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FIRST CUT: Meridian Energy lifts first-half operating earnings 6%

Wednesday 22nd February 2017

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A strengthening performance in its Australian business and less dry period insurance thanks to a wet spring and mild winter saw Meridian Energy record a 6 percent lift in operating earnings for the six months to Dec. 1, allowing an increased interim dividend and a further special dividend payment.

Earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments came in at $352 million, while statutory after-tax profit was $124 million, from $104 million for the same period a year earlier. The result was achieved on reduced total operating revenue of $1.13 billion, from $1.21 billion in the first half of the previous financial year.

"While the mild winter and wet spring conditions contributed to lower contracted sales, record generation, lower purchase costs and less dry period insurance saw 2 percent growth in New Zealand energy margin," said chief executive Mark Binns in a statement to the NZX.

Meridian's Australian wind farms and retail Powershop operations provided a "significant" contribution to the half-year, "with energy 43 percent higher than last year with Powershop Australia sales, generation volumes and prices all higher".

Meridian also delivered its Powershop IT platform to npower, a UK electricity retailer, during the period, prior to the challenger brand's launch in the British market.

The company will pay an interim dividend of 5.33 cents per share, an increase of 4.5 percent from last year, carrying 88 percent imputation, as well as a special dividend of 2.33 cents per share, which will carry no imputation credits and take distributions under the company's capital management plan to 9.8 cents per share since it was announced in August 2015, representing a return to shareholders of $250 million over ordinary dividends.

The government remains a 51 percent shareholder in Meridian, which was partially privatised in October 2013.

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