Meridian Energy’s Group net profit after tax (NPAT) was $74.6 million for the year ended 30 June 2012, $228.5 million (75%) lower than last year.
Last year’s result was boosted by the sale of the Tekapo hydro stations to Genesis Energy on 1 June 2011 (net gain of $157.4m), 11 months of generation revenue from the Tekapo stations ($32.4 net of costs) and proceeds received following the settlement with New Zealand Aluminium Smelters Limited ($28.1 net of legal costs). Excluding these impacts, NPAT was $28.8 million (28%) below last year.
EBITDAF of $476.6 million reduced by $183.3 million compared with last year. Adjusting for Tekapo generation revenue and the New Zealand Aluminium Smelters settlement last year, EBITDAF fell by $122.8m. Comparing this year’s result to 2008, the last significant but less severe dry year, EBITDAF was $102.7 million higher despite the loss of Tekapo generation.
Meridian’s Chief Executive, Mark Binns, said, “It’s been an unprecedented year in terms of hydrology conditions – the lowest inflows in 79 years. The integrated nature of our wholesale and retail business has been key to improving performance compared to 2008. We’ve managed the situation well through conservative generation and by actively hedging our position against contract load.”
The record low inflows and impairments realised during the year have driven the decline in NPAT. Impairments reflect the decisions taken to rationalise the company’s generation development portfolio and non-core investments.
Meridian’s underlying NPAT (where the effects of non-cash fair value movements, impairments and other one-off items are removed) has decreased by 52% compared to last year. Last year’s underlying NPAT includes 11 months of generation revenue from the Tekapo stations and proceeds from the settlement with New Zealand Aluminium Smelters Limited. If these items were excluded, the current year’s decrease would be 40%.
The Retail segment achieved pleasing growth in its underlying profitability based on a fixed input purchase price of $85/MWh, due to a better balanced portfolio. Meridian’s international and subsidiary segments also improved their performances compared with last year.
Since Mark Binns started as Chief Executive in January, the company has rationalised its non-core investments. This has included the announcements of the decisions to construct Mill Creek and exit both Project Hayes and Mokihinui. Meridian also sold Right House, its shareholding in Whisper Tech’s European joint venture, and is marketing its USA business.
Meridian’s overseas renewable development projects are progressing well. Mr Binns said, “In Victoria, Australia, the joint venture Macarthur wind farm project is on-track to start generating first power in September 2012, and we delivered a solar farm for the Tongan Government under the New Zealand Government aid programme.”
Meridian is trialling its award-winning Powershop offering in the Australian retail market, and is evaluating the potential to develop the Mt Mercer wind farm, also in Victoria.
Meridian started construction on the Mill Creek wind farm, near Wellington, in July.
During the year, Meridian paid $140.7 million of dividends to its shareholder.