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Meridian Energy has reported stable earnings for the six months to December 31, though the sales of its Tekapo A and B hydro stations to fellow state-owned generator Genesis Energy saw profit fall 20% to $98.9 million.
This figure excludes typically volatile changes in the fair value of financial instruments, which fell $89.4 million in the half-year, reflecting non-cash impacts of Meridian’s contracts with its largest customer, the Rio Tinto aluminium smelter at Tiwai Point near Bluff.
Total revenue in the first half rose 11.7% to $1.223 billion, although this was the result of higher average wholesale power prices, which also increased Meridian’s internal cost of sales.
Energy-related expenses of $559.4 million in the most recent half compared with $394.1 million in the same period a year earlier, as the average price of electricity was 52% higher than in the prior period, at $76.23 per megawatt hour.
Underlying return on equity excluding revaluations, fell 25% to 16.2%, although chief executive of Meridian Energy, Mark Binns, said the company had increased net profit after tax by 13% on a like for like basis, excluding Tekapo assets.
“Meridian has achieved a sound financial performance during a challenging period,” he said, labelling the result a “stable” outcome.