Wednesday 25th August 2021
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Meridian has reported underlying net profit after tax for the Group of $232m, down $84m or 27% on the prior year. EBITDAF for the year was $729m, down $124m or 15% on the prior year. With the benefit of $248 million of positive non-cash movements in the value of hedge instruments, Meridian Energy has reported $428 million of net profit after tax for the year ended 30 June 2021.
The previous two years saw record results powered by strong generation and growing retail sales volumes. This year the company maintained that strong retail sales growth with New Zealand volumes up 14% on the prior year. Challenging drought conditions prevailed through much of the second six months of the year and as a result New Zealand hydro generation was down 12% on the previous year. Notably the inflows into Meridian’s hydro catchments from November 2020 to April 2021 were the third lowest on record during that period.
Chief Executive Neal Barclay says, “We certainly experienced some challenges in FY21. Drought conditions during the second half of the financial year dampened our cash earnings by reducing generation and increasing hedge costs but that is just part and parcel of being a hydro generation company in New Zealand. Also, the price we negotiated with the owners of Tiwai Point Aluminum Smelter to extend operations to 2024 reduced during the second half of the year. Whilst both events were significant and impacted financial performance, the underlying drivers of future business value remained strong, in particular growth in customer sales and our commitment to build the Harapaki wind farm.”
The ordinary dividend remains stable with the Board declaring a final ordinary dividend of 11.20 cents per share, unchanged from the previous year. This brings the total ordinary dividends declared in FY21 to 16.90 cents per share, also unchanged from last financial year. This year, Meridian announced the introduction of a Dividend Reinvestment Plan, that will apply from this year’s final ordinary dividend. The Board has resolved to apply a 2.0% discount to this dividend under the DRP.
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