Sharechat Logo

FIRST TAKE: Meridian Energy reports flat earnings for FY17, explores Europe for Powershop

Thursday 24th August 2017

Text too small?

Meridian Energy reported flat earnings for the year to June 30, reflecting a strong first-half performance offset by dry conditions in the South Island that limited its ability to generate electricity from its southern hydro dams.

Net profit after tax was $197 million, up from $185 million the year before, but on its preferred measure of earnings before interest, tax, depreciation, amortisation and changes in the value of financial instruments (ebitdaf), earnings were just 5 percent up on the previous year at $653 million.

Delivering his last financial results before retiring later this year, chief executive Mark Binns described them as “another good financial result”.

A final dividend of 8.7 cents per share, 88 percent imputed, brings total ordinary dividends for the year to 14.03 cents per share, a 4 percent increase on the previous year and represents 84 percent of free cashflow.

Consistent with the previous year, Meridian will also pay an unimputed special dividend of 2.44 cents per share under its capital management programme, bringing to $312.5 million the total special dividends paid since the capital management programme began in August 2015.

The result was achieved on total revenues of $2.319 billion, from $2.375 billion the previous year and total expenses of $1.666 billion, compared with $1.725 billion.

Binns warned of a “slow start” to the 2017/18 financial year, with the company continuing to generate less from its hydro assets and buying more electricity under arrangements with other generators, although hydro lakes are beginning to recover after the driest February to June in 84 years in Meridian’s main catchments.

“Inflows in August 2017 have been above average so far,” say notes for Binns’s presentation to investors later today. “July 2017 saw New Zealand sales volumes up 14 percent across all segments and ICP (customer/meter)  numbers up 1.2 percent.

The current financial year would show the impact of a full year of new, higher pricing for the Tiwai Point aluminium smelter, Meridian’s single largest customer.

The systems behind the company’s online retail electricity offering, Powershop, had been successfully launched before Christmas last year in the UK and the company was now contemplating roll-outs in continental Europe.

To achieve this, it has split the Powershop front end from the software system that drives it and constituted that business as a new entity, dubbed Flux Federation.

In Australia, where Meridian has wind farms and more than 100,000 Powershop customers for the first time, the policy environment was “volatile and uncertain”.

“Higher wholesale and retail prices may elevate smaller retailer risk positions,” the company said, with lower customer growth “a possible result”.

Ebitdaf from Australian operations improved by $5 million to $34 million.

For the first time this year, Meridian is also using an integrated reporting framework aligned to the Global Reporting Initiative’s Sustainability Reporting Guidelines. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Vital Healthcare gets a new manager, Aaron Hockly
Venture capital funding gap is real - David Parker
Serko brings in booking.com in $45m capital raising
Fonterra farmers urge MPs to unshackle cooperative
NZ dollar benefits as EU likely to grant Brexit extension
24th October 2019 Morning Report
OPINION: All the questions the convention centre fire asks
MARKET CLOSE: NZ stocks drop as investors dump power companies on smelter scare
NZ dollar eases after another Brexit failure
SkyCity, Fletcher won't name their insurers

IRG See IRG research reports