Energy company Meridian has reported a drop in first-half profit reflecting negative changes in the value of hedge instruments as well as a drop in revenue from Tiwai Point Aluminium Smelter (NZAS).
Photo: RNZ / Nate McKinnon
Net profit fell 41 percent on the year earlier, however, Meridian chief executive Neal Barclay said the underlying profit, which excluded the hedging costs, was little changed from the year earlier.
On the plus side, the company's result reflected growth in its retail business, he said.
Key numbers (for the six months ended 31 December 2021 vs year earlier)
- Net profit: $133m vs $227m
- Revenue: $1.67b vs $1.69b
- Underlying profit (EBITDAF): $394m vs $395m
- Operating costs $1.28b vs $1.30b
- Dividend 5.85cps vs 5.7 cents per share
"Our retail performance has helped offset the impact of NZAS exit pricing, and we're making sound progress on our strategy to develop new sources of South Island demand following the Tiwai contract end in 2024," Barclay said.
Meridian announced in January 2021 that it had reached an agreement with its largest customer, Rio Tinto, which operates NZAS in Southland, to extend the planned closure period from August 2021 to December 2024.
The renewable energy company also completed the sale of its Australian business to a consortium of Shell Energy Operations for A$729 million (NZ$781m), and expected to make a gain of $240m in the full year.
Neal Barclay. Photo: Supplied
"This transaction is an outstanding result for Meridian's shareholders and a testament to the quality of the Meridian Energy Australia business and the employees who have been dedicated to its success," Barclay said.
The company had commenced bulk earthworks at its Harapaki wind farm development in Hawke's Bay and had been actively working to increase its renewable development pipeline, he said.
It had also identified four potential partners to work on the next phase of the Southern Green Hydrogen project, a joint venture between Meridian and Contact Energy to investigate the feasibility of developing the world's first large-scale green hydrogen plant in Southland.
Barclay said Meridian had also been a focus of a number of regulatory reviews, including the Electricity Authority's wholesale market review and reviews of the 9 August 2021 power outages.
"While we have some concerns with some of the preliminary findings from the Electricity Authority's most recent wholesale market review, there is no doubt that as an industry we need to move faster to help New Zealand achieve its climate goals," he said.