Meridian profit jumps on increased generation

Turbines at Meridian's West Wind farm near Wellington. Photo / Mark Mitchell

Meridian Energy's underlying earnings rose 29 per cent in the year to June 30 to $251.9 million, reflecting a 13 per cent increase in total generation, thanks to heavy use of hydro-electricity and its new West Wind power station.

However, while soft wholesale electricity prices in the early part of the current financial year are likely to improve, the State Owned Enterprise sees "a likely New Zealand electricity gross margin slightly below last year."

Meridian's net earnings swing considerably because of the impact of revaluing its Tiwai Point aluminium smelter contracts, but with those movements included, net profit after tax was up 106 per cent to $184 million.

Earnings before interest, tax, depreciation, amortisation and financial instruments was a record $641.7 million, and achieved on EBITDAF per Megawatt hour of $46.29 in the year just gone, an 11 per cent increase on the $41.87 per MWh seen in the previous year.

Describing the result as "strong" in a statement to the NZX ahead of briefings this morning, Meridian said "wholesale electricity revenues benefited from good lake storage and inflows during the year and the commissioning of West Wind."

Wind generation rose 95 per cent over the year, reflecting West Wind's commissioning part-way through the year, and represented 1,005 Gigawatt hours of Meridian's total 13,862GWh of generation from hydro and wind resources.

The result was achieved on a 9 per cent increase in total operating revenue of $2.062 billion.

State-owned Meridian will pay a $68.5 million dividend on October 29, taking total distributions for the last financial year to $158.1 million.