclay says.

"The purchase of the Greenstate hydro assets in Australia led to higher generation volumes in Australia and UK customer sales have also increased on the corresponding period."

The firm's New Zealand generation volumes climbed to 6,546 gigawatt-hours in the period, with increased hydro production offsetting lower wind generation. It received an average generation price of $124.20/MWh, about 33 per cent more than a year earlier.

Retail sales volumes – which exclude sales to the smelter - were about 4.5 per cent lower than a year earlier at 2,999 GWh, with the reduction across residential, small business and corporate customers.

In Australia, generation volumes were 37 per cent higher than a year earlier at 419 GWh. The firm acquired three New South Wales hydro plants from Trustpower a year ago. It also entered power purchase agreements with wind and solar providers Tilt Renewables, CWP Renewables and Total Eren to help supply its Powershop business there.

Retail electricity sales there were about 3.2 per cent lower than a year earlier at 280 GWh for the December half year. The company had almost 99,400 retail power accounts at the end of December, about 2,000 more than a year earlier. It has also amassed 12,500 gas connections in the past year.

Australian ebitdaf rose 14 percent to $41 million.

Meridian will pay an interim dividend of 5.7 cents and a special dividend of 2.44 cents on April 17. That is up from 5.38 cents and 2.44 cents respectively a year earlier.

- BusinessDesk