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

 

Inequality: Top 10% Of Housholds Have Half Of Total Net Worth

The average New Zealand household was worth $289,000 in the year to June 2015, Statistics New Zealand said today. However wealth was not evenly distributed, with the top 10 percent accounting for around half of total wealth. In contrast, the bottom 40 percent held 3 percent of total wealth. More>>

ALSO:

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news