19 Feb 2014

Meridian profit above forecast

7:37 pm on 19 February 2014

Meridian Energy easily beat its prospectus forecast for first-half profit, thanks to very high rainfall into its hydro lakes.

Meridian Energy's West Wind wind farm at Makara.

Meridian Energy's West Wind wind farm at Makara. Photo: PHOTO NZ

Meridian's net profit for the six months to December was $117 million, 49 percent above forecast.

The result is nearly 50 percent above forecasts in the prospectus it issued before listing on the stock market last October, when the Government sold 49 percent of its stake.

However, it is below the corresponding figure for the same time last year.

Meridian says it was able to keep a high share of the generation market due to very high lake levels in its catchments.

Chief executive Mark Binns says his company generated a record amount of electricity in the six months, aided towards the end of the period by the completion of the Pole 3 Cook Strait cable upgrade.

Waterflow into its hydro lakes was 122 percent of the average, allowing the company to generate 36 percent of the nation's electricity. This rose to 44 percent in December and January.

Meridian says the retail electricity market remains very competitive with 18 percent of customers changing suppliers in the six months but its customer connections rose 1.6 percent from June last year.

However, its average net sales fell 1.6 percent and Mr Binns says he expects the energy part of retail electricity prices will remain unchanged through until at least June 2015.

He says in terms of network and transmission charges these will continue to be passed onto Meridian customers, but if there is a decrease that will also be passed onto customers.