Meridian Energy has posted a steady full-year underlying profit although its headline number was swelled by the gains from an asset sale.
Photo: RNZ / Nate McKinnon
Key numbers for the year ended June compared to a year ago:
- Net profit $664m vs $428m
- Underlying profit $233m vs $231m
- Revenue $3.7b vs $3.96b
- Full year dividend 17.4 cents per share vs 16.9 cps
Meridian chief executive Neal Barclay said it had been a challenging, but successful year.
"We've navigated another significant drought, grown our customer base, built out our development pipeline and maintained momentum on the construction of our Hawke's Bay wind farm - Harapaki."
The company's bottom line was lifted by a $214m gain on the sale of its Australian business and a $281m rise in the value of hedging contracts, used to insure against market volatility.
Barclay said Meridian consumer and corporate power sales continued to increase and the company was continuing to focus on customers, particularly the vulnerable.
It was also looking at developments to decarbonise the energy and lift renewable energy, with projects totalling 2.4 gigawatts, including a battery storage system and solar farm in Northland, and a wind farm in Hawke's Bay.
"The team working at Harapaki have navigated a number of challenges successfully. The impact of these challenges has meant that we've had to spend more money on this project than anticipated to maintain the construction timeline," Barclay said.
It was also working to help industrial users switch needing process heat, such as dairy factories, to use renewable sources.
Meridian is working with Contact Energy on possibly using South Island power to produce green hydrogen, with Australian firms Woodside Energy and Fortescue Future Industries, shortlisted to develop detaIled proposals.
There was no discussion of what, if any, progress was being made in talks with NZ Aluminium Smelter on possible new supply contract after the current one expires at the end of 2024.
Investment analyst Grant Swanepoel of Jarden Securities said the improvement in Meridian's operating earnings was largely from increased hydro generation offsetting a dip in income from the Tiwai Point smelter.
Meridian had given itself plenty of headroom to press on with new projects after the sale of its Australian operations, he said.
"Financial year 2023 starts with plenty of water, softer wholesale prices but still well above long-run averages; the company appears well positioned for another positive year.
"Key risks are regulation, management of the Tiwai exit, electricity demand from consumers and dairy conversion and inflow from its hydro generation down the Waitaki River chain and at Manapouri."