Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Meridian beats forecast with 22% drop in FY profit

Meridian Energy beats prospectus forecast with 22% drop in full-year profit

By Jonathan Underhill

Aug. 18 (BusinessDesk) - Meridian Energy, which went public in October with a listing of installment receipts, posted a 22 percent decline in full-year profit in a market where retail electricity demand was flat and wholesale prices fell.

Profit was $229.8 million in the 12 months ended June 30, down from $295 million a year earlier, the Wellington-based company said in a statement. Operating revenue dropped to $2.51 billion from $2.7 billion.

Earnings beat the state-controlled utility's prospectus forecasts, showing a decline from 2013 that partly reflected a one-time gain in the year-earlier period from the sale of the Macarthur wind farm and accounting adjustments. Energy sales revenue fell 7.5 percent to $2.48 billion in the latest year, while energy related expenses fell 17 percent to $1.13 billion, distribution expenses rose 5.8 percent to $428 million and transmission expenses climbed 12 percent to $129 million.

"Last year’s result included earnings for six months under the then unvaried and higher priced Tiwai Point contract and five months operating earnings from the company’s interest in the Macarthur wind farm in Australia, which has since been sold," said chief executive Mark Binns.

“While inflows into our southern catchments were 111 percent of average, we experienced difficult wholesale trading conditions from February to April when inflows were around 62 percent of average. Despite this, electricity generation was up by 8.9 percent over the previous year,” Binns said. "The residential segment of the retail market remained very competitive."

Meridian's retail contracted sales rose to 5,754 gigawatts an hour from 5,660.8 GWh a year earlier, with NZAS aluminium sales rise to 5,010.7 GWh from 4,886 GWh. Operating cash flow rose about 28 percent.

The government sold installment receipts to reduce its holding in Meridian at $1 apiece last year. They last traded at $1.285, up 19 percent since listing, and are rated a 'buy' based on seven recommendations compiled by Reuters, with a median price target of $1.53. Investors must make the second 50 cent payment on the receipts in May 2015 after an initial public offering that will raise $1.88 billion in total.

In presentation slides the company said aggregate retail electricity demand "remains relatively flat" while manufacturing demand "remains subdued." Still Meridian's New Zealand customers rose 1.7 percent in the latest year and the volume of retail sales climbed 1.6 percent.

The company lifted generation by 8.9 percent including an 8 percent gain in wind generation, giving it a 35.3 percent average market share of generation. It noted lower wholesale market prices, accompanied by periods of high hydro generation. The average price it received for generation was $4.81 per megawatt hour, down 7.4 percent from a year earlier. The price Meridian paid to supply contracted sales fell 8.6 percent to $6.10/MWh.

Meridian said it is investigating the sale of its Arc metering business.

The company will pay a final dividend of 6.82 cents a share plus a special dividend of 2 cents, bringing total payments for the year to 13.01 cents, imputed to 90 percent. Meridian said it is "considering further mechanisms to ensure optimal capital structure" and will provide an update with its first-half results in February. It held off giving specific guidance other than to say it is "very focused" on meeting its prospectus forecasts.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news