Meridian's profit lifts 18pc

State-owned electricity company Meridian Energy achieved an 18 per cent increase in net profit in the half year ended December 31, to $60 million, and paid the Government $29.4 million in dividends and $31 million in tax.

The electricity retailer, which also generates a third of the country's power, said in a report tabled in Parliament yesterday the profit beat the $50.7 million made in the first half of the 1999-00 year despite an 11-day shutdown of its Manapouri power station.

The shutdown, 10 days shorter than expected, was for engineering work associated with a second tailrace, which will greatly increase the capacity of the country's largest generator.

Chief executive Keith Turner said the shutdown was helped by an out-of-court settlement with Contact Energy relating to supply obligations to the Comalco aluminium smelter at Tiwai Point. The result was well ahead of the company's own target but it did not set a precedent for the second half, Dr Turner said.

"While another solid annual result is forecast, we recognise that there is a seasonal influence in the company's financial performance," he said.

"Typically, revenues in the second half of the year are not as strong as those in the first."

Revenues for the latest December half rose 12 per cent to $311 million compared with the December 1999 six months, with generation volumes rising 6 per cent on the back of ample water inflows and storage.

Operating expenses rose 12 per cent to $212 million, while net financing costs dropped 43 per cent to $8.2 million. Meridian retired $23 million of debt.

The company said it was progressing through a capital restructuring, seeking a rating from credit rating agency Standard and Poor's.

"The results are expected by April 2001. This rating will facilitate the financing of new debt and refinancing of the existing (inherited) ECNZ debt on maturity, from a wide range of debt markets at competitive interest rates," Dr Turner said.

There has been speculation the Government may extract special dividends from its business enterprises, but spokesman Alan Seay said Meridian had not been told of such a move. The annual dividend would remain set at 65 per cent of net profit and that was unlikely to change in the near term.

Meridian said its profit would have been higher but for transmission constraints related to getting power from its southern stations to the Auckland market.

Dr Turner said Meridian's customer satisfaction rating had risen from 63 to 70 per cent.

- NZPA