Big dry in south keeps lid on Meridian earnings

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 $185m 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 per cent up on the previous year at $653m.

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 8.7c per share, 88 per cent imputed, brings total ordinary dividends for the year to 14.03c, a 4 per cent rise on the previous year.

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

The result was achieved on total revenues of $2.319 billion, down from $2.375b the previous year and total expenses of $1.666b, compared with $1.725b. Hydro lakes are beginning to recover after the driest February to June in 84 years in Meridian’s main catchments.

The current financial year would show the impact of a full year of new higher pricing for the Tiwai Point aluminium smelter, Meridian’s largest customer. The shares closed down 1.5c at $2.93. —